Reference no: EM132108263

Problem-Solving Case: Scrap Metal Trips Up Stamford Supervisors

In the city government of Stamford, Connecticut, the Office of Operations has many responsibilities for maintaining the city’s quality of life. The agency is charged with garbage collection and recycling, managing the city’s vehicles and build- ings, sewage treatment, maintaining city roads and parks, conducting building inspections, man- aging the construction of public buildings, and more. In carrying out some of these activities, employees of the Office of Operations generate or acquire scrap metal. And the question of what to do with that metal, unfortunately, became an eth- ical stumbling block for some of the agency’s employees and their supervisors. The scenario was something like this: At the end of a construction, repair, or demolition job, scrap metal such as old road signs and metal poles would be left at the site. Workers then had to dispose of it somehow. Supervisors established an informal practice in which the workers would take the metal to a private dealer, sell it, and take the cash payment to their supervisor, often with- out a receipt. Some employees even set up their own scrapping businesses and sold the scrap to their businesses. The supervisors would collect the money and keep it in a “petty cash” jar or in a locked desk or safe. They would spend this fund on employees and their departments, paying for food, Christ- mas parties, funeral cards, and supplies for work. The practice continued for at least 30 years until a complaint led to a police investigation and an audit of the agency’s books. A maintenance worker told a local newspaper reporter, “As long as I’ve been here, whoever the boss was got the money. That’s what they told us to do, and they were the bosses.” One employee reportedly told a police officer later that he had sold scrapped plows for more than $3,000 and kept the cash until the next day to “safeguard” the money until a supervisor became available to take it. When the practice was disclosed, there was a public outcry, objecting that the sale of city- owned scrap metal for cash to benefit employees off the books was a misuse of public property and an abuse of the public trust. After investiga- tors spent months trying to trace the cash received, placed in the funds, and spent at super- visors’ discretion, they concluded that it would be impossible to ever know how much money had been raised and spent. However, it seemed that no rules had been violated and no laws had been broken. The supervisors had used the money to benefit employees and their depart- ment, not themselves. The mayor suspended the director of the Office of Operations for three weeks without pay, and two supervisors caught engaging in the practice were suspended for two weeks without pay. In the months after the practice of selling scrap was exposed, the city began selling twice as much scrap metal through official channels. As a result, revenues to the city increased by $60,000. Mean- while, city officials established clearer policies for the disposal of scrap. From then on, no city offi- cial was allowed to accept payments in cash, and whenever an employee wants to sell city prop- erty, that sale must first be approved by the city’s purchasing agent.

Questions –

1. Officials found no grounds to say that selling scrap and using the proceeds for employees and the department was illegal, but they did treat it as unethical behavior. What was unethical about this activity? Who was harmed by it?

2. What conditions in Stamford’s Office of Operations might have contributed to this unethical conduct? What could the supervisors have done to ensure more ethical handling of scrap metal?

3. Review the definition of sustainability and description of sustainable organizations. In what way(s) did the handling of scrap metal contribute to making the Office of Operations a sustainable organization? What behavior worked against sustainability? How might the agency’s supervisors contribute to sustainability in the future?