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Like the watch in the classic Timex commercial, some in the petroleum and convenience industries are taking a licking these days.
Ethical stains from once seemingly untouchable Wall Street luminaries such as WorldCom, Tyco, Xerox and Enron have spread to smaller entities, in the petroleum and c-store universe.
From the ignominious resignations of Texaco and Ashland CEOs Peter Bijur and Paul Chellgren over improper romantic relationships with subordinates, to the personal failings of Giant Industries Inc.'s Jim Acridge, Fas Mart's Owais Dagra and, most recently, of Montana convenience store operator Steve Visocan, the once theoretical topic of executive ethics has become a painful reality.
"Ethics are the most important thing we have in running our business," said Howard "Blackie" Bowen, a principle operator at Liberty Petroleum LLC. "Ethics is how we relate to our customers and employees. Ethics is how we advertise and present ourselves."
This is not the first time America has been wrapped in economic scandal and ethical shame. The savings and loans debacle of the 1980s forced changes in how lending institutions do business.
As a nation now mulls over mandatory disclosures, independent boards of directors, shareholder fairness, pursues President Bush's call for "capitalism with conscience" and reflects on the "infectious greed" cited by Federal Reserve Chairman Alan Greenspan, it remains unclear how a convenience industry built on independence and a disdain for regulation internalizes a new threshold of morality.
In interviews with retail operators, association officials and national business experts, no clear roadmap is drawn. Some call for harsher sentences of the most corrupt, while others push for ethical codes that exempt no executive suite or trade association. Some argue against legislating morality, while others promote a new corporate creed rooted in the kindergarten lessons of honesty and fair play.
A discerning eye immediately scans to the priorities that primed America's economic boom of the late 1990s and subsequent free-fall. Cost efficiencies, synergies and record returns glossed the portfolios of major companies and the executives who drove them.
For their hard work and high ambition, these executives reaped golden bonuses, unprecedented stock options and unparalleled powers. Whether private or public, corporations and corporate execs swaggered with smug security, observers now say -- even in the convenience and fuel segments. And with outside money readily available, who can blame them?
In 1991, Owais Dagra burst onto the convenience retailing scene, launching a 13-store chain in Virginia with visions of controlling 500 stores. In a decade's time, Fas Mart Convenience Stores Inc. surged through acquisitions, climbing to nearly 200 stores.
But by early last year, an unsympathetic economy and misguided financial decisions, including over borrowing from securitized lenders, caught up with Dagra, and the company was forced into Chapter 11 bankruptcy. In May, Dagra's fall from prominence climaxed with his resignation as chairman, president and CEO, the same day a federal bankruptcy court judge appointed a trustee to oversee the chain's operations.
The c-store wonder kid, who turned a $500 investment in a single convenience store 12 years ago into a $500- million operation with more than 2,000 workers, also was slapped with a restraining order. A U.S. bankruptcy court froze his personal assets and those of other businesses Dagra steered after he allegedly diverted $5 million in cash and property from Fas Mart, according to court records.
With Fas Mart likely to be liquidated by year's end, corrective measures are too late. But Dave McComas, who replaced Dagra after serving as company COO, said the mistakes have underscored the need for integrity, from the highest-level position to stock boys and store clerks.
"We try to support a culture of not assessing blame, but rather to address the issue," McComas said. "I've been in jobs where they were more concerned with finger-pointing, instead of fixing the problem. I've tried to support an air of openness and that making honest mistakes is acceptable."
While Dagra's career rise and descent was swift, it was hardly isolated. In April, Jim Acridge, founder and head of Scottsdale, Ariz., refiner/marketer Giant Industries, stepped down amid questions concerning a personal loan. His departure coincided with the company's fourth-quarter loss of $5.7 million, compared to a $625,000 profit one year earlier.
While company officials did not publicly attribute the loss to Acridge's loan, Giant established a $5.4-million pre-tax reserve to cover the full amount of the loan. Officials said the loan was drawn around the time Acridge entered into a separate venture to buy Rawhide, a Western theme park managed by Acridge's son.
Again, a case of an executive raiding corporate funds for personal benefit.
Most recently, the National Association of Convenience Stores (NACS) -- the official body that represents the c-store industry -- sustained a black eye when its treasurer and chairman-elect Steve Visocan abruptly stepped down.
Initially attributing his resignation to business challenges confronting his Visocan Petroleum and three-store Pop Inn chain headquartered in Helena, Mont., Visocan, a well-liked and respected operator, pleaded guilty just days later to federal bank fraud charges for kiting nearly $1 million in bad checks dating back to 2000.
For 72 hours NACS was mum. So were many in the industry, stunned by the events and the fall of their colleague. Yet, the vast attention focused on the plunge of convenience and petroleum personalities is founded, some say, by an emerging national ethical code.
"Business ethics used to be an oxymoron," said W. Michael Hoffman, executive director at Bentley College's Center for Business Ethics in Waltham, Mass. "Today, our culture has changed in that our society has placed a new mandate on corporate America