Companies have an incentive to lie about Y2K. This theory has been posited many times on this forum. This seems intuitive. A company may wish to conceal its failure rather than suffer losses becaus of potential Y2K failures.

On the other hand, there is a signficant risk to the strategy of prevarication. If a company's board of directors, CEO and CIO lie about self-reported Y2K progress, they greatly increase the possibility of legal action. More importantly, they risk losing credibility with vendors, partners and customers. While companies might weather Y2K computer problems and nasty lawyers, they may not survive the wrath of customers.

If there was a "conspiracy" between key company officials, one might expect a major stock sell-off prior to rollover. Insider trading is closely monitored by the SEC. To my knowledge, there are no reports of massive insider selling in any sector... or firm. Another problem with the conspiracy theory... it would be difficult to keep this information private. While the threat of job loss has been cited by pessimists, how many bright IT folks think they'll have a job if their company fails? In addition, stock options are often part of senior (or junior) IT compensation. The waters have been amazingly calm as far as reports from IT pros selling all of their stock options due to Y2K.

Possibly the greatest incentive is to report nothing about Y2K. This strategy avoids creating legal liability and the expectation of minimal Y2K problems. It also avoids the potential loss of revenue associated with admitting a Y2K-related problem. Despite the attraction of the "don't ask, don't tell" strategy, thousands upon thousands of companies have made Y2K "ready" claims. This suggests some level of confidence in actual readiness, a willingness to roll high-priced dice or the intent run the company over a cliff.

Given the lack of evidence of massive insider selling, I find it difficult to believe private sector leaders are rolling the dice or dumping their firms. It is possible management is not receiving accurate information on Y2K readiness... but again, the incentives seem to suggest otherwise. I find it difficult to believe there is a widespread omerta among IT pros. In my experience, the folks in the IT shops have no problem sharing their opinion on ANY subject. In fact, the IT pros often take a "worst case" CYA approach, usually around budget time. (laughter)

Is it possible some people are lying about Y2K? Absolutely. Probably more in the public sector than anywhere else. As a side note, I think Y2K was used as a rationale to pad IT budgets worldwide. "Hey, we needed the new system anyway. Just tell 'em it ain't Y2K compliant."

Some people are hiding problems, even though it probably makes more sense to be honest. In the end, however, there are strong incentives NOT to lie about Y2K.

-- Ken Decker (kcdecker@worldnet.att.net), November 30, 1999

Answers

Mr. Decker,

While I agree with you overall, I think you may have overlooked an aspect of this phenomena over which no single IT Professional, nor the whole lot of them have power to effect, and that is the systemic nature of the links among networks. Indeed, it is this vulnerability, rather than the actual "y2k" phenomena singly, that alarms me. The sheer scale of it.

When I imagine that there could be disruptions of significant proportions across multiple States here and even more problematic ones abroad it is easy for me to imagine that single companies, even multinational companies, which go down and escape litigation of prior disclosures to be small news.

I can also imagine with no difficulty a company, who may have done some work in order to prepare, even a lot of work, feeling confident enough to say little and "wait and see." Especially given that, in the event of cascading defaults of various types (and the margin of error for for avoiding rather than witnessing a cascade or something of this nature which becomes widescale and disruptive seem small to me) the cascade itself can be blamed, and in court who would argue the opposite?

Of course, if there are minor disruptions, and individual companies do crash and encounter serious disruption to the point of bankruptcy, there again the entity itself is given an out by the system.

Just a thought.

M

-- m (mat_dc@hotmail.com), November 30, 1999.

It isn't a lie if you believe it.....

-- Jim (x@x.x), November 30, 1999.

being "Y2K Ready" has nothing to do with the computers being compliant. As long as a "good faith" effort has been attempted, everyone's ass is covered. I just do not have alot of faith in the "good faith effort" or the established "work arounds". And if you haven't noticed......NEITHER do the governments, or the industries themselves. Clinton didn't build a 50 million dollar y2k communications center, just tell us all..."see, I told you so, no problem!"

-- Vern (bacon17@ibm.net), November 30, 1999.

"We are Y2K Ready!!", but if the power goes out, or if our suppliers aren't ready, or if ....

I think businesses already have plently of strawmen to blame if they experience problems ("The 'evil programers didn't fix'em right, etc", and they also already have a nice fat new law passed this summer that helps limit their liability in Y2K litigation.

As for the statements concerning Y2K Readiness, plently of businesses currently project growth figures for upcoming quarters, and Alas... some are forced to admitt that they may not meet the street's expectations. You can bet that they wait till the last minute to divulge that tidbit of information. True some companies have lied about Y2k, maybe not about what they know, but rather about what they don't know. Conversely, some have spoken the truth about their risks, ie .. IBM, and suffered for it. Go figure..........

-- MMireles (MMireles2@hotmail.com), November 30, 1999.

Keep in mind, there is a MAJOR difference in liability concerns for a statement of "Y2K Ready" as opposed to "Y2K Compliant". "Ready" could denote a position of ready to deal with associated problems. "Compliant" infers "meeting a written set of rules or standards", in todays understanding.

Besides, it is so easy to play on words. If a corporation were to state it were Y2K Ready but yet didn't meet compliancy standards, their defense could be that they actually did not mean compliant but instead were positioned to handle those Y2K problems as they arose, with good chance of success.

Does this seem far-fetched ? It worked for Willie when he told the Grand Jury that his interpretation of sex was not the same as theirs. If I recall, he walked away from that accusation. It's a matter of perception and it is VERY tough to argue perception in a court of law. These corporate attorneys have already thrashed this about, I would betcha. Any further contributions to this line of thought ?

-- Rob (maxovrdrv51@hotmail.com), November 30, 1999.

Ken

Actually since the Greenspun board screwed that up I am not going to go further in this :o) I will get Diane or one of the other sysops to delete the above. Best laid plans of mice and men.

There maybe another way to get my point across.
[ fixed. Fixers.R.Us #3 ]

-- Brian (imager@home.com), November 30, 1999.

Don't forget the arrogance of a lot of senior mamagement: "I ordered it done, therefore it is."

-- ivan (ivan1776@ivnet.net), November 30, 1999.

Ken, I don't have all the info I would like about insider selling, but I do know that Bill Gates and one of the other "heads" of Microsoft sold about 15,000,000 shares this year. They cashed out, apparently to launch another company. In other words, they took out real money, and again are asking Joe Public to give them their real money inexchange for paper, i.e. stock. I'm sure someone who tracks this could come up with a lot of telltale insider moves.

-- Gregg (g.abbott@starting-point.com), November 30, 1999.

There doesn't have to be any "all knowing, all seeing" conspiracy from top to bottom. (This is a big POLLY myth that there has to be such a level of involvement.) Merely "fudging" and "filtering" at each level. The rule has always been: CYA. For example, as long as the project manager has memos from each project leader assuring that the job is done, no further digging is needed. Likewise, the project manager's memo to his management assuring that the job is done is likewise handled. This is in fact "business as usual", and is responsible for the old saying, "There's never enough time to do it right, but there is always enough time to do it over." Not with Y2K, however.

Tell the truth NOW to the stockholders to avoid FUTURE SHOCK? What planet are you on, Ken? Besides, there is always that slim chance that things really will work out OK, you never know. Maybe "the invisible hand of Adam Smith" will take care of things, maybe the hand is smart enough to re-write code. Now, THAT would be a MARKET-DRIVEN MIRACLE. LOL!!!

-- King of Spain (madrid@aol.cum), November 30, 1999.

Claims of "Y2K Ready!" or "Prepared for the New Millenium!" are NOT the same as saying fully compliant. They are careful constructions, sanctified by lawyers, which will mean whatever the lawyers want them to mean, whenever they need to use them. VERY VERY few companies have shown the testicular fortitude (or perhaps hypertrophy) of, for instance, Dolar Bank out of Pittsburg, who has indicated in their literature that they started in 1996, completed conversion and instalation of hardware and software in 1998 and have been running with tested and converted software for a year. They flat say they are y2K compliant, and ready to stay open REGARDLESS of the state of the power grid (generators at specific money centers and branches), or telecommunications net (portable ATM's) etc.

I applaud them. I haven't sen ANYONE else with that level of assurance standing up and being counted. Until I see a company or industry stand up that way, I won't believe them. Use weasel words, as my IT mentor taught me, and you can make ANY piece of tarnished base metal look like gold.

chuck

-- Chuck, a night driver (rienzoo@en.com), November 30, 1999.

Get serious, folks.

Imagine you are a mid-level manager at a Fortune 500 company. You have inside knowledge that the Y2K remediation effort in your shop has failed or is about to fail. You know that since you are there you will be blamed and probably fired.

Now, shall you tell your boss about it? Or should you quietly put out your resume in this red-hot economy and find another job on your timetable instead of theirs?

That is the real corporate world.

So how do problems ever get fixed? Normally when the new guy comes in and can blame the problem on the old guy they can focus attention on fixing the old problem.

Unfortunately this time it will be during rollover by the time the new guy finds out what a mess there is.

This is the Age of Clinton. Lying is the coin of the realm.

-- cgbg jr (cgbgjr@webtv.net), November 30, 1999.

Mr. Decker, the cigarette industry has lied outright for decades about the addictive nature of cigarettes, about the danger of cigarettes, about additives. THEY LIED ON LIVE TELEVISION UNDER OATH BEFORE CONGRESSIONAL COMMITTEES. They lied in the courts. It was either lie, or it was their asses. You don't think corporations and boards of directors can lie now? Duh, please.

-- Kurt Ayau (Ayau@iwinet.com), November 30, 1999.

Ken,

It's much simpler than that. If a company comes out today and says "we won't make it" the stock immediately takes a nose dive AND they get slapped with a shareholder lawsuit for destroying the stocks value when nothing has happened yet. The alternative route, which I believe most are taking, is CYA through EXTENSIVE documentation of the remediation process and crossing their fingers and hoping for the best (not to mention a whole hell of a lot of wishfull thinking).

You can bet that there WILL be Y2K related lawsuits next year and all that documentation will come into play. Also, the reason there has been no insider trading is BECAUSE of the close monitoring. Big insider trades would certainly raise a few question marks wouldn't it??

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), November 30, 1999.

You're right in theory, Ken, but sadly naive. Lying is stupid and has a big downside. That doesn't mean they aren't lying. I firmly believe they are.

-- Mara (MaraWayne@aol.com), November 30, 1999.

---yes, and with the rise of laundered money and assets, leveraged buyouts, insider manipulations, offshore creative bookkeeping, altering of computer records, and the past history of various corps track records in congressional testimony, the sophistication of lying has grown to an art form now. That's why I still maintain that the joe and josephine grunt level programmers and engineers need to hard copy their work and memos to "up stairs" and come out of the closet NOW, cuz sure as God made little grey suited lawyers, you'll come out now OR LATER ON when the lawsuits begin, AND YOU HAVE TO SHOW UP IN COURT, and you're gonna be hung out in the wind and NOT with those really good expensive lawyers to help you out, either, because all your "bosses" are going to have those guys. Think about it, think your bosses are going to sacrafice themselves to save YOU? I sure wouldn't bet on that! Lemme see, some lawsuit in the future "Why, yes, Mr. prosecutor, my technicians and programmers assured me we were all compliant and they had run tests, look at these documents I magically have right here..."< P>THAT'S what's GONNA happen. Look back to history when big companies got nailed, how about eastern airlines? I got a story on that one. Think ANY of those fatcats lost a nickel? heck no, but my girlfriend and thousands of other workers there are still waiting on their last months wages and lost all their pensions. It's always the lower workers who suffer financial loss, they got you all buffaloed with "non disclosure" forms. Phooey. That's crap designed to scare you to support their malfeasance, they are planning on selling you down the river if they get sued. A contract works BOTH WAYS! You're not industrial spies, that isn't what this is about, it's not non disclosure if they are breaking the law about their status! You are a party to it if it can be shown that you knew about it and did nothinfg, or they can make it APPEAR via doctored records that you lied to them, so they -in "good" faith, reported ready or compliant status. If you show that they are lying about the state of their repairs you are doing the right thing, at least in my book, and millions and millions of greatful fellow citizens books. We all would LOVE you to expose the lying.

Am I getting any backup on this, or am I just out to lunch? I'll about stop floggin this scaredy mule if I am. How about it, non programmers?< P> zoggus

-- zog (zzoggy@yahoo.com), December 01, 1999.

http://www.newsbytes.com/pubNews/99/140049.html

Link

Y2K Problems Still Likely, Experts Say By Sherman Fridman, Newsbytes

NEW YORK, NEW YORK, U.S.A., 30 Nov 1999, 11:22 AM CST

As New Years Eve approaches there is still no agreement among pollsters, prognosticators, and pundits as to the catastrophic events, or lack of them, that will befall computer-dependent societies as clocks move beyond midnight to herald the arrival of January 1, 2000.

An informal public-interest coalition comprised of CIO (chief information officer) magazine, ISACA (Information Systems Audit and Control Association), and the Y2K Center headed by Dr. Ed Yardeni, has just released the third in a series of Y2K Experts Polls which purports to reflect the first-hand knowledge of the world's top Y2K professionals.

According to Gary Beach, publisher of CIO magazine, "One in five large companies is racing to finish (Y2K preparedness) by the end of December. Some are going to make it, some aren't."

Beach also expressed concern that there will not be sufficient time for companies to adequately test and verify their Y2K preparedness work. "This concerns me," he said.

The Y2K Experts Poll claims to be a real-time snapshot of Y2K readiness among large, global firms, with an average of 1,261 suppliers and over 1,000 employees. The inaugural poll was conducted in June, the second in September. According to Karen Fogerty, a spokesperson for CIO Communications, Inc., the results of all three polls are consistent and this, coupled with the fact that the responses were anonymous, give a high degree of confidence in the accuracy of the data collected by the Y2K Experts Poll.

According to the current poll, most firms are finished with their Y2K project work. Thirty-two percent report their Y2K projects were 100 percent complete, while 56 percent said that they were 91 to 99 percent done.

But, the poll also pointed out that many organizations are taking longer than expected to finish, with 57 percent indicating they need the last months of this year to finish their Y2K projects. This is an increase from 43 percent in September, and only 16 percent of respondents who felt that way in June.

Dr. Yardeni added a further word of caution by admitting that, by targeting large, global firms, the poll's sample was skewed to firms that should be in good shape. While acknowledging that most Y2K experts were optimistic, he did feel that there were some disquieting responses, such as the "numerous laggards in finishing the project and preparing contingency plans in time."

When asked about the readiness of their mission-critical systems, 59 percent of the respondents said that they expected these systems to function properly. However, there was the reported expectation that an average of 2 percent of the responding companies would experience failure or malfunctions in their mission-critical systems.

But, a separate report out today from RSA Companies - a Y2K technology resources provider - contains the caveat that standards and definitions of "mission critical" are highly subjective, and low percentage figures could be misleading.

While a majority of the Y2K experts polled by the coalition expressed confidence in electricity and telephone service, about one-third still expect problems in these areas. This is in contrast with the RSA Companies report, which concluded that this country's telephone systems appear to be well prepared for Y2K.

Most of the Y2K Experts Poll respondents have contingency plans for Y2K, and about one-third are implementing these plans. Michael Cangemi, former international president of ISACA noted, "It is clear these large businesses are expecting some form of disruption."

Thirty-six percent of the respondents believe that the Y2K problem is a non-event, and they are ignoring the hype, the poll found; but, over half of the respondents plan to stockpile extra food in their homes, with an eight-day supply being the average.

According to Dr. Yardeni, "The poll results suggest widespread optimism based on very little hard evidence." However, a further sign of less than widespread confidence is contained in the poll data indicating that about half of the respondents said they were required to be on duty the weekend of January 1, 2000, while one-third said they would be on-call.

The RSA Companies, with some exception, is also taking a cautionary approach. They have warned the public that small regional airports and distribution centers are not following a prudent timeline in regards to Y2K readiness, and that this could impact the small and medium size companies that depend on these facilities.

RSA also expresses concern about the federal government and the health care industry, stating that the federal government has yet to do end-to-end tests on roughly 40 major programs, including Medicare and state tax information exchange systems. In addition, RSA believes that many doctor's offices are not Y2K compliant and may not be able to receive payment from the federal government for services rendered.

In addition to being optimistic about the country's telephone systems, RSA also expressed confidence in major utilities as well as the transportation and financial sectors.

Further information on the November 1999 Y2K Experts Poll is available at http://www.peoplepolls.com/results/cio/111099.asp .

-- (New@News.Now), December 01, 1999.

Another valuable contribution from Mr. Cucaracha.

*30 Days* and counting, this guy wants to pontificate about the possibility of corporate lying......or not. Why not simply ask for help rearranging the deck chairs Ken? The picture behind you is crooked, would you fix it, I can't reach it from this lifeboat.

(chuckle)

-- Will continue (farming@home.com), December 01, 1999.

A lie is not only in the telling,but in the hidden silence.

-- Maggie (song bird@iwon.com), December 01, 1999.

William Shakespeare: "As You Like It", Act 5

JAQUES:

Can you nominate in order now the degrees of the lie?

TOUCHSTONE:

O sir, we quarrel in print, by the book; as you have books for good manners: I will name you the degrees. The first, the Retort Courteous; the second, the Quip Modest; the third, the Reply Churlish; the fourth, the Reproof Valiant; the fifth, the Countercheque Quarrelsome; the sixth, the Lie with Circumstance; the seventh, the Lie Direct. All these you may avoid but the Lie Direct; and you may avoid that too, with an If. I knew when seven justices could not take up a quarrel, but when the parties were met themselves, one of them thought but of an If, as, 'If you said so, then I said so;' and they shook hands and swore brothers. Your If is the only peacemaker; much virtue in If.

-- Risteard MacThomais (uachtaran@ireland.com), December 01, 1999.

Once again, please read my original post. Of course corporations lie. I had to chuckle about the example of tobacco companies. When your customers are a bunch of nicotine addicts... it's easier to treat them with contempt. The tobacco companies used money and political influence to extend their day of reckoning. After all, the Surgeon General's warning came out in the early 60s... and we knew tobacco was harmful in the 50s. Y2K cannot be postponed 40 or 50 years. And, believe it or not, not all companies are like the tobacco firms. How many regular readers of this forum actually interact with corporate CEOs and Boards of Directors?

There is an incentive to tell the truth about Y2K. And there is scant evidence of wholesale prevarication in the private sector. I have been watching insider trading and see NO EVIDENCE of a massive sell off. Do you think CEOs so stupid as to not want to take their profits before a crash? Do you think the IT pros would hold their stock options? Is there a single CREDIBLE Y2K whistleblower. Hell, even the tobacco companies had whistleblowers... and Y2K extends beyond a handful of companies.

How about some definitive proof of widespread corporate lying about Y2K...? Or is just another pessimistic speculation?

-- Ken Decker (kcdecker@worldnet.att.net), December 01, 1999.

As long as there is time left, why should a company announce that they have failed. No one wants to announce failure as long as there is a chance of success. Maybe most CEO's really believe that they can somehow get it done. They will have to announce their problems when the bottom line begins to be affected, but not before. We will know much more about the situation when first quarter earnings come out. Some comapnies will preannounce that they are having problems. In the case of the oil industry, the price of crude will tell us how things are going.

-- Dave (dannco@hotmail.com), December 01, 1999.

Here is one for you friend Decker. My company only now rolled out the "compliant" system. We are still fighting some problems, and finding that even the application which is supposed to be compliant is not without some manual configuration. At the same time we have had responded to a couple of hundreds of questionaires since the beginning of this year. Now you tell me -- what did we write in those questionaires?

Last week I had a thread called "How to defend yourself from Y2K questionaires". You will find it in Legal section.

-- Brooklyn (MSIS@cyberdude.com), December 01, 1999.

I have interacted with some CEOs and Boards of Directors of very large corporations. By and large, they are ethical, though they have an orgasmic attraction to exercising power over others (let's not go there).

The problem is that they are NOT tech-savvy (even personally, most can barely use a computer and STILL brag about it) and rely almost entirely on reports up the line. Even most CIO's are not tech-savvy. And both CEO's and CIO's have an instinctive distrust of their own programmers because it GRATES ON THEM NO END that they don't understand what these lowlifes are telling them about systems upon which the entire corporation relies.

I assume, purely based on personal experience, that most of the flat- out lying is coming from the government. With big biz, it is more a matter of wishful thinking and, until recently, a strong reluctance to spend serious money on a purely negative proposition ("we need to do this to stay in business"). Regrettably, the .gov lying is a strong reinforcement not to spend anything more than the bare minimum.

Milage varies and the truly excellent corporations have done far more than the minimum. They deserve to survive and prosper and they will.

-- BigDog (BigDog@duffer.com), December 01, 1999.

Ken Darling.... 2 points.......

1) We're still 30 days out.

2)

NEW YORK (AP) -- Kosmas Spiridellis, the top technology manager at the securities firm CIBC World Markets, may be precisely the sort of well-informed American who gives Y2K planners insomnia.

Spiridellis is the main fixer of millennium bugs for his company, but he still plans to withdraw a few thousand dollars in cash, just in case there are glitches that cause bank computers to misread Jan. 1, 2000, as 1900. ``We all have to be prudent,'' he maintains.

So much for the techies not being concerned.

-- hadmoregotbummpedoff (karlacalif@aol.com), December 01, 1999.

If the title had been "What NET incentives do companies have to tell the truth about Y2K?", the thread would have been blank once the title had been posted.

www.y2ksafeminnesota.com

-- MinnesotaSmith (y2ksafeminnesoa@hotmail.com), December 01, 1999.