Whole Foods' CEO Throws Ethics Out Window, Where is the Media and Blog Outrage?

The anonymous postings of Whole Foods CEO John Mackey slamming a smaller competitor, Wild Oats, as reported in the Wall Street Journal, have certainly been the fodder of much media and blog discussion the last two days. The basic facts of the matter are not in dispute -- Mackey admits on the Whole Foods news site to years of venomous posting against Wild Oats under the pseudonym "rahodeb." He says he did it because "I had fun doing it," and that he "never intended any of those postings to be identified as me." To that last point we can be sure -- he never intended to be exposed.

But something is missing from all the coverage to date. Neither media nor the blogs have jumped into the story with the same fervor they would have if say, the CEO of Exxon or Wal-Mart had done the anonymous attacks. Here's the story as reported by ABC News. Obligatory comments from experts criticizing the lack of transparency to be sure, but it's all downplayed as "not exactly new news" considering such past ethical violations as the Wal-Mart-Edelman flog.

Where was Diane Sawyer asking Mackey if he planned to resign as she asked the President of Virginia Tech the morning after the VT massacre? 

That Mackey's behavior was irresponsible is without a doubt. Whether it was also criminal is a key issue: Mackey deliberately used his anonymous attacks to hurt his competitor, and likely to drive down its stock price in advance of Whole Foods' attempted takeover of Wild Oats. That's worse than shady behavior.

So why haven't journalists and bloggers rushed to condemn this unethical behavior? Why has Mackey's lame excuse -- that it was harmless prankish behavior -- played without criticism.? Don't you think the "Wal-Marting across America" flog was pretty tame by comparison?

The kid gloves treatment Mackey has received to date is clearly a case of media archetyping. Whole Foods has been a poster child for good behavior -- entrepreneurial company, organic food, environmental social responsibility, etc. This type of company plays the "good guy" in archetypical reporting, both in the media and in the blogosphere.

There is so much to genuinely like about Whole Foods. But the serious ethical (even if they don't prove to be technically criminal) violations of its CEO should not be swept under the rug. There should be a blog storm calling for his resignation whether or not the FTC (or SEC) seeks criminal charges against him.

So let's get it rolling. John Mackey needs to resign or be fired. Period.   

- Jon Harmon

Comments

[Lee D]

Where's the outrage, you ask?

I don't know about outrage, but I've got plenty of mockery:

http://businessopinions.blogspot.com/2007/07/did-whole-foods-ceo-john-mackey-troll.html

[JonH]

Half Sigma (and to others who wonder what was so wrong about Mackey's "rahodeb" postings):

Mackey admits to thousands of posts over four years on a Yahoo! chatboard for stock investors - an average of four a week. Rahodeb was well known to the Yahoo! board regulars of course; he was known as someone with a great deal of information and obvious interest in Whole Foods' stock. He was an unabashed chearleader for Whole Foods, predicting dramatic stock price rises, and he also was a shameless basher of Wild Oats, often ranting against what he described was an over-valued stock price. Then Whole Foods attempted to take over Wild Oats, offering to pay more than three times what rahodeb had ranted was an over-valued stock price.

This is called intentional manipulation of the stock market. Maybe it will all make sense when the SEC spells it all out in a criminal indictment against Mackey.

Less serious but equally telling about Mackey's ego, he has on his own blog for months and years been holding himself up as the paragon of transparency while deriding his critics as enemies of transparency. His last rant came just days before it was revealed that he had for years been hiding behind a veil of anonymity posting self-congratulatory praises of himself and his company, and viscious attacks against a competitior he would try to take over. This is all the behavior of a classic narcisist. And true to the form of the narcisist, he now believes everyone is picking on him, when, in fact, he is so far getting off remarkably light.

But we'll see. Neither the FTC nor the SEC take kindly to stock price manipulation.

[Richard Becker]

Jon,

Thank you so much for sharing this link on our write up. This is precisely one of the questions I will be exploring as well as it fits in with our prevailing concept that some personal brands seem to be more exempt than others from accountability than others.

"Why has Mackey's lame excuse -- that it was harmless prankish behavior -- played without criticism.?"

Because, I imagine, such behavior from him is to be expected. I am starting to believe, pending the next round of communication on his part, that only the SEC will able to remind us that what he has done may be no less criminal than insider trading. Yet, at the same time, regardless of my personal view, Mackey has managed to keep his head above water at the moment.

Great addition to the conversation. All my best,
Rich

[Half Sigma]

I'm not sure what Mackey did that was so horrible. CEOs are allowed to talk about their companies to people who don't work there, they do it all the time. And he did it on a public forum that any schmuck can read. I get a lot more worried about CEOs having private conversations with big investors, leaving the little guy completely out of the loop.

[Kerfuffles]

John Mackey's days as the Blogging CEO of Whole Foods Markets are numbered, mark my word. In fact, his days as WFM's CEO are numbered.