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Judging from the 70+ reader comments, many from present or former IBM employees, my last column about the arrest of IBM Sr. VP Bob Moffat on insider trading charges hit a nerve.  In a few hours I’ll be posting another column on a completely different topic, but I can’t let this one go without making one more observation.  It has been almost a week since Moffat was arrested and in that time, as far as I can tell, IBM has made no comment on the case to the press or even to its own employees.

Why no comment?  I’ve been wondering that aloud for the last day or two, asking my friends and almost anyone I meet why IBM would be so foolish not to at least issue a press release on the arrest?  After all, the company supposedly cooperated with the SEC investigation.  They should have known the arrest was coming.  Why weren’t they ready with at least some statement reaffirming corporate values or possibly distancing themselves from Moffat?

Doesn’t IBM management owe that to its 398,000 employees?

They removed Moffat’s bio from the IBM web site, but that’s all.

Lack of comment suggests Big Blue doesn’t know what to say.  Perhaps the company is paralyzed. Maybe there is disagreement in the executive ranks about how to handle the problem.  Maybe Moffat, himself, was the guy who would have helped craft any response but now he’s unavailable.  Beats me.

But it doesn’t smell good.

My Mom, who is 85 and, like me, doesn’t own any IBM shares, may have put it to me the best.

“My guess is that this isn’t over,” she predicted.  “IBM could declare him innocent until proven guilty or they could write him off, but the fact they have said nothing at all means there are probably more shoes to fall. They could announce an investigation to ferret out others who made the same mistakes, whether those others exist or not.  And that’s what they would have done, had all the remaining guilt lay below Moffat’s level. But it probably doesn’t. I’d look upstream.”

Mom is a clever girl.

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I have no idea whether IBM senior vice-president Bob Moffat is guilty of insider trading or not, though that’s what he was arrested for yesterday.  What I do know is that Moffat’s job since 2005 has been as the architect of IBM’s project called LEAN, which is intended to adjust Big Blue’s global labor force to maximize profitability. I’ve written quite a bit about LEAN, much to the consternation of IBM, characterizing it in large part as a way to replace expensive older American workers with younger and cheaper workers in India and Argentina while cleverly dodging U.S. age discrimination and possibly other civil rights laws.  Whatever the legality of LEAN it is downright mean and shows little respect for the people who made IBM what it is today.

What does it say, then, when the architect of LEAN is arrested for alleged insider trading?

The good news, I guess, is that he was caught. The rest of the news is bad.  If Moffat is guilty as charged then it shows serious ethical and moral lapses at the very top of IBM (Moffat has been mentioned as a possible successor to IBM CEO Sam Palmisano). Even if he is proved innocent Moffat is still guilty of poor judgment in his choice of friends and of being a blabbermouth.  Since Moffat is being charged, in part, with insider trading of IBM’s own shares, then LEAN itself should probably come under some scrutiny as a possible tool for generating insider profits.

Worst of all, this might well turn out to be yet another example of parasitic management using the power of the corporation entirely for self-enrichment.  There is no insider tide that raises all boats.  There is no insider trickling down, except perhaps in the manner of honor among thieves.  Moffat and his gardener may have benefitted, the latter by getting to mow twice per week instead of once, but the rest of us — and certainly the 398,000 other people who work at IBM — are no better off for his alleged actions.

So Moffat is guilty or he’s stupid, neither of which says much for IBM.