Former CEO of the Failed Microworkz Has Failed to Learn the Lesson of Truthfulness

Don Tennant

I routinely get pitched by PR people to interview authors with new books coming out, and such was the case last week when I took the opportunity to interview Richard Keith Latman, author of the book, "The Good Fail: Entrepreneurial Lessons from the Rise and Fall of Microworkz." But this interview was different. This interview provided textbook examples of the deceptive behaviors outlined in another forthcoming book, one I happened to co-write: "Spy the Lie: Former CIA Officers Teach You How to Detect Deception." If the interview was a test of his truthfulness, Latman failed it miserably.

 

First, a little background is in order. Microworkz was a company that Latman founded in Seattle in the 1990s to sell low-cost PCs. Latman bit off way more than he could chew, and the company began taking orders and accepting payments for PCs it couldn't deliver. Microworkz died a very messy death in 1999, leaving a lot of extremely unhappy people who had paid for computers they never received. The Washington state attorney general's office filed a lawsuit against Latman, alleging deceptive business practices, and won a $1.5 million judgment against him. Latman filed for bankruptcy and never paid up. He was subsequently indicted by a grand jury for bankruptcy fraud, and a guilty plea got him house arrest and five years' probation, which ended last year. This March 2006 Seattle Times article provides more details.

 

The convicted felon went on to start two new companies - iMagicLab, a Baltimore-based provider of software for automobile dealerships; and Latman Interactive, which makes video games for mobile devices. Latman wrote "The Good Fail," which was released earlier this month, with the message that we need to learn from our mistakes and move forward in life. A "good fail," then, is one that enables you to gain more from the lessons of the experience than you lose from the ramifications of the failure.

 

What I took away from my interview with Latman is that one lesson he didn't learn from his experience is the lesson of how essential it is to be truthful in life. I came to that conclusion in my capacity as a partner in QVerity, a company that provides training and consulting in deception detection and critical interviewing techniques, and as co-writer of "Spy the Lie." So I'll share and explain some of the deceptive behaviors I observed during the course of the interview.

 

The very first question I asked Latman was, "What did you learn about business ethics from the Microworkz experience?" It started off badly for Latman, because this was his response:

You know, it's funny, because when some people say the word "ethics," I think they mean, "intrinsically being honest." And I think the word "ethics" needs to be broadened, because what Microworkz taught was that ethics aren't just [about] whether you're telling things that are true, but whether or not you've actually gone through and done the requisite soul searching and measurement of whether what you're saying is, in fact, possible, whether you believe it or not. I think from an ethical perspective, the big lesson learned here is that you can try to change the world, that's fine; but you still have to have a semblance of reality that comes into your dreams, and certainly that wasn't there at Microworkz.

The deceptive behavior here is what we refer to as "failing to understand a simple question." Here's an excerpt from "Spy the Lie" that explains it:

When you ask a question, you often use certain words or phrases to establish boundaries that define the scope or magnitude of the question. If that particular wording traps the person, one strategy he might employ is to get you to change your phrasing or terminology. The aim is to shrink the scope or magnitude of the question, to give him just enough wiggle room to answer it to your satisfaction and to his. Perhaps the best-known example of this is the testimony of Bill Clinton before the independent counsel in the Monica Lewinsky case in August, 1997. During the proceedings, there was a reference to a statement that had been made by Clinton's attorney: "Counsel is fully aware that Ms. Lewinsky has filed, has an affidavit which they are in possession of saying that there is absolutely no sex of any kind in any manner, shape or form, with President Clinton." Clinton was asked whether that was a false statement. His famous response: "It depends on what the meaning of the word is' is. If is' means is and never has been, that is one thing. If it means there is none, that was a completely true statement." Clinton was trapped by the magnitude of the statement under question, so he was forced to try to shrink the scope of it so he could answer truthfully.

In Latman's case, he changed the scope of "ethics" from "intrinsically being honest" to a simple belief that what you're saying is possible, so that he could respond in a way that he found acceptable, and that would hopefully satisfy me.

 



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May 14, 2012 2:17 AM Liz Liz  says:

This man is flagrant politician gone wild.  Reminds me of Kwame Kilpatrick who writes a book on how he 'has seen the light' of his ways.  Owes the city of Detroit millions but, doesn't want the miniscule profits from the book to help repay the city!

How do they keep getting away with it, loopholes within the justice system growing into black holes?

Reply
May 14, 2012 10:39 AM Richard K Latman Richard K Latman  says:

Although it's sad to see someone take this kind of obviously biased approach to an "interview" it was no surprise to me. His "critique" of my book is nothing more that a self serving attempt to sell himself as an honest expert, as an "author" or as a, gasp, "journalist". I knew when I wrote this book there would be naysayers, there would be people who choose to twist words and remove things from context. All I can say to you folks out there is read the book and see, without this persons near-obsessive hatred, if you feel the same way. In the book I take clear responsibility for my mistakes but I will not bow down to the slander or the uninformed.

He compares me to O.J. Simpson, who murdered two innocent people in cold blood, need I say more?

Reply
May 14, 2012 11:23 AM Don Tennant Don Tennant  says: in response to Richard K Latman

Keith, you've very welcome to post comments here, but you need to be truthful. What you're referring to is this excerpt from my Amazon review of your book:

(BEGIN EXCERPT)

(M)y line of questioning that bothered him the most had to do with the $1.5 million judgment from the lawsuit brought by the Washington state attorney general's office that he never paid. I tried several times during the course of the interview to get Latman to talk about his failure to pay the money, but he repeatedly refused to answer, referring me back to the attorney general's office. Finally, I was able to break through.

'From an outsider's perspective, we're talking about two different issues,' I said. 'We're talking about the lessons learned from a fail, and that's one side of it. But then there's this whole other side that frankly, you're not willing to talk about: what a lot of people would consider doing the right thing, and making good on that $1.5 million.'

Phrasing it in terms of 'doing the right thing' was difficult for Latman to deflect. In an odd approach that was reminiscent of O.J. Simpson's chilling 2006 'If I Did It'  manuscript, Latman chose to respond in terms of a hypothetical scenario:

'I'll use hypotheticals for you, as opposed to exacts, because I promised that I wouldn't say anything exactly. But in hypotheticals, I think it's important to also learn that politics and goals of government, as well as of government civil servants, often correspond with the interests of the constituents in the community. And I think it would be nave for anybody to not assume that those two go hand-in-hand. And a lot of things that are done in government, I don't necessarily agree with. I'm not necessarily talking about this specific issue, but there are many cases of heavy-handed government officials going beyond their mandate, to do things that, in my opinion, are unjust. So when things happen that are unjust to an individual, it's hard to say that's a responsibility you have to continue to process something that's unjust.'

So if, hypothetically speaking, there was a $1.5 million judgment against him that he's not paying, he's not paying it because the goals of the civil servants corresponded with the interests of the constituents in the community, and he doesn't agree with what they did. Think about that. I have, and my conclusion is that refusing to abide by a decision of the state's judicial system because he doesn't agree with it, and then taking it upon himself to try to inspire people with the lessons he's learned from his failure, is one of the most arrogant, deceitful postures I've encountered in 20 years of interviewing corporate executives.

(END EXCERPT)

To make the claim that I compared you to O.J. Simpson, with no elaboration, isn't being truthful. It implies that I compared your criminal actions to the criminal actions of Simpson, and as you're very much aware, that's not true. I did no such thing.

As the full excerpt demonstrates, I wrote that your 'hypotheticals' approach to finally responding to my question was reminiscent of the approach O.J. Simpson took in writing 'If I Did It.' That is a fact. It is precisely the same approach, and I pointed that out to demonstrate a behavior that some deceptive people exhibit when confronted with a situation in which the facts are not their ally.

I trust that you will exercise more care in posting any future comment on my blog.

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May 14, 2012 11:31 AM Don Tennant Don Tennant  says: in response to Richard K Latman

One more thing. You accused me of twisting words and removing things from context. I don't like being falsely accused. I did no such thing. I would be more than happy to post a link to the full audio of the interview so you can back up your claim. Say the word and I'll post it right here. That way my readers can judge, too.

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May 14, 2012 12:34 PM George Alexander George Alexander  says:

Reminds me of R.Kelly when someone asked him about alleged flings with underage girls.

His response:

"Define underage".

Worst. Response. Ever.

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May 15, 2012 12:53 PM R. Lawson R. Lawson  says:

This has been quite a read. 

I need more information to draw any conclusions here.  The real question is if the deceptions are rehearsed and the intent is to mislead, or if it is simply misunderstanding the question or going on tangents in an answer.  The audio would certainly help.

As to your specific question regarding a judgement, I think that is a fair question. 

Most people convicted of felonies go on probation after serving time, and fines must be paid - or they are violated and sent to jail.  So was the bankruptcy something that legally expunged that debt?

A person has a choice.  They can choose to pay back the fine, forfeiting their gains from whatever crime they were convicted of, or they can opt not to.  Perhaps his choice not to pay was legal because of a bankruptcy, but it doesn't seem ethical.  If you are to later write a book on ethics, would you not expect people to demand an explanation for a past ethical lapse?

Personally, if I were Latman I would be thanking you.  I suspect that his book just got more publicity than he could have expected otherwise.  Intended or not, your blog entry will probably sell more of his books.  Hopefully he sends some of that money to the people who never got their PC in the 90s. 

Bankruptcy is basically a plea with the courts that "I cannot pay my debts, please have them legally expunged".  Legally your debts never need to be paid.  However suppose your luck in life turns around and now you can afford to pay past debt.  Do you think it is fair to the people you harmed financially that you not make things right?

That's the problem with many people.  They confuse legality with ethics.  I was watching a program yesterday on late term abortions.  Not a topic I wish to debate here, but the argument was that "this is legal, so it must be ethical". 

There are many terrible things I could do that are perfectly legal.  You may be free and clear with the courts and the law, but what about your conscience and if you believe in a higher power - what about that?  If not a higher power, can you explain your choices to your children, wife, or friends?

I'm not a particularly religious person (and I don't knock people who are) but I do have a strong sense of right and wrong.  It seems wrong that people don't correct their past misdeeds when they have a second chance to do so.

Perhaps I'm being hypocritical here because there are surely past deeds I should fix (if I owe someone reading this money or an apology, now is a good time to ask).  There are also people who wronged me over the years and an attempt to fix that would also be welcome.  I don't expect them to, but if they ever write a book on ethics I'll be sure to ask.

So my question for Mr. Latman is simple.  "You may be able to explain to the courts your actions and be in the clear.  Can you explain them to your maker, to your family, and look in the mirror and explain them to yourself?"  If not, at least man up and say "yep, I did something unethical".  You're human, so I can accept that as an answer.

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May 16, 2012 8:25 AM Richard Richard  says:

Don, your observations and comments are spot on.  As a former employee of Mr. Latman, I can tell you with certainty that he is nothing but a scam artist and a con man.

His unethical and deceptive business practices continue today.  You have exposed him for what he truly is.  A pathological liar and an ego maniac.  One of these days, and  hopefully soon, all this will catch up to him and he will get what he deserves.

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Oct 22, 2012 3:21 PM IT Guy IT Guy  says:
Don, I have to say that your characterization of Mr Latman is very accurate. I've had the dubious pleasure of working for him, and while I don't believe he was actively dishonest towards me, he was definitely living an incredibly opulent lifestyle for someone that's supposed to owe $1.5M. I can second the fact that he seems to be driving a new car everytime I saw him, he always had the latest Apple gadgets the day they came out, and he lived in a house that was like something out of the Fresh Prince of Bel Air. While I'm just a codemonkey, I had a hard time seeing, from what I was seeing in the company, how they were even turning a profit. Honestly, it was one of the most unprofessional IT environment that I've ever seen. While I was there they had shared root passwords, no long-term backup or recovery plans, no encryption on financial information, or audited access to production servers. Software updates were performed and tested on the same machine and database while real customer transactions were being performed. No processes, employee manuals, or standard operating procedures were written down ever. I didn't even have to sign anything other than a tax form the first day Reply

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