SECTION 3. Why do the bad guys win? A psychiatrist looks for some answers

The only thing necessary for the triumph of evil is for good men to do nothing.

-- Often attributed to Edmund Burke (1729-1797), but probably anonymous

Every profession has its bad apples. Law, medicine, architecture, accounting, real estate they all contain members who are an embarrassment to the vast majority of honest, ethical practitioners. In analyzing the myriad reports of victimized home owners, I am struck by how often the underlying, root cause in most horror stories seems to be 'bad people'. I don't mean the honest builder who makes a mistake. We all make mistakes. I mean those people who are dishonest, mean spirited, deceptive, deceitful; people who make mistakes and lie about them. People like our developer, Jake Cooper.

These people would rather spend money on lawyers to fight you instead of investigating your complaint or fixing the problem. They seem completely unconcerned about their reputation or your satisfaction. These are people who, because of deep seated psychological flaws, seek to hurt customers who complain instead of trying to help them. I believe that 'bad people' are responsible for much of the heartache and emotional trauma suffered by victims of defective construction.

Why do bad people get away with hurting others so easily, with causing so much trouble? The problem, of course, is not confined to the housing industry. Many best selling books have recounted the greed and dishonesty of people in the business world, of how they get away with their unethical behavior, and of the lawyers who help them succeed. Read these books for a flavor of what you are up against when the people selling you a product prove dishonest, or when they hire lawyers to fight a legitimate complaint. Several books of this genre are listed in the Bibliography.

These books cover such topics as the savings & loan scandal, Wall Street buyouts, stockbroker dishonesty and bank fraud. They are about complex dealings that involve lawyers, bankers, accountants, real estate executives, politicians and, above all, innocent people getting hurt. Some people see these stories as exemplifying the Greed of the 1980s. Others find in them signs of the decay of civilization. Still others see nothing more significant than a few bad guys getting caught with their hands in a gigantic cookie jar. Different people will no doubt come away with varying perspectives after reading these books.

Here's what I glean from the stories told in these books. Except for the most egregious of the players, like Dennis Levine, Michael Milken, Ivan Boesky, Charles Keating, and Robert Maxwell, most businessmen get away unscathed with unethical behavior that lines their pockets at the expense of innocent victims. Read these books and you will see that only a tiny percentage of the bad guys ever get caught or punished or penalized financially. The vast majority of unethical dealers get away completely with their chicanery. And the victims? Most of them never recoup anything more than a fraction of their losses. Billions lost to the S&L failures. Billions lost to BCCI. Billions lost to Drexal Burnham. And where do these billions of dollars come from? From thousands upon thousands of innocent people.

Of course, defective construction is seldom the result of conspiracy or fraud in the legal definition. People become victims when bad guys screw up and refuse to follow through, honor a guarantee, or make good on their work. Instead of outright, provable fraud, the root causes are much more mundane: incompetency, greed, inability to admit a mistake, lying, mean-spiritedness traits that are often displayed by 'bad people'.

Our architect and builder were incompetent by anyone's standard, and could not admit their mistakes. Our developer was greedy and provably dishonest. The defendants' lawyers did nothing meaningful to resolve the dispute or investigate our complaints. At no time was a realistic and honest offer made to fix our house, or satisfy our complaint. In any major dispute over defective construction, when the root cause is bad people, you will find a similar set of players, and similar consequences for the homeowners.

The arch villain in our case was the developer Jake Cooper, who profited by his unethical behavior. In philosophy, if not in style and methods, he is like other unethical businessmen whose actions are chronicled in the modern best sellers. The message to Cooper and other businessmen of no integrity is apparent: if you can profit by misrepresenting a guarantee or reneging on a contract, your chances of penalty are almost zero. That's the message I read in these books and in our trial judge's decision. It is a sad, sad message for America.

Our developer's 'quick-profit-no-responsibility' plan was stalled by our lawsuit, but not for long. He didn't make the quick second profit no doubt expected when he bought the house back, but I am confident he didn't lose money either (especially considering his $50,000 profit the first time around). Nor, I feel certain, did he lose any sleep in the three years between our first letter asking for his help (December 1986) and the time he re-sold the house (March 1990).

This experience was a true mid-life crisis for me and my family. To Jake Cooper the litigation was only a minor annoyance, like a mosquito at a picnic that you finally brush away. Unhappy homeowners, angry letters, lawsuit, depositions, a trial all are part of doing business as a builder and developer. No big deal.

Businessmen like Jake Cooper hurt others and feel no pain while doing so. They can make money by deceiving people or reneging on contracts, careful to avoid breaking any specific laws. If they have to go to court for breach of contract, that is only a civil (as opposed to criminal) matter, and just part of the routine of doing business.

You can get five years in the slammer for stealing a loaf of bread from the neighborhood supermarket, but if you "steal" a thousand loaves of bread by reneging on your contract there is no penalty. It is not 'against' any law to breach a contract, or to deceive homebuyers with promises you don't intend to keep. The same is true, of course, with virtually all types of consumer misrepresentation. A dishwasher and a house are treated the same in the eyes of the law.

So while it may be unethical, immoral, or abhorrent to sell a defective house and renege on all promises and written guarantees, it is not illegal. (In virtually all jurisdictions you have to prove outright fraud -- intent to deceive -- to have an illegal situation. The judge in our case did not accept that Cooper intended to defraud us, despite his lying and malicious behavior before the trial, and his total denial of all responsibility.) Because it is not illegal to breach a contract, even with malice, Cooper was able to convince himself and his cronies that they had done nothing wrong, as if deceiving others and lying is what decent people do all the time.

Why do the bad guys win? The answer is simple. If they can make a buck by hurting someone, and their actions do not clearly and unequivocally violate criminal law, they will get away with it. They know that no one will stop them. Our society is so burdened by examples of unlawful, unethical, immoral and deceitful behavior, on so many levels, that absent a criminal prosecution, perpetrators of such behavior have nothing to fear. Not civil litigation, not government regulations, not peer disapproval, not social ostracism.

Good people -- you, me, and the vast majority of Americans who do not profit by lying and deceiving -- are daily bombarded by stories of greedy politicians, businessmen, lawyers, and others. We shake our heads, wish it weren't so, and hope "someone" will do something about it. With rare exception, no one ever does. And that is why, also with rare exception, bad people come to be rewarded by their bad actions. They are free of the psychological barriers that keep good people from lying, cheating, reneging, deceiving. And they do not worry about retribution, because there will be none. They have learned to profit by behavior that would turn the stomach of most decent, honest citizens.

As a psychiatrist I can perhaps explain something about the psychology of bad people like our developer, what makes them 'tick'. This information may help you avoid the pain we endured. Although we didn't realize what we were up against until it was too late, you may find earlier clues in the people you deal with.

In my professional opinion, Cooper's behavior in our case is typical of people who inflict pain on others without feeling pain themselves. Chances are you have run into this type, known in psychiatric jargon as the sociopath or "antisocial personality disorder." A personality disorder is a pathological (not normal) `equilibrium state' in which the individual displays both occupational and interpersonal dysfunction. The antisocial personality maintains his (or her) state of equilibrium by inflicting pain on others, and feels no pain while doing so. The most extreme examples are serial murderers, rapists, and chronic child or spouse abusers.

The disorder can manifest in less extreme ways. The vast majority of these "bad people" people who hurt others without feeling pain are certainly not murderers or rapists or criminals in any sense of the word; instead, they have what psychiatrists call an antisocial character trait, a tendency toward antisocial or deviant behavior that arises in certain situations.

For example, we heard nothing about Cooper's lack of business integrity before our dealings with him. His antisocial trait became apparent when he was faced with the choice of acting responsibly (and risking the loss of money) or acting irresponsibly and inflicting pain on others (us). He utilized the coping mechanism of flagrant externalization (he lied and blamed us) when he was proven to have breached his contract and was publicly exposed.

The equilibrium of people with the antisocial personality trait is maintained by taking advantage of others, hurting people needlessly, telling obvious lies, being physically or verbally abusive, etc. Such behavior helps these bad people to maintain their psychologic equilibrium. Only their victims feel pain.

People with the antisocial personality trait lack "conscience," or what psychiatrists call the superego. In psychiatric jargon, these people have "holes" in their superego. If you end up in an argument with such a person it is best to understand early on what you are up against. You can't fight these people, except in a narrow legal sense, because they feel no pain or guilt for their dishonest behavior.

The thing that matters the least to this type of person is you, your feelings, your sense of injustice. Don't waste time hoping he will change behavior or attitude because of your pain, suffering and anguish. He won't. Finally, don't rely on his good will or sense of decency to do the right thing. If you have been hurt by someone with antisocial tendencies, understand that he (or she) is beyond feeling any pain, remorse, or guilt for what he did to you. If you try to reason with him or appeal to any sense of decency or ask for succor you will just be hurt further. That is a path to total frustration and self defeat.

What are signs of people with antisocial personality tendencies? Here are some strong indicators:

• They don't return your phone calls or answer letters, even when they have a moral or ethical obligation to do so.
  
• They make no attempt to reason with you, explain their actions, or negotiate honestly.
  
• They lie about you to others. Not white lies, but blatant, provable lies, often blaming you for a problem they created.
  
• They don't care what you say or to whom you say it (unless what you say costs them money). Their behavior is unchangeable by anything you say or do.
  
• When recounting events concerning a dispute (e.g., in courtroom testimony, press interviews, or conversations with mutual acquaintances) they present convincing revisionist history; the story they tell is apt to be a "believable" but gross distortion of the truth, designed to suit their purpose and maintain psychological equilibrium.

Integrity can be defined as doing the right or decent thing when you are not compelled by any law or social pressure. Cooper's sociopathic behavior translated into a lack of integrity in our case, and that was our undoing. Certainly a developer with any integrity would have acted differently, would have come in, examined the house, talked to us, helped mediate a settlement, explained his position, sought a resolution. Cooper did nothing despite his solicitation of our business, his verbal promises, a written contract, and a handsome profit he made on the deal.

I've explained why a bad person like Jake Cooper behaves in such a manner. But how did it come about that he profited by such behavior? How can this happen in America, that innocent people buying a new house lose money while the guilty party profits?

Do we blame our contract lawyer? Sure, for without a doubt his contract was worthless to our purpose. Do we blame our litigator? Certainly our plight was not his fault, and he did work very hard on the case. But was the abysmal outcome the result of bad legal advice? We'll never know, of course, but his strategy did somehow lead us into a no-win, money-losing legal situation. We are still not sure what strategy might have provided a fairer outcome.

Perhaps our litigator should have come to realize before the trial that the Judge was not sympathetic to our plight, because of numerous pre-trial hearings that went nowhere, and insisted on a jury. Or perhaps he should have pursued Cooper for malicious breach of contract or fraudulent misrepresentation, and not expended his efforts (and our money) against Cooper's incompetent cronies. Or perhaps he should have had us plead for the costs of repair and damages, instead of recision of the contract. Who knows if a different courtroom personality, or a different legal strategy, would have lead to a fairer outcome?

Do we blame ourselves? Yes, but only for being so trusting, and for not being more careful in choosing our builder, architect and contract lawyer. The plain truth, though, is that we were probably more deliberative than nine out of ten people who build a new house. It is just that we needed to be ten out of ten when up against someone like Jake Cooper.

Early on in this case Cooper realized that he could profit by lying and reneging. The ineffectiveness of our lawyers contract and trial and a compliant legal system first made his behavior possible, then made it profitable. We had never done business with such a blatantly dishonest businessman, but that is probably because we don't do much business, at least not the type that involves contracts and large sums of money.

Business people tell us that the Jake Coopers of the world are a dime a dozen, that reneging on contracts happens all the time in business transactions. In the business world, they say, you come to expect this sort of thing from a certain percentage of people. One must assume, of course, that there are plenty of sociopaths in the business world. Viewed simply as a business deal, perhaps what happened to us is not all that unusual.

What made it so painful for us is that this was our home, one we had nurtured from the ground up. The defects were not in some office building or warehouse, but in the place where we live and raise our three children. Our emotional attachment to this particular `business deal' was completely lost on the men who desecrated our home, and on their lawyers.

We always knew in a general way that this was a business deal (hadn't we gone to a contract lawyer to be protected?), but never seriously considered that someone would openly and brazenly breach his contract for further profit and get away with it. But it happens. Perhaps our story will sensitize you to two sobering facts:

1) That new house you buy is your home, but just another business deal for someone else.

2) There are plenty of bad people in the business world.