That something could very well be a few corrupt individuals in the mid-level management at Apple. Just this past Friday Paul Shin Devine, one of the global supply managers, was arrested as part of a Federal investigation involving kickbacks, money laundering, and fraud. Also included in the 23-count federal indictment were about half a dozen Asian suppliers to Apple.  These suppliers do not make the iPod and iPhone but do make accessories for them.

According to the indictment Devine would pass information to these suppliers so that they would be able to make better decisions and negotiate more favorable contracts with Apple for their products. In return Devine received payments from these companies which he laundered through a front company in addition to several banks. In an effort to distance themselves from this Apple has also filed a separate civil suit against Devine.

Now this is not exactly Apple doing something unethical and seems to be only related to this one mid-level manager and third party accessories for the iPod and iPhone at this point. This indictment and investigation does raise some interesting questions.  We have to wonder if there are other operations like this inside the company either known or unknown.  One thing we have always found odd is how Apple seems to have such great freedom with both the Patent office and the Copyright laws in the US.  They seem to have immunity to the laws governing prior art and also existing copyright. When we first noted this we felt it could be more of Google CEO Eric Schmidt’s doing as he was and is a technological advisor to the government (and still acts as an advisor to President Obama).  But even after Schmidt has left the Apple Board they still seem to get some incredible leeway in their practices.

Some of this may change in the near future as there are rumblings of an investigation by the FTC (Federal Trade Commission) and DOJ (Department of Justice) into the Apple Eco System and their practice of locking everyone out of their devices. For many years it has been argued that requiring iTunes and using a proprietary format for video and music on the iPhone and iPod is anti-competitive. However, nothing has been done to correct this situation. It was not until Steve Jobs made several very public rants about Adobe Flash and then locked out the use of Flash for any and all iOS app development that things even began to change. I think that Adobe (another large and influential company) might have whispered in the right ears and with Apple and Google now competitors in the smart phone race (they make competing software) Apple might finally find themselves out in the open and no longer protected as they have been in the past.

For many this comes as a welcome change, Apple has thumbed their noses at open competition, fair and accurate advertising, free use and many other laws and practices that exist in the US. We have sat by and watched as Apple made claims of immunity to viruses, spyware, and crashes in their ads for their desktop systems (including notebooks) as well as claims of encryption on the iPhone when it did not exist (until the limited encryption on the 3G S and the finally real encryption on the iPhone 4). But that is not all that we have endured at the hands of Apple, recently with their “Antennagate” scandal we watched them attempt to mislead the press by saying all phones have a grip of death and use different statistics and limited information sampling to give a false sense of the real issue.  Maybe now, with the specter of an investigation from the FTC and DOJ looming Apple will be taken down a notch and like Intel and Microsoft (both of whom have been the subject of investigations and lawsuits) we will see them begin to compete on a more level playing field.