The 5 Dumbest Things on Wall Street: Jan 7

1. Sign of the Apocalypse: Cheating of Charities Now Outsourced!

When a company sponsors a charity funding contest, it's presumably looking to reward good companies that are playing by the rules and to glean a little positive press. Pepsi somehow managed to do neither.

In this case, Pepsi's(PEP) charity funding contest, Pepsi Refresh, has apparently been exploited by a shrewd animal rescuer and a shadowy figure from India known only as "Mr. Magic."

Couldn't make this up if we tried.

Indeed, according to an article from the New York Times, the Pepsi Refresh contest, which grants up to $250,000 to charitable organizations, has fallen victim to voter fraud. The Times' account says that a woman who runs an exotic animal sanctuary in Hawaii discovered that a fellow animal lover, this one of cats, beat her out in the contest by employing the services of one "Mr. Magic." Based in India, this "Mr. Magic" (we like the name so much, we're just going to keep typing it over and over) apparently helped stuff the ballot boxes from overseas in violation of the contest rules. In return, "Mr. Magic" received a cut of the winnings.

Basically, the company outsourced the cheating of a charity contest to a firm in India. We have a hard time keeping count, but that's morally wrong on at least three levels.

For its part, Pepsi has been fending off such claims since the program started, and is refusing to admit that it has been hoodwinked by a vote-bot. The company says it employs a third party company to audit the results and that everything is just A-OK.

Well, the Times got Mr. Magic's email address and dropped him a line. Mr. Magic, being a polite guy, was kind enough to respond: "We would not like to disclose our tube Web site because this would be negative PR as we are using it to win charity contests," he said in an e-mail to the Times.

TheStreet Says:Looks like Pepsi is going to need to audit the auditors.