No matter how many times I hear about this, it’s something I just don’t get: Why do some big-time executives need to lie about academic degrees they never earned?

This topic is in the news again now that The Wall Street Journal has found that the chairman and CEO of gaming giant MGM Mirage has been lying about earning an MBA in finance from the University of Southern California.

According to the Journal, “J. Terrence Lanni, one of the gambling industry’s most powerful figures,” is stepping down from his executive posts after the newspaper started asking questions about Lanni’s academic credentials.

Although Lanni did graduate from USC with a bachelor of science degree in business back in 1965, he never earned the MBA in finance that is listed for him on the MGM Mirage Web site, according to USC officials.

And like all of these academic credential stories, this one follows a predictable pattern: When the executive is confronted by a long-standing but unsustainable academic claim, he changes the story a little in the hope that will help matters, even though in reality, it only makes things worse.

“Lanni said he took a series of classes toward an MBA, but didn’t finish because he went to work instead,” the Journal reported. “But he said he was awarded an honorary MBA from USC in 1992 when he was named Alumnus of the Year by the business school. ‘I understood I was given an honorary degree,’ he said. At USC, [a spokesperson] said the university’s list of honorary degrees didn’t include Lanni either.”

Another predictable part of this episode is the standard-issue claim that the lying excecutive’s departure has nothing to do with the foolish lie being discovered.  “Lanni, who is to leave Nov. 30, said his resignation was for personal reasons. … Lanni said, ‘I must stress that this issue has nothing to do with my decision.’ ”

This is a foolish fib that makes no sense. Lanni is, by all accounts, a stellar executive who “joined [the company] in June 1995 as president, chief executive and a [company] director,” according to the Journal. “He guided the company through periods of unprecedented growth, including mergers with Mirage Resorts and Mandalay Resort Group, [and] he was also instrumental in expanding MGM Mirage’s reach into the Middle East—personally negotiating a landmark partnership with Dubai last year that led to a $5 billion cash infusion from the Persian Gulf state’s investment arm to buy half” of MGM Mirage’s huge CityCenter project and a stake in the company.

I don’t know why Lanni did this, because whether he earned an MBA or not would seem to be inconsequential in the larger arc of his long career. But here’s my guess: He added the MBA reference to his résumé many years ago, when he felt it might help him. And then he forgot about it. After time went by, he couldn’t remove it since the reference had been on the résumé for so long, but on the other hand, he thought it would never be checked out. In his mind, it didn’t matter.

Problem is, it does matter. Lies and cover-ups always seem to bite people in a big way, usually much more than the original transgression itself. In fact, Terrence Lanni missed a golden opportunity to stand up and actually be held accountable here.

He could have set himself apart from people like Richard Fuld and all those Wall Street executives by saying something like: “You know, I put this on my résumé a long time ago when I felt I needed to, but it was wrong then and it’s wrong now. I don’t think it makes me any less of an executive or manager, but I should have never done it because lying is always wrong, even if I thought at the time that I was doing it for a good reason.”

Wouldn’t you love to hear an executive do that? I would, because I believe it would help restore some well-needed confidence in our corporate executives at a time when many of the people working for them believe that the top managers don’t live up to the company values they try to push on everyone else.

The problem with executives lying (or anyone lying, for that matter) is that it makes people think that if you lie about one small thing that you’ll probably lie about anything. That’s kryptonite to a company’s culture. It kills trust and destroys careers.

J. Terrence Lanni didn’t need to pretend he had an MBA. He built a great and accomplished career without it. Unfortunately, all those accomplishments will now always be clouded by a lie that didn’t need to be told. In other words, all the great good can be overshadowed by the little bad.

It’s a sobering lesson for everyone and anyone tempted to fib. In this day of Google searches and background checks, a little fib can come back to bite you in a big way.

There was a time not all that long ago when fudging—or “enhancing”—items on a résumé or job application was viewed as a normal and acceptable workforce practice. Few companies did background checks in those days, and padding the résumé was viewed as a very minor indiscretion and nothing to get worked up about.

In fact, I can remember being a new college graduate looking for my first “real” job and getting counseled, by a number of people from college professors to working professionals, to pad my internship experience to make it seem more substantial and make me appear more hirable.

Well, that was then and this is now. The trend these days is not only to do background checks on prospective employees, but to dig deeper into an applicant’s credentials to make sure they are what they say they are. And, as this New York Times story from 2006 points out, the consequences of being dishonest about yourself during the hiring process can have career-altering consequences—unless you work for the County of Orange in California, of course.

Orange County is where the Workforce Management world headquarters is located, and we like to think that our presence here helps raise the bar for the various organizations and businesses that call our little slice of California home.

No such luck, I’m afraid. Here’s a recent story from the Orange County Register that is remarkable for two reasons:

1. It says that the county’s HR manual was so old (last revised in 1978), according to a report from the Orange County Grand Jury, that it still makes references to typewriters and rotary phones.

2. It also says that the Orange County Grand Jury found that “deliberate misrepresentation during the hiring/promotion process … may not be automatic grounds for dismissal,” according to the Register story.

Here’s the part of the newspaper story that floored me: “Specifically defined educational requirements in some cases are considered by some HR professionals in the county as ‘artificial barriers to advancement,’ the Grand Jury’s report says. Some [county] agencies do not bother to check educational claims made by applicants—if you say you are a Harvard MBA, as far as they are concerned, you are a Harvard MBA. If you state during the hiring process that you have never been arrested for DUI but you actually have been and it subsequently comes to light, your job is not necessarily in jeopardy.”

Sound pretty amazing? Well, here’s some more: “As improbable as it may seem, omissions and false statements are considered on a case-by-case basis. If you have been a good county employee, or your supervisor really supports you, or your indiscretion is not material to your job description, you will probably keep your job.”

I have never been one to push for a zero-tolerance policy about most anything, but this HR policy by the County of Orange seems to turn the notion of a “good county employee” on its head. How can someone be considered a good employee if they weren’t truthful and upfront with you when you were hiring them? And how can one assume that the “good county employee” who lied to get hired won’t lie again on the job about something a lot more important?

California likes to tout that it is on the cutting edge of workplace issues, but this is as regressive and backward of a human resources policy as I have ever seen. But I shouldn’t be surprised; after all, Orange County is also the place where you have senior executives defending all manner of indefensible, boorish behavior.

Letting employees lie during the hiring process is a bad HR policy in any organization or business anywhere. It sends a terrible message to everyone and, more important, says truthfulness and honesty are values that don’t much matter anymore. No wonder people have so little faith in their government—any government—these days.