Why is a good ethical foundation especially important for public servants? What makes them so different from private employees?

You are a manager of a retail store. The owner of the store gives you permission to hire a fellow classmate to help out. One day you see the classmate take some clothing from the store. When confronted by you, the peer laughs it off and says the owner is insured, no one is hurt, and it was under $100. "Besides," says your acquaintance, "friends stick together, right?" What would you do?"