Looking Back on 2005
Posted by Brooke Shelby Biggs on January 2nd, 2006
Sure, sure, The New York Times is the voice of the status quo according to lefties, the bully pulpit of the liberal elite according to righties. But if corporate corruption, graft, greed, incompetence and influence-peddling are of concern to you - no matter your political stripe - you have to admit that a lot of stories used to fly under the radar of the Gray Lady are now frontpage news, and that is good news. Perhaps we can thank Kenneth Lay for that; what we at CorpWatch have long done just wasn't as sexy before he came along. Thanks, you big lug.
So here in the first week of a new year, we begin with a clean slate, ready for a year of customary despoiling. In reflection, let us review the year in corporate crime, courtesy of Gretchen Morgenson at The New York Times. (Or, of course, you could page through a few thousand of our favorite stories on the subject from the last 12 months ...)
Bechtel Fox in the Nuclear Henhouse
Posted by Brooke Shelby Biggs on December 22nd, 2005
The news today that the federal government had awarded the Los Alamos National Laboratory to the UC-Bechtel team should give us all pause.
After all, as CorpWatch noted when Bechtel was amassing huge no-bid contracts to rebuild Iraq (see "Profiting From Destruction"), the company's record with nukes is not exactly sparkling:
San Onofre, California, has a 950-ton
radioactive problem: a nuclear reactor built by Bechtel that nobody
wants. The unit was shut down over a decade ago in 1992 by its owners,
Southern California Edison, who preferred not to spend $125 million in
required safety upgrades.
The only place that will accept the reactor is a dump in South
Carolina but railway officials refused to transport the cargo across
the country. The next suggestion was to ship it via the Panama Canal
but the canal operators said no. So did the government of Chile when
the power plant owners asked for permission to take it around the Cape
of Good Hope.
The only option left is to ship it all the way around the world,
although even that is looking unlikely as harbor officials in
Charleston, South Carolina, are already suggesting that they may deny
the reactor entry. Edison officials are currently desperately looking
for a port that might accept the toxic cargo before the dump shuts its
doors in 2008. [...]
The local environmental costs continue to
mount every day as the plant sucks in huge quantities of plankton, fish
and even seals with the water to cool the reactors. It is destroying
miles of kelp on the seabed by discharging water that is 25 degrees
Fahrenheit warmer than ocean temperature, according to Mark Massara,
director of the Sierra Club's coastal program. [...]
Several former employees at the plant who have
developed cancer have also sued Bechtel and plant owner Southern
California Edison for exposure to radiation. It's a story that has
become depressingly familiar for dozens of communities living downwind
from nuclear plants that are seeing alarming increases in cancer.
Bechtel was also the contractor responsible for the biggest construction boondoggle in American history: Boston's Big Dig. Errors by Bechtel in planning and execution lead to massive cost overruns. As the Boston Globe observed at the time, "Yet, even as Bechtel's errors helped drive up the Big Dig's cost, the
company never paid for any of its mistakes. Instead, it profited."
Is this really the kind of company we want watching over the most sensitive and dangerous of projects?
While the award of the Los Alamos contract to UC and Bechtel surprised some, the company's long record of coziness with those in high government places even outpaces its rival for the contract, Lockheed Martin (which was to partner with the University of Texas to run the lab).
The Presidential Pipeline
Posted by Brooke Shelby Biggs on December 21st, 2005
The Pultizer Prize-winning and yet still oddly underappreciated Toledo Blade
ran a penetrating series this week on how specific Bush fundraisers
have seen their investments in the cadidate reap profitable policies.
It's worth a read as a primer on exactly how corporate executives and
lobbyists buy influence legally ... and sometimes not-so-legally.
example, Lonnie "Bo" Pilgrim is chairman of Texas-based Pilgrim's
Pride, the country's second biggest poultry processor, and a Bush
"Pioneer" (meaning he has raised over $100,000 for Bush. He freely
admits he asked the president directly for a favor in 2002. And quite a
favor it was: Pilgrim asked Bush to speak to Russian president Vladimir
Putin about dropping that country's ban on chickens imported from the
United States. Shortly thereafter, Russia opened its markets to
American chickens. Pilgrim's company has also collected $60 million in
federal monies since Bush took office for selling his birds to the
Department of Agriculture.
then there's MBNA, the massive credit-card company which eclipsed Enron
last year as the largest corporate patron of Bush's entire political
career. The company regularly let the Bush campaign use its corporate
jet. It was MBNA's generosity in Bush's campaigns that may have
persuaded the president to push through a revamping of the nation's
personal bankruptcy laws. The result: $380 million a year annually
toward MBNA's bottom line. (See CorpWatch coverage of MBNA here.)
Read the whole series:
- Presidential Pipeline: Bush's Top Fund-Raisers See Spoils of Victory
- Presidential Pipeline: Bush Money Network Rooted in Florida, Texas
- Presidential Pipeline: Kerry Backers Still Feel Sting of Losing 2004 Presidential Contest
US Lags Behind in Tobacco Regulation
Posted by Brooke Shelby Biggs on December 20th, 2005
It isn't new for the United States to fall behind the rest of the world on causes like global warming and arms control. But this week, news from the rest of the world reveals how much more seriously the tobacco problem is being addressed, even in the tiny, poverty-stricken country of Uganda.
The government of Uganda is considering banning all tobacco advertising in that country, because ministers consider the ads to imply falsely that smoking is an attractive and positive thing to do.
In China, the world's greatest consumer of tobacco products, the governors of Hong Kong may force several tobacco companies to change the names of their brands, because terms like "light" and "mild" imply that the cigarettes are less harmful.
In South Australia, the government is set to ban fruit-flavored cigarettes it claims are targeted to children. (You think?)
In the UK, the 2006 budget includes provisions for massive fines on tobacco companies whose product is found being smuggled anywhere in the world.
Meanwhile, back at the ranch ... a new study from a coalition of anti-tobacco groups shows that tobacco companies in the United States still spend $28 in advertising for every $1 they spend on anti-tobacco cessation and education programs.
After a series of high-profile lawsuits that mandated some of Big Tobacco's profits go to public service education campaigns, the industry has spent a lot of time and money advertising its altruistic side, while far less is being spent actually funding those community programs being hyped.
And there is always more. Just yesterday, a study showed that Indiana -- a major tobacco-growing state -- actually loses money because of tobacco.
Profits and tax revenue generated by tobacco production and sales is
far outweighed by the resulting costs associated with health-care and
decreased productivity due to tobacco-related illness and death.
But even with such evidence, tobacco companies are freer in the US than many other parts of the world. Appeals have shrunk the monetary awards resulting from those suits to negligible amounts, and tobacco again looks untouchable in this country. Last week the Illinois Supreme Court reversed a lower-court verdict penalizing Philip Morris over $10 million for defrauding customers into thinking its "light" cigarettes were less dangerous.
As ever, it keeps friends in high places to ensure that regulations like those in Uganda, China, and Australia do not happen at home. For example, Philip Morris and R.J. Reynolds reportedly supplied now-sullied Texas Senator Tom DeLay with their corporate jets as he flew from campaign fundraiser to campaign fundraiser.
From an Associated Press story today:
R.J. Reynolds let DeLay use a company plane at least nine times since
1999, once joining Philip Morris in making jets available for a DeLay
PAC fundraiser at a Puerto Rican resort in winter 2002. R.J. Reynolds
spokesman David Howard said planes are loaned usually at lawmakers'
request and are only done if jets aren't needed for company business.
much more convenient as opposed to your regular commercial travel,"
Howard said, noting there is no need to go through airport security.
R.J. Reynolds' planes, smoking is allowed and there are usually
beverages and deli-style food. There's more leg room and the
convenience of phones.
The smoking rule suits DeLay, who likes
to chomp on cigars while golfing and reported spending at least $1,930
in PAC money on cigar-shop purchases. The cigars were reported to the
Federal Election Commission as donor gifts.
It's business as usual in Marlboro country.
Welcome to the CorpWatch Blog!
Posted by Brooke Shelby Biggs on December 20th, 2005
Welcome to the Corpwatch Blog! We're introducing this new feature as a tool for you to navigate our resources, and to help provide context to breaking news elsewhere on the Web.
For example, you may have read today that the ex-CEO of Qwest Communications was indicted today for illegally cashing in on his company's IPO during the Internet boom, to the tune of $100 million. But did you know that Qwest in 2001 entered into Enron's bogus scam to trade digital bandwidth like any commodity? Back then, investigators discovered that the deal was all smoke and mirrors: Qwest agreed to pay Enron $308 million for use of "dark fiber" --
unused fiber optic capacity. In exchange, Enron agreed to pay Qwest
between $86 million and $195 million for access to active sections of
Qwest's network. Both companies could report these phantom revenues on their balance sheets to fool investors.
It's this kind of news-behind the news only CorpWatch can offer, and we think this forum is the place to do it.
We hope you find this new blog to be useful, informative, and enlightening. Of course, we welcome your comments, complaints, and especially compliments.
Is Wal-Mart Good for You?
Posted by Brooke Shelby Biggs on June 27th, 2005
"Progressive" economist Jason Furman and Barbara Ehrenreich are currently engaged in an eye-opening dialogue over at Slate. He presents the old red-herring argument that boild down to "What do you elitist liberals have against saving working people money?"
He makes some points I'll concede that I think critics should internalize: it isn't the low prices we object to, it's the way Wal-Mart treats people. If anything, the efficiencies that allow Wal-Mart to have such low prices do not require that the company abuse its employees, fail to provide a living wage or the most basic benefits, or to source product from factories that abuse people oversees. Wal-Maerts low prices, and its low regard for its own employees has been proven to depress wages in the communities where it operates. If Wal-Mart is so clever, why doesn't it innovate when it comes to how it treats human beings? Why doesn't it spend as much money actually improving communities as it does telling us about how it improves communities?