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The 10 Worst Corporations of 2004
By Russell Mokhiber and Robert Weissman, AlterNet. Posted January 26,
2005.
The year's most egregious price gougers, polluters, union-busters,
dictator-coddlers, fraudsters, poisoners, deceivers and general
miscreants.
More stories by Russell Mokhiber
Robert Weissman
It is never easy choosing the 10 Worst Corporations of the Year
there are always more deserving nominees than we can possibly
recognize. One of the greatest challenges facing the judges is the
directive not to select repeat recipients from last year's 10 Worst
designation.
The no-repeat rule forbids otherwise-deserving companies like Bayer,
Boeing, Clear Channel and Halliburton from returning to the 10 Worst
list in 2004.
Of the remaining pool of price gougers, polluters, union-busters,
dictator-coddlers, fraudsters, poisoners, deceivers and general
miscreants, we chose the following presented in alphabetical order
as the 10 Worst Corporations of 2004:
Abbott Laboratories: Drug Pricing Chutzpah
Chutzpah. Webster's defines the Yiddish term now incorporated into
English slang as: 1. unmitigated effrontery or impudence; gall. 2.
audacity; nerve.
In the next edition, they may want to add: 3. See Abbott.
In December 2003, the company raised the U.S. price of its anti-AIDS
drug Norvir (generic name ritanovir) by 400 percent. That is, unless
the product is used in conjunction with other Abbott products in
which case the price increase is zero.
Norvir has become an increasingly important treatment in recent years.
Scientists have discovered that while Norvir is generally too toxic
for safe use as a protease inhibitor (one category of anti-AIDS
drugs), in lower doses it works well as a booster to increase the
efficacy of other protease inhibitors. As a result, Norvir is
frequently prescribed along with other protease inhibitors.
The Norvir price increase does not apply when the product is used as a
booster with another Abbott protease inhibitor (in the combined
product Kaletra). Thus the impact of the Norvir price increase is to
make Kaletra far cheaper than rival combinations of Norvir and
non-Abbott protease inhibitors.
Norvir is especially important for patients in need of a "salvage
therapy" of new and powerful treatments because their virus has become
resistant to other medicines.
Lynda Dee, co-chair of the Aids Treatment Activists Coalition's Drug
Development Committee, called the price increase for these patients,
who may have no choice as to the medications they need to survive,
"pharma terrorism perpetrated against the patients who need new drugs
the most."
Abbott said the price spike was justified by its need to raise money
for research and development. "New medicines cost hundreds of millions
of dollars to develop," Jeffrey Leiden, president and chief operating
officer of Abbott's Pharmaceutical Products Group, told a National
Institutes of Health meeting in May.
Moreover, Leiden said, the price increase would not deny any patients
access to the drug. The price increase does not apply to federal AIDS
drug programs, which cover 54 percent of people with HIV/AIDS. Price
increases only apply to private insurers and to uninsured individuals,
who Abbott says can get the product for free under a special program
it operates.
Making the Abbott price jump especially pernicious in the eyes of
consumer advocates was that the drug was invented on a grant from the
U.S. federal government.
Because of the U.S. government's financing role, Essential Inventions,
Inc., a nonprofit corporation created to distribute affordable public
health and other inventions, in January petitioned the government to
exercise its "march-in" rights under the federal Bayh-Dole Act and
issue an open license to generic firms to produce their own version of
Norvir.
"Essential Inventions is asking the Bush Administration to adopt a
simple rule U.S. consumers should not pay more for drugs invented on
government grants," said Essential Inventions president James Love.
Following the U.S.-only price increase, Norvir is 5 to 10 times more
expensive in the United States than in other high-income countries.
But NIH rejected the Essential Inventions proposal, arguing that
companies that obtained licenses to government-funded inventions have
a duty only to commercialize the inventions. NIH does not have
authority to consider the price at which a product is sold and the
impact of the price on access, the agency ruled even though the
Bayh-Dole Act says government-funded inventions should be made
"available to the public on reasonable terms."
"If Secretary Thompson agrees that quadrupling the price of a
life-or-death AIDS drug, rigging the market, and discriminating
against U.S. consumers is 'reasonable,' you can't help but wonder what
the Secretary considers unreasonable," said Representative Sherrod
Brown, D-Ohio, in criticizing the NIH decision.
AIG: Deferred Prosecutions On the Rise
When the world's largest insurer, American International Group Inc.
(AIG), was charged by federal prosecutors with crimes in November, it
quickly cut a deal with the Justice Department that ended a criminal
probe into its finances with a deferred prosecution agreement.
In a deferred prosecution, the corporation accepts responsibility,
agrees not to contest the charges, agrees to cooperate, usually pays a
fine and implements changes in corporate structure and governance to
prevent future wrongdoing.
If the company abides by the agreement for a period of time, then the
prosecutors will drop the criminal charges.
In a non-prosecution agreement like the one secured by Merrill
Lynch's in 2003 with New York Attorney General Eliot Spitzer
prosecutors agree not to bring criminal charges in exchange for
corporate fines, cooperation and a change in corporate structure and
governance.
"This comprehensive settlement brings finality to the claims raised by
the SEC and the Department of Justice," said AIG Chair M. R.
Greenberg. "The role of the independent consultant complements our own
transaction review processes. We welcome this enhancement to our
overall risk management and control mechanisms."
Under the deal with AIG, an AIG subsidiary was charged with a crime
for the next 12 months, but then the charge will be dismissed with
prejudice if AIG abides by the deferred prosecution agreement.
As part of the agreement, AIG and two subsidiaries will pay an $80
million penalty, and $46 million into a disgorgement fund maintained
by the SEC.
Federal officials in October filed a criminal complaint charging
AIG-FP PAGIC Equity Holding Corp., a subsidiary of AIG, with violating
the federal securities laws, by aiding and abetting PNC Financial
Services Group, Inc. (PNC) in connection with a fraudulent transaction
to transfer $750 million in mostly troubled loans and venture capital
investments from subsidiaries off of its books.
These transactions were previously the subject of a deferred criminal
disposition involving PNC.
Earlier this year, the Department dismissed the criminal complaint
against a PNC subsidiary, after the company fulfilled its deferred
prosecution agreement obligations.
Merrill, AIG and PNC are three of 10 major corporations that have
settled serious criminal charges with deferred prosecution, no
prosecution or de facto no prosecution agreements over the last two
years. Companies are getting off the criminal hook with these
agreements, which were originally intended for minor street crimes.
Now they are being used in very serious corporate crime cases.
If a crime has been committed and there is little doubt that crimes
have been committed by the corporations in these cases then the
companies should plead guilty and pay the penalty. If prosecutors want
to impose change on the corporation, they can do this after securing a
conviction through probationary orders. Right now, corporate lawyers
are teaming up with prosecutors to go after individual executives
while the company's record is wiped clean.
Coca-Cola: KillerCoke.org vs. CokeKills.org
On KillerCoke.org, you'll find a raft of information on Coke and its
bottlers' operations in Colombia. There is extensive documentation of
rampant violence committed against Coke's unionized workforce by
paramilitary forces, and powerful claims of the company's complicity
in the violence.
An April 2004 report from a fact-finding delegation headed by New York
City Council Member Hiram Monserrate contends:
"To date, there have been a total of 179 major human rights violations
of Coca-Cola's workers, including nine murders. Family members of
union activists have been abducted and tortured. Union members have
been fired for attending union meetings. The company has pressured
workers to resign their union membership and contractual rights, and
fired workers who refused to do so."
"Most troubling to the delegation were the persistent allegations that
paramilitary violence against workers was done with the knowledge of
and likely under the direction of company managers."
Allegations such as these formed the basis of a lawsuit filed in 2001
by the International Labor Rights Fund and the United Steelworkers of
America in U.S. courts against Coke on behalf of a Colombian trade
union and union leader victims of violence at Coke bottling facilities
in Colombia.
In 2003, a federal court dismissed the claims against Coke, arguing
that its relationship with the owners of the Coke bottling plant in
Colombia was too attenuated to hold the soft drink multinational
responsible for human rights abuses at the plant. The plaintiffs have
since refiled their complaint they argue the original decision was
mistaken, but that Coke's subsequent purchase of the Colombia bottlers
means the company is now clearly responsible for the bottlers'
actions.
Strangely, for the response to KillerCoke.org, you can check out
CokeKills.org. That site, which is operated by Coke, redirects you to
CokeFacts.org.
Here's what Coke has to say:
"The pervasive violence in Colombia, and the targeting of union
members by its perpetrators, has, unfortunately, touched The Coca-Cola
Company in a very personal way. Employees of our Company and bottling
partners in Colombia have been threatened, kidnapped, and some have
even been murdered... In a lawsuit in Colombia, the court concluded
that the bottler not only took proper steps to initiate investigation
by the authorities, but went further to enhance its workers' safety by
heightening security at the plant."
Leave aside for the moment the issue of Coke's legal liability. The
idea that Coke can't control the behavior of its bottlers is simply
implausible. It can control them if it so chooses just the way that
clothing retailers can control the actions of their manufacturers, but
even more so.
Instructive in raising questions about Coke's good-faith concern for
its workers is its unwillingness to support an independent
investigation into the Colombia allegations even after the company's
former General Counsel, and the former assistant U.S. attorney
general, Deval Patrick, had committed to one. Coke's refusal to
authorize an investigation reportedly contributed to Patrick's
decision to resign from the corporation.
Dow Chemical: Forgive Us Our Trespasses
At midnight on December 2, 1984, 27 tons of lethal gases leaked from
Union Carbide's pesticide factory in Bhopal, India, immediately
killing an estimated 8,000 people and poisoning thousands of others.
Today in Bhopal, at least 150,000 people, including children born to
parents who survived the disaster, are suffering from exposure-related
health effects such as cancer, neurological damage, chaotic menstrual
cycles and mental illness. Over 20,000 people are forced to drink
water with unsafe levels of mercury, carbon tetrachloride and other
persistent organic pollutants and heavy metals.
Activists from around the world including human rights, legal,
environmental health and other experts mobilized this year to demand
that Dow Chemical, the current owner of Union Carbide, be held
accountable.
Twenty years after this disaster, the company responsible for this
catastrophe and its former executives are still fugitives from
justice. Union Carbide and its former chairman, Warren Andersen, were
charged with manslaughter for the deaths at Bhopal, but they refuse to
appear before the Indian courts.
Here is part of Dow's statement on Bhopal:
While Dow has no responsibility for Bhopal, we have never forgotten
the tragic event and have helped to drive global industry performance
improvements. This is why Responsible Care was created and why these
standards are essential for the protection of our employees and the
communities where we live and work. Our pledge and our commitment is
the full implementation of Responsible Care everywhere we do business
around the world.
Dow has no responsibility for Bhopal? The people of Bhopal don't
agree. They say Union Carbide was responsible, and if Union Carbide is
now owned by Dow, then Dow is responsible.
In commemoration of the 20th anniversary of the crime of Bhopal, we
present here 20 things to remember about Dow Chemical the company
now responsible for Bhopal and a fugitive from justice.
20. Agent Orange/Napalm: The toxic herbicide and jellied gasoline used
in Vietnam created horrors for young and old alike.
19. Rocky Flats: The top secret Colorado site managed by Dow Chemical
from 1952 to 1975 remains an environmental nightmare.
18. Body burden: In March 2001, the Centers for Disease Control
reported that most people in the United States carry detectable levels
of plastics, pesticides and heavy metals in their blood and urine.
17. 2,4-D: One of the key ingredients in Agent Orange, the toxic
defoliant used in Vietnam, 2,4-D is still the most widely used
herbicide in the world.
16. Mercury: In Canada, Dow had been producing chlorine using the
mercury cell method since 1947. Much of the mercury was recycled, but
significant quantities were discharged into the environment. In March
1970, the governments of Ontario and Michigan detected high levels of
mercury in fish in major waterways. Dow was sued by state and local
officials for mercury pollution.
15. PERC: Perchloroethylene is the hazardous substance used by dry
cleaners everywhere. Dow tried to undermine safer alternatives.
14. 2,4,5 T: One of the toxic ingredients in Agent Orange.
13. Busting unions: In 1967, unions represented almost all of Dow's
production workers. But since then, according to the Metal Trades
Department of the AFL-CIO, Dow undertook an "unapologetic campaign to
rid itself of unions."
12. Silicone: The key ingredient for silicone breast implants made
women sick. Litigation continues over silicone breast implants,
removed from the market more than a decade ago.
11. DBCP: The toxic active ingredient in the Dow pesticide Fumazone.
Doctors who tested men who worked with DBCP thought they had
vasectomies, because no sperm was present.
10. Dursban: Trade name for chlorpyrifos, a toxic pesticide, proved to
have nerve agent effects. It was tested on prisoners in New York in
1971. It replaced DDT when DDT was banned in 1972. A huge seller, in
June 2000, EPA limited its use and forced it off the market at the end
of 2004.
9. Dow at Christmas: "Uses of Dow plastics by the toy industry are
across the board," boasted Dow Chemical in an internal company memo
one Christmas season. Among the chemicals used in these toys are
polystyrene, polyethylene, ethylene copolymer resins, saran resins,
PVC resins, or vinyls and ethyl cellulose.
8.The Tittabawassee: A river and river basin polluted by Dow in its
hometown, Midland, Michigan.
7. Brazos River, Freeport, Texas: A February 1971 headline in the
Houston Post read: "Brazos River is Dead." In 1970 and 1971, Dow's
operation there was sending more than 4.5 billion gallons of
wastewater per day into the Brazos and on into the Gulf of Mexico.
6. Toxic Trespass: From Trespass Against Us: Dow Chemical and the
Toxic Century by Jack Doyle: "Dow Chemical has been polluting property
and poisoning people for nearly a century, locally and globally
trespassing on workers, consumers, communities, and innocent
bystanders on wildlife and wild places, on the global biota and the
global genome."
5. Holmesburg Experiments: In January 1981, a Philadelphia Inquirer
story revealed that Dow Chemical paid a university of Pennsylvania
dermatologist to test dioxin on prisoners at Holmesburg Prison in
Philadelphia in 1964.
4. Worker deaths: Dow has a long history of explosions and fires at
its facilities. In May 1979, an explosion ripped through Dow's
Pittsburgh facility, killing two workers and injuring more than 45
others.
3. Brain tumors: In 1980, investigators found 25 workers with brain
tumors at the company's Freeport, Texas facility 24 of which were
fatal.
2. Saran Wrap: The thin slice of plastic invaluable to our lives,
Saran Wrap was produced by Dow until consumers went looking for Dow
products to boycott.
1. Bhopal.
GlaxoSmithKline: Deadly Depressing
GlaxoSmithKline, Paxil and selective serotonin reuptake inhibitors
(SSRIs): It was the story that foreshadowed and strikingly paralleled
the controversy surrounding Merck, Vioxx and Cox-2 inhibitors.
With the antidepressant Paxil (generic name: paroxetine), the story
was driven primarily from the United Kingdom, by the BBC Program
"Panorama" and a public interest group called Social Audit. They
called attention to the severe side effects from the drugs; notably
that they are addictive and lead to increased suicidality in youth.
In 2003, the evidence of dangerous side effects had piled too high for
British regulators to continue to ignore them. In June, the UK health
experts advised that children should not be prescribed Paxil.
In February 2004, "Panorama" reported on internal documents from
GlaxoSmithKline (GSK) showing the company knew that Paxil could not be
proved to work in children.
In March 2004, days after the Medicines and Healthcare Products
Regulatory Agency (the UK's drug regulatory agency) advised that Paxil
dosages should be kept to low levels, an expert participating in the
Paxil review resigned, claiming the agency had possessed evidence for
more than a decade suggesting that Paxil dosages should be kept low,
but failed to act on it.
By this time, the story had started to heat up in the United States.
Dr. Andrew Mosholder, of the FDA Office of Drug Safety, had conducted
an analysis of clinical trials related to antidepressant use in
children, and found a heightened risk of suicidality. But his
superiors refused to let him present his findings to an advisory panel
convened to look at the issue in the wake of the British action.
According to an investigation by Senator Charles Grassley, R-Iowa, the
FDA actually tried to get Mosholder to present data that deceptively
underrepresented the risk of suicidality.
Although Paxil is not approved by the FDA for prescription to
children, doctors routinely write "off-label" prescriptions for the
product for children, a practice permitted under FDA rules. More than
two million prescriptions for Paxil were written for children and
adolescents in the United States in 2002.
In April 2004, the Lancet, the prestigious British medical journal,
published a paper showing that clinical test data did show problems
with prescribing Paxil and other SSRIs to children.
In June, New York State Attorney General Eliot Spitzer filed suit
against Glaxo, charging the giant drug maker with suppressing evidence
of Paxil's harm to children, and misleading physicians.
GSK responded in a statement that it "acted responsibly in conducting
clinical studies in pediatric patients and disseminating data from
those studies. All pediatric studies have been made available to the
FDA and regulatory agencies worldwide."
Spitzer's complaint cited a 1998 GSK memo which states that the
company must "manage the dissemination of these data in order to
minimi[z]e any potential negative commercial impact."
Responding to Spitzer's suit, GSK claimed that, "As for the 1998 memo,
it is inconsistent with the facts and does not reflect the company
position."
The New York complaint asserted as well that "GSK has repeatedly
misrepresented the safety and efficacy outcomes from its studies of
paroxetine as a treatment for MDD [Major Depressive Disorder] in a
pediatric population to its employees who promote paroxetine to
physicians."
In August, the company settled with Spitzer for $2.5 million, plus a
commitment to maintain the policy of posting clinical trial results,
for all drugs marketed by the company.
The next month, the Star-Ledger of New Jersey reported on a Glaxo memo
from the year before, instructing the company's sales force not to
talk to doctors about company data showing dangers from prescribing
Paxil to kids.
In October, the FDA ordered Glaxo and other SSRI makers to include a
"black box" warning with their pills. The warning says SSRIs double
the risk of suicide in children, though some medical researchers say
the number should be higher. At least one GSK clinical trial showed
7.5 percent of youth taking Paxil suffering from suicidality (versus
zero percent among those taking a placebo).
Glaxo continues to insist that it disclosed information to appropriate
authorities as soon as it discerned important results from its
clinical studies.
Hardee's: Heart Attack on a Bun
When Hardee's introduced the Thickburger this year, Jay Leno joked
that it was being served in little cardboard boxes shaped like
coffins.
With other major fast food outlets moving to green salads, Hardee's
revels in big beef. From Hardee's press release of November 15, 2004:
Now Hardee's is introducing the mother of all burgers the Monster
Thickburger. Weighing in at two-thirds of a pound, this 100 percent
Angus beef burger is a monument to decadence, yet is still a
throwback, as it features lots of meat, cheese and bacon on a bun.
Clearly, Hardee's, a subsidiary of CKE Restaurants, Inc. of
Carpinteria, California, is not worried about the public health
aspects of unleashing the monster into the marketplace.
Eating one Thickburger is like eating two Big Macs or five McDonald's
hamburgers. Add 600 calories worth of Hardee's fries and you get more
than the 2,000 calories that many people should eat in a whole day,
according to Michael Jacobson of the Center for Science in the Public
Interest.
The Federal Trade Commission (FTC) earlier this year charged KFC
Corporation, owner of the Kentucky Fried Chicken national restaurant
chain, with making false claims in a national television advertising
campaign about the relative nutritional value and healthiness of its
fried chicken.
The false claim? KFC said that eating fried chicken, specifically two
Original Recipe fried chicken breasts, is better for a consumer's
health than eating a Burger King Whopper.
The FTC says that while it is true that the two fried chicken breasts
have slightly less total fat and saturated fat than a Whopper, they
have more than three times the trans fat and cholesterol, more than
twice the sodium, and more calories.
KFC settled the case.
But there will be no law enforcement action brought against Hardee's.
Hardee's makes no pretensions that the Hardee's Thickburger is good
for you, and has no qualms about the impact of the monster on the
public's health. The fast-food pusher's new advertising campaign is
straight up: "Be afraid. Be very afraid."
As the New York Times put it in an editorial, "It is a setback for
public health, but a triumph for truth in advertising."
Merck: 55,000 Dead
It's not as if people in power didn't know about the impending
disaster what David Graham, a Food and Drug Administration (FDA)
drug safety official, calls "maybe the single greatest drug-safety
catastrophe in the history of this country.''
Testifying before a Senate committee in November, Dr. Graham put the
number in United States who had suffered heart attacks or stroke as
result of taking the arthritis drug Vioxx in the range of 88,000 to
139,000. As many as 40 percent of these people, or about
35,000-55,000, died as a result, Graham said.
The unacceptable cardiovascular risks of Vioxx were evident as early
as 2000 a full four years before the drug was finally withdrawn from
the market by its manufacturer, Merck, according to a study released
by the Lancet, the British medical journal.
"This discovery points to astonishing failures in Merck's internal
systems of post-marketing surveillance, as well as to lethal
weaknesses in the U.S. Food and Drug Administration's regulatory
oversight," Lancet editors wrote.
Authors of the Lancet study pooled data from 25,273 patients who
participated in 18 clinical trials conducted before 2001. They found
that patients given Vioxx had 2.3 times the risk of heart attacks as
those given placebos or other pain medications.
Merck withdrew Vioxx on September 30 of this year after a
company-sponsored trial found a doubling of the risks for heart attack
or stroke among those who took the medicine for 18 months or more.
Merck says it disclosed all relevant evidence on Vioxx safety as soon
as it acquired it, and pulled the drug as soon as it saw conclusive
evidence of the drug's dangers.
"Over the past six years," Merck CEO Raymond Gilmartin told the Senate
Finance Committee at the November hearing where Graham made his big
splash, "since the time Merck submitted a New Drug Application for
Vioxx to the FDA, we have promptly disclosed the results of numerous
Merck-sponsored studies to the FDA, physicians, the scientific
community and the media and participated in a balanced, scientific
discussion of its risks and benefits."
Until the September clinical trial results came in, Gilmartin said,
"the combined data from randomized controlled clinical trials showed
no difference in confirmed cardiovascular event rates between Vioxx
and placebo and Vioxx and NSAIDs other than naproxen. When data from
the APPROVe study [the September results] became available, Merck
acted quickly to withdraw the medicine from the market."
But there is evidence that strongly suggests a different version of
the story.
The Lancet findings came in the wake of new disclosures that suggest
Merck was fully aware of Vioxx's potential risks by 2000.
The Wall Street Journal revealed emails that confirm Merck executives'
knowledge of their drug's adverse cardiovascular profile the risk
was "clearly there," according to one senior researcher.
"Given this disturbing contradiction Merck's own understanding of
Vioxx's true risk profile and its attempt to gloss over these risks in
their public statements at the time it is hard to see how Merck's
chief executive officer, Raymond Gilmartin, can retain the confidence
of the public, his company's most important constituency," the Lancet
editors wrote.
Dr. Graham, the federal drug-safety reviewer, continues to seek to
publish his study demonstrating the dangers of Vioxx, but he has been
delayed and demeaned by top officials at the Food and Drug
Administration.
At the Senate hearing, Dr. Graham said that the FDA "as currently
configured is incapable of protecting America against another Vioxx,"
because of ties between agency reviewers and the pharmaceutical
industry. Graham says that as a result of his testimony, his bosses
have threatened to toss him out of the FDA's drug safety unit.
At the Senate hearing, Graham said that at least five medications
currently on the market pose such risks that their sale ought to be
limited or stopped. Graham named the five as Meridia, Crestor,
Accutane, Bextra and Serevent.
In November 2004, Forbes.com named David Graham "face of the year."
We join with Forbes in saluting Graham "for his steadfast advocacy of
drug safety and his willingness to blow the whistle on his bosses."
McWane: Death on the Job
The New York Times ran a three-part series by David Barstow and Lowell
Bergman that exposed the egregious safety record of McWane Inc., a
large, privately held Alabama-based sewer and water pipe manufacturer.
Nine McWane employees have lost their lives in workplace accidents
since 1995. More than 4,600 injuries were recorded among the company's
5,000 employees.
According to the series, one man died when an industrial oven exploded
after he was directed to use it to incinerate highly combustible
paint. Another was crushed by a conveyor belt that lacked a required
protective guard.
Three of McWane's nine deaths were the result of deliberate violations
of safety standards. In five others, safety lapses were a contributing
factor.
According to the Times, McWane pulled the wool over the eyes of
investigators by stalling them at the factory gates, and then hiding
defective equipment. Accident sites were altered before investigators
could inspect them, in violation of federal rules.
When government enforcement officials did find serious violations,
"the punishment meted out by the federal government was so minimal
that McWane could treat it as simply a cost of doing business."
"After a worker was crushed to death by a forklift that apparently had
faulty brakes, an Occupational Safety and Health Administration
investigation found defects in all 14 of the plant's forklifts,
including the one involved in the death," the Times reported. The fine
was just $10,500. Employers are further protected by the workers'
compensation system, which can make it hard for victims to sue."
According to the Times, in one McWane oven explosion that killed an
employee, Frank Wagner, McWane "hired a well-connected lobbyist to
lean on Dennis Vacco, then New York State's attorney general, and
ended up with a settlement in which it did not admit responsibility
for the death."
The experts who looked at the case determined that the explosion that
killed him was the result of reckless criminal actions by McWane,
which was operating a cast-iron foundry in Elmira, New York, where
Wagner worked.
"The evidence compels us to act," the prosecution team wrote in a
confidential memorandum to Vacco in 1996. The team urged him to ask a
grand jury to indict McWane and its managers on manslaughter and other
charges. A grand jury inquiry, senior investigators believed, could
have taken them up the corporate ladder, the Times reported.
But Vacco never sought an indictment against McWane for any crime.
Only after an unusual intervention by the United States attorney in
Buffalo, who threatened federal charges, did McWane agree to plead
guilty to a state felony and pay $500,000.
"But as the company and Mr. Wagner's widow are quick to note, that
charge, a hazardous-waste violation, specifically did not hold McWane
accountable for Mr. Wagner's death," the Times reported.
"It was a reckless act on the part of certain individuals in that
company that caused the death of that person. I'll believe that till
the day I die," says Donald Snell, who supervised the state
environmental agency's investigation. "The ends of justice were not
met."
As the Times series showed, in plant after plant, year after year,
"McWane workers have been maimed, burned, sickened and killed by the
same safety and health failures."
McWane says it is changing and it's certainly paying more attention
to PR after the Times series.
"Over the last several years, our Company has embarked on significant
changes that are focused on setting the industry standard in employee
safety, health and environmental programs," asserts a May 2004 report
from the company on health and safety.
That doesn't exactly jibe with what company managers call "the McWane
way" what federal and state regulators characterized to the Times as
a "lawless" and "rogue" operation that ruthlessly sought profits with
disregard for worker safety and well-being.
Riggs Bank: The Pinochet Connection
An explosive report from the U.S. Senate Permanent Subcommittee on
Investigations of the Committee on Governmental Affairs, issued in
July, revealed that Riggs Bank in Washington, D.C. illegally operated
bank accounts for former Chilean dictator Augusto Pinochet, and
routinely ignored evidence of corrupt practices in managing more than
60 accounts for the government of Equatorial Guinea.
An ongoing internal investigation by Riggs has revealed that the
bank's dealing with Pinochet dates back to 1985, while the Chilean
despot remained in power, according to a November Washington Post
report.
Riggs has not so far been cited for civil or criminal violations in
connection with the Pinochet money-laundering scheme. In May, the bank
paid $25 million in fines in connection with money-laundering
violations related to the Equatorial Guinea and Saudi Arabian
governments.
The bank capitalized on its venerable reputation in Washington to
become the banker to the embassies that dot the city and the large
foreign diplomatic corps resident in the U.S. capital. Riggs eagerly
sought to service them all, apparently even when dictators and their
families requested the bank engage in illegal activities to launder
money.
The Permanent Subcommittee on Investigations report found that from
1994 until 2002, Riggs opened at least six accounts and issued several
certificates of deposit (CDs) for Pinochet while he was under house
arrest in the United Kingdom and his assets were the subject of court
proceedings. The aggregate deposits in the Pinochet accounts at Riggs
ranged from $4 million to $8 million at a time.
What is now becoming apparent is that Riggs was collaborating with
Pinochet even a decade earlier, with a scale of activity not yet
clear.
Riggs was not a passive or unknowing actor in this drama. According to
the Permanent Subcommittee on Investigations report, high bank
officials solicited Pinochet's business, the bank helped Pinochet set
up offshore shell corporations and open accounts in the names of those
corporations to disguise his control of the accounts, altered the
names of his personal accounts to disguise their ownership, and
otherwise worked to help him hide his money flow.
Although these activities seem to violate U.S. banking rules, the
Office of the Comptroller of the Currency (OCC) did not take
enforcement action against the bank after it learned of these matters
in 2002. That presumably was not unrelated to the fact that the OCC
examiner at Riggs soon thereafter went to work for Riggs.
Pinochet is not the only dictator for whom Riggs undertook money
laundering.
Equatorial Guinea is a small, oil-rich West African country dominated
by a dictator, President Teodoro Obiang Nguema Mbasago. Obiang, his
family and cronies live a life of luxury, while the rest of the
country remains desperately poor.
The Permanent Subcommittee on Investigations report found that from
1995 until 2004, Riggs Bank administered more than 60 accounts and CDs
for the government of Equatorial Guinea, Equatorial Guinea government
officials or their family members. Money laundering to cover up
corruption appeared to be routine.
Combined, these accounts represented the largest relationship at Riggs
Bank, with aggregate deposits ranging from $400 to $700 million at a
time.
Riggs does not deny these activities took place, and its internal
investigation is continuing. A number of Riggs employees involved in
the scandals have been fired or demoted. In July, Riggs announced that
it was going to be acquired by PNC Financial Services Group (see
profile of AIG above) for more than $700 million. Ongoing legal
problems at Riggs could derail the deal, which is supposed to be
consummated early in 2005, but for now both parties say it remains on.
Wal-Mart: The Workfare Company
Wal-Mart faces a class action lawsuit on behalf of 1.6 million women
workers, alleging rampant employment discrimination at Wal-Mart.
The Service Employees International Union (SEIU) has announced plans
to spend $25 million a year with the ultimate goal of unionizing
Wal-Mart, the largest private U.S. employer.
And the company which has already lost more than 200 site fights
faces an even more-intensified resistance to its efforts to locate new
stores, as it increasingly seeks to enter markets in more urban areas.
But while on a bit of a public relations defensive, the company
remains the colossus of U.S. and increasingly global retailing. It
registers more than a quarter trillion dollars in sales. Its revenues
account for 2 percent of U.S. Gross Domestic Product.
A February 2004 report issued by Representative George Miller
(D-Calif.) encapsulated the ways that Wal-Mart squeezes and cheats its
employees, among them: blocking union organizing efforts, paying
employees an average $8.23 an hour (as compared to more than $10 for
an average supermarket worker), allegedly extracting off-the-clock
work, and providing inadequate and unaffordable healthcare packages
for employees.
Miller's report's innovation was in documenting how Wal-Mart's low
wages and inadequate benefits not only hurt workers directly, but
impose costs on taxpayers. The report estimated that one 200-person
Wal-Mart store may result in a cost to federal taxpayers of $420,750
per year about $2,103 per employee. These public costs include:
$36,000 a year for free and reduced lunches for just 50 qualifying
Wal-Mart families. $42,000 a year for Section 8 housing assistance,
assuming 3 percent of the store employees qualify for such assistance,
at $6,700 per family. $125,000 a year for federal tax credits and
deductions for low-income families, assuming 50 employees are heads of
household with a child and 50 are married with two children. $100,000
a year for the additional Title I [educational] expenses, assuming 50
Wal-Mart families qualify with an average of two children. $108,000 a
year for the additional federal healthcare costs of moving into state
children's health insurance programs (S-CHIP), assuming 30 employees
with an average of two children qualify.
Wal-Mart's abuses are giving rise to countervailing efforts, but it is
an open question whether the company has amassed such power that it
will be able to defeat such initiatives.
In California, in November, the company was able to stave off by a
51-to 49 percent margin a proposition that would have required every
large and medium employer in the state to provide decent healthcare
coverage for their workers, with the employer contribution set at a
minimum of 80 percent of costs.
Wal-Mart dumped a half million dollars into the anti-Proposition 72
campaign just a week before the vote.
"As one of California's leading employers, we care about the health of
our 60,000 employees here," said Wal-Mart spokesperson Cynthia Lin, in
celebrating the defeat of Proposition 72. "That's why we provide our
employees with affordable, quality health care coverage."
The biggest immediate challenge facing Wal-Mart is the class action
lawsuit filed by its women workers. The women allege that Wal-Mart
pays female workers less than men, promotes men faster than women and
men above more competent women, and fosters a hostile work
environment.
While Wal-Mart is willing to bend to consumer demand on marginal
issues like covering over the headlines on Cosmopolitan magazine, it
is not so flexible on respect for worker rights. Nor is there any sign
of a consumer rebellion on anything like the scale necessary to make
the company revisit its employment policies.
The full-length version of this piece can be found at The
Multinational Monitor.
Russell Mokhiber and Robert Weissman are co-authors of "On the
Rampage: Corporate Predators and the Destruction of Democracy"
(Monroe, Maine: Common Courage Press). Robert Weissman is general
counsel for Essential Inventions, a nonprofit mentioned in the Abbott
profile.
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