The 10 Worst Corporations of 2004

[Guest guest]

http://www.alternet.org/story/21088/

 

The 10 Worst Corporations of 2004

 

By Russell Mokhiber and Robert Weissman, AlterNet. Posted January 26,

2005.

 

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.

© 2005 Independent Media Institute. All rights reserved.