25 April 2006Russell Mokhiber and Robert Weissman
2005 was a good year for bad corporations.
There were no U.S. elections to worry about, with their troubling possibility of politicians running on the popular platform of curbing corporate power.
There were corporate scandals and corporate crime and violence galore, but none that rated the ongoing banner headlines of Enron and WorldCom.
Indeed, the ongoing prosecutions of individuals associated with corporate financial scandals enabled Big Business and its apologists to claim there had actually been a crackdown on corporate crime.
All leaving corporations free to buy legislation, profiteer, pollute, poison, and mistreat workers without restraint.
Benefiting from the spike in oil prices associated with the tragedy of Hurricanes Katrina and Rita, ExxonMobil recorded the most profitable year any company has ever achieved.
Thirty years ago, when the oil giants profiteered in the wake of the first oil embargo, almost half the U.S. Senate voted to break up the integrated oil companies. In 2005, just 40 of 435 members of the House of Representatives were willing to co-sponsor the leading legislation calling for a much more modest approach, imposing a windfall profits tax on the oil companies. Eight members of the Senate co-sponsored the leading windfall profits bill there.
In the U.S. Congress, corporations were able to ram through limitations on victims' rights to sue corporate perpetrators (mislabeled class action "reform"), the NAFTA-expanding Central American Free Trade Agreement (CAFTA), and an energy bill that deregulates electric utilities and actually gives tax breaks to the oil industry, among many other government gifts.
Perhaps nothing revealed Big Business's cockiness more than the Chamber of Commerce and other trade associations' efforts to undermine the Sarbanes-Oxley legislation. Sarbanes-Oxley imposes very modest anti-fraud requirements on corporations. It was the only reform legislation passed after the Enron and related financial scandals.
These corporations will never stop on their own.
Asked to comment on a recent Harris poll that found 90 percent of people in the United States believe corporations have too much power in Washington, D.C., Hank Cox, a spokesperson for the National Association of Manufacturers, replies, "That's a perception fostered by the news media and the entertainment industry, and if they really had any idea of how little power corporations have they would be astounded."
The corporations will never give up power, unless forced to do so by the people.
Where to start?
No better place than the 10 worst corporations of 2005, presented herewith in alphabetical order:
In November 2005, BP said that it expects to spend as much as $8 billion in alternative-energy projects, including solar, wind, hydrogen, and carbon-abatement technology, over 10 years.
It is running two-page ads in major U.S. newspapers touting itself as a leader in alternative energy.
This is part of a high-energy campaign to cover up BP's dirty tricks that flow from its oil business.
To do so, it has to cover up its shoddy operations on the North Slope of Alaska, where it is seeking to bust open the Arctic National Wildlife Refuge for drilling, and its reckless operations at its refineries around the globe.
In March, 15 workers were incinerated, and more than 170 injured, following an explosion at BP's sprawling refinery in Texas City, Texas.
It was the third fatal accident at the Texas City BP facility in the last four years.
In September 2004, two workers were burned to death and another was seriously injured.
In 2001, a maintenance worker at the facility died after falling into a tank that had been shut down. Nationwide, BP's facilities have had more than 3,565 accidents since 1990, ranking first in the nation, according to a 2004 report by the Texas Public Interest Research Group (TexPIRG).
BP has admitted it was at fault in the Texas City explosion. "We regret that our mistakes have caused so much suffering," said Ross Pillari, president of BP Products North America, after the company had completed an interim investigation in May.
"We apologize to those who were harmed and to the Texas City community," said Pillari. " We cannot change the past or repair all the damage this incident has done. We can assure that those who were injured and the families of those who died receive financial support and compensation. Our goal is to provide fair compensation without the need for lawsuits or lengthy court proceedings."
There is a case to be made that BP engaged in criminal reckless homicide, or involuntary manslaughter. To prove this, the District Attorney in Galveston County, where the deaths occurred, would have to find that BP and its executives consciously disregarded "a substantial and unjustifiable risk that a death will occur."
We believe that the families of the dead deserve a full-blown reckless homicide investigation by the District Attorney in Galveston County.
When asked about this, Mohamed Ibrahim, the first assistant district attorney in Galveston County, told us that his office had opened no such criminal investigation into the BP matter. "We have no reason to believe at this point that it was anything but an unfortunate industrial accident," Ibrahim said.
"If OSHA [the Occupational Safety and Health Administration] came to us and said it was a result of criminal recklessness, we would look at an investigation," he added.
In September, OSHA fined the company $21 million for violating federal OSHA law. There was no criminal referral. Lesser workplace crimes this year have resulted in criminal convictions against smaller companies. BP gets off because it is a large multinational?
On the North Slope of Alaska, BP continues to muscle the political machinery to get its way.
Its reckless operations there — including unreported oil spills — will someday end up in an environmental disaster, long predicted by oil industry critic Charles Hamel.
BP is eager to portray itself as the good guy oil company, but it is not eager to answer tough questions.
In October, U.S. News and World Report held a press conference to announce "America's Best Leaders 2005."
The press event was paid for by BP.
BP's guy at the door wouldn't let us in.
No questions about corporate crime allowed.
"I want you to view what is happening at Delphi as a flash point, a test case, for all the economic and social trends that are on a collision course in our country and around the globe," Delphi CEO Steve Miller told BusinessWeek in October.
Miller's view of how those trends should be resolved: with a leveling down of worker wages to the lowest common denominator, and provision of huge windfalls for executives.
In October, Miller took his company into bankruptcy, with the explicit purpose of trashing the social contract between unionized auto workers in the United States and the auto industry. He proposed slashing worker wages from $27 an hour to a mere 10 bucks.
In a fit of staggering arrogance, Miller and Delphi simultaneously proposed huge bonuses for company executives.
Delphi is the world's largest auto parts supplier. In a strange arrangement, it was spun off from General Motors in 1998. Roughly half of its business remains supplying GM. Many critics say GM separated Delphi for the purpose of dumping unwanted expenses on the new company. But GM agreed to guarantee certain Delphi obligations — including healthcare and pension costs — in the event the new company was unable to meet them.
Delphi enters bankruptcy not in any severe financial crisis, but having experienced steady losses over the last several years.
In its bankruptcy filings, the company stated that three problems are driving down revenues: the wages and benefits guaranteed under existing union contracts, declining sales from GM, Delphi's main buyer, and rising commodity prices. Through bankruptcy, it sought to address only the first issue — that is, to attack the living standards of its workers.
Delphi workers have reacted with predictable dismay and anger. "It's difficult to see our middle-income jobs go away like this," said Ron Garrett, 54, who has worked at Delphi's Dayton facility for 21 years. "It's very tough to see them go out the door." Workers have picketed and demonstrated against Delphi's proposals.
Their outrage has been stoked by the executive compensation plan Delphi has proposed in bankruptcy court.
Although Steve Miller has touted the fact that he has agreed to accept a salary of just $1 a year (he also received a signing bonus of $3 million after taking over the company in the summer, and $750,000 in salary before making the $1 pledge, and is due an unspecified bonus from the board of directors when the company emerges from bankruptcy), the executive class at Delphi will make out great.
Delphi has proposed in bankruptcy court through a "Key Employee Compensation Plan" that executives be given $43 million in incentive bonuses during the two years the company expects to undergo reorganization, that the top 500 executives pocket $88 million when the company emerges from bankruptcy, and that the top 600 get 10 percent of the shares of the post-bankruptcy Delphi.
Rationales for this?
Well, the company argued in bankruptcy court, "many of the company's incentive-based compensation programs failed to provide salaried and executive workforce with total compensation that is competitive with the industry norm."
Got that?
Because the company did poorly, executives made less money. The new plan is intended to remedy this perceived inequity.
Unfortunately, Delphi proposes the opposite deal for its workers.
Also, "the commencement of a bankruptcy case heightens employee concerns regarding possible job loss, and often increases employee responsibilities, creates longer hours, and imposes other burdens of an employer's status as a debtor-in-possession." In the dire time of bankruptcy, the company needs the "continued efforts and loyalty" of its executives, so they need big bonuses.
Workers' "continued efforts and loyalty" are apparently thought available on the cheap.
So, we kill Stanley Tookie Williams for killing four people.
And we fine DuPont $16.5 million for two decades' worth of covering up company studies that showed it was polluting drinking water and newborn babies with an indestructible chemical that causes cancer, birth defects and other serious health problems in animals.
Sounds like rough justice to us.
A public interest group in Washington, D.C., the Environmental Working Group (EWG), brought the disaster to the attention of the Environmental Protection Agency (EPA).
And the EPA sued DuPont in a civil action in July 2004.
No crime here, right?
EWG reported on the case of Glenn Evers.
Evers was a DuPont employee of 22 years, one of the company's top technical experts and the chair of an invitation-only committee of its 40 best scientists and technical experts.
He holds six patents, and his work has, to date, made the company an estimated $250 million in after-tax profits. Evers was, by his own description, a dedicated "company man."
According to EWG, he was also the company's top chemical engineer involved with designing and developing new uses of grease-resistant, or perfluorinated, chemical-based coating for paper food packaging.
Chemicals from these coatings and related sources are now in the blood of 95 percent of people in the United States.
DuPont has claimed that it does not know how the chemicals got there — and that it is not aware that the company's product is responsible.
"If we had any reason to believe that [there] was a safety issue for fluorinated telomers-based product, we wouldn't have commercialized them," DuPont Director of Planning and Technology Robert Ritchie told the Wilmington News Journal in 2003.
But Glenn Evers told EWG how his former employer hid for decades that it was polluting people's blood with a hyper-persistent chemical associated with the grease-resistant coatings on paper food packaging. (For a complete history, see www.ewg.org.)
The EPA boasted that the $16.5 million fine was the largest administrative fine it has ever levied under a weak toxic chemical law.
But as EWG noted, the fine is less than half of 1 percent of DuPont's after-tax annual profits from the Teflon product when averaged over the 20-year cover-up.
"What's the appropriate fine for a $25 billion company that for decades hid vital health information about a toxic chemical that now contaminates every man, woman and child in the United States?" asked EWG President Ken Cook. "What's the proper dollar penalty for a pollutant that will never break down, and now finds its way into polar bears in the Arctic and human babies in their mothers' wombs? We're pretty sure it's not $16 million, even if that is a record amount under a federal law that everyone acknowledges is extremely weak."
We're pretty sure it's not just a fine.
The poison is in the blood of 95 percent of people in the United States.
How many cancers has it caused?
Here is what ExxonMobil has to say about global warming: ExxonMobil recognizes that although scientific evidence remains inconclusive, the potential impacts of greenhouse gas emissions on society and ecosystems may prove to be significant.
And this: The earth has experienced a warming trend in global surface air temperatures during the twentieth century, but the cause of this trend and whether it is abnormal remain in dispute. Although recent temperatures are elevated, they are not unprecedented in the geological record, which shows considerable variation as well as previous periods that were as warm as or warmer than today.
Here is what the Intergovernmental Panel on Climate Change (IPCC), a UN-affiliated grouping of 1,800 of the world's climatologists — often needled for the extraordinarily cautious language it employs — says about global warming: The Earth's climate system has demonstrably changed on both global and regional scales since the pre-industrial era, with some of these changes attributable to human activities.
Globally, it is very likely that the 1990s was the warmest decade, and 1998 the warmest year, in the instrumental record (since 1861).
There is new and stronger evidence that most of the warming observed over the last 50 years is attributable to human activities.
Recent regional changes in climate, particularly increases in temperature, have already affected hydrological systems and terrestrial and marine ecosystems in many parts of the world.
The rising socio-economic costs related to weather damage and to regional variations in climate suggest increasing vulnerability to climate change.
The projected rate of warming [over the twenty-first century] is very likely to be without precedent during at least the last 10,000 years.
The impacts of climate change will fall disproportionately upon developing countries and the poor persons within all countries, and thereby exacerbate inequities in health status and access to adequate food, clean water and other resources.
Unfortunately, so far, the cynical, profit-motivated, short-term and self-interested views of ExxonMobil have mattered more than the evidence-based perspective of the IPCC.
That's because the most profitable corporation on Earth has lots of political power and is skilled at amplifying its views, and the climatologists do not and are not.
ExxonMobil has funded dozens of front groups, think tanks, industry associations, corporate-friendly research centers, and purportedly independent scientists to spread its denialism. Greenpeace has documented the company's support for a web of more than 100 organizations — from the American Council on Science and Health to the Washington Legal Foundation — that work to cast doubt on global warming science and likely consequences.
It hasn't hurt ExxonMobil to have a (failed) oilman and the former head of Halliburton, an oil services company, as president and vice president of the richest, most powerful and biggest greenhouse-gas-emitting country, the United States. The company was not without influence during the Clinton administration, but has been able to gain complete access and shape policy during the Bush era, in ways large and small.
ExxonMobil, for example, in 2002 urged the Bush administration to push to have Dr. Robert Watson removed as chair of the IPCC, according to company documents obtained by the Natural Resources Defense Council. Soon after, the Bush administration announced its opposition to the respected scientist who ExxonMobil said had a "personal agenda," and a new chair was selected.
The company has also collaborated with the administration on the basic denialism project. A former lobbyist for the American Petroleum Institute and chief of staff of the White House's Council on Environmental Quality, Philip Cooney, resigned in June 2005 after the New York Times revealed he had edited government reports to challenge the link between carbon emissions and global warming. A week later, Cooney was on ExxonMobil's payroll.
ExxonMobil is not just fiddling while the world burns. The company is raking in record profits — more than $36 billion in 2005, the highest ever earned for a single company in one year — as it benefited especially from the spike in oil prices after Hurricanes Katrina and Rita.
Given the company and the oil industry's obscene profits, many are calling for a windfall profits tax. (If just 3 percent of ExxonMobil's 2005 profits were taxed and invested in solar energy technology development, it would constitute a quintupling of the U.S. government solar R&D budget.)
But lubricated with oil industry cash, the Bush administration and Congress have chosen what might generously be called a different path. In July, the Congress passed an energy bill that showered tax breaks and other goodies on the industry — more than $4 billion worth, according to the U.S. Public Interest Research Group.
ExxonMobil is completely unashamed about this state of affairs. Outgoing CEO Lee Raymond testified before Congress about gas price hikes and industry super-profits in November. "If we are to continue to serve our consumers and your constituents, corporate and government leaders alike cannot afford to simply follow the ups and downs of energy prices," he told a Senate Committee. The basic message: don't tax us more, we need the huge earnings to find more oil to meet rising energy demand. Alternative energy is nice, but not serious.
Of course, it is not only by blocking efforts to address global warming that ExxonMobil is making the world a worse place.
It continues to stonewall on paying roughly $5 billion to fishing communities and Native Alaskans in punitive damages assessed for the impact of the Exxon Valdez spill.
It is lobbying hard for the opening of the Arctic National Wildlife Refuge.
And through a major oil development and pipeline in Chad, it is funding a dictatorial government that is using oil money to buy weapons. Amnesty International says that the ExxonMobil-led consortium operating the Chad project negotiated a deal enabling the oil companies "to effectively sidestep the rule of law in Chad and Cameroon, and limits the ability of those countries to develop effective human rights protection for their citizens over the next several decades."
For more details on ExxonMobil's sordid performance, see ExposeExxon.org, a website maintained by a coalition of environmental and public interest groups seeking to pressure ExxonMobil to "shed its past as an irresponsible oil company."
One block from the White House, on Washington, D.C.'s 15th Street, Northwest, embedded in the sidewalk, in front of The Old Ebbitt Grill, is a bronze medallion honoring the life of Booker T. Washington.
The medallion has a picture of Booker T. and reads: "As an influential African American, living in a time of escalating segregation, Booker T. Washington negotiated a course between accommodation and progress in advocating greater civil rights for blacks. His philosophy of 'request' not 'protest' allowed him to gain the respect of presidents and politicians, but sometimes alienated those of his own race. Washington believed education was a cornerstone for the advancement of blacks and his efforts to raise money for his beloved Tuskegee Institute helped secure its well-deserved reputation as a leading educational institution for African Americans."
"My life work is the promotion of education of my race."
— Booker T. WashingtonSponsored by Ford Motor Company
The Booker T. medallion is one of a growing list of U.S. volunteer pioneers being honored by the Points of Light Foundation.
Ultimately, the medallions will form a mile-long pathway in the heart of Washington, D.C.
There are now 20 medallions embedded on the sidewalks of 15th Street and G Streets in downtown Washington.
The monument — known as The Extra Mile — was dedicated on October 14, 2005 with great fanfare in a ceremony attended by former President George Bush and many extended family members of the honorees.
Each medallion is sponsored by a major U.S. corporation.
The one honoring Cesar Chavez, co-founder of the United Farm Workers of America, was also made possible by Ford Motor Company.
His plaque reads in part: "Under his leadership of nonviolent protest, the UFW was able to secure improved wages and benefits, more humane living and working conditions, and better job security for some of the poorest workers in America."
Obviously, the company is no fan of Cesar Chavez — or Booker T. for that matter.
Ford is doing it to buff its image, as they say.
Why?
For one, officials in New Jersey are calling for an investigation of the company for environmental crimes.
It turns out that over a period of years, Ford Motor Company dumped millions of gallons of paint sludge into a now-residential area of northern New Jersey.
The paint sludge was from the Ford Motor Co.'s factory in Mahwah, once the largest auto assembly plant in the nation, according to an investigative report published in October in the Bergen Record.
The Record has put out a series of investigative reports on the dumping. They are compiled at www.toxiclegacy.com.
According to the series, before closing in 1980, the plant spat out six million vehicles and an ocean of contaminants — including enough paint sludge to fill two of the three tubes of the Lincoln Tunnel.
Millions of gallons of paint sludge were dumped in the remote section of Ringwood, which is now a residential area.
Children played in it.
Streams washed over it.
And early this year, New Jersey officials announced some cancer rates in the area are unusually high.
Tests commissioned by the Record found lead, arsenic, and xylenes in the sludge — some at 100 times the levels the government considers safe.
The Record found that Ford repeatedly dumped in poor communities and failed to clean up its mess.
Reporters with the Record dug up documents showing that Ford executives knew as early as 34 years ago that its waste had contaminated a stream that feeds the Wanaque Reservoir.
The documents show that the company tried to evade responsibility by presenting tainted land as a "gift" to the state, the paper reported.
The Record interviewed truckers who hauled Ford's waste — they say that mob-controlled contractors dumped anywhere they could get away with.
They bribed, threatened, even murdered to maintain control of Ford's waste, the paper reported.
Millions of gallons of hazardous waste vanished in their hands.
According to the Record, Ford says its dumping in Ringwood was legal.
Ford says others dumped in Ringwood and share responsibility for the pollution.
Well, let's have a federal prosecutor decide.
There are points of light. (www.extramile.us)
And there are points of darkness.(www.toxiclegacy.com)
Getting cheap publicity by putting your name on a plaque is one thing.
Paying for the human and environmental wreckage you've caused in northern New Jersey is something else. (Not to mention matching your rhetorical concern with climate change and environmental well-being with company actions that help take the planet off the SUV-hardened fast track to planetary overheating. See www.jumpstartford.com.)
In honor of Booker T., we "request" that the U.S. Attorney in Newark take seriously the New Jersey hazardous waste case and open a criminal investigation of the company.
Try as we might, we couldn't keep Halliburton off a list of the worst companies two years running.
The company has effectively made a business model of crooked dealings with the U.S. government. Getting caught, over and over, doesn't seem to affect things much.
Here are the company's lowlights for the year, via HalliburtonWatch: January 10: Halliburton admitted that it expanded economic relations with Iran despite the Bush administration's insistence that the nation finances terrorism.
February 8: The U.S. Army agreed to pay Halliburton's KBR subsidiary nearly $2 billion for work that nobody can prove ever took place. Army auditors determined in 2004 that 43 percent of the $4.5 billion requested by Halliburton under a major contract could not be verified under normal accounting procedures. Despite recommendations to withhold 15 percent of payment from Halliburton, the Pentagon decided to pay the company what it requested. "This is indeed great news for KBR," said Andy Lane, chief operating officer of Halliburton, in a news release. "The Army and KBR have agreed to continue working closely together to resolve any remaining billing issues."
March 2: The U.S. Justice Department opened a criminal inquiry into possible bid-rigging on foreign contracts by Halliburton, the company revealed. In a filing with the Securities and Exchange Commission, the company said "information has been uncovered" that former employees of KBR "may have engaged in coordinated bidding with one or more competitors on certain foreign construction projects and that such coordination possibly began as early as the mid-1980s." These bribes involve contracts in Nigeria, and occurred in the 1990s, when Vice President Cheney headed Halliburton.
March 14: Pentagon auditors found another $108 million in overcharges by Halliburton's KBR subsidiary for provision of oil in Iraq, according to a disclosure by Representative Henry Waxman, D-California.
March 16: The Los Angeles Times reported that the U.S. Environmental Protection Agency (EPA) will investigate complaints by one of its engineers who said the agency purposely tampered with environmental science in order to shield a lucrative drilling technique, pioneered by Halliburton and known as hydraulic fracturing, from pollution laws.
April: the State Department issued a report concluding that Halliburton's repair work in Iraqi oil fields is plagued by serious cost overruns and "poor performance."
June 29: At a Congressional hearing, Bunnatine H. Greenhouse, then the senior contracting specialist with the Army Corps of Engineers, testified, "I can unequivocally state that the abuse related to contracts awarded to KBR [Halliburton's subsidiary] represents the most blatant and improper contract abuse I have witnessed during the course of my professional career." In August, Greenhouse would be demoted for her testimony.
At the hearing, Representative Waxman released a previously secret military audit criticizing an extra $1.4 billion in "questioned" and "unsupported" expenditures by Halliburton's KBR subsidiary in Iraq.
July 22: Halliburton announced that its KBR division, responsible for carrying out Pentagon contracts, saw profits jump 284 percent during the second quarter of the year.
September 8: The Washington Post reported that former head of the Federal Emergency Management Agency (FEMA), Joseph Allbaugh, now a lobbyist for Halliburton, is in Louisiana helping his clients obtain disaster relief contracts.
But Allbaugh insisted he's not in Louisiana seeking contracts for clients. "I don't do government contracts," he told the Post. Instead, he said he's "just trying to lend my shoulder to the wheel, trying to coordinate some private-sector support that the government always asks for."
September 15: Senator Frank Lautenberg, D-New Jersey reiterated his call for Vice President Dick Cheney to forfeit his continuing financial interest in Halliburton. Lautenberg points out that Cheney's Halliburton options are worth more than $9 million. Cheney insists he has no ongoing financial entanglement with Halliburton because he will donate the profits from stock sales to charity.
September 20: Former KBR employees and water quality specialists Ben Carter and Ken May told HalliburtonWatch that KBR knowingly exposes troops and civilians to contaminated water from Iraq's Euphrates River. One internal KBR email provided to HalliburtonWatch says that, for "possibly a year," the level of contamination at one camp was two times the normal level for untreated water.
October: Senator Mary Landrieu, D-Louisiana, charged that a Halliburton subcontractor had hired as many as 100 undocumented immigrants to clean up areas damaged by Hurricane Katrina. The president of the subcontractor, Alabama-based BE&K, is Retired U.S. Navy Admiral David Nash. Nash was head of the U.S. office in Baghdad which handed out Iraq contracts. "There is no connection between the hurricane-related work we are doing in Mississippi and Louisiana and Nash's involvement in Iraq," a BE&K spokesperson told Reuters.
November 15: Halliburton's KBR subsidiary and its subcontractors illegally abuse immigrants and undocumented workers in hurricane-damaged areas of the Gulf Coast, Roberto Lovato of Salon.com reported.
In an article titled "Gulf Coast Slaves," Lovato writes of his travels throughout the storm-ravaged region where KBR's cleanup contracts currently amount to $124.9 million.
He observed "squalid trailer parks where up to 19 unpaid, unfed, and undocumented KBR site workers inhabited a single trailer for $70 per person, per week." Many suffer from work-related health problems, including diarrhea, sprained ankles, cuts, and bruises acquired while working for KBR. Halliburton denies violating labor laws, but immigration enforcement officials discovered undocumented workers at the Belle Chasse facility in October.
