Multinational Monitor

Multinational Monitor
http://www.multinationalmonitor.org/

The System Implodes: The 10 Worst Corporations of

2008
by Robert Weissman

http://www.multinationalmonitor.org/mm2008/112008/weissman.html

AIG
Cargill
Chevron
CNPC
Constellation
2008 marks the 20th anniversary of Multinational Monitor’s
Energy
annual list of the 10 Worst Corporations of the year.
Dole
General Electric
Imperial Sugar
Philip Morris Int’l.
Roche
In the 20 years that we’ve published our annual list, we’ve covered corporate villains,
scoundrels, criminals and miscreants. We’ve reported on some really bad stuff — from
Exxon’s Valdez spill to Union Carbide and Dow’s effort to avoid responsibility for the
Bhopal disaster; from oil companies coddling dictators (including Chevron and CNPC,
both profiled this year) to a bank (Riggs) providing financial services for Chilean dictator
Augusto Pinochet; from oil and auto companies threatening the future of the planet by
blocking efforts to address climate change to duplicitous tobacco companies marketing
cigarettes around the world by associating their product with images of freedom, sports,
youthful energy and good health.

But we’ve never had a year like 2008.

The financial crisis first gripping Wall Street and now spreading rapidly throughout the
world is, in many ways, emblematic of the worst of the corporate-dominated political and
economic system that we aim to expose with our annual 10 Worst list. Here is how.

Improper political influence: Corporations dominate the policy-making process, from

city councils to global institutions like the World Trade Organization. Over the last 30
years, and especially in the last decade, Wall Street interests leveraged their political
power to remove many of the regulations that had restricted their activities. There are at
least a dozen separate and significant examples of this, including the Financial Services
Modernization Act of 1999, which permitted the merger of banks and investment banks.
In a form of corporate civil disobedience, Citibank and Travelers Group merged in 1998
— a move that was illegal at the time, but for which they were given a two-year
forbearance — on the assumption that they would be able to force a change in the
relevant law. They did, with the help of just-retired (at the time) Treasury Secretary
Robert Rubin, who went on to an executive position at the newly created Citigroup.

Deregulation and non-enforcement: Non-enforcement of rules against predatory lending

helped the housing bubble balloon. While some regulators had sought to exert authority
over financial derivatives, they were stopped by finance-friendly figures in the Clinton
administration and Congress — enabling the creation of the credit default swap market.
Even Alan Greenspan concedes that that market — worth $55 trillion in what is called
notional value — is imploding in significant part because it was not regulated.

Short-term thinking: It was obvious to anyone who cared to look at historical trends that
the United States was experiencing a housing bubble. Many in the financial sector
seemed to have convinced themselves that there was no bubble. But others must have
been more clear-eyed. In any case, all the Wall Street players had an incentive not to pay
attention to the bubble. They were making stratospheric annual bonuses based on annual
results. Even if they were certain the bubble would pop sometime in the future, they had
every incentive to keep making money on the upside.

Financialization: Profits in the financial sector were more than 35 percent of overall U.S.
corporate profits in each year from 2005 to 2007, according to data from the Bureau of
Economic Analysis. Instead of serving the real economy, the financial sector was taking
over the real economy.

Profit over social use: Relatedly, the corporate-driven economy was being driven by what
could make a profit, rather than what would serve a social purpose. Although Wall Street
hucksters offered elaborate rationalizations for why exotic financial derivatives, private
equity takeovers of firms, securitization and other so-called financial innovations helped
improve economic efficiency, by and large these financial schemes served no socially
useful purpose.

Externalized costs: Worse, the financial schemes didn’t just create money for Wall Street
movers and shakers and their investors. They made money at the expense of others. The
costs of these schemes were foisted onto workers who lost jobs at firms gutted by private
equity operators, unpayable loans acquired by homeowners who bought into a bubble
market (often made worse by unconscionable lending terms), and now the public.

What is most revealing about the financial meltdown and economic crisis, however, is
that it illustrates that corporations — if left to their own worst instincts — will destroy
themselves and the system that nurtures them. It is rare that this lesson is so graphically
illustrated. It is one the world must quickly learn, if we are to avoid the most serious
existential threat we have yet faced: climate change.

Of course, the rest of the corporate sector was not on good behavior during 2008 either,
and we do not want them to escape justified scrutiny. In keeping with our tradition of
highlighting diverse forms of corporate wrongdoing, we include only one financial
company on the 10 Worst list. Here, presented in alphabetical order, are the 10 Worst
Corporations of 2008.

AIG: Money for Nothing

There’s surely no one party responsible for the ongoing global financial crisis.

But if you had to pick a single responsible corporation, there’s a very strong case to make
for American International Group (AIG).

In September, the Federal Reserve poured $85 billion into the distressed global financial
services company. It followed up with $38 billion in October.

The government drove a hard bargain for its support. It allocated its billions to the
company as high-interest loans; it demanded just short of an 80 percent share of the
company in exchange for the loans; and it insisted on the firing of the company’s CEO
(even though he had only been on the job for three months).

Why did AIG — primarily an insurance company powerhouse, with more than 100,000
employees around the world and $1 trillion in assets — require more than $100 billion
($100 billion!) in government funds? The company’s traditional insurance business
continues to go strong, but its gigantic exposure to the world of “credit default swaps”
left it teetering on the edge of bankruptcy. Government officials then intervened, because
they feared that an AIG bankruptcy would crash the world’s financial system.

Credit default swaps are effectively a kind of insurance policy on debt securities.
Companies contracted with AIG to provide insurance on a wide range of securities. The
insurance policy provided that, if a bond didn’t pay, AIG would make up the loss.

AIG’s eventual problem was rooted in its entering a very risky business but treating it as
safe. First, AIG Financial Products, the small London-based unit handling credit default
swaps, decided to insure “collateralized debt obligations” (CDOs). CDOs are pools of
mortgage loans, but often only a portion of the underlying loans — perhaps involving the
most risky part of each loan. Ratings agencies graded many of these CDOs as highest
quality, though subsequent events would show these ratings to have been profoundly
flawed. Based on the blue-chip ratings, AIG treated its insurance on the CDOs as low
risk. Then, because AIG was highly rated, it did not have to post collateral.

Through credit default swaps, AIG was basically collecting insurance premiums and
assuming it would never pay out on a failure — let alone a collapse of the entire market it
was insuring. It was a scheme that couldn’t be beat: money for nothing.

In September, the New York Times’ Gretchen Morgenson reported on the operations of
AIG’s small London unit, and the profile of its former chief, Joseph Cassano. In 2007, the
Times reported, Cassano “described the credit default swaps as almost a sure thing.” “It is
hard to get this message across, but these are very much handpicked,” he said in a call
with analysts.

“It is hard for us, without being flippant, to even see a scenario within any kind of realm
of reason that would see us losing one dollar in any of those transactions,” he said.

Cassano assured investors that AIG’s operations were nearly fail safe. Following earlier
accounting problems, the company’s risk management was stellar, he said: “That’s a
committee that I sit on, along with many of the senior managers at AIG, and we look at a
whole variety of transactions that come in to make sure that they are maintaining the
quality that we need to. And so I think the things that have been put in at our level and the
things that have been put in at the parent level will ensure that there won’t be any of those
kinds of mistakes again.”

Cassano turned out to be spectacularly wrong. The credit default swaps were not a sure
thing. AIG somehow did not notice that the United States was experiencing a housing
bubble, and that it was essentially insuring that the bubble would not pop. It made an ill-
formed judgment that positive credit ratings meant CDOs were high quality — even
when the underlying mortgages were of poor quality.

But before the bubble popped, Cassano’s operation was minting money. It wasn’t hard
work, since AIG Financial Products was taking in premiums in exchange for nothing. In
2005, the unit’s profit margin was 83 percent, according to the Times. By 2007, its credit
default swap portfolio was more than $500 billion.

Then things started to go bad. Suddenly, AIG had to start paying out on some of the
securities it had insured. As it started recording losses, its credit default swap contracts
require that it begin putting up more and more collateral. AIG found it couldn’t raise
enough money fast enough — over the course of a weekend in September, the amount of
money AIG owed shot up from $20 billion to more than $80 billion.

With no private creditors stepping forward, it fell to the government to provide the
needed capital or let AIG enter bankruptcy. Top federal officials deemed bankruptcy too
high a risk to the overall financial system.

After the bailout, it emerged that AIG did not even know all of the CDOs it had ensured.

In September, less than a week after the bailout was announced, the Orange County
Register reported on a posh retreat for company executives and insurance agents at the
exclusive St. Regis Resort in Monarch Beach, California. Rooms at the resort can cost
over $1,000 per night.

After the House of Representatives Oversight and Government Reform Committee

highlighted the retreat, AIG explained that the retreat was primarily for well-performing
independent insurance agents. Only 10 of the 100 participants were from AIG (and they
from a successful AIG subsidiary), the company said, and the event was planned long in
advance of the federal bailout. In an apology letter to Treasury Secretary Henry Paulson,
CEO Edward Liddy wrote that AIG now faces very different challenges, and “that we
owe our employees and the American public new standards and approaches.”

New standards and approaches, indeed.

Cargill: Food Profiteers

The world’s food system is broken.

Or, more accurately, the giant food companies and their allies in the U.S. and other rich
country governments, and at the International Monetary Fund and World Bank, broke it.

Thirty years ago, most developing countries produced enough food to feed themselves.
Now, 70 percent are net food importers.

Thirty years ago, most developing countries had in place mechanisms aimed at
maintaining a relatively constant price for food commodities. Tariffs on imports protected
local farmers from fluctuations in global food prices. Government-run grain purchasing
boards paid above-market prices for farm goods when prices were low, and required
farmers to sell below-market when prices were high. The idea was to give farmers some
certainty over price, and to keep food affordable for consumers. Governments also
provided a wide set of support services for farmers, giving them advice on new crop and
growing technologies and, in some countries, helping set up cooperative structures.

This was not a perfect system by any means, but it looks pretty good in retrospect.

Over the last three decades, the system was completely abandoned, in country after
country. It was replaced by a multinational-dominated, globally integrated food system,
in which the World Bank and other institutions coerced countries into opening their
markets to cheap food imports from rich countries and re-orienting their agricultural
systems to grow food for rich consumers abroad. Proponents said the new system was a
“free market” approach, but in reality it traded one set of government interventions for
another — a new set of rules that gave enhanced power to a handful of global grain
trading companies like Cargill and Archer Daniels Midland, as well as to seed and
fertilizer corporations.

“For this food regime to work,” Raj Patel, author of Stuffed and Starved, told the U.S.
House Financial Services Committee at a May hearing, “existing marketing boards and
support structures needed to be dismantled. In a range of countries, this meant that the
state bodies that had been supported and built by the World Bank were dismantled by the
World Bank. The rationale behind the dismantling of these institutions was to clear the
path for private sector involvement in these sectors, on the understanding that the private
sector would be more efficient and less wasteful than the public sector.”

“The result of these interventions and conditions,” explained Patel, “was to accelerate the
decline of developing country agriculture. One of the most striking consequences of
liberalization has been the phenomenon of ‘import surges.’ These happen when tariffs on
cheaper, and often subsidized, agricultural products are lowered, and a host country is
then flooded with those goods. There is often a corresponding decline in domestic
production. In Senegal, for example, tariff reduction led to an import surge in tomato
paste, with a 15-fold increase in imports, and a halving of domestic production. Similar
stories might be told of Chile, which saw a three-fold surge in imports of vegetable oil,
and a halving of domestic production. In Ghana in 1998, local rice production accounted
for over 80 percent of domestic consumption. By 2003, that figure was less than 20
percent.”

The decline of developing country agriculture means that developing countries are
dependent on the vagaries of the global market. When prices spike — as they did in late
2007 and through the beginning of 2008 — countries and poor consumers are at the
mercy of the global market and the giant trading companies that dominate it. In the first
quarter of 2008, the price of rice in Asia doubled, and commodity prices overall rose 40
percent. People in rich countries felt this pinch, but the problem was much more severe in
the developing world. Not only do consumers in poor countries have less money, they
spend a much higher proportion of their household budget on food — often half or more
— and they buy much less processed food, so commodity increases affect them much
more directly. In poor countries, higher prices don’t just pinch, they mean people go
hungry. Food riots broke out around the world in early 2008.
But not everyone was feeling pain. For Cargill, spiking prices was an opportunity to get
rich. In the second quarter of 2008, the company reported profits of more than $1 billion,
with profits from continuing operations soaring 18 percent from the previous year.
Cargill’s 2007 profits totaled more than $2.3 billion, up more than a third from 2006.

In a competitive market, would a grain-trading middleman make super-profits? Or would

rising prices crimp the middleman’s profit margin?

Well, the global grain trade is not competitive.

In an August speech, Cargill CEO Greg Page posed the question, “So, isn’t Cargill
exploiting the food situation to make money?” Here is how he responded:

“I would give you four pieces of information about why our earnings have gone up
dramatically.

1. The demand for food has gone up. The demand for our facilities has gone up, and
we are running virtually all of our facilities worldwide at total capacity. As we
utilize our capacity more effectively, clearly we do better.
2. Fertilizer prices rose, and we are owners of a large fertilizer company. That has
been the single largest factor in Cargill’s earnings.
3. The volatility in the grain industry — much of it created by governments — was
an opportunity for a trading company like Cargill to make money.
4. Finally, in this era of high prices, Cargill over the last two years has invested
$15.5 billion additional dollars into the world food system. Some was to carry all
these high-priced inventories. We also wanted to be sure that we were there for
farmers who needed the working capital to operate in this much more expensive
environment. Clearly, our owners expected some return on that $15.5 billion.
Cargill had an opportunity to make more money in this environment, and I think
that is something that we need to be very forthright about.”

OK, Mr. Page, that’s all very interesting. The question was, “So, isn’t Cargill exploiting
the food situation to make money?” It sounds like your answer is, “yes.”

Chevron: “We can’t let little countries screw around with big companies”

The world has witnessed a stunning consolidation of the multinational oil companies over
the last decade.

One of the big winners was Chevron. It swallowed up Texaco and Unocal, among others.
It was happy to absorb their revenue streams. It has been less willing to take
responsibility for ecological and human rights abuses perpetrated by these companies.

One of the inherited legacies from Chevron’s 2001 acquisition of Texaco is litigation in
Ecuador over the company’s alleged decimation of the Ecuadorian Amazon over a 20-
year period of operation. In 1993, 30,000 indigenous Ecuadorians filed a class action suit
in U.S. courts, alleging that Texaco had poisoned the land where they live and the
waterways on which they rely, allowing billions of gallons of oil to spill and leaving
hundreds of waste pits unlined and uncovered. They sought billions in compensation for
the harm to their land and livelihood, and for alleged health harms. The Ecuadorians and
their lawyers filed the case in U.S. courts because U.S. courts have more capacity to
handle complex litigation, and procedures (including jury trials) that offer plaintiffs a
better chance to challenge big corporations. Texaco, and later Chevron, deployed massive
legal resources to defeat the lawsuit. Ultimately, a Chevron legal maneuver prevailed: At
Chevron’s instigation, U.S. courts held that the case should be litigated in Ecuador, closer
to where the alleged harms occurred.

Having argued vociferously that Ecuadorian courts were fair and impartial, Chevron is
now unhappy with how the litigation has proceeded in that country. So unhappy, in fact,
that it is lobbying the Office of the U.S. Trade Representative to impose trade sanctions
on Ecuador if the Ecuadorian government does not make the case go away.

“We can’t let little countries screw around with big companies like this — companies that
have made big investments around the world,” a Chevron lobbyist said to Newsweek in
August. (Chevron subsequently stated that “the comments attributed to an unnamed
lobbyist working for Chevron do not reflect our company’s views regarding the Ecuador
case. They were not approved by the company and will not be tolerated.”)

Chevron is worried because a court-appointed special master found in March that the
company was liable to plaintiffs for between $7 billion and $16 billion. The special
master has made other findings that Chevron’s clean-up operations in Ecuador have been
inadequate.

Another of Chevron’s inherited legacies is the Yadana natural gas pipeline in Burma,
operated by a consortium in which Unocal was one of the lead partners. Human rights
organizations have documented that the Yadana pipeline was constructed with forced
labor, and associated with brutal human rights abuses by the Burmese military.

EarthRights International, a human rights group with offices in Washington, D.C. and
Bangkok, has carefully tracked human rights abuses connected to the Yadana pipeline,
and led a successful lawsuit against Unocal/Chevron. In an April 2008 report, the group
states that “Chevron and its consortium partners continue to rely on the Burmese army for
pipeline security, and those forces continue to conscript thousands of villagers for forced
labor, and to commit torture, rape, murder and other serious abuses in the course of their
operations.”

Money from the Yadana pipeline plays a crucial role in enabling the Burmese junta to
maintain its grip on power. EarthRights International estimates the pipeline funneled
roughly $1 billion to the military regime in 2007. The group also notes that, in late 2007,
when the Burmese military violently suppressed political protests led by Buddhist monks,
Chevron sat idly by.
Chevron has trouble in the United States, as well. In September, Earl Devaney, the
inspector general for the Department of Interior, released an explosive report
documenting “a culture of ethical failure” and a “culture of substance abuse and
promiscuity” in the U.S. government program handling oil lease contracts on U.S.
government lands and property. Government employees, Devaney found, accepted a
stream of small gifts and favors from oil company representatives, and maintained sexual
relations with them. (In one memorable passage, the inspector general report states that
“sexual relationships with prohibited sources cannot, by definition, be arms-length.”) The
report showed that Chevron had conferred the largest number of gifts on federal
employees. It also complained that Chevron refused to cooperate with the investigation, a
claim Chevron subsequently disputed.

Constellation Energy: Nuclear Operators

Although it is too dangerous, too expensive and too centralized to make sense as an
energy source, nuclear power won’t go away, thanks to equipment makers and utilities
that find ways to make the public pay and pay.

Case in point: Constellation Energy Group, the operator of the Calvert Cliffs nuclear
plant in Maryland. When Maryland deregulated its electricity market in 1999,
Constellation — like other energy generators in other states — was able to cut a deal to
recover its “stranded costs” and nuclear decommissioning fees. The idea was that
competition would bring multiple suppliers into the market, and these new competitors
would have an unfair advantage over old-time monopoly suppliers. Those former
monopolists, the argument went, had built expensive nuclear reactors with the approval
of state regulators, and it would be unfair if they could not charge consumers to recover
their costs. It would also be unfair, according to this line of reasoning, if the former
monopolists were unable to recover the costs of decommissioning nuclear facilities.

In Maryland, the “stranded cost” deal gave Constellation (through its affiliate Baltimore
Gas & Electric, BGE) the right to charge ratepayers $975 million in 1993 dollars (almost
$1.5 billion in present dollars).

Deregulation meant that Constellation’s energy generating assets — including its nuclear
facility at Calvert Cliffs — were free from price regulation. As a result, instead of costing
Constellation, Calvert Cliffs’ market value increased.

Deregulation also meant that, after an agreed-upon freeze period, BGE was free to raise
its rates as it chose. In 2006, it announced a 72 percent rate increase. For residential
consumers, this meant they would pay an average of $743 more per year for electricity.

The sudden price hike sparked a rebellion. The Maryland legislature passed a law
requiring BGE to credit consumers $386 million over a 10-year period. At the time,
Constellation was very pleased with the deal, which let it keep most of its price-gouging
profits — a spokesperson for the then-governor said that Constellation and BGE were
“doing a victory lap around the statehouse” after the bill passed.
In February 2008, however, Constellation announced that it intended to sue the state for
unconstitutionally “taking” its assets via the mandatory consumer credit. In March,
following a preemptive lawsuit by the state, the matter was settled. BGE agreed to make
a one-time rebate of $170 million to residential ratepayers, and 90 percent of the credits
to ratepayers (totaling $346 million) were left in place. The deal also relieved ratepayers
of the obligation to pay for decommissioning — an expense that had been expected to
total $1.5 billion (or possibly much more) from 2016 to 2036.

The deal also included regulatory changes making it easier for outside companies to
invest in Constellation — a move of greater import than initially apparent. In September,
with utility stock prices plummeting, Warren Buffet’s MidAmerican Energy announced it
would purchase Constellation for $4.7 billion, less than a quarter of the company’s
market value in January.

Meanwhile, Constellation plans to build a new reactor at Calvert Cliffs, potentially the
first new reactor built in the United States since the near-meltdown at Three Mile Island
in 1979.

“There are substantial clean air benefits associated with nuclear power, benefits that we
recognize as the operator of three plants in two states,” says Constellation spokesperson
Maureen Brown.

It has lined up to take advantage of U.S. government-guaranteed loans for new nuclear
construction, available under the terms of the 2005 Energy Act [see “Nuclear’s Power
Play: Give Us Subsidies or Give Us Death,” Multinational Monitor, September/October
2008]. “We can’t go forward unless we have federal loan guarantees,” says Brown.

Building nuclear plants is extraordinarily expensive (Constellation’s planned construction

is estimated at $9.6 billion) and takes a long time; construction plans face massive
political risks; and the value of electric utilities is small relative to the huge costs of
nuclear construction. For banks and investors, this amounts to too much uncertainty —
but if the government guarantees loans will be paid back, then there’s no risk.

Or, stated better, the risk is absorbed entirely by the public. That’s the financial risk. The
nuclear safety risk is always absorbed, involuntarily, by the public.

CNPC: Fueling Violence in Darfur

Many of the world’s most brutal regimes have a common characteristic: Although subject
to economic sanctions and politically isolated, they are able to maintain power thanks to
multinational oil company enablers. Case in point: Sudan, and the Chinese National
Petroleum Corporation (CNPC).

In July, International Criminal Court (ICC) Prosecutor Luis Moreno-Ocampo charged the
President of Sudan, Omar Hassan Ahmad Al Bashir, with committing genocide, crimes
against humanity and war crimes. The charges claim that Al Bashir is the mastermind of
crimes against ethnic groups in Darfur, aimed at removing the black population from
Sudan. Sudanese armed forces and government-authorized militias known as the
Janjaweed have carried out massive attacks against the Fur, Masalit and Zaghawa
communities of Darfur, according to the ICC allegations. Following bombing raids,
“ground forces would then enter the village or town and attack civilian inhabitants. They
kill men, children, elderly, women; they subject women and girls to massive rapes. They
burn and loot the villages.” The ICC says 35,000 people have been killed and 2.7 million
displaced.

The ICC reports one victim saying: “When we see them, we run. Some of us succeed in
getting away, and some are caught and taken to be raped — gang-raped. Maybe around
20 men rape one woman. ... These things are normal for us here in Darfur. These things
happen all the time. I have seen rapes, too. It does not matter who sees them raping the
women — they don’t care. They rape girls in front of their mothers and fathers.”

Governments around the world have imposed various sanctions on Sudan, with human
rights groups demanding much more aggressive action.

But there is little doubt that Sudan has been able to laugh off existing and threatened
sanctions because of the huge support it receives from China, channeled above all
through the Sudanese relationship with CNPC.

“The relationship between CNPC and Sudan is symbiotic,” notes the Washington, D.C.-
based Human Rights First, in a March 2008 report, “Investing in Tragedy.” “Not only is
CNPC the largest investor in the Sudanese oil sector, but Sudan is CNPC’s largest market
for overseas investment.”

China receives three quarters of Sudan’s exports, and Chinese companies hold the
majority share in almost all of the key oil-rich areas in Sudan. Explains Human Rights
First: “Beijing’s companies pump oil from numerous key fields, which then courses
through Chinese-made pipelines to Chinese-made storage tanks to await a voyage to
buyers, most of them Chinese.” CNPC is the largest oil investor in Sudan; the other key
Chinese company is the Sinopec Group (also known as the China Petrochemical
Corporation).

Oil money has fueled violence in Darfur. “The profitability of Sudan’s oil sector has
developed in close chronological step with the violence in Darfur,” notes Human Rights
First. “In 2000, before the crisis, Sudan’s oil revenue was $1.2 billion. By 2006, with the
crisis well underway, that total had shot up by 291 percent, to $4.7 billion. How does
Sudan use that windfall? Its finance minister has said that at least 70 percent of the oil
profits go to the Sudanese armed forces, linked with its militia allies to the crimes in
Darfur.”

There are other nefarious components of the CNPC relationship with the Sudanese
government. China ships substantial amounts of small arms to Sudan and has helped
Sudan build its own small arms factories. China has also worked at the United Nations to
undermine more effective multilateral action to protect Darfur. Human rights
organizations charge a key Chinese motivation is to lubricate its relationship with the
Khartoum government so the oil continues to flow.

CNPC did not respond to repeated requests for comment.

Dole: The Sour Taste of Pineapple

Starting in 1988, the Philippines undertook what was to be a bold initiative to redress the
historically high concentration of land ownership that has impoverished millions of rural
Filipinos and undermined the country’s development. The Comprehensive Agricultural
Reform Program (CARP) promised to deliver land to the landless.

It didn’t work out that way.

Plantation owners helped draft the law and invented ways to circumvent its purported
purpose.

Dole pineapple workers are among those paying the price.

Under CARP, Dole’s land was divided among its workers and others who had claims on
the land prior to the pineapple giant. However, under the terms of the law, as the
Washington, D.C.-based International Labor Rights Forum (ILRF) explains in an October
report, “The Sour Taste of Pineapple,” the workers received only nominal title. They were
required to form labor cooperatives. Intended to give workers — now the new land
owners — a means to collectively manage their land, the cooperatives were instead
controlled by wealthy landlords.

“Through its dealings with these cooperatives,” ILRF found, Dole and Del Monte, (the
world’s other leading pineapple grower) “have been able to take advantage of a number
of worker abuses. Dole has outsourced its labor force to contract labor and replaced its
full-time regular employment system that existed before CARP.” Dole employs 12,000
contract workers. Meanwhile, from 1989 to 1998, Dole reduced its regular workforce by
3,500.

Under current arrangements, Dole now leases its land from its workers, on extremely
cheap terms — in one example cited by ILRF, Dole pays in rent one-fifteenth of its net
profits from a plantation. Most workers continue to work the land they purportedly own,
but as contract workers for Dole.

The Philippine Supreme Court has ordered Dole to convert its contract workers into
regular employees, but the company has not done so. In 2006, the Court upheld a
Department of Labor and Employment decision requiring Dole to stop using illegal
contract labor. Under Philippine law, contract workers should be regularized after six
months.
Dole emphasizes that it pays its workers $10 a day, more than the country’s $5.60
minimum wage. It also says that its workers are organized into unions. The company
responded angrily to a 2007 nomination for most irresponsible corporations from a Swiss
organization, the Berne Declaration. “We must also say that those fallacious attacks
created incredulity and some anger among our Dolefil workers, their representatives, our
growers, their cooperatives and more generally speaking among the entire community
where we operate.” The company thanked “hundreds of people who spontaneously
expressed their support to Dolefil, by taking the initiative to sign manifestos,” including
seven cooperatives.

The problem with Dole’s position, as ILRF points out, is that “Dole’s contract workers
are denied the same rights afforded to Dole’s regular workers. They are refused the right
to organize or benefits gained by the regular union, and are consequently left with poor
wages and permanent job insecurity.” Contract workers are paid under a quota system,
and earn about $1.85 a day, according to ILRF.

Conditions are not perfect for unionized workers, either. In 2006, when a union leader
complained about pesticide and chemical exposures (apparently misreported in local
media as a complaint about Dole’s waste disposal practices), the management of Dole
Philippines (Dolefil) pressed criminal libel charges against him. Two years later, these
criminal charges remain pending.

Dole says it cannot respond to the allegations in the ILRF report, because the U.S. Trade
Representative is considering acting on a petition by ILRF to deny some trade benefits to
Dole pineapples imported into the United States from the Philippines.

Concludes Bama Atheya, executive director of ILRF, “In both Costa Rica and the
Philippines, Dole has deliberately obstructed workers’ right to organize, has failed to pay
a living wage and has polluted workers’ communities.”

GE: Creative Accounting

General Electric (GE) has appeared on Multinational Monitor’s annual 10 Worst

Corporations list for defense contractor fraud, labor rights abuses, toxic and radioactive
pollution, manufacturing nuclear weaponry, workplace safety violations and media
conflicts of interest (GE owns television network NBC).

This year, the company returns to the list for new reasons: alleged tax cheating and the
firing of a whistleblower.

In June, former New York Times reporter David Cay Johnston reported on internal GE
documents that appeared to show the company had engaged in long-running effort to
evade taxes in Brazil. In a lengthy report in Tax Notes International, Johnston cited a GE
subsidiary manager’s powerpoint presentation that showed “suspicious” invoices as “an
indication of possible tax evasion.” The invoices showed suspiciously high sales volume
for lighting equipment in lightly populated Amazon regions of the country. These sales
would avoid higher value added taxes (VAT) in urban states, where sales would be
expected to be greater.

Johnston wrote that the state-level VAT at issue, based on the internal documents he
reviewed, appeared to be less than $100 million. But, “since the VAT scheme appears to
have gone on long before the period covered in the Moreira [the company manager]
report, the total sum could be much larger and could involve other countries supplied by
the Brazil subsidiary.”

A senior GE spokesperson, Gary Sheffer, told Johnston that the VAT and related issues
were so small relative to GE’s size that the company was surprised a reporter would
spend time looking at them. “No company has perfect compliance,” Sheffer said. “We do
not believe we owe the tax.”

Johnston did not identify the source that gave him the internal GE documents, but GE has
alleged it was a former company attorney, Adriana Koeck. GE fired Koeck in January
2007 for what it says were “performance reasons.” GE sued Koeck in June 2008, alleging
that she wrongfully maintained privileged and confidential information, and improperly
shared the information with third parties. In a court filing, GE said that it “considers its
professional reputation to be its greatest asset and it has worked tirelessly to develop and
preserve an unparalleled reputation of ‘unyielding integrity.’”

GE’s suit followed a whistleblower defense claim filed by Koeck in 2007. In April 2007,
Koeck filed a claim with the U.S. Department of Labor under the Sarbanes-Oxley
whistleblower protections (rules put in place following the Enron scandal).

In her filing, Koeck alleges that she was fired not for poor performance, but because she
called attention to improper activities by GE. After being hired in January 2006, Koeck’s
complaint asserts, she “soon discovered that GE C&I [consumer and industrial]
operations in Latin America were engaged in a variety of irregular practices. But when
she tried to address the problems, both Mr. Burse and Mr. Jones [her superiors in the
general counsel’s office] interfered with her efforts, took certain matters away from her,
repeatedly became enraged with her when she insisted that failing to address the
problems would harm GE, and eventually had her terminated.”

Koeck’s whistleblower filing details the state VAT-avoidance scheme discussed in

Johnston’s article. It also indicates that several GE employees in Brazil were
blackmailing the company to keep quiet about the scheme.

Koeck’s whistleblower filing also discusses reports in the Brazilian media that GE had
participated in a “bribing club” with other major corporations. Members of the club
allegedly met to divide up public contracts in Brazil, as well as to agree on the amounts
that would be paid in bribes. Koeck discovered evidence of GE subsidiaries engaging in
behavior compatible with the “bribing club” stories and reported this information to her
superior. Koeck alleges that her efforts to get higher level attorneys to review the
situation failed.
In a statement, GE responds to the substance of Koeck’s allegations of wrongdoing:
“These were relatively minor and routine commercial and tax issues in Brazil. Our
employees proactively identified, investigated and resolved these issues in the
appropriate manner. We are confident we have met all of our tax and compliance
obligations in Brazil.GE has a strong and rigorous compliance process that dealt
effectively with these issues.”

Koeck’s Sarbanes-Oxley complaint was thrown out in June, on the grounds that it had not
been filed in a timely matter.

The substance of her claims, however, are now under investigation by the Department of
Justice Fraud Section, according to Corporate Crime Reporter.

Imperial Sugar: 14 Dead

On February 7, an explosion rocked the Imperial Sugar refinery in Port Wentworth,

Georgia, near Savannah.

Tony Holmes, a forklift operator at the plant, was in the break room when the blast
occurred.

“I heard the explosion,” he told the Savannah Morning News. “The building shook, and
the lights went out. I thought the roof was falling in. ... I saw people running. I saw some
horrific injuries. ... People had clothes burning. Their skin was hanging off. Some were
bleeding.”

Days later, when the fire was finally extinguished and search-and-rescue operations
completed, the horrible human toll was finally known: 14 dead, dozens badly burned and
injured.

As with almost every industrial disaster, it turns out the tragedy was preventable. The
cause was accumulated sugar dust, which like other forms of dust, is highly combustible.

The Occupational Safety and Health Administration (OSHA), the government workplace
safety regulator, had not visited Imperial Sugar’s Port Wentworth facility since 2000.
When inspectors examined the blast site after the fact, they found rampant violations of
the agency’s already inadequate standards. They proposed a more than $5 million fine,
and issuance of citations for 61 egregious willful violations, eight willful violations and
51 serious violations. Under OSHA’s rules, a “serious” citation is issued when death or
serious physical harm is likely to occur, a “willful” violation is a violation committed
with plain indifference to employee safety and health, and “egregious” citations are
issued for particularly flagrant violations.

A month later, OSHA inspectors investigated Imperial Sugar’s plant in Gramercy,

Louisiana. They found 1/4- to 2-inch accumulations of dust on electrical wiring and
machinery. They found 6- to 8-inch accumulations on wall ledges and piping. They found
1/2- to 1-inch accumulations on mechanical equipment and motors. They found 3- to 48-
inch accumulations on workroom floors. OSHA posted an “imminent danger” notice at
the plant, because of the high likelihood of another explosion.

Imperial Sugar obviously knew of the conditions in its plants. It had in fact taken some
measures to clean up operations prior to the explosion.

Graham H. Graham was hired as vice president of operations of Imperial Sugar in

November 2007. In July 2008, he told a Senate subcommittee that he first walked through
the Port Wentworth facility in December 2007. “The conditions were shocking,” he
testified. “Port Wentworth was a dirty and dangerous facility. The refinery was littered
with discarded materials, piles of sugar dust, puddles of sugar liquid and airborne sugar
dust. Electrical motors and controls were encrusted with solidified sugar, while safety
covers and doors were missing from live electrical switchgear and panels. A combustible
environment existed.”

Graham recommended that the plant manager be fired, and he was. Graham ordered a
housekeeping blitz, and by the end of January, he testified to the Senate subcommittee,
conditions had improved significantly, but still were hazardous.

But Graham also testified that he was told to tone down his demands for immediate
action. In a meeting with John Sheptor, then Imperial Sugar’s chief operating officer and
now its CEO, and Kay Hastings, senior vice president of human resources, Graham
testified, “I was also informed that I was excessively eager in addressing the refinery’s
problems.”

Sheptor, who was nearly killed in the refinery explosion, and Hastings both deny
Graham’s account.

The company says that it respected safety concerns before the explosion, but has since
redoubled efforts, hiring expert consultants on combustible hazards, refocusing on
housekeeping efforts and purchasing industrial vacuums to minimize airborne
disbursement.

In March, the House of Representatives Education and Labor Committee held a hearing
on the hazards posed by combustible dust. The head of the Chemical Safety Board
testified about a 2006 study that identified hundreds of combustible dust incidents that
had killed more than 100 workers during the previous 25 years. The report recommended
that OSHA issue rules to control the risk of dust explosions.

Instead of acting on this recommendation, said Committee Chair George Miller, D-

California, “OSHA chose to rely on compliance assistance and voluntary programs, such
as industry ‘alliances,’ web pages, fact sheets, speeches and booths at industry
conferences.”
The House of Representatives then passed legislation to require OSHA to issue
combustible dust standards, but the proposal was not able to pass the Senate.

Remarkably, even after the tragedy at Port Wentworth, and while Imperial Sugar said it
welcomed the effort for a new dust rule, OSHA head Edwin Foulke indicated he believed
no new rule was necessary.

“We believe,” he told the House Education and Labor Committee in March, “that
[OSHA] has taken strong measures to prevent combustible dust hazards, and that our
multi-pronged approach, which includes effective enforcement of existing standards,
combined with education for employers and employees, is effective in addressing
combustible dust hazards. We would like to emphasize that the existence of a standard
does not ensure that explosions will be eliminated.”

Philip Morris International: Unshackled

The old Philip Morris no longer exists. In March, the company formally divided itself
into two separate entities: Philip Morris USA, which remains a part of the parent
company Altria, and Philip Morris International.

Philip Morris USA sells Marlboro and other cigarettes in the United States. Philip Morris
International tramples over the rest of the world.

The world is just starting to come to grips with a Philip Morris International even more
predatory in pushing its toxic products worldwide.

The new Philip Morris International is unconstrained by public opinion in the United
States — the home country and largest market of the old, unified Philip Morris —and
will no longer fear lawsuits in the United States.

As a result, Thomas Russo of the investment fund Gardner Russo & Gardner told
Bloomberg, the company “won’t have to worry about getting pre-approval from the U.S.
for things that are perfectly acceptable in foreign markets.” Russo’s firm owns 5.7 million
shares of Altria and now Philip Morris International.

A commentator for The Motley Fool investment advice service wrote, “The Marlboro
Man is finally free to roam the globe unfettered by the legal and marketing shackles of
the U.S. domestic market.”

In February, the World Health Organization (WHO) issued a new report on the global
tobacco epidemic. WHO estimates the Big Tobacco-fueled epidemic now kills more than
5 million people every year.

Five million people.

By 2030, WHO estimates 8 million will die a year from tobacco-related disease, 80
percent in the developing world.

The WHO report emphasizes that known and proven public health policies can
dramatically reduce smoking rates. These policies include indoor smoke-free policies;
bans on tobacco advertising, promotion and sponsorship; heightened taxes; effective
warnings; and cessation programs. These “strategies are within the reach of every
country, rich or poor and, when combined as a package, offer us the best chance of
reversing this growing epidemic,” says WHO Director-General Margaret Chan.

Most countries have failed to adopt these policies, thanks in no small part to decades-long
efforts by Philip Morris and the rest of Big Tobacco to deploy political power to block
public health initiatives. Thanks to the momentum surrounding a global tobacco treaty,
known as the Framework Convention on Tobacco Control, adopted in 2005, this is
starting to change. There’s a long way to go, but countries are increasingly adopting
sound public health measures to combat Big Tobacco.

Now Philip Morris International has signaled its initial plans to subvert these policies.

The company has announced plans to inflict on the world an array of new products,
packages and marketing efforts. These are designed to undermine smoke-free workplace
rules, defeat tobacco taxes, segment markets with specially flavored products, offer
flavored cigarettes sure to appeal to youth and overcome marketing restrictions.

The Chief Operating Officer of Philip Morris International, Andre Calantzopoulos,

detailed in a March investor presentation two new products, Marlboro Wides, “a shorter
cigarette with a wider diameter,” and Marlboro Intense, “a rich, flavorful, shorter
cigarette.”

Sounds innocent enough, as far as these things go.

That’s only to the innocent mind.

The Wall Street Journal reported on Philip Morris International’s underlying objective:
“The idea behind Intense is to appeal to customers who, due to indoor smoking bans,
want to dash outside for a quick nicotine hit but don’t always finish a full-size cigarette.”

Workplace and indoor smoke-free rules protect people from second-hand smoke, but also
make it harder for smokers to smoke. The inconvenience (and stigma of needing to leave
the office or restaurant to smoke) helps smokers smoke less and, often, quit. Subverting
smoke-free bans will damage an important tool to reduce smoking.

Philip Morris International says it can adapt to high taxes. If applied per pack (or per
cigarette), rather than as a percentage of price, high taxes more severely impact low-
priced brands (and can help shift smokers to premium brands like Marlboro). But taxes
based on price hurt Philip Morris International.
Philip Morris International’s response? “Other Tobacco Products,” which Calantzopoulos
describes as “tax-driven substitutes for low-price cigarettes.” These include, says
Calantzopoulos, “the ‘tobacco block,’ which I would describe as the perfect make-your-
own cigarette device.” In Germany, roll-your-own cigarettes are taxed far less than
manufactured cigarettes, and Philip Morris International’s “tobacco block” is rapidly
gaining market share.

One of the great industry deceptions over the last several decades is selling cigarettes
called “lights” (as in Marlboro Lights), “low” or “mild” — all designed to deceive
smokers into thinking they are safer.

The Framework Convention on Tobacco Control says these inherently misleading terms
should be barred. Like other companies in this regard, Philip Morris has been moving to
replace the names with color coding — aiming to convey the same ideas, without the
now-controversial terms.

Calantzopoulos says Philip Morris International will work to more clearly differentiate
Marlboro Gold (lights) from Marlboro Red (traditional) to “increase their appeal to
consumer groups and segments that Marlboro has not traditionally addressed.”

Philip Morris International also is rolling out a range of new Marlboro products with
obvious attraction for youth. These include Marlboro Ice Mint, Marlboro Crisp Mint and
Marlboro Fresh Mint, introduced into Japan and Hong Kong last year. It is exporting
clove products from Indonesia.

The company has also renewed efforts to sponsor youth-oriented music concerts. In July,
activist pressure forced Philip Morris International to withdraw sponsorship of an Alicia
Keys concert in Indonesia (Keys called for an end to the sponsorship deal); and in
August, the company was forced to withdraw from sponsorship in the Philippines of a
reunion concert of the Eraserheads, a band sometimes considered “the Beatles of the
Philippines.”

Responding to increasing advertising restrictions and large, pictorial warnings required

on packs, Marlboro is focusing increased attention on packaging. Fancy slide packs make
the package more of a marketing device than ever before, and may be able to obscure
warning labels.

Most worrisome of all may be the company’s forays into China, the biggest cigarette
market in the world, which has largely been closed to foreign multinationals. Philip
Morris International has hooked up with the China National Tobacco Company, which
controls sales in China. Philip Morris International will sell Chinese brands in Europe.
Much more importantly, the company is starting to sell licensed versions of Marlboro in
China. The Chinese aren’t letting Philip Morris International in quickly —
Calantzopoulos says, “We do not foresee a material impact on our volume and
profitability in the near future.” But, he adds, “we believe this long-term strategic
cooperation will prove to be mutually beneficial and form the foundation for strong long-
term growth.”

What does long-term growth mean? In part, it means gaining market share among
China’s 350 million smokers. But it also means expanding the market, by selling to girls
and women. About 60 percent of men in China smoke; only 2 or 3 percent of women do
so.

Roche: Saving Lives is Not Our Business

Monopoly control over life-saving medicines gives enormous power to drug companies.
And, to paraphrase Lord Acton, enormous power corrupts enormously.

The Swiss company Roche makes a range of HIV-related drugs. One of them is
enfuvirtid, sold under the brand-name Fuzeon. Fuzeon is the first of a new class of AIDS
drugs, working through a novel mechanism. It is primarily used as a “salvage” therapy —
a treatment for people for whom other therapies no longer work. Fuzeon brought in $266
million to Roche in 2007, though sales are declining.

Roche charges $25,000 a year for Fuzeon. It does not offer a discount price for
developing countries.

Like most industrialized countries, Korea maintains a form of price controls — the
national health insurance program sets prices for medicines. The Ministry of Health,
Welfare and Family Affairs listed Fuzeon at $18,000 a year. Korea’s per capita income is
roughly half that of the United States. Instead of providing Fuzeon, for a profit, at
Korea’s listed level, Roche refuses to make the drug available in Korea.

Korea is not a developing country, emphasizes Roche spokesperson Martina Rupp.

“South Korea is a developed country like the U.S. or like Switzerland.”

Roche insists that Fuzeon is uniquely expensive to manufacture, and so that it cannot
reduce prices. According to a statement from Roche, “the offered price represents the
lowest sustainable price at which Roche can provide Fuzeon to South Korea, considering
that the production process for this medication requires more than 100 steps — 10 times
more than other antiretrovirals. A single vial takes six months to produce, and 45
kilograms of raw materials are necessary to produce one kilogram of Fuzeon.”

The head of Roche Korea was reportedly less diplomatic. According to Korean activists,
he told them, “We are not in business to save lives, but to make money. Saving lives is
not our business.”

Says Roche spokesperson Rupp: “I don’t know why he would say that, and I cannot
imagine that this is really something that this person said.”
Another AIDS-related drug made by Roche is valganciclovir. Valganciclovir treats a
common AIDS-related infection called cytomegalovirus (CMV) that causes blindness or
death. Roche charges $10,000 for a four-month course of valganciclovir. In December
2006, it negotiated with Médicins Sans Frontières/Doctors Without Borders (MSF) and
agreed on a price of $1,899. According to MSF, this still-price-gouging price is only
available for poor and very high incidence countries, however, and only for nonprofit
organizations — not national treatment programs.

Roche’s Rupp says that “Currently, MSF is the only organization requesting purchase of
Valcyte [Roche’s brand name for valganciclovir] for such use in these countries. To date,
MSF are the only AIDS treatment provider treating CMV for their patients. They told us
themselves this is because no-one else has the high level of skilled medical staff they
have.”

Dr. David Wilson, former MSF medical coordinator in Thailand, says he remembers the
first person that MSF treated with life-saving antiretrovirals. “I remember everyone was
feeling really great that we were going to start treating people with antiretrovirals, with
the hope of bringing people back to normal life.” The first person MSF treated, Wilson
says, lived but became blind from CMV. “She became strong and she lived for a long
time, but the antiretroviral treatment doesn’t treat the CMV.”

“I’ve been working in MSF projects and treating people with AIDS with antiretrovirals
for seven years now,” he says, “and along with many colleagues we’ve been frustrated
because we don’t have treatment for this particular disease. We now think we have a
strategy to diagnose it effectively and what we really need is the medicine to treat the
patients.”

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Neither Honest Nor Trustworthy: The 10 Worst

Corporations of 2007
 Abbott
Blackwater
BP
Chiquitta
Countrywide
The U.S. public holds Big Business in shockingly low regard.
ExxonMobil
Gen Re
A November 2007 Harris poll found that less than 15 percent of the
Murray Energy
population believes each of the following industries to be "generally
Purdue Pharma
honest and trustworthy:" tobacco companies (3 percent); oil companies
SAIC
(3 percent); managed care companies such as HMOs (5 percent); health
insurance companies (7 percent); telephone companies (10 percent); life insurance
companies (10 percent); online retailers (10 percent); pharmaceutical and drug companies
(11 percent); car manufacturers (11 percent); airlines (11 percent); packaged food
companies (12 percent); electric and gas utilities (15 percent). Only 32 percent of adults
said they trusted the best-rated industry about which Harris surveyed, supermarkets.

These are remarkable numbers. It is very hard to get this degree of agreement about
anything. By way of comparison, 79 percent of U.S. adults believe the earth revolves
around the sun; 18 percent say it is the other way around.

The Harris results are not an aberration. The results have not varied considerably over the
past five years - although overall trust levels have actually declined from the already very
low threshold in 2003.

The Harris results are also in line with an array of polling data showing deep concern
about concentrated corporate power.
An amazing 84 percent told Harris in a poll earlier in 2007 that big companies have too
much power in Washington. By contrast, only 47 percent said that labor unions have too
much power in Washington (compared to 42 percent who said labor has too little power),
and 18 percent said nonprofit organizations have too much power in Washington.

These results have proven durable. At least 80 percent of the public has ranked big
companies as having too much power in Washington since 1994. In 2000, Business Week
and Harris asked a broader question: Has business gained too much power over too many
aspects of American life? Seventy-four percent agreed.

The November 2007 poll also asked about support for measures to control corporations.
These results are eye-opening as well, though perhaps not in the expected way.

Harris asked which industries "should be more regulated by government - for example for
health, safety or environmental reasons - than they are now?" Only oil companies (53
percent), pharmaceutical companies (53 percent) and health insurance companies (52
percent) crossed the 50 percent threshold. Even the tobacco industry managed to escape
in the survey with only 41 percent favoring greater regulation. The data trends
significantly negative - against greater regulation - over the last five years.

Does this show that while people distrust Big Business, they equally distrust the
government to constrain corporate power?

No.

The U.S. skepticism to regulation is only skin deep. When polls present specific
regulatory proposals for consideration, U.S. public support is typically strong and often
overwhelming - even when arguments against government action are presented.

For example:

• After hearing arguments for and against, 76 percent favor granting the Food and
Drug Administration (FDA) regulatory authority over tobacco, with 22 percent
opposed.
• After hearing arguments for and against, 75 percent favor legislation that would
significantly increase energy efficiency, including auto fuel efficiency standards,
and the use of renewable energy.
• Eighty-five percent favor country-of-origin labeling for meat, seafood, produce
and grocery products, and three quarters favor a legislative mandate.
• Seventy-one percent say it is important that drugs remain under close review by
the FDA and drug companies after they have been placed on the market.
• And, from a Harris finding a week after the poll showing skepticism about
industry regulation in general, the polling agency found that those who think there
is too little government regulation in the area of environmental protection
outpaced those who think there is too much by a more than 2-to-1 margin (53 to
21 percent).
What the Harris findings on attitudes to regulation do show is that the business campaign
against regulation as an abstract concept has been very successful.

It highlights the need for consumer, environmental, labor and other corporate
accountability advocates to defend the concept of regulation, and to connect the rampant
corporate abuses in society with the deregulation and non-regulatory failures of the last
three decades. There's little doubt that the general public attitude toward regulation
significantly affects the willingness of politicians - none too eager to offend business
patrons in the first place - to take on corporate power.

With the 10 Worst Corporations of 2007, we aim to show - again - that Big Business is
out of control and to connect comparable abuses to the failure of government overseers,
regulators and enforcers.

The task ahead is to reassert the supremacy of the people over corporations, and for
democratic government to impose controls and limits on what corporations can and
cannot do.

Presented alphabetically, here are the 10 Worst Corporations of 2007:

Abbott: Blackmailing Thailand

Imagine you are the only pharmacist in an isolated town. You impose massive mark-ups
on the drugs you sell. A customer needs a life-saving medication, but can't afford your
high price. So, the customer finds a pharmacy in a faraway town, which agrees to supply
the medicine for a quarter of your price.

Then the customer comes back. She needs several other medicines that you sell, and is
willing to pay your standard profiteering price. At least one of those medicines is not
available at the other pharmacy, or anywhere else.

You refuse to sell the medicines, unless the customer agrees to stop buying the life-saving
medicine from the other pharmacy.

If you engaged in this kind of behavior in the United States, you would be in violation of
the U.S. pharmacist code of ethics, which commands that "a pharmacist promotes the
good of every patient in a caring, compassionate and confidential manner." You would
also be breaking the law in most, if not all, states.

Should the ethical and legal treatment be any more lenient if it's not a pharmacist refusing
to serve an individual, but a pharmaceutical company - motivated solely by retaliatory
animus - denying medicines to an entire country? Doesn't denying medicines on a mass
scale out of animus merit harsh punishment?

Consider the case of Abbott Laboratories in Thailand. In January 2007, Thailand issued a
compulsory license on an AIDS drug made by Abbott. A compulsory license is a lawful
authorization of generic competition for a product that remains on patent. In Thailand's
case, the government issued a license that would enable its public health sector to buy
generic versions of lopinavir/ritonavir, sold by Abbott under the brand-name Kaletra.

Kaletra is a very important second-line AIDS drug, used for patients who have developed
resistance to first-line drugs. One reason Kaletra is so important is that Abbott has
endeavored to prevent other companies from combining ritonavir, which makes other
AIDS drugs more effective, with products they control [see "The 10 Worst Corporations
of 2004," Multinational Monitor, December 2004].

Thailand is a leader among developing countries in providing treatment to people living

with HIV/AIDS. Its treatment program started early and covers most people with HIV.
The natural progression of treatment is that people need to shift drugs over time, and an
increasing number of Thais living with HIV now need Kaletra.

Abbott has a discount program for Kaletra for developing countries, but its discount price
for middle-income countries like Thailand was $2,200 per person per year. Thailand's per
capita income is under $3,000, according to the World Bank.

In a detailed white paper explaining its decision, the Thai government estimated that
50,000 Thais will need second-line treatment in the near future. The cost of providing
lopinavir/ritonavir at Abbott's price to this population would be more than the entire
current budget for AIDS drugs, according to the government. Within a year of the license,
according to Thailand's National Health Security Office, the government had managed to
triple the number of people receiving lopinavir/ritonavir, to roughly 2,500. The white
paper estimated the government would be able to shift 8,000 people onto
lopinavir/ritonavir based on the immediate cost savings from buying generic. That
number will grow as generic costs fall over time.

Big Pharma viewed Thailand's actions as a major threat. Most worrisome to the industry
was the example Thailand set. "There could be 'a spreading epidemic of disrespect for IP
[intellectual property] rights,'" Billy Tauzin, head of PhRMA, the U.S. pharmaceutical
industry trade association, said in May.

Although Thailand's actions were consistent with its obligations under national and
international law, Big Pharma was able to employ the U.S. government (as well as the
European Union) to pressure Thailand. In April 2007, the U.S. Trade Representative
designated Thailand a "priority watch" country, a designation indicating it to be a serious
violator of U.S. patent and copyright interests, and triggering close scrutiny from U.S.
trade officials [see "Big Pharma and AIDS: Act II Patents and the Price of Second-Line
Treatment," Multinational Monitor, March/April 2007].

Abbott executives also took matters into their own hands. In March, the company
withdrew applications to market seven new medicines in Thailand. One of those
medicines was the heat-stable formulation of lopinavir/ritonavir - meaning it does not
require refrigeration, an important consideration in a tropical country like Thailand.
Public health advocates in Thailand and around the world reacted with outrage.

"What Abbott has done by withdrawing seven drugs from Thailand is using drugs as a
bargaining chip," says Jon Ungphakorn, the executive secretary of the AIDS Access
Foundation in Thailand. "This is unacceptable; it is a moral outrage that Abbott is doing
this. It's playing games, not only with the patients in Thailand, but with patients all over
the world. Abbott knows that what it's doing is intimidating the whole developing world
against using the same measures - legal measures - that Thailand has used to get access."

Dr. Tido von Schoen-Angerer, director of Médecins Sans Frontières/Doctors Without

Borders' Campaign for Access to Essential Medicines, agreed. "What Abbott is doing is
trying to protect high drug prices by actively denying an entire population access to new
medicines it produces," Dr. von Schoen-Angerer said. "This is as unprecedented as it is
shocking. We consider it unethical and utterly unacceptable."

Abbott declined repeated requests from Multinational Monitor to comment on the

dispute.

Campaigners in Thailand called for a boycott of Abbott. In April, health advocates around
the world held coordinated protests against the drug multinational.

Its hard-line approach notwithstanding, Abbott was not immune to the market pressure
applied by Thailand. In demonstrating how it could reduce prices for Kaletra by 75
percent, Thailand was laying out a road map for other middle-income countries. In April,
Abbott reduced its price for Kaletra for middle-income countries from $2,200 to $1,000.

The pressure campaign on Abbott also had some effect. In July, the company announced
it would register its pediatric formulation for Kaletra in Thailand.

Otherwise, Abbott continues to maintain its new-drug boycott of Thailand.

Should denying medicines as a form of collective punishment be legal in a civilized

world?

Actually, it's not so obvious that Abbott's actions are legal.

In April, a coalition of Thai consumer and health organizations - the Foundation for
Consumers, AIDS Access Foundation, the Thai Network of People Living with
HIV/AIDS and the Thai NGO Coalition on AIDS - filed a complaint with the Thai Trade
Competition Commission. It called for the instigation of criminal prosecution against
Abbott.

Sean Fynn, associate director of the Program on Information Justice and Intellectual
Property at American University's Washington College of Law, prepared a supporting
memorandum for the health and consumer groups' complaint.
Explains Flynn, "Abbott's response to the compulsory license - withholding a new
version of its Kaletra product from the Thai market - appears to directly contravene the
Thai Competition Act which prohibits 'suspending, reducing or restricting services,
production, purchase, distribution, deliveries or importation without justifiable reasons.'
An unwillingness to comply with a legal and justifiable government order cannot be a
'justifiable reason' for suspending the supply of life-saving medicines to Thai citizens."

In December, however, the Thai Trade Competition Commission declined to pursue the
complaint. It argued that Abbott does not have sufficient market share - even though it
has a monopoly on its patented medicines - to trigger the terms of the country's
competition law.

Blackwater: Deadly Cowboys in Iraq

On September 16, 2007, Blackwater private military contractors escorting a State

Department convoy in Iraq fired machine guns and grenade launchers at civilians at a
busy intersection. Seventeen civilians died.

The incident crystallized Iraqi fury at the unaccountable, cowboy-like actions of foreign
military contractors (the polite term for mercenaries). Iraqi Prime Minister Nouri al-
Maliki said the company should be ejected from Iraq. The Iraqi Minister of Interior
reportedly suspended the company's right to operate outside of the Green Zone.

Blackwater said its personnel operated properly in the incident, but numerous reports and
news accounts blamed the company's contractors for the slaughter.

In the wake of the incident, attention in Washington suddenly focused on the legal
Twilight Zone in which U.S.-employed private contractors operate - not subject to Iraqi
law, U.S. military law or U.S. civilian law.

But, in the subsequent months, attention has died down. Blackwater continues to operate
in Iraq, with no more accountability than existed on September 15.

The investigations that followed the September 16 massacre did establish two things
beyond any doubt. First, the September 16 incident was not exceptional. It fit a pattern of
outrageous conduct by Blackwater contractors. Second, Blackwater was representative of
a broader problem of reliance on private contractors.

Blackwater was founded in 1997 by Erik Prince, an ex-Navy Seal and scion of a
prominent Michigan Republican family.

Its business is based almost entirely on servicing the U.S. government, though it has
designs on providing military services to other countries. Prince says that 90 percent of
the company's business is contracts with the U.S. government. He testified before the
House Oversight Committee in October that he could not - or would not - say how much
the company earned. He did testify that key contracts paid the company a 10 percent
profit rate.

Blackwater obtained more than $1 billion in contracts from the U.S. government from
2001 to 2006, rising from $736,000 in 2001 to more than half a billion dollars in 2006.

Blackwater's main contract is providing security to State Department operations in Iraq. It

has roughly 1,000 personnel in Iraq.

In October, the majority staff of the House Oversight Committee prepared a devastating
report that concluded, "The Blackwater and State Department records reveal that
Blackwater's use of force in Iraq is frequent and extensive, resulting in significant
casualties and property damage." Blackwater is legally and contractually bound to only
engage in defensive uses of force to prevent "imminent and grave danger" to themselves
or others. In practice, however, the vast majority of Blackwater weapons discharges are
preemptive, with Blackwater forces firing first at a vehicle or suspicious individual prior
to receiving any fire.

The House Oversight Committee report found that from 2005 to 2007, Blackwater
personnel were involved in almost 200 incidents involving firearms discharge. In 84
percent of cases, Blackwater personnel were the first to fire.

The Committee's report showed that reckless activity by Blackwater mercenaries was
common. It described one case as follows:

On November 28, 2005, a Blackwater motorcade traveling to and from the Ministry of
Oil for official meetings collided with 18 different vehicles during the round trip journey
(six vehicles on the way to the ministry and 12 vehicles on the return trip). The written
statements taken from the team members after the incident were determined by
Blackwater to be "invalid, inaccurate and, at best, dishonest reporting." According to a
Blackwater contractor who was on the mission, the tactical commander of the mission
"openly admitted giving clear direction to the primary driver to conduct these acts of
random negligence for no apparent reason." The only apparent sanction resulting from
this incident was the termination of two of the employees.

The State Department is supposed to exercise oversight of Blackwater, but the House
Oversight Committee found the department had utterly failed in this duty. "Even in cases
involving the death of Iraqis, it appears that the State Department's primary response was
to ask Blackwater to make monetary payments to 'put the matter behind us,' rather than to
insist upon accountability or to investigate Blackwater personnel for potential criminal
liability."

The oversight committee's report was issued just prior to a high-profile hearing in which
Erik Prince defended the company.
"We have to provide that protective screen," he testified. "We only play defense, and our
job is to get those reconstruction people that are trying to weave the fabric of Iraq back
together, to get them away from that X, the place where the bad guys, the terrorists, have
decided to kill them that day."

Prince emphasized repeatedly that no individual protected by Blackwater had ever been
killed or seriously injured.

He said the company had fired more than 100 personnel for violating company and State
Department rules, but besides also fining them, could do no more to punish them for
wrongful acts. It was up to the Justice Department to prosecute them, he said.

Representative Danny Davis, D-Illinois, asked, "You do admit that Blackwater personnel
have shot and killed innocent civilians, don't you?"

Prince replied, "No, sir. I disagree with that. I think there have been times when guys are
using defensive force to protect themselves, to protect the package they are trying to get
away from danger. There could be ricochets. There are traffic accidents. Yes. This is war.
You know since 2005, we have conducted in excess of 16,000 missions in Iraq and 195
incidences with weapons discharged. In that time, did a ricochet hurt or kill an innocent
person? That is entirely possible. Again, we do not have the luxury of staying behind to
do that terrorist crime scene investigation to figure out what happened."

Concluded Representative Henry Waxman, D-California, "We have never had anything of
this magnitude before, where we have turned so much of our military activity over to
private military - [activity] that used to be, for the most part, provided by the U.S.
military itself." As Waxman noted, the October hearing showed that relying on
Blackwater is incredibly expensive - more than $400,000 per contractor per year - and
has undermined the U.S. military objective, by fostering animosity toward the United
States.

It has also led to the deaths of untold numbers of Iraqis, terrorized the Iraqi civilian
population, and added to the lawless atmosphere in Iraq in which violence is pervasive
and (Iraqi) life is cheap.

BP: Taking the Public

BP is a giant multinational oil company. It spends a lot of money trying to get us to

believe that it is something else: a decent, clean, conscientious corporation.

It is not.

It kills workers in Texas. It pollutes Alaska. It manipulates markets. And it uses the tricks
of the corporate criminal class to escape penalties commensurate with the seriousness of
the harm it causes.
In October, BP cut a deal with the Justice Department to pay $373 million in fines and
restitution related to a series of crimes and instances of wrongdoing: a felony violation of
the Clean Air Act connected to a 2005 refinery explosion that killed 15 contract
employees, a violation of the Clean Water Act related to major pipeline leaks in Alaska,
and a conspiracy to manipulate the propane market.

The $50 million fine in connection with the Texas refinery explosion was the largest ever
under the Clean Air Act, a source of pride at the Justice Department.

Not everyone was impressed. "I note with curiosity that when an average citizen commits
a felony it usually leads to a prison sentence," says Representative John Dingell, D-
Michigan, the chair of the House Energy and Commerce Committee. "Yet, apparently,
when a big oil company commits a felony that causes 15 deaths, it pays a criminal
penalty equal to less than a day's corporate profits. Until the Department of Justice starts
holding corporate executives accountable, I am not sure that there will be a meaningful
shift in corporate culture."

"It is troubling," says Representative Bart Stupak, D-Michigan, chair of the

Subcommittee on Oversight and Investigations of the House Energy and Commerce
Committee, "that many of the same BP executives who were responsible for the
management failures that led to the criminal charges and settlements announced today are
still employed by BP, and, in some cases, have been promoted to the highest levels of the
company. This does not reflect the kind of corporate culture change we would expect if
the company's leadership took to heart the consequences of its mismanagement."

For BP, the October settlement put to rest a series of debacles that has beset the company
over the last several years.

But it's certainly not the end of the company's mischief.

In February 2007, the company announced that it had chosen the University of California
(UC) at Berkeley, in collaboration with the Lawrence Berkeley National Laboratory and
the University of Illinois at Urbana-Champaign, to host the Energy Biosciences Institute
(EBI).

Funded with $500 million over 10 years, the agreement would double the amount of
corporate funding for research on campus, and change the direction of biofuels research
at UC Berkeley for years to come.

"In launching this visionary institute, BP is creating a new model for university-industry
collaboration," says Beth Burnside, UC Berkeley vice chancellor for research.

That's one way to look at things. Another is to characterize the BP-Berkeley deal as the
farthest-reaching effort by a corporation in recent U.S. history to colonize a major
university.
The agreement drew harsh criticism from much of the university community in part
because the deal was hatched without input from professors, students and others in the
university community.

In March 2007, students opposing the deal demonstrated outside the Chancellor's office
on the Berkeley campus.

Two students were arrested for dumping molasses on the steps of a university building (it
looked like oil).

They had a lot to protest.

The Energy Biosciences Institute, dedicated to problems related to global energy

production and primarily expected to research biofuels, is projected to encompass 24
laboratories on the three campuses, representing an unprecedented occupation of
university space and cooptation of public resources by a corporation.

BP will actually construct a building on the UC Berkeley campus, where it will be able to
conduct proprietary research, off limits to Berkeley personnel. There may be no
precedent for such absolute ceding of public university space to secret, for-profit industry
research.

The deal will enable BP to expropriate a major public investment. Various public
institutions are kicking in tens of millions of dollars to the project. Much more
importantly, BP will be able to capitalize on the long-term public investment in UC-
Berkeley and the other institutions, including the students and faculties who enjoy very
significant public support.

BP gets to control whatever useful technologies emerge from its colonial project. The
terms of the Energy Biosciences Institute contract between BP and the public partners
give BP the right to exclusively license and commercialize inventions developed in the
Institute's shared university/BP facilities, even inventions developed entirely by
university scientists (provided they are BP-funded). The company will almost surely be
able to cherry pick publicly funded inventions.

The deal also likely gives BP power to direct the research agenda at the Energy
Biosciences Institute. The deal specifies that BP representatives will serve in "high-level"
positions on the Institute's governing committees.

"BP researchers will be able to suck up the best of what Berkeley's scientists have to
offer, retreat behind locked, guarded doors and pursue their corporate agenda without
giving anything back," says John Simpson of the the Foundation for Taxpayer and
Consumer Rights in Santa Monica, California. "Academic research is based on an
exchange of ideas and information. This is a one-way street benefiting only BP."

Chiquita: Payments to Paramilitaries

In March, Chiquita entered into a plea agreement with the U.S. Department of Justice, in
which it admitted making illegal payments in Colombia to a right-wing militia designated
as a terrorist organization by the United States. Under terms of the deal, Chiquita agreed
to pay $25 million in fines to the U.S. government.

The victims of that terrorist paramilitary have a simple question: Why is Chiquita paying
the U.S. government, but not them?

The Justice Department's announcement of the deal was damning enough.

"From sometime in 1997 through February 4, 2004," explained the Justice Department's
release, "Chiquita paid money to the AUC [the Spanish acronym for a paramilitary
organization whose English name is United Self-Defense Forces of Colombia] in two
regions of the Republic of Colombia where Chiquita had banana-producing operations:
Urabá and Santa Marta. Chiquita made these payments through its wholly-owned
Colombian subsidiary known as 'Banadex.' By 2003, Banadex was Chiquita's most
profitable operation. Chiquita, through Banadex, paid the AUC nearly every month. In
total, Chiquita made over 100 payments to the AUC amounting to over $1.7 million."

The U.S. government designated the AUC as a foreign terrorist organization in

September 2001. That designation - which made it a crime for U.S. persons or companies
to make payments to the AUC - "was well-publicized in the American public media,"
notes the Justice Department's release. "The AUC's designation was even more widely
reported in the public media in Colombia." Yet Chiquita's payments continued - 50
payments totaling more than $800,000 followed.

In February 2003, top Chiquita officers learned of the payments and consulted with
outside counsel. Chiquita's outside lawyers unequivocally stated payments should stop.
The advice from numerous communications:

"Must stop payments."

"Bottom Line: CANNOT MAKE THE PAYMENT."

"Advised NOT TO MAKE ALTERNATIVE PAYMENT through CONVIVIR."

"General Rule: Cannot do indirectly what you cannot do directly."

Concluded with: "CANNOT MAKE THE PAYMENT."

"You voluntarily put yourself in this position. Duress defense can wear out through
repetition. Buz [business] decision to stay in harm's way. Chiquita should leave
Colombia."

"[T]he company should not continue to make the Santa Marta payments, given the AUC's
designation as a foreign terrorist organization[.]"
"[T]he company should not make the payment."

But the company continued to make payments.

Two months later, Chiquita self-reported the payments to the Justice Department. But
even then payments continued - 20 more payments of more than $300,000 through June
2004, at which time Chiquita sold its Colombian subsidiary.

Chiquita's version of the story is that it had been in a horrible dilemma. The then-leader
of the AUC, Carlos Castaño, met with a senior executive of Banadex and threatened that
he would harm Banadex personnel and property if the company did not pay protection
money.

"The payments made by the company were always motivated by our good faith concern
for the safety of our employees," says Chiquita CEO Fernando Aguirre. "Nevertheless,
we recognized - and acted upon - our legal obligation to inform the Department of Justice
of this admittedly difficult situation." The plea deal, he says, "is in the best interests of the
company."

Says company spokesperson Michael Mitchell, "Our payments were entirely motivated
by safety concerns."

"It was a difficult ethical dilemma," he says. "The Department of Justice admitted it was a
difficult situation."

A lawsuit filed in July 2007 by family members of Colombians killed by the AUC paints
a less sympathetic view of Chiquita's dilemma. The family members are represented by
the Washington, D.C.-based EarthRights International and other lawyers.

"The stability and social control provided by the AUC was to Chiquita's benefit," charges
the suit, "in allowing exportation of bananas without interruption due to conflict. The
influence of the AUC in the leadership of the banana workers' trade unions was also to
Chiquita's benefit, as it reduced labor strife. The AUC also provided protection services
to banana plantations dealing out reprisals against real or suspected thieves, as well as
against social undesirables, suspected guerrilla sympathizers or supporters, and anyone
who was suspected of opposing the AUC's activities and social programs."

The lawsuit also charges that Chiquita facilitated the illegal transfer of thousands of
assault rifles to the AUC.

The family members filing the suit - all named as John or Jane Doe to protect them from
retaliation - allege the AUC killed their relatives because they were active in labor
organizing and advocating for marginalized groups.

The suit seeks to represent a class of all people harmed by the AUC's "campaign of
military and social control" aiming to "exert total control over the land and inhabitants of
the banana-growing region of Colombia." The family members ask that the class include
"individuals who were the objects of acts constituting extrajudicial killing, forced
disappearance, torture, cruel, inhuman or degrading treatment, kidnapping, rape, forced
displacement, crimes against humanity, or crimes against civilians constituting war
crimes."

Chiquita "categorically denies" the allegations in the lawsuit, according to company

spokesperson Mitchell. "We reiterate that Chiquita and its employees were victims and
that the actions taken by the company were always motivated to protect the lives of our
employees and their families."

"The company," he says, "was forced to make payments to both left- and right-wing
paramilitary organizations to protect the lives of our employees at time when kidnappings
and murders were frequent, and government authorities were unable to provide security
and protection."

In the 1990s, Mitchell says, the company's workforce was put in grave danger by the
escalation of violence in the region. "Among hundreds of documented attacks by left- and
right-wing illegal groups were the 1995 massacre of 28 innocent Chiquita employees who
were ambushed and killed on a bus on their way to work, and the 1998 cold-blooded
murder of two more of our workers on a farm while their colleagues were forced to
watch."

In this context, the company was "forced to make protection payments to safeguard our
workforce. It is absolutely untrue for anyone to suggest that these payments were made
for any other purpose."

Countrywide: Subprime Kings

Many factors combined to create the current housing crisis in the United States.

Low interest rates after the 2001 stock market crash spurred the housing boom. Housing
prices skyrocketed above historic trendlines. People were duped into thinking prices
would rise forever, but it was inevitable that the housing bubble would burst, and houses
would suddenly be worth a lot less. With house prices falling, lots of people are now
finding they owe more than their house is worth. This problem is exacerbated by
predatory loan arrangements that have left millions facing suddenly rising mortgage
payments.

A lot of people and corporations deserve blame for this state of affairs.

Instead of warning consumers about the housing bubble - which would have gone a long
way to counter the excessive price run-ups - then-Federal Reserve Chair Alan Greenspan
denied a bubble was occurring.
Wall Street firms created exotic investment instruments that made possible the purchase
and trading of large numbers of mortgages. This created conditions so that banks and
initial lenders took less care in issuing mortgages - since they wouldn't be responsible for
mortgages gone bad. The Wall Street firms not only sold these instruments to duped
investors, they took on major liabilities on their own - even though it was obvious the
housing bubble would have to burst.

Rating agencies like Moody's and Standard & Poor's, which evaluated the riskiness of
these new mortgage investment instruments, failed utterly. The housing bubble meant
mortgage investments were sure to lose money, but the ratings agencies gave them top
ratings anyway. Along with the "innovation" of the Wall Street firms, the ratings agencies
helped maintain a market that dramatically exacerbated, and to a considerable degree
may have created, the housing bubble.

Financial bubbles create an incentive for criminal and shady activity. Just like the stock
bubble of the late 1990s created the climate for Enron and dozens of other companies to
cook their books, the housing bubble created incentives for predatory lenders to exploit
consumers.

The predatory lenders offered low rates, at least at first. Rates would rise later, but the
lenders said that - because home prices were rising so fast and would continue to do so -
borrowers could always refinance with a new loan.

The biggest of the predatory lenders was Countrywide, a mortgage lender acquired by
Bank of America in January 2008. The company and its CEO, Angelo Mozilo, made a
bundle, while setting up thousands and thousands of families for financial ruin.

"Over the past few years," says Martin Eakes of the Center for Responsible Lending, "by
steering millions of people into bad loans, Countrywide has been the largest rogue
mortgage lender in the country. According to Countrywide's own data, more than 80
percent of its exotic adjustable-rate loans were made to borrowers that do not meet
current banking standards. Countrywide knew that these homeowners would not be able
to make their monthly loan payments after dramatic payment increases became
effective."

The Center for Responsible Lending has compiled a dossier on Countrywide's

irresponsible practices, presented in a report, "Unfair and Unsafe." Its devastating report,
based on customer complaints, lawsuits, regulatory actions, news accounts, government
reports and company documents, shows how Countrywide engaged in rampant
wrongdoing:

o Predatory lending. "Lawsuits filed around the country have accused Countrywide of
preying on borrowers through a variety of unfair and fraudulent tactics that have
siphoned equity out of their homes and pushed many into foreclosure," notes "Unfair and
Unsafe." "Borrowers and regulators have accused the company of: steering borrowers
with good credit into higher-cost 'subprime' loans; gouging minority borrowers with
discriminatory rates and fees; working in cahoots with mortgage brokers who use bait-
and-switch tactics to land borrowers into loans they can't afford; targeting elderly and
non-English-speaking borrowers for abusive loans; and packing loans with inflated and
unauthorized fees."

In one lawsuit, Albert Zacholl, a 74-year-old man living in Southern California, alleges
that Countrywide and a pair of mortgage brokers "cold-called and aggressively baited"
him. They promised him $30,000 cash, a mortgage that would replace his previous
mortgage (which was leaving him owing more each month) and a monthly payment that
would not exceed $1,700. Zacholl told the brokers that his income consisted of a pension
of $350 a month and Social Security payments of $958, and that with help from his son,
he could afford a mortgage up to $1,700. According to the lawsuit, the broker falsified his
loan application by putting down an income of $7,000 a month, and then arranged for a
high-interest mortgage that required him to pay more than $3,000 a month (and failed to
deliver the $30,000 cash payment). The motivation for the scam, according to the lawsuit,
was to collect $13,000 in fees.

In court papers, the Center for Responsible Lending reports, Countrywide responded that
Zacholl "consented to the terms of the transaction" and that any problems were the result
of his own "negligence and carelessness."

• Dangerous products. Countrywide has been a leader in pushing unsound

mortgage terms. These include "exploding" subprime adjustable rate mortgages -
with reasonable interest rates in the first year that jump in subsequent years, often
by as much as 30 percent to 50 percent.

• Conflicts of interest. "Countrywide has created a corporate structure designed to

allow its subsidiaries to work hand-in-hand in squeezing borrowers with excessive
fees and penalties," according to "Unfair and Unsafe." Countrywide affiliates
handle appraisals, credit reports, flood certifications and other documentation for
new loans; provide "force-placing" insurance for borrowers whose homeowners
insurance has lapsed; and serve as a foreclosure trustee. The interconnections
enable Countrywide to charge high fees, and deny borrowers the benefit of third
parties' independent judgment and independent interests.

• Broken promises on loan modifications. The company has a history of failing to

fully live up to its promises to help borrowers keep their homes by modifying
onerous loans, according to "Unfair and Unsafe." The report cites a Fall 2007
Credit Suisse review that ranked Countrywide as one of the mortgage lenders
least willing to adjust loan terms.

Countrywide says it is committed to working out fair arrangements to

keep homeowners in their houses. In December, it entered into an
arrangement with the community group ACORN designed to help
subprime borrowers.
 "During the first 11 months of 2007, Countrywide helped more than
69,000 customers retain their homes through solutions such as loan
modifications, long-term repayment plans, special forbearance and other
options," says Steve Bailey, a Countrywide senior managing director of
loan administration. "Regardless of the reason for the payment difficulties,
Countrywide wants to try to find reasonable solutions for our borrowers."

• Abusive loan servicing. Borrowers claim that Countrywide has engaged in

sloppy and fraudulent loan servicing that has produced unwarranted fees and
foreclosures.

With the collapse of the housing market in 2007, Countrywide's fortunes turned, its
mortgage-backed securities plummeted in value, and the company seemed on the edge of
bankruptcy. In January 2008, Bank of America agreed to buy the company.

Do not weep for company co-founder and long-time CEO Angelo Mozilo, however.
Mozilo grabbed compensation worth $185 million from 2002-2006, according to an
analysis by the U.S. House of Representatives Committee on Oversight and Government
Reform. Between November 2006 and December 2007, Mozilo sold $150 million in
stock - effectively jumping from a sinking corporate ship for which he was supposedly at
the helm, or at least on the captain's deck.

"Particularly, the discrepancy between Mr. Mozilo's compensation and Countrywide's

performance is striking," concludes the Oversight Committee analysis. "In 2007,
Countrywide announced a $1.2 billion loss in the third quarter and an additional loss of
$422 million in the fourth quarter." By the end of the year, the company's stock fell 80
percent from its February peak. "During the same period, Mr. Mozilo was paid $1.9
million in salary, received $20 million in stock awards contingent upon performance, and
sold $121 million in stock."

Mozilo retired as CEO in 2006, remaining as company chair and an employee. The
House Oversight Committee analysis shows that his compensation contract, taking effect
in 2007, was outrageous, and based in part on recommendations from a compensation
consultant loyal to Mozilo rather than Countrywide.

Even so, Mozilo was bitter that the company did not give him everything he wanted. In
an e-mail message turned up by the Oversight Committee, Mozilo wrote to the
compensation consultant:

"I appreciate your input but at this stage in my life at Countrywide this process is no
longer about money but more about respect and acknowledgement of my
accomplishments. ... Boards have been placed under enormous pressure by the left wing
anti business press and the envious leaders of unions and other so called 'CEO Comp
Watchers' and therefore Boards are being forced to protect themselves irrespective of the
potential negative long term impact on public companies. I strongly believe that a decade
from now there will be a recognition that entrepreneurship has been driven out of the
public sector resulting in underperforming companies and a willingness on the part of
Boards to pay for performance."

With attention focused on the discrepancy between Mozilo's compensation package and
Countrywide's well-being, he waived various payments - totaling $37.5 million - he could
have received once Bank of America finalizes its takeover.

In March 2008, Mozilo appeared before the House Oversight Committee to explain his
compensation.

"Countrywide's board," he testified, "has aligned the interests of our top executives,
including me, with shareholders by making our compensation primarily performance-
based - namely, tied to earnings per share and share price appreciation. Since 1982
through early 2007, Countrywide's stock appreciated over 23,000 percent, reaching a
peak market value of over $25 billion from a starting value of zero. As a result, over
recent years, I have received substantial income from bonuses under a formula that was
approved by our shareholders on at least two occasions."

He also received substantial stock options, explaining, these were "options that required
the price of the stock to rise above the option price before any income could be realized,
thereby aligning me squarely with our shareholders." In anticipation of his retirement, he
testified, he put in place a plan to cash in some stock options earned in earlier years. His
sales were thus planned in advance of Countrywide's downturn. But he continues to hold
substantial shares in Countrywide - shares worth much less than before the company's
stock collapsed.

Mozilo testified that he is "very proud of the home ownership opportunities that
Countrywide has provided for over 20 million families," while acknowledging the
hardship faced by homeowners and Countrywide employees and shareholders.

"In my 55 years in the industry," he said, "this by far is the worst housing crisis I have
ever seen, combined with an unprecedented collapse of the credit and liquidity markets."

"The problem we face," he said, "is the deterioration of the value of homes. As values
were going up, we had no problem. We had no delinquencies and no foreclosures,
because people had options, because people run into three things in their lives generally -
loss of job, loss of marriage, loss of health. When that happens and they own a home, and
it impacts their income, they generally have a way out - sell the house, refinance, do
something.

"That equity that they have in their homes has been virtually wiped out. And that's what's
exacerbating this whole foreclosure problem."

Wasn't that problem entirely foreseeable? Didn't Countrywide's lending policies - which
generously might be called aggressive - depend on constantly rising housing values in
what was obviously a bubble market?
ExxonMobil: Planetary Endangerment

It is no longer possible for even ExxonMobil to deny the reality of climate change.

Here is the current company line, as elaborated by CEO Rex Tillerson in a November
2007 speech: "Many more questions on this complex subject remain and require
continued research. But it has become increasingly clear that climate change poses risks
to society and ecosystems that are serious enough to warrant action - by individuals, by
businesses and by governments."

Well, sure, lots of questions remain. And action is certainly "warranted."

But that understates things by several orders of magnitude.

The Intergovernmental Panel on Climate Change (IPCC), a collaboration of hundreds of

the world's leading climate scientists that won the 2007 Nobel Peace Prize, always
presents its findings in the most cautious and restrained language.

The IPCC concludes in its Fourth Assessment report, issued in April 2007: "Warming of
the climate system is unequivocal, as is now evident from observations of increases in
global average air and ocean temperatures, widespread melting of snow and ice and rising
global average sea level." Not only were 11 of the 12 years from 1995 to 2006 among the
12 warmest years recorded, the last 50 years in the Northern Hemisphere were probably
the warmest in the last 1,300 years.

"Most of the observed increase in global average temperatures since the mid-20th century
is very likely due to the observed increase in anthropogenic [greenhouse gas]
concentrations."

The IPCC details a series of horrors likely to befall the planet to rival the 10 Plagues the
Bible says were visited upon Egypt. Projections include:

• By 2020, between 75 and 250 million people in Africa are projected to be exposed
to increased water stress.
• By 2020, in some countries, yields from rain-fed agriculture could be reduced by
up to 50 percent. Agricultural production throughout Africa is projected to be
severely compromised.
• Sea level rise will affect heavily populated coastal areas in Africa by the end of
the century, imposing costs on affected countries of at least 5 percent to 10
percent of gross domestic product (GDP).
• African desertification will increase by 5 percent to 8 percent by 2080.
• Freshwater availability throughout Asia will be a serious problem by the 2050s.
• Flooding in heavily populated Asian coastal areas will intensify (posing risks to
lives and imposing massive economic costs).
• New patterns of flood and drought will lead to more infant and child deaths from
diarrhea in Asia.
 • By 2020, significant loss of biodiversity is projected to occur in Australia's Great
Barrier Reef.
• By 2050, ongoing coastal development and population growth in some areas of
Australia and New Zealand are projected to exacerbate risks from sea level rise
and increases in the severity and frequency of storms and coastal flooding.
• Mountainous areas in Europe will face glacier retreat, reduced snow cover and
winter tourism, and extensive species losses (in some areas up to 60 percent under
high emissions scenarios by 2080).
• By mid-century, increases in temperature and associated decreases in soil water
are projected to lead to gradual replacement of tropical forest by savanna in
eastern Amazonia. Semi-arid vegetation will tend to be replaced by arid-land
vegetation.
• Biodiversity will be lost everywhere.
• Heatwaves will increase in number, intensity and duration in North America and
Europe.

In a company statement, ExxonMobil responded to the April report from the IPCC, with
its new line that "Because the risks to society and ecosystems could prove to be
significant, ExxonMobil believes that it is prudent now to develop and implement global
strategies that address the risks …"

But there was a caveat. Here's the end of that sentence: "keeping in mind the central
importance of energy to the economies of the world."

The company therefore favors "putting policies in place that start us on a path to reduce
emissions, while understanding the context of managing carbon emissions among other
important world priorities, such as economic development, poverty eradication and public
health."

It's hard to find words to describe this posture. If the world fails to mobilize the needed,
increasingly urgent response to climate change - a disturbingly likely scenario - future
generations will look back on this kind of talk, and the global warming denialism that
Exxon so long funded, and know who to blame for the misery and suffering that could
have been avoided.

If in fact addressing climate change would interfere with other important world priorities
like poverty eradication and public health, perhaps there would be some moral hand-
wringing about doing what must be done to prevent the worst climate change projections
from being realized.

However, the very cautious IPCC report conveys in unmistakable terms that global
warming will impose the greatest burdens on the world's poorest countries. Climate
change will devastate agricultural production and rural societies in Africa. New disease
challenges will be worst in tropical countries. Flooding will be most severe in developing
countries. Adapting to climate change will be expensive but ultimately affordable for rich
countries; it will drain poor countries' economies, however.
You only need common sense to know that the rich will be better able to buy their way
out of both the hardships and inconveniences imposed by climate change.

Many people concerned about global warming are seeking ways to pressure or
incentivize ExxonMobil and the rest of Big Oil to change their business model. The idea
is for the companies to shift from providing oil and gas to becoming energy service
corporations, as ready to deliver solar power as gasoline.

We're not in that camp. We think ExxonMobil and Big Oil will need to be displaced, and
will be.

The most serious problem is that ExxonMobil, as the largest and most vociferous of the
oil majors, exerts its political and economic power to distort policy debates and stop
governments from taking proportionate action to address climate change.

We're not upset that ExxonMobil refuses to invest its obscenely large profits - $39.5
billion in 2007 - in renewable energy research and development. We place the company
on the 10 Worst list because it continues to deploy its political power to stop the U.S.
Congress from enacting a windfall profits tax, or ending tax and royalty subsidies for the
oil industry, and directing the proceeds for renewable energy.

Gen Re: Case Closed. Why?

In 2006, the Justice Department abruptly dropped a federal criminal probe into
allegations of insurance fraud at Berkshire Hathaway's General Reinsurance (Gen Re)
unit.

Paul McNulty was the U.S. Attorney in Alexandria, Virginia at the time. In March 2006,
McNulty went on to become the Deputy Attorney General. He is currently a partner at
Baker & McKenzie in Washington, D.C. McNulty did not return a call seeking comment
for this article.

Did anyone pressure McNulty or his successor, Chuck Rosenberg, the current U.S.
Attorney, to close down the investigation?

The case was looked at by the Justice Department's Inspector General, Glenn Fine. Fine's
office will not comment on the current status, if any, of the investigation.

Fine was dragged in after evidence was presented to his office that federal officials may
have incinerated more than 100 boxes of grand jury information in April 2007, just days
after the Virginia Lawyer's Weekly published an article titled, "Further Federal
Indictments In Reciprocal Case Unlikely."

The driving forces behind the criminal investigation of Gen Re were Thomas Gober, a
certified fraud examiner based in Glen Allen, Virginia - and David Maguire, the Assistant
U.S. Attorney in Alexandria charged by McNulty with shepherding the case.
For 12 years of his 18-year career, Gober has worked with federal investigators and
prosecutors, ferreting out significant insurance and reinsurance fraud schemes.

Most recently, he worked closely with Maguire on the criminal prosecution of the top
executives at Reciprocal of America (ROA), a major Virginia insurance company that
went belly up in January 2003. ROA provided malpractice insurance to lawyers, doctors
and hospitals. When the company went out of business, the policy holders were left
without coverage - and victims of malpractice, in many cases, were left with no way to
collect damages.

The collapse of ROA resulted in unpaid liabilities totaling $500 million.

The work of Maguire, Gober and a handful of FBI agents led to the February 2003 guilty
pleas of former ROA president Kenneth Patterson and former ROA CFO Carolyn
Hudgins. The two pled guilty to manipulating ROA's books. By cooking the books, the
ROA executives concealed from regulators the company's financial weakness. Their
failure to maintain sufficient reserves paved the way for the company's collapse.

In Richmond, Virginia, Judge James Spencer sentenced Patterson to 12 years in prison

and Hudgins to five years in prison.

Also caught up in the ROA case was the giant Gen Re company - a unit of the Omaha,
Nebraska-based Berkshire Hathaway. Gen Re is a reinsurer, a company which effectively
provides insurance to insurers

Between 2004 and 2007, McNulty, Maguire and their team of a half dozen FBI agents,
Assistant U.S. Attorneys and forensic auditors began to build their case against Gen Re.
They believed they had accumulated evidence that Gen Re had entered into sham
transactions with ROA. The Justice Department lawyers believed these deals helped ROA
hide its losses from regulators.

Gober says that McNulty "repeatedly championed the ROA case and all of our diligent
work," until McNulty left in March 2006 to become the Deputy Attorney General at Main
Justice.

The prosecution team believed that the evidence against Gen Re was overwhelming.
Maguire, Gober and FBI agent David Hulser drafted a more than 60-page indictment
against top Gen Re executives.

At the same time, lawyers for the giant reinsurer were pressuring the government to drop
the case or settle it as part of an overall global settlement with other matters the
government was looking at involving Gen Re.

When McNulty left for Main Justice in March 2006, he was replaced by Chuck
Rosenberg. Soon thereafter, the case was derailed.
In March 2007, in an effort to salvage years of work on the case, Gober wrote a seven-
page letter to Judge Spencer - the judge who had sentenced ROA executives Patterson
and Hudgins to long jail terms - chronologically laying out the derailment and pleading
for advice.

"First, David Maguire was totally removed from working the case," Gober wrote. "Dave
called me into his office and apologized about leaving the case, telling me that Main
Justice had told him he was being removed due to 'health concerns,'" Gober wrote. "Dave
had lost about 10 pounds while working on the ROA matter ... something I did not
consider very troubling (or even unusual) because this has been a very large and very
complex case. Dave is a brilliant prosecutor and he knows all of the facts of the ROA
case; indeed, he can literally recite them from memory."

Maguire was replaced by Assistant U.S. Attorney Mike Gill, another Texas import.

In his letter to Judge Spencer, Gober says that in the very first "team meeting" after
Maguire's removal, Gill announced to the team of FBI agents and prosecutors that he was
"glad we are all in agreement that this case is all about [name redacted] and that Gen Re
is no longer a target."

"To say the least, the team was a bit shocked about this 'announcement' concerning 'how
we all felt.'" Gober wrote.

Gill said he wanted to focus on an in-house ROA lawyer "who essentially had made
many of the day-to-day reinsurance decisions that had impacted ROA and resulted in its
eventual collapse."

But the "team" also wanted to focus on Gen Re and top Gen Re executives because they
believed, as Gober put it, that "the Gen Re issues were significant and far-reaching."

"We discovered a fraud scheme which included, but was not limited to, the execution of
'side letter agreements' between the reinsurer and ROA which resulted in a misleading
balance sheet impression for the insurance regulators," Gober wrote. "In effect, we found
that Gen Re was permitting the insurer to 'rent' reinsurance certification but there was no
true shifting back of risk."

"Because Gen Re is owned by the parent company of Berkshire Hathaway, and the two
richest men in the world (Warren Buffett and Bill Gates) serve on the Berkshire
Hathaway Board of Directors, I became quite concerned when the case against Gen Re
was allowed to 'go away,'" Gober wrote. "Why, I wondered, was this happening when the
entire team - prior to Mr. McNulty's elevation at the Justice Department - had been so
absolutely sure we had a 'slam dunk' case? Nevertheless, I decided to make the best of a
bad situation. If Gen Re was going to be let go, that was a decision over my head. At
least, I thought, the case was going to be forcefully and professionally pursued" against
the ROA lawyer.
Because the prosecutorial team felt that the case against the ROA lawyer was so strong,
they prepared a prosecution memo outlining their case. That memo was submitted to Gill
in February 2007. But the team heard nothing from Gill.

All Gill would say to Gober was that he just "felt" there was not a strong enough case
against the lawyer.

Gober was so upset with the decision not to proceed against Gen Re and the ROA lawyer
that he wrote a letter to McNulty outlining his concerns.

McNulty never responded to the letter.

"What has happened to this case?" Gober rhetorically asked Judge Spencer. "The facts are
the same (or better) as they were when Paul McNulty left to become the #2 man in the
Justice Department. The only thing that is 'different' is that two fellows from Texas have
been brought in and they do not seem to want to do anything with this matter but let it
die. I am very troubled that everyone on our team, and we are talking about seasoned
professionals, concluded this was (and remains) a very important case that needs to go
forward. Yet, somehow, the U.S. Attorney goes to D.C. and the new guy comes in and the
case is over, for all intents and purposes. Something is just wrong about all of this."

Gober is concerned not just because a criminal prosecution of a powerful U.S.

corporation has been derailed.

He's concerned not just because the case involved the largest single insurance collapse in
the history of Virginia that cost $500 million and has left more than 80,000 policyholders
with an insolvent and liquidated insurer. Gober is concerned also because the case "has
exposed a serious problem in the reinsurance industry which is going to have to be
addressed and corrected," he wrote to Judge Spencer.

"Hundreds of millions of dollars are at stake, and very powerful people are interested in
this matter simply dying," he wrote. "I am not one of them. Nothing would be worse than
to see a case like this one pushed 'under the radar' by greedy people who simply want
more and more money through fraud. Based on what has been going on lately at the
Justice Department, I am very worried about how all of this has happened and what
should be done to correct it."

Judge Spencer, through his clerk, suggested that Gober directly and personally approach
Glenn Fine, the Inspector General.

On April 2, 2007, the Virginia Lawyer's Weekly wrote the first article outlining Gober's
account. (A few months later, in July 2007, the McClatchy Newspapers ran a more
detailed article titled "Justice Department Drops Massive Accounting Fraud Case," by
Marisa Taylor.)
On April 3, the day after the Virginia Lawyer's Weekly article hit the stands, Gober wrote
a frantic e-mail to Fine's office warning that the FBI was planning on incinerating crucial
evidence in the case.

"I know from working past FBI cases that documents are stored for years," Gober wrote
to the Office of Inspector General's (OIG) Keith Bonanno. "The agents must not know of
your inquiry."

On April 5, Gober wrote again to Bonanno. "Yesterday, all documents were hauled off
from our site office to the FBI incinerator," Gober wrote. "My hard drive which held all
of the case data was taken as well. It is my hard drive and it was to be 'wiped clean'
before its return to me. I pushed for them to back it up before wiping clean or all case
data would be gone. Please request that the data be copied before my drive is re-
formatted. Otherwise, the investigation may be for naught. Two independent sources told
me that the agents were going to incinerate them to 'get ahead of the ball' and 'not let this
drag on forever.'"

OIG's Bonanno responded later that day. "Our office contacted the USAO [U.S. Attorney
Office] in Richmond and instructed that they (and/or the FBI) cease destruction of
documents related to the case since there is a pending OIG/OPR review," Bonanno wrote.

Before the whip came down, the government was in pretty serious negotiations with Gen
Re to settle the ROA case amicably.

Joshua Hochberg was at the time head of the Justice Department's Fraud Section.
Hochberg is currently a partner at McKenna Long & Aldridge in Washington, D.C.
Hochberg did not return a call seeking comment for this article.

In May 2005, Hochberg wrote to Maguire about the settlement of the Gen Re case. "The
bottom line has always been - what do we want to do with Gen Re." Hochberg wrote.
"The options range from indicting the company, to a plea by a subsidiary to a deferred
prosecution or a non-pros [non-prosecution] agreement with lots of favorable terms for
the government, including large $, monitors, cooperation. … Indicting the company
would have enormous collateral consequences. As you know, when we met with Gen Re's
counsel, we made no promises about any final resolution."

Thomas Hanusik was at the time assistant chief of the Fraud Section. He's now a partner
at Crowell & Moring. Hanusik said he would have no comment on this story.

On July 20, 2005, Hanusik wrote to Maguire to detail negotiations he had with Ron
Olson, a partner at Munger Tolles & Olson in Los Angeles.

Olson is an attorney for Gen Re and a member of the Berkshire Hathaway board of
directors.
Olson could not be reached for comment. But he told McClatchy's Marisa Taylor that
"there was no knowledge at Gen Re that people at Reciprocal of America were hiding
information from regulators or auditors."

He said the Gen Re had entered into "side deals" with ROA, and that these were the
industry norm. The company has since banned such arrangements as bad business
practice, he told Taylor.

He described the criminal case as "maybe the longest investigation I remember being
associated with. We were extremely frustrated."

Maguire responded to Hanusik's July 2005 note the next day. "I think we need a strong
united front on Gen Re's culpability on ROA in order to get them to fess up and pay a
share of the $450 million ROA loss commensurate with their conduct," he wrote.

"From the mid-1980s until approximately 2001, ROA grew from a small, marginally
capitalized Virginia reciprocal insurer of approximately 100 hospitals and a few hundred
doctors and lawyers into four commonly managed reciprocal insurers of more than
80,000 insureds in many different states across the country," Maguire wrote. "This
phenomenal growth, however, could not have happened without the world believing that
ROA was fully and truly reinsured by Gen Re and the receipt of consistently high ratings
from A.M. Best (A Ratings from 1983 to 2001), a national respected ratings service of
insurance companies, which also believed ROA was truly backed by Gen Re."

"Unfortunately, for more than 18 years, material facts about the true nature of ROA's
reinsurance relationship with Gen Re were falsely represented and concealed from Best,
the insurance commissioners, state legal and medical societies and hospital associations
that endorsed ROA to its members, and the insureds themselves. Indeed, the losses that
drove ROA into insolvency were the very losses that were supposedly covered by
reinsurance contracts with Gen Re," Maguire wrote. "The dark little secret we have
uncovered is that when Gen Re has to pay larger that [sic] expected losses, it uses it [sic]
might to dump the losses back on the reinsured."

The Gen Re investigation ultimately did not come out entirely to the company's liking -
and company executives have not escaped accountability, at least as relates to other
matters. The ROA case led federal prosecutors to investigate a similar alleged
arrangement between Gen Re and the insurer AIG. A federal jury would later find four
top Gen Re executives and an AIG executive guilty of conspiracy and securities fraud, in
a scheme also allegedly involving sham transactions, these intended to make AIG's
finances appear stronger than they actually were.

Murray Energy: Collapse of Decency

Mining disasters can transfix a nation.

Miners trapped underground, and the uncertainty of whether they survived a collapse,
evokes empathy for the miners, their families and their community in even the hardest of
hearts. Not many people have experience deep underground, but until the fate of the
involved miners is established, the drama and suspense feels very personal to the millions
waiting for updates, desperately hoping for good news and fearing the worst.

In the United States, the millions following the rescue typically watch the disasters play
out according to a familiar script. Families, miners and mine operators are stricken with
fear, supportive of each other, and articulate about the raw emotional urgency of rescue
operations.

In August 2007, a major calamity struck the Crandall Canyon coal mine in Utah. Six
miners were killed in the mine collapse. Ten days later, two rescue workers and a mine
inspector were killed trying to reach the six trapped men. The second set of fatalities
marked Crandall Canyon as particularly tragic.

There was something else unusual about the Crandall Canyon disaster. With the nation
watching, the mining company did not display the usual humility.

Rather than relying on PR professionals, Robert Murray, CEO of Murray Energy, the
operator of Crandall Canyon, stepped into the spotlight.

A day after the mine collapse, he began a nationally televised new conference by proudly
relating how he had built up the company, and fulminated against climate change
legislation.

"Without coal to manufacture our electricity," he exclaimed, "our products will not
compete in the global marketplace against foreign countries, because our manufacturers
depend on coal, low-cost electricity, and people on fixed incomes will not be able to pay
their electric bills. And every one of these global warming bills that has been introduced
in Congress today to eliminate the coal industry will increase your electric rates four- to
five-fold."

He went on to insist, against all evidence at the time - and the very detailed evidence now
available - that the disaster was caused by an earthquake.

He concluded his lengthy remarks by denouncing former mine industry regulators and the
leaders of the United Mine Workers of America, as well as reporters from the Associated
Press and Fox News. Referring to the experts and the union, he said, "These individuals
have given very false statements to the media and to America, for their own motives.
They know nothing about the natural disaster that occurred here. They know nothing
about the damage in the mine and the circumstances surrounding the trapped miners, or
the rescue efforts that are under way. And I caution the media to very much question the
veracity of these sources and their motivations."
Murray maintained the same tone in subsequent interviews, belligerently denying that he
knew of previous cave-ins in the same mine, or that the trapped miners were engaging in
a particularly dangerous operation known as "retreat mining."

The Ohio-based Murray Energy and its affiliates mine more than 20 million tons of coal
annually, according to the Cleveland Plain Dealer.

From 2004 through the end of 2007, a Multinational Monitor analysis found, the U.S.
Mine Safety and Health Administration (MSHA) cited companies controlled by Murray
for safety violations more than 7,500 times.

That astounding fact says quite a bit about the culture at Murray Energy.

But nothing can match the chilling report issued in March 2008 by Senator Edward
Kennedy, D-Massachusetts, chair of the Senate Health, Education, Labor and Pensions
Committee. The report shows a callous and utter indifference to miners' lives and well-
being. There were countless opportunities to recognize the dangers posed by Murray
Energy's perilous plans for Crandall Canyon, but Murray Energy ignored, discounted or
suppressed the warning signs, and feckless regulators let the company proceed.

Summarizes Kennedy, "The Committee's investigation has revealed that the owner of
Crandall Canyon mine, Murray Energy, disregarded dangerous conditions at the mine,
failed to tell federal regulators about these dangers, conducted unauthorized mining and -
as a result - exposed its miners to serious risks."

The report explains that "the mining operations proposed by Murray Energy, and
approved by MSHA, at Crandall Canyon were among the most dangerous ever
attempted." Murray Energy was undertaking retreat mining or pillar extraction - pulling
out the mine's supporting pillars, in the opposite direction from which the mine advanced.
Often the plan is designed to provided for controlled roof collapse. The retreat mining at
Crandall Canyon was the deepest MSHA had ever authorized. The deeper the mine, the
greater the stress on supporting pillars, and the more dangerous it is to remove them.

Murray Energy took over Crandall Canyon mine from a previous operator, Andalex, in
August 2006. It immediately began to pressure MSHA to lessen safety inspections,
according to the Kennedy report.

A few weeks after Murray Energy began operating Crandall Canyon, an MSHA official
e-mailed a colleague, "[Murray Energy] also told my supervisor they have been very
successful at getting MSHA people removed in other districts. I expected we would have
trouble with this operator, but didn't expect it on the 2nd day after they took over [the
mine]."

Six weeks later, another MSHA official wrote to the administrator of MSHA's Office of
Coal Mine Safety and Health, "Over the course of the first 10 days of Murray Energy
ownership they have aggressively opposed enforcement actions taken by [MSHA]
Inspectors Durrant and Shumway, accused them both of retaliation, met with Supervisor
Farmer and attempted to dictate how inspections should be performed at the mines. All
indications so far are that this operator intends to use whatever means available to try to
leverage enforcement at their mines."

By August 2007, if not earlier, internal company documents show, Murray Energy had
adopted a policy of contesting all MSHA safety violations, regardless of the merits.

The Kennedy report shows that Murray Energy's pressure tactics worked, and the agency
lightened up on enforcement activities. Internal company memos relate MSHA
commitments to "pul[l] back enforcement."

The August tragedy at Crandall Canyon could have been avoided if the retreat mining had
never been undertaken.

Andalex, the previous operator of the mine, had concluded that retreat mining could not
be conducted safely in the area where the mine collapse occurred. The company even
argued against the retreat mining encouraged by the Utah state department overseeing
mine leases, which earns royalties from the sale of extracted coal.

Murray Energy had an entirely different approach.

The company presented a plan based on a technical analysis of retreat mining safety at
Crandall Canyon performed by a consultant, Agapito. In a review conducted after the
disaster, the National Institute of Occupational Safety and Health found Agapito's work to
be deeply flawed.

Under federal law, MSHA must review and approve plans for underground coal mining.
The Kennedy report concludes that "the record shows that MSHA's review of the
company's mine plan was often rushed, superficial and pro forma. Indeed, mining expert
and former MSHA engineer Robert Ferriter described MSHA's review of Crandall
Canyon's mine plan as a 'broken system.'"

The MSHA engineer initially reviewing Murray Energy's plans urged rejecting the
proposal. A supervisor told the engineer that his analysis was flawed. Rather than
conducting a new one, according the Kennedy report, the supervisor "seems to have
simply accepted the company's rebuttal of Del Duca's analysis at face value," authorizing
the plan to go forward.

Even after the plan was approved, however, the Kennedy report shows, "there were
multiple warning signs during mining operations - including heightened seismic activity
and a major mine bounce [a bounce is a mine collapse in which the pressure on pillars
leads them literally to explode outward] - that should have raised red flags for both
MSHA and the mine operator. The company ignored these signs of danger and did not tell
MSHA about them, as the company promised it would do."
In February 2007, Murray Energy began retreat mining in a northern section of the mine.
Internal company records show 17 separate reports of roof falls, cave-ins and bounces.
An internal memo to Robert Murray identified these problems, beside which Murray
wrote "noted."

Only one of the 17 incidents listed in internal company records was reported in the
official logs Murray Energy is required to maintain by law, according to the Kennedy
report.

On March 11, the northern section where the retreat mining was being conducted - 900
feet away from the southern section that would be the site of the August tragedy -
collapsed. Because the collapse occurred at night, when no miners were nearby, no one
was hurt.

"The multiple warning signs that preceded the March bounce and the force of the
collapse itself should have alerted MSHA and the company to fundamental flaws in the
barrier pillar retreat mining plans," asserts the Kennedy report. "MSHA and Murray
Energy knew that the depth of cover and other geological characteristics of the South
barrier pillar were extremely similar to the North, yet they allowed retreat mining to go
forward in the South."

Internal company documents make clear that Robert Murray had been notified of the
March collapse. This directly conflicts his claim in the wake of the August disaster that
he did not know about similar, earlier problems.

Murray Energy also failed to formally report and investigate the March collapse, likely in
violation of federal law, according to the Kennedy report. The report notes, "A possible -
and inexcusable - reason for this reporting failure was a tacit agreement between Murray
Energy and MSHA to excuse the company from the Mine Act's reporting requirements."

On July 17, the company began retreat mining in the southern section of the mine.
Problems, including bumps and bounces, quickly became apparent and were reported to
Robert Murray (who marked "good" on an internal memo saying progress was being
made though significant warning signs were evident). Only one of the bumps and
bounces was noted in mine pre-shift reports. The memo to Murray, which he marked,
makes clear that - his subsequent claims notwithstanding - he did know that retreat
mining had been underway in the southern section of the mine.

Although the company had badgered and perhaps misled MSHA into authorizing an
unreasonably dangerous retreat plan, it is possible it was deviating even from the
approved plan, the Kennedy report concludes. "It is impossible to know to a certainty
what happened in the moments before the August 6th collapse," the report states.
"However, the investigation has uncovered evidence indicating that, at the time of
collapse, the company was conducting unauthorized mining."
There is evidence that the company was both conducting unauthorized mining of floor
coal, and extracting coal from a barrier pillar MSHA had specifically prohibited mining.

Murray Energy flatly denies, without elaboration, the findings of the Kennedy report. Its
subsidiary UtahAmerican Energy issued an official statement, but refused to comment
further. "We are shocked and outraged that the Senate Health, Education, Labor and
Pension (HELP) Committee, after conducting a superficial review of only some of the
facts, would level such serious and biased allegations. This report is politically motivated,
irresponsible and unjustifiable," Michael O. McKown, general counsel of UtahAmerican
Energy, said in the statement. "This matter merits considered and non-political
judgements."

"This sensational and irresponsible report makes slanderous allegations against innocent
individuals," McKown said. "We are confident that, with a full review of the facts, this
will be established. It is clear that the Senate HELP Committee report is precipitous and
wrong. It is obviously political grandstanding to certain constituents of some of its
members. Given the complex technical nature of this matter, the incompleteness of the
factual record and the lack of knowledge of the Committee, we consider the Senate HELP
Committee's report to be completely unreliable."

"Mr. Robert E. Murray, UtahAmerican and our employees all mourn the loss of our
miners and grieve for their families," McKown said. "Mr. Murray, our Company and our
employees have always been totally committed to the safety of our employees. Mr.
Murray and the Company would never knowingly expose any employee to danger, and
he hasn't in his 50 years of experience. For anyone to imply otherwise is blatantly false.
Once the facts are known, they will show that Mr. Murray deserves tremendous credit for
his courage and leadership under very difficult conditions. We are confident that the
comprehensive review of the facts will render a far more accurate and unbiased
accounting of what happened in this tragedy. We will reserve further comment until such
time as the facts can be clearly known."

The Kennedy report concludes that enough is already known. "Miners were exposed to
unnecessary and extreme risks," the report states. "The mine operator and MSHA must be
held accountable for their failures of diligence, care and oversight. The Secretary of
Labor should refer the case to the Department of Justice for prosecution."

Purdue Pharma: White-Collar Drug Dealers

How does street crime work? You commit the crime, you do the time.

How does corporate crime work? Big Pharma corporation commits a crime and hires a
high-paid white-collar crime defense lawyer.

Defense lawyer approaches prosecutor and says, "Let's make a deal." You agree not to
prosecute the company. I'll give you a shell company that does little business but has a
similar name. That company pleads guilty to the crime. It no longer sells drugs and thus
when Medicare lists the shell as a company with which Medicare will not do business, it
loses nothing. We turn over a couple of executives. They plead guilty. And you promise
no jail time.

You can hold a press conference and say, "We cracked down on corporate crime." And we
can get on with our business of making millions of dollars off average people addicted to
our opiate of choice.

That's pretty much what came down in 2007 when the Justice Department went after the
maker of OxyContin, the addictive pain killer that addicts will die for.

OxyContin offers major benefits for cancer patients and others in chronic pain.

But it's also an easy high for thousands of down and out Americans.

Crush the pill and snort it.

It's like heroin - without the needles. It's big in Appalachia. You don't need to ship it in
from overseas. You can get it at your local doctor's office or pharmacy.

Talk to family doctors working in hill country and one of the first issues they raise is Oxy
addiction. Abuse is so rampant that some hill doctors have stopped prescribing it. No
more break-ins and harassing phone calls from addicts claiming back pain.

In 2007, John Brownlee, the U.S. Attorney in Roanoke, Virginia, charged that "Purdue,
under the leadership of its top executives, continued to push a fraudulent marketing
campaign that promoted OxyContin as less addictive, less subject to abuse and less likely
to cause withdrawal."

"In the process," said Brownlee, "scores died as a result of OxyContin abuse and an even
greater number of people became addicted to OxyContin; a drug that Purdue led many to
believe was safer, less abusable and less addictive than other pain medications on the
market."

Brownlee charged that Purdue officials drafted an article published in a medical journal
claiming that OxyContin had less euphoric effect and less abuse potential than short-
acting opioids. The company then had its sales representatives distribute the article to
healthcare providers.

Said Assistant U.S. Attorney General Peter D. Keisler, Purdue "misled physicians about
the addiction and withdrawal issues involved with OxyContin."

Brownlee tried to pin the blame where it rightly belongs - on the company and executives
who pushed the drug on an unsuspecting public with claims that it was less addictive than
other painkillers.
Emphasis on the word "tried."

If you read the papers, you might now believe that Purdue Pharma, the Stamford,
Connecticut-based maker of OxyContin, pled guilty to illegally touting OxyContin. You
might believe, as the Los Angeles Times and other newspapers reported, "Purdue Pharma
pleaded guilty to one felony count of fraudulently misbranding a drug."

One problem. Purdue Pharma did not plead guilty to this crime. It was Purdue Frederick
that pled guilty.

Why is this distinction important? Under federal law, pharmaceutical companies

convicted of a felony are automatically excluded from federal insurance programs like
Medicare.

The idea behind mandatory exclusions is clean government - if a party commits a serious
crime, the federal government shouldn't do business with it.

Unless you are a giant corporation with hundreds of millions of dollars in profits at stake.

Then you get a deal.

In this case, the deal was brokered by Howard Shapiro, a partner at WilmerHale in
Washington, D.C. - the lawyer for Purdue Pharma. Shapiro did not return calls seeking
comment for this story.

Shapiro offered up Purdue Frederick to plead guilty.

What is Purdue Frederick?

We sent an e-mail off to company spokesperson James Heims.

We asked, "What is the difference between Purdue Frederick and Purdue Pharma?"

He wrote back immediately. "They are independent, associated companies. Please let me
know if you have further questions."

Well, yes, we do have further questions. Why did Purdue Frederick plead guilty and not
Purdue Pharma? No answer.

We call Mr. Heims. Now he's busy. No response.

So, we turn to the press packet sent out by Heidi Coy, the public affairs representative for
U.S. Attorney Brownlee. It's 89 pages. It contains Brownlee's statement, the press release,
the information, the agreed statement of facts, the plea agreements with Purdue
Frederick, Michael Friedman, the president and CEO, Howard Udell, the company's
general counsel, and Paul Goldenheim, the company's former medical director. But it
doesn't contain the non-prosecution agreement.

And, not surprisingly, out of the hundreds of mainstream news outlets that carried this
story, not one mentioned the non-prosecution agreement. The non-prosecution agreement
is the one that protects the companies that make the money.

Purdue Frederick takes the hit. It's the felon. It is excluded from government programs.
But so what? We can assume it has little if any government business to lose. (Brownlee
says he doesn't know. The company won't return calls.)

The more than 200 other affiliated Purdue Pharma companies scattered around the world
and listed in Appendix A of the non-prosecution agreement get off. No felony charge. No
exclusion. Business as usual.

Purdue is a privately held, very secretive company controlled by the Arthur Sackler
family. Arthur Sackler is the guy who, before he delivered OxyContin, brought to you the
marketing for Librium and Valium. Walk on the Mall in Washington and you walk by the
Freer Gallery of Art and Arthur Sackler Gallery.

Purdue was very happy with the deal to resolve the OxyContin criminal charge. In a
statement, Purdue said, "Nearly six years and longer ago, some employees made, or told
other employees to make, certain statements about OxyContin to some healthcare
professionals that were inconsistent with the FDA-approved prescribing information for
OxyContin and the express warnings it contained about risks associated with the
medicine. The statements also violated written company policies requiring adherence to
the prescribing information." The company said that, since 2001, it has cured these
problems.

It also insisted that "any attempt to connect the agreed to plea of misbranding by Purdue
with abuse and diversion of OxyContin is completely false."

In his statement that he read before the cameras, U.S. Attorney Brownlee said that Purdue
Frederick is the "manufacturer and distributor" of OxyContin.

Well, as it turns out, they used to be. No longer. Now, that's Purdue Pharma.

In an interview, Brownlee admitted that Purdue Frederick was chosen to plead guilty
because "we didn't want to ban the future sale of the drug."

Had Purdue Pharma been forced to plead guilty, OxyContin would have been excluded
from Medicare coverage, he said. "And we didn't want that," Brownlee said.

Actually, it's the company that would have been excluded from Medicare. It's up to the
government to decide what this means. Could it have ordered Purdue to let other
companies make OxyContin and sell it to Medicare? Yes, it could.
The other document that was not sent out in the press packet was the corporate integrity
agreement. This was the agreement that Purdue Pharma entered into and that requires the
company to hire an independent monitor to make sure it doesn't engage in future criminal
activity.

Brownlee won't give the name of the independent monitor who has been appointed. Why
not? He won't say.

The bottom line is that Brownlee prosecuted a case that few other U.S. Attorneys would
touch. He proceeded against a powerful privately held and secretive pharmaceutical
company with major resources at its disposal. He secured a guilty plea against an entity
and three top executives.

As part of the settlement, the company will pay over $600 million in fines, restitution and
a civil settlement. The three executives will pay collectively over $34.5 million in
penalties.

But in the end, he pulled his punches. Purdue Pharma was not charged. The independent
monitor's name has not been made public.

And perhaps most importantly, the executives will not face jail time. Why not?

Brownlee dodges the question.

This irks Sidney Wolfe of Public Citizen's Health Research Group.

Wolfe calls the fines and guilty pleas "an important message to the drug industry that this
kind of malicious, death-dealing behavior will not be tolerated."

But the government could have come down much harder on what he calls "white-collar
drug pushers."

Wolfe points out that from 2000 through 2006 alone, according to data from Drug Topics,
the news magazine for pharmacists, there have been $9.6 billion in retail U.S. sales of
OxyContin. It was one of 25 top-selling drugs from 2000 to 2005 - it was the 11th largest
selling prescription drug in 2003.

"The government should have forced the company to disgorge far more of its ill-gotten
profits in this case," Wolfe says. "Hundreds of thousands of people are languishing in jail
for relatively minor drug possession or distribution crimes involving illegal drugs or, in a
smaller number of cases, prescription drugs such as OxyContin. Why have the three
wealthy Purdue executives, who have pleaded guilty to orchestrating this dangerous
promotional campaign, escaped jail time, and why are they paying merely $34.5 million
in penalties? The damage to the public from these white-collared drug pushers surely
exceeds the collective damage done by traditional street drug pushers. Why do we have
such a double standard of justice?"
SAIC: The Government-Contractor Complex

When investigative reporters Donald Barlett and James Steele were fired from Time
magazine in May 2006, the magazine cried poverty.

"They're very good, but very expensive, and I couldn't get anyone to take them on their
budget," said John Huey, editor in chief at Time.

Time magazine then turned around and paid $4 million for photographs of Brad Pitt and
Angela Jolie's baby.

"That $4 million would pay for about 10 more years of salary and expenses for Barlett
and Steele and their research help," said Steve Lovelady, of the Columbia Journalism
Review, at the time.

Luckily, Brangolina central - Vanity Fair - picked up Barlett and Steele. They came back
with an exposé of SAIC - Science Applications International Corporation - the mega-
giant defense and intelligence contractor that straddles the Potomac. Through a
spokesperson, SAIC told Multinational Monitor it would not comment on the Vanity Fair
article.

Buried deep inside Vanity Fair's 500-page Hollywood issue, surrounded by anorexic male
and female models pushing bras, perfume, jewelry and handbags - is a 10-page profile of
the permanent government on the Potomac.

Barlett and Steele open with a nod to Hollywood:

"One of the great staples of the modern Washington movie is the dark and ruthless
corporation whose power extends into every cranny around the globe, whose
technological expertise is without peer, whose secrets are unfathomable, whose riches
defy calculation, and whose network of allies, in and out of government, is held together
by webs of money, ambition and fear. …

"To be sure, there isn't really such a corporation: the Omnivore Group, as it might be
called. But if there were such a company - and, mind you, there isn't - it might look a lot
like the largest government contractor you've never heard of: a company known simply
by the nondescript initials SAIC (for Science Applications International Corporation),
initials that are always spoken letter by letter rather than formed into a pronounceable
acronym."

In 2006, SAIC raked in nearly $8 billion, almost all of it from the government. The
company holds more than 9,000 contracts with the federal government.

Barlett and Steele say that while Halliburton and Bechtel supply the muscle - building
infrastructure - SAIC sells brainpower.
Founded almost 40 years ago in San Diego, the core of the company's sprawling
operations are now in the Washington, D.C. suburbs, where it serves the Pentagon and the
National Security State, as well as other arms of the federal government.

Two developments over the last 15 years have spurred SAIC's growth. One is the
outsourcing of federal government operations, an ongoing trend that got a huge boost
with then-Vice President Al Gore's "Reinventing Government" initiative. Under the Bush
administration, contracting out has gone into overdrive. A permanent government of
contractors like SAIC now do what the government once did - typically at greater
expense than when the same functions were performed in house.

The second boost for SAIC was the 9/11 terrorist attack, and the U.S. response - which
includes the Iraq War, despite the fact that Iraq and Saddam Hussein had nothing to do
with 9/11.

"There isn't a politically correct way to put it, but this is what needs to be said: 9/11 was a
personal tragedy for thousands of families and a national tragedy for all of America, but it
was very, very good for SAIC," Barlett and Steele write. "In the aftermath of the attacks,
the Bush administration launched its Global War on Terror, whose chief consequence has
been to channel money by the tens of billions into companies promising they could do
something - anything - to help. SAIC was ready."

Ready to capitalize on the business opportunity, that is. The extent to which the company
delivers useful services to the government is not so clear.

Barlett and Steele document a long list of whistleblower lawsuits and federal criminal
investigations of the company, and describe how several of SAIC's projects have turned
out to be colossal failures.

One example is the Iraqi Media Network.

A week before the invasion of Iraq, Barlett and Steele write, "SAIC was awarded yet
another no-bid contract, this one for $15 million, which within a year would balloon to
$82 million. The contract gave SAIC the responsibility for establishing a 'free and
independent indigenous media network' in Iraq, and for training a cadre of independent
Iraqi journalists to go with it. The selection of SAIC for this job may have seemed
counter-intuitive. A year earlier, SAIC had been involved in a Pentagon program designed
to feed disinformation to the foreign press."

"The job of establishing the Iraqi Media Network's infrastructure - cables, transmitters,
dishes - was rife with corruption and waste," Barlett and Steele write. In March 2004, the
Pentagon's inspector general found widespread violations of normal contracting
procedures. "One of the more blatant transgressions concerned SAIC's overall manager of
the media effort in Iraq. The investigators discovered that he had bought a Hummer and a
pickup truck in the United States and then chartered a DC-10 cargo jet to fly them to Iraq.
When a Pentagon official refused to allow the charge, the inspector general reported,
'SAIC then went around the authority of this acquisition specialist to a different office
within the Under Secretary of Defense for Policy to gain approval and succeeded.'"

SAIC hired Don North, a former NBC news staffer, to help build the Iraqi Media
Network. North and his colleagues aimed to create an independent media operation. Their
hopes were quickly dashed.

"With SAIC's cooperation," Barlett and Steele write, "the network quickly devolved into
a mouthpiece for the Pentagon - 'a little Voice of America,' as North would put it. Iraqis
openly snickered at the programming. Every time North protested, he recalls, he was
rebuffed by SAIC executives. 'Here I was going around quoting Edward R. Murrow,'
North says, 'and the people who were running me were manipulating and controlling a
very undemocratic press and media that was every bit as bad as what Saddam had
established.'"

With no authentic independent culture, the Iraqi Media Service was just a pawn of its
controllers. When it was turned over to the Iraqi government, it continued as a
propaganda machine, but with a different message. Today, in an ironic twist, it "spews out
virulently anti-American messages day and night."

Failure does not seem to hurt SAIC much. Nor do elections seem to matter much for the
company that has become a fixture in Washington.

"Political change causes scarcely a ripple," Barlett and Steele write. "As one former
SAIC manager observed in a recent blog posting: 'My observation is that the impact of
national elections on the business climate for SAIC has been minimal. The emphasis on
where federal spending occurs usually shifts, but total federal spending never decreases.
SAIC has always continued to grow despite changes in the political leadership in
Washington.'"

Russell Mokhiber is Editor of the Corporate Crime Reporter. Multinational Monitor

Editor Robert Weissman is Director of Essential Action.

++++++++++++++++++++++++++++++++++++++++++++++++++++

J'Accuse: The 10 Worst Corporations of 2006

by Russell Mokhiber and Robert Weissman

Selecting the 10 worst corporations of the year is more art than science.

We do, however, apply certain guidelines. One is that, barring extraordinary

circumstances, we do not place companies on the list two years running.
The rationale for this guideline is that we want to diversify the pool of named companies
(and there is a big pool of bad actors from which to select).

The downside is that we inevitably leave off companies who did something really bad in
the previous year — solely on the grounds that they were malefactors the year before.

So, as a warm-up to the 2006 list, permit a quick review of the recent activities of those
companies on the list in 2005.

BP: In March 2006, a leak in the Alaska pipeline that BP maintains led to the second
biggest oil spill in Alaskan history. Then, in August 2006, BP was forced to shut down the
pipeline because of massive corrosion problems the company had permitted to fester.

Delphi: Delphi continued in bankruptcy through 2006, plowing ahead with its shameful
scheme to manipulate the bankruptcy system to escape wage and pension payments owed
to past and present workers. Final arrangements are still pending for Delphi to emerge
from bankruptcy, but it’s fair to say the company will have achieved much of what it
desired — trashing its unionized wage and benefit structure, if perhaps not as fully as it
fantasized doing.

Dupont: Dupont appeared on our list in 2005 for a decades-long cover-up on the effects
of a chemical used to make Teflon and grease-resistant coatings. At the end of 2005, the
company agreed to phase out its use, over the course of a decade. But the company
continues to deny it has any harmful effect on humans. Meanwhile, a federal criminal
investigation is ongoing.

ExxonMobil: In 2005, ExxonMobil appeared on our list for its global warming
denialism, and price-gouging that resulted in record profits of $36 billion. In 2006, the
company began massaging its position on global warming — ExxonMobil now agrees
that “climate change is a serious and long-term challenge,” but doesn’t want governments
to do anything serious about it — and its continued mass rip-off of consumers enabled it
to rake in $39.5 billion in profits, a new record.

Ford: Ford lost more than $12 billion in 2006, the legacy of the company’s complete
failure to recognize that the future rests with fuel efficient vehicles (and soon, petroleum-
free transportation) rather than gas-guzzling giant SUVs. Investors took a big hit, but
workers felt the worst impact; at the start of 2006, Ford announced it would eliminate a
quarter of its U.S. jobs.

Halliburton: Halliburton continued with its scandalous looting of taxpayers. In a small

but totally typical example, the Associated Press in September reported that a company
whistleblower revealed in a lawsuit filed in 2005 that Halliburton’s KBR subsidiary in
Iraq billed millions to U.S. taxpayers for nonexistent recreational activities. In July 2006,
the Army fired Halliburton from its contract (which Halliburton called a routine decision
to suspend the contract). The contract to rebid will be broken up into several pieces —
Halliburton may yet end up as the overseer of the companies that take over its old
contractual duties.

KPMG: KPMG, the accounting firm mired in controversy over the sweetheart deal it
negotiated in 2005 to escape prosecution for peddling illegal tax shelter schemes, started
off 2006 with a bang. On January 3, the esteemed accountants at KPMG agreed to pay
$2.77 million for failing to disclose rebates the firm received for travel expenses billed to
the U.S. government.

Roche: In July, the newspaper The Australian reported that Roche had spent a remarkable
$49,000 on a dinner for 300 doctors. Held at a restaurant in the Sydney Opera House, the
purpose of the dinner was to promote the drug makers’ pill rituximab, used to treat non-
Hodgkin’s lymphoma. The dinner violated the Australian drug industry’s code that
donated meals to doctors be “simple and modest.”

Suez: Suez struggled to hold on to its privatized water business, which seems
increasingly non-viable in developing countries. In March, Argentina threw Suez out of
the country, terminating its 30-year contract on the grounds that Suez had failed to make
promised investments. Suez also left Bolivia in October, extracting a $5 million payment,
but backing down on threats to sue the country’s government in international arbitration.

W.R. Grace: In 2005, W.R. Grace appeared on our 10 worst list after being indicted for
its operations in Libby, Montana, a mining town where the company let hundreds be
exposed to deadly doses of asbestos and then concealed the problem. In April 2006, the
New York Times reported that “doctors at the clinic that has treated hundreds of asbestos
victims accuse the company of trying to discredit them and force the clinic to close.”

Anyway, that’s an update on our 2005 list. We’ve got a whole new crop for 2006,
presented herewith in alphabetical order.

ABBOTT: BULLYING THE PHILIPPINES

UNICEF and World Health Organization recommend exclusive breastfeeding in the first
six months of life. This is particularly important in poorer countries, where newborns face
greater health risks and the water used to make baby formula may be contaminated.

Nonetheless, and despite a decades-long global public health campaign to increase

breastfeeding rates throughout the developing world, breastfeeding rates are low.

In the Philippines, less than half of all babies are exclusively breastfed for at least than
one month, according to UNICEF. Only 16 percent of babies four to five months of age
are still exclusively breastfeeding. In the Philippines, according to public health
authorities, 82,000 children die each year before their fifth birthday. Improving
breastfeeding rates is the single most effective action that can be taken to prevent these
deaths.
The Filipino government decided to do something about this.

But the government’s public health measure has been blocked by Abbott and other infant
formula makers.

In July, the government issued regulations to ban the marketing of infant formula for
babies under two years of age.

The Pharmaceutical and Health Care Association of the Philippines (PHAP), whose
members include U.S. formula companies (Abbott Ross, Mead Johnson and Wyeth), and
Gerber (now owned by Swiss Novartis), promptly sued the government to stop
implementation of the new rules.

The Philippines Supreme Court declined to issue an injunction to stop the new rules from
going into effect.

Then, on August 11, Thomas Donohue, the head of the U.S. Chamber of Commerce,
wrote a letter to Philippine President Gloria Arroyo. Donohue complained that the
regulation was overbroad and unjustified, and adopted through improper purposes. His
complaint came with a threat: “If regulations are susceptible to amendment without due
process, a country’s reputation as a stable and viable destination for investment is at risk.”

Four days later, the Supreme Court reversed itself and issued an injunction against the
new rules.

The companies’ interference has mobilized women and public health organizations in the
Philippines. In one action, more than a thousand breastfeeding mothers rallied in Manila.

“We want to make companies accountable for the harmful effects of babyfood products
that undermine the power of breastfeeding and food security in the Philippines,” Ines
Fernandez, executive director of Arugaan, a Filipino breastfeeding organization, told
UNICEF.

Meanwhile, Abbott has also come under fire for its handling of AIDS drugs. Its product
Kaletra is a vital drug for treatment of people with HIV/AIDS, but the company
maintains inflated prices for the drug in many developing countries, and has failed to
register a variant of its drug that does not require refrigeration in many poor nations.

In August, the company announced a new discount deal for developing countries. It set a
price of $500 per patient a year in least developed countries, and $2,200 in low-income
and low-middle-income countries.

The company’s new release quoted Dr. Robert Redfield, director of Clinical Care and
Research, Institute of Human Virology in Baltimore as saying, “as a caregiver of HIV
patients in the developing world, I am pleased with Abbott’s continued effort to develop
new and innovative programs related to medication costs. These efforts will enable
individual countries to maximize their ability to provide medicine for their citizens.”

Perhaps Redfield thinks Abbott deserves congratulations. Most public health advocates
do not. They say the price remains out of reach, especially in middle-income countries,
and complain that Abbott continues to widely register its heat-resistant version.

“Where is Abbott’s Kaletra?” asks Anuja Singh, a member of the Student Global AIDS
Campaign and a student at Columbia University. “Abbott is in possession of life-saving
medication — but the people who need it do not have it.”

ALTRIA: RACKETEERS

After a case lasting seven years and a trial unfolding over nine months, Federal District
Court Judge Judith Kessler in August 2006 issued a ruling in United States v. Philip
Morris.

Adjudging Philip Morris USA, its parent company Altria, and the other leading tobacco
companies in the United States to be “racketeers” under the terms of the Racketeering-
Influenced and Corrupt Organizations Act (RICO), she wrote: “What this case is really
about … [is] an industry, and in particular these defendants, that survives, and profits,
from selling a highly addictive product which causes diseases that lead to a staggering
number of deaths per year, an immeasurable amount of human suffering and economic
loss, and a profound burden on our national healthcare system. Defendants have known
many of these facts for at least 50 years or more. Despite that knowledge, they have
consistently, repeatedly and with enormous skill and sophistication, denied these facts to
the public, to the government and to the public health community. Moreover, in order to
sustain the economic viability of their companies, defendants have denied that they
marketed and advertised their products to children under the age of 18 and to young
people between the ages of 18 and 21 in order to ensure an adequate supply of
‘replacement smokers,’ as older ones fall by the wayside through death, illness, or
cessation of smoking. In short, defendants have marketed and sold their lethal product
with zeal, with deception, with a single-minded focus on their financial success, and
without regard for the human tragedy or social costs that success exacted.”

In her more than 1,600-page ruling, Kessler spelled out in excruciating detail how Philip
Morris and the other defendants carried out their deadly conspiracy to deceive and addict.

For example, Kessler found that “Philip Morris intensively studied nicotine and both its
pharmacological and physiological effects on smokers (sometimes called addictive,
dependence producing or reinforcing effects) in an effort to increase its market share
within the industry. However, Philip Morris withheld from the public its internal
knowledge and acceptance that smoking, because of nicotine, was addictive.”

As evidence, Kessler noted that one-time Philip Morris Principal Scientist William Dunn
“observed that while Philip Morris would continue its research program ‘to study the
drug nicotine, we must not be visible about it.’ And while the program depended on a
‘heavy commitment’ by Philip Morris, Dunn wrote that ‘our attorneys, however, will
likely continue to insist on a clandestine effort in order to keep nicotine the drug in low
profile.’”

Similarly, she found that since the 1970s Philip Morris has used brand descriptors such as
“light” and “ultra light” to suggest, misleadingly, that lower tar and nicotine cigarettes are
less harmful.

Citing statements from James Morgan, who was brand manager of Marlboro from 1969
to 1972, during the time when Philip Morris introduced Marlboro Lights, its first “light”
cigarette, and who subsequently became CEO of the company, Kessler found, “Philip
Morris made a calculated decision to use the phrase ‘lower tar and nicotine’ even though
its own marketing research indicated that consumers interpreted that phrase as meaning
that the cigarettes not only contained comparatively less tar and nicotine, but also that
they were a healthier option.”

She also concluded that Philip Morris markets to young people, including those under 18.
Philip Morris and other defendants’ “marketing activities are intended to bring new,
young and hopefully long-lived smokers into the market in order to replace those who die
(largely from tobacco-caused illnesses) or quit,” Kessler found. “Defendants used their
knowledge of young people to create highly sophisticated and appealing marketing
campaigns targeted to lure them into starting smoking and later becoming nicotine
addicts.”

“As a result,” she determined, “88 percent of youth smokers buy the three most heavily
advertised brands — Marlboro, Camel and Newport. Fewer than half of smokers over the
age of 25 purchase these three brands. For example, in 2003, Marlboro, the most heavily
marketed brand, held 49.2 percent of the 12-to-17 year old market but only 38 percent of
smokers over age 25.”

“Defendants spent billions of dollars every year on their marketing activities in order to
encourage young people to try and then continue purchasing their cigarette products in
order to provide the replacement smokers they need to survive.”

And Kessler found that “Philip Morris suppressed and concealed many scientific research
documents, even going so far as to send them to a foreign affiliate in order to prevent the
disclosure of documents in litigation and in federal regulatory proceedings.” For
example, “in 1970, Helmut Wakeham, Philip Morris’s vice president for research &
development, recommended that Philip Morris purchase INBIFO, a research facility in
Cologne Germany, arguing that Germany ‘is a locale where we might do some of the
things which we are reluctant to do in this country.’”

While Judge Kessler’s findings were a devastating indictment of Philip Morris and the
rest of Big Tobacco, she pronounced herself handcuffed in terms of remedies. A previous
appellate court ruling had limited the judge’s ability to impose monetary penalties or
remedies based on the prior misconduct of the defendants.
Philip Morris is appealing the ruling.

“Philip Morris USA and Altria Group, Inc. believe much of today’s decision and order are
not supported by the law or the evidence presented at trial, and appear to be
Constitutionally impermissible or infringe on Congress’ sole right to provide for the
regulation of tobacco products,” said William S. Ohlemeyer, Altria Group vice president
and associate general counsel.

“Moreover, the conclusion that PM USA and Altria are reasonably likely to engage in
future wrongdoing is flawed in light of the profound and permanent changes in the way
cigarettes are marketed today, including requirements imposed by agreements with the
state attorneys general and other voluntary — and irrevocable — changes made by our
companies,” he said.

BAE, BLAIR, BRIBERY AND THE BENEFITS OF BREAKING THE LAW

Bribery is a menace that undermines democracy.

Yet, despite laws prohibiting bribery, corporations continue to bribe worldwide.

Why?

Because corporations consider a law violation as merely a cost of doing business.

Let us not forget the advice of two of the most revered corporate law professors in the
United States — University of Chicago Law Professors Frank Easterbrook and Daniel
Fischel — authors of the number one cited work in legal academia over the last 25 years
— The Economic Structure of Corporate Law — who advocate that corporations violate
the law if profits from the law-violating activity outweigh the fine.

Straight cost-benefit.

But that’s not to say that corporations won’t go to the end of the world to try and beat
back those who would accuse of them of criminal activity.

Take the case of BAE Systems — one of the world’s largest military contractors.

In 2006, the cops in the UK were deep into a bribery investigation of BAE in Saudi
Arabia.

Then the UK’s Serious Fraud Office took some serious political heat for its investigation.
The heat was generated by BAE and the Saudis. And the prosecutors couldn’t stand the
heat. So, they got out of the kitchen.

As in — they closed down the investigation.

Why?

Well, according to a press release from the prosecutors in the Serious Fraud Office:

“This decision has been taken following representations that have been made both to the
Attorney General and the Director of the SFO concerning the need to safeguard national
and international security. It has been necessary to balance the need to maintain the rule
of law against the wider public interest. No weight has been given to commercial
interests or to the national economic interest.”

Right.

BAE and the Saudis had been lobbying to close down this investigation for months. More
than $19 billion or so in BAE contracts was on the line.

Of course, no weight was given to these commercial interests.

In December 2006, Prime Minister Tony Blair defended the move to close down the
investigation by implying that it would hurt the UK’s relationship with Saudi Arabia.

“Our relationship with Saudi Arabia is vitally important for our country in terms of
counter-terrorism, in terms of the broader Middle East, in terms of helping in respect of
Israel-Palestine, and that strategic interest comes first,” Blair said.

Wait a second? Shut down a bribery investigation as a way to enhance the peace process?

A coalition of more than 40 public interest groups wrote to Prime Minister Tony Blair
that “the early termination of the investigation for reasons that do not relate to the legal
merits of the case sends the message that companies trading with countries that a
government claims to be of strategic importance are above the law and can bribe with
impunity.”

Impunity.

Good word.

The groups pointed out to Blair that the UK is a signatory to the OECD Convention on
Combating Bribery of Foreign Public Officials in International Business Transactions
(the OECD Antibribery Convention).

Article 5 of the convention requires that the investigation and prosecution of foreign
bribery “shall not be influenced by considerations of national economic interest” or “the
potential effect upon relations with another State.”
It’s not as if the BAE case is an isolated instance of big corporations getting their way
through bribery.

According to the Guardian paper in London, a $12 million BAE bribery scandal is
brewing in Tanzania.

Also according to the Guardian, Robin Cook, the former foreign secretary under Blair,
has written his memoirs in which he notes that “I came to learn that the chairman of BAE
appeared to have the key to the garden door to No. 10. Certainly I never knew No. 10 to
come up with any decision that would be incommoding to BAE.”

BAE says it does not comment on corruption allegations.

In a question-and-answer statement, it says, “There have been several media reports

relating to allegations made against our Company. None of these allegations has been
substantiated. We will not tolerate bribery or other attempts to influence improperly the
decisions of customers and suppliers. The intent of our policies is to establish compliance
with the law as the minimum standard and to aim for higher standards where possible.”

BOEING: OFF THE HOOK, AGAIN & AGAIN

Up until a couple of years ago, if you were a major U.S. corporation and you engaged in
criminal wrongdoing, and some insider had the goods on the company and could
convince a federal prosecutor to bring a case, there was a good chance that the
corporation would be forced to plead guilty to a crime.

Now, the odds are running the other way.

The corporate defense lawyers have federal prosecutors on the run.

Now, if you are a corporate insider, and you have the goods on corporate criminal
wrongdoing — the best that you can expect in most cases is a deferred prosecution
agreement or a non-prosecution agreement.

These agreements allow the corporation to clean house, fire a few “rogue” employees,
cooperate with federal authorities in putting the individual wrongdoers behind bars, admit
no corporate wrongdoing — and move on to the next crime.

Case in point: Boeing.

In May, the Justice Department announced a tentative agreement with Boeing to resolve
two entirely separate cases of apparent criminal wrongdoing — “concerning Boeing’s
hiring of former Air Force acquisition official Darleen Druyun in 2002 and the
investigation by the United States Attorney’s Office for the Central District of California
regarding possession of a competitor’s information in connection with launch service
contracts with the Air Force under the Evolved Expendable Launch Vehicle Program and
with a task order with NASA for 19 missions under its launch services contract.”

In the Evolved Expendable Launch Vehicle Program scandal, Boeing acquired 25,000
pages of bidding documents from its sole competitor, Lockheed Martin. It then used the
information to set its bids just below those of Lockheed. The government and taxpayers
were thus cheated of the benefits of genuine competition.

In the elaborate Darleen Druyun affair, Air Force contracting officer Druyun admitted
doing a variety of “favors” for Boeing. In the Pentagon’s misguided deal to lease rather
than buy tankers from Boeing, Druyun admitted that she “agreed to a higher price for the
aircraft than she believed was appropriate.” Boeing reciprocated for these gifts — ripoffs
of taxpayer money — by hiring her. Her hiring was managed at the highest levels of the
company, involving then-Chief Financial Officer Michael Sears. Druyun and Sears were
sentenced to jail time for their crimes.

There was no such pain for Boeing. Like most corporations that violate the criminal law,
it was able to cut a deal. Even by the degraded standards of the day, Boeing was able to
exact some extraordinary concessions. Boeing was forced to pay a $615 million fine —
modest for the company, especially in the context of its wrongdoing — but the
government agreed to describe the penalty payment from Boeing as a potentially tax
deductible “monetary penalty” rather than a “criminal penalty.” And the deal permits
Boeing not to acknowledge that federal prosecutors had sufficient evidence to warrant
felony charges.

Among other advantages, these concessions will assist the company in defending itself in
civil litigation. This comes on top of the main benefits: no criminal charges, no ongoing
scrutiny of the company’s performance in the context of a criminal prosecution, no
criminal penalties.

Perhaps the most audacious innovation of the Boeing non-prosecution agreement is that it
resolves not just one instance of potential criminal activity, but two. One of the key
factors in the Justice Department’s guidelines for prosecuting companies (known as the
Thompson Memorandum), and in any common-sense exercise of prosecutorial discretion,
is whether the wrongdoer has engaged in repeated violations of the law. Here by
definition Boeing had engaged in repeat violations, for the non-prosecution agreement
settled two brazen and potentially criminal abuses of the contracting process. It should
also be noted that Boeing has a record replete with other cases of serious wrongdoing
(most resolved civilly).

From Boeing, it was the typical corporate line — that’s all in the past. “We take full
responsibility for the wrongful acts of the former employees who brought dishonor on a
great company and caused harm to the U.S. government and its taxpayers,” Boeing CEO
Jim McNerney told the Senate Armed Services Committee in August. Note: “former”
employees.

Now, everything has changed, McNerney said. “In my 14 months as the company's
chairman, president and CEO, I have made it my mission to understand the root causes of
what went wrong in years past. And I can attest that those former employees referred to
in the settlement do not represent the people of Boeing, who are devoted to conducting
their work ethically and in the best interests of our customers and our country.”

Of course, as the Justice Department noted in announcing the deal, “the company is fully
cooperating with the government’s investigation.”

Now, would the federal government make a similar deal with, say, the mafia?

Imagine reading the following: “Under a deal cut with the federal government, the mob
agreed to pay $615 million and the United States agreed not to bring criminal charges
related to the conduct in part because ‘the mob is fully cooperating with the government’s
investigation.’”

We didn’t see the argument against corporate criminal liability being made by the
Chamber of Commerce or the white collar bar when the feds were cracking down on the
mob.

They didn’t say — go after the individual mob bosses, but forget the enterprise.

In fact, the FBI and the Justice Department were so concerned about mob “enterprise
liability” as they called it, that they got passed through the Congress a special law to help
them deal with the problem — the RICO Act, the very law used innovatively to go after
the tobacco companies.

Putting away individuals is not enough. The corporate culture poisons the system. You
have to deal with the organization, the enterprise, the corporation, the mob.

You would get the impression from listening to the onslaught of propaganda emanating
from the big corporate law firms that corporations are innocent vessels — it’s the corrupt
individuals who are evil.

Put them behind bars. Let the corporation do its good work.

In fact, corporate crime and violence has inflicted far more damage on society than all
individual wrongdoing combined.

And that’s why’s its important to preserve corporate criminal liability.

The criminal law is the big stick in society’s bag of tricks for controlling immoral, illegal
and anti-social behavior.

So, why not use it against society’s most dangerous criminals?

It’s important to be able say — with legal justification — to those who spend billions on
public relations campaigns to make themselves look good, “J’accuse — you are a
criminal.”

Exxon is a criminal. ADM is a criminal. Genentech is a criminal. Chevron is a criminal.

Coors is a criminal. Tyson is a criminal. GE is a criminal. Teledyne is a criminal.

All convicted of crimes in the 1990s, before the anti-corporate crime cult took hold of our
minds and legal system.

Today’s wrongdoers get off easy, and feel no shame.

Boeing in fact feels so little shame that it has now entered into a joint venture with
Lockheed, its sole competitor in the satellite launch business and the company from
which it stole thousands of proprietary documents.

In October, the Federal Trade Commission (FTC) blessed the creation of the joint
venture, which it acknowledged will create a durable monopoly, raise prices and reduce
innovation.

The FTC let the deal go through because the Defense Department — the sole customer
for the joint venture — endorsed it.

But whether the Pentagon just cravenly bows to the wishes of contractors, or is fooling
itself, or both, it is a safe prediction that the joint venture approval will lead not to
speeded-up satellite launches, but further delays. And no one will be in position to do
anything about it, because there won’t be any competitors.

FIRSTENERGY: NUCLEAR POWER IS NOT THE ANSWER

In January 2006, Akron, Ohio-based FirstEnergy’s Nuclear Operating Company agreed to

pay $28 million to settle criminal charges that it made false statements to the U.S.
Nuclear Regulatory Commission.

Now we agree with Dr. Helen Caldicott that — as she put it in the title of her recent book
— Nuclear Power is Not the Answer.

But if you are going to run a nuclear power facility, you can’t lie to the regulators. And if
you do, you should pay the price.

Was FirstEnergy forced to plead guilty?

No.

Instead, it was charged with crimes, but the criminal prosecution was deferred — if
FirstEnergy is a good boy for a couple of years, the charges will be dropped.
No harm, no foul.

Under the agreement, the company admitted that the government was able to prove that
its employees, acting on its behalf, knowingly made false representations to the Nuclear
Regulatory Commission (NRC) in the course of attempting to persuade the NRC that its
Davis-Besse Nuclear Power Station was safe to operate.

Prasoon Goyal, a design engineer, also accepted and entered into a deferred prosecution
agreement with the government.

In addition, two former employees and one former contractor of the company were
charged in a five-count indictment for allegedly preparing and providing false statements
to the NRC.

Federal officials alleged that David Geisen, Andrew Siemaszko and Rodney Cook falsely
represented to the NRC that past inspections of the plant were adequate to assure safe
operation until February or March of 2002.

“By misleading the NRC about its prior safety inspections, the company failed to meet its
regulatory obligations and violated the public’s trust,” said Assistant Attorney General
Sue Ellen Wooldridge for the Justice Department’s Environmental and Natural Resources
Division. “The deferred prosecution agreement entered today involves a full admission of
responsibility by the company and includes a financial penalty that reflects the revenue
that the company realized by misleading the NRC and delaying required safety
inspections at the Davis-Besse facility.”

The company owns and operates the Davis-Besse Nuclear Power Station, which is
located on the southwestern shore of Lake Erie, near Oak Harbor, Ohio.

To produce energy, the plant utilizes pressurized water reactors to heat water to
approximately 600 degrees Fahrenheit through the process of nuclear fission. At that
temperature, the reactor coolant water — which is sealed inside a reactor pressure vessel
— reaches a pressure of 2000 pounds per square inch. The reactor coolant is then used to
super-heat steam to drive turbines that generate electricity.

Reactor operators use two systems to control the rate of fission.

In one, they can raise or lower vertical control rods in the reactor core to absorb the
neutrons that drive the reaction. The machinery that raises and lowers the control rods is
attached to the reactor vessel head of the reactor pressure vessel. Nozzles pierce the
dome-shaped head and the control rods are raised and lowered through those nozzles. The
Davis-Besse reactor vessel head had 69 nozzles.

In the 1990s, some reactors in power plants, like Davis-Besse, started to develop cracks
where the nozzles were welded to the reactor vessel head. This cracking could lead to
breaks where control rod nozzles penetrated the steel-walled vessel that contained the
nuclear fuel and the pressurized reactor coolant water, resulting in a potentially serious
accident that would stress the plants’ safety systems.

Engineers predict that a broken nozzle, propelled by reactor coolant at 2000 pounds per
square inch, would violently launch itself out of the reactor vessel head, leaving a hole
through which reactor coolant would escape into the containment building.

In August 2001, following reports of nozzle cracks, the NRC issued Bulletin 2001-01,
requiring reactor operators to report on their plant’s susceptibility to cracking, the steps
they had taken to detect it, and their plans for addressing the problem in the future.

Any licensee that did not plan to inspect the reactor vessel head for signs of cracking by
December 31, 2001 was required to justify operation beyond that date.

Federal officials said that in the months following the issuance of Bulletin 2001-01, the
company submitted five letters to the NRC, arguing that its past inspections were
adequate to assure safe operation until February or March 2002, at which time the plant
had a prescheduled shut-down.

Federal officials charged that in order to persuade the NRC that their plant was safe to
operate until the prescheduled shutdown, company engineers and contractors —
including Geisen, Siemaszko and Cook — presented false information in its submissions
to the NRC.

The federal indictment charges that the defendants prepared and submitted false and
misleading responses to the NRC’s bulletin and concealed material information,
eventually persuading the NRC that Davis-Besse was safe to continue operation until
February 15, 2002.

Upon the scheduled shutdown in March 2002, workers discovered a pineapple-sized

cavity in the head of the reactor vessel at Davis-Besse.

Subsequent analysis showed that this hole was the result of corrosive reactor coolant
leaking through a nozzle crack.

In addition to alleging false and misleading statements to the NRC, the indictment alleges
that Geisen, Siemaszko and Cook lied about the extent of inspections done in 1996, 1998
and 2000.

Two of the defendants, Geisen and Siemaszko, were also charged with providing the
NRC with photographs bearing captions that falsely indicated generally good conditions
for visual inspections.

As part of the settlement agreement, the company will pay more than $23 million in fines
and will spend an additional $4.3 million on community service projects.
No guilty plea.

Crime.

No punishment.

As is typical in such cases, FirstEnergy expressed regret, chalked up the “mistake” to a

bygone era and said that the overall experience was positive. “FENOC [First Energy's
Nuclear Operating Company] regrets the significant performance deficiencies that led to
the reactor head issue and accepts full responsibility for the failure to accurately
communicate with the NRC,” said FENOC President and Chief Nuclear Officer Gary R.
Leidich. “We have learned much from this experience, and FENOC is a better and
stronger company today than in 2001 when this occurred. The agreement closes an
important chapter on the Davis-Besse reactor head issue for the company. FENOC will
continue to focus on safe, reliable plant operations, and do nothing to retreat from its
recovery nor erode the trust it has regained.”

Even when the company engages in run-of-the-mill pollution with visible consequences
— the fines are nothing, the slap is a tap.

In Pennsylvania, the Department of Environmental Protection fined FirstEnergy

Generation Corp. $25,000 for a “stack rain out” that covered more than 300 Beaver
County homes and properties in a black, sooty material July 22, 2006.

The material came from the tall stack of the company’s Bruce Mansfield power plant in
Shippingport Borough and rained over a two-mile area that extended from the borough
into Raccoon Township.

“This was a significant event that affected hundreds of nearby residents,” DEP’s Kenneth
Bowman said. “We recognize that FirstEnergy worked to clean up the sites by removing
the material from public and private properties. But the company still must pay a price
because of the nature and scope of the incident.”

The $25,000 fine — the maximum penalty allowed by the state’s Air Pollution Control
Act — was paid to the Clean Air Fund, which finances air quality improvement projects
across the commonwealth.

DEP analysis of samples of the material taken from sites in Shippingport and Raccoon
Township showed elevated levels of arsenic.

Analysis of samples taken by FirstEnergy from the facility also showed elevated levels of
arsenic.

KROGER: NOT TRUTHFUL TO THE OUTSIDE WORLD

Kroger Co. is a $60 billion corporation based in Cincinnati, Ohio.

It owns more than two dozen supermarket and department store chains — including
Kroger’s, Fred Mayer and Ralphs.

Ralphs is based in southern California.

On October 10, 2006, Kroger’s chair and CEO, Dave Dillon, gave a speech to a group of
analysts.

“A company is an artificial device that the government allows us to form, but it is nothing
more than a bunch of people,” Dillon said. “And those people coming together for a
common purpose also have to define themselves and they do through their values. And at
Kroger, when we began this journey about five years ago or so, we decided we need to
identify in what do we believe. What were the values that we were going to hold true.
And there were six that we identified. I’d like to talk about them each briefly. The first is
honesty, the second is integrity, the third is safety, the fourth is diversity, the fifth is
inclusion and the sixth is respect. So let’s go back to those. Honesty is probably obvious,
truthful to one another, truthful to the outside world.”

At about the time he was speaking these words, one of Kroger’s company’s, Ralphs, was
negotiating a guilty plea with federal officials in California for one of the more audacious
union-busting schemes in recent history.

Grocery unions were negotiating a new contract in 2003. The supermarkets in the Los
Angeles area claimed they were being squeezed by big box stores like Wal-Mart.

And they threatened to pull the fully paid health benefits to their more than 60,000
grocery workers.

The unions struck Vons — and as a show of solidarity with their corporate brother,
Ralphs and Albertsons locked out their workers.

One hard and fast federal rule governing strikes — companies can’t hire union workers
during the strike.

And during the strike, when asked, Ralphs said it hadn’t hired union workers.

After all, let’s recall Dave Dillon’s words about the values Ralphs hold dear — “Honesty
is probably obvious, truthful to one another, truthful to the outside world.”

So, what was Ralphs doing during the strike?

Hiring union workers.

Ralphs was dishonest about it.

And untruthful to the outside world about it.

In November 2006, the company pled guilty to a number of criminal acts in connection
with the strike.

Federal officials in Los Angeles said this is what happened:

The unions struck Vons on October 11, 2003. Pursuant to a secret agreement among three
grocery store chains, Albertsons and Ralphs Grocery locked out their grocery workers on
October 12. While workers picketed their stores, Ralphs, Vons and Albertsons continued
to operate with management and temporary workers.

During labor disputes, federal law allows an employer to lockout all union employees,
but prohibits “selective lockouts” where only a portion of the union workforce is locked-
out.

On Halloween 2003, the unions decided to stop picketing Ralphs stores, which led to a
huge increase in business at its supermarkets. The increase in business caused problems
at the store level because Ralphs was operating without its normal workforce.

In order to deal with the influx of customers, Ralphs began selectively rehiring locked-
out workers — many under false names and false social security numbers — in order to
operate with experienced personnel.

The lockout and strike lasted 141 days and affected approximately 65,000 to 70,000
grocery workers, making it the longest and largest labor dispute involving the grocery
industry in the United States.

Ralphs admitted that during the course of this labor dispute it falsified hundreds of
employment records and filed hundreds of false tax forms with the IRS and Social
Security Administration. Ralphs also admitted that a number of its executives participated
in the criminal conduct.

Ralphs pled guilty to several criminal charges of illegal rehiring hundreds of locked-out
union workers. The company paid a $20 million criminal fine and $50 million in
compensation for Ralphs’ workers, their health benefit and pension funds, and their
unions.

A federal judge in Los Angeles put the company on three-year probation.

At the plea hearing, United States District Judge Percy Anderson said that he was
“surprised, disturbed and disappointed” by Ralphs crimes, which were committed to gain
a “tactical, unfair advantage” over its employees and unions.

The company’s conduct, according to the judge, had the effect of “eroding public
confidence in the collective bargaining system.”
Ralphs, Judge Anderson stated, had a “pervasive and powerful corporate culture” that
“exalted profits” with a “win-at-any-costs” approach.

KING COAL: MASSEY ENERGY, DON BLANKENSHIP, AND THE

SKEWERING OF WEST VIRGINIA

Massey Energy is the largest coal producer in West Virginia. It’s the fourth largest coal
company in the United States. It’s the number one mountain top removal coal producer.

Mountaintop removal?

That’s right.

Blow off the top of the mountain with explosives, remove the coal from the exposed
seams, dump the wastes in the valley below.

Hey, this produces clean coal.

How do you clean the coal?

Well, you clean the coal with nasty chemicals. You store the clean coal in giant silos —
and then take the toxic waste product and put it in a giant human-made pond.

At the Massey facility in Sundial, West Virginia, the pond sits high above the Marsh Fork
Elementary School.

Ed Wiley used to work for a contractor at the site. And his granddaughter went to Marsh
Fork.

Wiley is worried that the human-made dam he helped build will someday give way,
sending 2.8 billion pounds of toxic slurry onto the community and elementary school
below.

Appalachia has seen such disasters before. In February 1972, in Logan County, West
Virginia, a Pittston Coal Company coal slurry impoundment dam blew, unleashing 132
million gallons of black waste water upon the residents of 16 coal mining communities in
Buffalo Creek Hollow.

One hundred and twenty-five people were killed, 1,121 were injured, and over 4,000
were left homeless. Saunders, West Virginia was completely leveled.

In October 2000, a Massey Energy impoundment in Kentucky blew, sending 306 million
gallons of sludge into local waterways — one of the worst environmental disasters in
Kentucky history.
So, Ed Wiley has reason to be concerned.

Wiley wants the school shut down and moved to a new location. Massey and Governor
Joe Manchin can’t seem to find the will to do it.

That’s in part because Don Blankenship has Manchin and the state by the proverbial
cojones.

Wiley was so upset with the threat to the school, its children and the surrounding
community — not just from the impoundment — but from the deteriorating quality of air
and water in the area — that he quit his job and took off on trek throughout West Virginia
to Washington, D.C. to publicize the problem

At one stop, in Berkeley Springs, West Virginia, Wiley was asked why during his entire
slide show presentation of the problem with the Massey site he never mentions the
company’s name or the name of the company’s CEO.

He says he was told by major environmental groups who were handling his tour not to
mention the names of his antagonists because the company and its CEO were a nasty
bunch of people.

The less their names were mentioned, the better.

But Massey’s and Blankenship’s reputations as corporate bullies are well deserved. In
2004, Blankenship blew up the state’s political landscape when he spent $3.5 million of
his own money to defeat Warren McGraw, a West Virginia Supreme Court justice who
had ruled against Massey and the coal companies on a wide range of issues.

Guess what Blankenship called the 526 committee he set up defeat McGraw. “For the
Sake of the Kids.”

Blankenship’s message was that McGraw let sex offenders roam among children.
McGraw was defeated. A no-name — Brent Benjamin — was elected. And the state has
been in a downward spiral ever since.

In the 2006 election, Blankenship dumped more than $3 million to pull the state
legislature away from the Democrats — to no avail.

According to the Wall Street Journal, more than 13 people, including some contract
employees, have died while working at Massey-owned mines in the past five years.

Massey is also under federal criminal investigations for some of those deaths.

Federal prosecutors have opened a criminal investigation into the January 2006 deaths of
two miners at a Massey Energy mine in Logan County, West Virginia, according to West
Virginia Public Radio. The mine had recurrent problems with broken or missing fire-
fighting equipment. According to the report, the state had fined Aracoma Coal’s Number
One mine 28 times for bad fire equipment over the last two and a half years. One former
miner told West Virginia Public Radio’s Dan Heyman that the water hoses did not work
when the workers needed them to get the deadly blaze under control.

Heyman said that the Mine Safety and Health Administration (MSHA) had requested a
federal criminal probe after it issued several citations in its own review of the fire.

A former miner at the mine, Brandon Conley, told Heyman that the exact same thing
happened at the same mine, a month before.

“The same exact thing that happened on the 23rd,” Conley said. “I could see all kinds of
belt shavings, pretty much flaming. And there was all kinds of smoke, pretty thick smoke.
My CO monitor was going off.”

Conley quit Aracoma, a subsidiary of Massey, soon after the deadly January fire, saying
he did not want to go back to work where his friends died.

“The fire hose did not match up to the water line,” Conley said of the December 23 fire.
“And I can tell you that the fire suppression and also the management knows that the fire
suppression on that particular belt did not work.”

But don’t think Massey doesn’t care. Its corporate statement proclaims, “We are
committed collectively and individually to the health and safety of each employee.”

And the company says it “takes very seriously its responsibility to protect, restore and
reclaim land and communities where it operates. Along with our regular comprehensive
land reclamation activities, we are focused on restoring and improving the lands impacted
by mining-related activities.”

For example, in the very Logan County area where Massey has had so many safety
problems, the company says it is working with local officials to develop a “state-of-the-
art” dirt racetrack on the “reclaimed” portion of a former mine.

PFIZER: INTIMIDATION IS OUR GAME

When it comes to the pharmaceutical industry, Pfizer is the biggest and baddest kid on the
block.

Over at the World Trade Organization in Geneva, some staffers refer to the Agreement on
Trade-Related Aspects of Intellectual Property (TRIPS — the agreement mandating all
WTO members adopt U.S.-style patent systems) as the Pfizer Agreement. That’s because
Pfizer played such a crucial role — operating through business coalitions like the
Intellectual Property Committee — in drafting TRIPS and ensuring that it would be
adopted as one of the WTO agreements.
Pfizer has built a business model of acquiring — or, occasionally, innovating — potential
blockbuster drugs, and then marketing them like crazy. The company’s business model —
like that of most of Big Pharma — has been premised on extended patent and other
monopoly protections for its products, permitting it to charge super-high mark-ups
sufficient to cover its major cost — marketing — and still secure megaprofits.

In its ruthless drive to defend its monopolies worldwide, Pfizer takes no prisoners.

Just ask Leticia Barbara Gutierrez and Ernilio Polig, Jr. Gutierrez is the director of the
Philippines’ Bureau of Food and Drugs, the Filipino equivalent of the U.S. Food and
Drug Administration. Polig is a top attorney at the agency.

In March 2006, Pfizer filed suit against not just BFAD, but Gutierrez and Polig in their
personal capacities. The suit also named the Philippine International Trading Corporation
(PITC) as a defendant. The Pfizer lawsuit charged that BFAD and its top officials, along
with PITC, were infringing on a Pfizer patent by permitting limited imports of Pfizer
products without the company’s permission. Pfizer sought money damages for the
claimed harm to the company — not just from BFAD, but from Gutierrez and Polig.

This is a nightmare scenario that has long hung over drug regulators in developing
countries, who fear that if they take measures to speed the introduction of price-lowering
generic competition, they will be held personally liable for the purported unjustified
harms to patent holders. Just the thought of such action has exerted a major deterrent on
drug regulators. Pfizer’s action was designed to send a message not just in the
Philippines, but around the world.

The Pfizer message was especially powerful, precisely because the company’s claim was
so tendentious. It was complaining about practices that are permitted in the United States,
Europe, Australia and many other countries, and had long been considered acceptable in
the Philippines.

The Philippines has among the highest drug prices in the world. A new PITC program
seeks to shop on the world market for the lowest prices available. But the agency is not
challenging existing patent rights, and it is not seeking to import commercial quantities of
brand-name products while they remain on patent — even though such imports are
completely permissible under WTO rules.

What PITC does intend to do is import cheaper versions of drugs once they go off patent.
In order to begin such imports immediately upon patent expiration, PITC needs to begin
the process of obtaining regulatory approval for the products it will import while the
patents remain in effect. To do so, it has to import limited versions of the products it
hopes later to import in quantity, solely for the purpose of conducting tests to obtain
regulatory approval.

This “early working” of patents is understood as an exception to patent rights in the

TRIPS agreement, and is standard practice in the United States and other industrialized
countries.

One drug that PITC has targeted is amlodipine besylate, a hypertension drug sold by
Pfizer under the brand name Norvasc. Pfizer charges more than seven times as much for
Norvasc in the Philippines as it does in India.

PITC and BFAD’s effort to exercise early working rights on Norvasc are what prompted
Pfizer’s suit.

In a bland statement about the suit, Pfizer claimed “the case Pfizer filed versus PITC and
BFAD is not only a trade issue, but a public health concern as well.” Pfizer argued that
there was a risk that the Philippines would import counterfeit or poor quality amlodipine
besylate (although the whole point of early working is to undertake tests to demonstrate
quality).

Pfizer was not able to escape scrutiny in the case, which gained significant attention in
the Philippines, and was the object of a modest international pressure campaign.

Most notably in the campaign was the intervention of Dan Murphy, a medical student at
the New York College of Osteopathic Medicine. He attended a CNN event at which
Pfizer CEO Hank McKinnell was bragging about the company’s contributions to
addressing global AIDS.

Murphy buttonholed McKinnell at the event. “I cornered Hank post filming and we had a
nice argument,” Murphy reports.

“I told him that I was a med student that I was upset about the lawsuit against the
Philippines, and that he was going to be facing a lot more angry students if they didn’t
end it. He said it wasn’t about generics, it was about protecting patents and we spent most
of our discussion arguing about this. Towards the end of the discussion he started saying
that it didn’t matter, because he had ordered a review of the matter and would be ending it
if it wasn’t about ‘legitimate protection of patented medicines.’ Eventually his people
dragged him away.”

Pfizer and the defendants settled the case in August, on terms favorable to Pfizer.

PITC and BFAD agreed not to import Norvasc until its patents expire.

BFAD also agreed not to grant marketing approval for pharmaceuticals in the future until
after the expiration of applicable patent terms, a practice commonly known as “linkage.”
Health advocates criticize linkage on the grounds that it transforms drug regulatory
agencies into patent enforcers — even though they typically do not examine (nor have the
expertise to examine) the validity of the patents they are enforcing. Left unclear in the
settlement is whether the Philippines will be able to employ early working provisions in
the future.
Pfizer’s victory may be pyrrhic. Partially in response to the litigation, the Philippines
legislature is considering and likely to pass legislation that would give the government
much more flexibility to speed the introduction of generic competition.

And, more centrally for Pfizer — and McKinnell — its business model is now widely
viewed as bankrupt.

Pfizer’s board forced McKinnell out in July. Pfizer’s stock had declined by more than 40
percent during McKinnell’s reign. Its acquired blockbusters are starting to approach the
end of their patent period, and its pipeline is dry — no surprise at a company that has
been weak at innovation.

Don’t cry for McKinnell, though. His business model may be bankrupt, but he’s not. He
managed to leave with a $200 million parting package from the company.

Shortly after taking over the company, McKinnell’s replacement Jeffrey Kindler
announced he would be slashing the payroll by 10,000. Thousands of those to be laid off
are marketers, but most are involved in manufacturing and research.

SMITHFIELD: JIM CROW ECONOMICS ALIVE AND WELL

Smithfield, the largest pork producer in the United States, has appeared twice before on
the Monitor’s 10 worst list — once for factory farm pollution, once for its takeover of the
former number two pork producer, a move that dramatically worsened agribusiness
concentration and left small farmers increasingly at the mercy of the remaining giant
processors. This year, Smithfield is on the list for its labor practices.

Jim Crow economics is alive and well at Smithfield’s Tar Heel, North Carolina pork
processing plant, the largest in the world.

For more than a decade, the more than 5,000 workers there have attempted to organize a
union, only to be met by a vicious anti-union campaign that has included organized
beatings of union supporters, operation of an official company police force within the
plant (not a private security operation, but a governmental police force) with the power to
arrest workers and detain them at the plant, the deployment of the local sheriff’s
department to intimidate workers, racist slurs, and use of the Immigration and
Naturalization Services department to harass Smithfield’s increasingly immigrant
workforce.

Smithfield opened the Tar Heel plant in 1992. Workers sought an election for union
representation in 1994. The union campaign failed, but the National Labor Relations
Board (NLRB) general counsel charged the company with violating federal labor law. In
1997, the company agreed to rerun the election and pledged to respect labor laws.

That promise was betrayed. The workers and their union, the United Food and
Commercial Workers (UFCW), lost the 1997 election, only for the NLRB general
counsel to issue a new set of charges. By 2004, the full NLRB finally ruled on those
allegations, which had been upheld by an administrative law judge.

The NLRB found that, among other wrongful acts, Smithfield illegally:

• interrogated employees concerning union sentiments;

• threatened plant closure;
• threatened reprisals against union supporters;
• threatened wage freezes;
• assaulted a union supporter; and
• caused the arrest of a union supporter.

Lawanna Johnson was one of Smithfield’s victims. After the Smithfield plant manager
overheard her encouraging fellow workers to support the unionization effort, the NLRB
found, he “pointed his finger in her face and said that if he heard her mention anything
about voting for the union he would fire her on the spot.” Three days later, she was fired
on pretextual grounds.

A former supervisor at the plant, Sherri Bufkin, was fired, she says, because she refused
to provide false testimony to the NLRB. She testified about her experience before a U.S.
Senate committee in 2002.

She explained that when the union campaign recommenced in 1997, Smithfield brought
in anti-union lawyers who directed supervisors. According to Bufkin, the lawyers said
“they would do whatever was necessary to keep UFCW out. And they did.”

She described how she was ordered to fire union supporters. “A lady — her name was
Margot — who worked for me in laundry as the second shift crew leader was pro-union.
She wasn’t afraid to voice her opinions to her co-workers. I was called downstairs and
told that the company wanted to speak with me. A plant manager was with him. The
lawyer said that he had just come from an antiunion meeting where her name came up
and asked me if she was one of mine. I told him she was, and the attorney said, and I
quote, ‘fire the bitch, I’ll beat anything she or they throw at me in court.’”

Bufkin also testified about how Smithfield sought to divide African-American and Latino
workers. “Smithfield keeps Black and Latino employees virtually separated in the plant
with the Black workers on the kill floor and the Latinos in the cut and conversion
departments. Management hired a special outside consultant from California to run the
anti-union campaign in Spanish for the Latinos who were seen as easy targets of
manipulation because they could be threatened with immigration issues. The word was
that black workers were going to be replaced with Latino workers because blacks were
more favorable toward unions.”

Eventually, the UFCW filed charges about union-related firings. According to Bufkin,
“The attorney wrote false affidavits for me to sign and gave those affidavits to the Labor
Board. The attorney wrote things that came out of his own mouth, and I told him they
weren’t true. I felt I had no choice but to sign the statement because I had a family to
feed.” When she was asked to stick to her story at an NLRB trial, however, she refused.
“I told them I wasn’t going to lie. I was fired shortly after that.”

In 2006, a federal appeals court upheld the NLRB’s 2004 decision, which ordered
Smithfield to cease and desist from the host of labor violations it identified, to provide the
UFCW with the names and addresses of workers at the plant, and to order another
election.

The response from Smithfield was a little bizarre.

After the appeals court ruling, Joseph W. Luter, IV, president and chief operating officer
of Smithfield Packing Company, said, “Smithfield respects and accepts the court’s
judgment, even though we strongly disagree with the findings. We have argued
strenuously that the allegations the union made concerning Smithfield’s conduct during
both elections were false. But we recognize that we have lost our case in court.”

He didn’t sound too contrite, however, particularly given the egregious nature of the
findings against the company.

“When a new election is called,” he said. “We will comply fully with the NLRB’s
remedies to assure a fair vote that represents the wishes of our plant’s employees. We
believe that our employees should have the right to choose whether to unionize, and we
respect the choices they make. Unions, including the UFCW, represent employees at a
number of our plants and have done so for years without labor conflict. The UFCW has
unsuccessfully attempted to organize employees at this particular plant for over a
decade.”

With the UFCW determining that conditions at the Tar Heel plant remain too intimidating
to undertake another election, the union has launched a Smithfield Justice campaign,
urging consumers and citizens to pressure the company. Smithfield has responded by
taunting the union, daring it to seek another election.

WAL-MART: A VERY BAD YEAR

It can’t be easy being Lee Scott, CEO of Wal-Mart.

Your company is facing an onslaught of criticism, for just about everything it does.
You care about this criticism — perhaps because you fear it will affect your ability to
enter Northeastern, West Coast and urban markets that you hope to penetrate. You hire
very expensive help to head off the campaigns mounted against you — including Michael
Deaver, a former chief of staff for President Reagan who is now vice chair of the
Edelman public relations firm.

But nothing seems to work. The problem is that the growing outrage directed at your
company is based not on the company’s image, but on what it does. And not just abusive
practices that are ancillary to Wal-Mart’s operations (though these, too), but on core
elements of your business model.

So, try as you might, you get pounded in public opinion, over and over. All for good
reason.

In January, the state of Maryland passed Fair Share legislation, requiring private
companies with more than 10,000 Maryland employees to spend at least 8 percent of
their payroll on employee healthcare, or to contribute the amount they fall short to the
state’s Medicaid program. Wal-Mart is the only employer in the state meeting the size
threshold and not spending 8 percent of payroll on health insurance costs. Wal-Mart
would go on to get the Fair Share legislation overturned in court (via a suit by the trade
association, the Retail Industry Leaders Association) — saving it from a duty to cover
health costs for its employees, but clarifying again its refusal to provide decent worker
benefits.

Contends Wal-Mart: “This politically motivated legislation did nothing to control the cost
of healthcare or improve access to healthcare, so it’s no wonder that legislators across the
country have rejected this as bad public policy.”

In February, the advocacy campaigning group WakeUpWalMart.com published a report

claiming the number of Wal-Mart workers with company health insurance decreased by 5
percent in 2005 — from 48 percent to 43 percent. WakeUpWalMart.com estimated that
“nearly 300,000 Wal-Mart workers and their family members depended on taxpayer-
funded public health care at a total cost to American taxpayers of $1.37 billion.”

Wal-Mart acknowledges that less than half of its workers receive insurance through the
company, but says that its surveys show 90 percent of employees get coverage from
“Wal-Mart or another source such as a spouse, Medicare, a parent, another employer, the
Department of Veterans Affairs (VA) or other government programs.”

That same month, another campaigning organization, Wal-Mart Watch, obtained access to
an internal Wal-Mart website where company CEO Lee Scott responded to a manager’s
request about provision of health insurance to retirees by stating that merely asking the
question suggested the manager should quit. “Quite honestly,” wrote Boss Scott, “this
environment isn’t for everyone. There are people who would say, ‘I’m sorry, but you
should take the risk and take billions of dollars out of earnings and put this in retiree
health benefits and let’s see what happens to the company.’ If you feel that way, then you
as a manager should look for a company where you can do those kinds of things.”

In March, the company capitulated to pressure from women’s groups, and agreed to carry
Plan B, the emergency contraceptive, in its pharmacies.

Also in March, the New York Times reported that Wal-Mart was covertly working with
bloggers to create an appearance of public support for the company. “Under assault as
never before,” the Times reported, “Wal-Mart is increasingly looking beyond the
mainstream media and working directly with bloggers, feeding them exclusive nuggets of
news, suggesting topics for postings and even inviting them to visit its corporate
headquarters.”

In April, Wal-Mart announced the promotion of Susan Chambers, to executive vice

president. Chambers won notoriety in 2005 for urging that employees be required to
perform some physical duties, such as “some cart gathering.” The rationale for this
recommendation was to discourage unhealthy people — who cost employers more —
from working at Wal-Mart.

In May, WakeUpWalMart.com obtained a company memo encouraging Wal-Mart

suppliers to join a company front group, Working Families for Wal-Mart. “Wal-Mart is
under attack, and Wal-Mart and Sam’s Club suppliers have the power to do something
about it and help protect their business,” asserted the memo, which was written by the
former national political director for the Bush-Cheney 2004 campaign.

In June, Wal-Mart Watch reported that its effort to put up a billboard in Bentonville,
Arkansas — where Wal-Mart’s headquarters is located — was squashed, with a billboard
company backing out of a signed contract. “Apparently there is no First Amendment in
Bentonville,” stated Wal-Mart Watch’s Andy Grossman.

In July, Wal-Mart abandoned the German market, selling its stores in the country at a $1
billion loss to a German retailer. The Bentonville giant was unable to gain ground against
German discount chains.

In August, Chinese news services reported that the viciously anti-union Wal-Mart agreed
to recognize the All-China Federation of Trade Unions (ACFTU). The move highlighted
Wal-Mart’s hypocrisy, but is unlikely to make much difference to Wal-Mart’s workers in
China — the Communist Party-affiliated ACFTU is something less than a vigorous
exponent of its members rights.

In September, Wal-Mart announced plans to cut down on packaging and company-related

greenhouse gas emissions. Many environmentalists applauded the move — but noted
also that Wal-Mart’s business model is inherently ecologically unsustainable. The firm’s
heavy dependence on global supply chains and the superstore approach that requires
consumers to drive long distances are structural problems that cannot be cured without a
fundamental change in what Wal-Mart is.

In October, WakeUpWalMart.com disclosed internal company documents revealing that

Wal-Mart was capping salaries for full-time employees — a reversal from a company
commitment just two years before. Company guidance to store managers on how to
convey the news to employees includes this question-and-answer:

[Question] You told us in 2004 that we wouldn’t have pay range

maximums. Sam was a man of honor. Apparently current management
doesn’t care about integrity and honor.
 [Answer] Wal-Mart is built on change and the ability to evolve and
continually meet the needs of customers. Therefore, things that may have
been the best approach in the past may not be appropriate to meet our
future business direction. These latest pay program changes, including pay
ranges, fall into this latter category.

In November, Business Week reported on how Chinese suppliers to Wal-Mart (and other
major retailers and manufacturers) easily skirted inspections designed to reveal
sweatshop conditions, with methods as simple as keeping two sets of books. Wal-Mart
acknowledges the problems, but told Business Week that “it does more audits than any
other company — 13,600 reviews of 7,200 factories last year alone — and permanently
banned 141 factories in 2005 as a result of serious infractions, such as using child labor.”

In December, the New York City Comptroller filed a shareholder resolution calling on the
company to issue a report “on the negative social and reputational impacts of reported
and known cases of management non-compliance with International Labor Organization
(ILO) conventions and standards on workers’ rights and the company’s legal and
regulatory controls.” Wal-Mart may oppose this proposal, but for Lee Scott and the rest
of the company, there is no escaping that its abusive practices have done major damage to
the company’s reputation — and there’s good reason to believe that this damage has had
an impact on the company’s bottom line.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

The 10 Worst Corporations of 2005

by Russell Mokhiber and Robert Weissman

BP Delphi Dupont ExxonMobil Ford

Halliburton KPMG Roche Suez W.R. Grace

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:

BP
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.

Delphi

“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 it 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.

Dupont

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?

ExxonMobil

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.”

Ford

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. Washington
Sponsored 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 it.

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.

Halliburton
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 dealing 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.

November 19: The Washington Post reported that a criminal investigation of Army
practices that allegedly favored Halliburton over competitors during the pre-war contract
award process has been referred to the Department of Justice (DOJ). This probe follows
on allegations made by Army Corps of Engineers whistleblower Bunnatine Greenhouse.

In a written statement to the Post, Halliburton said it “continues to cooperate fully with
the Justice Department’s investigation of certain issues pertaining to our work in Iraq.”
“As the investigation is ongoing, it would be inappropriate to comment further at this
time.”

December 2: The Army Corps of Engineers paid $38 million in bonuses to Halliburton
for oil transport and repair in Iraq even though the Pentagon’s own auditors declared
$169 million in costs for the work to be “unreasonable” and “unsupported,”
Representative Henry Waxman revealed.

December 27: The Chicago Tribune reported that Pentagon contractor trade groups are
blocking a Pentagon proposal prohibiting defense contractor involvement in human
trafficking for forced prostitution and labor. The contractors do not want to be responsible
for trafficking undertaken by their subcontractors. Halliburton subsidiaries have been
linked to trafficking-related controversies.

After the Tribune reported in October on the kidnapping of a dozen Nepali men and their
transport to work for Halliburton subcontractors in Iraq, Halliburton said it was not
responsible for the recruitment or hiring practices of its subcontractors.

The U.S. Army, for its part, said questions about alleged misconduct “by subcontractor
firms should be addressed to those firms, as these are not Army issues.”

KPMG

It is all about perception, isn’t it?

KPMG was charged in August with one felony count of conspiracy.

The Attorney General of the United States said that KPMG “has admitted to criminal
wrongdoing in the largest-ever tax shelter fraud.”

Yet, there was no conviction. There was no plea agreement.

For individuals, partners or executives who commit major crimes — yes. If there is a
crime, there is an indictment. And there is a plea agreement. Or there is a trial.
But for major U.S. corporations or other large entities, like KPMG, if you commit a
crime, you get a prosecution deferred.

Now, it’s almost automatic.

Ask Skadden Arps partner Robert Bennett. He’s the king of deferred prosecutions.

At the insistence of Bob Bennett, KPMG gets a deferred prosecution agreement.

Why?

Because if you indict KPMG, you might drive it out of business, à la Arthur Andersen.

But no matter, you can charge the company with a felony. And the Attorney General can
get on national television and say that KPMG has admitted to criminal wrongdoing.

The U.S. Attorney in New York wanted to pursue criminal charges. But he was overruled
by his higher ups at the Justice Department.

There is no doubt about it. KPMG engaged in criminal wrongdoing. Attorney General
Alberto Gonzales said so. But because of possible “collateral consequences,” there is no
conviction.

Corporate crime is now crime without conviction.

It’s all about perception.

What collateral consequences? What law says that if you are convicted of a crime, you
are driven out of business?

When reporters walked into the seventh floor conference room at the Justice Department
for the press conference announcing the KPMG deal, they were handed a number of
documents.

They were handed the Justice Department press release.

This informed us that KPMG has admitted to criminal wrongdoing and agreed to pay
$456 million in fines, restitution and penalties as part of an agreement to defer
prosecution of the firm.

The press release also informed us that “in the largest criminal tax case ever filed, KPMG
has admitted that it engaged in a fraud that generated at least $11 billion in phony tax
losses which, according to court papers, cost the United States at least $2.5 billion in
evaded taxes.”
Reporters were also handed a tough statement by IRS Commissioner Mark Everson.
“Simply stated, if you had a multi-million dollar tax liability, KPMG would find a way to
wipe it out even when the firm’s own experts thought the transactions would not survive
IRS scrutiny,” Everson said. “The only purpose of these abusive deals was to further
enrich the already wealthy and to line the pockets of KPMG partners.”

“Since the income tax first came into being under President Lincoln during the Civil War,
the wealthy have always paid more than average citizens,” Everson said. “But not
according to KPMG. KPMG’s actions were a direct assault on our progressive system of
income taxation, and, left unchecked, would have badly eroded the faith of hard working,
taxpaying Americans in the fairness of government itself.”

“At some point such conduct passes from clever accounting and lawyering to theft from
the people,” Everson said. “We simply can’t tolerate flagrant abuse of the law and of
professional obligations by tax practitioners, particularly those associated with so-called
blue chip firms like KPMG that, by virtue of their prominence, set the standard of
conduct for others. Accountants and attorneys should be the pillars of our system of
taxation, not the architects of its circumvention.”

They can’t tolerate this grand theft, but they did.

If they didn’t tolerate it, they would have indicted KPMG and forced a guilty plea.

Reporters were also handed an indictment of eight KPMG partners and an outside tax
attorney. These were the nine individuals behind the crime, prosecutors said.

The entity gets a deferred prosecution for criminal activities. It must pay $456 million in
fines and restitution. But there is no loss of freedom to operate.

The individuals face a loss of freedom. That’s what prison is all about.

Why the double standard?

True, the entity must hire a monitor, in this case, former Securities and Exchange
Commissioner Richard Breeden.

But who pays Breeden? KPMG.

How much? KPMG decides.

KPMG’s public response to the deferred prosecution makes clear the firm does not view
the deal as imposing serious punishment (let alone deterrence). It was as if the company
was required to stay after school for a day.

“KPMG LLP is pleased to have reached a resolution with the Department of Justice. We
regret the past tax practices that were the subject of the investigation. KPMG is a better
and stronger firm today, having learned much from this experience,” said KPMG LLP
Chair and CEO Timothy P. Flynn. “The resolution of this matter allows KPMG to
confidently face the future as we provide high quality audit, tax and advisory services to
our large multinational, middle market and government clients.”

What documents were reporters not handed at the Justice Department news conference?

They were not handed a 10-page, single-spaced statement of facts that laid out the
criminal activity in detail. And they were not handed the information charging KPMG
with a felony. They came only later, after the Attorney General was asked, Where’s the
charging document against KPMG?

Roche

Until recently, Swiss drug maker Roche’s sales of Tamiflu were doing dismally. (Roche
makes the drug on license from the patent holder, the San Francisco-based company,
Gilead.)

In 2001, sales of Tamiflu, an anti-viral intended to alleviate the flu, were $76 million.
Health advocates criticized the drug as offering few benefits, and encouraged people
concerned about the flu to instead get a flu shot.

Then along came avian influenza, and the threat of an outbreak of bird flu among
humans. There is no available vaccine for bird flu, and Tamiflu appears to be the best
available pharmaceutical defense for those exposed to the disease.

For now, avian flu is not communicative among humans. More than 150 people have
been infected with bird flu since 2003, when the first bird-to-human transmission was
recorded, and more than half of those infected have died.

Many public health experts believe that an outbreak among humans is virtually
inevitable.

An outbreak could have extremely dire consequences. In the United States, the Centers
for Disease Control reports that, a “‘medium-level’ pandemic could cause 89,000 to
207,000 deaths, 314,000 and 734,000 hospitalizations, 18 to 42 million outpatient visits,
and another 20 to 47 million people being sick. Between 15 percent and 35 percent of the
U.S. population could be affected by an influenza pandemic, and the economic impact
could range between $71.3 and $166.5 billion.” The illness and death toll would be much
worse in developing countries.

Slowly, the message has begun to penetrate government officials’ and the public’s
consciousness, and governments are, very belatedly, looking to stockpile Tamiflu in
advance of a potential outbreak.
That has provided a windfall for Roche. 2005 sales of Tamiflu are expected to top $1
billion.

It has also created a bit of a problem for Roche, because it cannot make enough Tamiflu
to meet demand.

Given the public health urgency of stockpiling the drug, Roche could have simply
announced that it would license other companies to manufacture it, conditioned on
payment of a reasonable royalty.

Instead, it chose a different course.

With no prospect of the company satisfying growing demand, it announced that it would
not license others to produce the medicine. Nor could others easily make the drug, the
company claimed. It said that the manufacturing process was extremely complicated and
dangerous, and that the key ingredient to make the drug was in short supply.

As it turned out, all of these claims turned out to be deeply misleading, or worse.

As late as October 13, Roche insisted that it would not license the product to competitors,
and that it was too complicated for them to make. These claims deterred officials at the
World Health Organization from pushing for compulsory licenses enabling competitors to
manufacture Tamiflu. (“There will be no way in the next two years a company would be
able to produce generic Tamiflu,” the head of WHO’s influenza program said on October
6.)

Roche “fully intends to remain the sole manufacturer of Tamiflu,’’ company

spokesperson Terry Hurley told reporters. He said that the company would not reveal
production figures, on the grounds that such information was “commercially sensitive.”
All drug makers are able to track other manufacturers’ sales through commercial
databases — but the information is not made available to public officials. Hurley also
offered the company line on the complexity of making the drug. Manufacturing Tamiflu
involves 10 complicated steps, and would take two-to-three years for a new entrant, he
alleged.

But October 13 would be the last day Roche could make these claims.

On October 14, the New York Times reported that the Indian drug maker Cipla had
reverse-engineered the drug two weeks earlier, and would have small commercial
quantities available by early 2006.

With the spread of bird flu being reported daily, countries in Southeast Asia, where the
epidemic among birds originated, started clamoring for the right to acquire greater
quantities of Tamiflu. Following Cipla’s announcement, many other firms soon said they
could produce the drug as well.
Taiwan’s National Health Research Institutes announced it had figured out how to
synthesize Tamiflu in September — in 18 days.

In Thailand, the Government Pharmaceutical Organization announced in November that

it had capacity to manufacture 1 million Tamiflu tablets in 10 days.

Roche’s claim that making Tamiflu involved a dangerous and potentially explosive step
also was revealed to be an exaggeration. Reported the Wall Street Journal: “that step —
which involves a chemical reaction with sodium azide, whose explosive potential has
made it the common choice in automobile air bags — turns out to be relatively routine,
according to some pharmaceutical executives and scientists familiar with the chemistry.
Although it is still dangerous, the process is well within the abilities of university
chemistry labs, let alone the world’s top generic-drug makers, these scientists say.”

The shortage of a key ingredient in Tamiflu also proved a chimera. The drug is made with
shikimic acid, which is found in the Chinese plant star anise (used as a spice in Chinese
cooking). The limited supply of star anise placed a constraint on how much Tamiflu could
be made, Roche had claimed. But it turns out that a Michigan State University professor
had developed a technique to make shikimic acid without star anise — and that Roche
had been using the technique under license for years.

With it increasingly plain that dozens of generic companies were capable of

manufacturing Tamiflu, Southeast Asian countries were prepared to issue compulsory
licenses to enable new manufacturers to start making the product.

With its posture of “fully intend[ing] to remain the sole manufacturer of Tamiflu” no
longer tenable, Roche announced it would license other companies to make the drug. In
December, it said it would enter intense negotiations with a dozen firms.

Many countries, it turned out, did not need to seek a license from Roche, compulsory or
otherwise. As countries began moves to authorize generic competition by issuing
compulsory licenses, Roche explained that Tamiflu was not patented in those countries.
The governments themselves did not know what was patented, and Roche had
conveniently let them operate under misperceptions that patents had been granted. This
occurred in the Philippines and Indonesia, among other countries.

While production is expanded — and in addition to the generic entrance into the market,
Roche has announced it has increased its manufacturing capacity 10 times over — there
remains a shortfall to meet the stockpiling standard urged by many public health officials.
The U.S. stockpile, for example, is sufficient to provide medications to less than 2
percent of people in the United States — about a tenth the coverage recommended by
public health officials.

“Roche has had plenty of time to figure out what its options are regarding the licensing of
the patents,” says James Love, director of the Washington, D.C.-based Consumer Project
on Technology. “There are too many potential suppliers to undertake individual
negotiations with each company. Roche needs to simply identify the relevant terms it will
impose on generic suppliers and offer open licenses to anyone who can comply.”

If Roche refuses such an approach, says Love, “governments should issue the appropriate
compulsory licenses in order to assure the competitive generics sector they can legally
sell generic copies of the drug.”

Suez

One of the continuous challenges of Big Business is to develop stories that explain why
the private sector is good and efficient and the public sector is bad, wasteful and
incompetent.

Given the scandals, criminality and wastefulness that pervades so much of corporate
activity, this is no easy matter. It certainly poses a major challenge for Suez, the French
services giant that is one of the world’s largest private water companies.

Suez has been a leading purveyor and beneficiary of the global trend of water
privatization — the selling off of public water systems to private entities, or the turning
over of control and management of public systems to corporations such as Suez.

In negotiations over the World Trade Organization’s services agreements, Suez has
worked through trade associations to ensure that the European Union works to pry open
water service markets around the world to private and foreign corporations.

And the company has worked hand in glove with the World Bank to encourage
developing countries to turn control over their water systems to private business.

However, Suez walks a fine line on the public-private divide. The company wants to
extract profits from water service provision, but it wants to limit its investment
obligations and maintain strong public bodies that can impose high prices on consumers,
and make them pay. And, if and when things go bad, it wants to blame public agencies.

Thus Suez Chair and CEO Gerard Mestrallet talks not about privatization, but “public-
private partnerships.”

“The success of public-private partnerships rests primarily on a sharing of roles between

those parties whose skills are best suited to fulfilling them,” he says. “It is perfectly clear
that the decision-makers in these arrangements are the public authorities, and whether or
not they seek the expertise of the private sector is entirely their decision.”

To those who complain about the failure of Suez and other companies to expand and
provide water service to the poor and lower-income groups, Mestrallet’s line is clear:
blame the public sector. “At present, 95 percent of water services worldwide are provided
by the public sector, so it is hardly the fault of the private sector if 1.2 billion people have
no access to water and 2 billion people have no sanitation services.”
Things look a little different in the municipalities and regions where Suez has had
responsibility for water provision, however.

As Public Citizen’s Water for All Campaign (now part of a new organization, Food and
Water Watch) shows in an April 2005 corporate profile, Suez has raised service charges,
underinvested and mismanaged water projects around the globe. City after city has found
out the hard way what exactly Suez has in mind by “public-private partnership.”

• In El Alto, Bolivia, mass demonstrations in January 2005 led the Bolivian

government to cancel a water privatization contract with Aguas del Illimani, of
which Suez is a major shareholder. “The Suez contract is a classic example of
‘ring fencing,’ where the contract obligates service delivery only in specific areas
of the city,” explains the Water for All Campaign in its report. “What is termed the
‘served area’ in the Suez contract focuses water service provision on profitable
customers and removes obligation from extending service to the newest and most
marginal settlements — the areas most in need of improvements.” For those who
did seek new connections, the price was $445, more than eight times the monthly
minimum wage. With the contract cancelled, Suez is threatening to sue Bolivia for
$90 million in lost investments and future profits.
• In Atlanta, the Suez subsidiary United Water signed a 20-year deal to operate the
city’s water system. Maintenance backlogs accumulated, with broken water lines
sometimes taking two months to fix. United Water improperly billed the city.
Although privatization was supposed to avert a rate hike, combined water and
sewer bills rose by about 25 percent. After only five years, Atlanta opted out of
the contract.
• In Manila, the Philippines, pressure by the World Bank led the government to
privatize the water system to two concessions, one led by Suez, in 1997. Within
five years, water rates for Manila residents had tripled. Both the Suez and other
concession won contract amendments that would weaken their performance
requirements. Still, because the value of the Philippines peso dropped sharply
with the Asian financial crisis of the late 1990s, Suez wanted steeper rate
increases. When the Manila authorities refused — the drop in the exchange rate of
the peso didn’t mean Manila residents had more pesos to spend — Suez sought to
renegotiate or abandon the contract. The company claims it is owed hundreds of
millions of dollars by the Manila water authority, while the government claims
Suez owes it money.

“Suez, the world’s largest water corporation, places profit over the human right to water,”
says Wenonah Hauter of Food and Water Watch.

W.R. Grace

What does it take to get federal prosecutors to indict an asbestos company for
endangering the health of the community?
If 2005 is any guide, it takes activist citizens who pressure their elected officials to “do
something” to bring justice.

It takes conscientious federal officials who shrug off bureaucratic inertia and demand that
justice be done.

And first and foremost, it takes editors and reporters who are willing to stay with a story.

One such reporter is Andrew Schneider, now deputy assistant managing editor for
investigations at the St. Louis Post-Dispatch.

Before moving to St. Louis, Schneider was a reporter at the Seattle Post-Intelligencer,
where, in 1999, he broke the story of how W.R. Grace’s vermiculite mine was killing its
workers and residents.

He has written a couple hundred stories about Grace since then and was in Billings,
Montana for the February announcement of the indictment against Grace.

With David McCumber, Schneider is the author of An Air That Kills: How the Asbestos
Poisoning of Libby, Montana, Uncovered a National Scandal.

Schneider told us that federal prosecutors and witnesses were “terrified” that Bush
administration corporate connections would derail the indictment.

Prosecutors and witnesses were “terrified that it was going to be derailed at any
moment,” Schneider said.

“They worried about Vice President Dick Cheney, who of course had his relationship
with Halliburton, which had $4.3 billion worth of asbestos claims against them,”
Schneider said. “They worried about his influence in killing off this prosecution. They
worried about the asbestos legislation on the Hill that President Bush has been touting.
Bush wins the election and goes on the stump talking about the poor corporations that
have been bankrupted by these bogus cases. And that frightened the hell out of the
investigators and a couple of the prosecutors.”

The criminal charge against W.R. Grace and seven of its current or former executives
represents the first time in the history of the industry that criminal charges have been filed
against an asbestos manufacturer for endangering the lives of residents.

And Schneider says the Grace indictment may well serve as a blueprint for prosecutors in
other areas of the country to criminally prosecute Grace for endangering the lives of
residents in their jurisdictions.

“How widespread it will be, I don’t know,” Schneider said. “But I know there is a great
deal of interest from prosecutors in what actually went down. I’m just basing that on the
number of calls that I received from prosecutors in different states.”
The indictment handed down against Grace in Billings charged the company and seven
current and former Grace executives with knowingly endangering residents of Libby,
Montana, and concealing information about the health affects of its asbestos mining
operations.

Federal officials alleged that Grace and its executives, as far back as the 1970s, attempted
to conceal information about the adverse health effects of the company’s vermiculite
mining operations and distribution of vermiculite in the Libby, Montana community.

The seven individual and one corporate defendant were also accused of obstructing the
government’s cleanup efforts and wire fraud.

Federal officials said that approximately 1,200 residents in the Libby area have been
identified as suffering from some kind of asbestos-related abnormality.

Schneider says that more than 200 Libby residents have died from asbestos-related
disease.

“We will not tolerate criminal conduct that is detrimental to the environment and human
health,” stated Thomas Sansonetti, assistant attorney general for the Justice Department’s
Environment and Natural Resources Division.

“A human and environmental tragedy has occurred in Libby,” said William Mercer, U.S.
Attorney for the District of Montana. “This prosecution seeks to hold Grace and its
executives responsible for the misconduct alleged.”

W.R. Grace operated a vermiculite mine in Libby, Montana from 1963 to 1990, as part of
its Construction Products Division, which was headquartered in Cambridge,
Massachusetts.

Vermiculite was used in many common commercial products, including attic insulation,
fireproofing materials, masonry fill, and as an additive to potting soils and fertilizers.

The vermiculite deposits in Libby were contaminated with a form of asbestos called
tremolite.

Studies have shown that exposure to asbestos can cause life-threatening diseases,
including asbestosis, lung cancer and mesothelioma.

Federal officials alleged that health studies on residents of the Libby area show increased
incidence of many types of asbestos-related disease, including a rate of lung cancer that is
30 percent higher than expected when compared with rates in other areas of Montana and
the United States.
The government claims that the defendants, beginning in the late 1970s, obtained
knowledge of the toxic nature of tremolite asbestos in its vermiculite through internal
epidemiological, medical and toxicological studies, as well as through product testing.

Despite legal requirements under the Toxic Substances Control Act to turn over to the
Environmental Protection Agency (EPA) the information they possessed, “W.R. Grace
and its officials failed to do so on numerous occasions.”

In addition to charging that the company concealed information from EPA, the indictment
alleges that W.R. Grace and its officials also obstructed the National Institute of
Occupational Safety and Health (NIOSH) when it attempted to study the health
conditions at the Libby mine in the 1980s.

Despite their knowledge of the hazards of asbestos, the company and executives
“distributed asbestos-contaminated vermiculite and permitted it to be distributed
throughout the Libby community” by allowing workers to leave the mine site covered in
asbestos dust, allowing residents to take waste vermiculite for use in their gardens and
distributing vermiculite “tailings” to the Libby schools for use as foundations for running
tracks and an outdoor ice skating rink.

And after W.R. Grace closed the Libby mine in 1990, it sold asbestos-contaminated
properties to local buyers without disclosing the nature or extent of the contamination.
One of the contaminated properties was used as a residence and commercial nursery.

In response to the groundbreaking series of articles in 1999 by Schneider documenting

the hazards posed the Grace mine, “W.R. Grace and its officials continued to mislead and
obstruct the government by not disclosing, as they were required to do by federal law, the
true nature and extent of the asbestos contamination.”

Ultimately, the Libby mine and related W.R. Grace properties were declared a Superfund
site by EPA, and as of 2001, EPA had incurred approximately $55 million in cleanup
costs. If convicted, the defendants face up to 15 years imprisonment on each
endangerment charge, up to five years imprisonment on each of the conspiracy and
obstruction charges, and 10 years on prison on the wire fraud charge.

W.R. Grace could face fines of up to twice the gain associated with its alleged
misconduct or twice the losses suffered by victims.

Federal officials alleged that Grace enjoyed at least $140 million in after-tax profits from
its mining operations in Libby. Grace also could be ordered to pay restitution to victims.

Grace denies the charges. In a company statement released after the indictment was
handed down, Grace said it “categorically denies any criminal wrongdoing.”
“As a company and as individuals, we believe that one serious illness or lost life is one
too many. That is why we have taken so seriously our commitment to our Libby
employees and the people of Libby,” the company said.

“The entire W.R. Grace team is supportive of the citizens of Libby. We hope that our
continued and dedicated support for their long-term health care, combined with their
characteristic strength and determination, will help them through these difficult times.”

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

The Ten Worst Corporations of 2004

by Russell Mokhiber and 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 Multinational Monitor judges is the directive
not to select repeat recipients of the 10 Worst designation.

There’s no way we could keep off companies that have ever appeared on the 10 Worst list
— what is one to do with the likes of ExxonMobil, Philip Morris or General Electric? —
but we do try to stick to the rule of not naming companies to the list who appeared on the
previous year’s list.

That’s not so easy.

Last year, for example, Bayer appeared on the list, for, among other things, bilking
Medicaid of hundreds of millions of dollars, paying students to consume pesticides as a
test, keeping its anti-cholesterol drug Baycol on the market despite reportedly possessing
evidence of its hazards, and dumping tainted blood-clotting medicines in developing
country markets. This year, as the German group Coalition against Bayer Dangers
relentlessly documents, Bayer’s wrongdoing continues: Bayer agreed to pay $66 million
to U.S. authorities to settle price-fixing charges related to chemicals used to make rubber,
faced demands for compensation from the families of two dozen Peruvian children
accidentally poisoned and killed in 1999 by a Bayer pesticide, pushed for import of
genetically modified rice into the European Union, polluted water in a South African
town with the carcinogen hexavalent chromium, suffered from new accusations and
evidence that it concealed dangers of Baycol, and was hit with evidence that its pain
medication Aleve (naproxen) increases the risk of heart attack.
Boeing made the 10 worst list in 2003 for the tanker plane scandal — the $27 billion
contract it obtained from the Pentagon to lease unneeded 767s that refuel fighter planes in
mid-air. In a brazen maneuver, Boeing hired Darleen Druyan — the procurement official
who gave the contract to the company — shortly after the deal was consummated. This
year, as Druyan pled guilty to conspiring to defraud the federal government — and then
supplemented her initial plea with one apparently more truthful — it emerged that the
tanker scandal was even worse than it originally appeared. In her supplemental plea,
Druyan admitted doing a variety of “favors” for Boeing. In the tanker negotiations, she
admitted that she “agreed to a higher price for the aircraft than she believed was
appropriate.” This was as a “parting gift” to Boeing, she told government prosecutors.
She also provided to Boeing proprietary information from another aircraft manufacturer.

In 2003, we recognized Clear Channel, the radio behemoth, for concentrating private
control over the public airwaves and for repeated lawbreaking, including misleading the
public and deceptive advertising. This year, Clear Channel managed to stoop to new lows
with a “Breast Christmas Ever” contest. Clear Channel stations promised to pay for breast
implants for a dozen contest “winners.” Contestants were required to submit essays
explaining why they wanted larger breasts. They also, as the National Organization of
Women pointed out, were required to “sign a liability release absolving the radio station,
plastic surgeon and Clear Channel from any responsibility should they have problems
with their implants or require additional medical treatment — problems which, not
incidentally, are frequently necessary and very expensive.”

And then there’s Halliburton. Dick Cheney’s former company made the 10 worst list in
2003 for a long list of government contracting scandals. It’s hard to believe things could
get worse with Halliburton, but they have. In just the last quarter of 2004:

• Swiss authorities shut down bank accounts allegedly used by Halliburton for
bribing the Nigerian government;
• A high-level Army whistleblower claimed that Army officials illegally favored
Halliburton in contracting decisions — sparking an FBI investigation;
• Accusations emerged that company officials demanded bribes from
subcontractors in Kuwait;
• In filings with the Securities and Exchange Commission Halliburton admitted it
may have paid bribes in Nigeria;
• An audit by the Inspector General for the U.S. occupation authority in Iraq found
that Halliburton could not account for over a third of the items it handled in
Kuwait while working for the occupation authorities.

And that’s just a partial list of the troubles in which Halliburton was embroiled in the last
few months of 2004.

But the no-repeat rule forbids these otherwise-deserving companies from returning to the
10 Worst list in 2004.
Although the judges cringe at being denied the opportunity to put these companies back
on 10 Worst list, it does at least help shrink the pool of eligible contenders.

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. “So it’s critical that we capture the
value of today’s drugs to allow development of these new therapies in our pipeline as
quickly as possible.”
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

The nation’s number one corporate crime buster, New York Attorney General Eliot
Spitzer, launched his campaign for higher office in December, announcing that he was
running for Governor of New York, the next step in his quest for the presidency.

Spitzer is out to prove that projecting a tough cop image against corporate crime pays
dividends — as long as you pull your punches when it comes to settlement time.

When Spitzer announced in November that he was opening a new front against the
insurance industry, there was the usual quaking in the boots by the Wall Street Journal
and the other lead megaphones for big business, charging Spitzer with using his law
enforcement powers to force changes in business practices.
And have no doubt — the corporate lobbies would prefer a do-nothing law enforcement
agency to an activist one, even a mildly activist one.

That’s why they rail against Spitzer, and even against SEC chair William Donaldson, a
former chief executive himself and friend of the Bush family.

Big business now reportedly wants even Donaldson removed from office for his mild
activism.

But when push comes to shove, there is no shoving allowed by prosecutors. If you do
shove, or push too hard, you will not be allowed to proceed up the political ladder.
Period. End of story.

Spitzer sent clear signals when he started his crusade against Merrill Lynch.

Remember the Merrill Lynch analysts who told their customers — trust me, buy this
stock, this stock is highly rated?

And then they would turn around and e-mail their buddies — hey, this stock is lousy, why
are we recommending this stock to our customers?

Spitzer got his hands on the e-mails, charged Merrill with violating the law and forced
them to pay $100 million.

But he got Merrill to pay up only by agreeing not to criminally prosecute the company.

Spitzer later admitted that had he forced Merrill to admit wrongdoing, the firm would
have gone kaput.

Just like Arthur Andersen.

In October, 2004 Spitzer moved against a major insurance broker, Marsh & McLennan,
alleging that the company steered unsuspecting clients to insurers with whom it had
lucrative payoff agreements, and that the firm solicited rigged bids for insurance
contracts.

By threatening criminal action, Spitzer forced the company’s CEO to resign — and
replaced him with a former work colleague.

Major insurance companies — ACE, American International Group, The Hartford and
Munich American Risk Partners — were named in the complaint as participants in
steering and bid rigging. Other insurance companies are still under investigation.

Here’s a prediction — Marsh & McLennan will not be convicted of any wrongdoing.
Why? Because Spitzer fears, as he feared in the Merrill case, that forcing a company to
admit to guilty would push it to the brink — à la Andersen.
Andersen’s conviction sent a powerful message to big business — engage in criminal
wrongdoing, and you will be criminally prosecuted to the full extent of the law.

Too powerful, as it turns out.

So, with the Merrill case, Spitzer has started a trend.

Yes, prosecute corporate crime, but don’t force companies to admit guilt.

Thus, 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.”

“We have always sought to adhere to the highest ethical standards and ensure that we are
in compliance with the applicable laws and regulations that govern our businesses around
the world. As part of this effort, we regularly review our compliance policies and
procedures and take additional action whenever appropriate to enhance them.”

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. The other seven are Computer Associates, Invision,
AmSouth Bancorp, Health South, Banco Popular de Puerto Rico, Canadian Imperial
Bank of Commerce and MCI. Bank of New York is currently seeking a similar deal with
prosecutors in Brooklyn.

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

Check out 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. The physical access that paramilitaries have had to Coca-Cola
bottling plants is impossible without company knowledge and/or tacit approval.
Shockingly, company officials admitted to the delegation that they had never investigated
the ties between plant managers and paramilitaries. The company’s inaction and its
ongoing refusal to take any responsibility for the human rights crisis faced by its
workforce in Colombia demonstrates — at best — disregard for the lives of its workers.”

“Coca-Cola’s complicity in the situation is deepened by its repeated pattern of bringing

criminal charges against union activists who have spoken out about the company’s
collusion with paramilitaries. These charges have been dismissed without merit on
several occasions.”

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:

“Colombia is a dangerous place, but The Coca-Cola Company and its bottling partners
will continue to do everything they can to keep employees safe.”

“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. Among them was Isidro Gil,
who was on security duty at a bottling facility in Carepa in December 1996 when he was
shot at the plant gate. 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. In the United States, The
Coca-Cola Company was dismissed from a lawsuit concerning, among other things, Mr.
Gil’s murder.”
“In the midst of the violence plaguing Colombia, The Coca-Cola Company and its
bottling partners have instituted special safeguards to protect employees — not just while
they’re on the job. For those at greatest risk, the security measures extend beyond the
workplace.”

“The Coca-Cola Company and Coca-Cola FEMSA [the Colombia subsidiary] believe that
respect for human rights and labor rights are non-negotiable, fundamental values. We
operate our businesses in Colombia and throughout the world according to these values.”

The back-and-forth is rather detailed. We find the claims of the advocates for Coke’s
Colombian workers most persuasive.

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.

Even more instructive is Coke’s refusal to agree to “Seven Points for Settlement” put
forward by the Colombian union and its advocates. These are reasonable points to which
the company could agree without accepting blame for the abuses committed at the
bottling plants. Completely apart from the litigation and the campaign against Coke, these
are points to which the company should agree if it wants to clamp down on violence in
the bottling plants. They include:

• In Colombia, denounce anti-union violence, assert that anti-union violence is bad

for business, and indicate the company’s belief that the union is not connected to
armed groups in Colombia.
• Agree to support the creation of an independent committee to which workers can
submit complaints about anti-union violence and intimidation at or around any
Coca-Cola bottling plant.
• Investigate connections between local Coke management in Colombia and
paramilitaries, and remove any managers with such ties.
• End criminal harassment charges in Colombia against plaintiffs in the lawsuit and
other union leaders.
• Compensate victims of anti-union violence.

DOW CHEMICAL: FORGIVE US OUR TRESPASSES

Let’s assume for a second, as the law does, that a corporation is a person.
If a corporation is a person, then how come we don’t see biographies of corporations?

We’re not talking about “official” biographies — those written by people in the pocket of
the corporation.

Of course they exist.

By why not warts-and-all biographies of major corporations?

Like “The Life and Times of General Motors?”

Actually, a historian by the name of Brad Snell has been working for years on such a
biography about General Motors — warts and all. He says he’s almost finished.

In 1974, Gerard Colby Zilg wrote a book titled DuPont: Behind the Nylon Curtain, which
was a biography of DuPont Corporation — warts and all.

Zilg claimed that his publisher, under pressure from DuPont, buried the book — and it
went nowhere.

Now comes Jack Doyle.

Doyle is trying to make a career out of writing critical corporate biographies.

In 2002, under contract with the Environmental Health Fund, Doyle wrote his first
corporate biography, titled Riding the Dragon: Royal Dutch Shell & The Fossil Fire.

To coincide with the twentieth anniversary of the Bhopal disaster, Doyle came out with
Trespass Against Us: Dow Chemical and the Toxic Century.

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 Dow’s “complete statement” on Bhopal:

Twenty years ago on December 3, 1984, one of the most tragic incidents
in the history of industry occurred in Bhopal, India. Those of us in
industry remember that day well, and the following days, when several
thousand people died.

Although Dow never owned nor operated the plant, we — along with the
rest of industry — have learned from this tragic event, and we have tried
to do all we can to assure that similar incidents never happen again.

To that end, the chemical industry learned and grew as a result of Bhopal
— creating Responsible Care with its strengthened focus on process safety
standards, emergency preparedness, and community awareness. The
industry also has worked with governmental regulators to assure that
industry best practices are implemented through regulations for the
protection of workers and communities.

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.

The former Bhopal plant was owned and operated by Union Carbide India,
Ltd. (UCIL), an Indian company, with shared ownership by Union Carbide
Corporation, the Indian government, and private investors. Union Carbide
sold its shares in UCIL in 1994, and UCIL was renamed Eveready
Industries India, Ltd., which remains a significant Indian company today.

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’s
responsible. They refuse to accept Dow’s corporate shell game.

Doyle took the title of his book, “Trespass Against Us,” from the Lord’s prayer:

Give us this day our daily bread, and forgive us our trespasses as we forgive those who
trespass against us.
We asked Doyle if he was urging humanity — those who have been polluted by Dow
chemicals — to forgive Dow for its trespass against us.

“Not at all,” Doyle said. “By using the ‘trespass against us’ phrase, I am trying to make
visible the invisible — trying to show that there are boundary lines being violated daily
by toxic substances. Corporations are making a profit on the invasion of my personal
space, my biology. They are not controlling the full costs of their operation, and we are
picking up the tab for their externalities in form of disease, illness, lower immunity,
altered reproduction, birth defects, cancer. That’s not right. That’s a mortal trespass, an
unforgivable transgression that must be stopped. We are certainly not calling on
consumers to ask that companies be forgiven — quite the opposite. They need to be
prosecuted. Companies like Dow are getting away with biological trespass daily.”

And his book documents this.

Dow says that for most of the past decade it has pursued a “series of ambitious goals to
improve Environment, Health, and Safety performance. We did this because we value the
safety of our people and neighbors.” The result, according to the company, has been
10,000 injuries averted since 1996.

“Our ‘Vision of Zero’ means we want no injuries, illnesses, accidents, or environmental

harm to result from our enterprise,” asserts the company. “It is a lofty goal, but it is also
the only acceptable Vision for us to work toward.”

But these words gloss over an odious history.

In honor of the dead and dying in Bhopal, we urge you to buy Doyle’s book. Every time
you use common plastic items, think of the destruction. Every time you use Saran Wrap
(originally a Dow product), question the consequences.

And in commemoration of the twentieth 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 — and an uproar back home that forced Dow to
rethink its public relations strategy.

19. Rocky Flats — The top secret Colorado site managed by Dow Chemical from 1952 to
1975 remains an environmental nightmare for the Denver area.

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 — An herbicide produced by Dow Chemical, 2,4-D is still in used for killing
lawn weeds, crop weeds and range weeds, and along utility company rights-of way and
railroad tracks. One of the key ingredients in Agent Orange, the toxic defoliant used in
Vietnam, 2,4-D is 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 through air emissions, water discharges, waste sludge
and in end products. In March 1970, the governments of Ontario and Michigan detected
high levels of mercury in the fish in the St. Clair River, Lake St. Clair, the Detroit River
and Lake Erie. 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 — This is one of the toxic ingredients in Agent Orange. Doyle says that “Dow
just fought tooth and nail over this chemical — persisted every way it could in court and
with the agencies, at the state and federal levels, to buy more time for this product. They
went into a court in Arkansas in the early 1970s to challenge the EPA administrator. They
did that to buy some extra marketing time, and they got two years, even though it appears
that Dow knew this chemical was a bad actor by then, caused birth defects in lab animals,
and was also being found in human body fat by then. But it wasn’t until 1983 that Dow
quit making 2,4,5-T in the United States, and 1987 before they quit production in New
Zealand. And 2,4,5-T health effects litigation continues to this day.”

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 by a joint venture
between Dow and Corning (Dow Corning), made women sick. Litigation over silicone
breast implants — removed from the market more than a decade ago — continues.

11. DBCP — DBCP is the toxic active ingredient in the Dow pesticide Fumazone.
Doctors who tested men who worked with DBCP thought they had vasectomies — they
had no sperm present.

10. Dursban — Dursban is the trade name for chlorpyrifos, a toxic pesticide, a product
that proved to have the nerve agent effects that Rachel Carson warned about. It was tested
on prisoners in New York in 1971 and in 1998 at a lab in Lincoln, Nebraska. 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 — “and
more and more of our materials are found under the Christmas tree and on the birthday
table, make some child, some toy company, and Dow, very happy indeed.” Among the
chemicals used in these toys — polystyrene, polyethylene, ethylene copolymer resins,
saran resins, PVC resins, or vinyls and ethyl cellulose. And a Happy New Year.

8.The Tittabawassee — The Tittabawassee is 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 — Doyle writes: “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. ... Dow Chemical must end its toxic trespass.”

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. Tests were conducted in 1964 on 70
inmates.

4. Worker deaths — Dow has a long history of explosions and fires at its facilities, well
documented by Doyle. One example, in May 1979: an explosion ripped through Dow
Chemical’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 were looking for Dow products to boycott. Dow
decided to get out of consumer products for this reason — it sold off Saran Wrap — and
since then the company, now the world’s largest plastics maker, just manufactures the
chemical feeds that manufacturers use to make our consumer products.

1. Bhopal — Give us this day our daily bread, and forgive us our trespasses, as we seek to
bring to justice those who trespass against us.

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.

Longstanding evidence of harm from a heavily advertised, blockbuster medicine.

Company and regulatory refusal to consider disturbing evidence of dangerous side
effects. Suppression of Food and Drug Administration (FDA) regulators willing to look
coldly at the evidence. And an eventual, but too long delayed breakthrough in appropriate
health messages to the public.

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 it. 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. Nearly 900,000 of these prescriptions were for
youngsters whose primary diagnosis was a mood disorder, the most common of which is
depression.

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. The Lancet would later name this article the scientific paper of the year.

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.
“By concealing critically important scientific studies on Paxil, GSK impaired doctors’
ability to make the appropriate prescribing decision for their patients and may have
jeopardized their health and safety,” said Spitzer in announcing the suit.

GSK responded in a statement that it “has 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. We have publicly
communicated data from all pediatric studies.”

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.”

Later in June, GSK announced a new policy, whereby it would post on the Internet
summaries of the results of clinical trials it conducts. 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. Glaxo says sales people do not discuss
off-label uses with doctors.

In October, the FDA ordered Glaxo and other SSRI makers to include a “black box”
warning — the agency’s strongest 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.

Thanks largely to Glaxo and other drug companies’ bombardment of the airwaves with
ads touting the wonders of drug treatments for all kinds of emotional disorders, childhood
use of antidepressants and other pills is skyrocketing — even for drugs that haven’t been
shown to help kids. No one should understate the sometime difficulties of adolescence
and the trauma that many youth must deal with. But overdosing kids is no answer — and
pushing ineffective drugs that spike their risk of suicidality is deplorable.
HARDEE’S: HEART ATTACK ON A BUN

Hardee’s, Home of the Monster Thickburger. When Hardee’s introduced the thickburger
earlier this year, Jay Leno joked that it was being served in little cardboard boxes shaped
like coffins.

David Letterman did a skit showing a Hardee’s executive suffering a heart attack as he
defended the thickburger.

But, alas, there is no defense for the Monster Thickburger.

With other major fast food outlets moving to green salads, Hardee’s revels in big beef.

Let’s now go to Hardee’s press release of November 15, 2004, which begins this way:

“St. Louis, Missouri — First there were burgers. Then there were
Thickburgers. 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.
Available at all Hardee’s restaurants starting today, the Monster
Thickburger is certain to crush the hunger pangs of even the most
famished burger lovers.”

“Before the introduction of the Thickburger line at Hardee’s, the Monster

Burger was one of our most popular menu items,” said Brad Haley,
executive vice president of marketing for Hardee’s. “In fact, it’s been one
of the most requested items from our old menu. However, we didn’t just
bring it back. Since it’s now a Thickburger, it’s even bigger and better than
it was before.”

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.

It’s a 1,420-calorie sandwich.

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, which calls the Thickburger “food porn.”

What’s in a Thickburger?
Two 1/3-lb. charbroiled patties of Angus beef, topped with no less than four strips of
crispy bacon, three slices of American cheese, and some mayonnaise — all on a buttered,
toasted, sesame seed bun.

The Monster Thickburger sells for $5.49 by itself, or $7.09 for a combo meal including
medium fries and a medium drink.

Want to see a picture of the beast? Go to www.monsterthickburger.com.

Hardee’s doesn’t believe in doing well without doing good, so the hamburger chain
partnered with the National Football league in 10 markets to raise money for charity.

In each of the markets, one “monstrous” NFL player will work the drive-thru of a local
Hardee’s for two hours, and the proceeds from every Monster Thickburger sold at that
location on that day will be donated to the player’s charity of choice.

Like what charity — medical efforts to drive down diabetes or hypertension?

And check the limits of law enforcement:

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 and with making false claims that its fried chicken is
compatible with certain popular weight-loss programs.

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.

One ad featured a woman putting a bucket of KFC fried chicken down in front of her
husband and announcing, “Remember how we talked about eating better? Well, it starts
today!” The ad then states that “Two KFC breasts have less fat than a BK 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.

Why?

Because Hardee’s makes no pretensions that the Hardee’s thickburger is good for you.
And they are reveling in the publicity from Jacobson’s group, Leno and Letterman.

Jacobson says that if Hardee’s persists in marketing this junk, it should at least list
calories right up on the menu board.

But Hardee’s 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,” The 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 e-mails that confirm Merck executives’ knowledge of
their drug’s adverse cardiovascular profile — the risk was “clearly there,” according to
one senior researcher.

Merck’s marketing literature included a document intended for its sales representatives
which discussed how to respond to questions about Vioxx — it was labeled “Dodge Ball
Vioxx.”

“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. “The FDA’s position is no less [un]comfortable. The public expects national drug
regulators to complete research in their ongoing efforts to protect patients from undue
harm. But, too often, the FDA saw and continues to see the pharmaceutical industry as its
customer — a vital source of funding for its activities — and not as a sector of society in
need of strong regulation.”

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.
In December 2004, a group of 22 members of the U.S. House of Representatives sent a
letter to the FDA complaining about efforts to intimidate and smear Dr. Graham.

House members, led by Bart Stupak, D-Michigan, sent the letter to acting FDA
Commissioner Lester Crawford “to express strong dismay at recent reports about efforts
taken by some at FDA to discredit and smear Dr. Graham.”

“This shameful behavior by management cannot continue, and we demand you put a stop
to it,” the letter said.

“Your treatment of Dr. Graham undoubtedly has had a chilling effect on the willingness
of FDA employees to speak up and disagree when they believe the public’s health is at
risk,” the letter said.

If Graham were targeting just Merck, his job might be safe. But it is about more than
Vioxx and Merck.

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 — capitalist tool that it claims to be — 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.”

“Without Graham, the Vioxx debacle might have been seen as an isolated event,” Forbes
wrote. “But because he was willing to step into the spotlight, the withdrawal of Vioxx
from the market looks like part of a systemic failure to properly weigh the risks and
benefits of drugs. To hear Graham tell it, this is part of a systemic failure to address drug
safety on the part of the FDA, a story that reaches back over the entirety of his 20-year
career at the agency. That could kick-start a broad debate over what risks we’re willing to
take every time we swallow pills. In the long run, change would be good for regulators
and drug companies.”

McWANE: DEATH ON THE JOB

When the New York Times is bad, it can be very bad. But when it is good, it can be very
good.

Earlier this year, it was very good.

It was very good when it 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.

One former plant manager told of submitting phony water samples to environmental
investigators, the Times reported.

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.”

Companies who cause the death of workers on the job rarely face the full force of the
criminal law. Manslaughter and negligence prosecutions in workplace death cases have
been declining for years — as the dead worker bodies steadily pile up.

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.”

The Times documented more than 400 safety violations and 450 environmental violations
since 1995 alone.

“Yet regulators and law enforcement officials have never joined forces to piece this
record together, never taken a coordinated approach to end patterns of transgression,” the
Times reported. “Their responses, piecemeal and disjointed, bring into sharp relief
weaknesses in government’s ability to take on corporations with operations spread far and
wide.”

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. “We have
challenged ourselves to go beyond compliance in the development of a state-of the-art
safety, health and environmental management system to create a comprehensive program
designed to exemplify excellence in environmental, health and safety performance,
integrity, service and quality.”

“McWane and its subsidiaries actively promote a safe workplace,” the company asserts.
“We have positive and ongoing working relationships with federal, state and local
authorities to continuously improve our safety training, workplace technologies, and
overall safety programs.”

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.

Now, consider this:

McWane is responsible for nine worker deaths and countless injuries.

Scott Peterson was responsible for the death of his wife and unborn child.

Which one did the mass television media focus on?

Who got the death penalty?

And why?

RIGGS BANK: THE PINOCHET CONNECTION

Being a military dictator is not as easy as it looks.

You need suppliers of weapons. You need an army to work with you. And, if you are a
crook — as most military dictators are — you need a bank to hold on to your money.

That’s where Riggs Bank in Washington, D.C. comes in.

An explosive report from the U.S. Senate Permanent Subcommittee on Investigations of

the Committee on Governmental Affairs, issued in July, revealed that Riggs 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 is the subject of ongoing criminal investigations by the U.S. Department of
Justice and the U.S. Attorney’s Office for the District of Columbia, according to recent
filings with the Securities and Exchange Commission.
Riggs, which traces its history back to 1840, likes to brag about serving such historical
figures as President Abraham Lincoln (and 19 other presidents) and American Red Cross
founder Clara Barton, and having supplied the gold for the purchase of the state of
Alaska.

It 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.

This is not just a matter of avoiding taxes or failing to follow legalistic rules. These are
the actions that reward dictators, and help them live lavishly after stepping down from
power. They come at the expense of the dictator’s victims — thousands of dead and
tortured in the case of Pinochet. For those who need a reminder of Pinochet’s brutality,
see www.memoriaviva.com for a moving list and pictures of victims.

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 (about which see the 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

You only have to look at the cover of Wal-Mart’s 2004 Annual Report to know the
company is facing trouble unlike any it has had to handle before.

“It’s my Wal-Mart,” asserts the slogan on the cover of the annual report.

At the bottom are these claims: “Good Jobs * Good Works * Good Citizen * Good
Investment.”

Missing is any reference to “Always Low Prices.”

Stepped up and novel community and legal challenges confronting the company are
making the mammoth retailer expend energy on repositioning its image. Hence the
annual report, the major image-oriented television ads, the sponsorships on National
Public Radio — listened to by few of its shoppers — and the huge surge in campaign
contributions. Wal-Mart and its managers gave more than $2 million to federal candidates
in the last U.S. electoral cycle, more than any oil company, and almost triple the level the
company donated in the 2000 elections.

The company 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. In April, voters in the largely African-American and
Latino working class town of Inglewood, California rejected a referendum that would
have allowed Wal-Mart to open a Supercenter without being subject to normal municipal
reviews.

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.

The company takes in more than one in five dollars spent nationally on food sales, and
market researcher Retail Forward predicts Wal-Mart will control more than a third of
food store industry sales, as well as a quarter of the drug store industry, by 2007. Wal-
Mart is the largest jewelry seller in the United States, “despite the fact that the prime
target market for jewelry — high-income women from 25 to 54 years — are the least
likely of all consumers to shop for jewelry in discount channels,” as Unity Marketing
notes. Wal-Mart is the largest outlet for sales of CDs, videos and DVDs. And on and on.

For two years running, Fortune has named Wal-Mart the most admired company in
America. It is arguably the defining company of the present era.

The company’s business model has relied on new innovations in inventory management,
focusing on ignored markets (low-income shoppers in rural areas — though this is now
changing), and squeezing suppliers to lower their margins. But it has also relied centrally
on undercompensating employees and externalizing costs on to society.

A February 2004 report issued by Representative George Miller, D-California,

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.

“There’s no question that Wal-Mart imposes a huge, often hidden, cost on its workers, our
communities and U.S. taxpayers,” Miller said. “And Wal-Mart is in the driver’s seat in
the global race to the bottom, suppressing wage levels, workplace protections and labor
laws.”

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.”

“Prop. 72 was never about Wal-Mart,” she claimed. “It was about allowing businesses to
operate without unreasonable government mandates, it was about the survival of small
businesses and it was about consumer choice in healthcare benefits.”

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. A federal judge ruled in June that the case could proceed as a
class action.

“We strongly disagree with his decision and will seek an appeal,” says company
spokesperson Mona Williams. “While we cannot comment on the specifics of the
litigation, we can say we continue to evaluate our employment practices. For example,
earlier this month Wal-Mart announced a new job classification and pay structure for
hourly associates. This new pay plan was developed with the assistance of third party
consultants and is designed to ensure internal equity and external competitiveness.”

Liza Featherstone, who has chronicled the claims of the women employees in her book
Selling Women Short, says women workers report “a pattern of arbitrary, very subjective
decision-making by management.” They report business meetings being held at Hooter’s
or strip clubs.

The contradiction of a self-righteously moral company — which won’t sell racy

magazines or CDs with parental advisory labels — permitting such behavior is a
reflection of women employees’ powerlessness. “Unlike its female workforce,”
Featherstone writes, “the women who shop at Wal-Mart can’t be ignored, and many of
them have conservative values.”

But 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.

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.

+++++++++++++++++++++++++++++++++++++++++++++++++++++
Multiple Corporate Personality Disorder:
The 10 Worst Corporations of 2003 Bayer
Boeing
Brighthouse
By Russell Mokhiber and Robert Weissman
Clear Channell
Diebold
We hate to sound like your parents, but you must take responsibility
Halliburton
for your actions.
HealthSouth
Inamed
Steal from the grocery store, go to jail.
Merrill Lynch
Safeway
Double park, pay the ticket.

But why doesn't this simple principle apply to corporations and their executives?

As of this writing, of all of the U.S. corporate financial crimes committed that have cost
hundreds of billions of dollars over the past couple of years, only two top level executives
are in prison.

That's it -- two.

Now, ask yourself, if working class people committed crimes that cost hundreds of
billions of dollars -- inconceivable as it is -- how many would be in prison? The whole lot
of them.

So, how is it that corporations and their executives get away with it?

It's the nature of the beast.

And perhaps that's why we should consider doing away with it -- the corporation that is.

Let's say that a corporation is caught fixing its books, committing in effect a $2.7 billion
fraud. That would be a case similar to HealthSouth.

Under U.S. law, if a healthcare corporation is convicted of a felony, that company can no
longer do business with the United States government, in this case the Medicare and
Medicaid program. And in HealthSouth's case, that means life and death.

So, the company hires one of the nation's best corporate crime defense attorneys -- Bob
Bennett -- and says to him, "Save us from the corporate death penalty."

Bob goes to the U.S. Attorney prosecuting the case and says, "Hey look, here's my phone
number, we'll give you everything you want. Just don't indict us. Please don't indict us."
And the U.S. Attorney indicts 16 top executives. But the company manages to escape
indictment.

That's one way a corporation morphs to get out of accepting responsibility for its sins --
blame the human beings.

But sometimes, the corporate executives say, "Hey, we don't have to take the heat. Let's
cough up a defunct subsidiary to plead guilty -- and the government can ban that unit
from doing business with Medicare. Who cares -- that unit never did business with
Medicare anyway."

So, there's a guilty plea, there's a corporate fine, there is a touch of adverse publicity --
but nobody's hurt. Crime without punishment.

Or let's say that the corporation wants to plea to a lesser offense, but not get any publicity
to the case. This too happens. The corporate lawyer can go to the Justice Department and
cut a deal where the Department will not put out a news release about the case. A number
of criminal defense lawyers have told the Monitor they have done this.

The Justice Department issued a memo earlier this year titled "Federal Prosecution of
Business Organizations."

The memo, authored by former Assistant Attorney General Larry Thompson, gives
prosecutors discretion to grant corporations immunity from prosecution in exchange for
cooperation.

These immunity agreements, known as deferred prosecution agreements, or pre-trial

diversion, were previously reserved for minor street crimes.

They were never intended for major corporate crimes.

In fact, the U.S. Attorneys' Manual explicitly states that a major objective of pretrial
diversion is to "save prosecutive and judicial resources for concentration on major cases."

Since the Thompson memo was issued, there has been a rash of deferred prosecution
agreements in cases involving large corporations, including a settlement with a Puerto
Rican bank on money laundering charges and a Pittsburgh bank on securities law charges.

And some corporate crime defense attorneys believe that it is possible to enter these
agreements with the Justice Department so as to avoid any publicity.

"This is a favorable change for companies," says Alan Vinegrad, a partner at Covington
& Burling in New York. "The memo now explicitly says that pre-trial diversion, which
had been reserved for small, individual, minor crimes, is now available for corporations."
Vinegrad says that while there have been a handful of publicized pre-trial diversion cases
by corporations, it is conceivable that the Justice Department can cut these kind of deals
with companies without filing a public document -- and therefore without any publicity to
the case.

Harry Glasbeek is a professor of criminal law at York University in Toronto. He has

studied corporate crime and written a book about it called Wealth By Stealth: Corporate
Crime, Corporate Law, and the Perversion of Democracy.

Glasbeek says that the creation of the corporation allowed for this "fungibility of
responsibility."

"Sometimes the executives plead the corporation to relieve the executives from
responsibility," Glasbeek says. "Sometimes the corporation causes the executives to
plead, a couple of people take the fall. And it is very difficult. We have created a separate
entity with separate property. You have a functional notion that property yields the
income stream and wealth to people outside the separate entity. You have in-between
actors who belong to both classes, the corporation and the outsiders. So, you have
multiple personalities with different legal duties and rights that the actors are allowed to
take on at any one time. That allows a shifting of responsibility that we cannot control."

Call it Multiple Corporate Personality Disorder (MCPD).

Glasbeek says this disorder undermines our notion of responsibility, which "supposedly
depends on the individual taking responsibility for his or her own actions."

"What we have designed is a creature that allows that responsibility to be shifted at the
whim of those people who are actually operating that system," Glasbeek says. "That's an
endemic design flaw."

Glasbeek has no illusions that criminal prosecution will bring corporate criminals to
justice.

"My notion of prosecuting more often is to bring attention to this embedded difficulty --
it is not because I believe that this will actually change the situation in and of itself," he
says.

And we write The 10 Worst Corporations of the Year, not because we believe that by
focusing attention on these crooks and miscreants we will actually change the situation.

We do it hoping that we can bring attention to this embedded difficulty -- and move to a
society where once again, we -- flesh and blood human beings -- are held responsible for
our crimes and misdeeds.

Here are Multinational Monitor's 10 Worst Corporations of 2003, presented in

alphabetical order:
Bayer - Everyone Is Expected To Obey The Law

Bayer's got a headache, and aspirin ain't going to help.

Earlier this year, the company pled guilty to defrauding the federal government out of
hundreds of millions of dollars in Medicare payments.

How did this crime come to light?

On February 9, 1999, George Couto, a Bayer Corporation marketing executive, attended

a mandatory ethics training session at a Bayer office in Connecticut.

The training session was kicked off by a video address by Helge Wehmeier, the head of
Bayer's entire U.S. operation.

"Everyone is expected to obey the law -- not only the letter of the law, but the spirit of the
law as well," Wehmeier told the assembled Bayer executives. "You will never be alone to
adhere to the high standards of the law. Should you feel prodded, speak with a lawyer, or
call me. I'm serious about that."

The assembled employees in the room erupted into laughter.

But Couto had something on his mind. He knew that Bayer had engaged in an elaborate
scheme to defraud the Medicaid program out of $100 million.

On February 11, 1999, two days after the ethics training class, he wrote his boss a one
paragraph memo asking how the company reconciled the Medicaid scheme with the
company's expectation to adhere to the spirit and letter of the law. No one ever got back
to him.

So, Couto decided to pursue the matter elsewhere. He sought legal assistance from
attorneys Neil Getnick, Lesley Skillen and Scott Tucker -- and filed a qui tam lawsuit
against Bayer. That lawsuit was filed in early 2000.

He quit Bayer soon thereafter.

The case was filed under seal. In April 2002, Couto, age 39, was diagnosed with
pancreatic cancer. He knew he was going to die, but wanted to make sure that the case
would not die with him.

So his lawyers, over the strenuous objections of Bayer's lawyers, demanded that Couto be
deposed on videotape. In August 2002, he was deposed, and withstood a grueling cross-
examination.

"In my view, all that cross-examination did was to underscore the strength of the case and
demonstrate what an extraordinary person George was," says Getnick. "As a litigator, I
came to the conclusion -- and I believe everyone in that room where the deposition was
taken came to the same conclusion -- that no defendant company would ever have wanted
that videotape played before a jury at trial."

Couto died in November 2002. But in April 2003, his wishes came true, as Bayer pled
guilty to one federal criminal count and agreed to pay a $5.5 million criminal fine.

The company also agreed to pay $251 million to settle Couto's civil False Claims Act
case.

Couto's estate will get a $34 million relator's fee. GlaxoSmithKline, which engaged in a
similar fraud against Medicaid, will pay $87 million to settle its case.

Bayer was charged with knowingly providing Medicaid incorrect data regarding pricing
of prescription drugs, preventing Medicaid from receiving discounts to which it was
entitled.

And it's not just stealing with Bayer.

Check this out:

The Times of London reported earlier this year that the giant pharmaceutical company
used students to test a "highly hazardous" pesticide linked to serious disorders.

Bayer CropScience, of Mannheim, Germany, paid the students, mostly from Heriot Watt
University, Edinburgh, about $450 each to consume the pesticide, according to the report
by Times medical correspondent Lois Rogers. Experts are worried that cash-strapped
students are vulnerable targets for researchers.

According to the report, Bayer is using the results of the study, conducted between 1998
and 2000, to argue that restrictions on pesticide use should be eased, because no
immediate adverse effects were suffered.

In April, the company said it was trying to settle an additional 500 lawsuits brought over
its anti-cholesterol drug Baycol. The company has already settled 400 of the cases. The
announcement came after the New York Times ran a front-page article reporting that
newly disclosed company documents indicate that some senior executives at Bayer were
aware that their anti-cholesterol drug had serious problems long before the company
pulled it from the market.

According to the Times, they include e-mail messages, memos and sworn depositions of
executives that suggest that Bayer promoted the drug, Baycol, even as a company
analysis found that patients on Baycol were falling ill or dying from a rare muscle
condition much more often than patients on similar drugs.
Bayer, which developed Baycol, says the drug was marketed appropriately and is safe
when used properly.

But approximately 100 deaths and 1,600 injuries worldwide have been linked to a muscle
disorder caused by the drug, according to regulatory filings by the company.

The drug, which studies found to be less effective at its initially approved strength than
competing medicines, caused more problems at higher doses.

Senior executives at Bayer and GlaxoSmithKline were aware that this might be possible
as early as 1997, the Times reported.

More than 10,000 patients who took Baycol or the families of those who died have filed
lawsuits against Bayer and GlaxoSmithKline.

Bayer and GlaxoSmithKline have settled more than 400 of the cases for individual
amounts ranging from $200,000 to $1.2 million, according to lawyers for the patients.

The company denies that it was aware of possible dangers with Baycol long before it
voluntarily withdrew the cholesterol-lowering drug from the market.

"Bayer continuously monitored ongoing Baycol data post-launch to ensure that the drug
was being used safely and correctly, and in accordance with labeling recommendations,"
the company says in a statement. It says it withdrew the drug as soon as it was apparent
that its dangerous side effects could not be avoided.

Baycol wasn't the only case in which Bayer was accused of deadly delay in removing
hazardous products from the market.

In June 2003, the New York Times reported that a Bayer unit sold millions of dollars of
blood-clotting medicine for hemophiliacs -- medicine that carried a high risk of
transmitting AIDS -- to Asia and Latin America in the mid-1980s while selling a new,
safer product in the West.

The Bayer unit, Cutter Biological, introduced its safer medicine in late February 1984 as
evidence mounted that the earlier version was infecting hemophiliacs with HIV. Yet for
over a year, the company continued to sell the old medicine overseas, prompting a U.S.
regulator to accuse Cutter of breaking its promise to stop selling the product, the Times
reported.

The company says it "emphatically denies misconduct in the marketing of these products
in the mid-1980s."

Boeing- Soaring Through Turbulence

It's not as if Boeing doesn't deserve the bad publicity that it's been getting this year.
First, the tanker deal. The Pentagon cuts a deal with Boeing. Boeing will lease tanker
planes -- 767s that refuel fighter planes in mid-air.

Well, wouldn't it be cheaper for taxpayers just to buy the planes?

Of course, but don't be silly.

This is the military-industrial complex.

So, the Pentagon official in charge of this fiasco, Darleen Druyun, favors Boeing. And
she facilitates the deal. And then she goes to work for Boeing.

It's just the way Washington works.

As a result of the political pressure created by Senator John McCain, R-Arizona, the
Project on Government Oversight and others, Boeing hires a fancy outside law firm to do
an internal investigation.

And lo and behold -- Druyun in November is fired from her new job. And so is Boeing's
chief financial officer -- Michael Sears.

"Compelling evidence of this misconduct by Mr. Sears and Ms. Druyun came to light
over the last two weeks," said Boeing Chair and CEO Phil Condit. "Upon review of the
facts, our board of directors determined that immediate dismissal of both individuals for
cause was the appropriate course of action."

"Boeing must and will live by the highest standards of ethical conduct in every aspect of
our business," Condit said. "When we determine there have been violations of our
standards, we will act swiftly to address them, just as we have today.

"We hope this sends a message across the defense industry that there has to be an end to
conflicts of interest," POGO's executive director Danielle Brian said. "The tanker deal is
obviously bad for everyone except Boeing."

Then one week later, Condit resigned.

Boeing said there was "nothing whatsoever" connecting Condit to the ethics issues.

"Maybe right now the best thing we can do is change leadership, let the company go
forward and remove some clouds along the way," Condit said during an interview on
CNBC. "My decision really was what was best for the company."

POGO says that Boeing could lose its $27.6 billion contract in the Druyan-Sears scandal.

The company might also lose military deals for rocket contracts because it was caught
with documents allegedly stolen from Lockheed Martin, a competitor.
In July, federal officials in Los Angeles charged two former Boeing Company managers
with conspiring to steal Lockheed Martin trade secrets concerning a multi-billion rocket
program for the United States Air Force.

Later the Air Force suspended Boeing from two rocket projects worth $1 billion.

"We understand the U.S. Air Force's position that unethical behavior will not be
tolerated," Condit said at the time. "We apologize for our actions."

Late in the year, the Wall Street Journal reported that the relationship between Druyan
and Sears was not the only example of Boeing's coziness with Pentagon insiders. In
recent years Boeing committed to invest about $250 million in around 29 venture-capital
funds, some of which either employ or are advised by Washington insiders, the Journal
reported. For example, the company committed to invest some $20 million in Trireme
Partners, which invests in homeland-security technologies. Trimeme's principal is
Richard Perle, who until March was chair of the Defense Policy Board, a group that
advises the defense secretary.

Right before he was fired, Sears had his publisher send galley copies of his new book to
book reviewers.

The book, is titled Soaring Through Turbulence: A New Model for Managers Who Want
to Succeed in a Changing Business World.

According to press reports, the first part of the book focuses on business ethics.

In the first section, titled "Soar with Credibility," Sears runs through Enron, Adelphia and
other corporate scandals that have "left managers confused as to what the new standards
of business ethics and professional accomplishments are."

Uh, yeah.

Brighthouse - Brave New World

Joey Reiman wants to bring into being a Brave New World, and he's created BrightHouse
(www.thoughtsciences. com) to help us get there.

BrightHouse is a new-agey advertising/consulting/ strategic advice company. (Typical

gibberish: "BrightHouse not only uncovers and articulates The Master Idea for our
clients, we create an actionable plan for transforming the organization. We deliver
unprecedented insights linked to your organization's ethos and culture that will
dramatically impact intellectual, emotional, and financial revenues.") Its clients include
Coca-Cola, Georgia-Pacific, Home Depot, Met Life, Southern Company and K-Mart.

But that's not what makes it noteworthy.

What makes BrightHouse noteworthy is the BrightHouse Neurostrategies Institute. The
institute undertakes research to see how the brain responds to advertising campaigns, and
to use this information to craft more effective marketing strategies.

Here's how the company describes its work:

"We are a novel form of consumer consultancy that leverages scientific knowledge about
how the human brain motivates consumer behavior to deliver strategic insights that are
intended to enhance the relationship between the consumer and the product, brand and
company. Our goal is to define the neural basis of behaviors that are of specific interest to
strategic business decision making, as well as of generic interest to the field of
neuroscience. We are not interested in telling companies what people think about their
products, but rather how they think. Our focus is decidedly from the consumer
perspective with the direct intent to influence the behavior of companies, rather than
consumers."

Or, as the company said a bit more directly in a 2002 news release: "The Thought
Sciences team uses functional Magnetic Resonance Imaging (fMRI), a safe and non-
invasive technique, to identify patterns of brain activity that reveal how a consumer is
actually evaluating a product, object or advertisement. Thought Sciences marketing
analysts use this information to more accurately measure consumer preference, and then
apply this knowledge to help marketers better create products and services and to design
more effective marketing campaigns."

Winning advertising approaches spark activity in the medial prefrontal cortex. This shows
an instinctive identification with a brand or product. There may be interest and desire for
a product if activity appears elsewhere in the brain, but not the same unbridled
identification. Or at least that's the theory.

Says Gary Ruskin of the Portland, Oregon-based Commercial Alert, "It sounds like
something that could have happened in the former Soviet Union, for purposes of behavior
control. Yet it is happening right here in America."

Atlanta-based BrightHouse maintains a close relationship with neighboring Emory

University, and is sponsoring research there.

Commercial Alert has seized on the BrightHouse-Emory relationship to request the U.S.
government investigate the research at Emory and, if a finding is reached that the
research violates federal ethical research guidelines, debar the university from receiving
any federal funds.

"The ethical basis for this research is not readily apparent," Ruskin writes in a December
letter to the U.S. Office for Human Research Protections. "According to news accounts, it
is being done at Emory through an institute that does market research for corporate
clients. Whatever its theoretical and hypothetical uses (and these are chilling for their
own reasons) in actual practice it most likely will be used directly by these corporations
to push products that are implicated in disease and human suffering and that impose great
costs upon individuals, families and the society at large."

Clear Channel - Poor Character

Believe it or not, you own the airwaves.

Public servants at the U.S. Federal Communications Commission (FCC) give licenses to
major for-profit corporations.

For free. It's like a license to print money.

In return, all that we ask -- and certainly we should ask for more -- is that the corporation
be of good character.

One thing is for sure: Clear Channel, the behemoth of the airwaves, is anything but a
corporation with good character, no matter how you define it.

So, earlier this year, in a desperate, yet public-spirited move, Jim Donahue of Essential
Information, the publisher of Multinational Monitor, petitioned the FCC to deny renewal
of broadcast licenses for 63 radio stations owned by Clear Channel Communications.

"The FCC is required by statute to deny applications for license renewal if a licensee
exhibits poor character," Donahue says. "In the three years since Clear Channel became
the largest holder of station licenses in the nation, it has demonstrated that it lacks the
requisite character to hold broadcast licenses."

Donahue says that Clear Channel had compiled a record of "repeated law-breaking."

"Clear Channel and its subsidiaries have violated the law on 36 separate occasions over
the last three years, demonstrating its poor character," says Donahue. "Clear Channel is
not qualified to hold a broadcast license under the FCC's own character rules."

Donahue released a report documenting Clear Channel's illegal activities, including:

• Misleading the public about the rules for radio contests, including its "So You
Want to Win 10,000" contest which offered a prize of "10,000" to listeners who
could accurately answer 10 questions -- without informing the audience that the
prize was 10,000 Italian lira (or $53), not $10,000;
• Deceptive advertising;
• Broadcasting conversations without obtaining permission of the second party to
the conversation;
• Broadcasting obscene and indecent material during daylight hours when children
are likely listening;
• Illegally taking operational control of a radio station;
 • Repeatedly flouting the rules pertaining to the testing of the emergency alert
system, maintenance of station logs, and antenna construction;
• Conviction for animal cruelty in violation of state law for the purpose of
promoting an on-air personality;
• Pleading guilty to criminal mischief in violation of state law for the purpose of
promoting an on-air personality;
• Disturbing the peace in violation of state law for the purpose of promoting an on-
air personality;
• Defacing public property in violation of state law for the purpose of promoting an
on-air personality; and
• Falsely causing a public emergency to be reported for the purpose of promoting
an on-air personality.

On September 3, 2003, FCC Chair Michael Powell stated on C-SPAN that Clear Channel
"may have concentrated too much" after Congress enacted the 1996 deregulation law and
that "there may be issues associated with that company" which the FCC should consider
scrutinizing.

But Powell did nothing. And neither did the FCC.

All talk, no action.

Diebold - Pulling Its Own Political Levers

If you were going to involve a private company in any way in the voting process, what
qualities would you insist the company display?

Political neutrality? Demonstrated ability to maintain security? Respect for the

democratic process?

Meet Diebold, a North Canton, Ohio-based company that is one of the largest U.S. voting
machine manufacturers, and an aggressive peddler of its electronic voting machines.

In 2003, Diebold has managed to demonstrate that it fails any reasonable test of
qualifications for involvement with the voting process. Its CEO has worked as a major
fundraiser for President George Bush. Computer experts revealed serious flaws in its
voting technology, and activists showed how careless it was with confidential
information. And it threatened lawsuits against activists who published on the Internet
documents from the company showing its failures.

According to Diebold, 33,000 of its voting machines are in use across the United States.

Computer scientists have sounded alarm bells about such technologies, warning that they
are open to abuse. Simply maintaining a printed copy of each vote would alleviate much
of the potential for trouble, they say, but Diebold rejects this call.
In July, Diebold announced that Maryland had entered a $55.6 million contract with the
company to purchase 11,000 electronic voting machines, making Maryland the first state
in the United States to begin implementation of state-wide touch-screen voting systems.

Soon after, researchers at Johns Hopkins and Rice Universities issued a study that found
Diebold's voting system "far below even the most minimal security standards applicable
in other contexts." Voters, they said, "without any insider privileges, can cast unlimited
votes without being detected by any mechanisms within the voting terminal." They found
outsiders might be able to tamper with election results as they are uploaded over the
Internet or by other means.

This report prompted Maryland to hire consultants SAIC to review the issue. A
subsequent SAIC report noted that the Hopkins study explicitly looked only at computer
source code and did not consider some other protections built into the Diebold system.
Nonetheless, SAIC agreed with the essential conclusions of the Hopkins study, finding
that "several high-risk vulnerabilities" in the Diebold system could be exploited to
undermine the "accuracy, integrity and availability of election results."

As the Maryland review was underway, Ohio was holding a hyper-competitive

qualification process to see which companies should have the rights to sell voting
machines to Ohio counties.

Then, in August, the Cleveland Plain Dealer reported that Diebold CEO Walden O'Dell
was actively involved in fundraising for George Bush's re-election. O'Dell attended a
meeting of Bush Rangers and Pioneers -- those who raised at least $100,000 for the Bush
campaign -- and then sent letters to potential contributors inviting them to a $1,000-a-
plate Bush fundraiser at his mansion in a Columbus suburb.

About this revelation, Ohio Secretary of State Ken Blackwell, a Republican, remarkably
told the Plain Dealer: "Let me put it to you this way: If there was one person uniquely
involved in the political process, that might be troubling. But there's no one that hasn't
used every legitimate avenue and a bit of leverage that they could legally use to get their
product looked at. Believe me, if there is a political lever to be pulled, all of them have
pulled it."

In September, Blackwell certified Diebold as one of the companies eligible to sell

machines in Ohio, though the state subsequently raised issues about the company's
security.

Meanwhile, Seattle-based activist Bev Smith had been devoting long hours to
investigating Diebold and electronic voting machines. (She's got a book on the sordid
story, available on the Internet at www.blackboxvoting.org) Early in 2003, she discovered
an ftp site on the Internet that contained 40,000 Diebold documents. The vaunted security
company had left available to anyone who looked thousands and thousands of
documents, including internal e-mail that acknowledges flaws in its voting systems. The
documents also contained personal information on hundreds of thousands of Texans,
Smith reports.

Smith put the documents on her web site, and they were soon copied by other activists
and placed elsewhere on the web.

This upset Diebold. A lot.

The company's lawyers sent cease-and-desist letters to more than a dozen Internet Service
Providers and universities, demanding that they take down the webpages with the
documents and even that they disable hyperlinks to pages with the documents. Posting
the material, Diebold argued, infringed on its copyright.

In November, Representative Dennis Kucinich, D-Ohio, posted some of the documents

on his official website.

In the wake of the Kucinich action and litigation conducted by the Electronic Frontier
Foundation (EFF), Diebold withdrew its cease-and-desist letters.

"Instead of paying lawyers to threaten its critics, Diebold should invest in creating
electronic voting machines that include voter-verified paper ballots and other security
protections," says EFF Legal Director Cindy Cohn.

The company's strategy of aggressively claiming copyright protections clearly backfired,

drawing much more attention to the underlying issue of the security of the firm's
machines.

As the Monitor was going to press, Diebold announced "a complete restructuring of the
way the company handles qualification and certification processes for its software,
hardware and firmware."

"We are committed to improving the effectiveness and efficiency of the procedures we
employ to address certification issues, and to communicate with the respective governing
and certification authorities and our customers," says Bob Urosevich, president of
Diebold Election Systems.

Halliburton - The Cheney-Industrial Complex

Sometimes corporate practices are so outrageous, they seem ripped from the pages of a
Gabriel Garcia Marquez novel.

Take Tyco's Dennis Kowzlowski spending millions of shareholders' money on an

extravagant party for his wife, complete with an ice replica of Michaelangelo's David,
with vodka spurting through David's penis.

Or take Halliburton.
After the first Gulf War, then-Secretary of Defense Dick Cheney hired Brown & Root to
conduct a crucial study on outsourcing of military operations.

Brown & Root would eventually be merged into Halliburton.

So would Dick Cheney.

In 1995, Cheney took over as Halliburton CEO. The company's military contracts
doubled during the five years he headed the company. Reports from the General
Accounting Office, the Congressional research arm, would eventually charge the
company with cost overruns.

But that was nothing compared to what would happen after Cheney returned to
government, as one of the most powerful vice presidents in U.S. history. Cheney still
receives annual deferred compensation payments from Halliburton, of more than
$150,000 a year.

In 2001, Halliburton subsidiary Kellogg Brown & Root won the U.S. Army's third
Logistics Civil Augmentation Program (LOGCAP) contract. LOGCAP contracts establish
an ongoing relationship between the army and the contractor, which supplies an array of
support for field operations -- including even combat support -- as the Army requests it.
The contract is "cost-plus," with the contractor paid a percentage of expenditures on each
"task order" as profit. According to the Center for Public Integrity, Halliburton pulled in
more than $2 billion in contract work under the LOGCAP contract as of September 2003.

In March 2003, the Army placed five task orders worth up to $7 billion with Halliburton
under the LOGCAP contract. Because these orders were placed under the rubric of the
LOGCAP contract, they were no-bid, sole-source arrangements -- meaning no other
company had the right to bid on them, and the Army is relying on only one company to
perform the requested operations.

This contract award, issued in what were at best murky circumstances -- its existence
wasn't known publicly for two weeks, and it took more than a month before the Army
revealed the actual scope of the contract -- raised a few eyebrows, even in Washington,
D.C.

Representatives Henry Waxman, D-California, and John Dingell, D-Michigan, the

ranking members of the House of Representatives Committee on Government Reform
and Commerce Committee, respectively, began a series of correspondence with Pentagon
and White House officials over the matter.

In April, the Army Corps of Engineers offered an initial defense of the contract award.

"Competition for initial performance of portions of the Central Command's (CENTCOM)

classified contingency support planning was not possible due to the requirements of the
CENTCOM mission," wrote Lt. General Robert Flowers. "To invite other contractors to
compete to perform a highly classified requirement that [Halliburton] was already under a
competitively awarded contract to perform would have been a wasteful duplication of
effort. It would also have delayed CENTCOM's war planning."

One of the tasks assigned to Halliburton was to import oil into Iraq, while the country's
oil operations are repaired.

Halliburton has been charging very high prices for the oil, with some analysts saying the
charges amount to "highway robbery."

Halliburton flatly denies any wrongdoing. "The claims made about our fuel delivery
mission in Iraq are inaccurate, misleading and unwarranted," says company CEO Dave
Lesar.

For oil imported from Kuwait, the company is charging $2.64 a gallon. According to
evidence uncovered by Waxman and Dingell, this fee includes $1.17 to purchase the
gasoline in Kuwait -- during a period when the spot price in the Middle East averaged
$.71 a gallon. The company is spending $1.21 to transport the gasoline from Kuwait to
Iraq, even though experts told Waxman and Dingell the cost should be only about one-
fifth that level. And, Halliburton is tacking on a $.26 charge for markup and "other" costs
-- even though its profits are paid on top of its expenses.

In contrast to the Halliburton $2.64 price, the Iraqi state oil company, SOMO, is
importing gasoline from Kuwait -- using the same transportation and distribution
mechanisms -- for $.96 a gallon. Halliburton argues that its charges are higher because it
cannot engage in the long-term contracting that SOMO can. "KBR is bound by guidelines
in its contract to negotiate fuel prices on a short term basis only," the company said in a
statement, "from suppliers acceptable to the US Army Corps of Engineers. Contractually,
KBR has been prevented from procuring fuel contracts for longer than a 30-day period.
In addition, all services and their associated costs to execute the mission are subject to the
same 30-day procurement limit including trucks, trailers, depots and labor. Simple
economics dictate that companies who are not bound by these guidelines, and are able to
negotiate price on a long-term contract basis, can negotiate lower prices."

Halliburton is importing hundreds of millions of gallons of gasoline, so "literally

hundreds of millions of taxpayer dollars are at stake," note Waxman and Dingell in a
December letter to National Security Adviser Condoleeza Rice.

In December, a Pentagon audit agency found that Halliburton had overcharged the Army
$61 million for gasoline, but that the profits had been accrued by a Kuwaiti
subcontractor, not by Halliburton.

Halliburton continues to maintain that it has not overcharged. Says a company statement,
"The Defense Contracting Audit Agency (DCAA) is conducting a routine audit and has
requested additional information from KBR [Halliburton's subsidiary]. There have been
no conclusions reached. ... It would not be appropriate to discuss the specifics of the
questions until our conversations with DCAA are complete."

HealthSouth - Getting Away Scot Free

It's a wonder, isn't it? The U.S. Attorney in Alabama gets 15 former top HealthSouth
executives to plead guilty and cooperate in the government's ongoing criminal case
against the company's founder and former CEO, Richard Scrushy.

It's a $2.7 billion fraud.

The government alleges that Scrushy was in charge. Fifteen of his underlings have pled
guilty -- but the company is not going to be held criminally responsible.

How did that happen?

Well, one answer might be this: Bob Bennett, the lawyer for HealthSouth, went to U.S.
Attorney Alice Martin earlier this year and turned over the store.

"At our first meeting, Mr. Bennett came in and said HealthSouth wanted to waive its
privileges," Martin told us. "He said, ëWe want to cooperate, and we want to do whatever
we can to help you determine who, what, when and why this fraud occurred. Here are my
telephone numbers, including my home number, and you call me directly, because I want
to make sure whatever you need gets done.'"

For his part, Bennett says he's trying to save the company.

"If you want to save a company for the benefit of the shareholders and the employees,
you have little choice but to cooperate," Bennett says. "We did not point fingers, but we
fully cooperated with them, and made as many arguments as we could that no legitimate
purpose would be served in indicting the company. The company has not been forced into
bankruptcy."

"Our full cooperation has given us a chance to make an argument to the government that
we come within the Thompson guidelines and the company shouldn't be indicted,"
Bennett says. "Nothing will be served by putting 4,000 people out of work in
Birmingham and 40,000 people out of work in the country and destroying what
everybody believes is a first rate health care company."

So far, 15 executives have pled guilty. Except for Scrushy. He's set up a web site to
declare his innocence. He didn't mind answering Mike Wallace's questions on "60
Minutes." But Scrushy refused to answer questions under oath before Congress.
Congressional investigators had some information about document destruction. Nobody
wants anything to do with that hot potato -- not Scrushy, not Martin, not Bennett. That
would sink the company, ý la Andersen.
At Scrushy's trial, there will be no Tyco-like video of an ice sculpture of Michelangelo's
David. But HealthSouth did erect a monument to Scrushy. In March of this year, a vandal
used spray paint to scrawl the word "thief" on the bronze statue of Scrushy outside a
HealthSouth building in downtown Birmingham. The statue was quickly cleaned.

When the case comes to trial, Scrushy says he will take the stand in his own defense.

The government should win a conviction.

But one question for federal prosecutors: How is it that 16 high level executives of
HealthSouth get criminally charged, but the corporation gets away scot free?

Inamed - Basic Questions Not Answered

Eleven years ago, the U.S. Food and Drug Administration (FDA) announced it was
pulling silicone breast implants from the market, leaving them available only to breast
cancer survivors who needed them for reconstruction or to women enrolled in limited
clinical studies.

The reason for the action, announced then-FDA Commissioner David Kessler, was that,
under the law, "these types of products have to be shown by their manufacturer to be safe
and effective before they may be distributed and used. ... The burden of proof is an
affirmative one and it rests with the manufacturer. In this instance, the manufacturers
have not shown these devices to be safe."

Although silicone breast implants had been on the market for three decades, Kessler said,
"the list of unanswered questions is long."

"We do not know how long these devices will last," he said.

"We know that some of these implants will rupture, but we don't know how many of them
will rupture," he pointed out.

And, he said, "We don't know whether there is any link between the implants and
immune-related disorders and other systemic diseases."

"Until these basic questions are satisfactorily answered, we cannot approve these
devices."

Fast forward to the present.

Dow Corning, the leading manufacturer of silicone implants more than a decade ago, is in
bankruptcy.

Inamed, a California-based company, is now seeking marketing authorization from the

FDA for silicone breast implants.
More than a decade has passed since the FDA restricted sales of silicone implants, but
Inamed only submitted to FDA three years worth of data from a study projected to
continue for 10 years.

The company sells silicone implants in Europe and more than 60 countries worldwide,
but it hasn't collected any safety information from women in those countries that is of
high enough quality to submit to FDA.

As a result, many of the questions Kessler identified remain unanswered, and most of
what is known is frightening.

• Painful breast hardening which can lead to deformity, dead tissue, loss of nipple
sensation, infections and rashes are common complications from silicone
implants.
• Rupture rates leading silicone to spread throughout the body are extremely high
over the long term -- occurring in more than half or two thirds of women after 10
years, according to two studies.
• It remains uncertain whether there is any link between the implants and immune-
related disorders and other systemic diseases, though there is worrying evidence
that there is a connection.

Asked about these matters, Inamed spokesperson Peter Nicholson says only that the data
Inamed submitted to the FDA is available on the web, and the company will not comment
further.

Inamed's data are indeed striking.

Even though the company reported on only three year's test results, the numbers show
significant short-term problems. After just three years, one in five augmentation patients
and almost half of reconstruction patients required additional surgeries.

Inamed's data did not show particularly high rupture rates during the three-year period of
study -- in no small part because it only provided MRIs to about a third of the women in
the study, and silicone rupture can only be detected through MRIs.

Inamed's data were replete with other flaws. For example, the company misleadingly
claimed a low incidence of lactation problems, by comparing the incidence of problems
to the overall population of women receiving augmentation, not just those who tried to
breastfeed.

These and other problems were pointed out by advocacy groups at an FDA advisory
committee hearing convened in October to issue a recommendation on whether Inamed's
marketing application should be approved.

The advisory committee also heard heart-wrenching testimony from more than two dozen
women with silicone implants. They described the extreme pain and life-changing
problems they have suffered as a result of silicone implants in terms that could fail to
move only those with hardened hearts. And several highlighted an important economic
component -- health insurance plans generally do not cover surgeries to remove implants
for augmentation patients, placing a huge financial burden on sick women.

Nonetheless, the advisory panel, a quarter of whom were plastic surgeons, and at least
one of whom was swayed by empty promises from Inamed to do ongoing follow-up
research, voted 9-6 to recommend the FDA approve Inamed's request.

The failure for a larger majority to support the application leaves it awkward for FDA to
recommend approval.

Inamed's chances of approval worsened soon after, when Dr. Thomas Whalen, the non-
voting chair of the advisory panel, in a highly unusual move, sent a letter to FDA
commissioner Mark McClellan. Whalen called the panel decision "misguided,"
emphasizing the lack of data on long-term safety. He felt "morally compelled" to urge the
FDA to deny approval, he told reporters.

Now the decision rests with FDA Commissioner Mark McClellan.

The law hasn't changed since the time the FDA ordered silicone implants off the market.
The agency faces the same choice it faced in 1992, with little new information -- and
much of the recent information indicating the implants' hazards.

If the FDA upholds its obligation under the law to approve products only that afford "a
reasonable assurance of safety," it has no choice but to deny approval.

Given the agency's pro-corporate proclivities, however, it is unclear how it will ultimately
rule on Inamed's application.

What is clear is that Inamed never should have sought approval for a medical device with
such poor safety data.

Merrill Lynch - Don't Trust Them

Remember the Merrill Lynch analysts who told their customers, "Trust me, buy this
stock, this stock is highly rated?"

And then they would turn around and e-mail their buddies, "Hey, this stock is crap, why
are we recommending this to our customers?"

New York Attorney General Eliot Spitzer got ahold of the e-mails, brought an
enforcement action, went before the television cameras, and said the case was settled,
with Merrill paying $100 million.

But Spitzer did not get Merrill to admit wrongdoing.

And he signed an unenforceable agreement with the company.

He later acknowledged that had he forced Merrill to admit wrongdoing, the firm would
have gone kaput.

Just like Arthur Andersen.

Well, Spitzer should have put the company out of its misery.

Because they keep coming back and messing up.

And prosecutors keep letting them off the hook.

Case in point: Earlier this year, Merrill Lynch offered up three former executives to
federal prosecutors and in return saved the company from the full wrath of the criminal
law.

After being stung by defense bar criticism over its death penalty prosecution of Arthur
Andersen, federal prosecutors have shown remarkable flexibility in dealing with
corporate defense counsel who insist on working out global settlements by offering up
individual executives in exchange for leniency for the corporation.

These settlements usually come in the form of deferred prosecution agreements.

But with Merrill Lynch, Justice Department officials offered a new wrinkle -- no
prosecution in exchange for oversight.

Merrill's sacrificial victims:

• Daniel Bayly, 56, of Darien, Connecticut, the former head of the firm's Global
Investment Banking division;
• James A. Brown, 51, of Darien, Connecticut, the head of Merrill Lynch's Strategic
Asset Lease and Finance group; and
• Robert S. Furst, 42, of Dallas, Texas, the Enron relationship manager for Merrill
Lynch in the investment banking division.

The indictment of these executives alleges that Enron and Merrill Lynch engaged in a
year-end 1999 deal involving the "parking" of Enron assets with Merrill Lynch.

That arrangement allowed Enron to enhance fraudulently the year-end 1999 financial
position that it presented to the public and used to pay its executives unwarranted
bonuses.

The indictment alleges that Bayly, Brown and Furst knowingly participated in this illegal
scheme, along with co-conspirators Andrew S. Fastow, Enron's then-chief financial
officer, and Daniel Boyle, then-vice president of Global Finance at Enron.
Fastow and Boyle were both charged in a May 2003 indictment, and Fastow's case is
scheduled for trial in April 2004.

Federal prosecutors said that "Merrill Lynch accepted responsibility for the conduct of its
employees" and that "Merrill Lynch also agreed to cooperate fully with the continuing
Enron investigation and to implement a series of sweeping reforms addressing the
integrity of client and third-party transactions."

An independent monitor, along with an outside auditing firm, will monitor Merrill
Lynch's compliance with these new reforms, federal officials said.

For its part, Merrill happily said in a statement that, "In this matter, Merrill Lynch, as
always, has cooperated fully with regulators and required all of its employees to
cooperate as well. Those who did not were terminated. As part of its effort to cooperate,
Merrill Lynch informed the SEC about one of the transactions at a time when the firm
believed the commission was unaware of the transaction."

Safeway - Unhealthy Demands

Wal-Mart is coming! Wal-Mart is coming!

That's the industry emergency that Safeway, one of the largest U.S. grocery chains, is
using to justify its anti-worker drive in California.

Safeway is leading the charge to demand givebacks from striking and locked out grocery
workers in Southern California. Along with Albertsons and Ralphs (Kroger's), Safeway's
Vons and Pavilion stores are asking employees to start paying for a major chunk of their
health insurance. Under the companies' proposals, workers and their families will lose
$4,000 to $6,000 a year in health insurance benefits.

The companies' ultimate goal, says Jill Cashen of the United Food and Commercial
Workers (UFCW), which represents the grocery workers, is "effective elimination of
health benefits in their stores, and ultimately in the entire industry."

Refusing to accept the companies' concessionary demands, Safeway workers went on

strike in October. In a show of corporate solidarity, Albertsons and Ralph's then locked
out their employees. Safeway, Kroger's and Albertsons control 60 percent of the Southern
California grocery market.

As the labor dispute has dragged out into its third month, the striking and locked out
workers have seen their strike pay cut -- down to $100 a week -- and their health benefits
run out.

But the workers "will not be starved into giving up their health insurance," says Cashen.
Safeway and the other chains' justification for their concessionary demands is the threat
posed by non-union grocery sellers, foremost among them Wal-Mart.

"There is a lot of uncertainty surrounding this negotiation because of the dramatic

changes we have seen and experienced in our industry," according to Vons President Tom
Keller. "We are seeing a significant influx of non-union, discount stores and unionized
independent operators with union contract agreements that provide lower wages and
significantly fewer benefits than we provide. These formats pay much lower labor
expenses than we do. This gives them an unfair advantage over other union operators."

But while Wal-Mart is certainly a serious threat to economic justice and worker well-
being (see "Corporations Behaving Badly: The Ten Worst Corporations of 2001,"
Multinational Monitor, December 2001), the Wal-Mart menace is not the real reason for
Safeway's demands.

The real reason is simply the company's greed, and its desire to offset a series of bad
business moves.

Wal-Mart isn't yet even in the Southern California market. The company has announced
plans to open 40 supercenters throughout California; analysts estimate that would give
Wal-Mart 1 percent of the regional market.

Not exactly a big enough threat to explain why Safeway and the others would weather a
strike and lock-out that is costing them hundreds of millions of dollars in lost earnings.

Safeway remains hugely profitable, but it has suffered setbacks in recent years. But these
are due to its own missteps, not high health costs or competition from non-union, low- or
no-insurance competitors.

As Hope Crifo, a consultant to the AFL-CIO's Office of Investment, points out, Safeway
competes with Wal-Mart at less than a fifth of its stores. Kroger competes with Safeway
at more than half of its stores. Yet Kroger is doing better than Safeway. For all grocery
chains combined, net profits are at historically high levels.

Crifo points to a range of missteps at Safeway that explain the company's difficulties:

• A series of poorly planned, overpriced acquisitions;

• Mistimed stock repurchases;
• Underinvestment in store redesign and upkeep;
• Generally poor management and failure to deliver on promised marketing and
financial targets.

The stakes are high in the Safeway fight. If unionized companies that together dominate
the local market can shunt their responsibility to provide healthcare benefits, then the
prospect of the service economy in the United States providing good jobs that can support
working families is bleak indeed.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Bad Apples in a Rotten System:

The 10 Worst Corporations of Arthur Andersen
2002 British American Tobacco
Catepillar
Citigroup
by Russell Mokhiber and Robert Weissman
Dyncorp
M&M/Mars
2002 will forever be remembered as the year of
Proctor & Gamble
corporate crime, the year even President George Bush
Schering Plough
embraced the notion of "corporate responsibility."
Shell Oil
Wyeth
While the Bush White House has now downgraded its
"corporate responsibility portal" into a mere link to
uninspiring content on the White House webpage, and although the prospect of war has
largely bumped the issue off the front pages, the cascade of corporate financial and
accounting scandals continues.

Consider this partial list of developments in the United States just in the month following
the November 5 elections:

• The Securities and Exchange (SEC) told Goldman Sachs that it was facing
potential charges for steering preferred customers to highly profitable Initial
Public Offering (IPO) opportunities;
• WorldCom disclosed that its falsely claimed profits may exceed $9 billion;
• Adelphia sued its accountant, Deloitte & Touche, saying it was partially
responsible for Adelphiaís financial improprieties;
• A shakeup in Tenet Healthcare management followed revelations that Medicare is
investigating the company for improper billing;
• Harvey Pitt resigned as chair for the SEC;
• Unsealed court documents show Mastercard and Visa collaborated to discourage
use of rival debit cards;
• Five Wall Street firms, including Goldman and Citigroup, were hit with $8.3
million in fines for failing to save e-mails desired by state and federal regulatory
authorities;
• The Grubman e-mails became public, indicating a leading Citigroup analyst
altered his assessment of AT&T at the behest of Citiís CEO, and in exchange for
efforts to get the analystís kids into an elite nursery school;
• The SEC commenced an investigation of Tenet, concerned about high levels of
stock trading in advance of announcements that affected share price;
• Media accounts reported an expected $1 billion in fines to be levied against Wall
Street firms for purposefully presenting overoptimistic analysis of stocks to the
public, with Citigroup reported to be hit with a $500 million fine;
 • The Sunday Times of the United Kingdom reported that Goldman Sachs internal
e-mails show analysts were privately concerned about the future of telecom firms,
but did not lower their public ratings of the firms;
• The SEC took action against Raytheon, Secure Computing and Siebal Systems for
providing "market moving" information to analysts and investors, without
conveying the same information to the public;
• An ex-Enron manager pled guilty to filing false tax returns in connection with a
controversial Enron partnership;
• An insurer lawsuit against J.P. Morgan, alleging J.P. Morgan deceived the insurers
into taking on Enron risk, commenced in court;
• William Webster indicated he will resign as chair of the newly formed accounting
board before its first meeting in January;
• El Paso Corporation pled its case before the Federal Energy Regulatory
Commission, arguing it did not withhold energy from California - helping
precipitate the California energy crisis - as an administrative judge earlier found;
and
• Mattel agreed to a $122 million settlement of a shareholder suit related to false
statements the company allegedly made during its purchase of the Learning
Company.

We easily could have filled our 10 worst list with some of the dozens of companies
embroiled in the financial scandals.

But we decided against that course.

As extraordinary as the financial misconduct has been, we didnít want to contribute to the
perception that corporate wrongdoing in 2002 was limited to the financial misdeeds
arena.

We asked Lee Drutman and Charlie Cray from Citizen Works to review the 2002
accounting and financial malefactions in a separate article, which appears after this one.

For our 10 Worst Corporations of 2002 list, we included only Andersen from the ranks of
the financial criminals and miscreants. Andersenís assembly line document destruction
certainly merits a place on the list. (Citigroup appears on the list as well, but primarily for
a subsidiaryís involvement in predatory lending, as well as the companyís funding of
environmentally destructive projects around the world.)

As for the rest, we present a collection of polluters, dangerous pill peddlers, modern-day
mercenaries, enablers of human rights abuses, merchants of death, and beneficiaries of
rural destruction and misery.

The overarching picture that emerges from these profiles: Not only are Enron,
WorldCom, Adelphia, Tyco and the rest indicative of a fundamentally corrupt financial
system, they are representative of a rotten system of corporate dominance.
ARTHUR ANDERSEN
Teaching A Lesson

It may just be that the criminal prosecution of Arthur Andersen will be the last such
prosecution of a large institution caught up in this yearís corporate fraud scandals.

The criminal prosecution and conviction of Andersen (the company was fined $500,000)
on obstruction of justice charges was an effective death sentence for the giant accounting
firm.

The lesson it taught to federal prosecutors: donít indict a big accounting or financial firm
unless you want to kill it off and throw out of work thousands of employees.

In an indictment filed earlier this year, federal officials alleged that on October 23, 2001,
Andersen partners assigned to the Enron audit launched "a wholesale destruction of
documents" at Andersenís offices in Houston, Texas.

"Andersen personnel were called to urgent and mandatory meetings," the indictment
alleged. "Instead of being advised to preserve documentation so as to assist Enron and the
SEC, Andersen employees on the Enron management team were instructed by Andersen
partners and others to destroy immediately documentation relating to Enron, and told to
work overtime if necessary to accomplish the destruction."

During the next few weeks "an unparalleled initiative was undertaken to shred physical
documentation and delete computer files," according to the indictment.

"Tons of paper relating to the Enron audit were promptly shredded as part of the
orchestrated document destruction," the indictment alleges. "The shredder at the
Andersen office at the Enron building was used virtually constantly and, to handle the
overload, dozens of large trunks filled with Enron documents were sent to Andersenís
main Houston office to be shredded. A systematic effort was also undertaken and carried
out to purge the computer hard-drives and e-mail system of Enron-related files."

And the feds alleged the shredding wasnít isolated to Houston, as Andersen claimed.

Federal officials said that instructions were given to Andersen personnel working on
Enron audit matters in Portland, Oregon, Chicago and London.

The shredding did not stop until November 8, 2001, when the SEC served Andersen with
the anticipated subpoena relating to its work for Enron.

Only in response to the subpoena did Andersen send out a "no more shredding" message,
because the firm had been "officially served" for documents.
Federal law makes it a crime for anyone to "corruptly persuade" another person to
destroy documents "with intent to impair" the use of the documents "in an official
proceeding."

Many white collar defense lawyers interpret this to mean that document destruction may
occur right up until, or right before, a subpoena arrives.

For example, in a 1994 article in the Cardozo Law Review titled "When Bad Things
Happen to Good Companies: A Crisis Management Primer," Harvey Pitt, the outgoing
chair of the Securities and Exchange Commission, wrote:

"Ask executives and employees to imagine all their documents in the hands of a zealous
regulator or on the front page of the New York Times. Ö Each company should have a
system for determining the retention and destruction of documents. Obviously, once a
subpoena has been issued, or is about to be issued, any existing document destruction
policies should be brought to an immediate halt."

At a press conference earlier this year, Pitt was asked about this advice.

"Whatever advice anyone gives as a private lawyer - and I stand by the advice I gave, I
might add - when you are representing the public interest, you have to put on your public
interest hat and make absolutely certain that the publicís interest is protected," Pitt said.

At the Justice Department press conference announcing the indictment against Andersen,
Deputy Attorney General Larry Thompson was asked about Pittís advice.

"I know Mr. Pitt," Thompson said. "Heís a fine lawyer. And I havenít read the article that
youíre talking about, but I would direct your attention to 18 USC 1512(e), which makes it
clear that an official proceeding does not have to be pending in order for someone to
come within the ambit of the obstruction of justice statute."

Richard Favretto is a partner at Mayer, Brown, Rowe & Maw and one of Andersenís
criminal defense lawyers.

Favretto hand delivered a six-page letter to Michael Chertoff, the head of the criminal
division, on March 13, 2002, the day before the indictment was announced.

In it, Favretto argues that there is no support for the allegation that the firm believed that
"any destroyed documents would be used in an ëofficial proceeding.í"

"During the last week, counsel for the firm repeatedly have asked Justice Department
prosecutors to identify the partners or other Andersen personnel who acted ëcorruptlyí
and had the requisite criminal intent to withhold documents from an ëofficial
proceeding,í" Favretto wrote. "The Departmentís lawyers repeatedly have declined to
provide a meaningful response to this critical question."
But this was a grave miscalculation on Andersenís part.

"Under that provision of the obstruction statute, if a person acts - knowingly - to

encourage or cause a person to destroy potential evidence, it doesnít matter that the
official proceeding has not yet been initiated," says Susan Koniak, a professor of law at
Boston University Law School. "What matters is that the encouragement to destroy was
given with the intent to keep the material from an official proceeding."

"If the person giving the instruction or encouragement to destroy could see that an official
proceeding was coming and encourages in advance, he comes under the terms of the
statute and may be prosecuted for his conduct," she says.

Andersen was convicted in June in a controversial decision by a jury. The conviction

effectively put out of business the accounting firm and threw out of work most of its
26,000 person workforce.

BRITISH AMERICAN TOBACCO

"Corporate Mendacity"

"Some say that ëtobacco and responsibilityí just donít go together - that a business canít
be responsible if its products can harm people."

So writes Martin Broughton, chair of British American Tobacco (BAT), the second largest
tobacco multinational in the world, just behind Philip Morris.

Rejecting that view, Broughton writes in BATís Social Report 2001/2002 that, "We have
much to offer in helping address the problems that concern our stakeholders, including
supporting soundly-based tobacco regulation and reducing the impact of tobacco
consumption on public health."

Broughton raises an interesting philosophical question about how a tobacco company

could be "responsible." Unfortunately, as far as BAT is concerned, the question is only
theoretical. The company continues to engage in a series of egregious practices, made all
the worse because they involve the pushing of an addictive and deadly product.

BATís social report itself represented a major public relations ploy by the company,
which along with the rest of Big Tobacco is eager to distance itself from what the
companies acknowledge to be the bad old days - when they denied any harms to their
product and recklessly promoted them.

As they have throughout history, the companies, with BAT and Philip Morris at the helm,
are positioning themselves to accept minimal marketing and product restrictions - while
their cutting-edge activities remain unhampered.

In advance of the release of the Social Report, Action on Smoking and Health UK (ASH
UK) issued a counter report, "British American Tobacco - The Other Report to Society."
Anticipating Broughtonís claim, the ASH UK report stated, "The problem with BAT is
not only that it makes a deadly and addictive product. We judge BAT by how it behaves,
its business practices, the directions it takes and its truthfulness. We find BAT to be
irresponsible because of the way it conducts its business, not simply because of what it
makes."

The ASH report notes that it took until 1998 before BAT acknowledged smoking caused
any harm at all. "Up until then they had undertaken an elaborate public relations exercise
to maintain a ëcontroversyí about data that had convinced most respectable scientists
some 40 years earlier that smoking was a cause of serious diseases like cancer. This is
perhaps the greatest exercise in corporate mendacity the world has ever known and one of
the most serious corporate crimes of the twentieth century. No admission has ever been
made, no apology has been forthcoming and no one has lost their job."

But the report does not condemn the company only for past practices. Among many other
indictments, it documents how:

• BATís worldwide programs supposedly designed to prevent youth smoking

actually make the practice more attractive to kids (by suggesting smoking is an
adult activity), while diverting attention from the issue of getting adult smokers to
quit. (BAT says it "does not want children to smoke" and hopes its programs "will
have a positive effect on preventing youth smoking.")
• BAT continues to deny the harmful health effects of second-hand smoke. (BAT
says "there is no convincing evidence that ETS [environmental tobacco smoke or
second-hand smoke] is a cause of chronic diseases," and the company advocates
indoor ventilation instead of smoke-free areas.)
• BAT has worked to oppose efforts at the World Health Organization to adopt a
strong Framework Convention on Tobacco Control, including a recommended
ban on tobacco advertising and promotion. (BAT says that, while it accepts that
tobacco advertising should be subjected to special rules, existing regulations
already go too far.)

Perhaps the most explosive news to emerge about BAT this year came from Australia,
where a judge found the company to have engaged in an elaborate, carefully considered,
company-wide document-destruction scheme.

In a case filed against BAT by a dying smoker named Rolah Ann McCabe, Judge
Geoffrey Eames found that BAT systematically destroyed key documents including
reports, memoranda and other materials specifying what the company knew about the
addictiveness of nicotine and when it knew it, what it knew about health impacts of
smoking and when it knew it, and matters relating to marketing cigarettes to children,
among other topics.

"The predominant purpose of the document destruction," the judge found, "was the denial
to plaintiffs of information which was likely to be of importance in proving their case, in
particular, proving the state of knowledge of the defendant of the health risks of smoking,
the addictive qualities of cigarettes and the response of the defendant to such
knowledge."

BAT defended, and continues to defend, the shredding on the grounds that the company
was not obligated to hold on to documents that may be useful to an opposing party in
some future litigation. But the judge stated that while corporations are not obligated to
store documents indefinitely, they are not free to destroy them in anticipation of future
litigation.

Finding the harm from the document to be unknowable and irreparable, the judge issued
a verdict in favor of McCabe without allowing BAT to mount a defense. The jury
awarded McCabe more than $350,000. Because McCabe was dying, and in an effort to
expedite the case, her attorneys agreed before the litigation that no punitive damages
would be sought. BAT appealed the decision.

As Multinational Monitor was going to press, the appellate court handed down a decision
reversing Judge Eamesí holding. The Court of Appeal ruled that, although BAT did
destroy vast troves of documents, it was not required to preserve them, or at least the
obligation was not such that the judge was justified in denying BAT the ability to mount a
defense. The appellate court said it did not offer judgment on whether BATís conduct
might be considered an effort to pervert justice. But it did effectively rule that BATís
actions were not wrongful in the way found by Judge Eames, and that some of BATís
internal documents were protected by attorney-client privilege, as the company had
claimed.

The case will now be considered on the merits of McCabeís claim for damages. Rolah
Ann McCabe died shortly before the appellate ruling. Her family intends to continue the
case.

CATERPILLAR
Total Devastation

There is total devastation, no whole standing house, as though someone has bulldozed a
whole community.

If anyone was in a house they could not have survived.

There is nothing but rubble and people walking around looking dazed.

There is a smell of death under the rubble.

These are the words of an Amnesty International delegate who entered Jenin refugee
camp in the occupied West Bank minutes after the Israeli Defense Forces (IDF) lifted the
blockade on April 17, 2002.
IDF forces that entered Jenin and Nablus brought tanks or bulldozers through roads, often
stripping off the front of houses.

In Hawashin and neighboring areas of Jenin refugee camp, 169 houses with 374
apartment units were bulldozed, mostly after the fighting had ceased.

As a result, more than 4,000 people were left homeless.

In both Jenin and in Nablus, there were instances where the IDF bulldozed houses while
residents were still inside.

The report found that IDF soldiers either gave inadequate warnings or no warnings before
houses were demolished and subsequently failed to take measures to rescue those trapped
in the rubble and prevented others from searching for them.

Amnesty International documented three such incidents leading to the deaths of 10

people. Six others on the hospital lists of those killed in Jenin were recorded as being
crushed by rubble.

This year, a group of university professors and students have organized Sustain (Stop
U.S. Tax-funded Aid to Israel Now).

One of its first campaigns is to pressure Caterpillar to stop selling house demolishers to
Israel.

Sustain points out that the Israeli Defense Forces have destroyed more than 7,000
Palestinian homes since the beginning of the Israeli occupation in 1967, leaving 30,000
people homeless.

Most home demolitions target civilians who have not been charged with any crime. They
are conducted as collective punishment or to clear the way for illegal Israeli settlements
on Palestinian land.

The Fourth Geneva Convention prohibits collective punishment and the destruction of
personal property in occupied lands.

The Caterpillar D-9 bulldozer is used by the Israeli military to carry out its program of
home destruction.

The Sustain activists are demanding that Caterpillar uphold its own code of conduct by
halting sales to the Israeli Defense Forces until civilian home demolitions cease.

The Caterpillar code states: "As a global company we can use our strength and resources
to improve, and in some cases rebuild, the lives of our neighbors around the world."
"How can Caterpillar claim to rebuild lives when its products are used to uproot and
punish civilians?" says Afifa Ahmed, a Sustain activist.

The Sustain campaign will conduct coordinated national pickets and direct action at
Caterpillar manufacturing and sales sites, in addition to street theater and other creative
tactics.

Caterpillar has said in response to the campaign that it never intended its machinery to be
used as the IDF uses them. The company declined to respond to requests for comment
from Multinational Monitor. In May, a spokesperson told a British paper, the Leicester
Mercury, "Caterpillar shares the worldís concern over unrest in the Middle East. While
we have compassion for those affected by the escalating political strife, we have neither
the right nor the means to police customer use of Caterpillar equipment."

But as Georgetown University professor Mark Lance points out in a letter to Caterpillar
CEO Glen Barton, "you know precisely how your equipment is being used."

"You are therefore knowingly facilitating crimes and there is no way to avoid the
responsibility that comes with this," Lance writes.

CITIGROUP
Some Rich Bastardís Son

The New Yorker ran a cartoon this year showing four U.S. soldiers sitting around talking.
One says to the other three: "I just hope it doesnít turn out that weíre going after Saddam
to get some rich bastardís son into some school."

This is an apparent reference to Jack Grubman, the former Salomon Smith Barney
analyst.

Salomon is a unit of Citigroup.

Citigroup, formed by a 1998 merger of Travelers and Citibank, is the country largest bank
holding company.

In January 2001, Grubman wrote that he had a reason for upgrading AT&T stock -
Citigroup CEO Sanford Weill wanted him to upgrade it, because Weill was in a power
struggle and wanted AT&T CEO Michael Armstrongís help in unseating Weillís rival,
John Reed.

In one e-mail, Grubman wrote, that, in exchange for his assistance to Weill, Weill helped
him get his kids into an exclusive Manhattan nursery school. Grubman now says he was
fibbing in the e-mail.

Meanwhile, federal and state officials are investigating Citigroup and other investment
banks for recommending stock that they described internally as "crap."
And Citi faces hundreds of millions in fines.

And the media and public are focused on Grubmanís kids and the nursery school.

Not the subject of endless commentary is how Citigroup, the nationís largest banker, was,
at the same time, screwing the poor out of house and home.

Earlier this year, Citigroup Inc. was forced to pay $215 million to resolve Federal Trade
Commission (FTC) charges that Associates First Capital Corporation and Associates
Corporation of North America engaged in systematic and widespread deceptive and
abusive lending practices.

Citigroup acquired The Associates in November 2000, and merged The Associatesí
consumer finance operations into its subsidiary, CitiFinancial Credit Company.

The company engaged in subprime lending - the extension of loans to persons who are
considered to be higher risk borrowers.

The Associates was one of the nationís largest subprime lenders.

In 1999, the total amount of all outstanding loans in The Associatesí U.S. consumer
finance portfolio was approximately $30 billion.

In March 2001, the FTC sued The Associates, alleging that it had violated the FTC Act
through deceptive marketing practices that induced consumers to refinance existing debts
into home loans with high interest rates and fees, and to purchase high-cost credit
insurance.

The complaint also named as defendants Citigroup and CitiFinancial, as successors to

The Associates.

The FTC also charged that The Associates engaged in deceptive practices designed to
induce borrowers unknowingly to purchase optional credit insurance products, a practice
known as "packing."

These insurance products were intended to cover the borrowerís loan payments in various
circumstances, such as death or illness, and the premiums were added to the principal
amount of the loan.

If the consumer noticed that the credit insurance products were being added to the loan,
The Associatesí employees used various tactics to discourage them from removing the
insurance, the complaint alleged.

The complaint also charged The Associates with additional deceptive practices and law
violations.
Citigroup says the problems at The Associates stem from the old regime, and that it is
acting to clean things up. "When we bought Associates we found certain unacceptable
practices that needed to be changed," said Citigroup President Robert Willumstad at the
time of the settlement with the FTC. "We are confident that todayís settlement provides
redress to those former Associates customers who were harmed. Weíre gratified this
matter is behind us."

"Since the acquisition of Associates in late 2000, we have implemented a series of

significant best practices throughout our consumer finance operation," said Willumstad.
"These reforms are grounded in our longstanding commitment to providing access to
credit to those who need it most while setting consumer protection standards that lead the
industry. Some of these, including our discontinuation of single premium credit insurance
on real estate-based loans, have driven industry-wide change. We also recently
announced enhancements to our sales practices and a substantial reduction in the
maximum points on real estate loans made at CitiFinancial branches from 5 to 3
percentage points. This reduction sets us apart from our competitors in the industry."

In a separate settlement this year, Citibank, a unit of Citigroup and the nationís largest
credit card issuer, was forced to pay $1.6 million to settle allegations brought by 26 state
attorneys general that it engaged in unfair and deceptive practices by telemarketing firms
that solicited business using Citibankís customer lists and encrypted credit card numbers.

"When a company sells its customer lists to telemarketers, it has some obligation to
protect these consumers from unfair and deceptive solicitations," said Illinois Attorney
General Jim Ryan "This agreement will hold Citibank responsible for the way these
telemarketers do business with Citibank customers."

The agreement settles a multi-state, two-year investigation led by Ryan and attorneys
general in New York, California and Vermont.

The states were looking into consumer complaints about the marketing practices of
Citibankís business partners.

The investigation revealed that since the mid-1990s, Citibank received a percentage of
sales made by companies selling various products and services to bank customers.
Consumers complained that deceptive pitches by these companies resulted in consumers
being charged for products and services that they did not knowingly agree to purchase.

In some cases, telemarketers promoted free trial offers on dental plans or credit card loss
protection service.

When the trial period ended, consumers did not understand that the companies would
charge their credit card for continued use unless the consumers canceled during the trial
period.
Around the world, Citigroup finances environmentally unsound and destructive projects
such as Peruís Camisea natural gas project and Ecuadorís controversial OCP oil pipeline
(see "The Cost of Living Richly: Citigroupís Global Finance and Threats to the
Environment," Multinational Monitor, April 2002).

DYNCORP
The Price of a Privatized Military

The great German sociologist Max Weber wrote that the definition of a state was that it
claims a monopoly on the legitimate use of physical force.

Maybe itís time for a post-modern update, because governments are now happy to share
that monopoly with private corporations.

Case in point: DynCorp, a $2 billion-a-year company that describes itself as "a leading
provider of diversified outsourcing and information technology services to government
agencies." Some critics say the company is better described as a mercenary firm.

DynCorp is among the leaders in a fast-growing industry to take over privatized functions
of the U.S. military. Some of these functions, like providing food services, are relatively
benign. Others are less so, and involve the takeover of quasi-military functions.

For example, the U.S. government is relying on DynCorp to provide protection for
Afghan President Hamid Karzai. This fall, responsibility for Karzaiís security was shifted
from the Pentagon to the State Departmentís Diplomatic Security agency. A State
Department spokesperson says, "Diplomatic Security is a civilian law enforcement and
security service that operates where the rule of law governs. That is not necessarily the
situation in Afghanistan. We looked to bring on board necessary specialists to do the job
properly. This required the use of contractors." The spokesperson declined to comment on
whether DynCorp security personnel would be armed.

This type of privatization of military matters "is another way to give the government
deniability," says William Hartung, director of the New York-based Arms Trade Resource
Center. The military "pays the private company to do the dirty work. They hope that
gives them more distance if personnel are killed than if they were uniformed service
people. If [private company employees] are engaged in unethical behavior or repressive
acts, the government is removed" from that.

What this really involves, Hartung says, is "unaccountability." He warns that it is even
more difficult to find out what private military contractors are doing than it is for the
Pentagon, and that contractor activity tends to fly below Congressional and media radar
screens.

One example of how contractors are able to escape accountability surfaced earlier this
year in Congress. The Subcommittee on International Operations and Human Rights of
the House of Representatives International Relations Committee heard testimony from
Ben Johnston, a former DynCorp employee. Johnston, who worked with DynCorp in
Bosnia, reported that he witnessed DynCorp employees trading in sex slaves, as young as
12. When he reported what he had seen to army authorities, Johnston says, DynCorp fired
him. DynCorp fired the implicated DynCorp employees and sent them home, but because
they were civilians they were not subjected to military discipline; and they escaped any
kind of prosecution in Bosnia.

Among DynCorpís other activities, it is flying planes that spray herbicides on coca crops
in Colombia. Farmers on the ground allege that the herbicides are killing their legal
crops, and exposing them to dangerous toxins.

A group of farmers in Ecuador has filed a class action lawsuit against DynCorp in U.S.
court, alleging the herbicides sprayed from the companyís planes drifted across the
Ecuador-Colombia border, with toxic effect. The plaintiffs allege the spraying has had
particularly serious effects on their children, causing serious deformities, major internal
bleeding, and, in some cases, deaths of infants.

The lawsuit, which is being handled by the Washington, D.C.-based International Labor
Rights Fund and the Amherst, Massachusetts Law Offices of Cristobal Bonifaz, alleges
that the spraying of the farmersí lands is "nothing less than an act of mercenary war
carried out surreptitiously by the DynCorp Defendants in total defiance of international
law, and outside the parameters of any legal contract to implement ëPlan Colombia,í" the
U.S. effort to wipe out illegal drug plantations in Colombia.

They claim that the DynCorp program is designed not just to spray drug plantations, but
to maintain an aggressive military presence on the Ecuador-Colombia border, "to
intimidate the local population into submission and prevent disruption to [the] extremely
profitable oil ventures" carried out in the region, or planned for the area, by
ChevronTexaco, BP Amoco and Occidental.

DynCorp could not be reached for comment.

M&M/MARS
Slow on Slavery

Is it too much to ask corporations not to sell products made with child slave labor?

Why should an industry whose products are made with child slave labor need to be
dragged kicking and screaming into taking modest measures to address the problem?

Following breakthrough investigations by Knight-Ridder reporters, there have been a

flurry of reports about the trafficking in child indentured workers to labor on cocoa
plantations and farms in the Ivory Coast, which supplies 43 percent of the worldís cocoa.
Many of the children are traded across borders, from Mali, Benin, Togo and Burkina
Faso. The U.S. State Department estimates 15,000 children have been sold into bondage
from these countries and transported to cocoa plantations in the Ivory Coast.

The child workers - most aged 12 to 16, with some as young as 9 - do the hot and
miserable work of harvesting cocoa beans. Many are are whipped and poorly fed. They
have no idea what chocolate, the ultimate product of their labor, tastes like.

Behind the regional trade in children, and the widespread use of indentured and abusive
child labor on cocoa farms, as well as elsewhere in the economy, are a number of inter-
related factors. Extreme poverty leads families to sell their children. International
Monetary Fund (IMF) and World Bank-recommended structural adjustment policies have
intensified poverty in the region. A tradition of moving children within the extended
family to facilitate educational opportunities has been perverted to enable trafficking in
children. Low cocoa prices have pushed farmers to use the cheapest labor they can find.

Chocolate companies in the rich countries have nothing to do with most of these
underlying factors.

But the industry has responded tepidly to revelations about child slaves in the fields
where their raw materials are grown. Initial denials of the problem gave way to grudging
acknowledgement, and ultimately to an industry-wide plan.

In June 2001, the industry acknowledged and denounced the use of child labor slaves.
"As an industry, we strongly condemn abusive labor practices, and our goal is to be part
of the worldwide effort to solve this problem. If one child is affected, that is one child too
many," Larry Graham, president of the Chocolate Manufacturers Association, said at the
time.

In September 2001, the industry signed a protocol designed to ensure that its products
were not made with child slave labor. It said cocoa should be grown in accordance with
International Labor Organization (ILO) Convention 182 on the elimination of the worst
forms of child labor, and committed to taking further action in 2002.

In May 2002, the Chocolate Manufacturers Association signed a Memorandum of

Cooperation with a number of nongovernmental organizations and trade unions. In July,
they established an "International Cocoa Initiative - Working Towards Responsible Labor
Standards for Cocoa Growing." The Initiative set as its goals to:

• Support field projects and act as a clearinghouse for best practices that help
eliminate abusive child and force labor in the growing of cocoa;
• Develop a joint action program of research, information exchange and action to
enforce internationally recognized abusive child and forced labor standards in the
growing of cocoa; and
• Help determine the most appropriate, practical and independent means of
monitoring and public reporting in compliance with these labor standards.
Critics, however, say the industry plan falls short. "The industry led initiative has resulted
in a privatized mechanism without binding and enforceable labor rights," says a statement
from the International Labor Rights Fund. "Privatized self-regulation may serve well in
various contexts, but when it comes to child labor, we must demand more."

The critics are looking for solutions that give farm jobs to adults and pay farmers a fair
price. As part of a solution, activists are asking the chocolate companies to buy Fair Trade
cocoa. The San Francisco-based Global Exchange is asking companies to purchase a
modest 5 percent of their product from Fair Trade providers.

Cocoa certified as Fair Trade by Transfair USA and other international certifying
organizations is sold for a sustainable 80 cents a pound and must be grown and harvested
in compliance with ILO conventions on both child and forced labor.

In 2001, Fair Trade cocoa growers produced 89 million pounds of cocoa, but only sold 3
million at Fair Trade prices.

Mars is one the largest chocolate makers in the United States, and the third largest private
companies in the country. M&Ms are among the worldís best-selling chocolate brands.
The three Mars siblings who own the company are each ranked tenth on the Forbes list of
richest people in the United States, and estimated to be worth a combined $30 billion.

The companyís rejection of Global Exchangeís 5 percent Fair Trade proposal leaves an
awfully bitter taste.

PROCTER & GAMBLE

Mugging the Third World

Hereís the problem:

"There is a crisis destroying the livelihoods of 25 million coffee producers around the
world," reports Oxfam. "The price of coffee has fallen by almost 50 percent in the past
three years to a 30-year low. Long-term prospects are grim. Developing country farmers,
mostly poor smallholders, now sell their coffee beans for much less than they cost to
produce - only 60 percent of production costs in Vietnamís Dak Lak Province, for
example. Farmers sell at a heavy loss while branded coffee sells at a hefty profit."

For many coffee-producing countries, plummeting prices are devastating their national
economies. Central American countries have seen revenues fall 44 percent in a year, from
1999/2000 to 2000/2001. In Ethiopia, coffee export revenues declined 42 percent. In
Uganda, where a quarter of the population depends on coffee for their livelihood, coffee
earnings dropped 30 percent.

For individual farmers around the world, declining prices have pushed them to the edge
of survival, or destroyed their means of livelihood altogether. Tens of thousands are
losing their land in Central America alone, and thousands of plantation workers have
been thrown out of work.

The low prices are due to a global surplus of coffee beans. The surplus reflects a variety
of forces, including the collapse of domestic and international marketing controls by
producer countries - in part a consequence of IMF and World Bank policies, the entrance
of Vietnam into the global coffee market and a surge in Brazilian production, and
stagnant demand in rich countries.

The market imbalance has further shifted power to the giant coffee roasters. Coffee
farmers get 1 percent or less of the price of coffee at Starbucks, and about 6 percent of the
cost of a supermarket pack of coffee, according to Oxfam.

Meanwhile, the coffee roasters are operating with extremely high profit margins.

Between them, the four largest companies - Philip Morris/Kraft (Maxwell House), Nestle
(Nescafe), Procter & Gamble (Folgers) and Sara Lee (Douwe Egberts and others) - plus a
fifth, German company, Tchibo, buy almost half of the world supply of green coffee
beans.

These companies do not have complete control of the market, but they have the power to
move to a global solution. They have not.

There will be no solution without management of price and supply.

Activists are demanding the companies buy a modest 5 percent of their beans from Fair
Trade-certified growers. Fair Trade coffee ensures farmers get a sustainable price. Procter
& Gamble, among others, has refused.

A global solution will also require a public system of supply management. The
International Coffee Organization says destruction of 5 million bags of low-grade coffee
would lead to a 20 percent rise in the commodity price. Oxfam has called for such
measures - estimated to cost $100 million, but likely to bring producers an extra $600
million to $700 million in revenue - as a central element of its coffee campaign. It is
urging the roasters and consumer countries to donate money to pay for the impoundment
of 5 million bags.

Procter & Gambleís response is dismissive. P&G says it supports the National Coffee
Associationís (NCAís) position on the coffee crisis. NCA supports a number of proposals,
including farmer education regarding crop diversification, roaster use of long-term
contracts, efforts to expand the coffee consumer market, gathering more data, and
opposing U.S. tariffs on agricultural products which purportedly discourage farmers from
switching to non-coffee crops (tariffs are low or non-existent on coffee), but does not
have a single, coherent plan to address the crisis. P&G says it is not prepared to support
the International Coffee Organizationís scheme because it is not the NCA position.
P&G says its response to the coffee crisis is its newly formed alliance with TechnoServe,
a non-profit organization, to help small-scale coffee growers in Latin America. P&G
donated $1.5 million to TechnoServe, to "help create long-term solutions to make coffee
growing profitable for as many people as possible. This will be accomplished by
improving the quality of coffee, exploring alternatives to coffee production and other
initiatives."

SCHERING PLOUGH
Here Come the Feds

This has been a bad year for the maker of Claritin and other allergy drugs, anticancer
drugs and Dr. Schollís foot products.

Let us count the ways.

First, in August, the Justice Department opened an investigation of both Schering Plough
and Wyeth to see whether they had engaged in price fixing by, on the same day, reducing
fees to their pharmaceutical brokers.

Second, Schering is the subject of an ongoing criminal investigation by federal

prosecutors in Boston. They are looking at whether the company is ripping off Medicaid
by repacking drugs at higher prices. A 1990 law requires companies to report to Medicaid
the best price it offers its private customers.

In conjunction with this investigation, prosecutors in Boston in November issued two

more subpoenas to the company requesting information on the companyís honoraria and
other payments to doctors, insurers and educational institutions.

Third, in June, federal prosecutors in New Jersey began investigating whether or not the
company imported ingredients that had not been approved by the Food and Drug
Administration for use in the United States. Schering denies these allegations.

Fourth, in May, the New York Times reported that the Food and Drug Administration
(FDA) had initiated a criminal probe into two Puerto Rican plants that make Scheringís
Nasonex nasal spray and Celestone, a corticosteroid.

After news of the criminal investigation leaked out, Schering announced that it will pay
$500 million to settle charges of repeated failure over recent years to fix problems in
manufacturing dozens of drugs at four of its facilities in New Jersey and Puerto Rico.

The $500 million settlement shatters the previous FDA record settlement amount of $100
million.

The government sought the $500 million to disgorge profits made by the firm on drug
products that were produced over the last three years.
The company also agreed to future monetary payments of up to $175 million and to
disgorge additional profits should it fail to adhere to timelines established in the consent
decree.

The governmentís action follows 13 inspections at four New Jersey and Puerto Rico
facilities since 1998 during which the FDA found significant violations of quality control
regulations related to facilities, manufacturing, quality assurance, equipment,
laboratories, and packaging and labeling.

The company has had a history of failing to comply with quality control requirements at
these plants, which produce about 90 percent of the firmís drug products.

The decree affects about 125 different prescription and over-the-counter drugs produced
at the Puerto Rico and New Jersey facilities.

As part of the decree, the company agreed to suspend manufacturing 73 other products.

"This agreement builds upon the efforts we have undertaken to date to resolve these
manufacturing issues," CEO Richard Jay Kogan said at the time of the settlement, "The
company has worked closely and cooperatively with the FDA throughout this process and
achieved two key objectives: keeping our plants open and operating, and continuing to
make available our major pharmaceutical products to meet the needs of patients. We are
confident of our ability to move forward under the agreement and complete our
improvement programs successfully."

Fifth, in April, European Community regulators initiated a safety review of Claritin after
reports from Swedish studies showed that about 1 percent of boys born to mothers who
used Claritin during early pregnancy were born with a malformed penis. The condition
occurred at a rate of three times the normal rate.

Finally, the companyís longstanding efforts to price gouge on Claritin were dealt a major
blow at the end of the year, when health insurer pressure forced the company to make the
drug available over the counter.

SHELL OIL
The Politics of Hype

What have the oil companies been up to this year?

BP Amoco said that it was pulling out of a major lobbying effort to open the Arctic
National Wildlife Refuge in Alaska to oil drilling, and has been running ads around the
United States touting its environmental credentials.

BP wants people to believe that the company is moving "beyond petroleum" - BP - get it?
- into the solar age.
ExxonMobil announced that it was donating $5 million to the National Fish and Wildlife
Foundation in an effort to save the tiger.

At a press conference announcing the companyís donation to the Save the Tiger Fund,
ExxonMobil handed out cuddling little tiger beanie baby dolls for the kids.

ExxonMobil wants people to believe that it cares about the natural world and all of its
living creatures.

In May 2000, Royal Dutch Shell set up a $30 million foundation to push for sustainable
energy and social investment projects around the world.

The Shell Foundation announced that it was spending $3 million on a campaign to raise
awareness of how the loss of Louisianaís wetlands will affect the state and to gain support
for efforts to save coastal Louisiana.

Shell called on environmentalist Amory Lovins to do an energy audit of one of its

petrochemical facilities in Denmark.

Shell also has pledged $7 million to the World Resources Institute in Washington, D.C. to
find environmentally sound solutions to the problems of urban transport.

And Shell donated $3.5 million to form the "Shell Center for Sustainability" at Rice
University.

Now, of course these are good deeds.

But why are the oil companies doing this?

Are they doing it because they want to move the world away from the fossil fuel
economy that is destroying the environment?

Are they doing it because they actually want to move the world to a solar energy
economy?

Or are they doing it to greenwash their image and buy silence from their environmental
critics?

Are they doing it to cover up their past history of oil spills, workers injured and killed on
the job, and the spewing of cancer-causing pollutants into the environment?

It was John D. Rockefeller, the turn of the century millionaire, who gave out dimes to
children. Why did Rockefeller give out dimes to children? To buy silence and good will.

Similarly, the oil companies today are giving millions to environmental groups and
activists to buy silence and good will.
Now comes Jack Doyle, who has just completed a remarkable corporate history of Shell,
Riding the Dragon: Royal Dutch Shell & the Fossil Fire.

The book is published by the Boston based Environmental Health Fund and is also
available on-line on www.shellfacts.org.

In documenting hundreds of cases of human rights abuses, oil pollution, worker injuries
and deaths, and the manufacture of cancer-causing chemicals, Doyle makes the point that
Shell and the big oil companies have a lot to hide.

Despite all the rhetoric of moving "beyond petroleum," they continue to secure long-term
contracts that tie them to the fossil fuel economy, with all of its geopolitical hazards, all
of its human rights abuses and all of its environmental destruction.

Shell is spending millions of dollars to create the impression that it is a socially and
environmentally responsible oil company.

Principle 6 of the companyís nine business principles is "To conduct business as

responsible corporate members of society, to observe the laws of the countries in which
they operate, to express support for fundamental human rights in line with the legitimate
role of business and to give proper regard to health, safety and the environment consistent
with their commitment to contribute to sustainable development."

But Doyle makes the point that the worldís second or third largest oil company remains
one of the worldís biggest environmental violators.

The book documents a concerted campaign by Shell to halt critical government reports,
rewrite history and cover-up its misdeeds.

Since Shellís alleged involvement in the execution of its highest profile critic, Ken Saro-
Wiwa of Nigeria, the company has claimed to adopt a new set of principles aimed at
reforming its internal practices and re-making their image.

"Despite an ongoing civil trial in New York on Shellís alleged role in the execution of
Saro-Wiwa and other activists, Shell has the temerity to advertise itself as a new company
committed to human rights, environmental protection and sustainable development,"
Doyle said. "There is ample reason to be skeptical about this manufactured image, which
is wildly at odds with the facts."

Shell has a long history of disregard for employees and the environment.

In 1995, Shell attempted to dispose in the North Sea a huge offshore oil storage facility -
the Brent Spar. There was an enormous worldwide protest and a boycott of Shell
products. Under pressure, Shell decided to dismantle it and used it to make some docking
facilities.
Doyle says that the "new" Shell continues to run an "apartheid era" facility in Durban,
South Africa, where there are leaking pipes, fires, explosions and ongoing pollution, and
where more than one million liters of oil have been dumped so far.

In the appendix to his book, Doyle lists more than 300 environmental and public safety
incidents between 1947 and 2002 - spills, leaks, fires explosions, lawsuits and fines.

Here are a few examples of Shellís problems just this year:

In May, federal officials sued Shell Pipeline in connection with the June 1999 gasoline
pipeline rupture near Bellingham, Washington that killed three young people. The
complaint alleges that the rupture was caused by gross negligence in the operation and
maintenance of the pipeline. The rupture resulted in the discharge of over 230,000 gallons
of gasoline in local waterways and caused the deaths of three young people as well as a
severe property damage and environmental damage. Officials are seeking up to $18.6
million in fines against Shell.

Also this year, Shell was ordered to pay $135,000 to settle allegations brought by the
Occupational Safety and Health Administration (OSHA) that it failed to implement
standards that protect workers against hazardous chemicals in one of its processors in
Geismar, Louisiana. OSHA opened its investigation after a February 12 accident at the
facility killed a catalyst technician.

In June, a Shell-chartered Singapore bunker oil tanker spilled about 450 tons of oil into
port waters just south of Singapore after a collision with another ship. The accident
ruptured one of the Shell tankerís cargo tanks, dumping marine fuel oil into the sea.

In August, a storage tank containing 30,000 barrels of residual fuel oil exploded at
Houston Fuel Oil Terminal Co., a 50 percent-owned Shell joint venture specializing in
handling and storage in Houston. The explosion and fire produced a dark, billowing
cloud of soot and smoke that rose more than a mile into the air.

Donít believe the hype. Put aside the cute little web sites and beany baby tigers.

Thereís nothing new about new Shell, ExxonMobil and BP. They are bought into the
fossil fuel economy.

We need to get out.

WYETH
"A Triumph of Marketing Over Science"

Manufacture a consumer need. Invent a consumer product to satisfy the newly created
need. Hawk the product.

That, in short, may be the epochal story of capitalism.

Itís one thing when the new consumer product is a pet rock, or blue soda.

Itís altogether another thing when the product is a pharmaceutical, where the stakes can
be life and death.

More than ever, Big Pharmaís standard mode of operation is to invent a disease, and then
provide a product. Thatís the case with the pathologization of pre-menstrual discomfort
(now labeled Pre-Menstrual Dysphoric Disorder in ads by Eli Lilly) and basic shyness
(the Social Anxiety Disorder so frighteningly portrayed in ads by SmithKline Beecham).

But the pioneering and still most egregious example of this phenomenon, at least in the
modern era, is the hormone replacement therapy (HRT) sold by Wyeth under the brand
name Prempro.

Earlier this year, a National Institutes of Health study concluded that HRT - a
combination of estrogen and progestin - posed major health risks to the millions of
women in the United States, and around the world, that Wyeth and others had lured into
taking HRT.

The NIH study, known as the Womenís Health Initiative, was a clinical trial to assess
HRT for use by healthy women. Researchers ended the study ahead of schedule, when
early results provided clear evidence of the hazards of HRT. The study results, published
in the Journal of the American Medical Association, showed that long-term HRT
increases the risks of breast cancer, heart attack, stroke and pulmonary embolism. Those
risks outweigh the benefits of long-term use of the drug in reducing the risks of bone
fracture and colon cancer.

The Womenís Health Initiative was the first large, randomized clinical trial to test the
effects of HRT. Wyeth had long imputed a wide array of benefits to HRT, but the only
scientific basis for these claims were observational studies, simply the reported effects
from women taking the drug. A randomized clinical trial, by contrast, compares the
effects of a drug in a patient group with the effects in a comparable group taking a
placebo. Clinical trials are designed to avoid problems common to observational studies,
such as a non-random group of patients - in the case of HRT, probably healthier and
better-educated women - taking the product.

For decades, Wyeth (and Ayerst, the originator of HRT, a company acquired by Wyeth)
had proclaimed the benefits of hormone therapy for menopausal and post-menopausal
women.

In 1966, Dr. Robert Wilson published Feminine Forever, a book which became a
bestseller. The book promoted estrogen as a wonder drug that could counter the changes
of menopause and keep women young, attractive, sexually vital and happy. Wilson
labeled menopausal women a no-longer truly female "intersex," who were "dull and
unattractive." Estrogen, he said in the book, and through subsequent advocacy work with
a foundation he established, could save these women, preserving their beauty and health.
Years later, the Washington Post revealed Ayerst had funded Wilsonís work.

Wyeth effectively continued with the same promotional line for 35 years, employing
spokespersons like Lauren Hutton to proclaim hormones as their beauty secret, and with
ads and marketing schemes conveying notions that HRT would not only prevent heart
disease and other ailments, but stop wrinkles and keep women looking and feeling young.
The Womenís Health Initiative study showed that HRT actually contributed to heart
disease.

Wyeth spokesperson Douglas Petkus, denies any knowledge of the company promoting
HRT to address general and cosmetic problems with aging such as wrinkles, and to
maintain beauty. "A pharmaceutical product can only be promoted for an approved use,
and that is not an approved use," he says.

But critics say there is no doubt that Wyeth ran a spectacularly effective campaign to
induce women to use HRT for these and other unproven purposes.

"Pharmaceutical companies have used statistical smoke and mirrors to tout unproven
benefits, minimize risks and mislead physicians into being an unsuspecting marketing
force for a regimen that harms healthy women," says Cynthia Pearson, executive director
of the National Womenís Health Network.

"This is not a story of science moving sedately forward, carefully adding pieces to a
puzzle before making recommendations to patients," she says. "This is a story of the
corruption of the medical and scientific community. The belief that hormones are good
preventive medicine has been a triumph of marketing over science." Not only did Wyeth
use direct-to-consumer ads to convince women to take a drug that was harmful for them,
she notes, but it maintained a full-bore campaign directed at doctors, through gifts, paid
presentations at scientific conferences, and funded articles or ads presented as articles,
among many other tactics.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

December 2001 - VOLUME 22 - NUMBER 12

T H E T E N W O R S T C O R PO RAT I O N S O F 2 0 0 1

Corporations
Behaving Badly:
The Ten Worst Corporations of 2001
 By Russell Mokhiber and Robert Weissman

The U.S. Supreme Court says a corporation is a person, or at least must

be treated like one when it comes to most constitutional protections.

Like the right to speak. And the right to act in the political arena —
giving campaign contributions, lobbying and advocating its agenda.

Now, if a corporation is in fact a person, with full constitutional rights,

then it should act like a moral human person.

And what is the fundamental basis of morality? Caring about others.

So, a corporation, to act like a moral human person, is going to have to
care about others, not just about its own bottom line.

It is going to have to care about its human compatriots.

But the vast majority of major corporations do not give a damn about
human persons. As such, they are immoral to the core. Or, maybe even
worse, they are amoral.

We say, if you are not a human person, and you cannot act like a moral
human person, then you should be stripped of your constitutional
protections.

No right to speak, no Fifth Amendment rights, no right to participate in

the political arena. You just produce your products, and go home.

It also makes sense to revisit the legal protections that facilitate

corporate im- or a-morality, particularly the corporation’s defining
characteristic — limited liability for shareholders.

Shareholders, the owners of a corporation, invest a certain amount of

money in a company. Under the rules of limited liability, no matter how
much harm the company does, or how much it owes creditors,
shareholders cannot be required to pay more than the amount they
already put in.

Lawrence Mitchell, a professor of law at George Washington

University, believes that limited liability for shareholders leads
shareholders — and therefore corporations — not to care. If your
liability is limited, you will not care as much as if your liability is full.

“We call stockholders owners,” Mitchell says. “You can hardly be

considered an owner if you don’t care, if you don’t act like it’s your
property. Limited liability encourages stockholders not to care.”

Mitchell, who has written a book, Corporate Irresponsibility: America’s

Newest Export, says that in the absence of limited liability, the
corporation can always buy insurance.

“Insurance internalizes the cost of the risk,” Mitchell said. “The

corporation has to pay based on the insurance company’s assessment of
the risk, rather than some creditor getting stuck holding the bag if the
corporation fails.”

So, yes, Mitchell would strip corporations of their limited liability

protection. Let the chips fall where they may.

Admittedly, these ideas do not appear likely to be implemented soon.

But there may be interim concepts to get us closer.

To determine whether a corporation is acting morally, we propose that

Congress legislate a Corporate Character Commission (CCC). This
would be a 10-person panel, with members chosen from the human
person community. Ideal candidates would be ethicists, philosophers,
corporate criminologists and the like.

The CCC would check on the criminal records, recidivism rates, acts of
immorality and other wrongdoing of the largest corporations.

If the CCC were up and running now, we would propose that it take a
close look at the Ten Worst Corporations of 2001. Clearly they do not
care. They are not moral entities. They should be stripped of their
constitutional protections. Their shareholders should be made fully
liable.

There is a precedent for this kind of review at the federal level. The
Federal Communications Commission reviews the character of
applicants for federal broadcast licenses. The FCC does not do a very
good job of it, obviously –– GE routinely gets renewed despite its
recidivist record.

But just because the FCC cannot do it right, does not mean the CCC
could not do it right. Let’s give it a try.

ABBOTT:
Shamefully Ripping Off the Government
Earlier this year, TAP Pharmaceutical Products Inc., a major U.S.
pharmaceutical manufacturer, was forced to pay $875 million to resolve
criminal charges and civil liabilities in connection with its fraudulent
drug pricing and marketing conduct with regard to Lupron, a drug sold
by TAP primarily for treatment of advanced prostate cancer in men.

TAP is a joint venture started by Abbott Laboratories and Takeda

Pharmaceuticals of Japan to market two particular drugs, one of which
is Lupron. Lupron is designed for the control of prostate cancer. TAP is
headquartered in the Chicago area.

The wrongdoing was brought to the attention of federal prosecutors by

Douglas Durand, the former vice president of sales of TAP
Pharmaceutical.

Under the federal False Claims Act, whistleblowers who file qui tam
lawsuits against companies defrauding the government are entitled to
15 to 25 percent of whatever funds the government recovers in cases
where the government joins the lawsuit.

Durand filed a False Claims Act lawsuit in May 1996. The government
intervened, and earlier this year, Durand was awarded $77 million as
his part in the recovery of the lawsuit.

Durand provided the government with information about free samples

and the implicit encouragement to bill Medicare for free samples, about
the company marketing the spread between Medicare reimbursement
and the amount the doctors had to pay TAP for the product, about
unrestricted educational grants and about extraordinarily lavish
entertainment and trips that were given to doctors who were willing to
prescribe Lupron in significant quantities.

He provided information on 2 percent management fees which were

given to high-volume urology practices.

Another whistleblower added some spice to Durand’s case. Dr. Joseph

Gerstein is a urologist at the Tufts Associated Health Maintenance
Organization in Boston.

Gerstein alleged that he was offered a substantial “unrestricted

educational grant” if he would change Tufts’ decision, which had been
to provide patients with the cheaper alternative to TAP’s product, back
to Lupron.

TAP made it fairly clear to Dr. Gerstein that he need not account for the
$25,000 unrestricted educational grant, that there were few if any
restrictions on how he used the money. But it was clearly tied to the
decision by Tufts to go back to using Lupron as the treatment of choice
for prostate cancer.

For a company compelled to enter into such a massive settlement, TAP

was surprisingly belligerent. “We fundamentally disagree with many of
the government’s allegations, but we resolved this matter to make clear
our commitment to proper and ethical business practices, and to avoid
protracted legal battles and ensure uninterrupted availability of Lupron
for many thousands of patients who rely on it,” said TAP President
Thomas Watkins in announcing the company’s plea. Watkins did admit
that TAP provided free samples of Lupron to doctors with the
knowledge that those physicians would seek and receive reimbursement
for sales of the product. But he said that “we fundamentally disagree
with government claims regarding TAP’s pricing and reimbursement
policies. We believe we consistently complied with pricing laws and
regulations.”

The TAP fiasco was only the tip of the proverbial iceberg for Abbott.

As the TAP case was being resolved in Boston, the Chicago Tribune
reported that federal prosecutors were investigating whether a division
of Abbott Laboratories and at least three other companies worked with
medical-care providers to bilk government health insurance programs
for the poor and elderly.

According to the report, at issue is whether the medical product

manufacturers engaged in a kickback scheme to encourage hospitals,
nursing homes or home-care providers to buy pumps and related
supplies used to feed seriously ill people by giving the products away
or selling them at a discount.

Some providers then allegedly billed the products at a higher price to

either Medicare, the federal health insurance program for the elderly, or
Medicaid, the federal-state health insurer for the poor.

Abbott wouldn’t elaborate on what investigators from the U.S.

attorney’s office for the Southern District of Illinois are looking at, but
said the North Chicago-based company isn’t the only target of the
prosecutors’ probe, the Chicago Tribune reported.

“We are aware of the investigation, and the investigation is inclusive of

the whole industry, which includes manufacturers, distributors and
providers,” said Mary Beth Arensberg, a spokeswoman for Abbott’s
Ross Products division, which makes the equipment.
And when they weren’t seeking to take what wasn’t theirs, Abbott was
allegedly engaging in market practices that addicted patients to the
powerful painkiller OxyContin, a prescription medication given to
cancer patients and those suffering from chronic, moderate to severe
pain.

Earlier this year, in an effort to stop the overly aggressive and deceptive
marketing of OxyContin, West Virginia Attorney General Darrell V.
McGraw, sued Abbott and Purdue Pharma, the manufacturers and chief
promoters of the drug.

With oxycodone — a member of the same family of drugs as opium

and heroin — as one of its main ingredients, OxyContin is also one of
the most commonly abused prescription medications in the Appalachian
region.

McGraw alleged that, though they knew the dangers posed by misuse
of OxyContin, the defendants willingly marketed the product in a
coercive and deceptive manner in hopes of achieving a greater margin
of profit and eventually an illegal monopoly on the narcotic pain
medication market.

ARGENBRIGHT:
Sometimes Corporate Crime Doesn’t Pay
Sometimes, at least, it turns out that corporate crime and law-breaking
doesn’t pay.

Ask Argenbright, a leader in the privatized airport security business in

the United States. Argenbright controls roughly 40 percent of the
market. Its employees screen passengers and carry-on bags for the
airlines, which have been delegated these responsibilities by the federal
government.

Not for long.

In November, the U.S. Congress agreed on legislation that will

federalize airport security operations. The workers doing security
checks at airports will become federal employees, with higher wages
and greater professional requirements. Working conditions should
improve, and the extremely high worker turnover rate should plunge.
And Argenbright should fade from the picture.

The move against the trend of privatization and contracting out of

government-provided services was obviously spurred by the September
11 terrorist attacks. But it was Argenbright’s extraordinarily poor
performance record that confronted Congress with an empirical reality
that overcame ideological resistance to an expansion of government
power and closure of a private market.

Owned by the British firm Securicor, Argenbright in May 2000 pled

guilty to two counts of making false statements to federal regulators
and paid $1.55 million in fines in connection with charges that it failed
on a massive scale to do background checks on security screeners
employed at Philadelphia International Airport, failed to provide them
with required training, and then lied to federal authorities about it.

The government’s sentencing memorandum in the case summarizes the

charges. “During the period January 1, 1995 through December 31,
1998 the Philadelphia district office of Argenbright Security, Inc. [ASI]
hired more than 1,300 untrained pre-departure screeners to work at the
security checkpoints at Philadelphia International Airport over a period
of more than four years. Through its employees in Philadelphia, ASI
caused dozens of criminals to be hired by not checking their
backgrounds, but falsely certifying that the checks had been done.
ASI’s district manager Steven Saffer encouraged and permitted test
scores to be falsified and phony GEDs to be created.”

Federal prosecutors acknowledged going easy on Argenbright. Rather

than piling on the charges, they put their faith in a compliance program
and a three-year probationary period.

Those hopes turned out to be misplaced.

In October 2001, Argenbright agreed to a new plea agreement.

Government papers filed with the U.S. District Court for Eastern
Pennsylvania in advance of the plea contained this amazing list of
allegations: “The government’s investigation and review of
Argenbright’s post-sentencing operation and compliance efforts
demonstrates that Argenbright, in violation of its probation and the
court-ordered compliance and audit plan: (1) has continued to hire pre-
departure screeners at Philadelphia International Airport after the date
of sentencing who have disqualifying criminal convictions; (2) has
retained and continued to employ pre-departure screeners with criminal
records after the date of sentencing even though it certified to the Court
that it had re-checked and re-verified every employee’s background
before the date of sentencing; (3) has made new false statements to the
FAA [Federal Aviation Administration] regarding employee background
verifications of a significant percentage (25%) of its Philadelphia
employees whose files have been reviewed by agents of the U.S.
Department of Transportation’s Office of Inspector General; (4) has
engaged in many new FAA regulatory violations in Philadelphia (32%
of files randomly reviewed by FAA evidence new violations and false
statements); (5) has failed to conduct audits in accordance with the
audit program that required Argenbright to obtain independent
verifications from third party sources that employee backgrounds were
properly verified in accordance with FAA regulations; (6) failed to
convene a meeting of its compliance management committee until nine
months after the date of sentencing; and (7) has engaged in many new
FAA regulatory violations at the following 13 airports throughout the
United States: Washington, D.C. (Dulles International and Reagan
National), Boston (Logan International), New York (Laguardia), Los
Angeles, Trenton, Phoenix, Las Vegas, Columbus, Dallas-Ft. Worth,
Seattle and Cedar Rapids.”

The October 2001 plea extended Argenbright’s probationary period

from three to five years, and required the company to do new
background checks, including fingerprinting, of its employees.

Hopefully, Argenbright will never have a chance to fill out its

probationary period. Its desperate and aggressive lobby campaign to
keep the screening jobs in the private sector failed. There are small
loopholes in the federal aviation security bill that could again give the
company a foothold in the industry, but the company’s future prospects
in the U.S. airline screening business are now very, very bleak.

BAYER:
It’s Been a Bad Year
How’s this for a scam?

Secure a government monopoly to sell your product. When a

competitor challenges the monopoly grant, alleging it transgresses the
rules by which the government awards monopolies, pay the competitor
off. Then use your monopoly power to price gouge consumers. When a
public emergency suddenly compels the government to purchase a huge
supply of your product, use your government-granted monopoly to
overcharge the government — and reap the tremendous publicity value
surrounding emergency use of the product. When the public complains,
drop the price, and bask in the positive publicity — even as you
continue to reap windfall profits.

That pretty much sums up the Bayer/Cipro story.

According to the Prescription Access Litigation (PAL) project, a

coalition of more than 60 organizations in 29 states, an agreement
between Bayer, Barr Laboratories and two other generic drug
companies is blocking access to adequate supplies and cheaper, generic
versions of Cipro, one of the leading antibiotics used to treat anthrax.
PAL has sued to undo the agreement. PAL charges that Bayer has
unlawfully paid three of its competitors — Barr Laboratories, Rugby,
and Hoechst-Marion Roussel — a total of $200 million to date to
abandon efforts to bring cheaper generic versions of Cipro to the
market.

Bayer denies that its patent is invalid. At the time it settled the generic
manufacturer Barr’s challenge to its patent, according to Bayer, “Bayer
was convinced of the validity of the Cipro patent, but — like any other
party involved in complex litigation — could not completely rule out
all uncertainties of litigation.”

The anthrax outbreak created a public relations bonanza for the

company.

Secretary of Health and Human Services (HHS) Tommy Thompson

announced that he wanted to stockpile a supply for 10 million people.
When Senator Charles Schumer, D-New York, and consumer groups
called for the government to purchase generic versions of Cipro, and
when it became known that Indian companies could produce the drug
for less than a twentieth of Bayer’s drugstore price and less than a ninth
of its price to the government, Thompson and Bayer entered into
furious negotiations. They agreed on a price of 95 cents a tablet.

Dr. Wolfgang Plischke, President of Bayer Corporation’s

Pharmaceutical N.A. Division, said, “We are grateful that our
researchers developed a product that is crucial in this hour of need. The
people of Bayer are very motivated and dedicated to playing an
important role in assuring that the American people have adequate
quantities of Cipro, which we pray are never needed.”

The Washington Post reported soon after that HHS pays Bayer 45 cents
per Cipro pill for purchases under a separate government program (still
more than twice the Indian generic price).

While Cipro made news like no drug since Viagra, it wasn’t Bayer’s
only controversy of 2001.

With mounting concern that widespread misuse of antibiotics is

contributing to rapidly rising antibiotic-resistant bacteria, the U.S. Food
and Drug Administration last year proposed a ban on use of a class of
drugs, fluoroquinolones, for poultry. This proposal followed a Centers
for Disease Control finding that its use in poultry was making human
versions of the drugs — used to treat severe food poisoning due to
salmonella, among other purposes — less effective.

Abbott Labs, one of two U.S. poultry fluoroquinolone producers in the

United States, subsequently voluntarily withdrew its product.

But Bayer has refused, instead asking for hearings that could delay a
ban for years.

“By the time the hearing process is complete, the ban may be a moot
point,” says Karen Florini, senior attorney with Environmental Defense.
“As rapidly as resistance to fluoroquinolones is growing, the drug may
be ineffective in humans by the time the FDA is able to issue a final ban
on the use of these drugs in poultry.”

Bayer has responded to pressure on the issue by establishing an

initiative called Libra to address overuse of antibiotics in humans. But
it is refusing to concede on the animal use dispute.

In August, the company was hit with yet another controversy, as it was
forced to withdraw Baycol, a leading cholesterol-reducing drug, from
the market. Especially in combination with another cholesterol-
reducing drug, gemfibrozil (Lopid), Baycol leads to a high rate of
rhabdomyolysis, a severe muscle-weakening disease that can be fatal.
Dozens of reported deaths have been linked to Baycol.

Upon withdrawing Baycol, Bayer said it would have to review its long-
term commitment to remaining in the pharmaceutical business. It also is
a world leader in agrichemicals (and its proposed purchase of Aventis
Cropscience is now drawing U.S. and European Union antitrust
scrutiny), chemicals and polymers.

Perhaps understandably, a company as bruised as Bayer is sensitive to

criticism. But Bayer’s response has been to inappropriately and
aggressively seek to stifle effective criticism. It brought suit against the
German watchdog group, Coalition against Bayer Dangers, for
maintaining a BayerWatch.com website. Although the group should
have been able to successfully defend against Bayer’s trademark claim,
it did not have enough money to litigate the issue.

It is going to take a lot more than legal intimidation tactics to rescue

this company’s reputation, however.

Coca-Cola:
The Real Thing: Coke the Evil Doer
Coke. Where do we begin?

Let’s start with Harry Potter.

Earlier this year, Coca-Cola reportedly paid Warner Brothers (a unit of

AOL Time Warner) $150 million for the exclusive global marketing
rights to the first Harry Potter movie and possibly the sequels. “Harry
Potter and the Sorcerer’s Stone” opened worldwide in November.

Coca-Cola is aggressively marketing to children by featuring Harry

Potter imagery on packages and in advertising for its carbonated (Coca-
Cola, Minute Maid, and other brands) and noncarbonated (Hi-C,
Minute Maid) soft drinks.

Coke’s Potter promotion, called “Live The Magic,” also uses contests,
games and a web site to entice kids to drink more soft drinks.

“Children and adults worldwide are outraged that their beloved Harry
Potter is being used to market ‘liquid candy’ to kids,” says Michael F.
Jacobson, executive director of the Center for Science in the Public
Interest. “Over-consumption of Coca-Cola and other sugar-laden soft
drinks contributes to obesity and diabetes, reduced nutrient intake and
tooth decay.”

The movie won’t include product placements and Coca-Cola says that
its marketing program includes a literacy campaign. But, “the bottom
line is that an adored literary phenomenon is being put to work to sell
more junk food,” says SaveHarry.com organizer Jacobson.

“It is outrageous that Coca-Cola is using the magic of Harry Potter to

lure kids to drink more soda pop. Consumption of soft drinks has
soared over the past two decades, contributing to the doubling in the
percentage of obese teenagers,” says Dr. Patience White, professor of
medicine and pediatrics at George Washington University Medical
Center. “That obesity epidemic is fueling a diabetes epidemic.”

According to U.S. Department of Agriculture (USDA) surveys, 20

years ago teenagers drank almost twice as much milk as soda pop.
Today they drink twice as much soda pop as milk.

A recent study done at the Harvard School of Public Health found that
increased soft-drink consumption was associated with increased obesity
in sixth- and seventh-grade students.
How about race discrimination?

Late last year, Coke agreed to pay $192.5 million to resolve a federal
lawsuit filed in April 1999 by African-American employees of the
Coca-Cola Company.

The settlement requires Coca-Cola to pay the class $58.7 million in

compensatory damages, $24.1 million in back pay, $10 million for
promotional bonuses and $43.5 in pay equity adjustments, as well as
make sweeping programmatic reforms costing another $36 million.

It also grants broad monitoring powers to a panel of outside experts

jointly appointed by Coke and the plaintiffs’ lawyers — an
extraordinary accomplishment.

Complicity with death squads?

Earlier this year, in Miami, the United Steel Workers Union and the
International Labor Rights Fund filed a lawsuit against Coke and
Panamerican Beverages, Inc., the primary bottler of Coke products in
Latin America and owners of a bottling plant in Colombia where trade
union leaders have been murdered.

The case was initiated by Sinaltrainal, the trade union that represents
workers at the Coke facilities in Colombia. Sinaltrainal has long
maintained that Coke maintains open relations with murderous death
squads as part of a program to intimidate trade union leaders.

Union officials said that Colombia holds the “terrible distinction of

being ranked number one in the world for the number of trade union
leaders murdered each year, and that Coke plays a key role in
maintaining that distinction.”

Other plaintiffs include the estate of Isidro Segundo Gil, a trade union
leader who was murdered while working at the Coke bottling plant in
Carepa, Colombia. The plaintiffs charge that the manager of that
facility, owned by an American, Richard Kirby, who is also a defendant
in this case, specifically threatened to kill the leaders of the union if
they continued their union activities.

The other plaintiffs are Luis Eduardo Garcia, Alvaro Gonzalez, Jose
Domingo Flores, Jorge Humberto Leal and Juan Carlos Galvis. All are
leaders of Sinaltrainal. All, while employed by Coke, were subjected to
torture, kidnapping, and/or unlawful detention in order to encourage
them to cease their trade union activities.

The lawsuit alleges that Coke employees either ordered the violence
directly, or delegated the job to paramilitary death squads that were
acting as agents for Coke.

“This case is extremely important for trade union and human rights,”
says Daniel Kovalik, assistant general counsel of the Steelworkers and
co-counsel for the plaintiffs. “If we cannot get Coke, one of the most
well known companies in the world, to protect the lives and human
rights of the workers at its world-wide bottling facilities, then we
certainly have a long way to go in making the global economy safe for
trade unionists.”

“There is no question that Coke knew about and benefited from the
systematic repression of trade union rights at its bottling plants in
Colombia, and this case will make the company accountable,” says
Terry Collingsworth, who is co-counsel on the case and general counsel
of the Washington, D.C.-based International Labor Rights Fund.

A spokesperson for Coke at its headquarters in Atlanta referred

Multinational Monitor to the company’s spokesperson in Colombia.

“We vigorously deny any wrongdoing regarding human rights

violations in Colombia and are deeply concerned by these allegations
against our company,” says Pablo Largacha, spokesperson for Coca-
Cola de Colombia. “We have been and continue to be assured by our
bottlers that behavior such as that depicted in the claim has in no way
been instigated, carried out or condoned by these bottling companies.”

ENRON:
Executive Rip-Off
So your company’s stock goes from $90 to less than a $1 over the
course of a year, and then your company plunges into bankruptcy.

And all of your fans desert you.

Even your old buddy, President Bush, won't acknowledge your

problems. No bailout for your company, buddy.

On the other hand, things aren’t so bad, at least not for you. You did
pull off one of the historic scams in major corporate history: your
company has acknowledged overstating its earnings over the years,
huge sums were spent on shady insider deals, and your puffing of
company stock at one time had your company ranked among the 10
largest in the United States. And now that it has all crumbled, your
lawyers are looking to protect you, so you do not have to pay one cent.

You got your multi-million dollar bonus. You are rich. If your workers
lost their life savings, that’s no skin off your back.

You are an executive of the now-bankrupt Enron. Sitting pretty, looking

for another gig on Wall Street.

Yes, the lawyers for the workers want to freeze your assets, alleging
you made them on illegal insider deals.

They say that you reaped your huge profits during the past three years
through a scheme that artificially inflated the price of Enron’s stock.
They say you falsified the company's financial condition. But that’s
what they always say.

One of the lawyers seeking to seize your assets called your company “a
grotesque fraud — a financial monstrosity of manipulation and
falsification.”

Amalgamated Bank, the trustee of equity and bond funds that invest the
retirement savings of union employees, suffered losses of $10.3 million,
part of a $20 billion loss for public investors.

The lawyer for the bank said that Enron cheated millions of investors
out of billions of dollars. Countless lives and retirements have been
destroyed.

“While lining their own pockets and setting themselves up financially

for life, Enron insiders misled many investors who represent working
men and women,” said an Amalgamated vice president. “It’s our
intention to retrieve the ill-gotten gains of the Enron insiders and return
it to the people who were ripped off.”

No one got hit harder than Enron employees. Enron used stock rather
than cash to match employee contributions to their 401(k) retirement
fund. And many of the employees, believing the company’s hype about
its prospects, chose to put even more of their money into company
stock. Sixty-two percent of the assets in the 401(k) were invested in
Enron stock. Then, in October, following the company’s announcement
that it was taking more than a billion dollars in charges to offset bad
investments connected to insider deals — at the exact moment that
Enron began to unravel –– the company “locked down” the pension
plan so that employees could not sell off their Enron stock. The
lockdown supposedly occurred because Enron was changing plan
administrators. Trading at $33.84 when the lockdown went into effect,
the stocks were worth less than $10 a share a month later, when
employees were again permitted to sell the stock. In the process, many
lost their life savings.

Enron says it does not comment on pending litigation.

Meanwhile, Enron board chairman Kenneth Lay, reported cashing in

more than $200 million worth of stock options in the last several years
— before share values started dropping like a stone. Lou Pai, chairman
of Enron unit Enron Accelerator, sold stock in excess of $353 million.

Even Wendy Gramm, the wife of former U.S. Senator Phil Gramm, is
reported to have sold $297,912 in stocks. She served, believe it or not,
on Enron’s audit committee.

What were they doing at audit committee meetings, drinking coffee and
eating donuts?

Anyway, these lawyers alleged that you guys set up limited partnerships
that were used as strawmen for keeping debt off Enron’s books.

And your buddies at Arthur Andersen, who oversaw the bookkeeping

procedures, are under the spotlight. Representative John Dingell, D-
Michigan, and the lawyers want to know — what did Arthur Anderson
know and when did they know it?

“How am I going to retire now?” Gary Kemper, 57, of Banks, Oregon,

a maintenance foreman with an Enron affiliate, asked USA Today.
“Everything I’ve worked for for the past 25 years has been wiped out.
Meanwhile, the executives got out while the getting was good.”

ExxonMobil:
King of Global Warming Denial
You know a company is behaving badly when it starts getting cuffed
around by the public relations industry.
That’s why it was so notable in May when O’Dwyer’s, the leading rag
of the PR industry, criticized “ExxonMobil’s stubborn refusal to
acknowledge the fact that burning fossil fuels has a role in global
warming.”

Climate change, now accepted by scientific consensus as fact and

acknowledged by virtually all reputable scientists to be underway, poses
enormous environmental, human health and economic threats in
coming decades. Among other consequences: rising tides due to polar
icecap melting are expected to submerge entire island nations and vast
swaths of coastal lands; changing temperatures are expected to
contribute to the spread of deadly tropical diseases; extreme weather
events are expected to become much more frequent; and countless
species are facing endangerment due to rapid shifts in local weather
patterns. Emissions of carbon dioxide from the burning of fossil fuels
such as oil are a leading contributor to the problem of climate change.

ExxonMobil, the gargantuan of the oil industry, is the world’s leading

obstacle to remotely sensible approaches to address global warming.

It was the largest oil company contributor to George W. Bush’s

presidential campaign/Republican Party — and has seen its investment
pay off in the Bush administration’s resolute failure to sign the Kyoto
Protocol, a global treaty committing countries to binding (though
inadequate) reductions in greenhouse gas emissions, or to take any
serious steps to combat climate change.

The company continues to fund public relations and lobby campaigns

denying the reality and dangers of global warming. It continues to tout
the greenhouse denialists — the handful of industry-backed scientists
who have gained notoriety by their dissent from the consensus
statements of more than 1,800 leading climate scientists on the risks of
global warming.

ExxonMobil is discernibly worse on the global warming issue than

other oil companies. BP/Amoco and Shell have been the most
concessionary in the industry, acknowledging the seriousness of the
issue, ending their hard-line resistance to Kyoto and other measures to
address climate change, and beginning to invest in renewable energy
technologies. The other leading company, ChevronTexaco, is more
recalcitrant, but can’t match ExxonMobil.

Here’s the current ExxonMobil line, delivered by company CEO Lee

Raymond.

Part One: We believe there could conceivably be a global warming

problem: “We agree that the potential for climate change caused by
increases in carbon dioxide and other greenhouse gases may pose a
legitimate long-term risk.”

Part Two: But we don’t know enough yet to take action: “However, we
do not now have a sufficient scientific understanding of climate change
to make reasonable predictions and/or justify drastic measures. Some
reports in the media link climate change to extreme weather and harm
to human health. Yet experts [he goes on to cite James Hansen, one of
the handful of greenhouse denialists] see no such pattern. ... Although
the science of climate change is uncertain, there’s no doubt about the
considerable economic harm to society that would result from reducing
fuel availability to consumers by adopting the Kyoto Protocol or other
mandatory measures that would significantly increase the cost of
energy.”

Part Three: So we should study more and rely on voluntary action.

“This does not mean we favor doing nothing. We have redoubled our
efforts in energy conservation at our own operations around the world”
and are investing in fuel cells.

Meanwhile, while obstructing appropriate action on global warming,

ExxonMobil continues with its plunder around the world. What is
consistent is its reckless behavior and efforts to evade the consequences
of its actions.

• An Australian jury in June convicted the company’s

Esso Australia unit of 11 charges linked to a 1998
explosion at a gas processing plant which killed two
people.
• ExxonMobil is the lead contractor in the World Bank-
backed Chad-Cameroon pipeline, which threatens to
replicate the devastating experience of Shell’s operations
in the Niger Delta, where money flowed to a corrupt,
brutal and repressive national government while local
communities saw their livelihoods destroyed by
pollution.
• ExxonMobil has continued to fight against the $5
billion punitive damage verdict in the Valdez case. In
November, a federal appellate court ruled that the $5
billion award was too high. The appellate court agreed
that Exxon’s conduct in the Valdez case was reckless,
but held that precedent compelled it to reduce the
punitive verdict, which was approximately 17 times the
compensatory damages awarded to commercial fishers
in the case.
• It has continued to push for opening of the Arctic
National Wildlife Refuge to oil drilling, which would
threaten the ecology of the largest designated wilderness
area in the U.S. National Wildlife Refuge System.
• The company is culpable for some of the mass
atrocities committed by the Indonesian military in Aceh
 Province, in North Sumatra, a June lawsuit filed by the
Washington, D.C.-based International Labor Rights
Fund alleges. The suit charges that Mobil Oil contracted
with the Indonesian military to provide security for its
Arun natural gas project, and controlled and directed the
units assigned to it. ExxonMobil responded in a
statement saying it “condemns the violation of human
rights in any form and categorically denies these
allegations. We believe a lawsuit recently filed by the
International Labor Rights Fund (ILRF) containing these
allegations is without merit and designed to bring
publicity to their organization.”
• A New Orleans jury in May ordered ExxonMobil to
pay a Louisiana judge and his family $1 billion for
contaminating their land with radioactivity. Exxon had
leased the land, and an Exxon contractor used the land to
clean radioactive Exxon pipes. The contractor allegedly
did not know the pipes contained radioactive material.
Exxon says remediation costs for the land are minimal,
and is appealing the verdict. The punitive award “was
clearly not justified by the evidence,” Exxon’s lawyer
Gregory Weiss told the National Law Journal. “The only
thing that I can conclude is that they hit Exxon because
it’s Big Oil.”

Philip Morris:
Still the Same. Still Killing.
We’ve changed. That’s the line from Philip Morris.

And evidence abounds.

The company is changing the name of its parent operation from Philip
Morris to Altria.

The tobacco giant says it is spending $100 million in the United States
to reduce youth smoking.

Go to the company’s web site and read this: “We agree with the
overwhelming medical and scientific consensus that cigarette smoking
causes lung cancer, heart disease, emphysema and other serious
diseases in smokers. Smokers are far more likely to develop serious
diseases, like lung cancer, than non-smokers. There is no ‘safe’
cigarette. … We agree with the overwhelming medical and scientific
consensus that cigarette smoking is addictive.”
Ask company representatives about the efforts to negotiate an
international treaty on tobacco control, the Framework Convention on
Tobacco Control (FCTC). Here’s what David Greenberg, senior vice
president for corporate affairs of Philip Morris International told us: “It
is time for regulation,” he said. Around the world, he said, the company
is ready to embrace regulation whether by international institutions
and/or at the national level. “We’d like to see a convention have as
broad a reach” as possible, Greenberg said, “so we know what the rules
are.”

The only problem: It is all a sham. Public health experts agree the
company’s youth smoking prevention advertisements and programs are
either worthless or harmful, because they portray smoking as an adult
activity and thus make it more desirable to kids.

Despite the company’s new acknowledgement that the product it hawks

is deadly and addictive, it continues to pioneer new ways of marketing
cigarettes.

• Early this year, the company continued its longstanding

seduction of women to the smoking habit with a Virginia
Slims “See Yourself as a King” campaign. Women’s
health and tobacco control groups rushed to denounce
the new marketing effort.

“Philip Morris, the world’s largest tobacco company,

insults and degrades women with its new magazine ad
for Virginia Slims cigarettes,” says a statement issued by
more than a dozen organizations including the Boston
Women’s Health Book Collective, the American Medical
Women’s Association, the American Lung Association
and the Campaign for Tobacco-Free Kids. “By once
again suggesting that women are empowered by
smoking, Philip Morris shows contempt for women’s
health issues.”

“The Virginia Slims ads,” the statement rightfully

concluded, “are the most recent evidence that Philip
Morris’ attempts to portray itself as a socially
responsible company are a sham.”

• Philip Morris and the rest of the industry continue to

bombard kids in the United States with cigarette ads. A
New England Journal of Medicine study found that, in
2000, magazine advertisements for youth brands of
 cigarettes (defined as cigarettes smoked by more than 5
percent of eighth, tenth and twelfth graders) reached
more than 80 percent of young people in the United
States an average of 17 times each.

• This holiday season, Philip Morris is selling a new

cigarette, called M, with the slogan, “A Special Blend
for a Special Season.” Comments Matthew Myers,
president of the Campaign for Tobacco-Free Kids,
“Perhaps Philip Morris should change its slogan to ‘M is
for murder.’ After all, they’re selling the usual blend of
addiction, disease and death.”

At the negotiations of the Framework Convention for Tobacco Control,

Philip Morris is working hand-in-glove with the Bush administration to
obstruct a strong, enforceable treaty. In a November letter to the White
House, Representative Henry Waxman, D-California, wrote that “my
staff has identified 11 specific instances where Philip Morris
recommended deleting provisions of the draft text. In 10 of the 11
instances, your negotiators proposed or prepared amendments
advocating exactly what Philip Morris urged.”

These amendments included proposals to: lessen tobacco taxes; permit

tobacco companies to use terms like “light” and “low-tar” that public
health experts say are misleading; preserve duty-free sales of cigarettes;
and impede the World Health Organization from developing standards
for testing, measuring, designing, manufacturing and processing
tobacco products.

More revealing than Philip Morris’s “we’ve changed” public relations

line was a company-commissioned study from the Arthur D. Little
consulting firm. Prepared in November 2000 and made public in the
Wall Street Journal in July, the study argued that smoking saved the
Czech Republic government money by contributing to the “early
mortality of smokers.” When smokers die, society saves costs on
healthcare, housing and pensions for the elderly, the report ghoulishly
argued.

(But even this conclusion was deceptive, points out Clive Bates of
Action on Smoking and Health (ASH) UK — the acknowledged costs
of smoking in the study (including health care costs and lost income to
society from early mortality) are about 13 times higher than the
purported savings.)

The real difference between the new and old Philip Morris? Where the
company would once have belligerently defended the study, the new
company — once caught — is sophisticated enough to be contrite.

“The funding and public release of this study which, among other
things, detailed purported cost savings to the Czech Republic due to
premature deaths of smokers, exhibited terrible judgment as well as a
complete and unacceptable disregard of basic human values,” the
company said in an apologetic statement. “We will continue our efforts
to do the right thing in all our businesses, acknowledging mistakes
when we make them and learning from them as we go forward.”

Empty words from the global leader in an industry whose products are
taking 4.2 million lives this year alone.

SARA LEE:
21 Dead, $200,000 Fine
Perhaps no prosecution in the history of corporate criminality can
compare in its duplicity to the prosecution in the Ball Park franks
fiasco.

Bil Mar Foods is a unit of the Chicago-based giant Sara Lee

Corporation, the maker of pound cakes, cheesecakes, pies, muffins,
L’Eggs, Hanes, Playtex and Wonderbra products — your typical food
and underwear conglomerate.

Bil Mar makes hot dogs — Ball Park Franks hot dogs.

In July, Sara Lee pled guilty to two misdemeanor counts in connection

with a listeriosis outbreak that led to the deaths of at least 21 consumers
who ate Ball Park Franks hot dogs and other meat products. One
hundred people were seriously injured. The company paid a $200,000
fine.

According to Kenneth Moll, a Chicago attorney representing the

families of the victims, this is what happened:

Bil Mar has a hot dog facility in Zeeland, Michigan. The company shut
down the facility over the July 4th weekend of 1998 to replace a
refrigeration unit that was above the hot dog processing facility. The hot
dogs are heated at one end and sent down a conveyer belt to the other.
Moll’s theory is that the removal of the air conditioning unit and its
replacement dislodged some dangerous bacteria in the ceiling. When
the plant reopened, steam from the passing hot dogs went up to the
ceiling, condensed and dripped back down with the dangerous bacteria
onto the hot dogs.

In November 1998, Paul Mead from the Centers for Disease Control
(CDC) in Atlanta started receiving calls from the state health
departments around the country that had isolated strains of a deadly
bacteria, Listeria monocytogenes.

Mead looked at the bacteria and found that they were the same strain.
He sent out questionnaires and discovered there was an open package
of hot dogs in the home of one of the people who died. The CDC tested
the hot dogs and isolated the same bacterial strain — a DNA fingerprint
of the type of bacteria.

According to Moll, Mead went to the Bil Mar plant in Zeeland,

Michigan, tested unopened packages of hot dogs and was able to isolate
the same DNA fingerprint bacteria. In December 1998, Sara Lee
ordered a recall of millions of pounds of hot dogs and deli meats.

According to a series of reports in the Detroit Free Press, plant workers

were regularly testing work surfaces for the presence of cold-loving
bacteria — a class of bacteria that includes the deadly Listeria
monocytogenes as well as some harmless bacteria.

According to the Free Press, beginning in July 1998, after the

replacement of the old refrigeration unit, workers recorded a sharp
increase in the presence of cold-loving bacteria. The number of positive
samples remained high until the company stopped performing tests in
November 1998 — a month before the Sara Lee recall.

“Sara Lee was doing testing of the environment in the plant for cold-
loving bacteria,” says Caroline Smith DeWaal of the Center for Science
in the Public Interest. “Then their tests started coming up positive, so
they stopped testing. They knew they had a problem with bacteria in the
plant. But instead of solving it, they chose to ignore it.”

This is crucial, because if the company knew that it had a Listeria

monocytogenes problem and ignored it, it could be hit with a felony
conviction. And felony convictions have all kinds of collateral
consequences, including possible loss of federal contracts — Sara Lee
had a big hot dog contract with the Department of Defense.

In an interview, U.S. Attorney Phillip Green said there was insufficient

evidence to bring a felony charge.

“There was simply no evidence that Sara Lee Bil Mar knew that the
food product that they were producing and shipping out was adulterated
with Listeria monocytogenes,” Green says.

When asked about the allegations raised by the Free Press that the
company was testing for cold-loving bacteria, Green told us, “the
testing that you are referring to is known as Low Temperature
Pathogens testing — that is a very general test that does not necessarily
indicate the presence of Listeria monocytogenes.”

“The USDA regulations don’t require a plant to conduct testing on

finished products for the presence of deadly pathogens such as Listeria
monocytogenes,” Green said. “And Bil Mar was following accepted
industry practices in conducting general testing for the low temperature
pathogens.”

But Green refused to answer specific questions about evidence

concerning a possible felony violation.

Moll — the attorney representing the victims — says that the evidence
“does necessarily indicate the presence of Listeria monocytogenes.”
The CDC’s Mead found studies showing that, had Sara Lee done
further testing for the deadly strain of listeria, almost half of the cold-
loving bacteria could have tested positive for Listeria monocytogenes.

But U.S. Attorney Green never read Mead’s report. He never called on
Mead, perhaps the crucial expert in this case, to testify before the grand
jury.

In fact, it is apparent that federal prosecutors were overpowered by Sara

Lee’s outside lawyers in this case — the Chicago firm of Jenner &
Block, led by former Chicago U.S. Attorney Anton Valukas.

Valukas refused, on advice of his client, to comment.

But the extraordinary degree of the collaboration between Sara Lee and
the federal prosecutors in this case can be seen on Sara Lee’s web site
where it has posted a “joint press release.”

No, that’s not a typo. The U.S. Attorney and Sara Lee issued a joint
press release announcing the plea agreement in which no mention is
made of Ball Park Franks hot dogs.

The issuance of a joint press release is an extraordinary event. U.S.

Attorney Green can’t name another case where the prosecutor and
convict issued a joint press release announcing their plea agreement.
Neither can the current chief of the Criminal Division at the
Department of Justice, Michael Chertoff. He calls it “unusual.”

In a number of ways, the Sara Lee prosecution brings home the double
standards in the criminal justice system.

A company pleads guilty to a crime that leads to the death of 21 human

beings. The company pleads to two misdemeanors. The company is
fined $200,000. Think about that.

SOUTHERN:
Dirty Money and Dirty Air
One of the dumber provisions in U.S. environmental law is the
“grandfather clause” in the Clean Air Act. This provision exempts
power plants built before 1970 from Clean Air Act standards. At the
time of adoption, it was viewed simply as a transition mechanism, with
utilities arguing that old, grandfathered plants would rapidly be
replaced. That hasn’t happened.

Instead, utilities like Southern Company — the largest in the United

States — continue to rely on grandfathered facilities, especially dirty
coal plants, to generate substantial portions of their electricity.
According to the U.S. Public Interest Research Group (PIRG),
grandfathered plants represent approximately 40 percent of Southern’s
generating capacity.

By now, three decades after passage of the Clean Air Act, the
grandfather clause is a major loophole in the U.S. clean air rules. Its
persistence in the U.S. code is a prime example of the nexus between
dirty money and dirty air. And Southern is at the center of this morass.

Southern was the most polluting utility in the United States in 1999,
according to U.S. PIRG, emitting more sulfur dioxide, more nitrogen
oxides and more carbon dioxide than any other power company. Sulfur
dioxide and nitrogen oxides cause or exacerbate an array of respiratory
ailments such as asthma and are associated with tens of thousands of
deaths in the United States annually, and are the principle components
of acid rain. Carbon dioxide is the most significant greenhouse gas.

Southern is the largest utility polluter not just because it is the largest
company. It pollutes at higher rate than other utilities. For example,
according to U.S. PIRG, it emits sulfur dioxide at a rate nearly 50
percent higher than the national average for utilities, and more than 400
percent higher than it would with new facilities. The company itself
reports that it has the seventh highest sulfur dioxide emission rate in the
country.

The company says it is doing everything it reasonably can to reduce

emissions, alleging it has spent $4 billion on environmental
improvements in the last decade. It says it is gradually shifting to
natural gas and de-emphasizing coal. It brags that it has reduced sulfur
dioxide emissions by a third and nitrogen oxides by more than 20
percent since 1990. (It admits major increases in carbon dioxide
emissions, and even an increase in its carbon dioxide emission rate.) It
says it is taking steps to reduce emissions in the future. And it touts its
support for various environmental initiatives, notably sponsorship of
the Nature Conservancy’s 2001 annual meeting, marking the group’s
fiftieth anniversary.

(What is the president of the Nature Conservancy doing praising

Southern Company’s “commitment to environmental stewardship”?)

It does not just happen that Southern can get away with polluting the
U.S. skies and the atmosphere so badly. It takes a lot of work, and
money.

Southern dumps more money into the political process than any utility,
according to U.S. PIRG. In the first six months of the 2002 election
cycle, according to U.S. PIRG, Southern has outdistanced every energy
company in the United States, including the profligate political
spenders in the oil and gas industry. The company spends millions on
lobbyists, and employs nearly a dozen outside lobby firms. It runs a
network of political action committees to funnel money to candidates,
and is a major donor to political parties. Its campaign cash targets key
members of energy and environment committees, who work hard to
deliver the goods.

Using the leverage gained from its political investments, Southern has
enmeshed itself in an array of legislative and administrative battles over
air pollution rules. When it has faced enforcement actions for clean air
violations, it has sought to change the clean air rules. When legislators
have sought to tighten pollution rules and to eliminate the grandfather
clause to protect public health and the environment, Southern has
reliably been in opposition. It has fought against a global warming
treaty and restrictions on mercury emissions.

Place Southern on the 10 Worst list for the swirl of campaign cash and
toxic ash surrounding the company.

Wal-Mart:
Against Workers, Against Community
We have never understood why Wal-Mart was a darling of the socially
responsible investment community.

Thankfully, this distasteful romance appears to be over. In February,

KLD Research & Analytics, which maintains the Domini 400 Social
Index — one of, or perhaps the, leading indices of supposedly socially
responsible firms — ejected Wal-Mart from its list.

KLD focused on Wal-Mart’s hawking of sweatshop-made clothing,

handbags and other products, and its refusal to take steps to ensure its
contractors were sweatshop free. Following reports from the National
Labor Committee, Business Week, the Interfaith Center for Corporate
Responsibility and others, KLD reviewed Wal-Mart’s vendor
contracting policies and practices.

KLD determined that Wal-Mart came up woefully short. “The

company’s code of conduct for vendors does not stipulate that its
vendors permit workers to bargain collectively, nor does it require them
to pay laborers a sustainable living wage,” KLD concluded. “The
company does not issue any public reports on the working conditions at
its vendors’ factories. Other companies that have been similarly
exposed to sweatshop and Myanmar [i.e., were found to be purchasing
products made in Burma, despite calls from the country’s democratic
forces for a boycott of such products] controversies, including The Gap,
Liz Claiborne, Nike, Timberland and Reebok, have taken steps to
improve their records on these issues. In contrast, Wal-Mart’s progress
has been minimal.”

Here’s the Wal-Mart line on sweatshops: “Wal-Mart strives to do

business only with factories run legally and ethically. We continue to
commit extensive resources to making the Wal-Mart system one of the
very best. We require suppliers to ensure that every factory conforms to
local workplace laws and that there is no illegal child labor or forced
labor. Wal-Mart also works with independent monitoring firms to
randomly inspect these factories to help ensure compliance. In fact, we
conduct more than 200 factory inspections each week to ensure these
facilities are being run legally and ethically.”

In announcing that it was dumping Wal-Mart from the Domini 400,

KLD emphasized that it preferred to negotiate with companies rather
than remove them from the list. “However, Wal-Mart’s sub-par vendor
contracting policies and practices and its unresponsiveness to calls for
change, amplified by its role as the retail industry’s market leader,”
convinced the socially responsible investment firm that further dialogue
with the company offered few prospects for achieving change.

Of course, one does not need to look overseas to find fault with Wal-
Mart (though sadly, as the company increasingly opens outlets in
foreign markets, the harms it has caused in the United States are
increasingly being replicated in other countries).

The nation’s leading retailer has certainly innovated an effective

distribution and sales system. But its untrammeled expansion is leading
to the homogenization of culture and the obliteration of small business
competitors, and contributing to the sprawl that is a blight on the U.S.
landscape and undermining the quality of life of millions.

And Wal-Mart’s tolerance of sweatshops abroad is matched by its

vicious anti-unionism in its home country. The largest employer in the
United States, Wal-Mart is completely union free.

That does not come just from the company’s warm relations with its
“associates.”

“Wal-Mart is opposed to unionization of its associates,” reads a 1991

“Labor Relations and You” guide for company supervisors acquired and
made public by the United Food and Commercial Workers (UFCW)
union. “You, as a manager,” the guidebook instructs, “are expected to
support the company’s position and you may be asked to be a
campaigner for your company. This may mean walking a tightrope
between legitimate campaigning and improper conduct.”

Often, the company falls on the side of improper conduct. With UFCW
efforts to unionize Wal-Mart facilities ramping up, the company has
intensified its anti-union campaigns. Since Labor Day, the National
Labor Relations Board has slapped the company with more than a
dozen complaints, in connection with allegations of illegal firings,
illegal surveillance of workers, and illegal threats to fire union
supporters.

“It is a pattern of contempt for this nation’s labor laws that shows how
low Wal-Mart will stoop to keep its workers from exercising their right
to have a union,” says UFCW Executive Vice President Michael
Leonard.

Leonard says Wal-Mart follows a two-track approach to block

unionization efforts.

First, according to Leonard, is a “velvet glove” meeting with the

 workers to unlawfully try to find out why they want a union.

Then representatives from the company’s Arkansas headquarters try to

explain why workers should oppose a union. If that approach is
unsuccessful, he says, management resorts to the “iron fist.” The
company identifies leaders in the organizing drive and, he says, seeks to
bribe them with pay raises or promotions, or moves to fire them.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

DECEMBER 2000 - VOLUME 21 - NUMBER 12

THE TEN WORST CORPORATIONS OF 2000

Enemies of the Future

The Ten Worst Corporations of 2000

By Russell Mokhiber and Robert Weissman

Clearly, you have not been paying attention - to the editors of Fast Company, Forbes
ASAP, and Wired magazine, the authors of The Millionaire Next Door and the
Beardstown Ladies investment books, to George Gilder, Tom Peters, Lester Thurow and
Thomas Friedman, to the Nike and Microsoft revolutionaries - and the myriad other
business hustlers who would have you believe that popular democracy is reflected not by
unions, activist groups, and communities of human beings - but by avant garde, internet
connected, tech-savvy corporations.

Revolution is the air! Forget the fight against the WTO in Seattle. We're talking about fast
companies leading the way to a new marketplace - fast companies that express the will of
the e-trading people, who are buying and selling their way into millionaire status, and
upending the hierarchical corporate order.

And you thought populism meant the movement of citizens to control, through
democratic means, their economy, their government, and their lives?
The incessant bombardment of this drivel drove cultural critic Thomas Frank up and over
the wall. This year, he landed on the other side with One Market Under God: Extreme
Capitalism, Market Populism, and the End of Economic Democracy.

Frank, a social critic and editor of the Chicago-based Baffler magazine

(www.thebaffler.com), has had it with the idea of "market populism" - the notion that
markets are identifiable with the "will of the people" - one dollar, one vote.

He's had it with the corporate hucksters who continue to paint this rosy picture of the
1990s: Corporate profits multiplied. The Internet liberated a new entrepreneurial spirit. A
new generation of millionaires was minted overnight. Not just the rich - but all people in
the United States - prospered, adapted easily to downsizing.

Or as laissez faire energy specialist Daniel Yergin put it: Privatization plus deregulation
plus globalization plus turbo-capitalism equals prosperity.

"From Deadheads to Nobel-laureate economists, from paleoconservatives to New

Democrats, American leaders in the nineties came to believe that markets were a popular
system, a far more democratic form of organization than democratically elected
governments," Frank writes.

In molotov cocktail style, Frank rips into the hucksters of business hype, pointing out that
democracy still means democratic institutions democratically controlled, including
governments and unions, and that all the hype about the millionaire next door and fast
company revolutionaries that allow workers to dress casual on Fridays and rip the boss on
e-mail will not change some fundamentals about our current version of extreme
capitalism - the top 10 percent of people in the United States control 90 percent of the
nation's wealth, CEO compensation skyrocketed, rising from 85 times as much as the
average blue-collar wage in 1990 to some 475 times as much by 1999, union membership
in the United States continues to crash, 15 percent of the U.S. population is without
health insurance, and hundreds of thousands of U.S. jobs have been exported overseas.

And, it should be added, the situation is far, far worse in developing countries, where
corporate power and the dogmatic markets-above-all policies of the International
Monetary Fund, World Bank and World Trade Organization have left hundreds of
millions of people in dire poverty.

Yet, because Frank effectively contrasts the hype of the business magazines and corporate
hucksters with the reality on the ground in this country, he is considered "an enemy of the
future" by Reason magazine editor Virginia Postrel.

Just practice democracy - seek to exert people power over corporate power - and you too
can become a card carrying enemy of the future.

Frank points out that for years, corporations, fearing public control, have sought to mess
with the collective mind of the citizenry.
He says he owes a debt of gratitude to Roland Marchand's classic Creating the Corporate
Soul: The Rise of Public Relations and Corporate Imagery in American Big Business, in
which Marchand points out that for all the legal legitimacy that the courts bestowed upon
corporations at the turn of the century, corporations "conspicuously lacked a comparable
social and moral legitimacy in the eyes of the public."

So big corporations launched a 100-year public relations campaign to "create the

corporate soul" - to convince the public that corporations had a moral purpose and were
serving the public good.

The public relations campaign continues today at warp speed. Many have been convinced
that democracy and the free market are identical. But at what price?

"Here at home the price was the destruction of the social contract, the middle class
republic itself," Frank writes. "Our portfolios may have appreciated generously, but they
did so only to the extent that we countenanced the reduction of millions to lives of casual
employment without healthcare or the most elementary of workplace rights. We caught
the tail end of the Qualcomm wave and pretended not to notice as sweatshops reappeared
on our shores. We wondered like tots at the majesty of Cisco, at the generosity of Gates,
and we stood by as the price of a good education for our kids ascended out of reach."

Frank and other social critics this year have helped us see through the fog of corporate
hype.

We second Frank's sentiment that the interests of living breathing human beings should
be put before machines, before profits, before the corporate state.

In that spirit, we present to you, our readers, the Ten Worst Corporations of 2000.

AVENTIS: MAKING HUMAN GUINEA PIGS

Humility and caution are not the strongsuits of the corporate technocracy.

Give them a new technological toy, and they are anxious to deploy it. Give them a new
technological toy with a scenario of how it can make them rich, and there's no restraining
them. Prudent consideration of the social, health and ecological consequences of the new
technologies routinely fall by the wayside.

No case illustrates this pattern better than the introduction of genetically modified
organisms (GMOs) into the environment and, most worrisome, the food supply.

Biotech foods have been forced on the public without even the same testing required of
food additives. The biotech apologists assure the world that there's no need for testing,
that GMO food is equivalent to conventional food.
GMOs have been released into the environment, despite agreement that some biotech
products will make lasting changes in ecosystems (for example, by building pest
resistance to the naturally occurring pesticide Bt) and the near certainty that some biotech
products will contaminate conventional food supplies.

The biotech and food companies have sought to block labeling of food containing GMOs,
apparently on the grounds that what consumers don't know can't hurt them - or at least
can't hurt the bottomlines of the biotech peddlers whose sales figures would surely
plummet if consumers could easily make a choice to avoid biotech foods.

This year, rushing to the head of the pack of irresponsible biotech companies was the
French corporation Aventis, the maker of Cry9C corn, sold under the name StarLink.

Earlier this year, StarLink corn - which has not been approved for human consumption -
contaminated Taco Bell brand taco shells sold in grocery stores by Kraft, as well as many
other foods.

In 1998, the U.S. Environmental Protection Agency approved StarLink, which is spliced
with a protein that kills insect pests, for use in animal feed or non-food industrial
purposes only. The EPA withheld approval for introduction into the food supply on the
grounds that it did not have satisfactory data to show it would not trigger allergic
reactions.

The EPA's approval of StarLink was conditioned on Aventis notifying farmers of the
critical importance of keeping StarLink corn separate from their other corn crops and of
maintaining a buffer zone between acreage planted with StarLink and land planted with
other corn.

The corn supply contamination appears to have occurred because uninformed farmers did
not maintain the required buffer zone, or perhaps because corn crops were mixed in grain
elevators. Aventis claims it properly notified farmers.

Biotech opponents say the StarLink contamination of the food supply was predictable.
Indeed, they predicted it.

Aventis was mildly apologetic about the contamination. As pressure from the public and
from companies whose products had been or might be contaminated mounted, Aventis
announced that it would buy back all StarLink corn, in a program overseen by the U.S.
federal government.

"This responsible, voluntary action demonstrates to growers and the consuming public
the commitment of Aventis and the agencies to provide additional confidence in the
integrity of the country's food supply," the company said in a statement.

But the company's main play was to push for expedited EPA approval to put StarLink in
the food supply. New evidence submitted to the regulatory agency in October, Aventis
said, "verifies that there is more than an adequate margin of safety for StarLink corn -
even for especially sensitive population groups (e.g. children and those whose dietary
patterns include high consumption of yellow corn)."

Critics have claimed the StarLink corn poses allergenic risks, including fever, rashes or
diarrhea. They are sharply critical of the scientific evidence produced by Aventis to dispel
the allergenicity concern, with Friends of the Earth's Bill Freese telling the EPA in
October that Aventis had submitted "shoddy" science, replete with failures to report
important data. The flaws, he charged, "are not minor oversights, but rather serious
breaches of basic scientific protocol; a high school biology student would be flunked for
less."

Many consumers apparently agree. At least 44 people have complained to the U.S.
government that they became ill after eating food contaminated with StarLink.

BAT: SMUGGLER OF DEATH

One of the most effective ways to reduce smoking rates is to raise the price of cigarettes.

That's why the World Health Organization and health authorities consider stiff excise
taxes on cigarettes as among the most important tobacco control measures a country can
adopt.

It is why the tobacco industry hates excise taxes.

And, it appears from evidence made public this year, it is why the tobacco industry has
promoted and managed cigarette smuggling on a massive scale throughout the world.

According to internal company documents unearthed by the International Consortium of

Investigative Journalists (ICIJ), a project of the Center for Public Integrity, and the
British group Action on Smoking and Health (ASH UK), British American Tobacco
(BAT) for decades engineered a worldwide smuggling scheme, with extensive efforts in
Latin America and Asia. BAT, which owns the U.S. company Brown & Williamson, is the
world's second largest tobacco multinational, just behind Philip Morris. The documents
are among millions of company documents made public in connection with the U.S. state
litigation against the tobacco companies.

As Clive Bates of ASH UK summarized in testimony before the British House of

Commons Health Select Committee, BAT undertook a comprehensive, planned project to
promote smuggling worldwide. Among the company's key strategies, he testified:

• Adopting an approach to business planning and sales target setting which treats the
various routes for smuggling as near-normal distribution channels which are under the
same sort of control as legitimate channels;
• Deliberately establishing business relations with intermediaries that directly or
indirectly supply smugglers and directing these companies so as to gain share in the
illegal markets;

• Building warehouses and stationing marketing personnel close to borders with poor
customs controls;

• Using a small legal or duty-free market to justify advertising campaigns which have the
real purpose of stimulating demand for cigarettes on sale in the illegal market (these are
known as ‘umbrella operations');

• Organizing complicated movements of cigarettes through several jurisdictions or

multiple levels within an elaborate distribution chain - leading to difficulties in tracing the
products.

Smuggling is not a "victimless" crime, Bates emphasized. "The lower prices increase
demand and improve the competitive position of the brand and stimulate overall market
demand - with knock-on health impacts due to increased smoking." The ultimate result,
he said, "is increased smoking, and hence increased illness, especially in developing
countries, among the poor, and among children and adolescents."

The BAT documents show high official awareness of and involvement in the smuggling
operations, with contraband cigarettes referred to by a range of euphemisms, including
DNP (duty not paid) and GT (general trade). Here are some excerpts from the internal
documents:

• "I am advised by Souza Cruz that the BAT Industries Chairman has endorsed the
approach that the Brazilian Operating Group increase its share of the Argentinean market
via DNP."

• From BAT's five-year plan for 1994-1998: "A key issue for BAT is to ensure that the
Group's system wide objectives and performance are given the necessary priority through
the active and effective management of such [DNP] business."

• In China, the company sought to "investigate alternative export routes/customers that

will improve penetration of UK brands in northern and central provinces."

• In Colombia, a memo said, "DNP product should be launched two weeks after the DP
product has been launched."

Asked to respond to charges based on its own internal documents, BAT was aggressively
evasive.

"We do not intend to answer questions or address allegations apparently based on highly
selective and out-of-context documents, about matters which are more properly addressed
- and in many instances are being addressed with our full cooperation - by governments
and customs authorities around the world," the company said in a statement in response
to the International Consortium of Investigative Journalists. The company said that it
knows that some of its products "are handled other than through official channels," but
added that "we cannot control the distribution chain all the way to the final customer."

Forced to appear before the British parliamentary committee with Clive Bates and
Duncan Campbell, a reporter affiliated with ICIJ and the Guardian newspaper, BAT Chair
Martin Broughton denounced the committee as a "kangaroo court." He ripped up a copy
of an internal memo handed him that referred to the smuggling, and denied he had read a
lengthy series of articles in the Guardian based on the ICIJ investigation.

BP/AMOCO: LAWBREAKER

What kind of nasty oil company do we have in BP/Amoco? (BP/Amoco, which is based
in Chicago, was created in 1998 by the merger of Amoco Corporation of the United
States and the British Petroleum Company p.l.c. of the United Kingdom.)

Let us review the evidence:

• In February, BP Amoco's Alaska subsidiary - BP Exploration (Alaska) Inc. - was hit

with a $500,000 criminal fine for failing to report the illegal disposal of hazardous waste
on Alaska's North Slope. The company was also ordered to establish a nationwide
environmental management system designed to prevent future violations.

As a condition of a five-year probation, BPXA was ordered to create an environmental

management system for all of BP Amoco's facilities in the United States and Gulf of
Mexico that are engaged in the exploration, drilling or production of oil. This court-
monitored system will be the first of its kind in the oil industry to result from a federal
prosecution.

At the time BPXA pleaded guilty to this environmental crime, the company also agreed
to a civil settlement involving related claims. Under the settlement, BPXA has paid $6.5
million in civil penalties to resolve allegations that the company illegally disposed of
hazardous waste and also violated federal drinking water law.

Both the criminal plea and the civil claims stem from the injection of hazardous wastes
on Endicott Island over a three-year period beginning in 1993.

• In April, according to a story in The Guardian newspaper, the Pension Investment

Research Consultants Groups (PIRC), which advises pension funds and investment
managers with combined assets over $400 billion), sent a report to its clients
recommending they vote in favor of a shareholder resolution calling on BP Amoco to
cancel its controversial Northstar offshore oil project now under construction in the
Arctic Ocean and stop lobbying to open the Arctic National Wildlife Refuge to drilling.
The resolution urges BP Amoco, which labels itself a forward-thinking energy company,
to invest in the extraordinary market opportunities now opening for solar energy.

A BP/Amoco spokesperson says that "it's going to come down to Congress as to whether
or not the [Arctic National Wildlife Refuge] is going to be opened up. We really don't
have a say in that."

The company says it is investing hundreds of millions annually in solar, but that this does
not replace the need for more oil. "Solar can't run your car at this point," says Youssef
Ibrahim, vice president of media relations. "The world is consuming 76 million barrels of
oil a day. When the Chinese finish buying another 170 million cars in the next 20 years,
where does anybody think the stuff is going to come from to run them?"

• In April, BP Amoco agreed to pay $32 million to resolve claims under the False Claims
Act and administrative claims that the corporation underpaid royalties due for oil
produced on federal and Indian lands since 1988.

• In July, BP/Amoco agreed to pay $10 million to settle a Clean Air Act case.

• And throughout the year, BP/Amoco and the other oil companies used their toadies in
Congress, led by Representative Don Young, R-Alaska, to threaten a public interest
group, the Project on Government Oversight (POGO), with a contempt of Congress
citation for failure to turn over subpoenaed documents.

POGO's lawyers say that POGO is refusing to provide the phone records to the House
Committee because to do so would undermine efforts to protect whistleblowers and
impermissibly intrude upon its First Amendment rights.

Young's subcommittee is investigating POGO's payment of about $800,000 to two federal

employees. POGO had received $1.2 million from Mobil Oil in a lawsuit settlement and
then made payments of $383,600 each to two whistleblowing federal employees.

Young argues that the POGO payment to the officials was a payoff for information.
POGO says it was a reward for their whistleblowing.

POGO's executive director, Danielle Brian says that Young is acting on behalf of the oil
industry in retaliation against POGO for the group's campaign to expose the federal
government's overpayment of royalties to the oil industry.

"Chairman Young's subpoena is the latest in a series of reprisals from oil-friendly

politicians aimed at POGO for their role in forcing the issue of oil royalty underpayments
in recent years," says Brian. "The only information Chairman Young will gain from this
subpoena are the identities and phone numbers of whistleblowers who have worked with
POGO, including those who exposed oil industry ripoffs. We will not betray these
whistleblowers and subject them to retaliation."
DOUBLECLICK: COOKIE CROOK?

Beware, computer junkies - Doubleclick is following you.

Earlier this year, Michigan Attorney General Jennifer Granholm commenced a legal
action against DoubleClick, Inc., the world's largest Internet advertising business, and
two web sites that it owns and controls, IAF.net and NetDeals.com.

Granholm alleged that DoubleClick had violated the Michigan Consumer Protection Act
and other laws by failing to disclose to Internet users that DoubleClick is systematically
implanting electronic "cookies" - electronic surveillance files - on the hard drives of
users' computers without their knowledge or consent.

DoubleClick then proceeds to compile personal user profiles on consumers which,

potentially, can be linked directly to a consumer's name, home address and e-mail
account.

DoubleClick has collected 100 million consumer profiles.

DoubleClick and the Attorney General's office have been in negotiations to resolve the
dispute throughout the year, although sources close to the case said that settlement talks
have broken down recently.

DoubleClick President Kevin Ryan said his company "has never and will never use
sensitive online data in our profiles, and it is DoubleClick's policy to only merge
personally identifiable information with non-personally identifiable information for
profiling, after providing clear notice and choice."

But Granholm says that "every time you use the Internet, DoubleClick is placing a bar
code on your back - a user I.D. - so that it can identify your interests, habits and
preferences."

"Because DoubleClick secretly implants additional surveillance files as you surf the
Internet, DoubleClick is continually adding detailed personal information about you to its
data banks," she says. "The average consumer has no idea that their on-line movements
are being spied upon. This amounts to little more than a secret, cyber wiretap."

"Cookies" are tiny, electronic files that are routinely placed on an Internet user's computer
when that user visits a site on the web. The files allow the site to recognize former
patrons and customize their offerings of goods and services when that patron visits again.
A cookie doesn't identify users by name - it merely tags their computer with an I.D.
number.
DoubleClick operates as a third party on many web sites, however, placing additional
surveillance cookies on a visitor's computer without the visitor's knowledge that
DoubleClick even maintains a presence on that site.

"A consumer visiting a trusted national clothing retailer's site, for instance, might expect
that retailer to collect preference information so the site could customize the consumer's
next visit," Granholm says. "That consumer would have no idea, however, that a third
party - DoubleClick - is also placing a surveillance cookie on their computer for the
purpose of selling that profile information to other web advertisers."

In November 1999, DoubleClick acquired Abacus Direct Corporation, a company that

compiles, analyzes and markets "identifiable" personal consumer information such as
names, home addresses and phone numbers gathered primarily from catalogue sale
transactions.

The Abacus database contains detailed consumer profiles on more than 90 percent of U.S.
households.

DoubleClick also collects "identifiable" personal information directly through the

operation of its two subsidiaries, IAF.Net and NetDeals.com.

DoubleClick has indicated that it "can associate" this "identifiable" personal information
with the "non identifiable" profile information it gathers from the surveillance cookies it
is surreptitiously placing on computers.

On February 14, 2000, DoubleClick announced a new "privacy policy" in the face of
growing public concern about its business activities. The fourth privacy policy
DoubleClick has posted since 1997, it continues to be ambiguous about what
DoubleClick will do with the consumer information it compiles.

Asked for clarification, officials from DoubleClick respond that they, along with other
industry players, have adopted the Network Advertising Initiative, self-regulatory
principles approved by the Federal Trade Commission.

Under the principles, "network advertisers shall not use personally identifiable
information about sensitive medical or financial data, sexual behavior or orientation, nor
social security numbers" for online preference marketing. It prohibits the merger of data
bases that include identifiable personal information with others absent an affirmative
"opt-in" by consumers.

But Granholm cautions, "DoubleClick's privacy policy is a moving target and consumers
should be extremely cautious about relying on the company's vague promises. Today, the
policy says one thing, but tomorrow, it may say another. We can't be certain that
tomorrow's policy won't allow the company to sell the information concerning your
Internet use to the highest bidder."
FORD/FIRESTONE: RECKLESS HOMICIDE?

In 1998, in Corpus Christi, Texas, 17-year-old Matthew Hendricks was on his way to pick
up his girlfriend. He was driving a Ford Explorer. The tread ripped off one of the Ford's
Firestone tires, causing him to lose control. He was thrown from the vehicle and killed.

"When I was told that my son died, I felt like someone had reached in and ripped my
heart out," says Vicki Hendricks, Matthew's mom.

The death of Matthew Hendricks is one of more than 150 deaths around the world linked
to Firestone tread separations.

Ford and Firestone knew of at least 35 deaths and 130 injuries before the U.S. federal
government launched its probe earlier this year. They knew about these cases because
they were being sued by the families of the victims. (The parents of Matthew Hendricks
settled their case against Firestone earlier this year.) And as a condition of these
settlements, Ford and Firestone were demanding that the lawyers who bring these cases
not speak to anyone about what they found out during discovery.

Ford and Firestone should be criminally prosecuted for reckless homicide in connection
with the more than 90 deaths and hundreds of injuries that resulted when 15-inch tires
that are standard equipment for Ford Motor Company's popular Explorer sports utility
vehicle failed, causing catastrophic accidents around the country.

Joan Claybrook, President of Public Citizen, plainly presented the evidence of corporate
culpability in Congressional testimony delivered in September.

"The Ford Explorer was first offered for sale in March 1990," Claybook told the
transportation subcommittee of the Senate Appropriations Committee. "Ford internal
documents show the company engineers recommended changes to the vehicle design
after it rolled over in company tests prior to introduction, but other than a few minor
changes, the suspension and track width were not changed. Instead, Ford, which sets the
specifications for the manufacture of its tires, decided to remove air from the tires,
lowering the recommended psi to 26. The Firestone-recommended psi molded into the
tire for maximum load is 35 psi."

"Within a year of introduction," she continued, "lawsuits against Ford and Firestone were
filed for tire failures that resulted in crashes and rollovers. At least five cases were filed
by 1993, and many others followed in the early 1990s. Almost all were settled, and
settled with gag orders prohibiting the attorneys and the families from disclosing
information about the cases or their documentation to the public or DOT. When lawsuits
are filed against a company about a safety defect, the company organizes an internal
investigation to assemble information and analysis about the allegations. Top company
officials are kept informed about all lawsuits against the company, particularly when they
accumulate concerning one problem. There is no question the companies knew they had a
problem. But they kept it secret."

By 1996, state agencies in Arizona were reporting problems with Firestone tires on
Explorers. By 1998, Ford and Firestone had entered into discussions over tire failures
with authorities in Middle Eastern, Asian and South American countries. "Ford eventually
decided to conduct its own recall without Firestone and replace the tires in the various
countries in 1999 and 2000," Claybook noted.

But the companies failed to act to remedy the problem in the United States until this year,
when the National Highway Traffic and Safety Administration began investigating the
problem.

Senator Arlen Specter, R-Pennsylvania, a former district attorney, has said that if he were
still a district attorney, he would bring such a criminal homicide prosecution under state
law at the "snap of a finger."

Unfortunately, there are few prosecutors in the country today with the resources and
courage to bring such a homicide prosecution against two corporate giants, and no
criminal prosecution has so far been brought against Ford/Firestone.

Legislation proposed by Senators John McCain, R-Arizona, and Specter would have
provided a structural remedy to deter future Ford/Firestone-style coverups by imposing
jail terms on corporate executives for knowingly selling vehicles or parts with dangerous
defects. But a Big Business lobby campaign defeated this proposal (though Ford
supported it). Instead, Congress passed only minor legislation that requires the auto
companies to notify U.S. regulators when they replace motor vehicle parts in a foreign
country and to turn over to federal regulators government data on warranty claims.

While there is no longer a dispute over the danger of the Firestone-Ford Explorer
combination, the two companies have sought to evade full responsibility by blaming each
other for the problem.

"We take full responsibility when there is a problem with our tires," John Lampe, then the
executive vice president and now CEO of Firestone told a Congressional committee in
September. "We firmly believe, however, that the tire is only part of the overall safety
problem shown by these tragic accidents. Mr. Chairman and members of the Committee,
let me be very clear; we could remove every one of our tires from the Explorer, and
rollovers and serious accidents will continue."

"My purpose is not to finger point," countered Ford's CEO Jac Nasser at a separate
Congressional hearing, "but simply to tell you that at each step Ford actively took the
initiative to uncover this tire problem and find a solution. It was not until we saw
Firestone's confidential claims data that it became clear what had to be done. If I have
one regret, it is that we did not ask Firestone the right questions sooner."
GLAXO WELLCOME: PATENTS OVER PEOPLE

More than 35 million people around the world have HIV/AIDS, well over 20 million in
sub-Saharan Africa. Thirty-six percent of adults in Botswana have HIV/AIDS. About 3
million Africans die annually from HIV/AIDS.

In the United States, as well as other rich countries, drug treatments enable many or most
of those with HIV/AIDS to survive.

But the life-saving drug cocktails are very expensive - costing $10,000 to $15,000 or
more per person per year. These prices are unaffordable for all but a tiny few in Africa,
where per capita incomes generally register in the hundreds of dollars. So for Africans, an
HIV/AIDS diagnosis is a death sentence.

In a rational and humane world, the life-saving drugs would be made available to
Africans, who would enjoy the same access to treatment as those in the rich countries.

Unfortunately, we don't live in a rational world.

Instead, drug companies use patents and various intellectual property protections to block
distribution of cheap, generic versions of HIV/AIDS and other drugs. Since the cost of
drug production is actually very low, these generic versions can reduce prices by 95
percent or more.

For years, the pharmaceutical industry was able to count on the U.S. government to
pressure developing countries not to undertake to make generics available - even when
those countries sought to adhere to the restrictive rules of the World Trade Organization.
In the face of strong domestic pressure from AIDS activists and others, the U.S.
government has backed down from many of the more extreme threats it made against
developing countries in connection with the drug access issue, though it has continued to
seek to deter the use of generics through its aid and trade policy [see "AIDS Drugs for
Africa," Multinational Monitor, September 1999].

While the U.S. government has restrained itself, the drug companies continue to do
everything they can to block generic competition. Their great fear is not losing markets in
Africa - where sales are miniscule - but that competition and lower prices in developing
countries will generate pressure for competition and lower prices in other countries,
especially the United States, where industry profiteering is at its peak.

Glaxo Wellcome, now planning to merge with SmithKline Beecham, has emerged as a
particular menace among the drug industry cartel. (Burroughs Wellcome, now merged
with Glaxo, was an early villain in the effort to promote access to AIDS medicines,
charging astronomical prices for AZT, one of the first successful anti-AIDS drugs, and
one developed by the U.S. government.)
And, in August, Glaxo dispatched a threatening letter to Cipla, an Indian generic drug
maker, objecting to Cipla's distribution of a small amunt of Combivir - a combination of
two anti-AIDS drugs for which Glaxo claims to hold patent rights - in Ghana.

"Importation of Duovir [Cipla's version of Combvir] into Ghana by Cipla or any of its
affiliates represents an infringement of our Company's exclusive patent rights," Glaxo
instructed Cipla.

In November, Cipla announced it would stop exporting Duovir to Ghana, even though it
contested Glaxo's patent claims. At stake is whether Cipla will sell low-cost AIDS drugs
in Ghana.

Ghana may represent only a sliver of Glaxo's revenue, "but where do you draw the line?"
Martin Sutton, a Glaxo spokesperson, said to the Wall Street Journal.

Low-cost sales of AIDS drugs by Cipla and other generic manufacturers in Africa could
suddenly make treatment within reach of hundreds of thousands or make it feasible for
foreign aid and philanthropic efforts to be devoted to treatment options.

Glaxo's actions make the day when that finally happens further off.

Meanwhile, the death toll mounts.

LOCKHEED MARTIN:

TESTING ITS POLLUTANT ON HUMANS

For years, pesticide companies have tested their dangerous products on human beings.
Now, the merchants of war are testing a pollutant on human beings.

In November, the Los Angeles Times reported that on behalf of military contractor
Lockheed Martin, Loma Linda University is conducting the first large-scale tests of a
toxic drinking water contaminant on human subjects - a step medical researchers and
environmentalists called morally unethical and scientifically invalid.

The Times reported that Loma Linda Medical Center is paying 100 people $1,000 each to
eat a six-month daily dose of perchlorate, a toxic component of rocket fuel that damages
thyroid function and is found in hundreds of water supplies in Southern California.

The Loma Linda subjects are being fed up to 83 times the "safe" level of perchlorate
currently set by the state health department, which is expected to review its perchlorate
standards in coming months.
The paper reported that a former Lockheed plant is the likely cause of the contamination
of water wells in San Bernardino County.

In 2001, the U.S. Environmental Protection Agency (EPA) will begin national testing of
water supplies for perchlorate in preparation for setting national regulations on the
chemical.

If Lockheed Martin can persuade the state and EPA not to set strict standards for
perchlorate allowed in drinking water, the company will save millions of dollars in
cleanup costs.

The Times said the Loma Linda tests are apparently the first large-scale study to use
human subjects to test a water pollutant. The EPA has set no protocols or regulations for
human testing. In September the agency's science advisory panel said human testing
should be used only with "the greatest degree of caution."

But two members of the panel dissented strongly, calling the studies dangerous and
insufficient to judge the safety of pollutants, especially for children. A recent study by the
Arizona state health department of infants near Lake Mead, Ariz., which is contaminated
with perchlorate, found that many were born with altered thyroid function.

In their dissent, EPA panel members Dr. Herb Needleman of the University of Pittsburgh
School of Medicine and Dr. J. Routt Reigart of the Medical University of South Carolina
wrote that allowing human testing "lays the ground for a flood of research that should not
be conducted and should not be accepted by the EPA for regulatory purposes."

And in a letter to the president of Loma Linda University, the Environmental Working
Group warned that the ethical and scientific cloud over human testing means that "the
human subjects in this experiment, including Loma Linda University students in all
likelihood, will have accepted risks during the course of an experiment that will yield
results that are unusable for any regulatory purposes."

As the Times pointed out, scientists who perform these human experiments compare
them to clinical trials for drugs. In fact, perchlorate isn't just a pollutant - high doses are
used, in rare cases, to treat hyperthyroidism.

But people who test drugs are helping society find treatments for sick people - consuming
a pollutant has no medical benefits.

Lockheed denies responsibility for the tests. Says Gail Rymer, company director of
environmental communications: "The corporation has relied on experts - in this case, Dr.
Braverman of Boston University (BU) - to ensure that the study is safe, and ethically and
scientifically sound. We believe it will help us understand better the effects of low-dose
perchlorate exposure on humans."
"BU has the lead on the study. Lockheed Martin put its money into a trust run by an
independent trust administrator, who paid BU, who then hired Loma Linda to conduct the
study," Rymer says.

Asked about the general perception that poisons should not be tested on humans, Rymer
responds: "That's not for us to determine. Again, we rely on the experts and their
guidance in their areas."

Of course, Lockheed Martin is involved in much more than testing pollutants. Among
other dubious activities, the company is the primary proponent of one of the greatest
government boondoggles of all time and a genuine national security risk: Star Wars.
Lockheed invested nearly $2 million in the 1999-2000 election cycle, not to mention
millions more spent on lobbyists, think tanks and other opinion makers to push for
increased support for the proposed National Missile Defense system [see "Star Wars,
Continued," Multinational Monitor, October 2000]. Despite an impressive record of
technological failure, all signs point to the U.S. government dumping billions more into
research and development for the military fantasy.

PHILLIPS PETROLEUM: DEADLY EMPLOYER

A massive explosion at a Phillips Petroleum plastics plant in Pasadena, Texas in March

killed one person and injured 74.

It was the third fatal accident at the sprawling petrochemical complex in the last 11 years,
including a 1989 blast that killed 23 people and an explosion in June 1999 that left two
dead.

The explosion was also the fourth within the last year at the facility.

The plant employs 850 workers who make high quality plastic resins for use in medical
and consumer products.

"This tragic explosion at the Phillips Chemical complex fits only too well with the
American chemical industry's history of accidents across the country and in Texas," says
Jeremiah Baumann of U.S. PIRG, a public interest group based in Washington, D.C.

After a six-month investigation, the Occupational Safety and Health Administration

(OSHA) proposed fining the company $2.5 million.

OSHA said that "failure to properly train workers" was a key factor in the deadly
explosion.

"Unfortunately, this tragedy is not an isolated incident, but one is a series of incidents at
this site," says U.S. Labor Secretary Alexis Herman. "Three workers lost their lives in
explosions at this plant in less than a year's time, and 23 others were killed in a major
explosion in 1989."

Phillips Petroleum disagreed with the conclusions of the OSHA investigation and
expressed disappointment that OSHA "chose to issue citations rather than pursue a
mutually satisfactory resolution of the issues."

OSHA blamed the blast on a chemical reaction in a 12,000-gallon tank of butadiene in the
K-resin section of the complex.

K-resin is a trade name for clear plastic sold and used for such items as drinking cups,
food containers and medical equipment. Butadiene is a highly reactive hydrocarbon.

"The tank had been out of service for cleaning and had no pressure or temperature gauges
that could have alerted workers in the control room to the impending hazard," according
to OSHA.

Jim Lefton, international representative with the Paper, Allied-Industrial, Chemical and
Energy Workers International union, applauded the fine.

"I wish it could have been more. Our bottom line is that we want this company to quit
killing people and quit hurting people," he says. "Our number one concern was to try to
find out what the company will do for the employees who were burned in the explosion.
They need to compensate the families beyond what workers' compensation insurance
requires."

Spokespersons for the Harris County District Attorney's office, the Pasadena City Police,
and the Harris County Sheriff's office all said that no criminal investigation had been
opened.

Since July 2000, the Phillips facility in Houston is under the control of a new Phillips-
Chevron joint venture, Chevron Phillips Chemical. Chevron Phillips Chemical says it is
launching a comprehensive plan to make the Houston facility "one of the safest plants in
the chemical industry."

"Chevron Phillips work site safety action plan not only addresses issues raised by
OSHA's investigation of a March 27, 2000 accident at the facility's K-Resin Plant, but
goes further," says James Gallogly, new CEO at Chevron Phillips.

The plan includes appointment of a "safety czar," development of a behavior-based safety

program [see "Blame the Worker: The Rise of Behavioral-Based Safety Programs,"
Multinational Monitor, November 2000] and training for employees.

The 1989 accident at the Phillips facility spurred Congressional passage of accident
preparedness provisions as part of the 1990 Clean Air Act amendments.
One of the provisions required facilities using extremely hazardous substances to publicly
report an estimated worst-case accident scenario including the radius of vulnerability
around the facility. For the Phillips facility, that worst-case accident scenario involved the
butadiene used in their K-resin plant where the accident occurred.

Last August, the Chemical Manufacturers Association (of which Phillips is a member)
lobbied for legislation passed by Congress barring the worst-case scenario estimates from
public dissemination.

"Last summer, the chemical industry successfully undermined the public's right to know
about chemical accident hazards," says Baumann. "Now we're seeing just how dangerous
it is to be kept in the dark."

SMITHFIELD FOODS: PIG OUT

Things are not right in farm country. Family farmers in the United States are being driven
off the land. Big corporations are taking over.

Consolidation in the ag business is accelerating.

In a merger than even stunned pro-big business allies like the Farm Bureau and U.S.
Agriculture Secretary Dan Glickman, Smithfield Foods, the largest U.S. pork producer,
announced that it was merging with IBP Inc., the second largest pork producer.

Smithfield currently controls 18.4 percent of the U.S. hog slaughtering capacity while
IBP controls 17.7 percent.

IBP has one-third of the nation's beef processing capacity.

Smithfield's slaughtering capacity is focused in the Mid-Atlantic with only two plants in
the Midwest.

In contrast, the bulk of IBP's hog processing is in the Midwest.

The two firms differ in their approach to acquiring hogs. Smithfield owns a majority of
the hogs it slaughters with a reported goal of becoming 100 percent vertically integrated.
IBP purchases its hogs through marketing contracts and on the open market.

"Livestock producers, and especially hog farmers, would be injured enormously by this
acquisition," says Fred Stokes, president of the Organization for Competitive Markets.
"With the increased consolidation, loss of a buyer and Smithfield's increased ability to
manipulate prices, farmers and ranchers are guaranteed to see lower prices" [see "In Firm
Control," Multinational Monitor, July/August 2000.]
The Smithfield/IBP merger comes on the heels of Smithfield's acquisition of Murphy
Farms, the nation's second-largest hog producer, and less than a year after its acquisition
of giant hog producer Carroll's Foods.

Four companies now control 80 percent of the beef slaughter business. Four companies
control 50 percent of the pork processing business.

In November, Senator Tim Johnson, D-South Dakota, called on the Justice Department to
investigate the merger.

"The strategic move to combine Smithfield with IBP would permit this unified
powerhouse to nearly monopolize the hog market and vertically integrate so as to erect
barriers to outside competition at nearly every level in the food chain," Johnson says. "As
the largest packer and processor of beef in the world, IBP now controls 40 percent of the
cattle slaughter market in the U.S. IBP, Excel, and Monfort control over 70 percent of the
total U.S. cattle slaughter market. I am concerned about the erosion of local and regional
market competition in the cattle marketplace as a result of this merger."

Smithfield argues that the merger will be good for small farmers. IBP will either merge
with Smithfield or become a debt-ridden company through a leveraged buyout, says a
Smithfield spokesperson. "In a Smithfield deal, you have a publicly traded company with
financial strength to stand by communities when times get tough and not be forced to cut
back to pay debt."

The company also argues that it is only responding to external forces supporting
consolidation. "The retail and food service industries are consolidating, and this is a
defensive response to that," says the company spokesperson. "The customers (Wal-Mart,
Japan, McDonald's) need companies that can service them on a national and international
scale. ... The producers and packers including IBP and Smithfield are responding to
what's happening higher up in their industry. Smithfield is the stronger of the two, and
therefore is better for the independent producers."

While wrecking havoc on the farm economy, the big hog companies are also destroying
farm country [see "The Dirt on Factory Farms," Multinational Monitor, July/August
2000]. The rapid growth of factory farms and the resulting mountains of untreated
livestock manure are fouling drinking water supplies and causing a public health risk
throughout the United States.

North Carolina has put a moratorium on new corporate hog farms after waste fouled
rivers and entered the Chesapeake Bay.

In 1996, the Environmental Protection Agency fined Smithfield $12.6 million after its
processing plants discharged pollutants into the Pagan River.

Earlier this year, the Justice Department sued IBP alleging that the meatpacker violated
pollution laws at its facility in Dakota City, Nebraska.
TITAN INTERNATIONAL: UNION BUSTER

Strike rates are at historic lows in the United States. Employer animus is now so intense
that many unions believe strikes only invite companies to permanently replace their
unionized workforce with strikebreakers. When unions do go on strike, it often means a
particularly vicious employer has left the unionized workers with no choice.

Morry Taylor and his Titan International are the poster children for illustrating the point.

Titan International produces agricultural, off-road and construction tires, wheels and
assemblies. Approximately 1,000 United Steelworker of America (USWA) workers at
two Titan facilities have struck the company since 1998.

In May 1998, 670 workers at Titan's Des Moines, Iowa factory went on strike when Titan
refused to seriously negotiate a new collective bargaining agreement with them. In
February 1999, an administrative law judge ruled the strike was an unfair labor practice
strike, which means the striking workers cannot be permanently replaced.

The administrative law judge found that the company unlawfully denied necessary
bargaining information to the union, unilaterally imposed a contract on the workers,
moved equipment and jobs from the Des Moines plant, and discontinued insurance to
workers on leave when the strike began. The National Labor Relations Board (NLRB)
would later issue a complaint charging Titan with unlawfully firing workers at the Des
Moines factory for exercising protected rights.

More than 300 workers at Titan's Natchez, Mississippi facility went on strike in
September 1998 after Titan fired the entire workforce in a fashion the NLRB has since
alleged illegal. The firings followed a complex financial deal in which Titan and various
interests associated with Titan CEO Morry Taylor and his family took a controlling
interest in Condere Corporation, a bankrupt company which owned Fidelity Tire in
Natchez. In September 1998, Titan bought Condere's assets, and then proceeded to fire
the Natchez workers, who were represented by the USWA.

The NLRB charged in July 2000 that Titan and Condere are alter egos, meaning they
share substantially identical ownership, and imposing on Titan the duty to respect the
collective bargaining arrangement between Condere and the USWA. The NLRB's
complaint against Titan/Condere also charges Condere with illegally threatening in
August 1998 to fire workers, lower wages, move work or close the plant because of
employees' involvement with the union.

Taylor responded to the NLRB complaint by reportedly telling the Natchez Democrat that
it merited "laughter in its highest extent." He added, "I figure in five years they'll get that
to the first federal court. By that time they'll all be enjoying retirement pay."

"Taylor may think this is a joke, but we don't," responded USWA Local 303L President
Leo "T-Bone" Bradley.
The Steelworkers have organized an intensive corporate campaign against Titan. The
union has highlighted the company's horrendous worker safety record and the company
policy of refusing access to Occupational Safety and Health Administration (OSHA)
inspectors who do not have a warrant. The union has pointed to the company's poor
environmental practices.

The Steelworkers have also shined a light on the company's strange financial dealings,
including a case in which a private company controlled by Morry Taylor allegedly bought
a house for $165,000 and then sold it to Titan for $1 million two minutes later. Taylor
now lives in the house as a CEO perk.

Titan's response to the Steelworker allegations and corporate campaign has been bluster
and intimidation. In September, the company filed a RICO (Racketeering Influenced and
Corrupt Organization) lawsuit against the union, charging that the USWA has threatened
Titan's replacement workers and violated the law.

"It is time for companies to stand up to labor unions and demand that the laws be
upheld," says Taylor. "Companies need to defend the rights of their employees. The Titan
lawsuit will bring to light the union's unbelievable disregard for laws."

"The union is accustomed to using its propaganda machine to influence politicians and
public opinion, but it is very difficult to bully a federal court with the same tactics. Titan
will be asking other companies to step forward with information regarding similar acts
committed by the USWA. Titan also plans to organize a group of companies to focus on
changing the labor laws of this country to better protect workers' rights."

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Avondale

The Ten Worst Citigroup

Corporations of 1999 Del Monte

by Russell Mokhiber Guardian

Postacute
As we move to the end of the millennium, it is important
to remind ourselves that this has been the century of Hoffman
the corporation, where for-profit, largely unaccountable La Roche
organizations with unlimited life, size and power, took
control of the economy and the political economy -- Tosco
largely to the detriment of the individual consumer,
worker, neighbor and citizen.
Tyson

U.S. Bank

Whirlpool

W.R. Grace
Let us again remind ourselves that corporations were created by the
citizenry. (Thanks here to Richard Grossman and the Project on
Corporations Law and Democracy for resurrecting and teaching us a
history we would have collectively forgotten.)

In the beginning, we the citizenry created the corporation to do the

public's work -- build a canal or a road.

We asked people with money to build the canal or road. If anything

went wrong, the liability of these people with money -- shareholders,
we call them -- would be limited to the amount of money they invested
and no more. This limited liability corporation is the bedrock of the
market economy. The markets would deflate like a punctured balloon if
corporations were stripped of limited liability for shareholders.

And what do we, the citizenry, get in return for this generous public
grant of limited liability? Originally, we told the corporation what to do.
Deliver the goods. And then let humans live our lives.

But corporations gained power, broke through democratic controls, and

now roam around the world inflicting unspeakable damage on the
earth.

Let us count the ways: price-fixing, chemical explosions, mercury

poisoning, oil spills, destruction of public transportation systems. Need
concrete examples? These could be five of the most egregious of the
century:

Number five: Archer Daniels Midland (ADM) and Price Fixing. In October
1996, Archer Daniels Midland (ADM), the good people who bring you
National Public Radio, pled guilty and paid a $100 million criminal fine
-- at the time, the largest criminal antitrust fine ever -- for its role in
conspiracies to fix prices to eliminate competition and allocate sales in
the lysine and citric acid markets worldwide.

Federal officials said that as a result of ADM's crime, seed companies,

large poultry and swine producers and ultimately farmers paid millions
more to buy the lysine additive.

In addition, manufacturers of soft drinks, processed foods, detergents

and others, paid millions more to buy the citric acid additive, which
ultimately caused consumers to pay more for those products.

Number four: Union Carbide and Bhopal. In 1984, a Union Carbide

pesticide factory in Bhopal, India released 90,000 pounds of the
chemical methyl isocyanate. The resulting toxic cloud killed several
thousand people and injured hundreds of thousands.

Several years of litigation in India resulted in a payment of $470 million

by Union Carbide.

In October 1991, the Indian Supreme Court held that the criminal
investigation and prosecution of Union Carbide should proceed and
stated that failure to accomplish this would constitute "a manifest
injustice."

Although Union Carbide was a party to all of these proceedings, it

subsequently refused to comply with all efforts to obtain its
appearance for the criminal trial by the Bhopal District Court. The
efforts of Indian authorities to secure jurisdiction over Union Carbide --
including the service of summons on Union Carbide through the U.S.
Department of Justice and INTERPOL -- have proved futile.

Number Three: Chisso Corporation and Minamata. Minamata, Japan

was home to Chisso Corporation, a petrochemical company and maker
of plastics. In the 1950s, fish began floating dead in Minamata Bay,
cats began committing suicide and children were getting rare forms of
brain cancer.

The company had been dumping mercury into the bay, a fact which it
at first denied.

By 1975, Chisso had paid $80 million to the 785 verified victims of
what became known as Minamata disease. Thousands of other
residents claimed they were affected, but were denied compensation.

Number two: Exxon Corporation and Valdez Oil Spill. Ten years ago, the
Exxon Valdez hit a reef in Prince William Sound Alaska and spilled 11
million gallons of crude oil onto 1,500 miles of Alaskan shoreline, killing
birds and fish, and destroying the way of life of thousands of Native
Americans.

Most people believe that the Valdez ran aground because the skipper
was drunk. Well, he was drunk, but he was also asleep in his bunk, and
his third mate was at the wheel. And the third mate was effectively
driving blind, as his Raycas radar had been out of order for months.

In March 1991, Exxon Corporation and Exxon Shipping pled guilty to

federal criminal charges in connection with the March 24, 1989 Valdez
oil spill and were assessed a $125 million criminal fine.
The companies pled guilty to misdemeanor violations of federal
environmental laws.

Number one: General Motors and the Destruction of Inner City Rail.
Seventy years ago, clean, quiet efficient inner city rail systems dotted
the U.S. landscape. The inner city rail systems were destroyed by those
very companies that would most benefit from their destruction -- oil,
tire and automobile companies, led by General Motors.

By 1949, GM had helped destroy 100 electric trolley systems in New

York, Philadelphia, Baltimore, St. Louis, Oakland, Salt Lake City, Los
Angeles and elsewhere.

In April 1949, a federal grand jury in Chicago indicted and a jury

convicted GM, Standard Oil of California and Firestone, among others,
of criminally conspiring to replace electric transportation with gas- and
diesel-powered buses and to monopolize the sale of buses and related
products to transportation companies around the country.

GM and the other convicted companies were fined $5,000 each.

And these are not unusual examples. Books have been written
documenting the destruction. The question remains -- how do we put a
stop to it?

And the answer seems clear -- reassert public control over what was
originally a public institution.

The ideas on how to reassert such control are the subject of debate
and conflict, in Seattle and around the world. But as the twentieth
century was the century of the corporation, the twenty-first promises
to be the century where flesh-and-blood human beings reassert
sovereignty over their lives, their markets and their democracy.

So as we document here the 10 worst corporations of 1999, let us not

forget that corporate control was never inevitable. They took it from
us, and it is our responsibility to take it back.

AVONDALE
Good riddance

Fewer than one in six workers in the United States are unionized,
something on the order of one in 10 in the private sector. There are
many reasons for this low unionization rate, but the bottom line is:
employers are able to threaten, harass and intimidate workers against
supporting a union. Where workers do vote for a union, many
employers refuse to bargain in good faith, and the union often withers
away -- hurting the affected workers directly, and deterring others from
risking active support for a union.

In the rare cases where employer threats are removed, unionization

typically follows quickly. That is the main explanation for the stark
divergence in unionization rates among public and private sector
workers: generally, workers in the public sector are free to organize
without employer interference.

This raw truth was confirmed this year at the Avondale shipyards in
New Orleans. There, workers had actually voted by a strong majority to
join the New Orleans Metal Trades Council in 1993. But the company
challenged the election results, over and over, and refused to
recognize the union.

Consider the following timeline, excerpted from an AFL-CIO

compilation:

September 1993 to March 1994: NLRB hearing is held on the

challenged ballots and the employer's objections to the election.

July 1994: Unfair labor practice trial begins. The NLRB General Counsel
alleges that Avondale has broken labor laws more than 100 times.

March 27, 1995: The NLRB hearing officer recommends that the
company's objections did not warrant setting aside the election.

May 25, 1995: Avondale appeals the hearing officer's report.

July 1996: First unfair labor practice trial ends.

January 27, 1997: Second unfair labor practice trial begins on the labor
law violations Avondale continued to commit after the election.

February 5, 1997: NLRB affirms hearing officer's report and again

rejects Avondale's objections to the conduct of the election. Board
orders some 550 challenged ballots to be opened and counted within
14 days.

February 14, 1997: NLRB opens and counts challenged ballots. The
workers' victory is confirmed. The final tally shows that 1,950 workers
voted for the union, 1,632 against.
April 29, 1997: NLRB overrules Avondale objections to the final vote
count of February 14 and certifies that the workers officially won their
union.

May 9, 1997: Avondale formally refuses to bargain and says that it

intends to lodge an appeal in federal court. The union files an unfair
labor practice charge citing Avondale's refusal to bargain.

October 22, 1997: NLRB issues summary judgment finding Avondale

has committed unfair labor practices by refusing to bargain. NLRB
dismisses Avondale's objections as "without merit."

November 1997: NLRB seeks order from Fifth Circuit enforcing its
bargaining order. Avondale continues to refuse to talk with its workers.

February 1998: Administrative Law Judge David L. Evans finds that

Avondale violated labor law more than 100 times. He orders company
CEO Al Bossier to personally read a cease and desist order to shipyard
workers and reinstate 28 workers.

In July 1999, however, the Fifth Circuit sided with Avondale in a dispute
over voter identification, and ordered a new election.

Then, in August, things took a sudden change for the better. Litton
Industries acquired the beleaguered Avondale, which was the focus of
one of the AFL-CIO's main organizing drives. Litton agreed to remain
neutral, and recognize the union if it could again gain majority support.
A majority of workers quickly signed union cards, and Litton recognized
the Metal Workers Council in November.

"When given the chance to form a union absent employer opposition,

Avondale workers enthusiastically embraced the opportunity," said
AFL-CIO President John Sweeney. "They lined up, often dozens deep, to
sign the union petitions carried by their co-workers in the New Orleans
ship yard, in the parking lots, and in the neighborhood store. Far more
than a majority signed up within less than two weeks."

"Their determination to have a voice at work," Sweeney said, "offers a

window into the hearts and minds of the nation's workers, the majority
of whom would like the same free and fair chance to improve their
lives with a union. Unfortunately, most employers deny their workers
this basic, American freedom."

Its vicious anti-union campaign notwithstanding, Avondale gave its

workers more cause to unionize than most. Although the shipyard is a
major government contractor -- with 80 percent of its business building
and repairing ships for the U.S. Navy -- it has paid its workers
abysmally, nearly 30 percent less than workers at other private Navy
contractors.

And it has maintained a horrific workplace safety record, averaging a

death a year. Earlier this year, the Occupational Safety and Health
Administration (OSHA) cited Avondale for 55 serious violations, and
fined the company more than half a million dollars, an enormous
amount by OSHA standards.

Alone among our 10 worst corporations of 1999, Avondale as an

independent company is no more. Good riddance.

Voluntary acquisition by another giant contractor is not the same as

the corporate death penalty, but Avondale workers can at least take
solace that their sustained campaign forced a transfer of control of the
company and won recognition of their union.

CITIGROUP
The standard in political corruption

Every once in a while, a major piece of legislation passes the U.S.

Congress and even old hands are left shaking their heads. This
happens only when new standards of legalized bribery are achieved,
when more money corrupts the political process in more egregious
ways than had recently been witnessed.

Those old hands were left shaking their heads this fall, after Citigroup
and the rest of the financial services industry (banks, insurance
companies and securities firms) succeeded in ushering the Financial
Services Modernization Act through both houses of Congress and
winning President Clinton's signature.

The finance, insurance and real estate industries together as a sector

are regularly the largest campaign contributors and invest more in
lobbying than any other sector. They spent more than $200 million on
lobbying in 1998, according to the Center for Responsive Politics -- a
number almost sure to be topped in 1999 -- and donated more than
$150 million in the 1997-1998 election cycle -- a total sure to be
exceeded in 1999-2000. Giant campaign contributions flowed
especially to the members of the Congressional banking committees as
well as the other committees with direct jurisdiction over financial
services legislation.

Even more grotesque was the intimate involvement of banking

lobbyists in the legislative process. With Citigroup's co-chair Sandy
Weill and lead lobbyist Roger Levy leading the charge, industry
executives and lobbyists badgered the administration and swarmed
the halls of Congress until the final details of a deal were hammered
out, effectively vetting all drafts before they were formally introduced.

As the deal-making on the legislation moved into its final phase -- and
with fears running high that the entire exercise would collapse -- into
the breach stepped Robert Rubin. The recently retired Treasury
Secretary, Rubin would be announced as the new de facto co-chair of
Citigroup just after the legislation passed Congress. He apparently had
negotiated the terms of his hiring while negotiating over the
legislation.

Citigroup played such a decisive role in the legislative process because

its very existence hung in the balance. The product of a merger
between Citibank and Travelers, the combination of banking and
insurance companies had been illegal under existing law (but excused
due to a loophole which provided a two-year review period). The new
legislation repeals the revered Glass-Steagall Act, and will allow such
mergers.

Glass-Steagall had reflected the long-standing understanding of the

political and economic dangers of financial industry concentration. Its
repeal and enactment of the "Citigroup Authorization Act," will:

• Pave the way for a new round of record-shattering financial

industry mergers, dangerously concentrating political and
economic power;
• Create too-big-to-fail institutions that are someday likely to drain
the public treasury as taxpayers bail out imperiled financial
giants to protect the stability of the nation's banking system;
• Leave financial regulatory authority spread among a half dozen
federal and 50 state agencies, all uncoordinated, that will be
overmatched by the soon-to-be financial goliaths;
• Weaken the Community Reinvestment Act (CRA): there will be no
ongoing sanctions against holding company banks that fail to
meet CRA standards, it will lessen the number of CRA
examinations, and provisions of the bill will discourage
community groups from challenging banks' CRA records.
• Facilitate the rip-off of mutual fund insurance policy holders by
permitting mutual insurance funds to switch domicile states --
thereby enabling them to locate in states where they can convert
to for-profit, stockholder companies without properly reimbursing
mutual policyholders (a conversion of tens of billions of dollars);
• Aggressively intrude on consumer privacy (and promote a still-
greater intensification of direct marketing), thanks to provisions
 permitting the new financial giants to share finance, health,
consumer and other personal information among affiliates; and
• Allow banks to continue to deny services to the poor (Congress
rejected an amendment requiring banks to provide "lifeline
accounts" to the poor, so they would have refuge from check-
cashing operations and the underground economy).

Citigroup and the financial services industry insist the new law will
benefit consumers by giving them efficient, one-stop shopping for
financial services.

DEL MONTE
Banana imperialism into the twenty-first century

As vicious as the process of corporate globalization is for workers in

industrialized countries, it is almost always worse for workers in
developing nations.

While workers in the United States and other nations are all too familiar
with employers closing plants and moving to lower wage opportunities
overseas, consider how the process plays out in the Third World. There,
even slight wage gains -- typically won through difficult and dangerous
organizing campaigns -- can prod employers to move elsewhere,
thanks to the vagaries of the international market and the employers'
monomaniacal profit maximization.

In September, Bandegua, the Guatemalan subsidiary of Coral Gables,

Florida-based Fresh Del Monte Produce (now a separate company from
California-based Del Monte Foods), dismissed 900 of its banana
workers. Del Monte attributed the firings to a glut in the world banana
market and a surge in production from low-cost Ecuador.

SITRABI, Guatemala's oldest union, represents the fired workers. It

alleges that the firings violate its contract with Bandegua and are
illegal. The Guatemalan Labor Minister, Luis Linares, agrees. He has
called the firings illegal and called on Del Monte to take back the
workers.

SITRABI is one of the strongest unions in Guatemala, a country which

for decades has been wracked by some of the worst labor repression in
the Western Hemisphere. Three thousand Del Monte workers in a
neighboring district decided at a general assembly of the union that
they would, on October 14, collectively respond to the layoffs by
exercising a provision of their contract permitting union members to
request 10 days of unpaid absence.
However, according to reports relayed by the U.S./Labor Education in
the Americas Project (U.S. LEAP), "on the evening of October 13, 200
heavily armed men with high caliber weapons and assault weapons
came to the union hall, grabbed two members of the executive
committee who were present, and forced them at gunpoint to drive to
the home of the general secretary who was dragged out of his house
and beaten before being taken back to the union hall."

With about 30 union officials present, according to the U.S. LEAP

report, the local president of the Chamber of Commerce stated that
Bandegua said it would leave Guatemala if the October 14
demonstration proceeded.

The gunmen then allegedly forced the union leaders to broadcast on

radio that an agreement had been reached with Bandegua, and that
the next day's action was cancelled. Then they forced the union leader
to sign letters resigning from both the union and as employees of the
company.

"At 2:00 a.m.," according to U.S. LEAP's report, "the armed individuals
gave [the union leaders] their final message: that the union leaders
were to disappear from Morales [the town where they lived] and never
return, that they would be murdered should they stay."

MINUGUA, the UN agency monitoring implementation of the

Guatemalan peace accords, says this paramilitary action is the second
worst breach (following the killing of Archbishop Gerardi) of the
accords.

U.S. LEAP is careful to state that there is no concrete evidence of

Bandegua's role in the incident, but reports that "local analysts say it is
impossible for Bandegua not to have at least known what was going on
in a small community like Morales."

Fresh Del Monte Produce declines to comment on the Guatemala

controversy, but reports that Bandegua has denied any association,
direct or indirect, with the violence.

The Del Monte disaster should be understood both as a product of

Guatemala's lingering culture of political violence, and of a global
restructuring of the banana industry carried out by the handful of
producers that dominate the worldwide banana trade.

In this global restructuring, not only are small producers in the Eastern
Caribbean on the verge of losing their livelihoods thanks to a World
Trade Organization (WTO) ruling against Europe's preferential market
access for poor Eastern Caribbean nations, but plantation workers in
Central America are finding themselves undercut by lower-wage
Ecuadoran workers. Dole has announced it will lay off 9,000 workers
and exit from both Nicaragua and Venezuela; thousands of Costa Rican
banana workers have recently lost their jobs; and Chiquita is
downsizing in Honduras.

For Guatemala workers, the stakes are particularly high: not only are
900 jobs at stake, but a successful effort to break SITRABI will weaken
the entire Guatemalan labor movement.

GUARDIAN POSTACUTE
Maggots everywhere

If you want, you can look at the booming stock market and say that
everything is fine. Go ahead, pat yourself on the back.

Or you can look at the way the United States, the wealthiest nation in
the history of the world, treats its elderly, and hang your head in
shame. This selfish society warehouses the elderly in what are
euphemistically called nursing homes, and then turns and looks the
other way.

One in four nursing homes across the United States is now out of
compliance with state or federal standards and has deficiencies that
caused actual harm to residents or placed them at risk of serious injury
or death. Spot surveys suggest that one in five nursing home
employees has a criminal record of arrest or conviction for serious
crimes.

Consider the case of Guardian Postacute Services Inc., a San Francisco

Bay area nursing home chain.

Earlier this year, the company was indicted on eight felony counts of
elder abuse.

A Santa Clara County grand jury indicted Guardian Postacute Services

Inc., the owner of four nursing homes in the county and many more
throughout California.

Deputy District Attorney Randy Hey said the investigation was opened
in March when he learned of the case of Mary Aljuni.

Aljuni was a patient at a Guardian nursing home in Los Gatos. A

feeding tube was inserted into Aljuni, but the tube was not properly
cleaned, and she was eventually rushed to an area hospital. "At the
hospital, the doctors could smell the area where the bandage was
covering the tube," Hey said. "They pulled it off and there were
maggots everywhere."

A complaint went to the state Health Department, the attorney general

and the San Jose Police Department, and finally ended up with Hey,
who launched his criminal investigation.

"At that point, Guardian came to me and told me they were going to
lose their federal funding if they were convicted of elder abuse," Hey
says. "I did not want to be in a position for being responsible to shut
down 16 facilities. So, we looked to see what else was out there. We
found over 60 Department of Health violations statewide, with the
majority being in our county. And we expanded the investigation and
found five other problems, which resulted in five additional felony
counts. As a result of the publicity, we have received much more
information and we are investigating a substantial number of new
cases."

Hey says that he found "substantial evidence that one of their certified
male nurse's assistants was sexually molesting a 37-year old
dependent female who could not remember what had occurred and
could not get out of her bed."

"Rather than follow up on that case, they sent somebody out to get a
pregnancy test on this patient," Hey said.

"They never had her checked out by a doctor and never fired the male
nurse," Hey said. "They fired him four months later for allegedly eating
another patient's food."

The other four felony counts fall in the category of allowing patients to
lie for hours in their own feces and urine, Hey said.

Hey said that since publicity on the indictments hit, he has been
getting "numerous other complaints that are every bit as significant as
the six counts I've indicted."

The company faces a possible $10,000 fine and $10,000 restitution

fine for each count.

"But the kicker is that they will automatically lose their federal funding,
and they don't have a right of appeal, if they are convicted," Hey said.
This could cost the company as much as 60 to 80 percent of its
corporate income stream, which the company reported to Hey is over
$100 million a year.

The company lawyer, William Goodman, said earlier this year that the
company will plead "not guilty on all counts."

"There is absolutely no foundation for charging the company with

criminal violations related to these six counts," Goodman said in an
interview from his San Francisco office. "Once all of the evidence is
presented to the world, it will be perfectly obvious that this is not a
criminal case of any sort and should not have been filed as one."

He said that the facts of the case "don't support a criminal violation."

"No crimes were committed," Goodman said. "The elder abuse statute
has very clear definitions and the evidence underlying each of the
counts isn't going to come close to meeting the criminal law
standards."

Given the facts of the case and the resolve of the Santa Clara District
Attorney, it appears unlikely that the company will be able to fight and
win this case.

But the great thing about being a corporation in this world is that even
if you lose such a case, and get cut off from federal funding, you can
recreate yourself, reincorporate and come back again and still do
business.

Look closely at the resolution of this case as a case study in how a

shameless society deals with its powerful corporate elite. A plea
hearing is scheduled for January 7, 2000.

HOFFMAN LA ROCHE
Take the market, pay the fine

In the fall of 1996, Eugene Reed, a vitamin industry executive, wrote a

four-page letter to the Federal Bureau of Investigation (FBI) detailing
information he had about a conspiracy.

Six weeks later, an FBI agent showed up at Reed's home north of Little
Rock, Arkansas. Reed mapped out the conspiracy and three years later,
the feds had two of the three biggest fines in the history of corporate
criminality.
Earlier this year, the Swiss pharmaceutical giant, F. Hoffmann-La Roche
Ltd., and the German chemical giant BASF Aktiengesellschaft, pled
guilty to leading a worldwide conspiracy to raise and fix prices and
allocate market shares for certain vitamins sold in the United States
and elsewhere.

The two companies control 80 percent of the worldwide vitamin

market.

Roche was fined $500 million. BASF was fined $225 million.

Reed is a national sales manager at the Food and Feed Division at

Summit Pharmaceuticals, a division of Sumitomo Corporation.

He predicts he will lose his job because of the assistance he is giving to

federal prosecutors in their ongoing investigation of the industry.

The Department of Justice charged the companies with conspiring to

fix, raise and maintain prices, and allocate the sales volumes of
vitamins sold by them and other unnamed co-conspirator companies in
the United States and elsewhere.

Federal officials also allege that the companies allocated contracts for
vitamin premixes for customers throughout the United States and
rigged the bids for those contracts.

The conspiracy lasted from January 1990 into February 1999 and
affected the vitamins most commonly used as nutritional supplements
or to enrich human food and animal feed -- vitamins A, B2, B5, C, E and
Beta Carotene.

Vitamin premixes, which are used to enrich breakfast cereals and

numerous other processed foods were also affected by the conspiracy,
the Justice Department said.

Two Hoffman LaRoche executives also pled guilty in connection with

the case.

"We intend to learn the right lessons from these events," said Markus
Altwegg, head of the company's vitamins and fine chemicals division.
"I am personally committed to ensuring that we in the division fully
accept our responsibility to conduct our business in a way that is above
reproach in every respect."

In order to ensure that such actions do not happen again, says Martin
Hirsch, director of public affairs for Roche, "we communicated
throughout the global organization that improper business practices
are not to be tolerated. We stepped up education and training
programs so that all people in the company know what proper business
practices are. We also enhanced the auditing of our businesses."

But executives were clear that contrition should not impede further
expansion: "By no means," said Franz Humer, chief executive manager
of Roche and head of the pharmaceuticals division, "will we allow this
setback to divert us from the course of steady growth we are pursuing
in all our businesses -- and that applies in particular to our vitamins
and fine chemicals division."

These words perhaps sounded different to whistleblower Reed than

Humer intended. Reed says that the convictions and fines have only
made Roche more determined to conquer the remaining 20 percent of
the market.

Reed said that one executive for Hoffman LaRoche told him that "we
will take this market, even if we have to pay the fine." "I told him, . I
have no choice but to try to derail this,'" Reed said. "He said, . Gene,
you are an American. You will do what an American has to do.'"

TOSCO
Four dead workers

If you or I have a couple of drinks, get behind the wheel of an

automobile, drive away, cross the center line, crash into an ongoing
vehicle and kill the four occupants of that vehicle, chances are that the
local district attorney will seek an indictment for manslaughter or
reckless homicide.

We didn't intend to kill the occupants of the other car, but we were
reckless in our actions and as a result, four innocent lives were taken.

We will pay.

But if a corporation operates an unsafe workplace and as a result four

workers are killed, then most likely the company will not be indicted for
manslaughter or reckless homicide -- unless that company happens to
be in one of the few counties where a district attorney criminal
investigates every workplace death. (There are only a handful of these
across the country.)

Contra Costa County in California is not one of those counties. On

February 23, 1999, four workers at a Tosco Corp. facility in Avon,
California were burned to death after they tried to replace a leaky oil
pipe.

The San Francisco Chronicle reported that one Tosco employee,

Anthony Creggett, claimed shortly after the fire that plant managers
had refused a request by four workers to shut down the high-
temperature distillation tower during the repairs on the pipe.

Kathy Alatorre, whose brother Michael Glanzman was killed in a

January 1997 Tosco accident, spoke at a special California Assembly
hearing on the February 23 fire.

"When I heard of the new explosion, my first thought was, . They did it
again,'" Alatorre told the committee. "I would not be allowed to get
away with murder. Why are they allowed to hide behind the law? When
safety issues and warnings and concerns are ignored, I feel it's
equivalent to premeditated murder."

In January 1998, Tosco pled guilty to a misdemeanor criminal charge of

violating the state labor code in connection with the explosion of a
hydrocracker at its Avon refinery that killed Glanzman. At the time, the
company was fined $25,000 and paid $300,000 to fund training or
educational safety programs.

In response to the new Tosco deaths, a San Francisco Bay area labor
coalition began circulating a petition calling on the local District
Attorney to bring criminal charges against the company and its
executives.

But Contra Costa County Assistant District Attorney Lon Wixson

indicated that a murder charge against the company or its executives
was unlikely, though he did not rule out involuntary manslaughter
charge against either.

Contra Costa County has never brought an involuntary manslaughter

charge in a worker death case, Wixson said.

Wixson said that, for the most part, he is relying on Cal/OSHA to

investigate the four deaths.

"We don't have independent investigatory capability," he said in an

interview from his office in Martinez. "We work with Cal/OSHA, which
does the investigations. They are the ones that generally investigate
these things and then refer them to us for criminal prosecution, just as
a police agency would investigate and refer to a DA. Our investigatory
capability is very limited."
In California, manslaughter is "the unlawful killing of a human being
without malice."

Wixson said that one of the problems with charging a corporation with
involuntary manslaughter is the relatively low maximum penalty --
$27,000. A charge of criminal violation of the state labor code, on the
other hand, would result in a fine of $189,000.

"You could charge the executive or another worker, or a supervisor or

any individual, if they have the requisite mental state to justify the
charge," Wixson said. "If we are going to prosecute a chief executive, it
is not enough that the workers or managers or supervisors have
knowledge of a particular crime. The executive has to have knowledge
for us to proceed against him. The fact that you have a worker death
anyplace in the company doesn't mean that the chief executive has
the requisite knowledge to convict him of that."

Wixson said he didn't know if Cal/OSHA is going to approach Tosco CEO

Thomas O'Malley "and ask him, . What do you know about this
incident?'"

Eventually, Cal/OSHA did fine Tosco $810,750 for the deaths of the four
workers.

Tosco did not respond to requests for comment.

TYSON
Seven deaths in seven months

Maybe we should consider raising our own chickens.

Clearly, relying on multinational corporations to raise millions of birds

for us in unsanitary and dangerous conditions is not working out.

Tyson's Foods is a case in point. Do you really want to buy your chicken
from these people?

Consider this: seven workers have been killed at Tyson facilities this
year. There have been no reported job-related deaths at any other
poultry company in 1999.

"How many more workers must die before the Occupational Safety and
Health Administration (OSHA) acts with a company-wide investigation
of Tyson?" asked Mary Finger, United Food and Commercial Workers
International Union (UFCW) International Vice President. (Apparently
more than seven.)
The UFCW issued a call on August 5, 1999 asking OSHA to launch an
investigation of all Tyson poultry plants across the country. The call
came after James Dame, Jr. and Mike Hallum fell into an open pit of
decomposing chicken parts and by-products and suffocated from the
methane gas emitted by the parts at Tyson's Robards, Kentucky facility.
The Robards plant had not been inspected by state or federal
Occupational Safety and Health agencies since January, 1998.

UFCW safety experts fear the deaths reflect a systemic problem with
Tyson's safety program. OSHA declined to launch a nationwide
investigation.

On October 8, 1999, another Tyson worker was killed on the job.

Charles Shepherd died from head trauma after a fall in the chiller room
in the Berlin, Maryland Tyson plant.

The Department of Labor's Poultry Initiative has found a majority of

poultry plants have high numbers of wage and hour violations and high
levels of workplace injuries. Tyson, as the industry leader, sets the
standards for wages, benefits and working conditions and therefore
warrants serious scrutiny in order to protect workers from unsafe
working conditions, Dority said.

In November 1999, the U.S. Department of Labor fined Tyson Foods,

Inc., for violations of federal child labor laws that contributed to the
death of an under-aged teenage worker and the serious injury of
another.

"One teenager died and another suffered serious injuries because this
company ignored the law," the Labor Department reported. "It was
illegal for either one of them to be employed in the kind of work
Tyson's hired them to do."

The company was fined $59,274 for violations of the child labor
provisions of the Fair Labor Standards Act at two of its plants.

The Labor Department's Wage and Hour Division determined that the
violations contributed to the death of a 15-year-old employed in the
firm's Hempstead County, Arkansas facility and the serious injury of a
14-year-old employed in its Sedalia, Missouri facility.

In addition to exposing workers to hazardous worksites, the company

cheats them out of fair pay.

That's the central allegation of a lawsuit filed in December by workers

against the Arkansas-based corporation.
The lawsuit, filed in federal court in Birmingham, Alabama, alleges that
Tyson Foods has been cheating its poultry plant employees out of
wages by forcing the workers to report to the plant early and stay late
-- working off the clock up to an hour a day. The workers claim that that
they should be compensated for putting on and taking off the
protective clothing and equipment that Tyson requires them to wear.

The lawsuit alleges that by forcing workers to work off the clock, Tyson
takes more than $100 million a year from the pockets and paychecks
of poultry workers.

The poultry industry is one of the fastest growing segments of the

meat industry. In the last 10 years, the dollar value of poultry
production has more than doubled, from nearly $6 billion to $12 billion.
Tyson is the largest poultry processing company in the United States,
with 65,000 employees at 59 plants. It dominates the market with 27
percent of sales nationwide.

Tyson did not respond to requests for comment on the allegations

against it.

U.S. BANK
Big brother is watching

Big brother is watching. No, no, no. Not that big brother. We're talking
about your neighborhood bank.

Earlier this year, Minnesota Attorney General Mike Hatch filed a lawsuit
against U.S. Bank for allegedly releasing customers' private banking
information to a telemarketing company in exchange for a fee of $4
million plus commissions.

Hatch alleges that U.S. Bank, a unit of U.S. Bancorp, violated the
federal Fair Credit Reporting Act and engaged in consumer fraud and
deceptive advertising by providing the telemarketing vendor with such
private information as Social Security numbers, account balances,
transactions and credit limits.

"People are appropriately careful about protecting their Social Security

number, checking and credit card information," said Hatch. "When a
bank hands out this information to the highest bidder, it has to answer
to its customers and to the Attorney General."

Hatch alleged that U.S. Bank provided Member Works Inc. with its
customers' name, address, telephone numbers of the primary and
secondary customer, gender, marital status, homeownership status,
occupation, checking account number, credit card number, Social
Security number, birth date, account open date, average account
balance, account frequency information, credit limit, credit insurance
status, year to date finance charges, automated transactions
authorized, credit card type and brand, number of credit cards, cash
advance amount, behavior score, bankruptcy score, date of last
payment, amount of last payment, date of last statement and
statement balance.

Since November 1996, U.S. Bank has received more than $4 million
plus commissions -- commissions equal to 22 percent of each sale
Member Works made -- from the provision of its customers' private
information to Member Works.

Member Works used the U.S. Bank customer data to sell memberships
in a health program that allowed members to get discounts on dental
and health care visits.

Hatch also alleged that in addition to providing confidential customer

information, U.S. Bank approved telemarketing scripts that contained
deceptive information.

For example, if a customer asked a telemarketer if U.S. Bank had given

the customer's credit card or checking account number to the
telemarketer, the script instructed the telemarketer to answer "No, I
personally do not have your account number."

Hatch alleges that U.S. Bank violated federal law and banking rules by
allowing the telemarketing company to automatically withdraw
payments from a checking account without written authorization from
the consumer.

Federal and state regulatory agencies require banks to publish privacy

policies telling consumers how their personal information will be used,
who has access to the information and if the bank intends to give its
personal information to non-affiliated third parties.

U.S. Bank has a privacy policy printed in its Customer Agreement that
says: "We share your concerns about the privacy of your personal
information and strive to maintain its confidentiality."

Nothing in the bank's agreement reveals that personal, confidential

information is being sold to companies that are not affiliated with U.S.
Bank.
Hatch said that none of U.S. Bank's consumer brochures disclose to
customers that their names and account information could be sold to a
third party.

U.S. Comptroller of the Currency John Hawke condemned such

practices as "seamy," unfair and deceptive.

To settle the case, U.S. Bancorp agreed to stop providing customer

information to third parties for marketing purposes, to pay the state $3
million and to refund customers whose credit cards were debited for
products and services they didn't want. Also, as part of the settlement,
the bank must notify customers before sharing data with bank
affiliates.

Hatch advises consumers to tell the company you are doing business
with not to sell your name. Companies are required to keep "do not
sell" lists.

"If you order a magazine or open a bank account, ask the company not
to sell your name," Hatch said.

Why did U.S. Bank trade in its customers' information?

"Two reasons," says Don Waage, public relations director for U.S.
Bancorp. "First, we thought our customers would like those products.
Over 70,000 customers did order them, so we had to make
arrangements for many of those customers to continue to receive
those products and services after we decided to no longer provide
them. Second, we did this because of competitive pressures in the
credit card industry."

"Action by the attorney general compelled us to step back and look at

this industry-wide practice," says U.S. Bancorp CEO John Grundhofer.
"As the trust of our customers is the bedrock of our business, our
decision to stop these practices was made easily and quickly."

WHIRLPOOL
Preying on the poor

As the movie Casablanca so memorably illustrated, anytime someone

expresses "shock, shock," there's a good chance they are full of it.

As are major corporate wrongdoers, who without hesitation or

embarrassment, routinely express "shock" any time the people,
through the shredded remnants of our democracy, stand up and slap
them with a hefty sanction.
Take the case of Whirlpool Corporation. Earlier this year, an Alabama
jury hit a recently spun off Whirlpool subsidiary, Whirlpool Financial,
and one of its dealers with a $581 million verdict for targeting illiterate
and poor people in a sales scheme involving satellite television dishes.

Lawyers representing the victims said that Whirlpool had dealers all
over the state going door-to-door soliciting poor, unsophisticated and
elderly customers to purchase satellite television dishes for $1,100
plus 22 percent interest. The same equipment could be bought at an
electronics store for $199.

The purchases were financed on Whirlpool "credit cards," which

allowed Whirlpool to avoid having to disclose the actual number of
payments that would be required, which Whirlpool then
misrepresented to its customers. Some customers were never even
issued actual credit cards.

The jury awarded the plaintiffs, Barbara Carlisle, and her parents,
George and Velma Merriweather, $975,000 in compensatory damages
and $580 million in punitive damages. The finding of liability was
based on an allegation that a salesperson for the satellite dish retailer,
Gulf Coast Electronics, misled the plaintiffs regarding financing terms
of the credit card loans.

One witness who was sold a satellite dish had less than a fifth grade
education. One plaintiff in the case had a tenth grade education and
had never owned a credit card.

A former agent testified that Whirlpool specifically targeted illiterate

and unsophisticated people, and that he had trained others to lie about
the terms of the financing.

A juror who spoke with plaintiff's attorney Tom Methvin of Montgomery

after the case said the jury was "sick" at how Whirlpool treated poor,
uneducated people. The juror also said that the jury was "inflamed"
that there are still "thousands of people out there" who are victims of
the scheme, but that Whirlpool had not helped these victims. The
jurors felt that their verdict was important to "get Whirlpool's
attention."

When the verdict hit, the Benton Harbor, Michigan-based Whirlpool

Corporation said that its former subsidiary, Whirlpool Financial National
Bank, now known as Transamerica Bank, N.A., planned to appeal the
verdict.
"The company strongly believes that it did nothing to warrant any
finding of liability in this litigation, much less $581 million," Whirlpool
said in a statement. "The company is confident that it will ultimately
prevail through the post-trial and appeal processes as the verdicts are
totally without merit and represent a gross miscarriage of justice. The
damage awards in this case are terribly unfair and contrary to sound
constitutional protections established by the Alabama Supreme Court
and the United States Supreme Court."

So, Whirlpool appealed the verdict.

A couple of months later, an Alabama appeals court denied the Bank's

post-trial motion to set aside a $581 million jury verdict and instead
reduced the jury's verdict to $301 million.

The company expressed "shock" that the appeals court didn't conform
to the corporate agenda and throw out the entire award.

"The fact that the judge reduced the verdict to $301 million in no way
corrects this miscarriage of justice," the company said in a statement.
"The Bank believes the jury verdict was clearly erroneous and that it
will ultimately prevail on appeal."

But Methvin, the attorney representing the victims of the scam, said
that the court allowed the verdict to stand because the actions of
Whirlpool represent "the worst conduct by corporate America ever to
be exposed in the Alabama judicial system."

"Whirlpool bilked thousands of vulnerable consumers out of millions of

dollars," Methvin said. "Eight other major out-of-state banks were
engaged in similar conduct in Alabama. As a result of our lawsuits
against them, those banks stopped doing this in Alabama. In spite of
the lawsuits, Whirlpool refused to quit their activities. The jury's verdict
and the trial judge's very strong ruling should make Whirlpool put a
stop to this type of conduct."

"Alabama has the weakest consumer protection laws in the entire

country and this is well known by companies such as Whirlpool,"
Methvin said last week. "Judgments like this one are particularly
important in Alabama and are the only form of consumer protection
that we have."

W.R. Grace
You can't eat enough of it
At the end of the millennium, W.R. Grace should be considered a
candidate as one of the world's most rapacious corporate predators.

Of course, if you have seen the movie A Civil Action or read the book
by the same title, you are aware of the injury inflicted by this
multinational chemical company.

A Civil Action told the story of how five children and one adult died of
acute lymphocytic leukemia from exposure to chemicals in the drinking
water of Woburn, Massachusetts.

The Environmental Protection Agency found Grace and a second

company responsible for dumping the toxic chemicals that poisoned
two of Woburn's wells. Grace paid $8 million to eight families to settle
their lawsuits against the company. Grace was indicted by the
Department of Justice on two counts of lying to the EPA about
the amount of hazardous chemicals it used at its Woburn plant. In
1988, Grace pled guilty to one count and was fined $10,000.

As protesters were fighting off the police and the effects of being
gassed in the streets of Seattle during the WTO meetings, the Seattle
Post-Intelligencer, the local corporate newspaper, began running a
series of articles documenting Grace's most recent outrage.

The paper reported that at least 192 people have died of asbestos-
related disease from a mine near Libby, Montana that was owned by
Grace for nearly 30 years. At least another 375 have been diagnosed
with the fatal disease.

The Post-Intelligencer detailed how federal, state and local agencies

had not stepped forward to help the people of Libby, either denying
knowledge of the problem or pointing to other agencies for solutions.

For three decades, Grace mined enormous deposits of vermiculite in

the earth of nearby Zonolite Mountain. Under the vermiculite are
millions of tons of tremolite, a rare and exceedingly toxic form of
asbestos.

For centuries, the tremolite lay undisturbed and harmless beneath a

thin crust of topsoil. But mining the vermiculite has released the deadly
asbestos fibers into the air.

The paper quoted Dr. Alan Whitehouse, a lung specialist from Spokane
and an expert in industrial diseases, as saying that another 12 to 15
people from Libby are being diagnosed with the diseases -- asbestosis,
mesothelioma -- every month.
According to Dr. Whitehouse, it takes anywhere from 10 to 40 years
from the time a person is exposed to dangerous amounts of asbestos
for the diseases to reveal themselves.

Since 1984, 187 civil actions have been filed against Grace on behalf of
Libby's miners and their families, the paper reported.

There are 120 cases pending. In the others, Grace has either been
found liable and been ordered to pay damages in a jury trial, or it
settled out of court, often shortly before the trial was to begin, the
paper reported.

At a community meeting in November in Libby, residents and workers

at the mine said that Grace managers told miners the dust was
harmless.

One Libby resident, Patrick Vinion, told the crowd of his fears for his
three children. "In the local paper our health department says we only
have 1 percent tremolite in our town," Vinion said. "One percent of
tremolite is not acceptable no matter what anybody says. One percent
of tons of tremolite and I guarantee it will kill your kids."

"When my father was a young man they told him, 'You can't eat
enough of that stuff. It won't bother you.' He's dead," Vinion said.
"When I started getting sick when I was younger, they told me, 'You
never worked there. It's not possible. You can't get it that way.' Well,
it's more than possible. I'm dying of it."

At the hearing, Roger Sullivan, a lawyer representing many of the

residents of Libby against Grace, explained how the largest stack in the
ore-processing mill spewed 10,000 pounds of asbestos each day, and
how the wind would disperse it over the town. He said the sparsely
covered tailings pile, given a clean bill of health by state investigators,
still contains 5 billion pounds of asbestos, the paper reported.

As expected, the company says it did no harm.

"Obviously we feel we met our obligation to our workers and to the

community," Jay Hughes, Grace's senior litigation counsel told the
paper. Hughes said the company spent "millions" to upgrade safety
conditions and reduce dust at the mine.

"We know that people have been harmed," says Grace spokesperson
Bill Corcoran, "and that will be resolved through the court system."
"New information about ongoing risk is entirely new to us and to the
state," Corcoran says. "We have no information on that, and we are
cooperating" with state and federal investigators.

Reporter Andrew Schneider and the Seattle Post-Intelligencer have dug

down and found a dirty company committing yet another dirty deed.

A town has been killed, its residents are dying.

Perhaps its time for the district attorney in Lincoln County and the U.S.
Attorney in Montana to see if justice can be done.