CORPORATE FOCUS: A Senate Trial We'd Like to See

Hear ye, hear ye, hear ye.Today we hear the case corporate perjury, corporate fraud and corporate obstruction of justice.Members of the Senate, let us turn to exhibit one: the 1994 transcripts of tobacco industry executives' testimony before a House of Representatives committee.Having raised their right hands and swore to tell the truth, the whole truth and nothing but the truth, so help them God, each then testified under oath that nicotine was not addictive. That was a blatant lie under oath -- albeit one less serious than the industry's decades-long conspiracy to lie to the U.S. Food and Drug Administration and other federal and state agencies about cigarettes' health effects and addictiveness. These are lies with severe consequences: hundreds of thousands die from smoking-related disease every year.But lying is not limited to the pariah tobacco industry. Please turn to exhibit two: the judge's decision in the case United States v. Royal Caribbean Cruise Lines. In September 1998, Royal Caribbean pled guilty to felony crimes for dumping oil in the Atlantic Ocean and then lying to the Coast Guard about it.Members of the Senate, let us now turn to count two: corporate fraud. Please consult the next exhibit, Black's Law Dictionary.Turn to page 788, where you will find the legal definition of the word "fraud" -- an intentional perversion of the truth for the purpose of inducing another to part with some valuable thing.In other words, theft through lying.Members of the Senate, because the federal government does not track corporate fraud the way it tracks petty theft, we are left to the judgment of experts to estimate what this harmful and often criminal lying and steal costs the American people.The estimates are startling. Harvard University's Malcolm Sparrow estimates that health care fraud alone cost the nation anywhere from $100 billion to $400 billion a year -- 10 to 40 percent of the $1 trillion a year we spend on health care. Most of this is corporate fraud -- corporations ripping off the Medicare and Medicaid programs.The savings and loan scandal, what former Attorney General Dick Thornburgh called "the biggest white-collar swindle in history," cost the nation anywhere from $300 billion to $500 billion.Then you have an array of lesser frauds that amount in total to real money. Auto repair fraud: $40 billion a year. Securities fraud -- $15 billion a year. And on down the list.Not a day goes by without a major fraud being reported in the mainstream media, with $100 million frauds coming around once a month or so.Last month, for example, Great American Life Insurance Co. paid $115 million to elderly citizens it allegedly deceived into buying high-priced investments.In June 1998, Blue Cross/Blue Shield of Illinois pled guilty to eight felony counts and paid $144 million to the federal government after admitting it concealed evidence of poor performance and lied to auditors in processing Medicare claims for the federal government. Just last week, the company paid $29.1 million Evelyn Knoob of Carterville, Illinois. Knoob blew the whistle on the company.Corporate fraud costs the nation hundreds of billions. Compare that to street crime and burglary, which, according to the FBI, costs the nation $3.8 billion a year.Finally, we turn to count three, obstruction of justice. Please incorporate by reference the earlier evidence of Big Tobacco's cover-ups and Blue Cross/Blue Shield of Illinois and Royal Caribbean's concerted efforts to thwart law enforcement.Then please direct your attention to our final exhibit, a series published last year in the Louisville Courier-Journal that documented coal mine operators routinely submitting coal dust samples to the Mine Safety and Health Administration which were impossibly clean. The obvious inference is that coal companies are regularly cheating on their coal dust tests, and in the process exposing miners to deadly and black lung-inducing levels of coal dust. The inference was substantiated by coal mine supervisors' admission to the Louisville Courier-Journal of regular cheating on the tests designed to protect miners' safety.Senators, corporate perjury, fraud and obstruction of justice are undermining efforts to protect health, safety and our environment, and eating away at the foundations of our economy.We seek today not a conviction, but a redirection of national policy to put an end to the scourge of corporate fraud and obstruction. We call on you to enact legislation to mandate the collection of corporate crime data. We ask that you work with your colleagues in the House to boost the budget of federal enforcement agencies. We call for legislation that gives citizen standing to enforce critical health, safety, environmental and financial laws, and we demand that you cease efforts to undermine the civil justice system, our country's strongest safeguard against corporate fraud. We call for serious penalties for corporate criminals, including heavy fines, innovative probation plans, loss of the right to bid for government contracts and charter revocation for recidivist corporations.Finally, we insist that you clean up the campaign finance system and the attendant political corruption which enables corporate criminals to bribe politicians to lessen regulatory and legal restraints on corporate misbehavior, and to undermine the federal cops on the corporate crime beat.Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor.


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