Robert Weissman

It's a 'frightening' prospect if an authoritarian like Trump declares state of emergency

President Trump says that he will likely declare a national emergency over the border wall if negotiations over the government shutdown continue. We speak with Robert Weissman, president of Public Citizen. “The Congress has given the president quite a bit of authority to declare emergencies with terms that are almost unbounded,” Weissman says. “Congress has always expected, and society has always expected, that presidents wouldn’t abuse that authority recklessly, declaring emergencies just because they want to. We obviously have a president now who has no such constraints.”

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Despite White House Chaos, Trump Delivers Favors for Corporate America

The Trump administration may be dazed and confused about many things, but not about its corporate agenda.

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An Unusual Experiment with the Truth: Trump Tweets on Record Corporate Profits

An unusual experiment with the truth from Donald Trump: he tweeted, truthfully, that “corporations have NEVER made as much money as they are making now.”

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President Trump’s Corporate Government

We’re 100 days into Corporate Government.

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The For-Profit Presidency, Month One

One month into the Trump administration, and it’s clear that there has been a wholesale corporate takeover of the government.

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US Chamber Freaks Out Over Modest Obama Proposal That Would Require Gov't Contractors To Disclose Campaign Spending

It's a good rule of thumb: If the U.S. Chamber of Commerce -- the trade association for large corporations -- is whipped up about something, there's probably good reason for the public to strongly back whatever has sent the Chamber into fits.

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$5 Billion in Lobbying for 12 Corrupt Deals Caused the Multi-Trillion Dollar Financial Meltdown

What can $5 billion buy in Washington?

Quite a lot.

Over the 1998-2008 period, the financial sector spent more than $5 billion on U.S. federal campaign contributions and lobbying expenditures.

This extraordinary investment paid off fabulously. Congress and executive agencies rolled back long-standing regulatory restraints, refused to impose new regulations on rapidly evolving and mushrooming areas of finance, and shunned calls to enforce rules still in place.

"Sold Out: How Wall Street and Washington Betrayed America," a report released by Essential Information and the Consumer Education Foundation (and which I co-authored), details a dozen crucial deregulatory moves over the last decade -- each a direct response to heavy lobbying from Wall Street and the broader financial sector, as the report details. (The report is available at: www.wallstreetwatch.org/soldoutreport.htm.) Combined, these deregulatory moves helped pave the way for the current financial meltdown.

Here are 12 deregulatory steps to financial meltdown:

1. The repeal of Glass-Steagall

The Financial Services Modernization Act of 1999 formally repealed the Glass-Steagall Act of 1933 and related rules, which prohibited banks from offering investment, commercial banking, and insurance services. In 1998, Citibank and Travelers Group merged on the expectation that Glass-Steagall would be repealed. Then they set out, successfully, to make it so. The subsequent result was the infusion of the investment bank speculative culture into the world of commercial banking. The 1999 repeal of Glass-Steagall helped create the conditions in which banks invested monies from checking and savings accounts into creative financial instruments such as mortgage-backed securities and credit default swaps, investment gambles that led many of the banks to ruin and rocked the financial markets in 2008.

2. Off-the-books accounting for banks

Holding assets off the balance sheet generally allows companies to avoid disclosing “toxic” or money-losing assets to investors in order to make the company appear more valuable than it is. Accounting rules -- lobbied for by big banks -- permitted the accounting fictions that continue to obscure banks' actual condition.

3. CFTC blocked from regulating derivatives

Financial derivatives are unregulated. By all accounts this has been a disaster, as Warren Buffett's warning that they represent "weapons of mass financial destruction" has proven prescient -- they have amplified the financial crisis far beyond the unavoidable troubles connected to the popping of the housing bubble. During the Clinton administration, the Commodity Futures Trading Commission (CFTC) sought to exert regulatory control over financial derivatives, but the agency was quashed by opposition from Robert Rubin and Fed Chair Alan Greenspan.

4. Formal financial derivative deregulation: the Commodities Futures Modernization Act

The deregulation -- or non-regulation -- of financial derivatives was sealed in 2000, with the Commodities Futures Modernization Act. Its passage orchestrated by the industry-friendly Senator Phil Gramm, the Act prohibits the CFTC from regulating financial derivatives.

5. SEC removes capital limits on investment banks and the voluntary regulation regime

In 1975, the Securities and Exchange Commission (SEC) promulgated a rule requiring investment banks to maintain a debt to-net capital ratio of less than 15 to 1. In simpler terms, this limited the amount of borrowed money the investment banks could use. In 2004, however, the SEC succumbed to a push from the big investment banks -- led by Goldman Sachs, and its then-chair, Henry Paulson -- and authorized investment banks to develop net capital requirements based on their own risk assessment models. With this new freedom, investment banks pushed ratios to as high as 40 to 1. This super-leverage not only made the investment banks more vulnerable when the housing bubble popped, it enabled the banks to create a more tangled mess of derivative investments -- so that their individual failures, or the potential of failure, became systemic crises.

6. Basel II weakening of capital reserve requirements for banks

Rules adopted by global bank regulators -- known as Basel II, and heavily influenced by the banks themselves -- would let commercial banks rely on their own internal risk-assessment models (exactly the same approach as the SEC took for investment banks). Luckily, technical challenges and intra-industry disputes about Basel II have delayed implementation -- hopefully permanently -- of the regulatory scheme.

7. No predatory lending enforcement

Even in a deregulated environment, the banking regulators retained authority to crack down on predatory lending abuses. Such enforcement activity would have protected homeowners, and lessened though not prevented the current financial crisis. But the regulators sat on their hands. The Federal Reserve took three formal actions against subprime lenders from 2002 to 2007. The Office of Comptroller of the Currency, which has authority over almost 1,800 banks, took three consumer-protection enforcement actions from 2004 to 2006.

8. Federal preemption of state enforcement against predatory lending

When the states sought to fill the vacuum created by federal non-enforcement of consumer protection laws against predatory lenders, the Feds -- responding to commercial bank petitions -- jumped to attention to stop them. The Office of the Comptroller of the Currency and the Office of Thrift Supervision each prohibited states from enforcing consumer protection rules against nationally chartered banks.

9. Blocking the courthouse doors: Assignee Liability Escape

Under the doctrine of “assignee liability,” anyone profiting from predatory lending practices should be held financially accountable, including Wall Street investors who bought bundles of mortgages (even if the investors had no role in abuses committed by mortgage originators). With some limited exceptions, however, assignee liability does not apply to mortgage loans, however. Representative Bob Ney -- a great friend of financial interests, and who subsequently went to prison in connection with the Abramoff scandal -- worked hard, and successfully, to ensure this effective immunity was maintained.

10. Fannie and Freddie enter subprime

At the peak of the housing boom, Fannie Mae and Freddie Mac were dominant purchasers in the subprime secondary market. The Government-Sponsored Enterprises were followers, not leaders, but they did end up taking on substantial subprime assets -- at least $57 billion. The purchase of subprime assets was a break from prior practice, justified by theories of expanded access to homeownership for low-income families and rationalized by mathematical models allegedly able to identify and assess risk to newer levels of precision. In fact, the motivation was the for-profit nature of the institutions and their particular executive incentive schemes. Massive lobbying -- including especially but not only of Democratic friends of the institutions -- enabled them to divert from their traditional exclusive focus on prime loans.

Fannie and Freddie are not responsible for the financial crisis. They are responsible for their own demise, and the resultant massive taxpayer liability.

11. Merger mania

The effective abandonment of antitrust and related regulatory principles over the last two decades has enabled a remarkable concentration in the banking sector, even in advance of recent moves to combine firms as a means to preserve the functioning of the financial system. The megabanks achieved too-big-to-fail status. While this should have meant they be treated as public utilities requiring heightened regulation and risk control, other deregulatory maneuvers (including repeal of Glass-Steagall) enabled them to combine size, explicit and implicit federal guarantees, and reckless high-risk investments.

12. Credit rating agency failure

With Wall Street packaging mortgage loans into pools of securitized assets and then slicing them into tranches, the resultant financial instruments were attractive to many buyers because they promised high returns. But pension funds and other investors could only enter the game if the securities were highly rated.

The credit rating agencies enabled these investors to enter the game, by attaching high ratings to securities that actually were high risk -- as subsequent events have revealed. The credit rating agencies have a bias to offering favorable ratings to new instruments because of their complex relationships with issuers, and their desire to maintain and obtain other business dealings with issuers.

This institutional failure and conflict of interest might and should have been forestalled by the SEC, but the Credit Rating Agencies Reform Act of 2006 gave the SEC insufficient oversight authority. In fact, the SEC must give an approval rating to credit ratings agencies if they are adhering to their own standards -- even if the SEC knows those standards to be flawed.

From a financial regulatory standpoint, what should be done going forward? The first step is certainly to undo what Wall Street has wrought. More in future columns on an affirmative agenda to restrain the financial sector.

None of this will be easy, however. Wall Street may be disgraced, but it is not prostrate. Financial sector lobbyists continue to roam the halls of Congress, former Wall Street executives have high positions in the Obama administration, and financial sector propagandists continue to warn of the dangers of interfering with "financial innovation."

The 10 Worst Corporations of 2008

2008 marks the 20th anniversary of Multinational Monitor's annual list of the 10 Worst Corporations of the year.

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Don't Mourn the Collapse of WTO Talks

Predictably, the cheerleaders for corporate globalization are bemoaning the collapse of World Trade Organization negotiations.

"This is a very painful failure and a real setback for the global economy when we really needed some good news," said Peter Mandelson, the European Union's trade commissioner.

Even worse, says the corporate globalization rah-rah crowd, the talks' failure will hurt the developing world. After all, these negotiations were named the Doha Development Round.

"The breakdown of these talks is bad news for the world's businesses, workers, farmers and most importantly the poor," laments U.S. Chamber of Commerce President Tom Donohue.

But don't shed any tears for the purported beneficiaries of the WTO talks. If truth-in-advertising rules applied, this might have been called the Doha Anti-Development Round.

The alleged upside of the deal for developing countries -- increased access to rich country markets -- would have been of tiny benefit, even according to the World Bank. The Research and Information System for Developing Countries points out that Bank analyses showed a successful conclusion of the Doha Round would, by 2015, increase developing country income in total by $16 billion a year -- less than a penny a day for every person in the developing world.

The World Bank study, however, includes numerous questionable assumptions, without which developing countries would emerge as net losers. One unrealistic assumption is that governments will make up for lost tariff revenues by other forms of taxes. Another is that countries easily adjust to import surges by depreciating their currencies and increasing exports.

In any case, the important point is that there was very little to gain for developing countries.

By contrast, there was a lot to lose.

The promise to developing countries was that they would benefit from reduced agricultural tariffs and subsidies in the rich countries. Among developing nations, these gains would have been narrowly concentrated among Argentina, Brazil and a few other countries with industrial agriculture.

What the spike in food prices has made clear to developing countries is that their food security depends fundamentally not on cheap imports, but on enhancing their capacity to feed themselves. The Doha rules would have further undermined this capacity.

"Opening of markets, removal of tariffs and withdrawal of state intervention in agriculture has turned developing countries from net food exporters to net food importers and burdened them with huge import bills," explains food analyst Anuradha Mittal of the Oakland Institute. "This process, which leaves the poor dependent on uncertain and volatile global markets for their food supply, has wiped out millions of livelihoods and placed nearly half of humanity at the brink of hunger and starvation."

Farmers' movements around the world delivered this message to government negotiators, and the negotiators refused to cave to the aggressive demands made by rich countries on behalf of agricultural commodity-trading multinationals. Kamal Nath, India's Minister for Commerce and Industry, pointed out that the Doha Development Round was supposed to give benefits to developing countries -- especially in agriculture -- not extract new concessions.

The immediately proximate cause of the negotiations' collapse was a demand by developing countries that they maintain effective tools to protect themselves from agricultural import surges. Rich countries refused the overly modest demand.

And agriculture was the area where developing countries were going to benefit.

The rough trade at the heart of the deal was supposed to be that rich countries reduce market barriers to developing country agricultural exports, and developing countries further open up to rich country manufacturing and service exports and investment.

Such a deal "basically suggests that the poor countries should remain agricultural forever," says Ha-Joon Chang, an economics professor at the University of Cambridge and author of Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. "In order to receive the agricultural concession, the developing countries basically have to abolish their industrial tariffs and other means to promote industrialization." In other words, he says, developing countries are supposed to forfeit the tools that almost every industrialized country (and the successful Asian manufacturing exporters) has used to build their industrial capacity.

In sum, says Deborah James, director of international programs for the Washington, D.C.-based Center for Economic and Policy Research, this was a lose-lose deal for developing countries. "The tariff cuts demanded of developing countries would have caused massive job loss, and countries would have lost the ability to protect farmers from dumping, further impoverishing millions on the verge of survival," she says.

By the way, it's not as if this is a North vs. South, rich country vs. poor country issue. Although there have been multiple lines of fragmentation in the Doha negotiations, the best way to understand what's going on is that the rich country governments are driving the agenda to advance corporate interests, not those of their populations. That's why there is so little public support for the Doha trade agenda, in both rich and poor countries.

Says Lori Wallach of Public Citizen's Global Trade Watch: "Now that WTO expansion has been again rejected at this 'make or break' meeting, elected officials and those on the campaign trail in nations around the world -- including U.S. presidential candidates -- will be asked what they intend to do to replace the failed WTO model and its version of corporate globalization with something that benefits the majority of people worldwide."

Stinky Roses for Valentine's Day

Before you buy your sweetie those roses for Valentine's Day, pause for a moment to consider where they come from, and at what cost – and what can be done to give a bit more joy not just to the flowers' recipients, but their producers.

Cut flowers are a highly globalized industry. The majority of cut flowers sold in the United States are imported, especially from Colombia and Ecuador. Kenya and Tanzania are the key overseas suppliers for Europe. Here's how the industry looks from the multinational corporate perspective: "In just a 24-hour period, each stem is cut, packed and loaded onto a temperature controlled UPS aircraft heading to Miami. There, they clear Customs and are distributed to florists and consumers across the country. Eighty-seven percent of all cut flower imports arrive in Miami." UPS reports that it imported more than 14.8 million stems of cut flowers into the United States last year from South American countries such as Colombia and Ecuador.

But on the ground in Colombia and Ecuador, things don't look so smoothly efficient and trouble free.

Olga Tutillo is secretary general of Rosas del Ecuador, a flower workers' union in Ecuador. She has worked at flower plantations for 22 years. She is 38 years old and has five children.

Tutillo explains how hard the work is for Ecuador's roughly 100,000 flower workers, about 70 percent of whom are women; the faces behind Cupid. The International Labor Organization estimates about 20 percent of the workforce consists of children.

The workers generally earn the national minimum wage, $145 per month. They work especially long hours in advance of Valentine's Day and other flower-giving holidays in the United States. They experience major occupational risks. Back pain is common among those who must stand or lean all day. Repetitive motion injuries are common. Rose pickers are frequently cut by thorns.

"There are also problems caused by pesticide fumigation," she explains. "Fumigation happens every day, either to prevent the plants from getting different diseases or to deal with it when they do get those diseases. Some of these chemicals are highly toxic."

Flower workers who try to organize to improve their working conditions face severe repression.

"It is extremely difficult to unionize in Ecuador," says Tutillo. "The companies are organized among themselves and they have a list on the internet of the people who have tried to unionize or have unionized. If someone tries to create a union, the company threatens to fire them and says they won't be able to find another job. These are the famous blacklists."

Thanks to firings, blacklisting and other tactics – like increasing use of contract workers instead of full-fledged employees – the unionization rate in Ecuador is depressingly low. Among 300 flower companies in Ecuador, reports Tutillo, "only four have unions – the other attempts to unionize have been repressed."

The story is much the same in Colombia, says Ricardo Zamudio, president of Cactus, a Colombian organization that conducts research on issues related to the flower industry.

Workers are trying to organize despite the repression they face. In Colombia a recent important development has been independent unionization at one flower company owned by Dole, which altogether controls 20 percent of Colombia's flower exports. The International Labor Rights Fund (ILRF) is running a letter-writing campaign to urge Dole Fresh Flowers and the Colombian-based firm Splendor Flowers to respect workers' right to unionize (www.laborrights.org).

Unfortunately, as long as the repression remains intense, consumers have much more freedom to demand flower justice than do the flower workers.

In Europe, a flower certification program has taken hold that tells consumers whether flowers were grown on farms or plantations that respect minimal environmental and labor conditions. According to the International Labor Organization, a substantial portion of flowers grown in Kenya, Tanzania and Zimbabwe receive certification under the Flower Label Program. The flower certification program is no panacea, but it does help modestly improve environmental and working conditions, and it gives workers more space to organize.

The program has had much less impact in South America, in considerable part because the Flower Label Program hasn't taken hold in the United States, where most Colombian and Ecuadorian flowers are shipped.

Just like with sweatshops, consumer pressure can make a significant difference in the lives of the flower workers. But the opportunity is in some ways greater, because of the concentration among both flower producers and sellers. ILRF is leading the way, trying to galvanize consumer pressure to force Dole and large cut-flower sellers – Albertsons, Safeway, Costco and Wal-Mart, among others – to pressure flower suppliers to respect workers' rights to organize, protect employees' health and safety, and pay overtime wages.

So go ahead and give that rose for Valentine's Day. But be careful of the thorns; and to avoid sticking it to the flower workers, support the ILRF campaign.






The 10 Worst Corporations of 2004

It is never easy choosing the 10 Worst Corporations of the Year – there are always more deserving nominees than we can possibly recognize. One of the greatest challenges facing the judges is the directive not to select repeat recipients from last year's 10 Worst designation.

The no-repeat rule forbids otherwise-deserving companies – like Bayer, Boeing, Clear Channel and Halliburton – from returning to the 10 Worst list in 2004.

Of the remaining pool of price gougers, polluters, union-busters, dictator-coddlers, fraudsters, poisoners, deceivers and general miscreants, we chose the following – presented in alphabetical order – as the 10 Worst Corporations of 2004:

Abbott Laboratories: Drug-Pricing Chutzpah

Chutzpah. Webster's defines the Yiddish term now incorporated into English slang as: 1. unmitigated effrontery or impudence; gall. 2. audacity; nerve.

In the next edition, they may want to add: 3. See Abbott.

In December 2003, the company raised the U.S. price of its anti-AIDS drug Norvir (generic name ritanovir) by 400 percent. That is, unless the product is used in conjunction with other Abbott products – in which case the price increase is zero.

Norvir has become an increasingly important treatment in recent years. Scientists have discovered that while Norvir is generally too toxic for safe use as a protease inhibitor (one category of anti-AIDS drugs), in lower doses it works well as a booster to increase the efficacy of other protease inhibitors. As a result, Norvir is frequently prescribed along with other protease inhibitors.

The Norvir price increase does not apply when the product is used as a booster with another Abbott protease inhibitor (in the combined product Kaletra). Thus the impact of the Norvir price increase is to make Kaletra far cheaper than rival combinations of Norvir and non-Abbott protease inhibitors.

Norvir is especially important for patients in need of a "salvage therapy" of new and powerful treatments because their virus has become resistant to other medicines.

Lynda Dee, co-chair of the AIDS Treatment Activists Coalition's Drug Development Committee, called the price increase for these patients, who may have no choice as to the medications they need to survive, "pharma-terrorism perpetrated against the patients who need new drugs the most."

Abbott said the price spike was justified by its need to raise money for research and development. "New medicines cost hundreds of millions of dollars to develop," Jeffrey Leiden, president and chief operating officer of Abbott's Pharmaceutical Products Group, told a National Institutes of Health meeting in May.

Moreover, Leiden said, the price increase would not deny any patients access to the drug. The price increase does not apply to federal AIDS drug programs, which cover 54 percent of people with HIV/AIDS. Price increases only apply to private insurers and to uninsured individuals, who Abbott says can get the product for free under a special program it operates.

Making the Abbott price jump especially pernicious in the eyes of consumer advocates was that the drug was invented on a grant from the U.S. federal government.

Because of the U.S. government's financing role, Essential Inventions, Inc., a nonprofit corporation created to distribute affordable public health and other inventions, in January petitioned the government to exercise its "march-in" rights under the federal Bayh-Dole Act and issue an open license to generic firms to produce their own version of Norvir.

"Essential Inventions is asking the Bush administration to adopt a simple rule – U.S. consumers should not pay more for drugs invented on government grants," said Essential Inventions president James Love. Following the U.S.-only price increase, Norvir is 5 to 10 times more expensive in the United States than in other high-income countries.

But NIH rejected the Essential Inventions proposal, arguing that companies that obtained licenses to government-funded inventions have a duty only to commercialize the inventions. NIH does not have authority to consider the price at which a product is sold and the impact of the price on access, the agency ruled – even though the Bayh-Dole Act says government-funded inventions should be made "available to the public on reasonable terms."

"If Secretary Thompson agrees that quadrupling the price of a life-or-death AIDS drug, rigging the market, and discriminating against U.S. consumers is 'reasonable,' you can't help but wonder what the [s]ecretary considers unreasonable," said Rep. Sherrod Brown, D-Ohio, in criticizing the NIH decision.

AIG: Deferred Prosecutions On the Rise

When the world's largest insurer, American International Group Inc. (AIG), was charged by federal prosecutors with crimes in November, it quickly cut a deal with the Justice Department that ended a criminal probe into its finances with a deferred prosecution agreement.

In a deferred prosecution, the corporation accepts responsibility, agrees not to contest the charges, agrees to cooperate, usually pays a fine and implements changes in corporate structure and governance to prevent future wrongdoing.

If the company abides by the agreement for a period of time, then the prosecutors will drop the criminal charges.

In a non-prosecution agreement – like the one secured by Merrill Lynch's in 2003 with New York Attorney General Eliot Spitzer – prosecutors agree not to bring criminal charges in exchange for corporate fines, cooperation and a change in corporate structure and governance.

"This comprehensive settlement brings finality to the claims raised by the SEC and the Department of Justice," said AIG Chair M. R. Greenberg. "The role of the independent consultant complements our own transaction review processes. We welcome this enhancement to our overall risk management and control mechanisms."

Under the deal with AIG, an AIG subsidiary was charged with a crime for the next 12 months, but then the charge will be dismissed with prejudice – if AIG abides by the deferred prosecution agreement.

As part of the agreement, AIG and two subsidiaries will pay an $80 million penalty, and $46 million into a disgorgement fund maintained by the SEC.

Federal officials in October filed a criminal complaint charging AIG-FP PAGIC Equity Holding Corp., a subsidiary of AIG, with violating the federal securities laws, by aiding and abetting PNC Financial Services Group, Inc. (PNC) in connection with a fraudulent transaction to transfer $750 million in mostly troubled loans and venture capital investments from subsidiaries off of its books.

These transactions were previously the subject of a deferred criminal disposition involving PNC.

Earlier this year, the Department dismissed the criminal complaint against a PNC subsidiary, after the company fulfilled its deferred prosecution agreement obligations.

Merrill, AIG and PNC are three of 10 major corporations that have settled serious criminal charges with deferred prosecution, no prosecution or de facto no prosecution agreements over the last two years. Companies are getting off the criminal hook with these agreements, which were originally intended for minor street crimes. Now they are being used in very serious corporate crime cases.

If a crime has been committed – and there is little doubt that crimes have been committed by the corporations in these cases – then the companies should plead guilty and pay the penalty. If prosecutors want to impose change on the corporation, they can do this after securing a conviction through probationary orders. Right now, corporate lawyers are teaming up with prosecutors to go after individual executives while the company's record is wiped clean.

Coca-Cola: KillerCoke.org vs. CokeKills.org

On KillerCoke.org, you'll find a raft of information on Coke and its bottlers' operations in Colombia. There is extensive documentation of rampant violence committed against Coke's unionized workforce by paramilitary forces, and powerful claims of the company's complicity in the violence.

An April 2004 report from a fact-finding delegation headed by New York City Council member Hiram Monserrate contends:

"To date, there have been a total of 179 major human rights violations of Coca-Cola's workers, including nine murders. Family members of union activists have been abducted and tortured. Union members have been fired for attending union meetings. The company has pressured workers to resign their union membership and contractual rights, and fired workers who refused to do so."

"Most troubling to the delegation were the persistent allegations that paramilitary violence against workers was done with the knowledge of and likely under the direction of company managers."

Allegations such as these formed the basis of a lawsuit filed in 2001 by the International Labor Rights Fund and the United Steelworkers of America in U.S. courts against Coke on behalf of a Colombian trade union and union leader victims of violence at Coke bottling facilities in Colombia.

In 2003, a federal court dismissed the claims against Coke, arguing that its relationship with the owners of the Coke bottling plant in Colombia was too attenuated to hold the soft drink multinational responsible for human rights abuses at the plant. The plaintiffs have since refiled their complaint – they argue the original decision was mistaken, but that Coke's subsequent purchase of the Colombia bottlers means the company is now clearly responsible for the bottlers' actions.

Strangely, for the response to KillerCoke.org, you can check out CokeKills.org. That site, which is operated by Coke, redirects you to CokeFacts.org.

Here's what Coke has to say:

"The pervasive violence in Colombia, and the targeting of union members by its perpetrators, has, unfortunately, touched The Coca-Cola Company in a very personal way. Employees of our Company and bottling partners in Colombia have been threatened, kidnapped, and some have even been murdered ... In a lawsuit in Colombia, the court concluded that the bottler not only took proper steps to initiate investigation by the authorities, but went further to enhance its workers' safety by heightening security at the plant."

Leave aside for the moment the issue of Coke's legal liability. The idea that Coke can't control the behavior of its bottlers is simply implausible. It can control them if it so chooses – just the way that clothing retailers can control the actions of their manufacturers, but even more so.

Instructive in raising questions about Coke's good-faith concern for its workers is its unwillingness to support an independent investigation into the Colombia allegations – even after the company's former General Counsel, and the former assistant U.S. attorney general, Deval Patrick, had committed to one. Coke's refusal to authorize an investigation reportedly contributed to Patrick's decision to resign from the corporation.

Dow Chemical: Forgive Us Our Trespasses

At midnight on Dec. 2, 1984, 27 tons of lethal gases leaked from Union Carbide's pesticide factory in Bhopal, India, immediately killing an estimated 8,000 people and poisoning thousands of others.

Today in Bhopal, at least 150,000 people, including children born to parents who survived the disaster, are suffering from exposure-related health effects such as cancer, neurological damage, chaotic menstrual cycles and mental illness. Over 20,000 people are forced to drink water with unsafe levels of mercury, carbon tetrachloride and other persistent organic pollutants and heavy metals.

Activists from around the world – including human rights, legal, environmental health and other experts – mobilized this year to demand that Dow Chemical, the current owner of Union Carbide, be held accountable.

Twenty years after this disaster, the company responsible for this catastrophe and its former executives are still fugitives from justice. Union Carbide and its former chairman, Warren Andersen, were charged with manslaughter for the deaths at Bhopal, but they refuse to appear before the Indian courts.

Here is part of Dow's statement on Bhopal:

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The 10 Worst Corporations of 2003

2003 was not a year of garden variety corporate wrongdoing. No, the sheer variety, reach and intricacy of corporate schemes, scandal and crimes were spellbinding. Not an easy year to pick the 10 worst companies, for sure.

But Multinational Monitor magazine cannot be deterred by such complications. And so, here follows, in alphabetical order, our list for Multinational Monitor of the 10 worst corporations of 2003.

Bayer: 2003 may be remembered as the year of the headache at Bayer. In May, the company agreed to plead guilty to a criminal count and pay more than $250 million to resolve allegations that it denied Medicaid discounts to which it was entitled. The company was beleaguered with litigation related to its anti-cholesterol drug Baycol. Bayer pulled the drug – which has been linked to a sometimes fatal muscle disorder – from the market, but is facing thousands of suits from patients who allege they were harmed by the drug. In June, the New York Times reported on internal company memos which appear to show that the company continued to promote the drug even as its own analysis had revealed the dangers of the product. Bayer denies the allegations.

Boeing: In one of the grandest schemes of corporate welfare in recent memory, Boeing engineered a deal whereby the Pentagon would lease tanker planes – 767s that refuel fighter planes in the air – from Boeing. The pricetag of $27.6 billion was billions more than the cost of simply buying the planes. The deal may unravel, though, because the company in November fired for wrongdoing both the employee that negotiated the contract for Boeing (the company's chief financial officer), and the employee that negotiated the contract for the government. How could Boeing fire a Pentagon employee? Simple. She was no longer a Pentagon employee. Boeing had hired her shortly after the company clinched the deal.

Brighthouse: A new-agey advertising/consulting/ strategic advice company, Brighthouse's claim to infamy is its Neurostrategies Institute, which undertakes research to see how the brain responds to advertising campaigns. In a cutting-edge effort to extend and sharpen the commercial reach in ways never previously before possible, the institute is using MRIs to monitor activity in people's brains triggered by advertisements.

Clear Channel: The radio behemoth Clear Channel specializes in consuming or squashing locally owned radio stations, imposing a homogenized music play list on once interesting stations, and offering cultural support for U.S. imperial adventures. It has also compiled a record of "repeated law-breaking," according to our colleage Jim Donahue, violating the law – including prohibitions on deceptive advertising and on broadcasting conversations without obtaining permission of the second party to the conversation – on 36 separate occasions over the previous three years.

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, 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.

Halliburton: Now the owner of the company which initially drafted plans for privatization of U.S. military functions – plans drafted during the Bush I administration when current Vice President and former Halliburton CEO Dick Cheney was Secretary of Defense – Halliburton is pulling in billions in revenues for contract work – providing logistical support ranging from oil to food – in Iraq. Tens of millions, at least, appear to be overcharges. Some analysts say the charges for oil provision amount to "highway robbery."

HealthSouth: Fifteen of its top executives have pled guilty in connection with a multi-billion dollar scheme to defraud investors, the public and the U.S. government about the company's financial condition. The founder and CEO of the company that runs a network of outpatient surgery, diagnostic imagery and rehabilitative healthcare centers, Richard Scrushy, is fighting the charges. But thanks to the slick maneuvering of attorney Bob Bennett, it appears the company itself will get off scot free – no indictments, no pleas, no fines, no probation.

Inamed: The California-based company sought Food and Drug Administration approval for silicone breast implants, even though it was not able to present long-term safety data – the very thing that led the FDA to restrict sales of silicone implants a decade ago. In light of what remains unknown and what is known about the implants' effects – including painful breast hardening which can lead to deformity, and very high rupture rates – the FDA in January 2004 denied Inamed's application for marketing approval.

Merrill Lynch: This company keeps messing up. Fresh off of a $100 million fine levied because analysts were recommending stocks that they trashed in private e-mails, the company saw three former execs indicted for shady dealings with Enron. The company itself managed to escape with something less than a slap on the wrist – no prosecution in exchange for "oversight."

Safeway: One of the largest U.S. grocery chains, 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 company's proposals, workers and their families will lose $4,000 to $6,000 a year in health insurance benefits.

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.

U.S. Hires Christian Extremists to Produce Arabic News

The U.S. government this week launched its Arabic language satellite TV news station for mostly Muslim Iraq. It is being produced in a studio -- Grace Digital Media -- controlled by fundamentalist Christians who are rabidly pro-Israel. That's grace as in "by the grace of God."

Grace Digital Media is controlled by a fundamentalist Christian millionaire, Cheryl Reagan, who last year wrested control of Federal News Service, a transcription news service, from its former owner, Cortes Randell. Randell says he met Reagan at a prayer meeting, brought her in as an investor in Federal News Service, and then she forced him out of his own company.

Grace Digital Media and Federal News Service are housed in a downtown Washington, D.C. office building, along with Grace News Network. When you call the number for Grace News Network, you get a person answering "Grace Digital Media/Federal News Service." According to its web site, Grace News Network is "dedicated to transmitting the evidence of God's presence in the world today."

"Grace News Network will be reporting the current secular news, along with aggressive proclamations that will 'change the news' to reflect the Kingdom of God and its purposes," GNN proclaims.

The Broadcasting Board of Governors (BBG), the U.S. government agency producing the television news broadcasts for Iraq, likes to say it is the BBC of the USA. BBG runs Radio Free Europe, Voice of America, and Radio Sawa -- Arabic language radio for the Middle East.

"Our mission is clear," BBG's Joan Mower told us. "To broadcast accurate and objective news about the United States and the world. We don't do propaganda, leafleting -- we are like the BBC in that respect."

Well, then why hook up with Grace?

BBG's Joan Mower said that Grace Digital Media is a mainstream production house used by all kinds of mainstream news organizations.

"Grace will have nothing to do with the editorial side of the news broadcast," she said. "They are renting us equipment, space, studio. The Grace personnel we use include technicians, production people but no editorial people."

But Mower said she couldn't get us a copy of the contract between BBG and Grace Digital Media. Nor could she say how Grace Digital was chosen as the production studio.

Grace News Network proclaims that it will be a "unique tool in the Lord's ministry plan for the world," according to the company's mission statement. "Grace News Network provides networking links and portals to various ministries and news services that will be of benefit to every Christian believer and seeker of truth."

The CEO of Grace News Network is Thorne Auchter. The same Thorne Auchter who began the dismantling of the Occupational Safety and Health Administration (OSHA) under Presidents Reagan and George Bush I. Auchter did not return our calls seeking comment for this story.

While it's unclear whether Grace News Network actually produces any news, it has produced a documentary movie titled "Israel: Divine Destiny" which it showed at the National Press Club in September 2002. The film is about "Israel's destiny and the United States' role in that destiny," according to Grace News Network.

Grace News said that it could not make a copy of the film available to us at this time, since it is now undergoing post-production editing. Nor could it provide a transcript.

The mainstream media has documented strong and growing ties between right-wing Republican Christian fundamentalists and right-wing Sharonist Israeli expansionists. This alliance is personified in Ralph Reed's Stand Up for Israel, a group formed to "mobilize Christians and other people of faith to support the State of Israel."

President Bush has very strong ties to fundamentalist Christians, most notably Franklin Graham, the son of Rev. Billy Graham. Last week, Franklin Graham delivered a Good Friday message at the Pentagon, despite an uproar over his previous slander of Islam as "a very evil and wicked religion."

Don Wagner, a professor of religion and director of the Center for Middle Eastern Studies at North Park University, an evangelical Christian college in Chicago, has written extensively about what he calls Christian Zionism, whose leaders he identifies as, among others, Ralph Reed, Jerry Falwell, Pat Robertson, Gary Bauer, and Franklin Graham.

"Christian Zionists have historically pointed to Genesis 12:3-96 -- I will bless those who bless you. And the one who curses you, I will curse," Dr. Wagner said. "They have interpreted this to mean that individuals and nations who support the state of Israel will be blessed by God. It has come to mean political, economic and moral support, often uncritically rendered to the state of Israel."

Grace News Network seems to fit the mold.

Joan Mower says that BBG is currently producing and transmitting six hours of news into Iraq including a dubbed version of the daily evening news from ABC, CBS, NBC, Fox and PBS, plus three hours of original news programming from BBG.

BBG says it sees no problem in having Grace produce the evening news broadcast for Iraq. Given the brewing anti-American revolt through all sectors of Iraqi society, maybe it should reconsider.

We called Grace Digital Media to speak with Cheryl Reagan. Her secretary told us that she has been away in extended vacation for more than a month -- in Israel.

When will she back? we asked. No one knows, the secretary said.

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. They are co-authors of "Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy" (Monroe, Maine: Common Courage Press).

The Unbalanced Hawks at the Washington Post

What is going on at the Washington Post?

We would say that the Post editorial pages have become an outpost of the Defense Department -- except that there is probably more dissent about the pending war in Iraq in the Pentagon than there is on the Post editorial pages.

In February alone, the Post editorialized nine times in favor of war, the last of those a full two columns of text, arguing against the considerable critical reader response the page had received for pounding the drums of war.

Over the six-month period from September through February, the leading newspaper in the nation's capital has editorialized 26 times in favor of war. It has sometimes been critical of the Bush administration, it has sometimes commented on developments in the drive to war without offering an opinion on the case for war itself, but it has never offered a peep against military action in Iraq.

The op-ed page, which might offer some balance, has also been heavily slanted in favor of war.

In February, the Post op-ed page ran 34 columns that took a position on the war: 24 favored war and 10 were opposed, at least in part. (Another 22 mentioned Iraq, and sometimes were focused exclusively on Iraq, but didn't clearly take a position for or against the war.)

Over the last four months, the Post has run 46 op-ed pieces favoring the war, and only 21 opposed.

This constitutes a significant change from September and October, when the opinion pieces were much more balanced, and even tilted slightly in favor of peace.

A few words on our methodology: We reviewed every editorial and op-ed piece in the Post over the last six months that contained the word "Iraq." We looked at the substance of the articles, and did not pre-judge based on the author. We categorized as neutral pieces which mentioned Iraq as an aside, or which discussed the war without taking a position. For example, an article which assesses how European countries are responding to U.S. Iraq-related proposals, but does not take a position on the war itself, is categorized as neutral. Neutral articles are not included in our tally.

The methodology tends to undercount pro-war columns. We categorized as neutral articles which we thought presumed a certain position on the war, but which did not explicitly articulate it. Over the last four months, there were 17 "neutral" articles which we believe had a pro-war slant, and only five "neutral" pieces with an anti-war orientation.

Our methodology also tended to overcount pro-peace op-eds. We tallied an op-ed as pro-peace if it took a position opposing the drive to war on the issue of the moment -- even if the author made clear that they favored war on slightly different terms than the President proposed at the time (for example, if UN authorization was obtained).

Someone else reviewing the Post editorial page might disagree with our categorization of this or that article. We concede it may be rough around the edges. But overall, we think other reviewers would agree that our count is in the ballpark, and tends to underestimate the disparity between pro- and anti-war pieces.

Moreover, the dramatic quantitative tilt in favor of the war if anything underplays how pro-war the Post's editorial pages have been.

Among the regular columnists at the Post, those providing pieces that we considered anti-war include E.J. Dionne, a self-described "doubter" not opponent of the war, Mary McGrory, who pronounced herself convinced by Colin Powell's presentation to the United Nations (a position from which she has backtracked) and Richard Cohen, who actually is pro-war. Only William Rasberry could be labeled a genuine and consistent opponent of war.

On the other side, the regular pro-war columnists are extraordinarily harsh and shrill. George Will labeled David Bonior and James McDermott, two congresspeople who visited Iraq, "American collaborators" with and "useful idiots" for Saddam. Michael Kelly, in one of his calmer moments, says no "serious" person can argue the case for peace. Charles Krauthammer says that those who call for UN authorization of U.S. military action in Iraq are guilty of a "kind of moral idiocy."

The Post op-ed page has been full of attacks on anti-war protesters. Richard Cohen has managed to author attacks on John Le Carre, for an anti-war column he wrote, poets against the war, and Representative Dennis Kucinich. Cohen joined war-monger Richard Perle in calling Kucinich a "liar" (or at very least a "fool"), because Kucinich suggested the war might be motivated in part by a U.S. interest in Iraqi oil. (Is this really a controversial claim? Pro-war New York Times columnist Thomas Friedman says that to deny a U.S. war in Iraq is partly about oil is "laughable.")

Neither Le Carre, the poets, nor Kucinich has been given space on the Post op-ed page.

Indeed, virtually no one who could be considered part of the peace movement has been given space. The only exceptions: A column by Hank Perritt, then a Democratic congressional candidate from Illinois, appeared in September. Morton Halperin argued the case for containment over war in February. And Reverend Bob Edgar, a former member of Congress who now heads the National Council of Churches, a key mover in the anti-war movement, was permitted a short piece that appeared in the week between Christmas and New Year's, when readership and attention to serious issues is at a lowpoint.

Edgar only was given the slot after editorial page editor Fred Hiatt, in an op-ed, characterized the anti-war movement, and Edgar by name, as "Saddam's lawyers."

Does this shockingly one-sided treatment on the Post editorial pages of the major issue of the day matter?

It matters a lot.

The Washington Post and the New York Times are the two papers that most fundamentally set the boundaries for legitimate opinion in Washington, D.C. The extraordinary tilt for war in the Post editorial pages in the last four months makes it harder for officialdom in Washington and the Establishment generally to speak out against war.

Everyone who might be characterized as an "insider" in the political-military-corporate establishment knows there are major internal divisions on the prospect of war among elder statesmen, retired military brass and present-day corporate CEOs. There are many reasons those voices are inhibited from speaking out, but the Post's extremist editorial pages are certainly a real contributor.

The failure to give a prominent platform to anti-war voices has also worked to soften the debate among the citizenry. It's no answer to say a vibrant anti-war movement, reliant on the Internet, its own communications channels and dissenting voices in other major media outlets, has sprung up. Sending out an e-mail missive is not exactly the same thing as publishing an op-ed in the Washington Post.

The Post editorial page editors have failed to fulfill their duty to democracy. The heavy slant on the editorial pages, the extreme pro-war rhetoric offset only by hedging and uncertain war critics, and the scurrilous attacks on the anti-war movement to which minimal response has been permitted -- all have undermined rather than fueled a robust national debate.

At this point, there is no real way for the Post to rectify its wrongdoing. It could start to mitigate the effect by immediately making a conscious effort to solicit and publish a disproportionately high number of pro-peace op-eds, and to let the peace movement occasionally speak for itself, especially since the paper's regular columnists so savagely and repeatedly attack it.

Unfortunately, the drive to war, which the Post editorial pages have helped fuel, may not stop in Iraq. There is good reason to believe that a war with Iraq will be followed by calls from the hawks at the Post and around the administration for more military action, against some other target. Will the paper's editorial page editors find a better way to achieve balance in advance of the next military buildup? Or are the paper's editorial pages now simply devoted to the Permanent War Campaign?

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, multinationalmonitor.org. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press; corporatepredators.org.

The New American Filter

Here's a good bet: Young, good-looking, hip and upcoming policy wonks aren't going to bite the hands that feed them.

If a public policy group holds a conference or a press briefing in Washington, D.C. that is sponsored by big corporations, then the discussion will barely mention big corporations, their role in causing the problems, or solutions that might adversely affect those big corporations.

You can take it to the bank.

Case in point:

This week, at the National Press Club, the Atlantic Monthly Magazine and The New America Foundation co-sponsored an event titled, "What is the Real State of the Union?"

In the materials is a copy of the January/February issue of The Atlantic Monthly, hot off the press.

The magazine and the Foundation got together 14 hot New America Foundation fellows and asked them to think anew and write about problems facing the nation.

So, for example, we get Jerediah Purdy on Trust (too much trust can actually be a bad thing -- a polity of suckers is no better than a nation of cynics); Shannon Brownlee on Health Care (one of our biggest health care problems is that there's just too much health care -- cutting down on the excess could save enough to cover everyone who is now uninsured); Margaret Talbot on Crime (the inevitable consequence of America's high incarceration rate is a high prison-release rate -- and the prisoners getting out are often more violent and anti-social than they were before); and Welfare and Poverty (it may be the greatest policy achievement in recent history -- over the past decade significant numbers of formerly welfare dependent black women have successfully entered the work force. But what about black men?).

Along with the materials, is a one-page note from Ted Halstead, the president of the New America Foundation, and Elizabeth Baker Keffer, the publisher of the Atlantic Monthly.

"We close with a note of thanks to each of our advertising partners and their support of our effort to create a platform for thoughtful dialogue about the true state of our union. In particular, we recognize: Shell, Lockheed Martin, ADM, TIAA-CREF, Microsoft, The Hartford, Hewlett Packard, and the Nuclear Energy Institute."

The event at the press club was an all day affair. And by the early afternoon session, there was hardly a mention of the C word -- corporations.

This seemed to us to be a simple case of the rule: Don't bite the hand that feeds you. And they didn't.

One of the afternoon sessions was moderated by Jim Fallows, national correspondent for the Atlantic Monthly and chairman of the New America Foundation. One of the panelists during that session was Senator John Breaux (D-Louisiana).

The senator, apparently oblivious to a banner hanging behind him prominently featuring the corporate logo of the conference sponsors, including the yellow seashell of Royal Dutch Shell, begins to tell a story about the debate over drilling in the Arctic National Wildlife Refuge, how he argued that drilling would do minimal damage to the environment, how other Democratic senators would come up to him and in private say they agreed with him, but couldn't side with him in public because of the "interest groups" -- read environmental groups.

Yes, interest groups were the problem.

They get in the way of reasonable compromise, Breaux said.

During the question period, Fallows calls on us.

Well, isn't it interesting, we observe, that Senator Breaux totally ignored the interest groups that are sponsoring the conference.

I mean, there is the Shell Oil corporate logo glowing over the senator's left shoulder, and all he can talk about are the environmental groups, as if the oil companies have no say in the matter?

Who are we kidding here?

And isn't the senator's failure to recognize the elephant in the room symptomatic of the entire effort?

Here you have The New America Foundation and the Atlantic Monthly taking money from Shell, and ADM, and Lockheed Martin, The Hartford, and the Nuclear Energy Institute to write about the real state of the union, and you ignore corporate power -- just don't talk about it?

At this point, one of the young New America kids takes the microphone from our hands and won't hand it back.

We pry it from his hands and continue to address Fallows.

In the essay about crime, why do you write nothing about corporate crime and focus solely on street crime, ignoring that corporate crime and violence inflicts far more damage on society than all street crime combined?

And in the essay on welfare, why do you focus solely on black Americans, and ignore corporate welfare, which costs more than all individual welfare combined?

And Fallows' answer is -- well, to run a magazine, you can't rely on subscription income alone.

Well, yeah, but you don't have to totally ignore the subject of corporate power, either.

And you don't have to give free advertising to your advertisers by ordering a banner with their corporate logos emblazoned across the bottom, to be beamed across national television via C-Span.

And we give up the mike.

And then, Michael Lind, a New America fellow, comes up to us and says had we read his article (on National Unity -- overcrowded cities on the coasts; dying rural communities in the interior; the way to save both may be to create a post-agrarian heartland) -- we would have known that he in fact calls for a cutback on agricultural subsidies and we wouldn't have asked this "stupid question."

In fact, Michael, it was not a stupid question.

Just because you had a throwaway line on cutting agricultural subsidies, that doesn't mean the issue of corporate power, corporate crime and corporate welfare has been addressed.

New America scholars are young, hip and with it.

The Economist says they are "the brightest American thinkers under 40."

The New York Times says they "break out of the traditional liberal and conservative categories."

The Washington Post calls the New America Foundation "The think tank for Generation Next."

Looks more like they are bought and paid for.

And in exchange, they filter out any discussion of corporate power.

Call it the New American Filter.

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. They are co-authors of "Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy."

The 10 Worst Corporations of 2002

The year 2002 will forever be remembered as the year of corporate crime, the year even President George W. Bush embraced the notion of "corporate responsibility."

While the Bush White House has now downgraded its "corporate responsibility portal" to 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.

We easily could have filled Multinational Monitor's list of the 10 Worst Corporations of the Year 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 didn't want to contribute to the perception that corporate wrongdoing in 2002 was limited to the financial misdeeds arena.

We included only Andersen from the ranks of the financial criminals and miscreants. Andersen's assembly line document destruction certainly merits a place on the list. (Citigroup appears on the list as well, but primarily for a subsidiary's involvement in predatory lending, as well as the company's 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.

Appearing in alphabetical order, the 10 worst are:

Arthur Andersen, for a massive scheme to destroy documents related to the Enron meltdown. "Tons of paper relating to the Enron audit were promptly shredded as part of the orchestrated document destruction," a federal indictment against Andersen alleged. "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 Andersen's main Houston office to be shredded." Andersen was convicted for illegal document destruction, effectively putting the company out of business.

British American Tobacco (BAT), for operating worldwide programs supposedly designed to prevent youth smoking but which actually make the practice more attractive to kids (by suggesting smoking is an adult activity), continuing to deny the harmful health effects of second-hand smoke, and working to oppose efforts at the World Health Organization to adopt a strong Framework Convention on Tobacco Control.

Caterpillar, for selling bulldozers to the Israeli Defense Forces (IDF), which are used as an instrument of war to destroy Palestinian homes and buildings. The IDF has destroyed more than 7,000 Palestinian homes since the beginning of the Israeli occupation in 1967, leaving 30,000 people homeless.

Citigroup, both for its deep involvement in the Enron and other financial scandals and its predatory lending practices through its recently acquired subsidiary The Associates. Citigroup paid $215 million to resolve Federal Trade Commission (FTC) charges that The Associates engaged in systematic and widespread deceptive and abusive lending practices.

DynCorp, a controversial private firm that subcontracts military services with the Defense Department, for 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.

M&M/Mars, for responding tepidly to revelations about child slaves in the West African fields where much of the world's cocoa is grown, and refusing to commit to purchase a modest 5 percent of its product from Fair Trade providers.

Procter & Gamble, the maker of Folger's coffee and part of the coffee roaster oligopoly, for failing to take action to address plummeting coffee bean prices. Low prices have pushed tens of thousands of farmers in Central America, Ethiopia, Uganda and elsewhere to the edge of survival, or destroyed their livelihoods altogether.

Schering Plough, for a series of scandals, most prominently allegation 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. Schering paid $500 million to settle the case with the Food and Drug Administration.

Shell Oil, for continuing business as usual as one of the world's leading environmental violators -- while marketing itself as a socially and environmentally responsible company.

Wyeth, for using duplicitous means, and without sufficient scientific proof, to market hormone replacement therapy (HRT) to women as a fountain of youth. Scientific evidence reported in 2002 showed that long-term HRT actually threatens women's lives, by increasing the risks of breast cancer, heart attack, stroke and pulmonary embolism.

What's the lesson to draw from this year's 10 worst list? 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.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Multinational Monito, also based in D.C.

Of Caviar and Capitalism

Are capitalism and caviar incompatible? Is the system that prides itself on the creation and veneration of wealth unable to to maintain a sustainable market for one of the great trappings of wealth?

Well, at the very least, the tragic story of the global caviar industry gives pause. It stands as a parable illustrating the pitfalls of the market fundamentalist ideology that has dominated global economic policy-making for two decades.

The story of the industry is recounted in a new book by Inga Saffron, a Philadelphia Inquirer reporter and former Moscow correspondent for the paper, "Caviar: The Strange History and Uncertain Future of the World's Most Coveted Delicacy" (New York: Broadway Books).

For most of the twentieth century, the world caviar market was supplied primarily by the Soviet Union. Caviar -- the salted eggs of sturgeon or paddlefish -- is a creation of Russian culture. Although sturgeon once populated many of the world's great seas and rivers in large numbers, most of the world's supply after World War I came from the Caspian Sea and the Black Sea.

After coming to power, Saffron says, "the Soviets realized they could make a lot of money if they controlled the caviar market."

They exported the product to Western markets to earn hard currency, but limited supply to increase prices.

"I don't want to say that they had a great environmental record, because they didn't," Saffron says. "But they did act as a brake on fishing because they limited caviar exports."

Even when the Soviets embarked on their disastrous dam-building schemes, which blocked sturgeon from swimming upstream to spawn, they developed an extensive hatchery system that maintained the sturgeon population.

Communism, it turned out, was pretty good for caviar.

When the Soviet Union collapsed, so did the protections and support system for caviar.

In the chaos following the fall of the Soviet Union, factories across the country stopped doing business as government money for operating expenses evaporated. Funding to maintain the hatcheries similarly disappeared, and the hatchery system fell apart. Overall, Saffron says, the hatchery system became much less efficient, and was able to put back many fewer fish than it had before.

Even worse, perhaps, was the rampant poaching that occurred after the fall of the USSR.

"Many of the people who had been thrown out of work began to fish illegally," according to Saffron. "They began to poach for sturgeon and make caviar in their kitchens, because that is the only way they could make money. It was the one resource in Southern Russia."

The old Soviet limits on fishing "were ignored, and people just fished all the time," she says.

Enforcement agencies were weak and ineffectual. Many were bought off or intimidated by the criminal gangs that gained control over much of the industry.

Today, the sturgeon in the Russian and Kazakhstan portions of the Caspian are in steep decline, and Saffron has little hope that they will be saved. International controls on caviar imports are coming too little, too late, and in any case cannot stop the internal traffic in the delicacy.

The collapse of the sturgeon in the Russian and Kazakhstan portions of the Caspian is history repeating itself. Rampant overfishing led to the rapid destruction of sturgeon populations in Germany, France, the Eastern United States and the U.S. Great Lakes, all in a matter of decades in the late nineteenth and early twentieth centuries.

Today, the counterexample to the laissez-faire caviar failure is Iran. Like the Soviet Union once did, Iran maintains strong limits on fish catch in its portion of the Caspian and operates a sophisticated and effective hatchery system.

Countries relying only on price signals to regulate the industry have witnessed a short cycle of boom and bust.

Countries that have succeeded in maintaining a viable caviar industry over time have made long-term investments in infrastructure and put in place systems to ensure sustainable management of limited resources.

Those are key elements for effective economic management and a livable world.

Markets alone will not deliver them.

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, http://www.multinationalmonitor.org. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999; http://www.corporatepredators.org).

Why Newsweek is Bad for Kids

Did you see the cover story of Newsweek magazine last week?

The cover story is titled, "Why TV is Good for Kids."

What are we to expect from Newsweek next week?

Why Soda Pop is Good for Kids.

Why Sedentary Living is Good for Kids.

Why Obesity is Good for Kids.

Some things are good for kids.

Reading is good for kids.

Love and caring is good for kids.

Teaching is good for kids.

Running, playing basketball and baseball and tennis and swimming are good for kids.

But don't try and insult us by telling us that sitting in front of a TV is good for kids.

Why, against all common sense, is Newsweek going to try and convince us that television is good for kids?

Well, one reason might be: Newsweek is owned by the Washington Post Company, which owns a sprawling cable company and six broadcast stations around the country.

Of course, nowhere in the article does Newsweek tell us this.

And how does Newsweek try and convince us that TV is good for kids?

They trot out an expert, Daniel Anderson, a professor of psychology at the University of Massachusetts, who claims that TV is good for kids.

But what Newsweek doesn't tell us is Anderson is a paid consultant to a variety of television networks and advertising interests.

His clients include: NBC, CBS, Universal Pictures, Sony, General Mills, the Leo Burnett ad agency, Nickelodeon and the National Association of Broadcasters.

The article says that TV is a good thing because kids learn from television and parents are "looking for TV to help them do a better job of raising kids."

But Frank Vespe, executive director of the TV TurnOff Network (www.tvturnoff.org), points out that the article misses a crucial issue: the average American school child spends more time in front of the television each year -- about 1,023 hours -- than in the classroom -- about 900 hours.

"This amount of television -- more than twice what anyone thinks is a healthy amount -- has negative consequences for health, education, and family time," Vespe said.

This amount of television watching actually hurts children.

Vespe points to studies documenting how kids gain weight from watching TV, and that TV reinforces sex roles and stereotyping.

Voracious TV-watching kids turn into voracious TV-watching adults. The average American watches four hours a day, 1460 hours a year, about two full months, 24 hours a day, every year.

Newsweek did run a one-page counterpoint ("No It's Not") to its "TV Is Good for Kids" eight pager.

The "No It's Not" counterarticle is written by a mom who points out that the American Academy of Pediatrics recommends no television for children younger than two and a maximum of two hours a day of "screen time" -- TV, computers or videogames -- for older kids.

We rang up the author of the "Why TV Is Good for Kids" article, Daniel McGinn.

McGinn immediately points out that at the end of his article, he did write that the expert, Anderson, advised on a handful of television shows during their conception.

"People who help create television shows get paid to do so," McGinn tells us.

Well, yes, but Anderson gets paid to do much more.

According to his own bio, Anderson has been paid by NBC and by General Mills to consult "on television viewing behavior."

And he's been paid by the Leo Burnett ad agency to consult on "children's cognitive processing of television."

That's a touch more than helping to "create television shows."

We asked Newsweek's McGinn why he didn't inform his readers that Newsweek is owned by the Washington Post which owns a cable company and six broadcast news outlets.

"Newsweek is owned by the Washington Post," he says. "I'm not sure what the Washington Post owns today."

You mean you don't know that the Washington Post Company owns television outlets?

It's right on the company's web site: WDIV in Detroit, KPRC in Houston, WPLG in Miami, WKMP in Orlando, KSAT in San Antonio and WJXT in Jacksonville.

The Post also owns Cable ONE, the owner and operator of cable television systems serving subscribers across the country.

Earlier, McGinn left a message on our machine saying he was willing to talk with us "at whatever length."

At this point, though, McGinn decides the conversation has gone on long enough.

"Who do you write for?" he asks. We tell him.

"Have a great day, bud." And he hangs up.


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, http://www.multinationalmonitor.org. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999; http://www.corporatepredators.org).

Thirsty for Justice

Shown the folly of over-reliance on markets even in the world's richest country, the market fundamentalists at the World Bank are continuing their push for privatization of services -- with the provision of drinking water at the top of the list -- in the developing world.

Water works plagued by poor service and underinvestment can be rejuvenated by private water operators. That according to the World Bank, a compromised consulting industry and the private water industry -- dominated by the French firms Suez and Vivendi -- itself.

But citizen movements across the planet are rising to challenge the World Bank and corporate schemes to gain control of now-public water systems. Perhaps the hottest flashpoint in the conflict between the people and the Water Barons is in Ghana. There, the National Coalition Against the Privatization of Water (NCAP of Water) is aggressively opposing a Bank-advocated privatization scheme that would lease out the country's urban water systems for a song. The scheme was hatched in 1995, and may be implemented next year, unless NCAP can thwart it.

(A newly released International Fact-Finding Mission assessment of the Ghanaian privatization proposal is available at: http://www.citizen.org/documents/factfindingmissionGhana.pdf)

To make the system generate enough revenue to pay the operator -- a handful of international operators, including Suez and Vivendi, are in the running to take over the system -- the privatization scheme would require persistent rate hikes. The goal is to achieve "cost recovery" -- tariff revenue sufficient to meet operations and maintenance costs, without any public subsidy to keep prices in check. This, even though systems in the United States, among other industrialized countries, routinely rely on support from general tax revenues.

Compounding the rate hikes, the privatization scheme calls for the inclusion of an "automatic tariff adjustment" -- with rates rising automatically to offset inflation and, most importantly, currency devaluations. That makes sense from the viewpoint of the foreign operator -- they will want to maintain constant profits in dollar-denominated terms, not in cedis, the local currency. But it is a disaster from the point of view of Ghanaian consumers -- their cedi income does not go up just because the value of the cedi declines. Assuming future devaluations, Ghanaian consumers will find themselves paying a higher and higher proportion of their income to the water company.

In exchange for certain ongoing rate hikes into the indefinite future, Ghana is supposed to benefit from a more reliable and efficient system, and from expansion of the piped water system to reach the millions of urban consumers who are not connected to water pipes. But almost all of the evidence suggests these promises will turn out to be illusions or deceptions.

First, the record of private water company operation in developing countries is very poor. There is little to suggest that private companies deliver "efficiencies" in this area, though they are clearly skilled at extracting enormous profits.

The details of the Ghanaian privatization plans offer little comfort that things will be different in this case.

There are some incentives built in the proposal to increase the amount of water delivered -- many lower income Ghanaians may get water from pipes only once every two or four weeks -- but the proposed leasing terms would encourage the private operator to improve service for high-volume richer consumers, rather than low-volume poorer ones.

Achievement of water delivery and other performance standards would be self-monitored by the private water operator, overseen by a newly created regulatory agency with little experience and little chance of effectively controlling a giant multinational.

The proposed leasing arrangements impose only the most minimal investment requirements on the private operator (who would lease the system, rather than purchase it outright) -- and the operator is guaranteed a return even on that minimal investment, making it more of a loan than actual investment. So the operator will offer almost nothing in terms of new money for repairs or pipe expansion.

There is some new money promised in the deal for pipe expansion. But the money will all be in the form of new loans and some grants from the World Bank and donor countries. The private operator does nothing to obtain these loans, and has no pay-back obligations. This money -- desperately needed for system expansion -- could be made available right now (or could have been provided five years earlier), but the Bank and donors have made the loans and grants conditional on privatization.

Even this money is far less than needed to connect most urban Ghanaians to the piped water system. They will continue to rely on exploitative private water tanker operators, who buy water in bulk from the water utility, drive to areas without piped water service and sell to consumers at rates five or ten times that of price of piped water. The poorest people in cities have no choice but to rely on these water sources, and find themselves spending 10, 15 or even 20 percent of their income on drinking water.

The tanker prices could easily be controlled. The utility could operate tankers and sell tanker-provided water at the piped water rate. Or the private tankers could be tolerated, but required to sell water at a regulated price -- with the utility refusing to sell water to those tanker operators who fail to comply.

The World Bank has not considered these approaches, and at least one pro-privatization consultant's document suggests that such measures would interfere with the flourishing private market in water provision!

NCAP of Water, like colleagues around Africa and elsewhere in the developing world, rejects this market fundamentalist illogic. They insist that drinking water be treated as a right, not a commodity. Rather than inviting predatory multinationals in to drive up prices, suck up profits, serve the urban elite, and ignore the poor, they say, the public sector can and must be reinvigorated to ensure decent delivery of water, one of life's essentials.

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, http://www.multinationalmonitor.org, and was a member of the International Fact-Finding Mission on Water Sector Reform in Ghana. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999; http://www.corporatepredators.org).

Reality Check: It's Business As Usual

The predominant view in Washington right now is that the corporate reformers are in control. President Bush's Wall Street speech chastising corporate bad apples was a bomb, immediately discarded in Washington circles as containing proposals that were too weak to constitute serious reform.

The Senate has passed an accounting reform bill that actually contains provisions that would at least partially address some of the worst abuses of the Enron, WorldCom and other corporate scandals. Last week, it passed amendments that would strengthen criminal penalties for securities fraud, and that require company executives to take responsibility for the information appearing in their financial statements.

Conservative economist Jude Wanniski says the Senate is making "it a crime to do business in the United States." Representative Michael Oxley, R-Ohio, says "summary executions [for CEOs committing fraud] would get 85 votes in the Senate right now." Intel CEO Andy Grove complains in the Washington Post that he and other CEOs feel like "class aliens," victims of "social stigma" and unfairly labeled "as a group of untrustworthy, venal individuals." Sometimes, the emotional peaks get so high in Washington that people lose their ability to think clearly. The microscopic, snapshot focus on a particular matter at a particular moment in time causes politicians and commentators alike to lose all perspective.

In fact, Congress and the Bush administration continue as never before to shower benefits and perquisites on Big Business. Consider the president's Wall Street speech and a follow up earlier this week in Alabama.

Bush reminded his audiences that he and the Congress "passed the biggest tax cut in a generation," and urged that the 10-year tax cuts be made permanent. That tax cut dropped corporate tax payments to historic lows as a percentage of gross domestic product, and heaped more than half of its benefits on the richest 1 percent of the U.S. population.

Bush asked "Congress to join me to promote free trade" -- meaning that Congress should support fast-track trade authority for negotiation of new trade deals, including one for all of North, Central and South America, modeled on NAFTA. Both houses of Congress have approved fast-track trade authority, but still have to reconcile their bills in a complicated process which may yet falter. Fast-track -- which establishes in law the priority of commercial interests over health, safety, environmental and other citizen protections -- is atop the Chamber of Commerce's legislative wish list, and opposed by labor unions, environmentalists, consumer groups, human rights organizations and citizen groups.

Bush further requested the provision of terrorism insurance, which is by and large unneeded. The administration-favored plan would constitute a massive giveaway to the insurance industry, which would receive a giant subsidy from the federal government at no charge.

And it is not as if this administration and Congress have not already been exceedingly generous to Big Business.

Both houses have passed versions of an energy bill that will sweep aside the federal energy regulatory regime, freeing energy utilities to consolidate and enter other industries -- an approach strikingly similar to the financial deregulation and integration that helped precipitate the current financial crisis.

The two major parties have engaged in a grotesque competition to pour more and more money into the Pentagon. An emergency supplemental appropriations bill lavished billions more onto a bloated defense budget that is approaching $400 billion annually. What a gift for Lockheed, Boeing, Raytheon and Northrop Grumman.

Earlier this month, the Congress acted to enable plans to ship radioactive waste through towns and cities across the country, for disposal at Yucca Mountain, in Nevada. This deadly gamble -- risking the accidental release of radioactive waste en route (prompting critics to call the scheme "Mobile Chernobyl"), or leakage into water supplies at Yucca Mountain -- is vital to the hopes of the nuclear industry not just to continue, but to expand operations.

And the pending appropriations bills will shower on large corporations a wide array of subsidies and benefits totaling tens of billions of dollars.

Apocalyptic rhetoric notwithstanding, Washington continues to coddle the corporate elite. Only beginning with campaign contributions, the corrupting influence of corporate money and power seeps into every pore of Washington.

Washington policymakers by and large are not acting to restrain corporate abuses, they are continuing to aid and abet them.

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. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy.

Brokerman

So, you want to buy some stock in an American corporation.

And you go to your broker.

Brokerman, please help me. I want to buy some stock in an American corporation. But here's the thing, Brokerman, sir. Is Wall Street a safe neighborhood, sir? Can't safely go into Wall Street, with executives being led away in handcuffs, can I, Brokerman sir?

Calm down, calm down -- Brokerman says.

It's all media hype. I'm here on Wall Street, and I haven't been mugged, have I?

But Mr. Brokerman, sir, I'm watching television and see these corporate executives being handcuffed by big burly guys in blue jackets and big yellow letters on the back that say F-B-I.

Turn off your television. It's all tabloid stuff, Brokerman says. Lookee here, Brokerman says -- I've got these ratings. I take all the financial data from all the publicly held companies and rate each one, A to F -- just like grade school. Now -- Brokerman says -- here are a group of stocks that you can buy safely -- because the computer has rated them A.

Don't worry. Trust me. Everything is going to be all right.

Trust me.

Yeah right.

Andersen -- guilty, obstruction of justice.

ImClone Systems CEO -- under indictment, insider trading.

Martha Stewart -- under investigation, insider trading.

Enron -- criminal investigation.

Or what about Adelphia, CMS Energy, Computer Associates, Dynergy, Global Crossing, Halliburton, Kmart, Lucent Technologies, MicroStrategy, Network Associates, PNC Financial Services, Qwest Communications, Reliant Resources, Tyco International and Xerox?

All of them are now facing serious questions about their business practices.

Three Rite Aid executives -- indicted for cooking the company's books by overstating revenues by $1 billion.

And now, the Securities and Exchange Commission files fraud charges against WorldCom for hiding $3.8 billion in expenses.

Trust me. Trust me.

Remember Merrill Lynch? Remember the Merrill Lynch analysts who were telling their customers -- trust me, buy this stock, this stock is highly rated? And then they would turn around and email their buddies -- hey, this stock is crap, why are we recommending this crap to our customers?

And then New York Attorney General Eliot Spitzer gets ahold of the emails, brings some kind of enforcement action, and goes before the television, and says the case is settled, Merrill will pay $100 million.

But Spitzer doesn't get Merrill to admit wrongdoing. And he signs some kind of agreement that is totally unenforceable. He later admits that had he forced Merrill to admit wrongdoing, the firm would have gone kaput. Just like Andersen.

And Merrill Lynch isn't the least of them. Most of the big investment companies are now under investigation by the states for misleading investors just like Merrill did.

Weiss Ratings Inc. is an independent ratings firm (www.weissratings.com). Earlier this month, Weiss Ratings released a study that found that among the 50 brokerage firms covering companies that have gone bankrupt this year, 47 firms continued to recommend that investors buy or hold shares in the failing companies even as they were filing for Chapter 11 in the first four months of 2002.

Lehman Brothers maintained six buy ratings on failing companies, while Salomon Smith Barney maintained eight hold ratings up through the date the companies filed for bankruptcy.

Also sticking with buy ratings until the very end were Bank of America Securities, Bear Stearns, CIBC World Markets, Dresdner Kleinwort Wasserstein, Goldman Sachs, and Prudential Securities.

"This analysis shows that Wall Street's record is far worse than previously believed," says Martin D. Weiss, chair of Weiss Ratings. "Even when there was abundant evidence that companies were on the verge of bankruptcy, over 90 percent of the latest ratings issued by brokerage firms continued to tell investors to hold their shares or buy more."

So, what happens when people think that the Street is being overrun by criminals?

They don't go there.

And that's what investors have started doing. Pulling out. As the Dow heads below 9,000 (James "Dow 36,000" Glassman, where art thou?), can anyone doubt why?

Russell Mokhiber and Robert Weissman are co-authors of "Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy."

Stripping Away Big Pharma's Figleaf

Drug prices in the United States are out of control, and rising.

The reason is that the United States permits pharmaceuticals to be marketed by unregulated monopolies: Patent protection gives the drug companies monopoly control over their products. These companies face neither direct competition, nor price controls.

But what is the reason for the government grant of these patent monopolies (which often extend long beyond the official 20 years, thanks to a variety of Big Pharma "evergreening" tactics to block or delay the introduction of generic competition)?

Leaving aside the raw political power of the pharmaceutical industry and its allies, the policy rationale for patent monopolies is the cost of drug development. According to the drug companies, the cost of researching and developing a new drug is $800 million.

The myth of astronomical drug development costs is the figleaf behind which Big Pharma and its paid associates (inside and outside of government) hide to escape criticism for price gouging. If this myth were peeled away, Big Pharma would stand exposed. And the prospect of a more rational system of drug development and pricing would rise dramatically.

This matter could be resolved, simply, if the drug companies were to open their books and reveal their actual investments in R&D. Instead, they implausibly claim that this information would give away trade secrets and must remain proprietary.

The industry claim of $800 million costs per drug relies on a study from an industry-funded research center at Tufts University in Boston. Tufts researchers supposedly had access to industry data to come up with their figure, but no one else is able to see the underlying data. So if you choose to believe in this number, it is simply a matter of faith.

To get closer to the actual figures for the cost of drug development and company per drug expenditures on R&D, you have to peel away the assumptions and built-in biases of the Tufts-industry study.

Approximately half of the Tufts-industry estimates are attributed to financing costs, known as opportunity cost of capital. Money invested in drug R&D could have been invested in treasury bonds, say. While the bonds would start returning revenues right away, R&D returns are not realized for years, until a drug is discovered, developed, approved and put on the market. So in the Tufts-industry study, a "cost" of development is the forsworn income during the period of development.

This is all true, as far it goes, but it is not how people normally think about "cost." As James Love of the Consumer Project on Technology says, it is the equivalent of saying the cost of a car is not the sticker price, but the sticker price plus interest payments on a car loan.

Exacerbating the problem, the researchers may pick an unreasonably high interest rate. They may also set the period for drug development as too long -- in the Tufts-industry model, relatively small delays in getting the drug to market lead to big increases in the overall cost.

The Tufts-industry estimate is for the cost of new chemical entities for which the industry was wholly responsible -- that is, where there was no substantial public contribution to R&D.

It turns out, however, that the vast majority of new drugs Big Pharma brings to market do not involve new chemical compounds. A May 2002 study by the National Institute for Health Care Management (NIHCM) Foundation found that two-thirds of the prescription drugs approved by the FDA between 1989 and 2000 were modified versions of existing medicines or identical to drugs already on the market (and only about 15 percent were both new and deemed by the FDA to provide significant improvement over existing medicines). Pharma denies it, but there is every reason to believe these less novel products are far cheaper to bring to market.

Then there's the not insignificant fact that the case of drugs brought to market without government support is the exception, not the norm. The federal government supports an enormous amount of research, and funds the earliest and riskiest portions of the R&D process: basic research and the earlier phases of clinical trials.

Finally, the Tufts-industry figures seem to wildly inflate the cost of clinical testing. Looking at company filings with the IRS for tax credits on research for "orphan drugs" (drugs which treat small populations), however, the Consumer Project on Technology found that -- adjusted for risk -- drug companies report expenditures of only $7.9 million on clinical trials, less than 1 percent of the overall estimate.

Even if the costs for this category of drug are below average, as the industry claims -- even if they were, implausibly, a tenth of the average -- this would still suggest a much lower total development cost than the Tufts-industry estimate.

Any honest examination of available evidence on the costs of drug development suggests the United States -- and most of the rest of the world, which thanks to the U.S./industry strong-arming tactics in international trade negotiations, now maintains or soon will adopt U.S.-style patent rules -- is massively overcompensating Big Pharma for its work in bringing drugs to market.

With the U.S. healthcare system bursting at the seams, seniors draining their bank accounts to buy drugs, and millions of people around the world going without medicines, the time has come for fundamental reform.

Meaningful reform might include ending the industry's patent extension tricks, licensing drugs developed with public monies on a nonexclusive basis to permit price-reducing competition (or at least permitting competition where prices are excessive), and considering rollbacks to the 20-year patent term and the adoption of price controls.

But even these measures may prove inadequate. Why couldn't the government simply take over the job of drug development, and then let private companies manufacture and distribute medicines in a competitive environment -- doing away with patent monopolies on drugs altogether?

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. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999; http://www.corporatepredators.org).

Big Banks and Terrorism

What is the purpose of law enforcement? To enforce the law, and make public the results.

What deterrent effect does law enforcement have if the public is not aware of the results of the law enforcement?

Not much.

And yet, when it comes to big banks and major financial institutions, the Treasury Department enforces the law in private. Why? To protect the reputation of the big banks.

We thought about this the other day when President Bush and Treasury Secretary Paul O'Neill stood together at the White House Rose Garden and announced a crackdown on big banks and other financial institutions who do business with terrorists.

President Bush signed an executive order providing the Treasury Department with the authority to block funds of terrorists and anyone associated with a terrorist or terrorism.

"With the signing of this executive order, we have the President's explicit directive to block the U.S. assets of any domestic or foreign financial institution that refuses to cooperate with us in blocking assets of terrorist organizations," O'Neill said. "This order is a notice to financial institutions around the world -- if you have any involvement in the financing of the al Qaeda organization, you have two choices: cooperate in this fight, or we will freeze your U.S. assets -- we will punish you for providing the resources that make these evil acts possible."

So what?

What good does it do to punish the big banks if no one knows about the punishment?

If the history of law enforcement against corporate criminals is any indication, the fines will probably be a slap on the wrist. But in this case, we have no way of knowing, because the Treasury Department won't tell us.

President Bush's executive order -- and all laws governing trading with the "enemies" of the United States -- terrorists, Cuba, Libya -- are enforced by the Treasury Department's Office of Foreign Assets Control (OFAC).

Which American citizens are most concerned about OFAC's enforcement powers? Big banks and financial institutions. Why? Because they do business with the "enemies" of the United States and they have the most to lose if that dirty little secret gets out. They have corporate reputations to protect.

So, they have worked a deal with OFAC -- enforce the law against us, fine us if you must, but don't tell the public. And for years, OFAC has agreed to be a party to this cover-up.

How do we know this is going on?

Because the white-collar criminal defense lawyers who the banks and financial institutions hire to defend them against OFAC criminal and civil enforcement actions readily admit it.

Last week, Dale Chakarian Turza, a partner in the Washington, D.C. office of Clifford Chance Rogers & Wells, told us that she believes that OFAC enforcement officials, led by chief of the penalty division, Betsy Sue Scott, run a "very active case load." That means that big banks and financial institutions are being cited with law violations and are paying fines. And the enforcement activity never sees the light of day.

Of course, the banks and financial institutions like it that way. And they will like even more now, as they search their databases to determine which terrorists have deposits at their institutions.

Which bank would want the public to know that they are doing business with Osama bin Laden?

"None of our clients want any publicity in this area," Turza said. "It is not a badge that any financial institution or others who are tagged by OFAC wear proudly. These are very serious statutes. Violations are generally inadvertent. No bank or other financial institution likes to have any publicity or press on an enforcement action."

"So the defense bar is generally very pleased when our clients don't get press in this area," Turza said.

Secret settlements are unusual when it comes to enforcing the law against corporations. Every time the Federal Trade Commission enforces the law, it puts the result up on its web site. Same for the Securities and Exchange Commission. Same for the Occupational Safety and Health Administration. In most cases, when the Justice Department enforces the law against a major corporations, the public finds out about it -- one way or another.

Publicity is supposed to have a deterrent effect. Why should OFAC be different?

"In some ways I think they get better compliance through silence," Turza said.

Yeah, right. And if we ever got arrested for a street crime, we wouldn't want the public to know, either. Could we have that deal, too?

The Treasury Department's policy of cutting secret deals with big banks is an indefensible embarrassment. The Department refuses to return reporters' calls about the subject.

Last month, we sued the Treasury Department to compel enforcement officials there to produce records of enforcement actions settled by OFAC.

The public has a right to know.

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.

The Wartime Opportunists

Corporate interests and their proxies are looking to exploit the September 11 tragedy to advance a self-serving agenda that has nothing to do with national security and everything to do with corporate profits and dangerous ideologies.

Fast track and the Free Trade Area of the Americas. A corporate tax cut. Oil drilling in Alaska. Star Wars. These are some of the preposterous "solutions" and responses to the terror attack offered by corporate mouthpieces.

No one has been more shameless in linking their agenda to the terror attack than U.S. Trade Representative Robert Zoellick. Writing in The Washington Post last week, Zoellick proclaimed that granting fast-track trade negotiating authority to the president -- to assist with the ramming through Congress of a Free Trade Area of the Americas, designed to expand NAFTA to all of the Americas, among other nefarious ends -- was the best way to respond to the September 11 tragedy.

"Earlier enemies learned that America is the arsenal of democracy," Zoellick wrote, "Today's enemies will learn that America is the economic engine for freedom, opportunity and development. To that end, U.S. leadership in promoting the international economic and trading system is vital. Trade is about more than economic efficiency. It promotes the values at the heart of this protracted struggle."

No explanation from Zoellick about how adopting a procedural rule designed to limit congressional debate on controversial trade agreements advances the democratic and rule-of-law values he says the United States must now project.

The administration has identified fast track as one of the handful of legislative priorities it hopes to see Congress enact this year.

Getting fast track passed isn't big business's only priority for the shrinking legislative calendar. The Fortune 500 has been whimpering since George Bush was elected president and top administration officials told the business community to silence their demand for corporate tax cuts until after passage of the inequality-increasing personal income tax cut.

Even before the September 11 attack, business interests and the anti-tax ideologues were increasingly making noise that corporate tax cuts were the solution to the coming recession.

Now they are beginning to argue that capital gains tax cuts and corporate tax breaks are America's patriotic duty.

In releasing a study purporting to explain how a capital gains cut would spur economic growth, the National Taxpayers Union (NTU) touted a capital gains tax cut -- a tax break that exclusively benefits the wealthy -- as an anti-terrorism initiative. "By reducing the rate at which capital gains are taxed, President Bush and Congress could help revitalize the sagging economy and bring new revenues to Washington -- decidedly aiding our war against terrorism," said NTU director of congressional relations Eric Schlecht.

Not wishing to be outdone, Senator Frank Murkowski, R-Alaska, didn't wait long to explain how the terror attack makes it imperative to open up the Arctic National Wildlife Refuge (ANWR). "There is no doubt that at this time of national emergency, an expedited energy-security bill must be considered," the Alaska senator announced last week. "Opening ANWR will be a central element in finally reducing this country's dangerous overdependence on unstable foreign sources of energy," he said.

Neither Murkowski nor the oil companies pushing for opening ANWR have ever been able to offer a coherent explanation of how using up U.S. oil reserves heightens energy security. Security rests in maintaining the reserves. Real energy security and independence can only come from renewables (particularly solar and wind) -- where the supply is plentiful and infinitely renewing. Only a failure of public and private investment leaves the country (and the world) unable to harvest renewable energy efficiently.

[Editor's note: Murkowski later backed off his position, but Senator James Inhofe, R-Oklahoma, stepped in to support opening up ANWR as a legitimate response to the September 11 attacks.]

And, of course, the purveyors of Star Wars couldn't let the opportunity pass them by. The Center for Security Policy --the center of a web of defense industry-backed think tanks and organizations pushing for a National Missile Defense program -- urged President Bush in advance of his address to Congress to announce that "this Administration will use every tool at its disposal to ensure that the resources and latitude needed to develop and deploy missile defenses are made available."

A missile defense system -- even if it overcame the technical obstacles which have so far proved insurmountable, after billions spent -- would have done nothing to stop the September 11 attack. Nor would it do anything to stop any other conceivable terrorist attack on the United States, none of which involve might missile delivery systems.

Opportunism and cynical manipulation of tragedy are nothing new in Washington. But the proposals to exploit the September 11 tragedy for narrow corporate aims mark a new low.

The United States is emerging from a national mourning period. Now is the time to proceed with caution and care, as the nation seeks to address legitimate security concerns (e.g., airport security) and tend to victims of the attack. It is no time to rush through proposals on matters essentially unrelated to the attack, especially damaging and foolhardy proposals that have been unable to win popular or Congressional support when the public has had a chance to consider them dispassionately, and on the merits.

Russell Mokhiber and Robert Weissman are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Common Courage Press, 1999).

CORPORATE FOCUS: 9-11 Opportunists

Make way for the wartime opportunists!

Corporate interests and their proxies are looking to exploit the September 11 tragedy to advance a self-serving agenda that has nothing to do with national security and everything to do with corporate profits and dangerous ideologies.

Fast track and the Free Trade Area of the Americas. A corporate tax cut. Oil drilling in Alaska. Star Wars. These are some of the preposterous "solutions" and responses to the terror attack offered by corporate mouthpieces.

No one has been more shameless in linking their agenda to the terror attack than U.S. Trade Representative Robert Zoellick. Writing in the Washington Post last week, Zoellick proclaimed that granting fast-track trade negotiating authority to the president -- to assist with the ramming through Congress of a Free Trade Area of the Americas, designed to expand NAFTA to all of the Americas, among other nefarious ends -- was the best way to respond to the September 11 tragedy.

"Earlier enemies learned that America is the arsenal of democracy," Zoellick wrote, "Today's enemies will learn that America is the economic engine for freedom, opportunity and development. To that end, U.S. leadership in promoting the international economic and trading system is vital. Trade is about more than economic efficiency. It promotes the values at the heart of this protracted struggle."

No explanation from Zoellick about how adopting a procedural rule designed to limit Congressional debate on controversial trade agreements advances the democratic and rule-of-law values he says the United States must now project.

The administration has identified fast track as one of the handful of legislative priorities it hopes to see Congress enact this year.

Getting fast track passed isn't big business's only priority for the shrinking legislative calendar. The Fortune 500 has been whimpering since George Bush was elected president and top administration officials told the business community to silence their demand for corporate tax cuts until after passage of the inequality-increasing personal income tax cut.

Even before the September 11 attack, business interests and the anti-tax ideologues were increasingly making noise that corporate tax cuts were the solution to the coming recession.

Now they are beginning to argue that capital gains tax cuts and corporate tax breaks are America's patriotic duty.

In releasing a study purporting to explain how a capital gains cut would spur economic growth, the National Taxpayers Union (NTU) touted a capital gains tax cut -- a tax break that exclusively benefits the wealthy -- as an anti-terrorism initiative. "By reducing the rate at which capital gains are taxed, President Bush and Congress could help revitalize the sagging economy and bring new revenues to Washington -- decidedly aiding our war against terrorism," said NTU director of congressional relations Eric Schlecht.

Not wishing to be outdone, Senator Frank Murkowski, R-Alaska, didn't wait long to explain how the terror attack makes it imperative to open up the Arctic National Wildlife Refuge (ANWR). "There is no doubt that at this time of national emergency, an expedited energy-security bill must be considered," the Alaska senator announced last week. "Opening ANWR will be a central element in finally reducing this country's dangerous overdependence on unstable foreign sources of energy," he said.

Neither Murkowski nor the oil companies pushing for opening ANWR have ever been able to offer a coherent explanation of how using up U.S. oil reserves heightens energy security. Security rests in maintaining the reserves. Of course, real energy security and independence can only come from renewables (particularly solar and wind) -- where the supply is plentiful and infinitely renewing. Only a failure of public and private investment leaves the country (and the world) unable to harvest renewable energy efficiently.

And, of course, the purveyors of Star Wars couldn't let the opportunity pass them by. The Center for Security Policy --the center of a web of defense industry-backed think tanks and organizations pushing for a National Missile Defense program -- urged President Bush in advance of his address to Congress to announce that "this Administration will use every tool at its disposal to ensure that the resources and latitude needed to develop and deploy missile defenses are made available."

A missile defense system -- even if it overcame the technical obstacles which have so far proved insurmountable, after billions spent -- would have done nothing to stop the September 11 attack. Nor would it do anything to stop any other conceivable terrorist attack on the United States, none of which involve might missile delivery systems.

Opportunism and cynical manipulation of tragedy are nothing new in Washington. But the proposals to exploit the September 11 tragedy for narrow corporate aims mark a new low.

The United States is emerging from a national mourning period. Now is the time to proceed with caution and care, as the nation seeks to address legitimate security concerns (e.g., airport security) and tend to victims of the attack. It is no time to rush through proposals on matters essentially unrelated to the attack, especially damaging and foolhardy proposals that have been unable to win popular or Congressional support when the public has had a chance to consider them dispassionately, and on the merits.

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.

Why You Should Go to D.C.

This year, at the end of September, the maturing anti-corporate globalization movement is poised to make history. During the fall meetings of the International Monetary Fund (IMF) and World Bank, tens of thousands of people will come to Washington, D.C. to denounce the institutions' policies, and to challenge the logic of corporate globalization.

If you can make it to Washington, D.C. for the protests, teach-ins and cultural events, make the effort. You will learn a lot, have fun and make a difference. (A calendar of events is posted at the Mobilization for Global Justice's website. Information on a teach-in for action presented by Essential Action and other groups is posted at www.essentialaction.org/wbimf.)

This year's demonstrations and activities build on the success of last year's April 16 protests against the IMF and World Bank, while promising to be both broader and more strategically focused.

The key achievement of A16 was shining a spotlight on the IMF and World Bank. While people from Argentina to Zambia have conducted mass protests against the policies of the International Monetary Fund and World Bank over the last 20 years, the institutions have managed to escape critical scrutiny in the United States. Unfortunately, however, the IMF and World Bank are not accountable to developing countries, whereas they are to the United States and other creditor countries. It is protest and media attention in the United States that most worries the IMF and Bank.

This fall's protests against the IMF and World Bank are sure to replicate and surpass A16 in energy, turnout and media attention.

They will benefit as well from much deeper involvement of organized labor. Last year, the AFL-CIO and a number of major U.S. unions endorsed the A16 rally. This year, the AFL-CIO is devoting substantial staff and financial resources for the large September 30 rally -- planned in conjunction with the Mobilization for Global Justice and several other organizations -- and is making a significant effort to turn out union members.

Organized labor's involvement marries the institutional influence and powerful membership of the AFL-CIO and affiliate unions with the energy, passion, creativity and turnout capacity of the street protestors. The partnership has the capacity to push forward shared demands of the IMF and World Bank and to leverage real change at the institutions.

The Mobilization for Global Justice has crafted four inter-related demands for the IMF and Bank. These demands follow from priority concerns of Third World labor unions, debt campaigners, environmentalists and other allies.

The first demand is for the IMF and World Bank to open all of their meetings to the public and media, and to make all key lending documents public.

Second, the IMF and World Bank must cancel the debts owed them by impoverished countries, using their existing resources.

Third, the Mobilization for Global Justice calls on the IMF and World Bank to end the "structural adjustment" policies -- the standard IMF/World Bank policy package, which calls for slashing government spending, privatization and opening up countries to exploitative foreign investment, among other measures -- that hinder people's access to food, clean water, shelter, healthcare, education and the right to organize. Organizers are focusing particular attention on IMF and World Bank-mandated "user fees" -- charges -- that impede access to primary healthcare.

Finally, the World Bank must end all support for socially and environmentally destructive projects, such as oil, mining and gas activities and large dams.

Each of these demands is specific and achievable. They are connected to ongoing international campaigns, meaning the energy and attention generated by the demonstrations will not simply dissipate when the protesters go home. Some version of each of the demands is under consideration in the U.S. Congress.

Over the years, environmentalists in particular have won some important, though partial, victories at the World Bank. But by and large, the institutions have remained impervious to criticism.

In the last couple years, there has been a rhetorical revolution at the Bank and especially the IMF, with all activities now described in terms of poverty reduction. But the rhetorical shift forced on the institutions by the international jubilee (debt cancellation) movement and A16 have not been matched by comparable changes in policy.

The convergence of forces around this fall's protests in Washington contains the potential not to just shine a light on the IMF and World Bank's abuses, or to win rhetorical concesions, but to galvanize existing campaigns to limit the power of the institutions, and to begin to force meaningful changes in the institutions' policies.

This opportunity may not repeat itself. That's why it is vital that those who can come to Washington, do.

Washington, D.C. at the end of September. It will be a lovely place to be.

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 and co-director of Essential Action, a corporate accountability group.

Bush's Challenge: Globalization Good for The Poor

George Bush has thrown down the gauntlet, issuing a public challenge to the anti-corporate globalization movement. When hundreds of thousands last month demonstrated against the G-8 meeting of rich country leaders in Genoa, Italy, George Bush decried the activists, saying it was the advocates of corporate globalization who genuinely are seeking to advance the interests of the world's poor.

It's not enough to mock Bush's pretension of being a defender of the poor by pointing out that, through his giant tax cut, the president has overseen one of the history's great transfers of wealth to the rich in U.S. history. Critics must respond to his claims.

Unfortunately, that turns out to be a remarkably easy challenge to meet. The last 20 years of corporate globalization, even measured by the preferred indicators of the International Monetary Fund (IMF) and World Bank, have been a disaster for the world's poor.

Over the last two decades, Latin America has experienced stagnant growth, and African countries have seen incomes plummet. The only developing countries that have done well in the last two decades are those Asian countries that ignored the standard prescriptions of the IMF and World Bank.

The Washington, D.C.-based Center for Economic and Policy Research (CEPR) has published compelling data comparing growth rates from 1980 to 2000 (during the period of ascending IMF/World Bank power, when countries throughout the developing world adhered to the IMF/Bank structural adjustment policy package of slashing government spending, privatizating government-owned enterprises, liberalizing trade, orienting economies to exports and opening up countries to exploitative foreign investment) with the previous 20 year period (when many poor countries focused more on developing their own productive capacity and meeting local needs).

The results: "89 countries -- 77 percent, or more than three-fourths -- saw their per capita rate of growth fall by at least five percentage points from the period (1960-1980) to the period (1980-2000). Only 14 countries -- 13 percent -- saw their per capita rate of growth rise by that much from (1960-1980) to (1980-2000)."

CEPR found that the growth slowdown has been so severe that "18 countries -- including several in Africa -- would have more than twice as much income per person as they have today, if they had maintained the rate of growth in the last two decades that they had in the previous two decades. The average Mexican would have nearly twice as much income today, and the average Brazilian much more than twice as much, if not for the slowdown of economic growth over the last two decades."

A follow-up CEPR study used a similar methodology to look at social indicators. CEPR found that progress in reducing infant mortality, reducing child mortality, increasing literacy and increasing access to education has all slowed during the period of corporate globalization, especially in developing countries.

The CEPR global comparisons across time show the bottomline, combined effect of the specific policy components of corporate-friendly policies imposed by the IMF and World Bank and enforced by free trade agreements. These include the following:

* Trade Liberalization -- The elimination of tariff protections for agriculture and industries in developing countries often leads to mass layoffs and displacement of the rural poor. In Mexico, for example, opening to U.S. agriculture imports has forced millions of poor farmers, who find themselves unable to compete with Cargill and Archer Daniels Midland, off the land.

* Privatization -- IMF and World Bank structural adjustment policies typically call for the sell off of government-owned enterprises to private owners, often foreign investors. Privatization is regularly associated with layoffs and pay cuts for workers in the privatized enterprises.

* Cuts in government spending -- Reductions in government spending frequently reduce the ability of the government to provide services to the poor, exacerbating the social pain from rural displacement and industrial layoffs.

* Imposition of user fees -- Many IMF and World Bank loans and programs call for the imposition of "user fees" -- charges for the use of government-provided services like schools, health clinics and clean drinking water. For very poor people, even modest charges may result in the denial of access to services.

* Export promotion -- Under structural adjustment programs, countries undertake a variety of measures to promote exports, at the expense of production for domestic needs. In the rural sector, the export orientation is often associated with the displacement of poor people who grow food for their own consumption, as their land is taken over by large plantations growing crops for foreign markets.

* Higher interest rates -- Attractive to foreign investors, higher interest rates exert a recessionary effect on national economies, leading to higher rates of joblessness. Small businesses, often operated by women, find it more difficult to gain access to affordable credit, and often are unable to survive.

Advancing the interests of the poor has nothing to do with the corporate globalization agenda. This agenda is driven first by profit-seeking, and second by ideology.

But the corporate globalizers are nothing if not ambitious. They are seeking now to push fast-track negotiating authority through the U.S. Congress, to force all of Latin America into a NAFTA-style trade and investment agreement, launch a new World Trade Organization negotiating round, and intensify the IMF and World Bank's ability to impose structural adjustment through a sham debt relief process.

To lessen preventable human suffering, it is imperative that the protesters continue to build the movement against corporate globalization, with everything from street protests to citizen lobbying of Congress.

Another world is indeed possible, as the protesters are asserting. But for now the immediate challenge is to stop the corporate globalizers from making the existing one worse.

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.

The Ball Park Franks Fiasco

Let us now have a moment of silence for the victims of the Ball Park Franks fiasco.

Thank you.

This is the situation: 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. You've seen them when you go to a baseball game at Tiger Stadium in Detroit and elsewhere.

Last month, 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 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 and 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," said 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 they were had a Listeria monocytogenes problem and ignored it, they 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 told us.

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 product 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 -- told us 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 from our investigation into this matter 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 speak with us.

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 a 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 our 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.

We were so outraged by this that we went over to the White House and asked President Bush's press secretary about it.

We laid out the facts of the Sara Lee case and then asked our question. This is how it went:

Question: Ari, has the President expressed a view on the death penalty for corporate criminals -- that is, revoking the charter of a corporation that has been convicted of a crime that has resulted in death?

Fleischer: ... The President does not weigh in on those matters of justice. They should not be dictated by decisions made at the White House.

Question: Now, Ari, wait a second. Ari, Ari, wait a second. He's in favor of the death penalty for individuals generally. Is he in favor of the death penalty for corporations convicted of crimes that result in death?

Fleischer: ... These are questions that are handled by officials of the Justice Department -- not by people at the White House.

Someday, Ari, the White House too will have to answer -- why death to individual criminals, but not to your corporate criminal paymasters?

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.

CORPORATE FOCUS: Once a Big Drug Company, Always a Big Drug Company

One of the perquisites of power is that the powerful can always command a fresh start. Past crimes and misdemeanors, and even current misdeeds, are not held against them.

Consider the case of the pharmaceutical industry and the issue of access to HIV/AIDS and other essential medicines.

The rich countries are now, belatedly, gearing up to commit some substantial monies to address HIV/AIDS in Africa and elsewhere in the developing world. The brand-name pharmaceutical companies are jockeying for a central role in determining how those monies are spent. And, unless sufficient public opposition emerges, they are likely to secure it.

There is now no serious dispute that the brand-name pharmaceutical companies have worked overtime to deny poor countries access to lifesaving medicines.

The industry insistence in maintaining its lawsuit challenging South Africa's Medicines Act helped forge a broad, worldwide consensus -- from the New York Times to the European Parliament -- against the industry's role in interfering with poor countries' efforts to promote access to essential medicines. International condemnation forced the industry to back down in the suit, but the South Africa case was only one of many instances where the industry has played a pernicious role. Big Pharma's obsession has been to block the introduction of generic competition -- which has the potential to bring drug prices down by 95 percent or more -- and it has employed misleading propaganda campaigns, threats of litigation, promises of trade sanctions, and new trade agreements to advance its aims.

Against this backdrop comes a set of proposals for a global AIDS fund, or a global tropical disease fund. In late June, the United Nations will hold a special session on HIV/AIDS. Then the elite rich countries, grouped together in the G8, will meet in Genoa, Italy, in July. There is widespread expectation that the rich countries will agree to a framework for a new fund, and make preliminary dollar commitments. UN Secretary General Kofi Annan has requested contributions of $7 billion to $10 billion per year. The United States is expected to announce a $200 million commitment shortly.

How the fund will be governed and operated remains very unclear.

One possible starting point is a new, U.S.-initiated fund, housed at the World Bank. The World Bank AIDS Trust Fund was created by Congressional action last year, and the United States has allocated $20 million for the fund. This fund was intended to galvanize international donations, but they have not materialized, and some thought the fund would never get off the ground. However, Kofi Annan's proposal for a global fund sounded very similar to the World Bank AIDS Trust Fund, leading some to think the World Bank entity would be revamped and become the big global fund.

That makes governance of the fund very important. The U.S. Treasury Department is in charge of establishing the charter for the World Bank AIDS Trust Fund. The Treasury Department's proposal envisions a governing board made up of donors, with some participation by recipient countries. "Donors" would include not just governments, but private parties -- meaning not just private foundations, but private corporations É including the drug companies. Under the Treasury Department proposal, for $5 million contributions, the drug companies would be able to buy themselves seats on the Trust Fund's governing board.

This is a morally outrageous proposal. There are many parties to blame for the horrible toll taken by the AIDS pandemic in poor countries (with as many as one in three adults now HIV-positive in some African countries, and virtually all of the HIV-positive people certain to die from AIDS unless treatment costs are radically reduced), but the drug companies are hugely culpable. That they would be permitted a key role in directing the world's belated response to the crisis dishonors the memories of the millions who have died preventable deaths from HIV/AIDS.

Underlying the moral argument are very practical considerations. Big Pharma participation on the governing body of new global fund would create an irresolvable, structural conflict of interest.

For example, a crucial decision for the new fund will be whether it buys drugs at best world prices, from multiple sources, including generics. The brand-name companies are intent on excluding generics, and the brand-name companies certainly should not have a role in the fund's decision-making on this issue.

Suggestions that the brand-name companies could simply recuse themselves from such issues offer no solution. The brand-name companies should not be positioned to influence fellow board members. And lots of decisions the board will make -- from matters relating to the mechanisms to deliver drugs, drug registration rules, preferred drug regimens, and much more -- will involve issues where drug company conflicts will be pervasive, but may not be recognized.

If Big Pharma wants to redeem itself and be "part of the solution" to the AIDS pandemic, there is plenty it can do, starting with issuing licenses for its HIV/AIDS drugs to the World Health Organization, which could then contract with generic makers to provide cheap drugs for distribution in poor countries. But putting the industry in charge, or partially in charge, of the primary global response to HIV/AIDS -- while the brand-name companies continue to place enormous obstacles in the way of the generic competition that could make AIDS drugs far more affordable and save millions of lives -- would be unconscionable.

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, and co-director of Essential Action, a corporate accountability group. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999).

CORPORATE FOCUS: Big Business Has a Dream

We've heard it said that commercialism will keep expanding its frontiers until every boundary has been smashed and non-commercial values are completely extinguished.

Let's now admit that we are rapidly approaching that point.

We are friends with a seven-year-old, who has been sheltered to a large degree from the ravages of commercialism, who likes baseball, and who likes to sing that American classic "Take me out to the Ballgame."

We were driving him to see a major league ballgame the other day, running late, listening to the first inning on the radio, when an jingle for an oil company came on -- "Take me Out to Sunoco."

"What's Sunoco?" the seven-year old asked.

"Sun Oil Company," we said in shock.

Slowly, baseball has been giving in to the creep of commercial culture. Of course, for years, ads have played a dominant role at the ballparks. But now things are getting out of control.

Every time the New York Yankees turn a double play, the Yankees play-by-play announcers are required, by contract, to say "There's Another Jiffy Lube Double Play." When Yankee skipper Joe Torre pulls the starting pitcher and calls for a relief pitcher, the Yankees announcers must say there's a "Geico Direct Call to the Bullpen." And so on.

And now, the forces of commercialism have grabbed onto one of baseball's all-time heroes, The Ironman, Lou Gehrig.

Alcatel, the French telecommunications firm that is using Martin Luther King's "I Have a Dream" speech in national television and print ads, has obtained the rights to Gehrig's famous 1939 farewell speech at Yankee Stadium.

In that speech, despite having a fatal disease that bears his name -- amyotrophic lateral sclerosis -- Gehrig told the Yankee stadium crowd on that day he considered himself "the luckiest man on the face of the Earth."

We called up Brian Murphy, the U.S. spokesperson for Alcatel and asked him about the Gehrig ad. He said that decision on whether to run the ad would be made with a few weeks.

We made the point that Dr. King was not about commercialism and would never have allowed his name to be used for commercial purposes.

We reminded Murphy that there has been strong criticism from the civil rights community over the use of Dr. King to sell the French company's telephone equipment.

On the Today Show last month, Julian Bond, chairman of the NAACP and a colleague of Dr. King's, ripped into Alcatel.

"It just seems to me that some things ought to be sacrosanct," Bond said. "Some things ought not be commercialized. Martin Luther King is one of those icons of the movement. This just strikes me as leading us further and further down a dangerous path. I can imagine some day seeing Franklin Roosevelt saying, 'We have nothing to fear but headache pain,' or John F. Kennedy saying, 'Ask not what you can do for your country, but what you could do for Country Ham.' It just strikes me as a further intrusion of commercialism into some of the -- one of the most important icons of the 20th century."

Murphy admitted that the company has received "mixed reactions" to the King, but defended the company's course, reminding us that the King estate was paid for the rights to the "I Have a Dream" speech.

How much? we asked.

"That's proprietary information," he said.

"We worked with the King Foundation, the King estate throughout the process, they approved the King ad -- all along we wanted to make sure we were honoring Dr. King and we feel we did," Murphy said. "We believe we did the right thing."

But what about the fact that Dr. King would never have allowed such a thing, that he was disappointed that our country had failed "to deal positively and forthrightly with the triple evils of racism, extreme materialism and militarism."

"I don't know the man," Murphy blurted out.

Clearly you don't.

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. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999).

Big Tobacco, Free Trade

An international conspiracy to poison millions of men, women and teenagers around the world is killing four million people a year. By 2030, it will take 10 million lives annually, 70 percent of them in developing countries. This "conspiracy" is run by Big Tobacco: companies like Philip Morris, British American Tobacco and R.J. Reynolds, to name just a few.

If we lived in a rational world, the Bush administration's foreign policy team would focus energy and attention on how to stop the health ravages of the global tobacco trade. But we don't live in a rational world. As a result, far more is known about the Bush administration's plans to pursue a fantasy-world Star Wars missile defense system than whether the new administration will confront the global scourge of tobacco-related death and disease. In fact, the new administration has so far been silent on almost every important tobacco control policy question.

That's not surprising, given the record of key players in the administration and the strong support Philip Morris and the rest of the tobacco industry provided to the Bush campaign and the Republican Party. Critics say there is little reason to be hopeful that the administration will adopt a pro-public health posture on international tobacco control. Instead, trade considerations are expected to trump global health concerns.

Meanwhile, a growing international public health movement is advocating for meaningful tobacco control. Tobacco activists are demanding that the Bush administration oppose Philip Morris' efforts to increase overseas sales, and to support -- or at least not undermine -- efforts to negotiate an international tobacco control treaty. And they are calling attention to a series of domestic policy fights that will have significant ripple effects on international tobacco control, including conflicts over federal regulation of tobacco.

Tobacco and Trade

International trade issues are central to the world's largest tobacco company, U.S.-based Philip Morris. Philip Morris now earns more than half of its cigarette profits overseas, garners almost two-thirds of its tobacco revenues in foreign markets, and sells more than three-quarters of its cigarettes outside the United States. The company's international gains come after two decades of heavy overseas spending to advertise its products, buy newly privatized cigarette companies, set up joint ventures, and build distribution networks. (The second leading U.S. tobacco company, R.J. Reynolds, has sold its international operations, including the right to market RJR products in foreign countries, to Japan Tobacco.)

Activist concern about potential trade impacts on tobacco control has risen dramatically over the last year. They worry about both the harmful consequences of market opening measures, and that tobacco control regulations could be vulnerable to challenge in the WTO or other trade institutions. (For example, regulations that call for plain, black-and-white cigarette packaging could be considered a violation of trademark protections contained in the WTO agreement on intellectual property.) Even Ira Shapiro, former USTR general counsel, now states that he believes tobacco should be excluded from international trade agreements.

The most critical test of whether tobacco control advocates are able to win a "carve out" of tobacco from international trade agreements is likely to come during upcoming negotiations on the proposed Free Trade Area of the Americas agreement (FTAA). That agreement would effectively extend NAFTA to cover the entire Western hemisphere, except Cuba.

The new USTR, Robert Zoellick, has signaled that he intends to aggressively advance corporate interests in trade negotiations, which includes seeking fast-track negotiating authority from the U.S. Congress on the FTAA. However, he has not been forced to specifically comment on tobacco-related issues.

A Framework For Health

The biggest showdown on international tobacco control policy for the new administration will be the proposed Framework Convention on Tobacco Control (FCTC). In 1999, member states of the World Health Organization unanimously agreed to launch negotiations on a global tobacco treaty. If adopted, it will constitute the first treaty negotiated through the WHO.

The Framework Convention could make an enormous contribution to stemming the global tobacco epidemic by fostering international cooperation on issues such as smuggling and the global marketing of tobacco products. Tobacco control advocates are also pressing to ban tobacco advertising all together, or at least limit it to the extent permitted by the law in member countries. Many involved in the process hope to see two protocols adopted simultaneously as part of the Framework Convention, one on advertising and marketing, and one on smuggling.

If adopted, the smuggling protocol is likely to involve a system of tracking cigarette exports, including labels indicating the intended final destination. Cigarette smuggling is at epidemic levels -- an estimated one in three internationally traded cigarettes is smuggled -- and newly emerging evidence from company documents suggests the tobacco industry is facilitating, encouraging or even directing smuggling on a massive scale. Smuggling allows tobacco companies to evade excise taxes, which in most countries make up a considerable portion of the consumer price -- and which deter smoking by keeping prices up.

Activists are focusing on other issues, as well. The Network for Accountability of Tobacco Transnationals (NATT), for example, is emphasizing the need for measures to hold companies accountable for the health impacts they perpetrate, and for limits on tobacco companies' multi-million dollar lobbying efforts.

The Bush administration has yet to create its team to handle Framework negotiations, which resume in Geneva in late April. While it is unclear exactly how the Bush administration will position itself, few expect the Bush negotiators to be more positive than the Clinton delegates, who got only fair grades from activist groups. Many fear the new administration will be actively obstructionist.

"If the Bush administration can't support major provisions in the Framework Convention, then it should keep quiet or get out of the way," says Judith Wilkenfeld, Director of the Framework Convention Initiative at the Campaign for Tobacco-Free Kids.

Wilkenfeld and others want the United States to abstain on provisions it may find unacceptable, rather than block other countries from adopting effective tobacco control measures. And while almost all U.S. activists would like to see the United States sign the treaty, they say they would rather Washington pull out of negotiations than torpedo an agreement.

One recent development that is sure to profoundly affect the U.S. position on the Framework Convention is that Philip Morris, the only remaining U.S. tobacco giant which is truly international, has done an abrupt about face and now claims to support a tobacco treaty.

"It is time for regulation," says David Greenberg, Philip Morris International's Senior Vice President for Corporate Affairs. The company is ready to embrace regulation around the world 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 says, "so we know what the rules are."

Philip Morris would support treaty provisions on youth smoking prevention, information to adult smokers, ingredient disclosure, disclosure of the constituents of tobacco smoke, marketing standards and smuggling. The company also supports government regulation of the tobacco product itself, so that cigarettes can be "made as safe as they can be," Greenberg says.

He says the company is even willing to cede to governments the right to regulate nicotine levels, although this agreement comes reluctantly and seems of uncertain scope. "We're not going to get anywhere in [achieving] public health goals if manufacturers are required to make a product that no one wants to smoke," he warns. Then governments would just be "stepping on the gas" of increasing illegal products, he contends.

However, tobacco activists are skeptical of Philip Morris' last minute about face. "Philip Morris is spreading disease and death around the world, and now calls for a seat at the negotiating table," says INFACT Executive Director Kathryn Mulvey. Boston-based INFACT is spearheading a boycott of Philip Morris products, including Kraft Foods and other subsidiaries.

"Through decades of deceit, Philip Morris and the rest of the tobacco industry have disqualified themselves from the FCTC process," adds Mulvey. "If Philip Morris had really changed its ways, it would stop trying to manipulate the treaty into protecting corporate profit over human life."

Not surprisingly, the company does not agree with most of the basic positions advocated by the tobacco control movement. For example, Philip Morris supports restrictions on broadcast advertising of tobacco products, bans on the use of cartoons in cigarette ads and prohibitions on the placement of advertisement in locations with a "particular appeal to minors" -- measures that many activists believe to be of little value. However, the company strongly opposes a total marketing ban.

What Philip Morris wants taken off the negotiating table are proposals for a worldwide taxation level, any elements that might create new opportunities for litigation, and efforts to exclude tobacco from world trade rules. In general, Greenberg says, the company supports "things meant to be good, solid public health regulations... [and] opposes things that are either punitive against companies or smokers."

Again, tobacco campaigners are suspicious of the company's motives. "On product regulation, Philip Morris' primary goal is to gain governments' stamp of approval for the so-called 'reduced risk' products that it plans to market with the goal of getting more people to start smoking," notes Judith Wilkenfeld of Tobacco Free Kids. "Right now, with the treaty at such an early stage, there are major public relations benefits to appearing to be cooperative," she adds.

How Philip Morris' approach to the Framework Convention will affect the Bush administration remains unknown. "This is barely a blip on the screen for the administration," says Greenberg, who says he has had virtually no contact with Bush officials on the issue. Asked if the transition from Clinton to Bush will affect the U.S. position on the FCTC, Greenberg professes to have "no idea."

Whether or not Philip Morris has the White House's ear, it seems unlikely that the Bush administration will pursue constructive measures on international tobacco policy. The unresolved question is whether activists will be able to muster sufficient pressure to stop the administration from doing harm.

Robert Weissman is editor of Multinational Monitor magazine and co-director of Essential Action, a corporate accountability group.

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