Monday, 11 July 2011

Spotlight on Corporate Crime Reporter

As I move forward with Corporate Constraint, I will mix my posts to include commentaries intended for wider publication -- the first four posts on this site -- and the daily blogs of a less formal nature.  Today's will be of the latter variety.

There are many progressive sites to which I regularly turn for updates, analysis and commentary.  A few of my favorites include Truthout, Antiwar, Counterpunch, Democracy Now and The RealNewsNetwork.  And I regularly visit The Times and The Post, and in Britain The Guardian and The Independent (the Globe & Mail here in Canada).  In future, I will occasionally reproduce material from these sites, or highlight a well written or important story.

In the area of corporate reporting and watchdog sites, there are several sites that I return to regularly: CorpWatch, Center for Corporate Policy, Taming the Giant Corporation (a Ralph Nadar conference site from 2007) and Corporate Crime Reporter -- it is the final entry from this list that I'll highlight today.

The Corporate Crime Reporter first appeared on April 13, 1987.  It's first interview was with the premier corporate crime prosecutor of his day, Rudolph Giuliani, then U.S. Attorney in the Southern District of New York.  At the time, he was prosecuting the likes of Michael Milken, Ivan Boesky and Marc Rich (President Clinton subsequently pardoned Mr. Rich; as it happened, Marc Rich’s wife was dumping big cash into the Clinton library).  Mr. Giuliani subsequently cashed in his chips, made nice with Corporate America, and become Mayor of New York; fortunately he failed miserably when he tried to cash in his 9/11 chips in his run for the Presidency.

On the CCR website you will find interviews with leading legal minds, updates on recent corporate criminal investigations, and reports such as "Twenty Things You Should Know About Corporate Crime".  What follows is some very interesting material from that report.  So pay attention -- this shit's important!

Item 1
 - Corporate crime inflicts far more damage on society than all street crime combined.
 - Whether in bodies or injuries or dollars lost, corporate crime and violence wins by a landslide.
 - The FBI estimates, for example, that burglary and robbery – street crimes – costs the nation $3.8 billion a year.
 - The losses from a handful of major corporate frauds – Tyco, Adelphia, Worldcom, Enron – swamp the losses from all street robberies and burglaries combined.
 - Health care fraud alone costs Americans $100 billion to $400 billion a year.

Item 2
 - Corporate crime is often violent crime.
 - The FBI estimates that, 16,000 Americans are murdered every year.
 - Compare this to the 56,000 Americans who die every year on the job or from occupational diseases such as black lung and asbestosis and the tens of thousands of other Americans who fall victim to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice.  These deaths are often the result of criminal recklessness. Yet, they are rarely prosecuted as homicides or as criminal violations of federal laws.

Item 3
 - Corporate criminals are the only criminal class in the United States that have the power to define the laws under which they live. 
 - They have marinated Washington -- from the White House to the Congress to K Street -- with their largesse. And out the other end come the laws they can live with.  They still violate their own rules with impunity.  But they make sure the laws are kept within reasonable bounds.
 - An excellent example is the automobile industry.  Over the past 30 years, the industry has worked its will on Congress to block legislation that would impose criminal sanctions on knowing and willful violations of the federal auto safety laws.  Today, with very narrow exceptions, if an auto company is caught violating the law, only a civil fine is imposed.
 - More recently, Wall Street has demonstrated that it breaks the rules that it writes, and then negotiates the most favourable of terms in settlement (see my article below "Corporate Crime of the Week: JP Morgan & Chase Co.").

Item 4
 - Corporate crime is underprosecuted by a factor of say – 100.  And the flip side of that – corporate crime prosecutors are underfunded by a factor of say – 100.
 - Big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.  
 - For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.
 - For every company convicted of polluting the nation's waterways, there are many others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.
 - For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally through political action committees to candidates and political parties. They profit from a system that effectively has legalized bribery.
 - For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way in Washington to ensure that dangerous pesticides remain legal.
 - For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don't even get investigated for reckless homicide when a worker is killed on the job.  Only a few district attorneys across the country have historically investigated workplace deaths as homicides.

Item 5
 - Beware of consumer groups or other public interest groups who make nice with corporations.
 - There are now probably more fake public interest groups than actual ones in America today.  And many formerly legitimate public interest groups have been taken over or compromised by big corporations.  Our favorite example is the National Consumer League. It’s the oldest consumer group in the country.  It was created to eradicate child labor.
But in the last ten years or so, it has been taken over by large corporations.  It now gets the majority of its budget from big corporations such as Pfizer, Bank of America, Pharmacia & Upjohn, Kaiser Permanente, Wyeth-Ayerst, and Verizon.

There are many more excellent points in this piece "Twenty Things You Should Know About Corporate Crime", so do go to the site and read the full document.  This brief glimpse is important, though, to show how corporations act with impunity, even after they have lobbied the politicians and written their own rules.

Corporations will always act in their own best interests, in the manner most likely to maximize shareholder wealth.  We need to understand that fact and, in recognition of it, regulate and control those behaviors that create harmful externalities.

By David.

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Your musical accompaniment for the day: "Standing Around Crying" from Muddy Water Blues, with Paul Rodgers and David Gilmore. Great vocals from the legendary front man for Free and Bad Company, great guitar work from the Pink Floyd alumnus, and a wonderful fat sound from the rhythm section.  Enjoy.

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