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This is a local copy of the Multinational Monitor file http://multinationalmonitor.org/mm1999/mm9912.05.html
DECEMBER 1999 · VOLUME 20 · NUMBER 21
T H E C O R P O R A T E C E N T U R Y
The Ten Worst Corporations of 1999
by Russell Mokhiber
As we move to the end of the millennium, it is important to remind ourselves that this has been the century of the corporation, where for-profit, largely unaccountable organizations with unlimited life, size and power, took control of the economy and the political economy -- largely to the detriment of the individual consumer, worker, neighbor and citizen.
Let us again remind ourselves that corporations were created by the citizenry. (Thanks here to Richard Grossman and the Project on Corporations Law and Democracy for resurrecting and teaching us a history we would have collectively forgotten.)
In the beginning, we the citizenry created the corporation to do the public's work -- build a canal or a road.
We asked people with money to build the canal or road. If anything went wrong, the liability of these people with money -- shareholders, we call them -- would be limited to the amount of money they invested and no more. This limited liability corporation is the bedrock of the market economy. The markets would deflate like a punctured balloon if corporations were stripped of limited liability for shareholders.
And what do we, the citizenry, get in return for this generous public grant of limited liability? Originally, we told the corporation what to do. Deliver the goods. And then let humans live our lives.
But corporations gained power, broke through democratic controls, and now roam around the world inflicting unspeakable damage on the earth.
Let us count the ways: price-fixing, chemical explosions, mercury poisoning, oil spills, destruction of public transportation systems. Need concrete examples? These could be five of the most egregious of the century:
Number five: Archer Daniels Midland (ADM) and Price Fixing. In October 1996, Archer Daniels Midland (ADM), the good people who bring you National Public Radio, pled guilty and paid a $100 million criminal fine -- at the time, the largest criminal antitrust fine ever -- for its role in conspiracies to fix prices to eliminate competition and allocate sales in the lysine and citric acid markets worldwide.
Federal officials said that as a result of ADM's crime, seed companies, large poultry and swine producers and ultimately farmers paid millions more to buy the lysine additive.
In addition, manufacturers of soft drinks, processed foods, detergents and others, paid millions more to buy the citric acid additive, which ultimately caused consumers to pay more for those products.
Number four: Union Carbide and Bhopal. In 1984, a Union Carbide pesticide factory in Bhopal, India released 90,000 pounds of the chemical methyl isocyanate. The resulting toxic cloud killed several thousand people and injured hundreds of thousands.
Several years of litigation in India resulted in a payment of $470 million by Union Carbide.
In October 1991, the Indian Supreme Court held that the criminal investigation and prosecution of Union Carbide should proceed and stated that failure to accomplish this would constitute "a manifest injustice."
Although Union Carbide was a party to all of these proceedings, it subsequently refused to comply with all efforts to obtain its appearance for the criminal trial by the Bhopal District Court. The efforts of Indian authorities to secure jurisdiction over Union Carbide -- including the service of summons on Union Carbide through the U.S. Department of Justice and INTERPOL -- have proved futile.
Number Three: Chisso Corporation and Minamata. Minamata, Japan was home to Chisso Corporation, a petrochemical company and maker of plastics. In the 1950s, fish began floating dead in Minamata Bay, cats began committing suicide and children were getting rare forms of brain cancer.
The company had been dumping mercury into the bay, a fact which it at first denied.
By 1975, Chisso had paid $80 million to the 785 verified victims of what became known as Minamata disease. Thousands of other residents claimed they were affected, but were denied compensation.
Number two: Exxon Corporation and Valdez Oil Spill. Ten years ago, the Exxon Valdez hit a reef in Prince William Sound Alaska and spilled 11 million gallons of crude oil onto 1,500 miles of Alaskan shoreline, killing birds and fish, and destroying the way of life of thousands of Native Americans.
Most people believe that the Valdez ran aground because the skipper was drunk. Well, he was drunk, but he was also asleep in his bunk, and his third mate was at the wheel. And the third mate was effectively driving blind, as his Raycas radar had been out of order for months.
In March 1991, Exxon Corporation and Exxon Shipping pled guilty to federal criminal charges in connection with the March 24, 1989 Valdez oil spill and were assessed a $125 million criminal fine.
The companies pled guilty to misdemeanor violations of federal environmental laws.
Number one: General Motors and the Destruction of Inner City Rail. Seventy years ago, clean, quiet efficient inner city rail systems dotted the U.S. landscape. The inner city rail systems were destroyed by those very companies that would most benefit from their destruction -- oil, tire and automobile companies, led by General Motors.
By 1949, GM had helped destroy 100 electric trolley systems in New York, Philadelphia, Baltimore, St. Louis, Oakland, Salt Lake City, Los Angeles and elsewhere.
In April 1949, a federal grand jury in Chicago indicted and a jury convicted GM, Standard Oil of California and Firestone, among others, of criminally conspiring to replace electric transportation with gas- and diesel-powered buses and to monopolize the sale of buses and related products to transportation companies around the country.
GM and the other convicted companies were fined $5,000 each.
And these are not unusual examples. Books have been written documenting the destruction. The question remains -- how do we put a stop to it?
And the answer seems clear -- reassert public control over what was originally a public institution.
The ideas on how to reassert such control are the subject of debate and conflict, in Seattle and around the world. But as the twentieth century was the century of the corporation, the twenty-first promises to be the century where flesh-and-blood human beings reassert sovereignty over their lives, their markets and their democracy.
So as we document here the 10 worst corporations of 1999, let us not forget that corporate control was never inevitable. They took it from us, and it is our responsibility to take it back.
Fewer than one in six workers in the United States are unionized, something on the order of one in 10 in the private sector. There are many reasons for this low unionization rate, but the bottom line is: employers are able to threaten, harass and intimidate workers against supporting a union. Where workers do vote for a union, many employers refuse to bargain in good faith, and the union often withers away -- hurting the affected workers directly, and deterring others from risking active support for a union.
In the rare cases where employer threats are removed, unionization typically follows quickly. That is the main explanation for the stark divergence in unionization rates among public and private sector workers: generally, workers in the public sector are free to organize without employer interference.
This raw truth was confirmed this year at the Avondale shipyards in New Orleans. There, workers had actually voted by a strong majority to join the New Orleans Metal Trades Council in 1993. But the company challenged the election results, over and over, and refused to recognize the union.
Consider the following timeline, excerpted from an AFL-CIO compilation:
September 1993 to March 1994: NLRB hearing is held on the challenged ballots and the employer's objections to the election.
July 1994: Unfair labor practice trial begins. The NLRB General Counsel alleges that Avondale has broken labor laws more than 100 times.
March 27, 1995: The NLRB hearing officer recommends that the company's objections did not warrant setting aside the election.
May 25, 1995: Avondale appeals the hearing officer's report.
July 1996: First unfair labor practice trial ends.
January 27, 1997: Second unfair labor practice trial begins on the labor law violations Avondale continued to commit after the election.
February 5, 1997: NLRB affirms hearing officer's report and again rejects Avondale's objections to the conduct of the election. Board orders some 550 challenged ballots to be opened and counted within 14 days.
February 14, 1997: NLRB opens and counts challenged ballots. The workers' victory is confirmed. The final tally shows that 1,950 workers voted for the union, 1,632 against.
April 29, 1997: NLRB overrules Avondale objections to the final vote count of February 14 and certifies that the workers officially won their union.
May 9, 1997: Avondale formally refuses to bargain and says that it intends to lodge an appeal in federal court. The union files an unfair labor practice charge citing Avondale's refusal to bargain.
October 22, 1997: NLRB issues summary judgment finding Avondale has committed unfair labor practices by refusing to bargain. NLRB dismisses Avondale's objections as "without merit."
November 1997: NLRB seeks order from Fifth Circuit enforcing its bargaining order. Avondale continues to refuse to talk with its workers.
February 1998: Administrative Law Judge David L. Evans finds that Avondale violated labor law more than 100 times. He orders company CEO Al Bossier to personally read a cease and desist order to shipyard workers and reinstate 28 workers.
In July 1999, however, the Fifth Circuit sided with Avondale in a dispute over voter identification, and ordered a new election.
Then, in August, things took a sudden change for the better. Litton Industries acquired the beleaguered Avondale, which was the focus of one of the AFL-CIO's main organizing drives. Litton agreed to remain neutral, and recognize the union if it could again gain majority support. A majority of workers quickly signed union cards, and Litton recognized the Metal Workers Council in November.
"When given the chance to form a union absent employer opposition, Avondale workers enthusiastically embraced the opportunity," said AFL-CIO President John Sweeney. "They lined up, often dozens deep, to sign the union petitions carried by their co-workers in the New Orleans ship yard, in the parking lots, and in the neighborhood store. Far more than a majority signed up within less than two weeks."
"Their determination to have a voice at work," Sweeney said, "offers a window into the hearts and minds of the nation's workers, the majority of whom would like the same free and fair chance to improve their lives with a union. Unfortunately, most employers deny their workers this basic, American freedom."
Its vicious anti-union campaign notwithstanding, Avondale gave its workers more cause to unionize than most. Although the shipyard is a major government contractor -- with 80 percent of its business building and repairing ships for the U.S. Navy -- it has paid its workers abysmally, nearly 30 percent less than workers at other private Navy contractors.
And it has maintained a horrific workplace safety record, averaging a death a year. Earlier this year, the Occupational Safety and Health Administration (OSHA) cited Avondale for 55 serious violations, and fined the company more than half a million dollars, an enormous amount by OSHA standards.
Alone among our 10 worst corporations of 1999, Avondale as an independent company is no more. Good riddance.
Voluntary acquisition by another giant contractor is not the same as the corporate death penalty, but Avondale workers can at least take solace that their sustained campaign forced a transfer of control of the company and won recognition of their union.
Every once in a while, a major piece of legislation passes the U.S. Congress and even old hands are left shaking their heads. This happens only when new standards of legalized bribery are achieved, when more money corrupts the political process in more egregious ways than had recently been witnessed.
Those old hands were left shaking their heads this fall, after Citigroup and the rest of the financial services industry (banks, insurance companies and securities firms) succeeded in ushering the Financial Services Modernization Act through both houses of Congress and winning President Clinton's signature.
The finance, insurance and real estate industries together as a sector are regularly the largest campaign contributors and invest more in lobbying than any other sector. They spent more than $200 million on lobbying in 1998, according to the Center for Responsive Politics -- a number almost sure to be topped in 1999 -- and donated more than $150 million in the 1997-1998 election cycle -- a total sure to be exceeded in 1999-2000. Giant campaign contributions flowed especially to the members of the Congressional banking committees as well as the other committees with direct jurisdiction over financial services legislation.
Even more grotesque was the intimate involvement of banking lobbyists in the legislative process. With Citigroup's co-chair Sandy Weill and lead lobbyist Roger Levy leading the charge, industry executives and lobbyists badgered the administration and swarmed the halls of Congress until the final details of a deal were hammered out, effectively vetting all drafts before they were formally introduced.
As the deal-making on the legislation moved into its final phase -- and with fears running high that the entire exercise would collapse -- into the breach stepped Robert Rubin. The recently retired Treasury Secretary, Rubin would be announced as the new de facto co-chair of Citigroup just after the legislation passed Congress. He apparently had negotiated the terms of his hiring while negotiating over the legislation.
Citigroup played such a decisive role in the legislative process because its very existence hung in the balance. The product of a merger between Citibank and Travelers, the combination of banking and insurance companies had been illegal under existing law (but excused due to a loophole which provided a two-year review period). The new legislation repeals the revered Glass-Steagall Act, and will allow such mergers.
Glass-Steagall had reflected the long-standing understanding of the political and economic dangers of financial industry concentration. Its repeal and enactment of the "Citigroup Authorization Act," will:
- Pave the way for a new round of record-shattering financial industry mergers, dangerously concentrating political and economic power;
- Create too-big-to-fail institutions that are someday likely to drain the public treasury as taxpayers bail out imperiled financial giants to protect the stability of the nation's banking system;
- Leave financial regulatory authority spread among a half dozen federal and 50 state agencies, all uncoordinated, that will be overmatched by the soon-to-be financial goliaths;
- Weaken the Community Reinvestment Act (CRA): there will be no ongoing sanctions against holding company banks that fail to meet CRA standards, it will lessen the number of CRA examinations, and provisions of the bill will discourage community groups from challenging banks' CRA records.
- Facilitate the rip-off of mutual fund insurance policy holders by permitting mutual insurance funds to switch domicile states -- thereby enabling them to locate in states where they can convert to for-profit, stockholder companies without properly reimbursing mutual policyholders (a conversion of tens of billions of dollars);
- Aggressively intrude on consumer privacy (and promote a still-greater intensification of direct marketing), thanks to provisions permitting the new financial giants to share finance, health, consumer and other personal information among affiliates; and
- Allow banks to continue to deny services to the poor (Congress rejected an amendment requiring banks to provide "lifeline accounts" to the poor, so they would have refuge from check-cashing operations and the underground economy).
Citigroup and the financial services industry insist the new law will benefit consumers by giving them efficient, one-stop shopping for financial services.
As vicious as the process of corporate globalization is for workers in industrialized countries, it is almost always worse for workers in developing nations.
While workers in the United States and other nations are all too familiar with employers closing plants and moving to lower wage opportunities overseas, consider how the process plays out in the Third World. There, even slight wage gains -- typically won through difficult and dangerous organizing campaigns -- can prod employers to move elsewhere, thanks to the vagaries of the international market and the employers' monomaniacal profit maximization.
In September, Bandegua, the Guatemalan subsidiary of Coral Gables, Florida-based Fresh Del Monte Produce (now a separate company from California-based Del Monte Foods), dismissed 900 of its banana workers. Del Monte attributed the firings to a glut in the world banana market and a surge in production from low-cost Ecuador.
SITRABI, Guatemala's oldest union, represents the fired workers. It alleges that the firings violate its contract with Bandegua and are illegal. The Guatemalan Labor Minister, Luis Linares, agrees. He has called the firings illegal and called on Del Monte to take back the workers.
SITRABI is one of the strongest unions in Guatemala, a country which for decades has been wracked by some of the worst labor repression in the Western Hemisphere. Three thousand Del Monte workers in a neighboring district decided at a general assembly of the union that they would, on October 14, collectively respond to the layoffs by exercising a provision of their contract permitting union members to request 10 days of unpaid absence.
However, according to reports relayed by the U.S./Labor Education in the Americas Project (U.S. LEAP), "on the evening of October 13, 200 heavily armed men with high caliber weapons and assault weapons came to the union hall, grabbed two members of the executive committee who were present, and forced them at gunpoint to drive to the home of the general secretary who was dragged out of his house and beaten before being taken back to the union hall."
With about 30 union officials present, according to the U.S. LEAP report, the local president of the Chamber of Commerce stated that Bandegua said it would leave Guatemala if the October 14 demonstration proceeded.
The gunmen then allegedly forced the union leaders to broadcast on radio that an agreement had been reached with Bandegua, and that the next day's action was cancelled. Then they forced the union leader to sign letters resigning from both the union and as employees of the company.
"At 2:00 a.m.," according to U.S. LEAP's report, "the armed individuals gave [the union leaders] their final message: that the union leaders were to disappear from Morales [the town where they lived] and never return, that they would be murdered should they stay."
MINUGUA, the UN agency monitoring implementation of the Guatemalan peace accords, says this paramilitary action is the second worst breach (following the killing of Archbishop Gerardi) of the accords.
U.S. LEAP is careful to state that there is no concrete evidence of Bandegua's role in the incident, but reports that "local analysts say it is impossible for Bandegua not to have at least known what was going on in a small community like Morales."
Fresh Del Monte Produce declines to comment on the Guatemala controversy, but reports that Bandegua has denied any association, direct or indirect, with the violence.
The Del Monte disaster should be understood both as a product of Guatemala's lingering culture of political violence, and of a global restructuring of the banana industry carried out by the handful of producers that dominate the worldwide banana trade.
In this global restructuring, not only are small producers in the Eastern Caribbean on the verge of losing their livelihoods thanks to a World Trade Organization (WTO) ruling against Europe's preferential market access for poor Eastern Caribbean nations, but plantation workers in Central America are finding themselves undercut by lower-wage Ecuadoran workers. Dole has announced it will lay off 9,000 workers and exit from both Nicaragua and Venezuela; thousands of Costa Rican banana workers have recently lost their jobs; and Chiquita is downsizing in Honduras.
For Guatemala workers, the stakes are particularly high: not only are 900 jobs at stake, but a successful effort to break SITRABI will weaken the entire Guatemalan labor movement.
If you want, you can look at the booming stock market and say that everything is fine. Go ahead, pat yourself on the back.
Or you can look at the way the United States, the wealthiest nation in the history of the world, treats its elderly, and hang your head in shame. This selfish society warehouses the elderly in what are euphemistically called nursing homes, and then turns and looks the other way.
One in four nursing homes across the United States is now out of compliance with state or federal standards and has deficiencies that caused actual harm to residents or placed them at risk of serious injury or death. Spot surveys suggest that one in five nursing home employees has a criminal record of arrest or conviction for serious crimes.
Consider the case of Guardian Postacute Services Inc., a San Francisco Bay area nursing home chain.
Earlier this year, the company was indicted on eight felony counts of elder abuse.
A Santa Clara County grand jury indicted Guardian Postacute Services Inc., the owner of four nursing homes in the county and many more throughout California.
Deputy District Attorney Randy Hey said the investigation was opened in March when he learned of the case of Mary Aljuni.
Aljuni was a patient at a Guardian nursing home in Los Gatos. A feeding tube was inserted into Aljuni, but the tube was not properly cleaned, and she was eventually rushed to an area hospital. "At the hospital, the doctors could smell the area where the bandage was covering the tube," Hey said. "They pulled it off and there were maggots everywhere."
A complaint went to the state Health Department, the attorney general and the San Jose Police Department, and finally ended up with Hey, who launched his criminal investigation.
"At that point, Guardian came to me and told me they were going to lose their federal funding if they were convicted of elder abuse," Hey says. "I did not want to be in a position for being responsible to shut down 16 facilities. So, we looked to see what else was out there. We found over 60 Department of Health violations statewide, with the majority being in our county. And we expanded the investigation and found five other problems, which resulted in five additional felony counts. As a result of the publicity, we have received much more information and we are investigating a substantial number of new cases."
Hey says that he found "substantial evidence that one of their certified male nurse's assistants was sexually molesting a 37-year old dependent female who could not remember what had occurred and could not get out of her bed."
"Rather than follow up on that case, they sent somebody out to get a pregnancy test on this patient," Hey said.
"They never had her checked out by a doctor and never fired the male nurse," Hey said. "They fired him four months later for allegedly eating another patient's food."
The other four felony counts fall in the category of allowing patients to lie for hours in their own feces and urine, Hey said.
Hey said that since publicity on the indictments hit, he has been getting "numerous other complaints that are every bit as significant as the six counts I've indicted."
The company faces a possible $10,000 fine and $10,000 restitution fine for each count.
"But the kicker is that they will automatically lose their federal funding, and they don't have a right of appeal, if they are convicted," Hey said.
This could cost the company as much as 60 to 80 percent of its corporate income stream, which the company reported to Hey is over $100 million a year.
The company lawyer, William Goodman, said earlier this year that the company will plead "not guilty on all counts."
"There is absolutely no foundation for charging the company with criminal violations related to these six counts," Goodman said in an interview from his San Francisco office. "Once all of the evidence is presented to the world, it will be perfectly obvious that this is not a criminal case of any sort and should not have been filed as one."
He said that the facts of the case "don't support a criminal violation."
"No crimes were committed," Goodman said. "The elder abuse statute has very clear definitions and the evidence underlying each of the counts isn't going to come close to meeting the criminal law standards."
Given the facts of the case and the resolve of the Santa Clara District Attorney, it appears unlikely that the company will be able to fight and win this case.
But the great thing about being a corporation in this world is that even if you lose such a case, and get cut off from federal funding, you can recreate yourself, reincorporate and come back again and still do business.
Look closely at the resolution of this case as a case study in how a shameless society deals with its powerful corporate elite. A plea hearing is scheduled for January 7, 2000.
In the fall of 1996, Eugene Reed, a vitamin industry executive, wrote a four-page letter to the Federal Bureau of Investigation (FBI) detailing information he had about a conspiracy.
Six weeks later, an FBI agent showed up at Reed's home north of Little Rock, Arkansas. Reed mapped out the conspiracy and three years later, the feds had two of the three biggest fines in the history of corporate criminality.
Earlier this year, the Swiss pharmaceutical giant, F. Hoffmann-La Roche Ltd., and the German chemical giant BASF Aktiengesellschaft, pled guilty to leading a worldwide conspiracy to raise and fix prices and allocate market shares for certain vitamins sold in the United States and elsewhere.
The two companies control 80 percent of the worldwide vitamin market.
Roche was fined $500 million. BASF was fined $225 million.
Reed is a national sales manager at the Food and Feed Division at Summit Pharmaceuticals, a division of Sumitomo Corporation.
He predicts he will lose his job because of the assistance he is giving to federal prosecutors in their ongoing investigation of the industry.
The Department of Justice charged the companies with conspiring to fix, raise and maintain prices, and allocate the sales volumes of vitamins sold by them and other unnamed co-conspirator companies in the United States and elsewhere.
Federal officials also allege that the companies allocated contracts for vitamin premixes for customers throughout the United States and rigged the bids for those contracts.
The conspiracy lasted from January 1990 into February 1999 and affected the vitamins most commonly used as nutritional supplements or to enrich human food and animal feed -- vitamins A, B2, B5, C, E and Beta Carotene.
Vitamin premixes, which are used to enrich breakfast cereals and numerous other processed foods were also affected by the conspiracy, the Justice Department said.
Two Hoffman LaRoche executives also pled guilty in connection with the case.
"We intend to learn the right lessons from these events," said Markus Altwegg, head of the company's vitamins and fine chemicals division. "I am personally committed to ensuring that we in the division fully accept our responsibility to conduct our business in a way that is above reproach in every respect."
In order to ensure that such actions do not happen again, says Martin Hirsch, director of public affairs for Roche, "we communicated throughout the global organization that improper business practices are not to be tolerated. We stepped up education and training programs so that all people in the company know what proper business practices are. We also enhanced the auditing of our businesses."
But executives were clear that contrition should not impede further expansion: "By no means," said Franz Humer, chief executive manager of Roche and head of the pharmaceuticals division, "will we allow this setback to divert us from the course of steady growth we are pursuing in all our businesses -- and that applies in particular to our vitamins and fine chemicals division."
These words perhaps sounded different to whistleblower Reed than Humer intended. Reed says that the convictions and fines have only made Roche more determined to conquer the remaining 20 percent of the market.
Reed said that one executive for Hoffman LaRoche told him that "we will take this market, even if we have to pay the fine." "I told him, . I have no choice but to try to derail this,'" Reed said. "He said, . Gene, you are an American. You will do what an American has to do.'"
If you or I have a couple of drinks, get behind the wheel of an automobile, drive away, cross the center line, crash into an ongoing vehicle and kill the four occupants of that vehicle, chances are that the local district attorney will seek an indictment for manslaughter or reckless homicide.
We didn't intend to kill the occupants of the other car, but we were reckless in our actions and as a result, four innocent lives were taken.
We will pay.
But if a corporation operates an unsafe workplace and as a result four workers are killed, then most likely the company will not be indicted for manslaughter or reckless homicide -- unless that company happens to be in one of the few counties where a district attorney criminal investigates every workplace death. (There are only a handful of these across the country.)
Contra Costa County in California is not one of those counties. On February 23, 1999, four workers at a Tosco Corp. facility in Avon, California were burned to death after they tried to replace a leaky oil pipe.
The San Francisco Chronicle reported that one Tosco employee, Anthony Creggett, claimed shortly after the fire that plant managers had refused a request by four workers to shut down the high-temperature distillation tower during the repairs on the pipe.
Kathy Alatorre, whose brother Michael Glanzman was killed in a January 1997 Tosco accident, spoke at a special California Assembly hearing on the February 23 fire.
"When I heard of the new explosion, my first thought was, . They did it again,'" Alatorre told the committee. "I would not be allowed to get away with murder. Why are they allowed to hide behind the law? When safety issues and warnings and concerns are ignored, I feel it's equivalent to premeditated murder."
In January 1998, Tosco pled guilty to a misdemeanor criminal charge of violating the state labor code in connection with the explosion of a hydrocracker at its Avon refinery that killed Glanzman. At the time, the company was fined $25,000 and paid $300,000 to fund training or educational safety programs.
In response to the new Tosco deaths, a San Francisco Bay area labor coalition began circulating a petition calling on the local District Attorney to bring criminal charges against the company and its executives.
But Contra Costa County Assistant District Attorney Lon Wixson indicated that a murder charge against the company or its executives was unlikely, though he did not rule out involuntary manslaughter charge against either.
Contra Costa County has never brought an involuntary manslaughter charge in a worker death case, Wixson said.
Wixson said that, for the most part, he is relying on Cal/OSHA to investigate the four deaths.
"We don't have independent investigatory capability," he said in an interview from his office in Martinez. "We work with Cal/OSHA, which does the investigations. They are the ones that generally investigate these things and then refer them to us for criminal prosecution, just as a police agency would investigate and refer to a DA. Our investigatory capability is very limited."
In California, manslaughter is "the unlawful killing of a human being without malice."
Wixson said that one of the problems with charging a corporation with involuntary manslaughter is the relatively low maximum penalty -- $27,000. A charge of criminal violation of the state labor code, on the other hand, would result in a fine of $189,000.
"You could charge the executive or another worker, or a supervisor or any individual, if they have the requisite mental state to justify the charge," Wixson said. "If we are going to prosecute a chief executive, it is not enough that the workers or managers or supervisors have knowledge of a particular crime. The executive has to have knowledge for us to proceed against him. The fact that you have a worker death anyplace in the company doesn't mean that the chief executive has the requisite knowledge to convict him of that."
Wixson said he didn't know if Cal/OSHA is going to approach Tosco CEO Thomas O'Malley "and ask him, . What do you know about this incident?'"
Eventually, Cal/OSHA did fine Tosco $810,750 for the deaths of the four workers.
Tosco did not respond to requests for comment.
Maybe we should consider raising our own chickens.
Clearly, relying on multinational corporations to raise millions of birds for us in unsanitary and dangerous conditions is not working out.
Tyson's Foods is a case in point. Do you really want to buy your chicken from these people?
Consider this: seven workers have been killed at Tyson facilities this year. There have been no reported job-related deaths at any other poultry company in 1999.
"How many more workers must die before the Occupational Safety and Health Administration (OSHA) acts with a company-wide investigation of Tyson?" asked Mary Finger, United Food and Commercial Workers International Union (UFCW) International Vice President. (Apparently more than seven.)
The UFCW issued a call on August 5, 1999 asking OSHA to launch an investigation of all Tyson poultry plants across the country. The call came after James Dame, Jr. and Mike Hallum fell into an open pit of decomposing chicken parts and by-products and suffocated from the methane gas emitted by the parts at Tyson's Robards, Kentucky facility. The Robards plant had not been inspected by state or federal Occupational Safety and Health agencies since January, 1998.
UFCW safety experts fear the deaths reflect a systemic problem with Tyson's safety program. OSHA declined to launch a nationwide investigation.
On October 8, 1999, another Tyson worker was killed on the job. Charles Shepherd died from head trauma after a fall in the chiller room in the Berlin, Maryland Tyson plant.
The Department of Labor's Poultry Initiative has found a majority of poultry plants have high numbers of wage and hour violations and high levels of workplace injuries. Tyson, as the industry leader, sets the standards for wages, benefits and working conditions and therefore warrants serious scrutiny in order to protect workers from unsafe working conditions, Dority said.
In November 1999, the U.S. Department of Labor fined Tyson Foods, Inc., for violations of federal child labor laws that contributed to the death of an under-aged teenage worker and the serious injury of another.
"One teenager died and another suffered serious injuries because this company ignored the law," the Labor Department reported. "It was illegal for either one of them to be employed in the kind of work Tyson's hired them to do."
The company was fined $59,274 for violations of the child labor provisions of the Fair Labor Standards Act at two of its plants.
The Labor Department's Wage and Hour Division determined that the violations contributed to the death of a 15-year-old employed in the firm's Hempstead County, Arkansas facility and the serious injury of a 14-year-old employed in its Sedalia, Missouri facility.
In addition to exposing workers to hazardous worksites, the company cheats them out of fair pay.
That's the central allegation of a lawsuit filed in December by workers against the Arkansas-based corporation.
The lawsuit, filed in federal court in Birmingham, Alabama, alleges that Tyson Foods has been cheating its poultry plant employees out of wages by forcing the workers to report to the plant early and stay late -- working off the clock up to an hour a day. The workers claim that that they should be compensated for putting on and taking off the protective clothing and equipment that Tyson requires them to wear.
The lawsuit alleges that by forcing workers to work off the clock, Tyson takes more than $100 million a year from the pockets and paychecks of poultry workers.
The poultry industry is one of the fastest growing segments of the meat industry. In the last 10 years, the dollar value of poultry production has more than doubled, from nearly $6 billion to $12 billion. Tyson is the largest poultry processing company in the United States, with 65,000 employees at 59 plants. It dominates the market with 27 percent of sales nationwide.
Tyson did not respond to requests for comment on the allegations against it.
Big brother is watching. No, no, no. Not that big brother. We're talking about your neighborhood bank.
Earlier this year, Minnesota Attorney General Mike Hatch filed a lawsuit against U.S. Bank for allegedly releasing customers' private banking information to a telemarketing company in exchange for a fee of $4 million plus commissions.
Hatch alleges that U.S. Bank, a unit of U.S. Bancorp, violated the federal Fair Credit Reporting Act and engaged in consumer fraud and deceptive advertising by providing the telemarketing vendor with such private information as Social Security numbers, account balances, transactions and credit limits.
"People are appropriately careful about protecting their Social Security number, checking and credit card information," said Hatch. "When a bank hands out this information to the highest bidder, it has to answer to its customers and to the Attorney General."
Hatch alleged that U.S. Bank provided Member Works Inc. with its customers' name, address, telephone numbers of the primary and secondary customer, gender, marital status, homeownership status, occupation, checking account number, credit card number, Social Security number, birth date, account open date, average account balance, account frequency information, credit limit, credit insurance status, year to date finance charges, automated transactions authorized, credit card type and brand, number of credit cards, cash advance amount, behavior score, bankruptcy score, date of last payment, amount of last payment, date of last statement and statement balance.
Since November 1996, U.S. Bank has received more than $4 million plus commissions -- commissions equal to 22 percent of each sale Member Works made -- from the provision of its customers' private information to Member Works.
Member Works used the U.S. Bank customer data to sell memberships in a health program that allowed members to get discounts on dental and health care visits.
Hatch also alleged that in addition to providing confidential customer information, U.S. Bank approved telemarketing scripts that contained deceptive information.
For example, if a customer asked a telemarketer if U.S. Bank had given the customer's credit card or checking account number to the telemarketer, the script instructed the telemarketer to answer "No, I personally do not have your account number."
Hatch alleges that U.S. Bank violated federal law and banking rules by allowing the telemarketing company to automatically withdraw payments from a checking account without written authorization from the consumer.
Federal and state regulatory agencies require banks to publish privacy policies telling consumers how their personal information will be used, who has access to the information and if the bank intends to give its personal information to non-affiliated third parties.
Nothing in the bank's agreement reveals that personal, confidential information is being sold to companies that are not affiliated with U.S. Bank.
Hatch said that none of U.S. Bank's consumer brochures disclose to customers that their names and account information could be sold to a third party.
U.S. Comptroller of the Currency John Hawke condemned such practices as "seamy," unfair and deceptive.
To settle the case, U.S. Bancorp agreed to stop providing customer information to third parties for marketing purposes, to pay the state $3 million and to refund customers whose credit cards were debited for products and services they didn't want. Also, as part of the settlement, the bank must notify customers before sharing data with bank affiliates.
Hatch advises consumers to tell the company you are doing business with not to sell your name. Companies are required to keep "do not sell" lists.
"If you order a magazine or open a bank account, ask the company not to sell your name," Hatch said.
Why did U.S. Bank trade in its customers' information?
"Two reasons," says Don Waage, public relations director for U.S. Bancorp. "First, we thought our customers would like those products. Over 70,000 customers did order them, so we had to make arrangements for many of those customers to continue to receive those products and services after we decided to no longer provide them. Second, we did this because of competitive pressures in the credit card industry."
"Action by the attorney general compelled us to step back and look at this industry-wide practice," says U.S. Bancorp CEO John Grundhofer. "As the trust of our customers is the bedrock of our business, our decision to stop these practices was made easily and quickly."
As the movie Casablanca so memorably illustrated, anytime someone expresses "shock, shock," there's a good chance they are full of it.
As are major corporate wrongdoers, who without hesitation or embarrassment, routinely express "shock" any time the people, through the shredded remnants of our democracy, stand up and slap them with a hefty sanction.
Take the case of Whirlpool Corporation. Earlier this year, an Alabama jury hit a recently spun off Whirlpool subsidiary, Whirlpool Financial, and one of its dealers with a $581 million verdict for targeting illiterate and poor people in a sales scheme involving satellite television dishes.
Lawyers representing the victims said that Whirlpool had dealers all over the state going door-to-door soliciting poor, unsophisticated and elderly customers to purchase satellite television dishes for $1,100 plus 22 percent interest. The same equipment could be bought at an electronics store for $199.
The purchases were financed on Whirlpool "credit cards," which allowed Whirlpool to avoid having to disclose the actual number of payments that would be required, which Whirlpool then misrepresented to its customers. Some customers were never even issued actual credit cards.
The jury awarded the plaintiffs, Barbara Carlisle, and her parents, George and Velma Merriweather, $975,000 in compensatory damages and $580 million in punitive damages. The finding of liability was based on an allegation that a salesperson for the satellite dish retailer, Gulf Coast Electronics, misled the plaintiffs regarding financing terms of the credit card loans.
One witness who was sold a satellite dish had less than a fifth grade education. One plaintiff in the case had a tenth grade education and had never owned a credit card.
A former agent testified that Whirlpool specifically targeted illiterate and unsophisticated people, and that he had trained others to lie about the terms of the financing.
A juror who spoke with plaintiff's attorney Tom Methvin of Montgomery after the case said the jury was "sick" at how Whirlpool treated poor, uneducated people. The juror also said that the jury was "inflamed" that there are still "thousands of people out there" who are victims of the scheme, but that Whirlpool had not helped these victims. The jurors felt that their verdict was important to "get Whirlpool's attention."
When the verdict hit, the Benton Harbor, Michigan-based Whirlpool Corporation said that its former subsidiary, Whirlpool Financial National Bank, now known as Transamerica Bank, N.A., planned to appeal the verdict.
"The company strongly believes that it did nothing to warrant any finding of liability in this litigation, much less $581 million," Whirlpool said in a statement. "The company is confident that it will ultimately prevail through the post-trial and appeal processes as the verdicts are totally without merit and represent a gross miscarriage of justice. The damage awards in this case are terribly unfair and contrary to sound constitutional protections established by the Alabama Supreme Court and the United States Supreme Court."
So, Whirlpool appealed the verdict.
A couple of months later, an Alabama appeals court denied the Bank's post-trial motion to set aside a $581 million jury verdict and instead reduced the jury's verdict to $301 million.
The company expressed "shock" that the appeals court didn't conform to the corporate agenda and throw out the entire award.
"The fact that the judge reduced the verdict to $301 million in no way corrects this miscarriage of justice," the company said in a statement. "The Bank believes the jury verdict was clearly erroneous and that it will ultimately prevail on appeal."
But Methvin, the attorney representing the victims of the scam, said that the court allowed the verdict to stand because the actions of Whirlpool represent "the worst conduct by corporate America ever to be exposed in the Alabama judicial system."
"Whirlpool bilked thousands of vulnerable consumers out of millions of dollars," Methvin said. "Eight other major out-of-state banks were engaged in similar conduct in Alabama. As a result of our lawsuits against them, those banks stopped doing this in Alabama. In spite of the lawsuits, Whirlpool refused to quit their activities. The jury's verdict and the trial judge's very strong ruling should make Whirlpool put a stop to this type of conduct."
"Alabama has the weakest consumer protection laws in the entire country and this is well known by companies such as Whirlpool," Methvin said last week. "Judgments like this one are particularly important in Alabama and are the only form of consumer protection that we have."
At the end of the millennium, W.R. Grace should be considered a candidate as one of the world's most rapacious corporate predators.
Of course, if you have seen the movie A Civil Action or read the book by the same title, you are aware of the injury inflicted by this multinational chemical company.
A Civil Action told the story of how five children and one adult died of acute lymphocytic leukemia from exposure to chemicals in the drinking water of Woburn, Massachusetts.
The Environmental Protection Agency found Grace and a second company responsible for dumping the toxic chemicals that poisoned two of Woburn's wells. Grace paid $8 million to eight families to settle their lawsuits against the company. Grace was indicted by the Department of Justice on two counts of lying to the EPA about the amount of hazardous chemicals it used at its Woburn plant. In 1988, Grace pled guilty to one count and was fined $10,000.
As protesters were fighting off the police and the effects of being gassed in the streets of Seattle during the WTO meetings, the Seattle Post-Intelligencer, the local corporate newspaper, began running a series of articles documenting Grace's most recent outrage.
The paper reported that at least 192 people have died of asbestos-related disease from a mine near Libby, Montana that was owned by Grace for nearly 30 years. At least another 375 have been diagnosed with the fatal disease.
The Post-Intelligencer detailed how federal, state and local agencies had not stepped forward to help the people of Libby, either denying knowledge of the problem or pointing to other agencies for solutions.
For three decades, Grace mined enormous deposits of vermiculite in the earth of nearby Zonolite Mountain. Under the vermiculite are millions of tons of tremolite, a rare and exceedingly toxic form of asbestos.
For centuries, the tremolite lay undisturbed and harmless beneath a thin crust of topsoil. But mining the vermiculite has released the deadly asbestos fibers into the air.
The paper quoted Dr. Alan Whitehouse, a lung specialist from Spokane and an expert in industrial diseases, as saying that another 12 to 15 people from Libby are being diagnosed with the diseases -- asbestosis, mesothelioma -- every month.
According to Dr. Whitehouse, it takes anywhere from 10 to 40 years from the time a person is exposed to dangerous amounts of asbestos for the diseases to reveal themselves.
Since 1984, 187 civil actions have been filed against Grace on behalf of Libby's miners and their families, the paper reported.
There are 120 cases pending. In the others, Grace has either been found liable and been ordered to pay damages in a jury trial, or it settled out of court, often shortly before the trial was to begin, the paper reported.
At a community meeting in November in Libby, residents and workers at the mine said that Grace managers told miners the dust was harmless.
One Libby resident, Patrick Vinion, told the crowd of his fears for his three children. "In the local paper our health department says we only have 1 percent tremolite in our town," Vinion said. "One percent of tremolite is not acceptable no matter what anybody says. One percent of tons of tremolite and I guarantee it will kill your kids."
"When my father was a young man they told him, 'You can't eat enough of that stuff. It won't bother you.' He's dead," Vinion said. "When I started getting sick when I was younger, they told me, 'You never worked there. It's not possible. You can't get it that way.' Well, it's more than possible. I'm dying of it."
At the hearing, Roger Sullivan, a lawyer representing many of the residents of Libby against Grace, explained how the largest stack in the ore-processing mill spewed 10,000 pounds of asbestos each day, and how the wind would disperse it over the town. He said the sparsely covered tailings pile, given a clean bill of health by state investigators, still contains 5 billion pounds of asbestos, the paper reported.
As expected, the company says it did no harm.
"Obviously we feel we met our obligation to our workers and to the community," Jay Hughes, Grace's senior litigation counsel told the paper. Hughes said the company spent "millions" to upgrade safety conditions and reduce dust at the mine.
"We know that people have been harmed," says Grace spokesperson Bill Corcoran, "and that will be resolved through the court system."
"New information about ongoing risk is entirely new to us and to the state," Corcoran says. "We have no information on that, and we are cooperating" with state and federal investigators.
Reporter Andrew Schneider and the Seattle Post-Intelligencer have dug down and found a dirty company committing yet another dirty deed.
A town has been killed, its residents are dying.
Perhaps its time for the district attorney in Lincoln County and the U.S. Attorney in Montana to see if justice can be done.
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