Russell Mikhiber and Robert Weissman
criminal element has seeped deep into every nook and cranny of American society.
Forget about the underworld — these crooks dominate every aspect of our market,
culture, and politics. They cast a deep dark shadow over life in turn of the
buy gas from them (Exxon, Chevron, Unocal). We take pictures with their cameras
and film (Eastman Kodak). We drink their beer (Coors). We buy insurance from
them to guard against financial catastrophe if we get sick (Blue Cross Blue
Shield). And then when we get sick, we buy pharmaceuticals from them (Pfizer,
Warner Lambert, Ortho Pharmaceuticals). We do our laundry washers and dryers
from them (General Electric). We vacation with them (Royal Caribbean Cruise
Lines). We buy our food from them (Archer Daniels Midland, Southland, Tyson
Foods, U.S. Sugar).
drive with them (Hyundai) and fly with them (Korean Air Lines). All of these
companies and more turned up on Corporate Crime Reporter’s list of the Top 100
Corporate Criminals of the 1990s, released this past week at a news conference
at the National Press Club.
before a roomful of reporters and cameras (including a C-Span camera which took
us live to our TV nation), we made the following points:
year, the major business magazines put out their annual surveys of big business
have the Fortune 500, the Forbes 400, the Forbes Platinum 100, the International
800 — among others.
lists rank big corporations by sales, assets, profits and market share. The
point of these surveys is simple — to identify and glorify the biggest and most
point of releasing The Top 100 Corporate Criminals of the Decade, on the other
hand, was to focus public attention on the pervasive criminality that has
corrupted the marketplace and that is given little sustained attention and
analysis by politicians and news outlets.
compile The Top 100 Corporate Criminals of the 1990s, we used the most narrow
and conservative of definitions — corporations that have pled guilty or no
contest to crimes and have been criminally fined. And still, with the most
narrow and conservative of definitions of corporate crime, we came up with
society’s most powerful actors.
corporations that made the list of the Top 100 Corporate Criminals were criminal
recidivist companies during the 1990s. Exxon, Royal Caribbean, Rockwell
International, Warner-Lambert, Teledyne, and United Technologies each pled
guilty to more than one crime during the 1990s.
we warned that we in no way imply that these corporations are in any way the
worst or have committed the most egregious crimes. We did not try to assess and
compare the damage committed by these corporate criminals or by other corporate
wrongdoers. We warned that companies that are criminally prosecuted represent
only the tip of a very large iceberg of corporate wrongdoing.
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.
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.
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.
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.
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 (Michael McCann, the DA in Milwaukee County, Wisconsin, being one)
regularly investigate workplace deaths as homicides.
pointed out that corporations define the laws under which they live.
argument can be made that the most egregious wrongful corporate acts — the
genetic engineering of the food supply, or the systematic pollution of the
nation’s air and waterways, or the bribery by corporate criminals of the
political parties — are totally legal.
What Do We Do?
Law and Order Regulation for Corporations
you commit a felony, you lose the right to vote.
happens to corporations that break the law? They don’t have the right to vote.
But do they lose any rights or privileges?
what may be one of its most important corporate accountability initiatives
(there haven’t been many), the Clinton administration is suggesting that chronic
violators of labor, environmental, tax, antitrust or employment laws should be
denied the privilege of entering contracts with the federal government.
President Gore first floated the idea in a 1997 speech to the AFL-CIO. A
business outcry persuaded the administration to put the proposal on hold, but
two years later it decided to move forward.
July the administration proposed regulations that would clarify federal
procurement officers’ duty to ensure that government contractors have a
"satisfactory record of integrity and business ethics." Under the
regulations, corporations that repeatedly or seriously transgress worker rights,
health, safety, environmental, tax or antitrust laws would be deemed ineligible
for federal government contracts.
business is up in arms about the proposal — a sign that it may be of
consequence. The U.S. Chamber of Commerce along with an alphabet-soup full of
business trade associations have organized the National Alliance Against
Blacklisting to block the proposal.
Alliance is planning a full-blown campaign against the regulations. It is
revving up arguments about how the regulations would bestow on procurement
officers the power to act arbitrarily, how corporations could be unfairly
penalized for failing to comply with confusing and technical federal rules, and
how the regulations improperly side the federal government with labor in
business groups are right about one thing: the Clinton administration has hit
upon a potentially powerful tool to discipline large corporations.
federal government spends approximately $200 billion a year on procurement,
buying goods and services from firms that employ approximately 20 percent of the
U.S. workforce. Government contracts make up a significant revenue stream for
many firms, including many of the largest companies in the country. In refusing
to contract with polluting, consumer-cheating, racially or sexually
discriminating, tax-avoiding, clearcutting, price-fixing and other miscreant
companies, the government can leverage its buying power to promote more
responsible corporate behavior.
the issues of worker rights and worker safety. A 1995 study by the General
Accounting Office (GAO), the congressional research agency, found that 80
federal contractors, receiving more than $23 billion in federal government
business in fiscal year 1993, had violated the National Labor Relations Act. Six
contractors — McDonnell Douglas, Westinghouse, Raytheon, United Technologies,
AT&T and Fluor — received almost 90 percent of the $23 billion.
1996 GAO study found that 261 federal contractors, receiving more than $38
billion in federal government business in fiscal year 1994, received penalties
of at least $15,000 for violating Occupational Safety and Health Act
regulations. The biggest of these contractors included General Electric,
Lockheed Martin, Westinghouse, United Technologies, General Motors, Boeing and
current U.S. labor law regime imposes virtually no meaningful penalties on
businesses that violate worker rights. The standard sanction imposed against a
company that fires a worker for supporting a union is an order to reinstate the
worker with back pay — there are no punitive damages available. Serious
violators of workplace health and safety regulations typically walk away with
contrast, the threat of losing major government contracts is a much more serious
and costly penalty. The proposed procurement regulations would make federal
contractors much more wary of recklessly disregarding worker rights and worker
the generally weak penalties for corporate law-breaking in the United States,
the same holds in other spheres. Too frequently, corporations are able to brush
off fines and sanctions for law-breaking.
corporations calculate, overtly or implicitly, whether they should respect the
law, they consider the odds of getting caught and the size of the likely penalty
if they are caught. Other factors go into such decisions of course — potential
civil liability, the social pressure to comply with the law or simple respect
for the law — but no one seriously doubts that enforcement vigor and the size
of sanctions affect corporate adherence to the law.
the regulation, really a very modest step, is enacted, the answer to the
question, "Do corporate law breakers lose any privileges or rights?"
will finally be, "Yes."
more details on the proposed regulation, see the Essential Action web page,
federal government is now accepting comments on the proposed regulation.
Business groups are weighing in heavily against it; and so if the proposal is to
be enacted, it is vital that citizens and public interest groups submit comments
in support of the regulation.
is easy to submit comments — even a comment that says nothing more than,
"I support the principle that the federal government should not contract
with companies that seriously transgress the law" is valuable, and comments
can be submitted by e-mail (as well as regular mail).
background on the proposed regulation, and tips on what to say in comments, see
the Essential Action web page, http://www.essentialaction.org/anti-scofflaw. You
can e-mail comments directly to the agency from this page.