The Biggest Scandal of Corporate America: What Happens on Its Best Behavior

A recent column by popular Chicago business writer David Greising speaks volumes about the limits of recent “mainstream,” well, corporate media commentary on the sins of corporate America. In an amusing July 12th piece in the Chicago Tribune, Greising expressed relief at the content of a press conference called the previous day by the Chicago-based Boeing Corporation. Expecting to hear yet another shocking revelation of corporate malfeasance, Greising was pleased to see Boeing announce something “positive.”

The “positive” news? Boeing, Greising wrote, “is realigning its defense and satellite business into a $23 billion unit,” headed by Jim Albaugh. Albaugh, we learn, “beat out Jerry Daniels, whose Boeing career took a detour when the company lost to arch-rival Lockheed Martin last year in a bid for the $200 billion Joint Strike Fighter Program.”

In a time of rampant popular obsession with corporate misbehavior, Greising was gratified to hear Boeing CEO Phil Condit talk about the “nuts and bolts and spy satellites” of “his business” and about the approach that “will be necessary to win the Pentagon’s next megaproject.”

Greising’s judgment ignored the rather dark content of the Pentagon’s projects both “mega” and otherwise and of the core activities of giant “defense” corporations like Boeing that reap billions of taxpayer dollars thanks to a US military budget that dwarfs that of all potential rivals combined.

Chicago’s friendly not-so local Boeing Corporation is a powerful, heavily subsidized Master of War. With operative revenues of more than $51 billion in 2000, it is the nation’s second largest weapons manufacturer, exceeded in that fascinating “entrepreneurial” field only by Lockheed Martin. It is responsible for such fine products of the “free enterprise system” as the Ground-Based Interceptor missile, X-Band Radar, Battle Management, Command, Control and Communications (BMC3), Upgraded Early Warning Radars, and the Airborne Laser.

Boeing’s realignment is related to its status as the main contractor for the Pentagon’s dangerous, destabilizing, and costly Star Ways System, a key part of the United States’ open plan to extend its total domination of the planet through the militarization of outer space.

Beyond working to wreak havoc from the stars, Boeing has contributed to the killing and maiming of countless world citizens with such high-tech tools of death and destruction as the notorious Apache AH-64A helicopter, the F-15 and the F/A-18 Hornet fighter jets. Its famous B-52, the longtime “backbone of the manned-strategic bomber forces in the United States,” (according to Boeing’s web-site), includes among its most recent accomplishments the “anti-terrorist” bombing of Afghanistan, conducted from heights guaranteed to produce significant deadly civilian “collateral damage.”

The F-15 has been featured in the 11-year bombing campaign against Iraq in the enforcement of the lethal illegally imposed “no fly zone.”

The F-22, produced in cooperation with Boeing’s “arch-rival” Lockheed Martin is an “air superiority fighter” with what Boeing’s web site calls “first look, first-shot, and first-kill capability.”

Boeing’s B-2 Stealth Bomber is one of the most horrifying human creations to date. It is a monument to the Dark Side of Star Wars (the movie) fame – a “multi-role bomber, capable of delivering both nuclear and conventional munitions” to, in Boeing’s words, “strike targets all over the world from bases in the United States.” It is perfectly matched to the White House’s current plans, greatly emboldened by 9-11, for permanent US military supremacy and unlimited global offensive capacity even in the absence of a single remotely threatening rival state.

One of Boeing’s most curious current projects is the Unmanned Combat Air Vehicle (UCAV), dedicated to the proposition that “the only way to completely protect the person flying a combat mission is to have them fly it from somewhere else.” Boeing has taken the appropriate imperial lesson from Vietnam, loaded with cowardice and consistent with the (Colin) “Powell

Doctrine”: massive death and destruction for Evil Others but a minimum of risk for the direct agents of that mayhem.

“We build UCAV and other innovative defense products,” write the Orwellian content providers of Boeing’s web site, “because they do one thing and do it very well – they save lives.” War is Peace, Love is Hate, and Death is Life.

Boeing is also a major world arms dealer, with its products widely used in deadly conflicts and by repressive regimes around the world. “Its Apache AH-64A,” Kevin Martin noted last December, “has been sold to Egypt, Greece, Israel, Saudi Arabia, and United Arab Emirates. Israel has used the helicopter in raids against the Palestinians. Boeing’s F-15 Eagle has been sold to Israel, Japan, and Saudi Arabia, and its F/A-18 Hornet has been sold to Australia, Canada, Finland, Kuwait, Malaysia, Spain, and Switzerland.”

Boeing capitalizes on its overseas sales to drive demand at home. “In a perverse manifestation of the pursuit of its interests above national or international security concerns,” Martin writes, “Boeing uses its weapons exports to help perpetuate demand for its future planes. New weapons…developed for the U.S. military…are sold to allies around the world. (Often, the potential export market is factored into and helps justify research and development costs.) These weapons exports, in turn, fuel the push for higher and more expensive technology to be developed by U.S. weaponeers to maintain our military superiority.” (Kevin Martin, Tim Nafziger, Jeremy Shenk, & Mark Swier, “The Boeing Corporation,” Z Magazine, November 2001).

Along the path to its current position at the commanding heights of the military-industrial complex, Boeing has developed strong reputations for slashing labor costs by outsourcing union jobs, poisoning the environment, discriminating against African-American employees, receiving colossal corporate welfare and other state-capitalist subsidies, and making massive investments in the American political and policy process. Boeing spent $8.2 million on lobbying in 1995 and more than $1.75 million on campaign contributions in 1999-2000, a profitably small sum in comparison to the billions of public dollars it receives. .

In agreeing to move its headquarters from Seattle to Chicago last year, Boeing managed to extract from the city and the state of Illinois a taxpayer-financed incentive package estimated to be worth $64 million over the next 20 years.

All of which raises some interesting questions about the about the extent to which the current political and media focus on the corporate wrongdoing and the relationship between business corruption and the White House is really getting to the rotten core of the American System.

To be sure, it has been more than a little gratifying to see what many of us on the left have long known to be system-wide corporate cronyism, corruption, and criminality (far beyond the Bush administration’s twaddle about “a few bad apples”) become headline news. It has been good to see corporate Fat Cats fall in public esteem like no time since the 1930s. It’s a long overdue correction. It is pleasing to see the scandals begin to engulf an illegitimate White House chock full of former corporate CEOs. The Bush administration is remarkably beholden and dedicated to corporate power even by the plutocratic standards of the United States, surely the “best democracy that money can buy.”

Still, in observing this new coverage and opinion, which has put the question of corporate social responsibility in the public eye like no time in recent memory, it becomes easy to forget that waves of corporate abuse and insufficient reform are a recurrent and predictable feature of American state capitalism. It is easy to lose sight of the fact that very little in the way of truly substantive punishment and regulation is being seriously advanced by American policymakers, including Democrats, reflecting the addiction of both parties (the two wings of the US Chamber of Commerce

Party) to corporate largesse.

Also too readily forgotten is the fact that much, indeed most of the considerable harm inflicted on human society and the planet by the corporate masters of the world is the result of corporations acting non-scandalously, profitably, and in accord with the rule of law and standard business procedure. Scandals don’t emerge in the US when Boeing and/or Lockheed Martin develop a new way to terrorize distant peoples, when McDonalds finds a new way to spread cholesterol, or when Monsanto finds new techniques to cripple small farmers in developing countries. The media and official opinion is not stirred and CEOs keep their jobs when General Motors works to subvert environmental considerations, when Iowa Beef Processors exploits immigrant workers, and when leading energy firms influence politicians and policymakers in their interests. In each case, the corporate actor’s behavior is consistent with the letter and spirit of American business (corporate), law, which requires corporate managers to one thing first and

foremost: company profits.

Thanks to a legal revolution effected during the late 19th and early 20th centuries, there is no legal requirement compelling an American corporation to make any contribution whatsoever to the common good. Corporations’ basic legal requirement is to make money for investors. They tend to get in trouble, temporarily, with the public and government when the misbehavior and mismanagement of excessively selfish and/or stupid strategic insiders threaten profitability for large numbers of investors. They generally escape critical scrutiny when their basic operations threaten human beings and the world of living things in general in the interest of profit, as they do on an incremental and daily basis.

Which brings us to another dark underside to the current corporate scandals, as spun by the architects of American policy and opinion. One does not have to be a conspiracy theorist to know that the current media and public focus on the intimately related sins of the Bush administration and corporate America is deepening the momentum towards a massive and deadly US assault on Iraq. As the New York Times’ Frank Rich, neither radical nor conspiracy-oriented, wrote last Saturday, “wagging the dog no longer cut is. If the Bush administration wants to distract Americans from watching their 401 K’s go down the toilet, it will have to unleash the whole kennel. Maybe only unilateral annihilation of the entire axis of evil will do.”


If Rich’s “kennel” is in fact unleashed just partly for the reason he suggests, it will certainly be scandalous. We can be sure however, that Boeing Corporation and the rest of the nation’s leading “defense” contractors will be waiting in the wings to reap a not-so “free enterprise” profits windfall, without the slightest hint of scandal, all very much in accordance with standard corporate practice and business as usual.

Paul Street is a social policy research and freelance writer in Chicago, Illinois. He can be reached at pstreet@cul-chicago.org

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