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MAY 2009
GETTING TO KNOW BERNIE MADOFF
UP CLOSE AND PERSONAL WITH TIM
GEITHNER
MARCH 2009
FED BLOCKS NAMES OF BAILOUT WELFARE
FATHERS TO AVOID 'STIGMA'
FEBRUARY 2009
SUE THE WALL STREET MOB
DECEMBER 2008
RUBIN NAMED IN SUIT ALLEGING CITIGROUP
PONZI SCHEME
FORMER CHAIR OF NASDAQ ARRESTED
IN ALLEGED SCAM
AUGUST 2008
HARVARD BUSINESS SCHOOL IS FAR
WORSE THAN YOU THOUGHT
What They Teach You
at Harvard Business School
Philip Delves Broughton
Christopher Hart, Sunday
Times, UK - In 2004, the journalist Philip Delves Broughton walked
away from what sounds like a peach of a job, Paris bureau chief
for the Daily Telegraph, to enroll in Harvard's world-famous
MBA course. . .
Feelings of unease emerge
even before he arrives. He reads a student guide on What to Bring.
"Don't bring that guitar . . . Don't bring any books from
literature or history classes . . . Don't bring your cynicism.
Do bring all the diverse rest of you. We can't wait to share
the experience." Immediately, his bolshie British bullshit-
detector thrums into life: "Who were these people? And why
did they talk like this? Why can't I bring my cynicism? Or my
books? Aren't they a part of the 'diverse rest of me'?"
. . .
He is surprised at the
large presence of earnest Mormons and unimaginative former-military
men in this cauldron of capitalism. But gradually this begins
to make sense, for HBS is pervaded with an oppressive atmosphere
of unquestioning obedience and creepy religiosity. There is the
confessional My Reflected Best-Self exercise, to encourage students
"to create a developmental agenda for leveraging their reflected
best-self" and "work maximally from positions of strength".
Approved results sound like this: "I do not take on the
negative energy of the insecure . . . I stay centered . . . I
try to model the message of integrity, growth and transformation."
. . .
The weirdest and creepiest
episode is when a student writes to the entire school, confessing
to a "regrettable property- damage incident", a gorgeous
euphemism for urinating against a neighboring student's door.
"His behaviour had made him realize he still had work to
do figuring out exactly who he was." . . . Even more creepily,
Delves Broughton finds that he no longer responds to such tosh
with a healthy snort of laughter. "It was serious, right?
Leadership. Core values. Transformation. Being true to oneself."
It takes his wife - his American wife - to inject some common
sense. "These people are freaks.". . .
For all its vast reputation,
power and pomposity, you feel that HBS neither understands the
complexity nor acknowledges the chaotic unpredictability of the
world economy any better than anyone else. More conclusively,
it encourages its little alumni to major in hypocrisy. You go
there for one simple reason: to make shedloads of money. Fine,
so it's no crime in itself to want to be absurdly and pointlessly
rich, although it's certainly no virtue. What sticks in the gullet
is graduates' self-flattering delusion that they're on some kind
of crusade, their "very American" insistence, as Delves
Broughton puts it, on being not only "the most powerful,
the richest and most successful", but also "the most
morally good". At the same time as learning how to manipulate
billions in order to profit, say, from ordinary people's fretful
indebtedness during a recession, you can believe that you are
a philanthropic leader of men. Yet these are people whose answer
to their own question, "How will I know how much is enough?"
is, "When you've got your own jet." Any notion that
such jet-setting plutocrats are truly concerned about the rest
of us, or the planet, or the future, is laughable. . .
These money-loving graduates
must nurture "heightened self-awareness" and "a
strong moral compass", they must "foster integrity
strategies", acquire "leadership and values".
But why the hell would the rest of us want to be led by these
spreadsheet-reading, PowerPoint-presenting swots who've devoted
the best years of their lives simply to making moolah?
JUNE 2008
CEOs OVERCREDIT THEMSELVES FOR SUCCESSES
MORE TOP FIGURES RECEIVED SWEETHEART DEALS
FROM COUNTRYWIDE
JAILED LOBBYIST HAD 485 CONTACTS WITH BUSH
OFFICIALS OVER THREE YEARS
MARCH 2008
HOW CORPORATIONS TOOK OVER THE SUPREME COURT
JEFFREY ROSEN, NY TIMES - A generation
ago, progressive and consumer groups petitioning the court could
count on favorable majority opinions written by justices who
viewed big business with skepticism - or even outright prejudice.
An economic populist like William O. Douglas, the former New
Deal crusader who served on the court from 1939 to 1975, once
unapologetically announced that he was "ready to bend the
law in favor of the environment and against the corporations."
Today, however, there are no economic
populists on the court, even on the liberal wing. And ever since
John Roberts was appointed chief justice in 2005, the court has
seemed only more receptive to business concerns. Forty percent
of the cases the court heard last term involved business interests,
up from around 30 percent in recent years. While the Rehnquist
Court heard less than one antitrust decision a year, on average,
between 1988 and 2003, the Roberts Court has heard seven in its
first two terms - and all of them were decided in favor of the
corporate defendants.
Business cases at the Supreme Court
typically receive less attention than cases concerning issues
like affirmative action, abortion or the death penalty. The disputes
tend to be harder to follow: the legal arguments are more technical,
the underlying stories less emotional. But these cases - which
include shareholder suits, antitrust challenges to corporate
mergers, patent disputes and efforts to reduce punitive-damage
awards and prevent product-liability suits - are no less important.
They involve billions of dollars, have huge consequences for
the economy and can have a greater effect on people's daily lives
than the often symbolic battles of the culture wars. In the current
Supreme Court term, the justices have already blocked a liability
suit against Medtronic, the manufacturer of a heart catheter,
and rejected a type of shareholder suit that includes a claim
against Enron. In the coming months, the court will decide whether
to reduce the largest punitive-damage award in American history,
which resulted from the Exxon Valdez oil spill in 1989. . .
It should come as little surprise
that John Roberts and Stephen Breyer, both of whom studied the
economic analysis of law at Harvard, have similar instincts in
business cases. This elite consensus, however, is not necessarily
shared by the country as a whole. If anything, America may be
entering something of a populist moment. If you combine the groups
of Americans in a recent Pew survey who lean toward some strain
of economic populism - from disaffected and conservative Democrats
to traditional liberals to social and big-government conservatives
- at least two-thirds of all voters arguably feel sympathy for
government intervention in the economy. Could it be, then, that
the court is reflecting an elite consensus while contravening
the sentiments of most Americans? Only history will ultimately
make this clear. One thing, however, is certain already: the
transformation of the court was no accident. It represents the
culmination of a carefully planned, behind-the-scenes campaign
over several decades to change not only the courts but also the
country's political culture. . .
The origins of the business community's
campaign to transform the Supreme Court can be traced back precisely
to Aug. 23, 1971. That was the day when Lewis F. Powell Jr.,
a corporate lawyer in Richmond, Va., wrote a memo to his friend
Eugene B. Snydor, then the head of the education committee of
the U.S. Chamber of Commerce. In the memo, Powell expressed his
concern that the American economic system was "under broad
attack." He identified several aggressors: the New Left,
the liberal media, rebellious students on college campuses and,
most important, Ralph Nader. Earlier that year, Nader founded
Public Citizen to advocate for consumer rights, bring antitrust
actions when the Justice Department did not and sue federal agencies
when they failed to adopt health and safety regulations.
Powell claimed that this attack
on the economic system was "quite new in the history of
America." Ever since 1937, when President Franklin D. Roosevelt
threatened to pack a conservative Supreme Court with more progressive
justices, the court had largely deferred to federal and state
economic regulations. And by the '60s, the Supreme Court under
Chief Justice Earl Warren had embraced a form of economic populism,
often favoring the interests of small business over big business,
even at the expense of consumers. But what Powell saw in the
work of Nader and others was altogether more extreme: a radical
campaign that was "broadly based and consistently pursued."
To counter the growing influence
of public-interest litigation groups like Public Citizen, Powell
urged the Chamber of Commerce to begin a multifront lobbying
campaign on behalf of business interests, including hiring top
business lawyers to bring cases before the Supreme Court. "The
judiciary," Powell predicted, "may be the most important
instrument for social, economic and political change." Two
months after he wrote the memo, Powell was appointed by Richard
Nixon to the Supreme Court. And six years later, in 1977, after
steadily expanding its lobbying efforts, the chamber established
the National Chamber Litigation Center to file cases and briefs
on behalf of business interests in federal and state courts.
Today, the Chamber of Commerce is
an imposing lobbying force. To fulfill its mission of serving
"the unified interests of American business," it collects
membership dues from more than three million businesses and related
organizations; last year, according to the Center for Responsive
Politics, the chamber spent more than $21 million lobbying the
White House, Congress and regulatory agencies on legal matters.
But its battle against the forces of Naderism got off to a slow
start. In 1983, when Robin Conrad arrived at the chamber, the
Supreme Court was handing Nader and his allies significant victories.
That year, for example, the court held that President Reagan's
secretary of transportation, Andrew L. Lewis Jr., acted capriciously
when he repealed a regulation, inspired by Nader's advocacy,
that required automakers to install passive restraints like air
bags. . .
Exactly how successful has the Chamber
of Commerce been at the Supreme Court? Although the court is
currently accepting less than 2 percent of the 10,000 petitions
it receives each year, the Chamber of Commerce's petitions between
2004 and 2007 were granted at a rate of 26 percent, according
to Scotusblog. . . .
Thirty years after the Chamber of
Commerce founded its litigation center to counteract his influence,
Nader all but conceded defeat in the battle for the Supreme Court.
With the decline of economic populism in Congress, the weakening
of trade unions and the rise of globalization, the political
climate, he lamented, was passing him by. "I recall a comment
by Eugene Debs," Nader said, looking at me intensely. "He
said: The American people live in a country where they can have
almost anything they want. And my regret is that it seems that
they don't want much of anything at all." Nader chuckled
quietly and shook his head. "I say ditto.". . .
The Supreme Court is unlikely to
reconsider its pro-business outlook anytime soon. Nevertheless,
there are several currents in American political life that run
counter to the court, even if they may not be strong enough,
or suitably directed, to reverse it. There are, for example,
economic populists in both political parties - John Edwards Democrats
and Mike Huckabee Republicans, to cite just two types - who express
concern about growing economic inequality and corporate corruption,
and blame unchecked corporate power for America's escalating
economic problems. These populists tend to be from the working
and middle classes rather than the professional classes, and
their numbers may be growing. In recent Pew surveys, 65 percent
of Americans agreed that corporations make excessive profits
- the highest number in 20 years. Moreover, about half the country
now asserts that America is divided on economic lines into two
groups - the "haves" and "have nots" - up
from only 26 percent two decades ago. And the number of Americans
who view themselves as "have nots" has doubled to 34
percent today from 17 percent in 1988. . .
A long but excellent piece well
worth reading in full
JANUARY 2008
MPAA BADLY MISLED CONGRESS OVER COLLEGE
PIRATING
ARS TECHNICA - After commissioning
a 2005 study from LEK Consulting that showed collegiate file-swappers
were responsible for 44 percent of movie studio "losses"
to piracy, the MPAA then used the report it bought to bludgeon
Congress into considering legislation to address this massive
problem. Now the MPAA admits that the report's conclusions weren't
even close to being right; collegiate piracy accounts for only
15 percent of "losses." Oops. And that's assuming you
believe the rest of the data.
The Associated Press broke the news
today; apparently, the MPAA is busy notifying government and
education officials about the blunder, which may explain why
it's too busy to post a mea culpa to its web site. The group
blames "human error" for the calculation problem. .
.
Howard Berman (D-CA), a powerful
Congressman from Hollywood who does plenty of work with IP issues,
bought the complete bill of goods. In March of 2007, we reported
on Berman's veiled threats against universities and colleges
in the US, comments apparently based in part on the now-discredited
report.
"Indeed, the statistics demonstrate
that students engage in rampant piracy," he said at the
time, "and while Congress has given universities many exemptions
from copyright liability it might be time to condition some of
those exemptions on action taken by universities to address the
piracy problem."
This attitude led to bills like
the College Opportunity and Affordability Act of 2007, still
pending a vote in the House. That bill directs schools to "develop
a plan for offering alternatives to illegal downloading or peer-to-peer
distribution of intellectual property as well as a plan to explore
technology-based deterrents to prevent such illegal activity."
RIAA: COPY A CD AND YOU MAY BE A CRACKHEAD
TERRORIST
RECORDING GLUTTONS WANT OVER A $1 MILLION
FOR EACH IMPROPERLY DOWNLOADED CD
CIRCUIT CITY EXECS GET MILLION BUCK REWARDS
FOR DRIVING STOCK PRICE DOWN
CARLYLE GROUP WANTS TO TAKE OVER NURSING
HOME GIANT
AIRLINES: WORSE SERVICE, HUGE PROFITS
EVEN CORPORATE BOSSES ADMIT THEY'RE OVERPAID
THE INSURANCE COMPANIES THAT STOLE CHRISTMAS
U.S. INCOME GAP SETS POSTWAR RECORD
MORTGAGE LENDERS PREFER FORECLOSURE TO HELPING
HOME BUYERS PAY OFF LOAN
INDICATORS: ROBBER BARONS STILL DOING WELL
THE REAGAN-BUSH-CLINTON-BUSH YEARS: BRINGING
INEQUALITY TO PRE-DEPRESSION LEVELS
STUDY: WAL MART REDUCES NATIONAL
WAGES $4.5 BILLION A YEAR
Retail workers in the U.S. are making
$4.5 billion less each year due to Wal-Mart's presence, according
to a new study by the University of California's Center for Labor
Research and Education.
The study focuses on stores that
opened between 1992 and 2000 and concludes, "Opening a single
Wal-Mart store lowers the average retail wage in the surrounding
county between 0.5 and 0.9 percent."
Wal-Mart's presence pushes down
wages in two ways. "First is the substitution effect: a
new Wal-Mart store replaces better paying jobs with lower-paying
ones," the authors explain. "A second factor is competition:
Wal-Mart pushes down wages in competing businesses."
Not only did Wal-Mart lower average
wage rates, but "every new Wal-Mart in a county reduced
the combined or aggregate earnings of retail workers by around
1.5 percent." Because this number is higher than the reduction
in average wages, it indicates that Wal-Mart not only lowered
pay rates, but also reduced the total number of retail jobs.
That finding is consistent with a major study published earlier
this year that found that the opening of a Wal-Mart store causes
a net loss of about 150 retail jobs.
"At the national level, our
study concludes that in 2000, total earnings of retail workers
nationwide were reduced by $4.5 billion due to Wal-Mart's presence,"
they find.
Most of these losses were concentrated
in metropolitan areas. Although Wal-Mart is often associated
with rural areas, three-quarters of the stores it built in the
1990s were in metropolitan counties.
Another new study from the UC Center
for Labor Research and Education indicates that Wal-Mart could
substantially raise its workers' earnings, particularly those
living at or near poverty, with little impact on most shoppers.
"Living Wage Policies and Wal-Mart" analyzes the effects
of instituting a $10 minimum wage at Wal-Mart. More than half
of the retailer's employees (56%) currently earn less than $10
an hour.
"We find that 46.3 percent
of the pay increase would go to workers in families with total
incomes below 200 percent of the federal poverty level,"
the study finds. "These poor and low-income workers could
expect to earn an additional $1,020 to $4,640 a year."
http://www.newrules.org/retail/news_slug.php?slugid=365
MAY 2007
STUDY: CORPORATIONS SEEK SUCK-UP DIRECTORS,
PUNISH THOSE WHO DO THEIR JOB
CNN - The most sought-after
corporate board members are those who curry favor with fellow
directors, not those who are active in standing up for shareholders,
a new academic study has concluded. . . The study by business
professors James Westphal of the University of Michigan and Ithai
Stern of Northwestern University suggests that directors - who
are supposed to be watchdogs for shareholders - still are not
independent enough. . .
"Our findings indicate that directors
who engage in monitoring and control behavior are effectively
punished in the director labor market," Westphal and Stern
wrote. "They are less likely to be selected onto additional
boards, and thus they are less likely to become central in the
board network" that exists throughout corporate America.
The study also concluded that board members
who are women or ethnic minorities are rewarded significantly
less than white male directors when they try to ingratiate themselves
with peer directors "and are punished more for any given
level of monitoring and control behavior."
APRIL 2007
SPEEDING TICKET POINTS HELP INSURANCE
COMPANIES PROFITS, BUT NOT GOOD DRIVING
THE NEWSPAPER - The practice of assigning
license demerit points for traffic violations has little effect
on reducing bad driving behavior according to a study published
in this month's issue of the journal Traffic Injury Prevention.
Researchers from the University of Maryland School of Medicine
came to this conclusion after examining the driving records of
3.7 million motorists within the state from 2001 to 2003.
"Our findings indicate that a single
speeding citation has limited effects on changing drivers' likelihood
of receiving subsequent speeding citations," the researchers
concluded. "Receiving fines and points had no significant
impact on the risk of repeat citations, although this was the
most severe penalty."
Maryland offers motorists accused of speeding
two options. The easiest is to pay a fine by mail and suffer
an increase in insurance premiums of anywhere from $25 to $1000
a year from license points. Judges also have the power to grant
"probation before judgment" to motorists who show up
at trial. This option allows the court to collect either a full
or reduced fine without license points appearing on the motorist's
record if no other violation is committed within a 6 to 12 month
period.
Heavy lobbying from the insurance industry
has pressured lawmakers into emphasizing the importance of license
points. In Maryland, about 120,000 motorists receive points on
their license each year. Assuming an average rate increase of
just $100 per ticket, the insurance companies stand to make $36
million in additional profit for a single year's worth of ticketing,
as violations remain on the record for three years.
The study found, however, that probation
was significantly more effective than license points at preventing
additional speeding. The 15,814 drivers who received a speeding
ticket in May 2002 were twice as likely to receive another speeding
ticket within the next year than the 3.7 million who were not
ticketed in May. Yet the 4584 motorists who received probation
in May were less likely to receive additional tickets than the
9527 who received license points.
http://www.thenewspaper.com/news/16/1678.asp
FEBRUARY 2007
TRUE STORY OF CHOCOLATE ISN'T ALL THAT
SWEET
TEX DWORKIN, GLOBAL EXCHANGE FAIR TRADE ONLINE
STORE, TREE HUGGER - This year
marks the 100th anniversary of the Hershey's kiss, and yet a
celebration is hardly in order. Why? Because with each bite,
we are reminded that most chocolate sold in the U.S. comes from
cocoa farms where farmers work in unsafe conditions, receive
below poverty wages, many of them children under 14 years old
who are forced to work and denied education. . . The Ivory Coast
is the world's largest cocoa producer, providing 43% of the world's
cocoa. And yet, in 2001 the U.S. State Department reported child
slavery on many cocoa farms in the Ivory Coast. A 2002 report
from the International Institute of Tropical Agriculture about
cocoa farms in the Ivory Coast and other African countries estimated
there were 284,000 children working on cocoa farms in hazardous
conditions. U.S. chocolate manufacturers have claimed they are
not responsible for the conditions on cocoa plantations since
they don't own them. . .
Hershey's and M&M/Mars alone control
two-thirds of the $13 billion U.S. chocolate candy market. The
result? An industry marred with child slavery, unsafe working
conditions and a cycle of poverty with no end in sight for cocoa
farmers. Chocolate companies are not held accountable for sourcing
practices, and despite their knowledge about the travesties that
occur on cocoa farms, they lack the will to change.
The U.S. chocolate industry has faced multiple
deadlines requiring new protocol, and yet little has changed.
Under pressure from Congress, in the Harken-Engel Protocol, the
U.S. chocolate industry agreed to voluntarily take steps to end
child slavery on cocoa farms by July of 2005. This deadline has
since passed, and the chocolate industry has failed to comply
with the terms of this agreement. . .
JANUARY 2006
Putting the squeeze
on the robber barons
DECEMBER 2006
NON-PROFITS DOING COVER LOBBYING FOR
CORPORADOS
BILL ADAIR, ST PETERSBURG TIMES
- Like other charities, Citizens Against Government Waste enjoys
gentle treatment from the government.
It doesn't have to pay income taxes. It doesn't have to publicly
disclose its donors. And those who donate get generous tax deductions.
But CAGW, as the group is known
in Washington, sometimes acts more like a corporate lobbying
firm than a guardian of the little guy. It has received tens
of thousands of dollars from corporations and trade associations
to lobby on topics such as imported avocados that have nothing
to do with government waste.
CAGW, like other so-called watchdog
groups, uses its special federal status to lobby in disguise.
While Washington lobbyists must tell the public who pays them,
tax-exempt groups do not.
The pay-to-play activities of
CAGW, first detailed by the St. Petersburg Times last April,
have raised questions about whether tax-exempt groups exploit
their status to build false credibility with Congress and the
public. Critics say such actions undermine faith in all tax-exempt
groups. . .
A recent Senate Finance Committee
report shows CAGW is not alone. It reveals how former lobbyist
Jack Abramoff orchestrated elaborate lobbying campaigns with
Americans for Tax Reform, an influential conservative group.
The report documents how Abramoff secretly paid the group thousands
of dollars to write favorable research reports and newspaper
articles about his clients.
The Senate report says CAGW,
Americans for Tax Reform and other groups "appear to have
perpetrated a fraud" by hiding behind their special tax-exempt
status when they were simply acting like corporate lobbyists.
"Nonprofits should not function as de facto lobbying firms,"
said Sen. Max Baucus, D-Mont., the incoming committee chairman.
http://www.sptimes.com/2006/12/11/Worldandnation/Groups_hide_behind_ta.shtml
CORPORATE BOSSES PLAY HIDDEN ROLE IN FALL OF PENSIONS
WALL STREET JOURNAL - A Wall
Street Journal analysis of corporate filings reveals that executive
benefits are playing a large and hidden role in the declining
health of America's pensions. Among the findings:
- Boosted by surging pay and
rich formulas, executive pension obligations exceed $1 billion
at some companies. Besides GM, they include General Electric
Co. (a $3.5 billion liability); AT&T Inc. ($1.8 billion);
Exxon Mobil Corp. and International Business Machines Corp. (about
$1.3 billion each); and Bank of America Corp. and Pfizer Inc.
(about $1.1 billion apiece).
- Benefits for executives now
account for a significant share of pension obligations in the
U.S., an average of 8% at the companies above. Sometimes a company's
obligation for a single executive's pension approaches $100 million.
- These liabilities are largely
hidden, because corporations don't distinguish them from overall
pension obligations in their federal financial filings.
- As a result, the savings that
companies make by curtailing pensions for regular retirees --
which have totaled billions of dollars in recent years -- can
mask a rising cost of benefits for executives.
- Executive pensions, even when
they won't be paid till years from now, drag down earnings today.
And they do so in a way that's disproportionate to their size,
because they aren't funded with dedicated assets.
One reason executive pensions
have grown so large is that they are linked to ballooning overall
executive compensation. Companies often design retirement payouts
to replace a percentage of what a person earns while active.
But for executives, the percentage
of pay replaced is itself higher. Compensation committees often
aim for a pension that replaces 60% to 100% of a top executive's
compensation. It's 20% to 35% for lower-level employees.
SEPTEMBER 2006
HALF OF AMERICA'S BUSINESS ELITE
ADMIT CHEATING IN GRAD SCHOOL
RICHARD MORIN, WASHINGTON POST
- Not only do
cheaters apparently prosper, they get graduate degrees in business.
That's what business professor Donald L. McCabe of Rutgers University
and his colleagues found when they surveyed more than 5,000 graduate
students and asked if they had cheated in the past year - and
if so, how often. A majority of MBA candidates -- 56 percent
-- acknowledged that they had cheated at least once, compared
with 47 percent of graduate students in other disciplines, the
researchers reported in the latest issue of Academy of Management
Learning & Education. . . Nearly as many graduate students
in engineering (54 percent) said they had cheated at least once
in the previous year . . . Those least likely to cut corners
were grad students in the social sciences and humanities -- 39
percent said they had broken the rules.
HALLIBURTON CEO EARNED $100 MILLION
SINCE WAR STARTED
& OTHER WAR PROFITEERING
SCANDALS
AUGUST 2006
BIG MYTHS ABOUT BIG BOXES AND
WHAT TO DO ABOUT THEM
WHAT ONE TOWN IS DOING
NW AIRLINES ADVISES FIRED EMPLOYEES
TO TRY DUMPSTER DIVING
REUTERS - Bankrupt Northwest
Airlines Corp. advised workers to fish in the trash for things
they like or take their dates for a walk in the woods in a move
to help workers facing the ax to save money. The No. 5 U.S. carrier,
which has slashed most employees' pay and is looking to cut jobs
as it prepares to exit bankruptcy, put the tips in a booklet
handed out to about 50 workers and posted for a time on its employee
Web site.
http://www.chron.com/disp/story.mpl/bizarre/4119078.html
JULY 2006
WAL-MART BOMBS IN GERMANY
REUTERS - Wal-Mart, the world's biggest retailer,
is selling its underperforming German stores to the country's
leading retail chain Metro, marking a major retreat that will
cost it about $1 billion. The U.S. retail giant has struggled
to capture market share ever since entering the crowded German
retail arena eight years ago, hurt by cut-throat competition
and tepid consumer spending, and frustrated by Germany's tight
labor and trade laws.
The move to quit Germany
marks the second time in two months that Wal-Mart has pulled
out of a country to focus on more promising growth opportunities
in China and South and Central America, and as it lobbies for
permission to build stores in India. . .
Wal-Mart, which operates
85 hypermarkets across Germany, said on Friday it would incur
the roughly $1 billion pretax loss on the deal in the second
quarter of its fiscal 2007 year. . .
THE CASE FOR BREAKING UP THE
WAL-MART MONOPOLY
BARRY C. LYNN, HARPER'S - It is now twenty-five years since the
Reagan Administration eviscerated America's century-long tradition
of antitrust enforcement. For a generation, big firms have enjoyed
almost complete license to use brute economic force to grow only
bigger. And so today we find ourselves in a world dominated by
immense global oligopolies that every day further limit the flexibility
of our economy and our personal freedom within it. There are
still many instances of intense competition -- just ask General
Motors. . .
The idea that Wal-Mart's power actually subverts the functioning
of the free market will seem shocking to some. . . One of the
basic premises of the free-market system is that actors are free
to buy from or sell to a variety of other actors. In the case
of Wal-Mart, no one can deny that every single firm that supplies
the retailer is, technically, free not to do so. But is this
true in the real world? After all, once a firm comes to depend
on selling through Wal-Mart's system, just how conceivable is
the idea of walking away? Producers own and maintain machines,
employ skilled workers, lease land and buildings. Even with careful
planning, most would find the sudden surrender of 20 percent
or more of their revenue to be extremely disruptive, if not suicidal.
. .
No one can deny that, technically, every firm that supplies Wal-Mart
is free to ask whatever price it wants. But again, we must ask
whether this holds true in the real world. Every producer knows
that Wal-Mart is, as one of its executives told the New York
Times, a "no-nonsense negotiator," which means the
firm sets take-it-or-leave-it prices, which as we know from the
previous paragraph are far harder to leave than to take. Every
so often Wal-Mart will accept a higher price, but then the retailer's
managers may opt to punish the offending supplier, perhaps by
ratcheting up competition with its own in-house brands. . .
http://www.alternet.org/workplace/39251/
JUNE 2006
WAL-MART WANTS YOU ON FILM
MAX MCCOY, JOPLIN GLOBE
- Call it Area 71. Behind a fence topped with razor wire just
off U.S. Highway 71 is a bunker of a building that Wal-Mart considers
so secret that it won't even let the county assessor inside without
a nondisclosure agreement.
The 125,000-square-foot
building, tucked behind a new Wal-Mart Supercenter, is only a
stone's throw from the Arkansas line and about 15 miles from
corporate headquarters in Bentonville, Ark.
There is nothing about
the building to give even a hint that Wal-Mart owns it.
Despite the glimpses through
the fence of manicured grass and carefully placed trees, the
overall impression is that this is a secure site that could withstand
just about anything. Earth is packed against the sides. The green
roof - meant, perhaps, to blend into the surrounding Ozarks hills
- bristles with dish antennas. On one of the heavy steel gates
at the guardhouse is a notice that visitors must use the intercom
for assistance.
What the building houses
is a mystery.
According to one consumer
activist, Katherine Albrecht, even the wildest conspiracy buff
might be surprised at just how much Wal-Mart knows about its
customers - and how much more it would like to know. "We
were contacted about two years ago by somebody who runs a security
company that had been asked in a request for proposals for ways
they could link video footage with customers paying for their
purchases," Albrecht said. "Wal-Mart would actually
be able to view photos and video of customers paying, say, for
a pack of gum. At the time, it struck me as unbelievably outlandish
because of the amount of data storage required." But Wal-Mart,
according to a 2004 New York Times article, had enough storage
capacity to contain twice the amount of all the information available
on the Internet. For the technically minded, the exact amount
was for 460 terabytes of data. . . Albrecht, founder of Consumers
Against Supermarket Privacy Invasion and Numbering, said she
never could confirm the contractor's story. . . A Globe request
for information about the Jane data center was referred at Wal-Mart
headquarters to Carrie Thum, a senior information officer and
former lobbyist for the retailer. "This is not something
that we discuss publicly," Thum said. "We have no comment.
And that's off the record.". . .
Bill Wilson, McDonald
County presiding commissioner, said he has never been inside
the green-roofed data center, and that to his knowledge, only
one county official has: Assessor Laura Pope. "I had to
sign a document saying that I wouldn't talk about what's in there,"
Pope said. "I've never been in a situation to tour anything
like that before. I don't want to be secretive about it. Basically,
it houses computer equipment." Pope said she had never been
asked to sign a nondisclosure agreement before in her job as
assessor, and that she didn't keep a copy. She said she didn't
appraise the building and equipment, but rather came to an agreement
with Wal-Mart on what it was worth. . .
Albrecht, the consumer
activist, said that when the contractor came to her with the
story about Wal-Mart wanting to biometrically identify customers
through video, one of the reasons given was to help law enforcement.
. . In 2003, she said, Wal-Mart did two experiments using RFID
on. . . razor blades and lipstick. At Brockton, Mass., Albrecht
said, the company used a surveillance camera on a shelf that
was linked to chips in packages of razor blades. When someone
picked up a package, she said, the shelf camera would be activated.
Another camera would take a mug shot of the customer at the checkout
stand. At Broken Arrow, Okla., she said, the company linked devices
in packages of lipstick that triggered a camera that allowed
the lipstick manufacturer to watch consumers on live video.
"There's a sense
that when you enter a retail space, you should retain some degree
of privacy." But, Albrecht said, there's a push among retailers
to collect as much information about their customers as possible
- and to keep the lower-profit individuals, known as "barnacles"
and "bottom-feeders," away. . . ."
http://www.joplinglobe.com/local/local_story_148015054/resources_printstory
APRIL 2006
NO MORE ENRON TRIALS? NEGROPONTE
GETS POWER TO EXEMPT CORPORADOS FROM SECURITIES LAWS
DAWN KOPECKI, BUSINESS
WEEK - Intelligence Czar Can Waive SEC Rules Now, the White House's
top spymaster can cite national security to exempt businesses
from reporting requirements. President George W. Bush has bestowed
on his intelligence czar, John Negroponte, broad authority, in
the name of national security, to excuse publicly traded companies
from their usual accounting and securities-disclosure obligations.
Notice of the development came in a brief entry in the Federal
Register, dated May 5, 2006, that was opaque to the untrained
eye.
Unbeknownst to almost
all of Washington and the financial world, Bush and every other
President since Jimmy Carter have had the authority to exempt
companies working on certain top-secret defense projects from
portions of the 1934 Securities Exchange Act. Administration
officials told Business Week that they believe this is the first
time a President has ever delegated the authority to someone
outside the Oval Office. It couldn't be immediately determined
whether any company has received a waiver under this provision.
The timing of Bush's move
is intriguing. On the same day the President signed the memo,
Porter Goss resigned as director of the Central Intelligence
Agency amid criticism of ineffectiveness and poor morale at the
agency. Only six days later, on May 11, USA Today reported that
the National Security Agency had obtained millions of calling
records of ordinary citizens provided by three major U.S. phone
companies. Negroponte oversees both the CIA and NSA in his role
as the administration's top intelligence official.
In addition to refusing
to explain why Bush decided to delegate this authority to Negroponte,
the White House declined to say whether Bush or any other President
has ever exercised the authority and allowed a company to avoid
standard securities disclosure and accounting requirements.
http://www.businessweek.com/bwdaily/dnflash/may2006/
nf20060523_2210.htm
TARGET: THE WAL-MART THAT GETS
AWAY WITH IT
KARI LYDERSEN, CORPWATCH
Target may look more upscale -- but when it comes to wages, working
conditions, sweatshop-like suppliers, and effects on communities,
the two big boxes are eerily similar. . . While many people associate
Wal-Mart with low-income, rural communities perhaps dominated
by a prison or power plant, life-size photos throughout Target
stores remind you that their customers are a lively, beautiful
cast of multi-cultural hipsters. . .
In contrast to this image,
however, critics say that in terms of wages and benefits, working
conditions, sweatshop-style foreign suppliers, and effects on
local retail communities, big box Target stores are very much
like Wal-Mart, just in a prettier package.
Of more than 1,400 Target
stores employing more than 300,000 people nationwide, not one
has a union. Employees at various stores say an anti-union message
and video is part of the new-employee orientation. At stores
in the Twin Cities, where Target is headquartered, the United
Food and Commercial Workers union Local 789 has been trying for
several years to help Target employees organize, with little
luck.
"People ask what
the difference between Wal-Mart and Target is," said UFCW
organizer Bernie Hesse. "Nothing, except that Wal-Mart is
six times bigger. The wages start at $7.25 to $7.50 an hour [at
Target]. . . .
Wal-Mart has about 3,800
stores nationwide and another 2,600 worldwide, employing about
1.6 million people. Target plans to open at least 600 more stores
by 2010, for a total of about 2,000 in 47 states. . .
A survey by the UFCW found
that starting wages are similar in Targets and Wal-Marts - possibly
higher overall at Wal-Marts - and that Target benefits packages
are often harder to qualify for and less comprehensive. . .
Perhaps Target's oddest
singularity is the fact that it boasts one of the nation's top
forensics labs at its company headquarters. A product of its
efforts to stop shoplifting and property destruction at its stores,
its mastery of surveillance and investigative technology and
strategy is now eagerly subscribed to by law enforcement agencies
nationwide, including the FBI. The company provides training
for police and federal agents on investigation and prevention
of everything from arson and robbery to smuggling.
http://www.alternet.org/workplace/35610/
WATCH WAL-MART GROW:
MAP SHOWS HOW VIRUS SPREAD
SIGN OF THE TIMES
FORBES
LISTS BEST PLACES TO GO TO PRISON
The most narrow-minded,
mean-spirited, nasty member of Congress is probably Rep. James
Sensenbrenner, who, among other things, is promoting a bill which
would turn 11 million undocumented immigrants into felons, punish
anyone guilty of providing them assistance, and construct an
iron wall between the US and Mexico. Sensenbrenner is also an
heir to the family fortune of Kimberly Clark, which is now the
subject of a latino boycott
MARCH 2006
SURPRISE, SURPRISE: ELECTRIC
DEREGULATION WAS A SCAM
TERENCE O'HARA AND AMIT R. PALEY,
WASHINGTON POST
- Maryland and District consumers angry at the record electric
bills they will receive this summer might want to recall the
promises made by proponents of deregulation seven years ago.
If they do, they'll be even angrier. At the time, in 1999, evangelists
for deregulation described a competitive, efficient and lower-priced
system of energy delivery that, for the most part, remains a
fantasy in the Mid-Atlantic region and other parts of the country
today, according to industry experts.
The District, Maryland
and Virginia, along with much of the nation, are wrestling with
the ramifications of deregulation at the same time that the cost
of producing electricity is skyrocketing. But as energy prices
have soared, electricity rates have gone up more in deregulated
states than in regulated ones. Though Northern Virginia residents
won't feel the full effects of deregulation until 2010, when
rate caps expire, caps were lifted for Pepco customers in the
District and Maryland several years ago, resulting in steady
increases, including a 38 percent jump for suburban Maryland
and 12 percent for the District announced last week.
JANUARY 2006
WAL-MART, TARGET, COSTCO CONSIDERING
BIG BROTHER CHECK ON CUSTOMERS
FORTUNE - Buying groceries with the touch of a finger
could be closer than you think, if new research touting the benefits
of biometric payment for retail giants like Wal-Mart, Target,
and Costco is anything to go by. The report, by Sanford Bernstein
analyst Emme Kozloff, found that the use of so-called "electronic
wallets" reduces the potential for fraud and identity theft,
speeds up the checkout process, and most importantly, lowers
transaction processing fees for retailers, improving their bottom
line. A 20% reduction in processing costs at big-box discounters
like Wal-Mart over the next several years could result in a 3%
to 4% increase in earnings per share by 2009, the report estimated.
"We believe both Wal-Mart (Research) and Costco (Research)
are looking at it closely," Kozloff wrote. (Both companies
declined to comment.)
Already in use at supermarket
chains like Albertsons (Research) (which yesterday agreed to
be sold to a group that includes CVS and Supervalu), Cub Foods
(part of Supervalu), and privately held Piggly Wiggly, biometric
systems are just one of several emerging payment technologies
that retailers are currently experimenting with. Others include
self-checkout (widely deployed at Home Depot), contactless cards
like J.P Morgan Chase's "blink," and so-called "near
field communication," which involves waving your cell phone,
say, near a reader.
Here's how biometric payment
works: To set up an account, customers scan their fingerprint
at an in-store kiosk, enter their phone number, and then submit
checking and credit card account information. To make a purchase,
they place their finger on a scanner at the register, enter their
phone number, and choose how they want to pay (credit, debit,
or checking.). . .
The privacy issue "remains
a deep bone of contention and will mitigate against pervasive
usage," says David Robertson, publisher of The Nilson Report,
an industry newsletter. One industry source calls biometric readers
"clunky." And if enrollment is confusing or time-consuming,
few shoppers will even bother.
ALICE HILL REAL TECH NEWS
- Associate Professor of Electrical and Computer Engineering
Stephanie Schuckers and her team at Clarkson University found
that most scanning systems can be fooled 90% of the time by taking
a mold of the mark's finger, filling the mold with Play-Doh,
and using the fake digit to gain access. Don't go running out
to Toys 'R Us just yet, though, as the Clarkson team also designed
an algorithm that detects the spread of perspiration from the
pores out to the ridges of a live person's finger, and is only
foiled by the Play-Doh method 10% of the time.
FROM WASHINGTON SQUARE TO FEDEX
FIELD
JON ROWE, CHRISTIAN SCIENCE
MONITOR - The news that a town in Texas has changed its name
to that of a corporation, in exchange for free TV, made me think
about my elementary school, which was named for a local man who
died in World War I. I'm not going to pretend that I sat at my
desk each day and pondered his bravery, as opposed to, say, the
little League Game that evening.
But I still remember the
awe I felt when I looked up at the plaque in the main corridor.
Somehow the message penetrated my unruly mind, that I was supposed
to be brave and unselfish, and to serve my community and my country,
the way young Albert Edgar Angier had done.
America once was full
of messages like that. Schools, arenas, and public places bore
the names of civic leaders and national and local heroes. A Washington
Square Park, a Martin Luther King Jr. Boulevard, was not just
a memorial to a dead person. It was a testament to the qualities
of character that the nation purports to stand for and to pass
along to its young. . .
It's not the kind of message
that young Americans are getting much these days. . . A high
school football field in Illinois has become Rust-Oleum Field.
In New Jersey, an elementary school now has a ShopRite gym. It's
not just the schools. Piece by piece the civic landscape is collapsing
under a deluge of commercial self-promotion. Sports stadiums,
parks, and other spaces all are dropping civic names for corporate
ones. Ballparks once were a kind of lyric poetry of place. Crosley
Field meant Cincinnati. Briggs Stadium meant Detroit. Candlestick
conjured up the San Francisco fog, and the wondrous Willie Mays.
Now you hear Cinergy, Comerica, SBC, and you are everywhere and
nowhere. . .
Next time ideologues bemoan
the decline in traditional values in America today, and how young
people choose self-indulgence over service, they might look at
the propaganda they have invited into the schools, and into the
culture at large. Character comes with a price; and if you aren't
willing to pay for it, don't blame others when it is gone.
http://www.csmonitor.com/2006/0126/p09s01-coop.html
BANK REFUSES TO MAKE LOAN FOR EMINENT
DOMAIN DEVELOPMENT
DEE ANN DIVIS, DC EXMAINER -
BB&T, one of the largest banks in Washington area, announced
Wednesday it will no longer lend to development commercial projects
that involved the seizure of private property under eminent domain
rules. "It's a philosophical decision consistent with our
values," said Ken Chalk, BB&T's senior executive vice
president and chief credit officer. "We think this is just
not good public policy.". . .
The bank is the third-largest
in Virginia with some 405 branches. It has nine branches in the
District and 127 in Maryland. Nationally, BB&T makes roughly
$75 billion in loans a year, with half of that going to commercial
projects. . .
"I think there is a good
change other banks will follow," said George Nation III,
and expert on commercial lending a professor of law at Lehigh
University, Bethlehem, Pa. "From a strictly legal point
of view, I think there is a good chance you may wind up with
more litigation in these types of projects," said Nation,
who noted that there was also little incentive to take on a project
likely to generate negative publicity. . .
"This is a unique move,"
said Susan Besaw, a spokeswoman for the American Bankers Association.
No other banks have implemented similar policies, she said, but
the announcement was very new.
http://dcexaminer.com/articles/2006/01/26/business/00business26bbandt.txt
TO OPEN A BB&T CHECKING ACCOUNT
[BB&T serves AL, DC, FL,
GA, IN, KY, MD, NC, SC, TN, VA, WV]
MEDIA CORPORADOS COME UP WITH
PLAN TO BLOCK ANYTHING
NEW
HANNIBAL, ARSTECHINICA
- The EFF's Deeplinks section has a pretty alarming post about
the RIAA and MPAA's attempts to freeze the progress of consumer
electronics technology and then start turning back the clock
on all of us. Fair use, meet your successor: "customary
historic use."
The post points to broadcast
flag draft legislation sponsored by Senator Gordon Smith (R-Ore.)
that contains provisions which appear to limit digital broadcast
media reception devices to "customary historic use of broadcast
content by consumers to the extent such use is consistent with
applicable law and that prevents redistribution of copyrighted
content over digital networks." In other words, if it does
anything heretofore unheard of with the digital content that
it receives, then it's illegal. And if it does anything "customary"
that could also possibly lead to unauthorized redistribution,
then it's also illegal. So all the bases are covered. . .
So, if you were planning
to launch a startup and make millions off the coming digital
broadcast media revolution by inventing the next iPod or by combining
digital radio with Web 2.0 and VoIP and Skype and RSS and WiFi
mesh networks, then forget about it. When digital broadcast nirvana
finally arrives, the only people who'll be legally authorized
to make money off of music and movies are the middlemen at the
RIAA and the MPAA. . .
http://arstechnica.com/news.ars/post/20060121-6025.html
THE QUESTIONS NO ONE HAS ASKED
OF ALITO
MEMO
To: Members of the Senate
Judiciary Committee
From: Morton Mintz
Subject: Your hearing
on Judge Samuel A. Alito Jr.'s nomination.
There's no doubt that
many of the subjects you are pursuing, women's rights and presidential
powers being foremost examples, are of utmost importance. But
there is also little doubt that many people are being turned
off, not only by the predictable excess of self-serving oratory
and by the bowing and scraping, but also by the emphasis on issues
that few care much about, such as Vanguard. So here's a suggestion
for a line of questioning that the committee -- whether run by
Republicans or Democrats -- has regularly dodged down through
the years, but that really, truly matters to most everybody --
men, women, whites, blacks, Hispanics, the elderly, the young,
the healthy, the sick. In two words, the subject is, corporate
power.
First a bit of background.
In a 1978 case, First National Bank of Boston v. Bellotti, the
Supreme Court decided, 5 to 4, that business corporations --
just as flesh and blood like you and me -- have a First Amendment
right to spend their money to influence elections. Chief Justice
William H. Rehnquist dissented. "It might reasonably be
concluded," he wrote, "that those properties, so beneficial
in the economic sphere, pose special dangers in the political
sphere." The late Chief Justice went on to write: "Furthermore,
it might be argued that liberties of political expression are
not at all necessary to effectuate the purposes for which States
permit commercial corporations to exist."
Questions for Judge Alito:
-- Do you believe that
corporate money in our elections poses "special dangers
in the political sphere"?
--Do you believe "that
liberties of political expression" are necessary "to
effectuate the purposes for which States permit commercial corporations
to exist"?"
-- Do you believe that
money is speech? Or is it property?
-- Do you agree that Justice
Rehnquist was effectively saying, in the quote that follows,
that the state having created the corporation, the state can
regulate the corporation: "I would think that any particular
form of organization upon which the State confers special privileges
or immunities different from those of natural persons would be
subject to like regulation, whether the organization is a labor
union, a partnership, a trade association, or a corporation."
Key related questions
flow from Section 1 of the Fourteenth Amendment, which was adopted
in 1868, soon after the end of the Civil War: "All persons
born or naturalized in the United States and subject to the jurisdiction
thereof, are citizens of the United States and of the State wherein
they reside. No State shall make or enforce any law which shall
abridge the privileges or immunities of citizens of the United
States; nor shall any State deprive any person of life, liberty,
or property, without due process of law; nor deny to any person
within its jurisdiction the equal protection of the laws."
Judge Alito, was the "person"
whose basic rights the framers and the people sought to protect
the newly freed slave?
-- Was the "person"
a corporation?
-- Is a corporation a
person "born or naturalized in the United States"?
Another question flows
from Justice Hugo L. Black's dissent in Connecticut General Life
Insurance Co. v. Johnson in 1938. "[W]hen the Fourteenth
Amendment was submitted for approval, the people were not told
that [they were ratifying] an amendment granting new and revolutionary
rights to corporations," Justice Black wrote. "The
history of the Amendment proves that the people were told that
its purpose was to protect weak and helpless human beings and
were not told that it was intended to remove corporations in
any fashion from the control of state governments," he continued.
"The Fourteenth Amendment followed the freedom of a race
from slavery. . . Corporations have neither race nor color.")
-- In proclaiming a paper
entity to be a person, Judge Alito, was the court faithful to
the intent of the framers of the Amendment and to the intent
of the people who ratified it?
The prompt for a final
group of key questions is Santa Clara County v. Southern Pacific,
a case the Supreme Court had before it not very long after the
people ratified the Fourteenth Amendment.
The issue was whether
the Amendment's guarantee of equal protection barred California
from taxing property owned by a corporation differently from
property owned by a human being. Chief Justice Morrison R. Waite
disposed of it with a bolt-from-the-blue pronouncement: "The
Court does not wish to hear argument on the question whether
the provision in the Fourteenth Amendment to the Constitution,
which forbids a state to deny any person the equal protection
of the laws, applies to these corporations. We are all of the
opinion that it does."
- Judge Alito, how would
you characterize the court's refusal to hear argument in a momentous
case before deciding it?
--Would you describe the
court's decision in Santa Clara County as conservative? As radical?
As open-minded?
--Would you agree that
the Court that decided Santa Clara in 1886 failed to meet the
standard of judicial conduct that was met by the Court in 1973,
when it decided Roe v. Wade only after being fully briefed, hearing
oral argument, and deliberating at length?
-- You have expressed
profound admiration for Judge Robert H. Bork. calling him one
of the outstanding nominees of the 20th Century." As you
know, he famously denounced Roe as "a wholly unjustified
usurpation of state legislative authority." Without regard
as to whether Roe was rightly or wrongly decided, was Santa Clara
"a wholly unjustified usurpation of state legislative authority?"
-- Again without regard
as to whether Roe was rightly or wrongly decided, how does it
strike you that the Court has declared a corporation -- a paper
entity that is neither born nor naturalized -- to be a person
but has declared a fetus not to be a person?
Is there just one committee
member who will raise questions such as the foregoing with Judge
Alito? We'll know very soon.
[Morton Mintz covered
the Supreme Court for the Washington Post 1964-1965 and again
1977-1980 and is a former chair of the Fund for Investigative
Journalism]
NEW FRONTIERS IN PRIVATIZATION
DECEMBER 2005
SLAPP SUIT VICTIMS SLAPPING BACK
TIM JONES, CHICAGO TRIBUNE
- A year ago Tom and Barbi Diehl were sweating a $5 million libel
and slander suit, filed against them by a company that objected
to Tom Diehl's public opposition to a proposed garbage holding
pen in his suburban St. Louis neighborhood. The lawsuit was tossed
out by Missouri courts this year and now the Diehls are suing
the garbage company for damages, arguing that the suit against
them was malicious.
Defamation lawsuits are
filed every day, but amid the clutter of allegations claiming
damaged reputations and hurt feelings is a trend of countersuits
against corporations, public officials and others that have used
so-called SLAPPs to silence opposition in public forums. The
reaction to strategic lawsuits against public participation,
or SLAPPs, varies from state to state, but legal analysts say
there is a growing backlash against these suits that many say
are designed solely to stifle public dissent and discourage involvement
in civic affairs.
In Nebraska, a jury recently
found two hog-production companies guilty of using a lawsuit
to intimidate two individuals and a lawyer who successfully fought
to keep a large livestock confinement out of a southern Nebraska
county. Each of the defendants was awarded $300,000 in the late
October jury verdict. Part of the reaction against SLAPPs is
fueled by state legislatures, two dozen of which have passed
laws to restrict the filing of such suits or, in some cases,
to make it easier for people to fight back. . .
Most SLAPPs are eventually
dropped or dismissed, but the effect of the filing, some lawyers
say, is to discourage average citizens from speaking out for
fear of incurring the cost of hiring a lawyer. Stephen Kling,
a St. Louis lawyer who describes SLAPPs as a form of economic
warfare used in planning, zoning and development disputes, said
he has recently noticed a drop in such suits.
http://www.kansascity.com/mld/kansascity/news/nation/13486576.htm
POOH ENDANGERED AS DISNEY PLANS
TO 'REBRAND' HIM
[No comment on reports
that Disney is also planning a new version of the Bible in which
Jesus gets married and settles down]
WASHINGTON POST - After 80 years in Hundred Acre
Wood Winnie the Pooh is to get a female friend, replacing Christopher
Robin, according to reports. The Walt Disney Company has decided
to pair Pooh up with a red-haired six-year-old tomboy for its
2007 series, newspaper USA Today reported. Disney said My Friends
Tigger and Pooh will keep the "trust, friendship and happiness"
of AA Milne's stories. Pooh is being re-branded as part of its
80th anniversary celebrations.
HALLIBURTON GOT BONUSES DESPITE
OVERBILLING TAXPAYERS
HALLIBURTON WATCH - The
Army Corps of Engineers paid profits and bonuses to Halliburton
for oil transport and repair in Iraq even though the Pentagon's
own auditors declared $169 million in costs for the work to be
"unreasonable" and "unsupported," a congressman
disclosed. In a letter to the chairman of the House Government
Reform Committee, Rep. Henry Waxman (D-CA) requested hearings
on how Halliburton could have been awarded $38 million in bonus
payments for contract work plagued by overcharges. The disputed
costs were paid to Halliburton's KBR subsidiary under its no-bid
Iraqi oil contract, known as Restore Iraqi Oil , awarded in March
2003.
Typically, between 60
percent and 70 percent of costs challenged by Pentagon auditors
are ultimately denied to contractors by the contracting authority.
But under six of 10 task orders of the RIO contract, only 27
percent of the costs challenged by auditors was ultimately denied
to Halliburton by the Corps of Engineers. Specifically, Pentagon
auditors said Halliburton overcharged the military by $169 million,
but the Corps of Engineers repaid $124 million of the cost to
the company anyway. The Corps denied repayment of $45 million,
or 27 percent of the overcharges.
http://halliburtonwatch.org/news/billings_bonuses.html
WAL-MART, OTHER BIG BOX RETAILERS
PUSHING FOR WTO CONTROL OVER LAND USE POLICIES
PUBLIC CITIZEN - An agreement
that will be discussed at this week's WTO ministerial meeting
in Hong Kong poses a serious threat to state and local authority
over land use policy, according to Public Citizen. Big box retailers
such as Wal-Mart are pushing for new provisions in the WTO's
General Agreement on Trade in Services that could further undermine
local zoning and other land use and development policies.
"Unlike many European
and Asian nations, U.S. trade negotiators failed to safeguard
local land use laws from the existing WTO services agreement,
much in the same way that they failed to protect state gambling
laws from the GATS," said Lori Wallach, director of Public
Citizen's Global Trade Watch division, referring to a recent
WTO ruling against U.S. gambling laws.
Unless the United States
takes action to fix this problem in the current round of negotiations,
local governments could see challenges to state and local land
use laws brought before WTO tribunals, which are empowered to
authorize trade sanctions against countries that refuse to conform
their domestic policies to WTO dictates. Across the country,
state and local officials are working to put laws in place to
protect their communities, their environment, their wage base
and tax dollars by putting land use limits on "big box"
retailers, as well as retail chains and other development projects
they deem destructive to the community or the environment or
out of step with local needs and planning.
Among the local laws threatened
by GATS rules are those that impose size and height restrictions
on big box stores; limits on hours of operation; economic needs
tests before stores can be approved; and limits on development
to protect the environment or protect historic and cultural sites.
No state or local group has yet recognized the threat posed to
land use laws and local sovereignty by the WTO's one-size-fits-all
rules for service firms. One group that has recognized this threat
is major retail firms.
"Major big box retail
corporations have been eyeing the GATS as a way of gutting local
zoning and land use laws that have kept them out of communities
in Europe and the United States," said Saerom Park, Public
Citizen's GATS outreach coordinator. "They are pursuing
a strategy of global preemption. Citizens concerned about setting
sane land use policies need to know that Wal-Mart is just one
of the firms that has been lobbying both the U.S. government
and the WTO on this issue."
Indeed, Wal-Mart, in a
May 1, 2002, submission to the U.S. Trade Representative, asked
that Bush administration trade negotiators press countries to
remove "any size limitations on individual stores"
and "geographic limitations on store locations" in
member countries. Similarly, at a Sept. 12, 2002, conference
on the GATS organized by the U.S. Department of Commerce, a retail
industry representative identified IKEA (the Swedish furniture
retailer) and Royal Ahold (the Netherlands-based owner of the
Stop & Shop and Giant Food chains in the United States) as
among the globalized companies facing problems with local land
use policies. The representative identified regulations related
to the "size and location of stores" as a specific
trade barrier.
http://www.citizen.org/pressroom/release.cfm?ID=2099
TYSON'S PUSHES THE GOOD BOOK
WHILE THE BOOK ON TYSONS GROWS
DOUG IRELAND, DIRELAND
- Ad Age reports today that the giant international mega-conglomerate
Tyson Foods -- twice as large as any competitor in the meat-and-chicken
industry -- is now trying to sell God along with its chickens,
beef, and pre-prepared frozen meals. Tyson is distributing "mealtime
prayer booklets" for a variety of faiths all over the world.
Under the headline, "TYSON LAUNCHES FAITH-FRIENDLY MARKETING
CAMPAIGN," Ad Age reports: "What started out as the
internal manifestation of Tyson's mission statement -- a set
of core values that includes 'striving to be a faith-friendly
company. . . and to honor God. . . ' -- has over the last few
years morphed into placing 128 part-time chaplains in 78 plants
across the country and, now, the external marketing initiative
to play a part in mealtime prayer." Tyson's chairman, born-again
John Tyson, Ad Age notes, is a sometime drug addict and alcoholic.
. .
Blood, Sweat and Fear,
a recent report by Human Rights Watch, condemned Tyson for violating
the basic human rights of its workers by allowing unsafe working
conditions at many of its production facilities and using illegal
means to stop their joining unions: Tyson workers "contend
with conditions, vulnerabilities, and abuses which violate human
rights," said the January, 2005 HRW report. Just four years
ago, the U.S. Immigration and Naturalization Service charged
Tyson Foods and six company execs with running a massive ring
to smuggle illegal aliens into the United States from Mexico,
Honduras and Guatemala. After a two-and-a-half year investigation,
the INS alleged that Tyson had smuggled illegal immigrants to
work at 15 Tyson plants in nine states. Undercover INS agents,
who'd posed as 'recruiters,' testified that Tyson managers had
asked them to smuggle in more than 2,000 workers. Two Tyson managers
pleaded guilty. Another one committed suicide. And the Human
Rights Watch report details the inhuman treatment to which Tyson's
workers are subjected during the hiring process and after their
hiring. . .
In April 2005, the U.S.
Securities and Exchange Commission sued Tyson Foods and former
chairman and company patriarch Don Tyson (right) for filing misleading
disclosures, and Tyson Foods was forced to pay $1.5 million in
fines, while Don Tyson was ordered to pay a $700,000 penalty.
The SEC found that while Don Tyson was chairman, the company
provided an estimated $3 million US in perquisites and personal
benefits to Tyson, his wife, their daughters, and three close
personal friends, including $8,000 for a horse, $20,000 for oriental
rugs, $84,000 for lawn maintenance at the family's homes, and
$203,675 in personal housekeeping services. . .
Tyson uses violence, among
other impermissible and illegal tactics, to try to stop union
organizing. Just two months ago, in October, Royal Canadian Mounted
Police charged Tyson exec Andrew Crocker, head of security at
its Lakeside, Canada, plant, and Carey Kopp, the company's director
of human resources, with five criminal charges, including criminal
harassment and intimidation, after a car chase which ended when
the car of United Food and Commercial Workers Local 401 President
Doug O'Halloran was forced off the road and crashed in a ditch.
Four other men with ties to the plant were also charged in the
incident. . .
In August 2005, the U.S.
Equal Employment Opportunity Commission filed a suit against
Tyson's Foods alleging that its Alabama-based facility maintained
a "whites-only" bathroom and that managers sternly
disciplined black workers who complained about it. . .
The company was accused
not long ago by the U.S. Labor Department of cheating its workers
out of $340 million in "lost" wage hours. And, in case
you've forgotten,Tyson Foods pleaed guilty to bribery 1997 and
paid out $6 million in fines after it corrupted Bill Clinton's
Agriculture Secretary, Mike Espy. The two Tyson executives jailed
in the case were later conveniently pardoned by Pres. Clinton.
. .
http://direland.typepad.com/direland/2005/12/tyson_foods_sel.html
PROGRESSIVE REVIEW, 1998
- Back in 1994, Time reported that a senior pilot for Tyson had
been grilled for three days by [special prosecutor Dan] Smaltz
and FBI agents about transfers of cash to the governor's mansion.
Joe Henrickson claimed to have carried white envelopes containing
a quarter-inch stack of $100 bills on six occasions. Here's how
Ambrose Evans-Pritchard describes what happened next:
"In one case, [Henrickson
claimed] a Tyson executive handed him an envelope of cash in
the company's aircraft hanger in Fayetteville and said, 'This
is for Governor Clinton."
"'I nearly fell off
my chair when I heard Joe make the allegation. I took over the
questions,' Smaltz told Time." But Smaltz had no authority
to investigate Clinton and when he asked Janet Reno for permission
she said no. Reno's refusal, along with Starr's mishandling of
the Mena drug and Foster death investigations, rank among the
biggest scandals that lie within the Whitewater scandal.
JULY 2005.
. .
ELECTRICITY DEREG PROVES JUST ANOTHER
CORPORATE FAD
ERIC KELDERMAN, STATELINE - In 1996, California
launched a national fad by allowing power utilities to compete
for customers within and across its borders. By 2000, 23 states
and the District of Columbia had rushed down the path of electricity
deregulation.
But the fad to open up the electricity
market has faltered. Residential consumers have found little
reason to switch to new power providers, and the promises of
lower prices and a reliable electricity infrastructure have failed
to materialize. The California energy crisis of 2000-2001, the
financial scandals of energy giant Enron, and the massive Northeastern
blackout in August 2003 have soured policy-makers, consumers
and even some power companies on electric utility competition.
As a result, Arkansas, California, Montana,
Nevada, New Mexico and Oklahoma have changed course and abandoned
or indefinitely delayed deregulation. Oregon has limited electricity
competition to large industrial customers, and pressure is rising
in both Illinois and Michigan to pull back from utility restructuring.
Consumers in many states also are bracing for rate hikes in coming
years as price caps -- enacted to protect them during the early
phases of deregulation -- expire. "Nobody's benefited from
deregulation - period, end of story," said Charles Acquard,
executive director of the National Association of State Utility
Consumer Advocates.
APRIL 2005. . .
MEDIAN TOP CAPITAL AREA CEO IS PAID
OVER $5 MILLION
WASHINGTON POST - The median total compensation for the 100 highest-paid
executives in The Washington Post's annual survey of executive
pay was $5.25 million in 2004, up slightly from $5.13 million
the year before. Despite increased scrutiny of executive compensation
after a series of corporate scandals, the executive suite at
many companies remains a charmed place in which boards not only
reward executives with rich salaries and bonuses but also help
them with such routine expenses as commuting to work and preparing
their taxes.
Last year, 294 executives of
area companies received packages worth $1 million or more, compared
with 270 executives in 2003 and 190 in 2000, according to The
Post's study of top-level compensation at 157 local companies
that publicly report pay and benefits.
The median total compensation
-- which includes salary and bonus, long-term benefits, perks
and the projected value of option grants -- for all executives
in the 2004 survey was $704,713, compared with $668,049 in 2003.
The median is the midpoint of the survey, with half below and
half above. The survey covered 764 executives in 2004 compared
with 728 in 2003.
DAVID S. HILZENRATH, WASHINGTON POST - Mired in bankruptcy reorganization,
W.R. Grace & Co. agreed this year to pay newly installed
chief executive Alfred E. Festa a $1.75 million "Chapter
11 emergence bonus" -- whether or not the chemical company
emerges from Chapter 11, according to a report filed with the
Securities and Exchange Commission.
General Dynamics Corp. promised
last year that, if chairman and chief executive Nicholas D. Chabraja
stays at the company through April 2008, he will be allowed to
use corporate aircraft for up to 500 hours during his first decade
of retirement. That would be on top of annual retirement pay
projected at $2.1 million based on his salary and bonus last
year, the defense contractor said in an SEC filing.
Perks granted to General Dynamics
chief executive Nicholas D. Chabraja include about $270,000 for
personal travel on company planes.
Coventry Health Care Inc., an
HMO company, gave chairman and former chief executive Allen F.
Wise a deal that includes as much as $12,000 for legal, tax and
financial planning, an unspecified automobile allowance, 75 hours
of personal airplane use and a "tax equalization bonus"
to ensure that those other benefits entail "no net cost
to him," according to a regulatory filing.
GENERAL MOTORS BOYCOTTS LA
TIMES
http://tinyurl.com/4uaor
[If you've ever wondered why
daily newspaper auto sections read like advertising supplements,
this will give you a clue]
REUTERS - The world's largest
automaker, in a rare move for a major corporation, said it was
pulling its ads from one of the country's biggest dailies over
what it called factual errors and misrepresentations in the L.A.
Times' editorial coverage. The boycott likely will be short-lived
because GM won't want to risk losing market share to its rivals
in the large L.A. market, publishing analysts said.
But the Chicago-based media company "doesn't need any more
bad news," said Douglas Arthur, a Morgan Stanley stock analyst.
"Tribune remains the cheapest major media company in the
country, but probably the one with the most issues right now.".
. .
GM's move came a day after the
L.A. Times published a column by its Pulitzer Prize-winning auto
critic, Dan Neil, about the automaker's brand strategy. The column's
headline called the Pontiac G6 "a sales flop." It also
said the automaker should "dump" Chairman and Chief
Executive Rick Wagoner and "let the impeachment proceedings
begin."
FEBRUARY 2005
MCDONALD'S PROTESTERS WIN
CASE, BUT BLAIR REGIME WOULD MAKE ACTIONS CRIMINAL
http://www.guardian.co.uk/Columnists/Column/0,5673,1419908,00.html
GEORGE MONBIOT, GUARDIAN - It
was the greatest legal victory against corporate power in living
memory. Last week, two penniless activists, Dave Morris and Helen
Steel, persuaded the European court of human rights that Britain's
libel laws, under which they had been sued by McDonald's, had
denied them their right of free speech. The law will probably
have to be changed, depriving the rich and powerful of their
most effective means of stifling public protest. So why aren't
they hopping mad? The company that sued Dave and Helen will say
only that "the world has moved on ... and so has McDonald's."
The Confederation of British Industry, so quick to denounce legal
rulings it doesn't like, hasn't uttered a word.
They don't care, and they don't
need to. You can see why by reading the serious organized crime
and police bill, which has now passed through the Commons for
the third time. What civil law once gave them, criminal law now
offers instead. . .
Section 121 of the bill prohibits
people from "pursuing a course of conduct which involves
harassment of two or more persons" in order "to persuade
any person ... not to do something that he is entitled or required
to do, or to do something that he is not under any obligation
to do". Harassment, the bill explains, can involve "conduct
on at least one occasion". . . "in relation to two
or more persons." In other words, you need only approach
someone once to be considered to be harassing them, as long as
you have also approached someone else in the same manner.
The law is left wide open: there
is nothing in it to prevent a company seeking an injunction and
damages against someone who has handed out leaflets to two of
its customers. To demonstrate harassment, it needs to show that
the protester's conduct has caused its customers "alarm
or distress;" but again the law grants as much scope as
it could ask for.
CORPORATE TRESPASSING IN CENTRAL
PARK
[This is the second such attempt
by a corporation to invade urban public space improperly citing
copyright law. The other involved a sculpture in Chicago where
the city is now backing down after a public outcry. Robert Ledeman
is a NYC artist activist]
ROBERT LEDERMAN - This Christo
- Central Park Conservancy - Bloomberg fiasco is taking on some
amazing twists. Today, a representative of Christo's German publisher
informed street artists, photographers and art vendors around
Central Park that they would be subject to arrest for selling
any images of The Gates. I got the number of this person, Dr.
Fils, and had a lengthy talk with him.
Christo's publisher claims a
vast new degree of copyright and trademark protection. They claim
they will prosecute anyone who sells their own original photos
of the Gates; who makes and sells a drawing of the Gates or who
even uses the words, the Gates, without their permission. They
claim to have copyrighted the words, The Gates. They also claim
to have an agreement with the media that media sources may only
use news photos of the gates for the period the installation
is up. That after that the media will only be allowed to use
"official" photos of The Gates.
They also claim that all of Central
Park is now "private property." Talk about privatization.
Be sure to thank Christo, Bloomscrooge and the CPC.
I called the Central Park Precinct
on this and they said if an artist is selling their own art (rather
than a copy of an official piece of Christo merchandise) it was
legal to do so.
MONSANTO HARASSING FARMERS
WITH SEED POLICE
http://ipsnews.net/interna.asp?idnews=27046
STEPHEN LEAHY, INTER PRESS SERVICE
- Agribusiness giant Monsanto has sued more than 100 U.S. farmers,
and its "seed police" have investigated thousands of
others, for what the company terms illegal use of its patented
genetically engineered seeds, and activists charge is "corporate
extortion".
Monsanto prohibits farmers from
saving seed from varieties that have been genetically engineered
to kill bugs and resist ill-effects from the herbicide glyphosate
(sold under the brand name Roundup).
Kem Ralph of Covington, Tennessee
is believed to be the first farmer to have gone to jail for saving
and replanting Monsanto's Roundup Ready soy seed in 1998. Ralph
spent four months behind bars and must also pay the company 1.8
million dollars in penalties. In total, U.S. courts have awarded
Monsanto more than 15 million dollars, according to a new report
by the Washington- based Center for Food Safety called "Monsanto
vs. U.S. Farmers."
"Monsanto's business plan
for GE crops depends on suing farmers," said Joe Mendelson,
legal director for CFS.
CENTER FOR FOOD SAFETY - The
report finds that, in general, Monsanto's efforts to prosecute
farmers can be divided into three stages: investigations of farmers;
out-of-court settlements; and litigation against farmers Monsanto
believes are in breach of contract or engaged in patent infringement.
. .
"Monsanto would like nothing
more than to be the sole source for staple crop seeds in this
country and around the world," said Joseph Mendelson, CFS
legal director. "And it will aggressively overturn centuries-old
farming practices and drive its own clients out of business through
lawsuits to achieve this goal.". . .
Farmers even have been sued after
their fields were contaminated by pollen or seed from a previous
year's crop has sprouted, or "volunteered," in fields
planted with non-genetically engineered varieties the following
year; and when they never signed Monsanto's Technology Agreement
but still planted the patented crop seed. In all of these cases,
because of the way patent law has been applied, farmers are technically
liable. It does not appear to matter if the use was unwitting
or if a contract was never signed.
REPORT
http://www.centerforfoodsafety.org/Monsantovsusfarmersreport.cfm
MONSANTO EXTENDS TYRANNY OVER
FOOD SUPPLY
REUTERS -
Agriculture products company Monsanto Co. said it will buy Seminis
Inc., the world's largest commercial fruit and vegetable seed
company, for at least $1 billion from a private equity firm to
capitalize on the trend toward healthier eating. . . Monsanto,
a leading developer of genetic modifications for crops like soybeans
and corn, said biotechnology modifications to Seminis' fruit
and vegetable lines were an option, but the initial focus would
be on leveraging Seminis' conventional breeding programs with
Monsanto's advanced research and development to develop improved
product options. . . Seminis supplies more than 3,500 seed varieties
to commercial fruit and vegetable growers, dealers, distributors
and wholesalers around the world.
URUKNET - As part of sweeping
"economic restructuring" implemented by the Bush Administration
in Iraq, Iraqi farmers will no longer be permitted to save their
seeds, which include seeds the Iraqis themselves have developed
over hundreds of years. Instead, they will be forced to buy seeds
from US corporations. That is because in recent years, transnational
corporations have patented and now own many seed varieties originated
or developed by indigenous peoples. . .
The American Administrator of
the Iraqi CPA (Coalition Provisional Authority) government, Paul
Bremer, updated Iraq's intellectual property law to 'meet current
internationally-recognized standards of protection.' The updated
law makes saving seeds for next year's harvest, practiced by
97% of Iraqi farmers in 2002, and is the standard farming practice
for thousands of years across human civilizations, to be now
illegal. . . Instead, farmers will have to obtain a yearly license
for genetically modified seeds from American corporations.).
These GM seeds have typically been modified from seeds developed
over thousands of generations by indigenous farmers like the
Iraqis, and shared freely like agricultural 'open source.'"
http://www.uruknet.info/?p=9114
GRAIN - When former Coalition
Provisional Authority administrator L. Paul Bremer III left Baghdad
after the so-called "transfer of sovereignty" in June
2004, he left behind the 100 orders he enacted as chief of the
occupation authority in Iraq. Among them is Order 81 on "Patent,
Industrial Design, Undisclosed Information, Integrated Circuits
and Plant Variety." This order amends Iraq's original patent
law of 1970 and unless and until it is revised or repealed by
a new Iraqi government, it now has the status and force of a
binding law. With important implications for farmers and the
future of agriculture in Iraq, this order is yet another important
component in the United States' attempts to radically transform
Iraq's economy.
For generations, small farmers
in Iraq operated in an essentially unregulated, informal seed
supply system. Farm-saved seed and the free innovation with and
exchange of planting materials among farming communities has
long been the basis of agricultural practice. This has been made
illegal under the new law. The seeds farmers are now allowed
to plant - "protected" crop varieties brought into
Iraq by transnational corporations in the name of agricultural
reconstruction - will be the property of the corporations. While
historically the Iraqi constitution prohibited private ownership
of biological resources, the new US-imposed patent law introduces
a system of monopoly rights over seeds. . .
The rights granted to plant breeders
in this scheme include the exclusive right to produce, reproduce,
sell, export, import and store the protected varieties. . . The
term of the monopoly is 20 years for crop varieties and 25 for
trees and vines. During this time the protected variety de facto
becomes the property of the breeder, and nobody can plant or
otherwise use this variety without compensating the breeder.
This new law means that Iraqi farmers can neither freely legally
plant nor save for re-planting seeds of any plant variety registered
under the plant variety provisions of the new patent law. This
deprives farmers what they and many others worldwide claim as
their inherent right to save and replant seeds. . .
Iraq is one more arena in a global
drive for the adoption of seed patent laws protecting the monopoly
rights of multinational corporations at the expense of local
farmers. Over the past decade, many countries of the South have
been compelled to adopt seed patent laws through bilateral treaties.
. .
http://www.grain.org/articles/?id=6
The list
TEN WORST CORPORATIONS OF 1004
Russell Mokhiber and Robert Weissman
Abbott Laboratories
AIG
Coca-Cola
Dow Chemical
GlaxoSmithKline
Hardee's
Merck
McWane
Riggs Bank
Wal-Mart
TO FIND OUT WHY
http://lists.essential.org/pipermail/corp-focus/2005/000193.html
A METAPHOR FOR AMERICAN CAPITALISM
BROOKE A. MASTERS, WASHINGTON
POST - Former World Com Inc. chief financial officer Scott D.
Sullivan took the stand at the trial of his ex-boss Bernard J.
Ebbers on Monday and described the former chief executive as
a "micromanager" with a "good grasp of accounting
concepts" who was directly involved with the alleged conspiracy
to falsify the telecommunications giant's books. . . World Com
filed for bankruptcy protection in July 2002 and ultimately said
it had uncovered $11 billion in accounting fraud. . .
Sullivan and the World Com budget
analyst who testified right before him, G. Brady Connor, also
described Ebbers's focus on cutting costs. Sullivan said Ebbers
would demand that World Com's Atlanta-based marketing director
drive six or seven hours to Mississippi to save airplane costs
and that Ebbers alleged that company employees were stealing
coffee because the number of filters outnumbered the supply of
beans.
Connor testified that Ebbers
said at a company meeting in Atlanta that he wanted the information
technology staff to track employee start times through the company's
e-mail programs and that he planned to reprimand a senior manager
for spending too much time on smoking breaks.
Ebbers also described a cost-cutting
measure he had secretly implemented in the Pentagon City offices,
Connor said. Ebbers said he had ordered a security guard to use
tap water to refill the company's water dispensers rather than
order more bottled water. "The employees didn't know the
difference," Connor described Ebbers as saying.
DECEMBER 2004
CORPORATIONS DESTROYING PENSION PLANS
ALBERT B. CRENSHAW, WASHINGTON
POST - Last week's disclosure by International Business Machines
Corp. that it will close its traditional pension plans to new
employees and give the new hires only a 401(k) plan is more than
a change in the relationship between employer and employee. It
is part of a fundamental shift in our sense of what American
society owes individuals in the form of financial protection
and what individuals owe society in terms of self-reliance --
a shift of a magnitude unseen since the 1930s, when it went in
the opposite direction. IBM itself is only a small ripple in
this wave. The company styles itself as "a follower, not
a leader" in this arena, and few would dispute that. But
its decision to fade out of the pension business is emblematic
of a massive shifting of risk that is taking place across the
economy.
Employers, unwilling and increasingly
unable to promise their workers a secure retirement, are handing
that problem off to the workers themselves. Most companies, like
IBM, will chip in some extra pay in the form of an "employer
contribution" to a 401(k) plan or similar plan, and a growing
number will offer some advice on what to do with the money. But
if things don't work out a few decades from now -- well, tough.
And now the Bush administration
says it wants to do something similar with Social Security. Instead
of a set of benefits fully guaranteed by the government, the
administration envisions some type of "personal accounts"
-- details to come -- that could accumulate real wealth over
a worker's lifetime.
CORPORATIONS RAISE RETIREMENT COSTS
KAISER FAMILY FOUNDATION - [Businesses]
are asking their retirees to pay more and plan to do so again
in 2005, according to a new survey of many of the nation's largest
employers conducted by the Kaiser Family Foundation and Hewitt
Associates. The survey found that firms providing retiree health
benefits experienced cost increases averaging 12.7 percent in
2004, with employers and retirees sharing these cost increases
at most firms. In the past year, 79 percent of firms increased
their retirees' contributions for premiums, and 85 percent expect
to do so in the coming year. In addition, 8 percent of employers
surveyed said that, in 2004, they had eliminated subsidized health
benefits for future retirees (current workers). For 2005, only
a small fraction of firms (1 percent) said they are likely to
terminate subsidized coverage for current retirees, but 11 percent
said they are likely to terminate coverage for future retirees.
HALIBURTON DOUBLES SINCE IRAQ
INVASION
HALIBURTON ADMITS POSSIBLE
BRIBES TO NIGERIANS DURING CHENEY ERA
AGENCE FRANCE PRESSE - US oil
service firm Halliburton has acknowledged that improper payments
"may have been made" to Nigerian officials through
a consortium of which it was a member. In a document dated Friday
and filed with the US Securities and Exchange Commission, Halliburton
said the US Justice Department had expanded its investigation
into potential bribes through the TSKJ consortium, a matter also
under review in France and Nigeria. "We understand from
the ongoing governmental and other investigations that payments
may have been made to Nigerian officials," the company said
in the SEC filing. It noted that investigators were scrutinizing
the role by British lawyer Jeffrey Tesler, who has been reported
to have funneled as much as 132 million dollars from the consortium,
and from Halliburton's former consultant A. Jack Stanley, fired
in June. . . TSKJ is a private limited liability company registered
in Portugal comprising Technip of France, Snamprogetti Netherlands,
an affiliate of the Italian group ENI, JGC Corporation of Japan,
and Kellogg Brown and Root, which was acquired by Halliburton
in 1998. . . The alleged payments, many of which occurred when
Halliburton was being run by Dick Cheney, now the US vice president,
helped a consortium including the US group to win a 12 billion
dollar contract to build a gas terminal.
The ownership society
HOMEOWNERS
SUED FOR COMPLAINING ABOUT HOMES
WESH-TV, FL - Homeowners say
a Brevard County homebuilding company is bullying, threatening
and even suing homeowners for complaining about inferior construction.
A News Channel 2 investigation found Mercedes Homes actually
filed a lawsuit against a woman for telling her neighbors about
severe leaks in her home. Jay Ann Contardi couldn't imagine a
problem any worse than the deluge of rainwater pouring into her
leaking home. That is, until she ran afoul of the aggressive
lawyers representing her builder, Mercedes Homes. . .
She's not the only one. Other
Mercedes homeowners asked us to protect their identities. "I
feel like I'm in a police state. I can't do anything. I have
no avenues. I have nowhere to turn," one homeowner said.
In the company's plush corporate
offices, executives hatched a plan to make buyers sign away their
First Amendment rights. "It's there in black and white.
The customer should read his or her contract thoroughly before
they enter into it," said Patrick Roche, Mercedes Attorney.
When you buy a Mercedes home, the fine print says you can't complain
to your neighbors, call the news media or even carry a picket
sign, even if your new quarter-million dollar home leaks through
the roof, walls and windows. . .
Complaints about Mercedes homes
are among the most numerous News Channel 2 has received in our
ongoing investigation of local builders. Owners told us the stucco
is substandard or too thin, screws are even left out of pre-drilled
holes in the windows and poorly applied exterior paint does not
protect against moisture.
So, 150 concerned homeowners
packed into a park, talking about leaks and identical problems
with windows. But what they didn't know was that there was a
spy at the meeting. "Two days after that, I was served with
papers," Contardi said.
OCTOBER 2004
TAKING ON 'CORPORATE PERSONHOOD'
KEN PICARD, STRAIGHT GOODS -
Porter Township in northwestern Pennsylvania was an unlikely
hotbed for an anti-corporate uprising. The tiny rural community
about an hour north of Pittsburgh has a population of only 1500
people, many of whom are staunch Republicans with deeply-held
conservative values.
But after the Alcosan Corporation,
a Pennsylvania sewage-sludge hauler, threatened to sue Porter
Township in 2002 for passing a local ordinance regulating the
dumping of sludge in their community, town officials decided
that their citizens had taken enough crap from corporations.
Literally. So on December 9, 2002, Porter became the first municipality
in the United States to pass a law denying corporations their
rights as "persons" under the law. Weeks later, Licking
Township, another rural Pennsylvania community facing a similar
lawsuit, passed a more expansive ordinance revoking all constitutional
rights of corporations within their jurisdiction.
Since then, dozens of other municipalities
across Pennsylvania, some with as few as 1000 residents, have
followed suit, reversing nearly 120 years of corporate encroachment
on the rights guaranteed to all citizens under the US Constitution.
Prompted by the failure of state and federal regulatory agencies
to protect citizens' health, safety and quality of life from
large-scale corporate activities, these municipalities took matters
into their own hands and reclaimed their right of self-rule.
Though the laws fly in the face of more than a century's worth
of legal precedents that say corporations are "persons"
protected by the Bill of Rights and the 14th Amendment, thus
far these ordinances seem to be working.
Now some Vermonters are looking
to follow Pennsylvania's example and draft similar ordinances
here to address environmental and public-health problems stemming
from large corporate activities: the influx of big-box stores,
the spreading of toxic sludge, even the proposed power increase
at the Vermont Yankee nuclear power plant. Proponents of this
strategy suggest that these laws may even be used one day to
challenge undemocratic principles that were written into the
World Trade Organization charter and the North American Free
Trade Agreement.
FANNIE MAE HIRES ENRON LAWYER
WASHINGOTN POST - Chalk up another
troubled corporate client for veteran defense lawyer Robert S.
Bennett. Last week District-based mortgage giant Fannie Mae hired
him to help stave off Justice Department and Securities and Exchange
Commission investigations into its accounting practices. Bennett,
65, a partner in the Washington office of Skadden, Arps, Slate,
Meagher & Flom, in recent years has developed a lucrative
specialty of representing companies ensnared in financial scandals.
He and other Skadden partners
also run interference for French bank BNP Paribas, disgraced
energy trader Enron Corp., rehabilitation hospital chain Health
South Corp., audit firm KPMG LLP, and the Allbritton family of
Riggs Bank fame.
FANNIE MAE EXECS GOT MILLIONS, SPENT
$80K ON ONE'S CLUB INITIATION
DAVID S. HILZENRATH WASHINGTON
POST - During a packed hearing on Fannie Mae's accounting practices
last week, Rep. Richard H. Baker (R-La.), a leading critic of
the District-based mortgage finance company, displayed a poster-size
chart of the compensation of 22 of its top executives. The document
showed that 20 of the individuals received more than $1 million
each in total compensation in 2002. Twelve received more than
$2 million. Nine received more than $3 million. . .
Raines protested that the release
of the information was an invasion of privacy and would provide
a road map for recruiters trying to raid Fannie Mae's talent.
The company had fought to keep the information private, hiring
Kenneth W. Starr, the attorney who investigated President Bill
Clinton, in the effort. . .
Perhaps the most eye-catching
number in the package [Rep.] Baker released was one that Fannie
had previously disclosed in a little-noticed footnote in a report
filed with the SEC. Last year, Fannie paid an $80,000 initiation
fee for its vice chairman and chief operating officer, Daniel
H. Mudd, to join a private club. . .
Fannie agreed to pay that benefit
when it was recruiting Mudd from his job as president of G.E.
Capital in Japan in 2000, to match a benefit he received at G.E.,
said Janice Daue, a Fannie spokeswoman. She declined to identify
the club. Fannie's payment of club fees "is extremely limited
and only provided when business needs dictate," she said.
SEPTEMBER 2004
ESTABLISHMENT ICONS LINKED TO FANNIE
MAE SCANDAL
WASHINGTON POST - There are signs
the gilt-edged resumes, and political futures, of three former
Fannie executives have already been tarnished, because of findings
they profited from manipulation of financial results in 1998.
Former Fannie Mae chief James A. Johnson, who holds a top post
in the Democratic presidential campaign and headed the Kennedy
Center and the Brookings Institution; Smithsonian Institution
Secretary Lawrence M. Small, who was Fannie Mae's chief operating
officer; and Washington lawyer Jamie Gorelick, a former Fannie
vice chairman, who has served as deputy attorney general, the
Pentagon's top lawyer and a member of the 9-11 commission, joined
Raines and Howard in receiving sizable bonuses that year. Regulators
allege they were paid after the company improperly deferred other
expenses.
Johnson, who headed the vice
presidential selection process for Sen. John F. Kerry (D-Mass.),
could be the first to feel the fallout. Democratic Party insiders
say that Johnson is no longer considered the leading candidate
for treasury secretary in a potential Kerry administration. His
role as leader of Kerry's transition planning for the White House
might also be in jeopardy unless the regulators' allegations
are convincingly disputed, they add. "It strikes me those
are the most likely outcomes for Johnson," said a senior
economic adviser to Kerry, who sought to remain anonymous for
fear of reprisals within the campaign.
Johnson declined to respond to
requests for a comment.
Small's mention in the OFHEO
report is another in a series of personal missteps that have
come to light recently. Earlier this year a federal judge sentenced
him to two years' probation and 100 hours of community service
for the purchase and possession of 206 art objects made with
the feathers of protected species. As the director of the nation's
largest complex of museums, Small was also ordered to write a
public letter of apology and explanation for his actions.
Small, who was Fannie's chief
operating officer for eight years, declined to comment on the
regulators' report.
Gorelick has told friends that
she would seriously consider an offer some day to serve as defense
secretary, an aspiration that could be harder to achieve if OFHEO's
allegations pan out. In an interview, she said, "I have
no desire to go back into government in the near term."
She added that she had "knocked herself out" on the
9/11 commission and for the time being is "very happy"
working as a D.C.-based partner of the law firm Wilmer, Cutler,
Pickering, Hale and Dorr.
At the same time, Gorelick might
be spared because, unlike many of the other former or current
officers, her responsibilities at Fannie did not specifically
include financial matters.
Raines is in the most difficult
predicament. In the wake of the regulators' study, Fannie's stock
fell 13.4 percent in three days More than any other time in its
36-year history, the District-based company with 4,100 employees
in the area finds itself under the microscope.
Besides the board-ordered independent
internal probe by Rudman, the Securities and Exchange Commission
has begun an informal inquiry. Members of Congress have promised
to look into the matter. And OFHEO has hired Stanley Sporkin,
a former federal judge and senior SEC enforcement official, to
help them in the continuing examination of Fannie Mae.
Raines, budget director in the
Clinton White House and chair last year of the Business Roundtable's
committee on good corporate governance, now finds himself being
criticized by regulators for permitting a corporate culture that
made the accounting problems possible.
FISCAL SCANDAL ERUPTS AT FANNIE MAE
DAVID S. HILZENRATH, WASHINGTON
POST - Fannie Mae, the giant mortgage finance company, has used
improper accounting methods that raise serious questions about
the quality of its management and the validity of its financial
reports, government regulators reported yesterday. Though it
didn't quantify the effect of what it called pervasive misapplication
of accounting rules on the company's books, the report by the
Office of Federal Housing Enterprise Oversight cited one instance
in 1998 where the company inappropriately deferred $200 million
of estimated expenses, which enabled management to receive full
annual bonuses. Had Fannie recorded the expenses in 1998, no
bonus would have been paid, the report said.
The report also detailed numerous
transactions over several years where it said Fannie Mae management
intentionally smoothed out gyrations in its earnings to show
investors it was a low-risk company. Fannie "maintained
a corporate culture that emphasized stable earnings at the expense
of accurate financial disclosures," regulators said in a
letter to the company.
Chief executive Franklin D. Raines
and the board of directors were not singled out for blame, but
the report criticized "a culture and environment that made
these problems possible." It did name J. Timothy Howard,
the company's vice chairman and chief financial officer, saying
he "failed to provide adequate oversight" of key control
and reporting functions and had jobs in which he both set earnings
targets and then the accounting policies that could be used to
meet them. . .
In [a] 1998 incident questioned
in the report, Fannie reported paying bonuses to the following
executives: chairman and chief executive James A. Johnson, who
received $1.932 million; Raines, who then was chairman-designate,
received $1.110 million; Chief Operating Officer Lawrence M.
Small received $1.108 million; Vice Chairman Jamie Gorelick received
$779,625; Howard received $493,750; and Robert J. Levin, who
was executive vice president for housing and community development,
also received $493,750. The executives either could not be reached
or declined comment last night.
In 1999, Raines set a goal of
doubling Fannie's earnings in five years. Last year, Fannie met
that goal. Employees were rewarded through special stock options
pegged to the five-year goal.
Financial performance has also
influenced executive compensation in other ways. For example,
the size of a bonus pool for Fannie executives in 2002 was based
on "an aggressive earnings per share ('EPS') growth measure
that Fannie exceeded," the company said in a report filed
with the SEC.
Raines received $17.1 million
of compensation in 2003, plus stock options the company estimated
were worth $3 million when granted.
MORE
http://www.washingtonpost.com/wp-dyn/articles/A43162-2004Sep22.html
http://www.washingtonpost.com/wp-dyn/articles/A43161-2004Sep22.html
AUGUST 2004
LOCKHEED TO CONTROL AMERICA'S
ELECTRONIC ARCHIVES
SHAREHOLDER - The National
Archives and Records Administration today announced its selection
of Lockheed Martin as one of two companies that will compete
to design a permanent archives system to preserve and manage
electronic records created by the Federal government.
The Electronic Records
Archives, a major NARA-led initiative to help enable the successful
move to government-wide electronic records management, will capture
electronic information, regardless of its format, save it permanently,
and make it accessible on whatever future hardware or software
is currently in use. When operational, ERA will make it easy
for the public and government officials to find records they
want, and easy for NARA to deliver those records in formats people
need.
JULY 2004
ADM TO PAY $400 MILLION IN PRICE
FIXING CASE
ROBERT MANOR, CHICAGO
TRIBUNE: Anyone wanting to find drama in antitrust law need look
no further than Archer Daniels Midland Co. The Decatur, Illinois
company is paying a huge sum to end a nine-year legal struggle.
ADM said it would pay
$400 million to Coca-Cola, Pepsi-Cola and other customers who
had sued ADM for price-fixing. The food ingredient supplier was
accused of colluding with other makers of high-fructose corn
syrup, a sweetener used instead of sugar in many beverages and
foods.
G. Allen Andreas, chairman
and chief executive officer of ADM, noted in a statement that
if they prevailed in court, the companies suing his business
could win up to $4.8 billion. "In light of the potential
exposure inherent in litigation," Andreas said, ADM decided
to settle. There was some compelling evidence against ADM.
"Our competitors
are our friends," an ADM executive was quoted as saying
in appeals court documents. "Our customers are the enemy."
One antitrust defense lawyer offered another reason why ADM might
have wanted to avoid trial.
"Literally everything
that could happen has happened," Michael Lazerwitz said.
"People went to jail."
JUNE 2004
GENE JOHNSON, ASSOCIATED
PRESS - Enron Corp.'s manipulation of energy markets gouged Western
customers for at least $1.1 billion, according to audiotapes
and documents released today by the Snohomish County Public Utility
District, which earlier uncovered tapes of traders laughing about
cheating grandmothers on their electricity bills. The Public
Utility District analyzed the records in hopes of defending itself
against a $122 million lawsuit filed by Enron, which has accused
it of illegally breaking its contracts with the company. The
utility claims the contract was void because Enron engaged in
fraudulent business practices to drive up the cost of energy
during the 2000-01 power crunch.
MAY 2004
ARE CORPORATIONS PSYCHOPATHIC?
ECONOMIST
- To the anti-globalisers, the corporation is a devilish instrument
of environmental destruction, class oppression and imperial conquest.
But is it also pathologically insane? That is the provocative
conclusion of an award-winning documentary film, called "The
Corporation", coming soon to a cinema near you. People on
both sides of the globalisation debate should pay attention.
Unlike much of the soggy thinking peddled by too many anti-globalisers,
"The Corporation" is a surprisingly rational and coherent
attack on capitalism's most important institution.
It begins
with a potted history of the company's legal form in America,
noting the key 19th-century legal innovation that led to treating
companies as persons under law. By bestowing on them the rights
and protections that people enjoy, this legal innovation gave
the company the freedom to flourish. So if the corporation is
a person, ask the film's three Canadian co-creators, Mark Achbar,
Joel Bakan and Jennifer Abbott, what sort of person is it?
The answer,
elicited over two-and-a-half hours of interviews with left-wing
intellectuals, right-wing captains of industry, economists, psychologists
and philosophers, is that the corporation is a psychopath. Like
all psychopaths, the firm is singularly self-interested: its
purpose is to create wealth for its shareholders. And, like all
psychopaths, the firm is irresponsible, because it puts others
at risk to satisfy its profit-maximizing goal, harming employees
and customers, and damaging the environment. The corporation
manipulates everything. It is grandiose, always insisting that
it is the best, or number one. It has no empathy, refuses to
accept responsibility for its actions and feels no remorse. It
relates to others only superficially, via make-believe versions
of itself manufactured by public-relations consultants and marketing
men. In short, if the metaphor of the firm as person is a valid
one, then the corporation is clinically insane.
. . .
The main message of the film is that, through their psychopathic
pursuit of profit, firms make good people do bad things. . .
Human values and morality survive the onslaught of corporate
pathology only via a carefully cultivated schizophrenia: the
tobacco boss goes home, hugs his kids and feels a little less
bad about spreading cancer.
APRIL 2004
NEARLY TWO THIRDS OF CORPORATIONS DIDN'T
PAY ANY FEDERAL TAX 1996-2000
JOHN D. MCKINNON, WALL
ST JOURNAL - More than 60% of U.S. corporations didn't pay any
federal taxes for 1996 through 2000, years when the economy boomed
and corporate profits soared, the investigative arm of Congress
reported. The disclosures from the General Accounting Office
are certain to fuel the debate over corporate tax payments in
the presidential campaign. Corporate tax receipts have shrunk
markedly as a share of overall federal revenue in recent years,
and were particularly depressed when the economy soured. By 2003,
they had fallen to just 7.4% of overall federal receipts, the
lowest rate since 1983, and the second-lowest rate since 1934,
federal budget officials say.
The GAO analysis of Internal
Revenue Service data comes as tax avoidance by both U.S. and
foreign companies also is drawing increased scrutiny from the
IRS and Congress. But more so than similar previous reports,
the analysis suggests that dodging taxes, both legally and otherwise,
has become deeply rooted in U.S. corporate culture. The analysis
found that even more foreign-owned companies doing business in
the U.S. -- about 70% of them -- reported that they didn't owe
any U.S. federal taxes during the late 1990s.
WHILE EVERYONE is talking
about negative ads, the worst commercials to appear in DC of
late were those by Fannie Mae lobbying the institution that chartered
it - the US Congress - not to pass legislation that would increase
oversight over the controversy-stained agency. Perhaps the legislation
should add a provision prohibiting such ads.
CORPORATE TRESPASSING - The Yankees and the Tampa Bay
Devils put commercial ads on their players' sleeves and helmets
for a two game series in Japan. Coming soon to a tax-supported
stadium near you.
A FLORIDA JUDGE HAS told RIAA it has to file individual lawsuits
against downloaders, rather than doing it in bulk
MARCH 2004
WALL STREET THINKS COSTCO IS TOO GOOD TO
EMPLOYEES
ANN ZIMMERMAN, WALL STREET
JOURNAL - Wal-Mart Stores Inc.'s parsimonious approach to employee
compensation has made the world's largest retailer a frequent
target of labor unions and even Democratic presidential candidate
John Kerry, who has accused the Bentonville, Ark., chain of failing
to offer its employees affordable health-care coverage. In contrast,
rival Costco Wholesale Corp. often is held up as a retailer that
does it right, paying well and offering generous benefits.
But Costco's kind-hearted
philosophy toward its 100,000 cashiers, shelf-stockers and other
workers is drawing criticism from Wall Street. Some analysts
and investors contend that the Issaquah, Wash., warehouse-club
operator actually is too good to employees, with Costco shareholders
suffering as a result. "From the perspective of investors,
Costco's benefits are overly generous," says Bill Dreher,
retailing analyst with Deutsche Bank Securities Inc. "Public
companies need to care for shareholders first. Costco runs its
business like it is a private company."
Costco appears to pay
a penalty for its largesse to workers. The company's shares trade
at about 20 times projected per-share earnings for 2004, compared
with about 24 for Wal-Mart. Mr. Dreher says the unusually high
wages and benefits contribute to investor concerns that profit
margins at Costco aren't as high as they should be.
Costco, which opened its
first store in 1983 and now has 432 locations, disputes the contention
that it takes care of workers at the expense of investors. "The
last thing I want people to believe is that I don't care about
the shareholder," says Jim Sinegal, Costco's president and
chief executive since 1993, who owns about 3.2 million Costco
shares valued at $118 million based on yesterday's price of $36.96,
up 52 cents, in 4 p.m. Nasdaq Stock Market trading. "But
I happen to believe that in order to reward the shareholder in
the long term, you have to please your customers and workers."
CORPORADOS SEEK TO TO RIP OFF FACTS
KIM ZETTE, WIRED - Imagine
doing a Google search for a phone number, weather report or sports
score. The results page would be filled with links to various
sources of information. But what if someone typed in keywords
and no results came back? That's the scenario critics are painting
of a new bill wending its way through Congress that would let
certain companies own facts, and exact a fee to access them.
Ostensibly, the Database
and Collections of Information Misappropriation Act makes it
a crime for anyone to copy and redistribute a substantial portion
of data collected by commercial database companies and list publishers.
But critics say the bill would give the companies ownership of
facts -- stock quotes, historical health data, sports scores
and voter lists. The bill would restrict the kinds of free exchange
and shared resources that are essential to an informed citizenry,
opponents say. The House Judiciary Committee approved the bill
and the commerce committee is expected to review it on Thursday.
The bill's biggest backers
are the Software and Information Industry Association; Reed Elsevier,
which owns the Lexis Nexis database; and Westlaw, the biggest
publisher of legal databases. Art Brodsky, spokesman for public
advocacy group Public Knowledge, says the bill would let anyone
drop a fact into a database or a collection of materials and
claim monopoly rights to it. This would contradict the core principle
of the Copyright Act, which states that mere information and
ideas cannot be protected works.
Under the terms of the
broadly written bill, a public-health website could be deemed
in violation of the law for gathering a list of the latest health
headlines and providing links to them on its home page. Google
would be in violation for trolling media databases and providing
stories on its news page.
An encyclopedia site not
only could own the historical facts contained in its online entries,
but could do so long after the copyright on authorship of the
written entries had expired. Unlike copyright, which expires
70 years after the death of a work's author, the Misappropriation
Act doesn't designate an expiration date. "The law of unintended
consequences in this case has the potential to be huge,"
Brodsky said.
PRODUCT PLACEMENT COMES TO THE NOVEL
MARTIN PLAUT BBC NEWS
- We have got used to seeing consumer products promoted in films
and television programmes. But Ford is claiming a first with
a deal that puts its cars into the pages of a book. The company
has paid British novelist Carole Matthews to mention their cars
prominently in her work. Ms Matthews is what's called a "chick
lit" writer, producing romantic fiction that appeals specifically
to young women. She has been paid to include a Ford in her latest
book - The Sweetest Taboo. The car giant also commissioned her
to write short stories for women's magazines and its own website.
One snippet from a story
on the Ford website entitled A Racy Little Number reads: "I
look out of the window of the shop and eye my lovely Ford Fiesta
Roxanne with something approaching misery. "Last year was
a different story. Business was booming and I splashed out on
my first-ever new car. Brand spanking new - complete with enough
gadgets to keep even Alex amused. She's red, raunchy and drives
like a dream and now, she's got to go. Believe me, it will be
like cutting off one of my own arms."
FEBRUARY 2004
CREDIT UNIONS BEING CONVERTED
INTO CORPORATIONS
ED ROBERTS, CU JOURNAL
- There's gold in credit union conversions--at least after the
subsequent sale of the institution in an initial public stock
offering. That's what managers and directors have learned at
least seven credit unions that have made the switch first to
mutual savings bank, then to publicly traded company. Insiders
of mutual savings banks going public can profit handsomely, with
upper level managers often able to increase their compensation
several times over, according to Robert Clark, an analyst with
SNL Financial, a Charlottesville, Va., firm specializing in the
savings and loan market. "These companies are interested
in raising money for two reasons, one is to expand the value
of the company and two is to benefit the insiders," he said.
From fast profits on IPOs,
to employee stock options plans, to management stock options,
and to perhaps the most lucrative stock-tied plan of all--the
management recognition plan; credit union-turned-bank executives
and directors are reaping millions in windfall profits from the
conversion of their institutions.
The conversion of Rainier
Pacific Bank, known as Rainier Pacific CU until December 2000,
is the most recent example. The six executive officers and nine
directors of the $500 million credit union-convert subscribed
to 600,000 shares in last November's IPO at $10 a share, earning
them a quick profit, on paper at least, of $3.6 million (The
stock was trading on the Nasdaq last week at $16.09), according
to documents filed with the Securities and Exchange Commission.
WAL-MARTING
THE WORLD'S WEALTH
The ranking of the world's
richest people as estimated by Forbes magazine. Listings include
rank, name, home country or state, age where known, wealth in
billions of dollars and source of the money.
1. William Gates III,
U.S., 48, $46.6, Microsoft
2. Warren Buffett, U.S., 73, $42.9, Berkshire Hathaway
3. Karl Albrecht, Germany, 84, $23, supermarkets
4. Prince Alwaleed Bin Talal Alsaud, Saudi Arabia, 47, $21.5,
investments
5. Paul Allen, U.S., 51, $21, Microsoft, investments
6. Alice Walton, U.S., 55, $20, Wal-Mart
6. Helen Walton, U.S., 84, $20, Wal-Mart
6. Jim Walton, U.S., 56, $20, Wal-Mart
6. John Walton, U.S., 58, $20, Wal-Mart
6. S. Robson Walton, U.S., 60, $20, Wal-Mart
CORPORATIONS AS PSYCHOPATHS
STEPHEN LEAHY, INTER PRESS
SERVICE - Corporations are not only the most powerful institutions
in the world, they are also psychopathic, a new Canadian documentary
on globalization elegantly argues. While the corporation has
the rights and responsibilities of "a legal person",
its owners and shareholders are not liable for its actions. Moreover,
the film explains, a corporation's directors are legally required
to do what is best for the company, regardless of the harm created.
What kind of person would
a corporation be? A clinical psychopath, answers the documentary,
which is now playing in four Canadian theaters. "Everything
we do in the world is touched by corporations in some way,"
says 'The Corporation' writer Joel Bakan
~ In law, today's corporations
are treated like a person: they can buy and sell property, have
the right to free expression and most other rights that individuals
have. This legal creativity came as a result of U.S. businesses
using the Fourteenth Amendment to the U.S. Constitution -- designed
to protect blacks in the U.S. South after the Civil War -- to
proclaim that corporations should be treated as "persons".
The filmmakers show four
examples of corporations at work -- including garment sweatshops
in Honduras and Indonesia -- to demonstrate that this "legal
person" is inherently amoral, callous and deceitful. The
corporation, the film points out, ignores any social and legal
standards to get its way, and does not suffer from guilt while
mimicking the human qualities of empathy, caring and altruism.
A person with those character traits would be categorized as
a psychopath, based on diagnostic criteria from the World Health
Organization points out the film.
NOVEMBER 2003
EMORY UNIVERSITY RESEARCHING HOW TO CHANGE
BRAIN TO MAKE YOU BUY
A GROUP OF prominent psychology
experts have joined with Commercial Alrt in asking Emory University
President James Wagner to stop Emory's conducting neuromarketing
experiments. These medical experiments on human subjects are
seen as unethical because they will likely be used to promote
disease and human suffering.
Neuromarketing is a controversial
new field of marketing which uses functional Magnetic Resonance
Imaging - a medical technology - not to heal, but to sell products.
A Bright House Institute for Thought Sciences news release issued
June 22, 2002 explains that it uses fMRI "to identify patterns
of brain activity that reveal how a consumer is actually evaluating
a product, object or advertisement. Thought Sciences marketing
analysts use this information to more accurately measure consumer
preference, and then apply this knowledge to help marketers better
create products and services and to design more effective marketing
campaigns."
The Bright House Institute's
neuromarketing experiments are conducted in the neuroscience
wing of the Emory University Hospital. Excerpts from the letter:
||| This new field is
called "neuromarketing." It seeks, in the words of
Forbes magazine, to "find a buy button inside the skull."
It sounds like something that could have happened in the former
Soviet Union, for the purposes of behavior control. Yet it is
happening right here in America, at a major university - your
university. . .
Universities exist to
free the mind, and enlighten it. They do not exist to find new
ways to subjugate the mind and manipulate it for commercial gain.
Emory's quest for a "buy button" in the human skull
is an egregious violation of the very reason that a university
exists. It also likely violates the principles of the Belmont
Report, which sets out guidelines for research on human subjects
in the United States.
Emory's descent into neuromarketing
is a project of something called the Bright House Institute for
Thought Sciences, which is the leading neuromarketing research
firm. . . The Institute in turn is part of Bright House, an advertising
agency whose clients have included Coca-Cola, Pepperidge Farm,
K-Mart and Home Depot. . .
The Bright House website
boasts of having the "most-advanced neuroscientific research
capabilities and understanding of how the brain thinks, feels
and motivates behavior." This knowledge of the brain enables
corporations to "establish the foundation for loyal, long-lasting
consumer relationships," the website says. Loyalty through
brain mapping, in other words. . .
The "chief scientist"
at the Institute is Clinton D. Kilts, professor and vice-chair
for research in the Department of Psychiatry and Behavioral Sciences.
Dr. Kilts is an expert in addiction. . . Dr. Kilts's research
interests include "drug craving induced by mental imagery
of drug use-related scenes," according to his Emory University
School of Medicine web page. Is Dr. Kilts now using his knowledge
of addiction to sell products such as Coke? Is he working on
mental mapping to induce product cravings through the use of
product-related scenes? Dr. Kilts has declined to respond to
repeated calls regarding his neuromarketing research. |||
OCTOBER 2003
SECRET SETTLEMENTS HIDE VALUABLE INFORMATION
FROM PUBLIC
ROBERT SCHWANEBERG, NEWARK STAR-LEDGER - Battles are taking place
nationwide as courts examine whether their rules on confidentiality
have kept the public in the dark about serial child molesters,
incompetent physicians and defective products ranging from tires
to heart valves.
Within the past year,
both the state and federal courts in South Carolina have adopted
new rules restricting secret settlements. The Federal Judicial
Center, the research arm of federal courts nationwide, is studying
how often court-approved secrecy agreements are used, and why.
. . . Civil libertarians
are alarmed by increasing court secrecy in the name of national
security, which has closed some deportation proceedings and,
in one case, a bail hearing. A Star-Ledger/Eagleton-Rutgers poll
found a bare majority of New Jerseyans -- 51 percent -- approves
of closing such hearings. But those same citizens adamantly oppose
secrecy agreements that conceal hazards in the products they
use. Sixty-nine percent said that when lawsuits over allegedly
defective products are settled out of court, the public has a
right to know the terms. Only 25 percent said companies have
a right to keep such settlements secret, even when both sides
agree.
CORPORATE TRESPASSING
STATES
WANT TO USE ADVERTISING TO MAKE UP FOR DEFICITS
KATHLEEN MURPHY, STATELINE
- An advertising ploy that brings big bucks to professional sports
teams -- selling naming rights to the stadiums and arenas where
they compete - is the newest revenue-raising wrinkle for some
cash-strapped state and local governments. Just this month, Illinois
House Speaker Michael Madigan (D-Chicago) endorsed Democratic
Gov. Rod Blagojevich's plan to sell naming rights to state-owned
buildings. Madigan would exempt the state capitol, the Abraham
Lincoln Presidential Library and other historically significant
sites.
. . . Not everyone is
quite so enthusiastic. State Sen. Steve Rauschenberger (R-Elgin),
a U.S. Senate candidate, said the plan is like having "bake
sales for state government" and raises ethical questions
about seeking handouts from state-regulated companies. "It's
an unhealthy relationship, and the proceeds are small in relation
to the state deficit," Rauschenberger said.
If Blagojevich's plan
is adopted, Illinois would be the first state to sell advertising
space - but not the first political entity to do so. School buses
in some Colorado districts already carry ads for soda pop and
a hamburger franchise, and some New York state school buses advertise
clothing. Arizona, Minnesota, Nevada, Tennessee and Texas also
allow school bus ads, according to the Education Commission of
the States.
The concept even extends
to the courts. Texas State District Judge Jim Wallace wants to
sell naming rights to a state-run Houston drug treatment program.
. . . Environmentalists
helped torpedo a Massachusetts plan to sell naming rights to
state property in April because they hated the possibility of
Henry Thoreau's Walden Pond becoming "Wal-Mart Pond."
"At least for now we're not going to put giant plastic Coke
bottles on top of the Statehouse," said Jim Gomes, Massachusetts
Environmental League president.
THE WAL-MART HEGEMONY
ANTHONY BIANCO AND WENDY
ZELLNER, BUSINESS WEEK - In business, there is big, and there
is Wal-Mart. With $245 billion in revenues in 2002, Wal-Mart
Stores Inc. is the world's largest company. It is three times
the size of the No. 2 retailer, France's Carrefour. Every week,
138 million shoppers visit Wal-Mart's 4,750 stores; last year,
82% of American households made at least one purchase at Wal-Mart.
. .
Wal-Mart's seemingly simple
and virtuous business model is fraught with complications and
perverse consequences. To cite a particularly noteworthy one,
this staunchly anti-union company, America's largest private
employer, is widely blamed for the sorry state of retail wages
in America. On average, Wal-Mart sales clerks -- "associates"
in company parlance -- pulled in $8.23 an hour, or $13,861 a
year, in 2001, according to documents filed in a lawsuit pending
against the company. At the time, the federal poverty line for
a family of three was $14,630. . .
Wal-Mart's marketplace
clout is hard to overstate. In household staples such as toothpaste,
shampoo, and paper towels, the company commands about 30% of
the U.S. market, and analysts predict that its share of many
such goods could hit 50% before decade's end. Wal-Mart also is
Hollywood's biggest outlet, accounting for 15% to 20% of all
sales of CDs, videos, and DVDs. The mega-retailer did not add
magazines to its mix until the mid-1990s, but it now makes 15%
of all single-copy sales in the U.S. In books, too, Wal-Mart
has quickly become a force. "They pile up best-sellers like
toothpaste," says Stephen Riggio, chief executive of Barnes
& Noble Inc., the world's largest bookseller. . .
WAL-MART LOCKS IN WORKERS AT NIGHT
NY TIMES - For more than
15 years, Wal-Mart Stores Inc., the world's largest retailer,
has locked in overnight employees at some of its Wal-Mart and
Sam's Club stores. It is a policy that many employees say has
created disconcerting situations, such as when a worker in Indiana
suffered a heart attack, when hurricanes hit in Florida and when
workers' wives have gone into labor. Mona Williams, Wal-Mart's
vice president for communications, said the company used lock-ins
to protect stores and employees in high-crime areas. She said
Wal-Mart locked in workers - the company calls them associates
- at 10 percent of its stores, a percentage that has declined
as Wal-Mart has opened more 24-hour stores. Ms. Williams said
Wal-Mart, with 1.2 million employees in its 3,500 stores nationwide,
had recently altered its policy to ensure that every overnight
shift at every store has a night manager with a key to let workers
out in emergencies.
INVESTORS SAID TO GAIN LITTLE FROM SHAREHOLDER
SUITS
ALLYCE BESS, ST LOUIS
POST-DISPATCH - Any restitution might be only a few cents on
the dollar, with the lawyers finding greater prosperity. But
even a victory in court isn't likely to make a big impact on
corporate reform. Because of recent corporate chicanery, millions
of American investors have lost billions of dollars. Given our
litigious culture, it seems only natural to sue.
Law firms have filed myriad
claims against companies, investment banks and mutual-fund managers
on behalf of investors. But overall, it's uncertain how effective
such lawsuits are at reclaiming money or reforming corporate
behavior. Restitution to injured investors is likely to be a
few cents on the dollar. The recurring theme seems to be that
the law firms handling these cases often are the greatest beneficiaries.
. . . "Usually, what
shareholders get back is some minuscule fraction of their loss,
some symbolic payment," said Stuart Greenbaum, dean of Washington
University's Olin School of Business. "They're of great
benefit to the legal profession, but I don't know that they do
a great deal to right corporate wrongs." Troy Paredes, an
associate professor at the Washington University School of Law,
said shareholders are afforded few rights in the corporate hierarchy:
"They can vote for the board of directors, they can sell
their shares and they can sue."
SEPTEMBER 2003
THE
BIG SNAPPLE
RALPH NADER - Mayor Michael
R. Bloomberg held a news conference on September 9th which was
described by the New York Post this way: "Looking more like
a pitchman than a politician, the mayor bought an orange-mango
juice drink from a Snapple machine, opened it and took a sip."
In so doing, the Mayor's
common sense snapped, as he committed New York City unilaterally
to naming Snapple as the official water, juice and iced tea provider
for the nation's largest metropolis. The elaborate five-year
agreement -- not publicly available -- transferred $166 million
from Snapple to the city in return for exclusive selling rights
of these and other products in the public schools and public
buildings. Snapple's logo is to go on ferries and garbage cans.
The City's chief marketing
officer (that's his title) said that the Snapple agreement was
both "relevant" and "tasteful." The mayor
flagged the future of selling New York City without asking its
citizens: "This agreement is the first in a limited number
of high-quality partnerships that we think will greatly enhance
our efforts to promote and market New York City," he enthused.
What's next? Mayor Bloomberg
isn't saying. Let's guess. Will New York City have its official
cars, sports equipment, jeans, sneakers, computers, colas, hot
dogs, pens and cereal? And what intriguing new areas for corporate
logos will be made available? In his fervent quest for budget
dollars (never mind the massive tax abatements the City has given
to corporations), Mayor Bloomberg might want to make City Hall
and his own backside available. Imagine what price a huge banner
for GM or Apple Computer in front of City Hall will fetch year
after year?
AUGUST 2003
THE 10 WORST CORPORATIONS OF 2002
HOW THE WORLD BANK AND IMF ARE BANKRUPTING
COUNTRIES TO MAKE CORPORATIONS RICH
CORPORATE TRESPASSING IN SCHOOLS IS
UBIQUITOUS
WAL-MART NATION: FIRM EQUIVALENT OF
19TH CENTURY STANDARD OIL
JUNE 2003
GREAT MOMENTS IN PUBLIC UTILITIES
LIFE AT WORLDCOM
STATE BLESSED CORPORATION IN DEEP
TROUBLE
CORPORATE TRESPASSING
BOSTON
CABRIDERS HARASSED BY ADS
CORPORATE TRESPASSING
FORTUNE
COOKIES TO BECOME ADVERTISING
[Your editor has been
unsuccessful in his efforts to launch a class action suit against
fortune cookie manufacturers for including bromides in lieu of
fortunes in many cookies. Meanwhile, the fortune cookie situation
has continued to deteriorate]
LET THEM DRINK BOTTLED WAR
STUPID CORPORATE
LAWYERS TRICKS
STARBUCKS
TO SUE ABORIGINAL CAFÉ HAIDABUCKS OVER NAME
MCDONALD'S SPONSORED POPE'S TRIP
TO SPAIN
MCDONALDS SUES CRITIC FOR £15
MILLION
MARK DOWDNEY, DAILY MIRROR,
UK - a critic who slammed McDonald's for selling "fodder"
is being sued for £15.3million. The fast food giant launched
it's claim against Edoardo Raspelli yesterday after he branded
its fries "obscene and tasting of paper." Raspelli,
one of Italy's culinary experts and author of a dozen books on
food, defended himself at the hearing in Milan. He said: "I
was only saying what I thought of fast food and that I find it
repulsive.". . . Prosecutor Alessandro Facchino said: "What
he said harmed my client's reputation and the claims are completely
false."The fries that are said to taste of paper are thrown
away within five minutes of being cooked if they have not been
served and the oil is changed regularly." |