The 10 Worst Corporations of 2005
Pollution, corruption and other misdeeds
By Russell Mokhiber and Robert Weissman
2005 was a good year for bad corporations.
There were no U.S. elections to worry about, with their troubling possibility of politicians running on the popular platform of curbing corporate power.
There were corporate scandals and corporate crime and violence galore, but none that rated the ongoing banner headlines of Enron and WorldCom.
Indeed, the prosecutions of individuals associated with corporate financial scandals enabled Big Business and its apologists to claim there had actually been a crackdown on corporate crime.
All leaving corporations free to buy legislation, profiteer, pollute, poison and mistreat workers without restraint.
The corporations will never give up power, unless forced to do so by the people.
Where to start?
No better place than the Multinational Monitor’s 10 Worst Corporations of 2005, presented herewith in alphabetical order. (For the full story, go to www.multinationalmonitor.org.)
BP (British Petroleum)
In November 2005, BP said that it expects to spend as much as $8 billion in alternative-energy projects, including solar, wind, hydrogen, and carbon-abatement technology, over 10 years.
It is running two-page ads in major U.S. newspapers touting itself as a leader in alternative energy.
This is part of a high-energy campaign to cover up BP’s dirty tricks that flow from its oil business.
It has to cover up its shoddy operations on the North Slope of Alaska, where it is seeking to bust open the Arctic National Wildlife Refuge for drilling, and its reckless operations at its refineries around the globe.
What’s more, in March 2005, 15 workers were incinerated, and more than 170 injured, following an explosion at BP’s sprawling refinery in Texas City, Texas.
It was the third fatal accident at the Texas City BP facility in the last four years. Nationwide, BP’s facilities have had more than 3,565 chemical and refinery accidents since 1990, ranking first in the nation, according to a 2004 report by the Texas Public Interest Research Group (TexPIRG).
BP has admitted it was at fault in the Texas City explosion. “We regret that our mistakes have caused so much suffering,” said Ross Pillari, president of BP Products North America, after the company had completed an interim investigation in May 2005.
Delphi
“I want you to view what is happening at Delphi as a flash point, a test case, for all the economic and social trends that are on a collision course in our country and around the globe,” Delphi CEO Steve Miller told BusinessWeek in October 2005.
Miller’s view of how those trends should be resolved: with a leveling down of worker wages to the lowest common denominator, and provision of huge windfalls for executives.
Last October, Miller took his company into bankruptcy, with the explicit purpose of trashing the social contract between unionized autoworkers in the United States and the auto industry. He proposed slashing worker wages from $27 an hour to a mere 10 bucks. And, in a fit of staggering arrogance, Miller and Delphi simultaneously proposed huge bonuses for company executives.
Delphi has proposed in bankruptcy court through a “Key Employee Compensation Plan” that executives be given $43 million in incentive bonuses during the two years the company expects to undergo reorganization, that the top 500 executives pocket $88 million when the company emerges from bankruptcy, and that the top 600 get 10% of the shares of the post-bankruptcy Delphi.
DuPont
Deadly chemicals from DuPont’s perfluorinated, chemical-based coatings and related sources are now in the blood of 95% of people in the United States.
DuPont has claimed that it does not know how the chemicals got there. But Glenn Evers, formerly one of the company’s top technical experts, says that DuPont hid for decades that it was polluting people’s blood with a hyper-persistent chemical associated with the grease-resistant coatings on paper food packaging. (For a complete history, see www.ewg.org.)
In December 2005, the U.S. Environmental Protection Agency (EPA) agreed to settle claims against DuPont for a paltry $16.5 million.
The EPA boasted that the $16.5 million fine was the largest administrative fine it has ever levied under a weak toxic chemical law.
But as EWG.org noted, the fine is less than half of 1% of DuPont’s after-tax annual profits from the Teflon product when averaged over the 20-year cover-up.
On a happier note, the agency and DuPont announced that the chemicals will be phased out by 2015.
ExxonMobil
In the face of a virtually complete scientific consensus that global warming is real and happening—and considerable agreement that it is happening faster than expected just a few years ago—ExxonMobil continues to insist that “scientific evidence remains inconclusive.”
So far, the cynical, profit-motivated, short-term and self-interested views of ExxonMobil have mattered more than the evidence-based perspective of the world’s climatologists. That’s because the most profitable corporation on earth has lots of political power and is skilled at amplifying its views (see ExposeExxon.org for details), and the climatologists do not and are not.
ExxonMobil has funded dozens of front groups, think tanks, industry associations, corporate-friendly research centers and purportedly independent scientists to spread its denialism. Greenpeace has documented the company’s support for a web of more than 100 organizations—from the American Council on Science and Health to the Washington Legal Foundation—that work to cast doubt on global warming science and likely consequences.
While the world burns, ExxonMobil is raking in record profits—more than $36 billion in 2005, the highest ever earned for a single company in one year.
Ford
Ford Motor Co.’s factory in Mahwah, N.J., once the largest auto assembly plant in the nation, dumped millions of gallons of paint sludge—enough to fill two of the three tubes of the Lincoln Tunnel—into a now-residential area, revealed a series published in the Bergen Record (see www.toxiclegacy.com). Tests commissioned by the Record found lead, arsenic and xylenes in the sludge—some at 100 times the levels the government considers safe. The Record found that Ford repeatedly dumped in poor communities and failed to clean up its mess.
Reporters with the Record dug up documents showing that Ford executives knew as early as 34 years ago that its waste had contaminated a stream that feeds the Wanaque Reservoir.
The documents show that the company tried to evade responsibility by presenting tainted land as a “gift” to the state, the paper reported.
Halliburton
The company has effectively made a business model of crooked dealing with the U.S. government. Getting caught, over and over, doesn’t seem to affect things much.
In February 2005, the U.S. Army agreed to pay Halliburton’s KBR subsidiary nearly $2 billion for work that nobody can prove took place. In March 2005, the company revealed that the U.S. Justice Department opened a criminal inquiry into possible bid-rigging on foreign contracts by Halliburton. Last June, at a Congressional hearing, Bunnatine H. Greenhouse, then the senior contracting specialist with the Army Corps of Engineers, testified, “I can unequivocally state that the abuse related to contracts awarded to KBR [Halliburton’s subsidiary] represents the most blatant and improper contract abuse I have witnessed during the course of my professional career.”
And the list of abuses goes on and on …
In September 2005, the Washington Post reported that former head of the Federal Emergency Management Agency (FEMA), Joseph Allbaugh, now a lobbyist for Halliburton, was in Louisiana helping his clients obtain disaster-relief contracts.
But Allbaugh insisted he’s not in Louisiana seeking contracts for clients. “I don’t do government contracts,” he told the Post.
Also last September, Sen. Frank Lautenberg (D-New Jersey) reiterated his call for Vice President Dick Cheney to forfeit his continuing financial interest in Halliburton. Lautenberg pointed out that Cheney’s Halliburton options are worth more than $9 million. Cheney insists he has no ongoing financial entanglement with Halliburton because he will donate the profits from stock sales to charity.
What’s more, former KBR employees and water quality specialists Ben Carter and Ken May told HalliburtonWatch (www.halliburtonwatch.org) that KBR knowingly exposed U.S. troops and civilians to contaminated water from Iraq’s Euphrates River. One internal KBR e-mail provided to HalliburtonWatch says that, for “possibly a year,” the level of contamination at one camp was two times the normal level for untreated water.
In October 2005, Sen. Mary Landrieu (D-Louisiana) charged that a Halliburton subcontractor had hired as many as 100 undocumented immigrants to clean up areas damaged by Hurricane Katrina. The president of the subcontractor, Alabama-based BE&K, is retired U.S. Navy Rear Admiral David Nash. Nash was head of the U.S. office in Baghdad, which handed out Iraq contracts. “There is no connection between the hurricane-related work we are doing in Mississippi and Louisiana and Nash’s involvement in Iraq,” a BE&K representative told Reuters.
On Nov. 15, 2005, Roberto Lovato of Salon.com reported that Halliburton’s KBR subsidiary and its subcontractors illegally abused immigrants and undocumented workers in hurricane-damaged areas of the Gulf Coast.
KPMG
KPMG “admitted to criminal wrongdoing in the largest-ever tax shelter fraud,” said U.S. Attorney General Alberto Gonzales in August 2005. KPMG managed to escape with no conviction or plea agreement, thanks to a “deferred prosecution” agreement by which the firm promised to pay $456 million in fines, restitution and penalties and do better in the future.
That won’t quite make up for the harm the company inflicted. According to the government, “KPMG has admitted that it engaged in a fraud that generated at least $11 billion in phony tax losses which, according to court papers, cost the United States at least $2.5 billion in evaded taxes.”
According to a statement by IRS Commissioner Mark Everson, “Simply stated, if you had a multi-million dollar tax liability, KPMG would find a way to wipe it out even when the firm’s own experts thought the transactions would not survive IRS scrutiny. The only purpose of these abusive deals was to further enrich the already wealthy and to line the pockets of KPMG partners.”
Roche
On license from the San Francisco-based company Gilead, Roche makes the anti-flu drug Tamiflu. Tamiflu appears to be the best available pharmaceutical defense for those exposed to the avian influenza. For now, avian flu is not communicative among humans, but if the disease mutates so that it is, the global consequences could be dire.
For Roche, this is good news—suddenly its poorly selling product is in such great demand that the company literally can’t make enough. Rather than licensing production broadly, the company has engaged in a series of obfuscations about how difficult it is to manufacture Tamiflu, and maneuvered to keep as much control over the global supply as possible.
But Roche’s claim that making Tamiflu involved a dangerous and potentially explosive step also was revealed to be an exaggeration.
On Oct. 14, 2005, The New York Times reported that the Indian drug maker Cipla had reverse-engineered the drug two weeks earlier, and would have small commercial quantities available by early 2006.
With the spread of bird flu being reported daily, countries in Southeast Asia, where the epidemic among birds originated, started clamoring for the right to acquire greater quantities of Tamiflu. Following Cipla’s announcement, many other firms soon said they could produce the drug as well.
Taiwan’s National Health Research Institutes announced it had figured out how to synthesize Tamiflu last September—in 18 days.
In Thailand, the Government Pharmaceutical Organization announced in November 2005 that it had the capacity to manufacture one million Tamiflu tablets in 10 days.
Suez
Suez has been a leading purveyor and beneficiary of the global trend of water privatization—the selling off of public water systems to private entities, or the turning over of control and management of public systems to corporations. The result has been lousy service, jacked-up rates and targeted efforts for well-off households at the expense of the poor.
In a notable case in El Alto, Bolivia, mass demonstrations in January 2005 led the Bolivian government to cancel a water privatization contract with Aguas del Illimani, of which Suez is a major shareholder.
In Atlanta, the Suez subsidiary United Water signed a 20-year deal to operate the city’s water system. Maintenance backlogs accumulated, with broken water lines sometimes taking two months to fix. United Water improperly billed the city. Although privatization was supposed to avert a rate hike, combined water and sewer bills rose by about 25%. After only five years, Atlanta opted out of the contract.
W.R. Grace
Federal prosecutors in February 2005 charged Grace with knowingly endangering residents of Libby, Mont., and concealing information about the health effects of its vermiculite mining operations. Vermiculite was used in many common commercial products, including insulation, fireproofing materials, masonry fill, and as an additive to potting soils and fertilizers. The vermiculite deposits in Libby were contaminated with a form of asbestos called tremolite. Federal officials charge that Grace knew the residents would get sick—they allege Grace learned in the 1970s of the toxic nature of the tremolite asbestos in its vermiculite, but failed to turn the information over to the government, despite a legal duty to do so. The company allowed workers to leave the mine site covered in asbestos dust, allowed residents to take waste vermiculite for use in their gardens and distributed vermiculite tailings to the Libby schools for use as foundations for running tracks and an outdoor ice skating rink. n
Russell Mokhiber is editor of Corporate Crime Reporter, www.corporatecrimereporter.com. Robert Weissman is editor of Multinational Monitor, www.multinationalmonitor.org. Mokhiber and Weissman are co-authors of On the Rampage: Corporate Predators and the Destruction of Democracy (Common Courage Press).
© Russell Mokhiber and Robert Weissman |
