The Multinational Monitor

JUNE 1989 - VOLUME 10 - NUMBER 6

B E H I N D   T H E   L I N E S

Protecting Pensions

A pension law loophole is allowing an increasing number of companies to strip assets from pension plans, create artificial windfalls and rob workers and retirees of expected benefits and cost of living adjustments. These pension fund raids have increased from nine in 1980 to 1,400 in 1986. Much of the money siphoned off is not really surplus as the companies claim; rather it is needed to fund ongoing benefits for active workers, to shield against stock market tumbles and to restore the value of retirees' pensions eroded by inflation.

Senator Howard Metzenbaum, D-OH, and Representative William Clay, D-Mo., recently introduced the Employee Pension Protection Act of 1989 (S. 685, H.R. 1661) to close this loophole. The bill, currently before the Labor subcommittee, is supported by such diverse employee groups as the American Red Cross retirees and the Alabama shipbuilders of Local #18 of the Industrial Union of Maritime and Shipbuilding Workers of America.

The Red Cross announced in April 1989 that it was going to raid the retirees' pension fund and asserted that it would be in the retirees' interest. The retirees believe that the raid was planned by George Moody who, in addition to being the Chairman of the Red Cross Board of Directors, is the Chief Operating Officer of the Security Pacific Bank in California. James Foley, a spokesperson for the Red Cross retirees called this management decision "unconscionable" and said, "We'd expect this of a Wall Street raider, not of the American Red Cross." Foley accused Moody of applying "short-sighted, profit-motivated corporate strategies to the federally chartered Red Cross

Employee groups, facing pension raids see the legislation as a possible compromise because it would allow companies to have access to the pension money but it would also control that access and protect employee benefits. Red Cross retirees are trying to convince management to wait until the legislation is enacted before going ahead with the raid.

The Metzenbaum-Clay bill, if enacted, will protect pension funds by allowing access to the funds only if the company: 1) terminates the existing plan and buys insurance company annuitiesto protect all benefits earned to that point; 2) sets up a new plan which assures funding of workers' benefits on an ongoing basis according to reasonable actuarial standards and maintains enough money in the plan to cushion against stock market downturns; and 3) provides a one-time payment to retirees to restore the purchasing power of their pensions.


"Anti-smoking laws can pass before you know it. But now Protecting your rights is as easy as picking up the phone." This message appeared in an R.J. Reynolds (RJR) mailing advertising the ActionAlert hotline, an 800 telephone number that encourages smokers to inform RJR about any proposed anti-smoking laws or activities in their city or state. Tobacco comparty executives are dearly worry, ing.

R.J. Reynolds is trying to counter thegrov ingpublicaware ness of the harmful health effects of both smoking and passive smoking, as well as the resulting decline in the number of Americans smoking.

Although RJR claims that a national survey found that a majority of American adults do not support more restrictive or tougher anti-smoking measures, 60 percent of the 1,000 Americans (including 303 smokers) polled by Gallup in 1988 said that they favor a smoking ban in all places of public accommodation. In addition, both the Surgeon General and the National Academy of Sciences agree that inhaling second-hand smoke can cause disease, including lung cancer, in healthy non-smokers. They also estimate that�5,000 non-smokers die of lung cancer every year because of the tobacco smoke in the air.

Included in the recent RJR mailing is a newsletter called CHOICE, which describes how "smokers are uniting for victory." In mid-1988, RJR began sponsoring smokers' rights meetings in several states to encourage smokers to organize against legislation that would re-strict smoking in some public places and impose higher excise taxes on cigarettes.

The Politics of Religion

A recent study sponsored by the Center for the Study of Social and Political Change and published in the March/ April 1989 issue of Public Opinion, surveyed 178 Christian religious leaders in the United States on issues of economic, social and foreign policy. Ninety-seven per-cent of the leaders classified themselves as Catholics, Mainline Protestants or Fundamentalist Protestants.

The survey concluded that the attitudes of the religious leaders correspond closely to their religious ideologies. Fifty-nine percent of Catholic leaders and 80 percent of MainlineProtestantsconsider themselves liberals, compared to only 13 percent of the Fundamentalists. Ina 1988 CBS/New York Times poll, only 21 percent of Americans called themselves liberal, and 33 percent considered them-selves conservative.

The professed liberalism of some of the leaders goes beyond the label too. The survey found that Catholic and Mainline Protestant leaders are "much more critical of capitalism than are the Fundamentalists." When asked if the "U.S. would be better off if it moved toward social-ism," 31 percent of Catholics and 25 percent of Mainline Protestants agreed. In response to the statement that "big corporations should be taken out of private ownership," 23 percent of Catholics and 21 percent of Mainline Protestants agreed, compared with only 4 percent of Fundamentalist leaders agreeing to each statement. Moreover, only a slight majority of Mainline Protestants (52 percent) and 64 percent of Catholics believe that private enterprise is fair to workers, compared to an overwhelming 91 percent of Fundamentalists.

Researchers concluded that the criticism of capitalism seems to be part of a broader disaffection with American institutions on the part of religious leaders. Catholic and Mainline Protestant leaders are more sympathetic to a welfare-state philosophy and less supportive of what has sometimes been called the "Protestant ethic" than are Fundamentalists. All Fundamentalists agreed with the statement that "those who are more able should earn more," compared to 82 percent of Catholics and 77 per-cent of Mainline Protestants.

The Catholic and Mainline Protestant leaders favor a stronger role for government. Eighty-one percent of Catholic and 83 percent of Mainline Protestant leaders favor government action to reduce the income gap between rich and poor, as compared to only 43 percent of Fundamentalist leaders. Fifty-one percent of the Catholic elite and 32 percent of Mainline Protestants prefer less regulation of business, compared to 83 percent of Fundamentalist leaders.

Pueblo to People

In 1979 Daniel Salcedo and Marijke Belzebor founded a new kind of development organization. Their creation, "Pueblo to People," works to build connections between the people of Latin America ("pueblo" in Spanish) and those in North America. Pueblo to People sells Latin American products in the North, and uses the proceeds to fund aid projects in the South. The operation markets crafts and food items from Latin America through a mail order catalog and in two stores in San Francisco and Houston. Pueblo to People's merchandise is from craft and agricultural cooperatives run by low income people in Latin America. The sales to North America provide important income and job opportunities.

Pueblo to People studies the underlying causes of the poverty affecting the deprived majorities of most developing countries and provides technical and financial assistance for health and educational aspects of projects. Its founders hope that this will ensure that aid reaches those that need it most. The sale of Pueblo to People merchandise pays for more than 95 percent of the cost of the projects it sponsors.

Salcedo and Belzedor believe that by linking trade with development aid, Pueblo to People can provide help without encouraging the unhealthy dependence on aid that so many government programs have fostered. In an introduction to the organization, Salcedo writes, "Even though we hear about U.S. involvement in the region primarily through military or government to government aid, the unnoticed fact is that, for generations the United States has had a much more powerful and constant influence through trade."

The Pueblo to People operation also serves as a vehicle for informing the U.S. public about the lives of many people in Central America. The Spring 1989 catalog is called "Field Guide to Citizen's Diplomacy." Interspersed among the photographs and descriptions of colorful hand-loomed Guatemalan clothing, Peruvian jewelry and Honduran wood work, there are blurbs about many of the non-governmental organizations which have developed programs to encourage popular exchange between the United States and Latin America. Each catalog has a theme; the next one, due this summer, will provide information about women in Latin America.

� Katherine Isaac

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