DECEMBER 1991 - VOLUME 12 - NUMBER 12
C O R P O R A T E C R I M E A N D V I O L E N C E I N R E V I E W
Corporate Crime & Violence in Review
The 10 Worst Corporations of 1991by Russell Mokhiber
The past year has seen corporate crime and violence on the move at an accelerating pace--public corruption, environmental degradation, financial fraud, procurement fraud and occupational homicide are all on the increase.
Criminal corporate collectivist action has inflicted injuries on the planet and its people that even the most evil of individuals acting alone could not dream of inflicting--the growing hole in the ozone layer, global warming, and increasing cancer rates, to name a few.
Yet, many people in positions of authority continue to deny this reality and defy common sense.
The vast majority of crime shows on television today, for example, focus on street crime, not corporate crime.
Earlier this year, Washington Post columnist Richard Cohen wrote that "Young black males commit most of the crime in Washington, D.C." This statement is demonstrably false. In making it, Cohen ignored the research of corporate criminology, which has found that all corporate crime and violence combined inflicts far greater damage on society than all street crime combined.
Apparently, Cohen did not take into account Exxon, International Paper, United Technologies, Weyerhauser, Pillsbury, Ashland Oil, Texaco, Nabisco, and Ralston-Purina, all convicted of environmental crimes in recent years. All of these convicted corporations operate in Washington, D.C. None of them are young black males.
All of the 46 individuals convicted in the Operation Ill-Wind prosecution of defense procurement fraud were white males. The six corporations convicted in that operation--Cubic, Hazeltine, Loral, Sperry/Unisys, Teledyne, and Whittaker--are controlled by white males. And of the people convicted in the recent Wall Street insider trading scandals, the vast majority were white males. Cohen apparently redlines these white-collar criminals and their Washington associates from his definition of crime.
Jeffrey Parker, an associate professor of law at George Mason University School of Law, put forth the idea earlier this year that "there is no corporate crime--only individuals can commit crime."
"Crime can only be committed by an individual human being who can be held morally responsible through punishment," Parker wrote. "The idea of 'corporate crime' is a corruption of the core meaning of crime and a dilution of the underlying ethic of individual moral responsible and autonomy."
Parker's theoretical idea that a "corporation has no mind, and therefore cannot commit crime" defies reality. Sure, a corporation doesn't have a mind in the human sense, but as Thomas Donaldson points out in his book, Corporations and Morality, corporations have "practical and theoretical knowledge that dwarfs that of individuals."
And their crimes dwarf those of individuals, too. In support of a different view of criminology, specifically, that a corporation can commit a crime, that white people commit more crime than black people and that television is still a vast wasteland, we present the Ten Worst Corporations of 1991.
ALYESKA: Invasion of Privacy
Charles Hamel is a former oil industry executive in Alaska. He left the business when he discovered that oil he was sending to foreign customers was significantly diluted with water. Hamel investigated the problem and found that the oil companies were aware of the water problem but failed to take action to correct it. "Instead, they denied the truth, and apparently hoped that I would forget about my business, the damage to my credibility and reputation and my lost income," Hamel says.
In 1985, Hamel decided to expose the "dishonesty of the oil industry." In addition to the water-in-the-oil problem, Hamel concluded that "the oil industry was turning Alaska into an environmental disaster."
Hamel focused his attention on Alyeska Pipeline Service Co., the consortium which represents the major oil companies operating in Alaska.
"The more I heard, the angrier I got about what was going on," Hamel told a congressional committee earlier this year. "Alyeska was polluting the water by introducing toxic sludge, including cancer-causing benzene, into the pristine waters of Port Valdez and Prince William Sound. Alyeska was poisoning the Valdez fjord's air by venting extremely hazardous hydrocarbon vapors directly into the atmosphere."
Alyeska insiders began turning information over to Hamel about environmental and other violations committed by Alyeska. Hamel passed the information to federal enforcement agencies, to the media and to Congress.
Hamel's advocacy led to enforcement actions, news stories, congressional investigations and growing public awareness of the problems of oil in Alaska. He became a major thorn in the side of the industry.
Then, Alyeska sought to silence Hamel. The company hired Wackenhut Corp., a major security firm, to investigate Hamel. Alyeska claims that it hired Wackenhut to recover "stolen documents." But Representative George Miller, D-California, who investigated the Alyeska/Wackenhut operation, said that the surveillance operation "involved the much more sinister and disturbing motives of silencing environmental critics and intimidating whistleblowers."
Wackenhut created a fake environmental group to try to trick Hamel. "One day in April 1990, a Dr. Wayne Jenkins came to me," Hamel told Representative Miller's Committee on Interior and Insular Affairs earlier this year. "He described his company, Ecolit Groups, as a well-funded group of attorneys who wanted to help me. They would provide me the tools to protect these workers who had turned to me for help. Ecolit could help protect their jobs, and supply me support staff and assistance to manage what had become a full-time, financially costly job of protecting whistleblowers and coordinating government investigations. I thought it was too good to be true."
And it was. Dr. Wayne Jenkins was in fact a Wackenhut investigator. Wackenhut surreptitiously videotaped the meetings with Hamel. And that was only the beginning.
"Alyeska authorized stealing our trash, monitoring and taping our telephone calls, concealing video cameras in a hotel room, stealing our mail and illegally obtaining our personal and financial information," Hamel testified.
Based on the information gathered through this surreptitious operation, Alyeska fired a number of employees who fed Hamel information.
Virginia state police are investigating allegations that Alyeska and Wackenhut might have violated state laws by secretly intercepting Hamel's telephone calls.
Miller's committee believes that the Wackenhut/Alyeska operation may have violated federal mail and wire fraud statutes, and laws governing theft, eavesdropping, tape recording and obtaining telephone toll records. 80th companies deny engaging in any illegal activities.
"I refuse to believe that any citizen of this country has to tolerate the invasion of privacy that I have been subjected to simply because I have exercised my Constitutional rights and responsibilities as a citizen to petition Congress," Hamel says.
AMERICAN HOME PRODUCTS: Puerto Rican Racket
What do Chef Boyardee pasta, Jiffy Pop popcorn, Wheatena, Advil, Anacin, Robitussin, Dristan have in common? They are all made by American Home Products Corp., a company that cares little about its workers.
In November 1990, AHP announced that it would close down its Whitehall plant in Elkhart, Indiana, throw its 775 employees out of work and move the facility to Guyama, Puerto Rico.
Unfortunately for American Home Products (AHP), its Indiana workers refused to go quietly into the night. Last year, the Oil, Chemical and Atomic Workers Union (OCAW) launched a grassroots campaign called "Keep Whitehall Open: Hometowns Against Shutdowns" to prevent the plant from closing [See "'American' Home Products Moves Abroad," Multinational Monitor, April 1991]. The campaign has seen a number of street actions and numerous lawsuits against AHP, including a $100 million racketeering lawsuit. The National Labor Relations Board has charged the company with numerous labor law violations.
"The closure of Whitehall looms like a death sentence over our members," says Connie Malloy, president of OCAW local 7-515. "American Home Products has displayed a total lack of respect for the law and a total lack of respect for [its] long-term employees."
In Puerto Rico, U.S. District Court Judge Jaime Pieras agreed with Malloy, at least in part. In August 1991, Pieras cited AHP for an "outrageous violation" of a discovery order in connection with the racketeering lawsuit. Pieras held that AHP had improperly withheld thousands of documents which the labor union had requested.
OCAW's racketeering lawsuit, filed in January 1991, alleges that American Home Products fraudulently obtained federal tax benefits by falsely certifying that the plant would not harm existing employment in company facilities on the U.S. mainland. Under federal tax law, corporations cannot utilize a number of tax breaks available in Puerto Rico if mainland jobs will be lost as a consequence.
CLOROX: Mud Ball
Everybody's Business: A Field Guide to the 400 Leading Companies in America, by Milton Moskowitz, Robert Levering and Michael Katz, calls Clorox "a good corporate citizen in their hometown of Oakland."
But the giant bleach manufacturer has its dirty side, too, and that side reared its ugly head earlier this year when a public relations firm prepared a "Crisis Management Plan" for Clorox, advising the company on how to deal with the environmental movement.
The plan, prepared for Clorox by the public relations division of Ketchum Communications, recommends labelling environmental critics as "terrorists," threatening to sue "unalterably green" journalists, dispatching "independent scientists" on media tours as a means to counteract bad news for the chlorine industry and recruiting "scientific ambassadors" to tout the Clorox cause and call for further study. The Clorox plan makes reference to studies linking chlorine use to cancer, and suggests key ways to discredit the findings if they ever become public.
The plan was apparently prompted by fears that the environmental group Greenpeace would target household use of chlorine bleach and call for its elimination.
And those fears proved correct later in the year when Greenpeace issued a scathing report, "The Product is Poison: The Case for a Chlorine Phase-Out. " According to the report, chlorine is one of the world's most severe toxic pollutants and should be phased out. The report also called for plans to protect the 10,000 to 20,000 workers employed in the chlorine industry and the communities where such industries are located. The report found that in U.S. and Canadian populations, 177 organochlorines have been identified in human fat, breast milk, blood, semen and breath.
Greenpeace has instituted an international program aimed at ending the use of chlorine in the pulp and paper industry. Greenpeace's slogan, "Chlorine-Free in 1993" is cited in the Clorox crisis management plan, which outlines numerous "worst case scenarios" in which Greenpeace and "unalterably green" journalists figure prominently.
Water pollution from the use of chlorine in the paper industry has contaminated rivers, streams and lakes throughout the world. Chlorine is the base chemical in DDT, PCBs, Agent Orange, CFCs and many other persistent toxic pollutants, according to Greenpeace's Shelly Stewart.
Fred Reichler, Clorox's director of corporate communications, backed away from the plan when stories about it hit the press in May of this year, saying that the plan was "rejected by Clorox." But, he added, "all responsible corporations must be aware of issues that may affect their products and services."
Du PONT: Worst Polluter
Earlier this year, E.I. Du Pont de Nemours & Company began running a television advertisement featuring sea lions, otters, dolphins and penguins playing in their natural environments while Beethoven's "Ode to Joy" plays in the background. The 30- second commercial shows a shoreline and pans the horizon, as the narrator remarks, "Recently, Du Pont announced that its energy unit would pioneer the use of new double-hulled oil tankers in order to safeguard the environment."
Friends of the Earth's Jack Doyle points out, however, that Du Pont's oil subsidiary, Conoco, does not have any double-hulled ships in service and that its fleet will not be doubled hulled until the year 2000. And the company has no plans to put double hulls in two of its supertankers, according to Doyle.
The advertisement "is doubly effective, because it doesn't just make us feel good about Du Pont--it makes us feel good about Du Pont the environmental company," Doyle says.
In fact, Du Pont is the nation's number one corporate polluter. According to an exhaustive report issued by Friends of the Earth earlier this year, Du Pont has paid out nearly $1 million in fines, penalties or lawsuit settlements for alleged environmental and public health problems between March 1989 and June 1991. Du Pont reported that it emitted 348 million pounds of pollution in 1989--14 times more than Dow Chemical, 20 times more than Chrysler, and 30 times more than Mobil. The Friends of the Earth report, "Hold the Applause," found that, among the largest 10 companies in 1989, Du Pont had the highest ratio of pollution to profit and the lowest value of sales generated per pound of U.S. pollution.
According to the study, Du Pont has dumped pollutants into the world's oceans, invented chemicals which are now destroying the earth's protective ozone layer, injected millions of pounds of hazardous wastes underground with unknown consequences, produced pesticides that have infiltrated the world's foodstuffs and drinking water, sold lead additives for gasoline in developing countries and lobbied Congress, state legislatures and foreign governments to oppose or weaken environmental measures.
An incident reported earlier this year sheds light on the company's callousness and disregard for human life. The News Journal of Wilmington, Delaware reported that, in its quest to develop a method of dry-cleaning women's clothing, Du Pont exposed volunteers to Freon 113 during early experiments, leading to the death of a company secretary. Du Pont continued the experiments even after the death of 44-year-old Beverly B. Manning, according to company documents obtained by the Journal.
But if large megacorporations go the way of the dinosaurs, Du Pont will probably be most remembered for producing chlorofluorocarbons (CFCs), the chemicals which destroy the earth's protective ozone layer. The Environmental Protection Agency estimates that increased exposure to ultraviolet rays brought on by ozone destruction will result in 200,000 additional U.S. skin cancer-related deaths over the next 50 years.
"Du Pont is perhaps most culpable for stringing out the CFC era for its own business reasons and for delaying a shift to safe alternatives," asserts Doyle [See "Du Pont's Disgraceful Deeds: The Environmental Record of E.I. Du Pont de Nemours," Multinational Monitor, October 1991].
ETHYL CORPORATION: Poisoning Third World Children
The hazards of lead to children are well known: low birth weight, decreased intelligence, behavioral abnormalities and other life-long, irreversible damage. A public education campaign in a number of Western countries forced governments to ban lead additives in gasoline.
However, a U.S. corporation still produces tetraethyl lead (TEL), a toxic gasoline additive--for export to Third World countries.
"Ethyl is exporting a developmental toxin to developing countries," says Kenny Bruno, coordinator of Greenpeace's Hazardous Exports Prevention Campaign. "Lead was taken out of gasoline in North America after it poisoned countless children, but Ethyl continues to export lead additives abroad. Ethyl's decision to fuel profits by exporting this deadly [chemical] demonstrates contempt for children around the world" [See "Poison Petrol: Leaded Gas Exports to the Third World," Multinational Monitor, July/August 1991].
While most industrialized countries have banned or reduced the use of leaded fuel, Ethyl, which manufactures TEL at a plant in Canada near Sarnia, Ontario, applied for permission to double its production capacity of the additive. Later, under pressure from environmentalists,the company abandoned its expansion plans, announcing that it would instead buy TEL from other suppliers.
Ethyl is one of only three companies in the world that produce TEL. The others are Du Pont and the United Kingdom-based Octel. Ethyl, the second-largest producer of the additive, insists that TEL is not linked to lead poisoning.
But, according to Dr. Sergio Piomelli, a hematologist at Columbia University who has published a number of studies on lead poisoning, there is very strong evidence that lead exposure even at low levels interferes with the intellectual function of the developing brain.
"The removal of lead from gasoline in this country has had a fantastic effect on children's health," Dr. Piomelli says. "It is unfair and immoral to inflict more exposure to lead on children in developing countries."
Many Third World countries still rely exclusively on highly leaded fuel. According to David Schwartzmann, professor of geology at Howard University, lead poisoning of children in the Third World cities "can be expected to be truly epidemic."
Bruno concludes that "there is no technological impediment to preventing almost all of the lead contamination stemming from the use of leaded gasoline."
It's the political impediment--Ethyl Corp. and the other lead additive producers--that's blocking change and creating health problems worldwide.
GENERAL ELECTRIC: Bringing Nasty things to Life
After a two-year absence, General Electric (GE) is back on the Ten Worst List. General Electric is still a criminal recidivist company, it is still heavily engaged in building weapons of mass destruction and it still trying to whitewash its image by flooding the national media with its catchy jingle, "GE Brings Good Things to Life."
But the people at INFACT, the Boston-based public interest group that is calling for a consumer boycott of all GE products, want you to know that GE has brought some very bad things to the environment, too--namely extensive pollution and contamination.
In a report released last year, "Bringing GE to Light: General Electric's Trail of Radioactive and Toxic Contamination from the Company's Nuclear Weapons Work," INFACT found that GE's nuclear weapons work has created environment health and safety nightmares across the United States.
INFACT charges that GE knowingly contaminated residents of Washington, Oregon and Idaho with radioactive contamination from its Hanford nuclear weapons facility. Workers and communities faced similar dangerous contamination problems at GE facilities throughout the country.
In addition, the report found that:
And in a report released earlier this year, "Workers At Risk: A Survey of OSHA's Enforcement Record Against the 50 Largest U.S. Corporations," Essential Information's James Donahue found that of the 50 largest industrial corporations surveyed, General Electric was by far the most frequent violator of federal workplace and safety health laws. From 1977 through 1990, GE received 2,017 citations and paid a penalty for 27.3 percent of those citations. GE received 550 penalties during the period, more than any other corporation in the survey.
GE was also heavily involved in killing in the Persian Gulf. INFACT reported that GE received nearly $2 billion in U.S. military contracts for systems employed in the Gulf War effort.
GE owns NBC, the television network. During the Gulf War, as the media watchdog group FAIR has pointed out, "Conflicts of interest at NBC were an ongoing problem, as when the network aired a laudatory segment on the Patriot missile (1.18.91), for which GE produces parts. [NBC anchor Tom] Brokaw called the Patriot "the missile that put the Iraqi scud in its place."
FAIR also reported that "the government of Kuwait is believed to be a major GE shareholder, having owned 2.1 percent of GE stock in 1982, the last year for which figures are available.
Conflicts of interest at NBC have not been confined to the war. When NBC's "Today" show did a segment on consumer boycotts around the country, many consumer products from Spam to Marlboros were mentioned. GE's light bulbs were left out. Todd Putnam, editor of the National Boycott News, says a "Today" show staffer told him "We can't do that one [GE]. Well, we could do that me, but we won't." A
nother "Today" producer joked that he would be looking for a job if he publicized the GE boycott on NBC. G. HEILEMAN BREWING CO.: Racist Marketing (omitted here; unscannable) KELLOGG'S: Harassing the Police (omitted here; unscannable) ------------------------------------------------------------------------------  MULTINATIONAL MONITOR VOLUME 12, NUMBER 12, DECEMBER, 1991.
HOFFMAN LA ROCHE: 80 Dead and Counting
The giant Swiss drug manufacturer F. Hoffman La Roche discounted early warnings by its U.S. counterpart that a drug used as a sedative and an anesthesiac could cause deadly side effects if sold in a highly concentrated form, according to internal company documents released earlier this year.
The documents indicate that the company's marketing division felt that the problem was "less significant" than the "commercial exploitation" of the drug. Roche went forward and sold the drug, Versed, in the more concentrated form. Versed has been linked to about 80 deaths and many more near fatalities.
In July 1991, Public Citizen's Health Research Group called on the Bush administration to launch a criminal investigation of the company for failing to report key findings about the hazards of Versed to the government. The Bush administration has yet to act.
"It is clear from FDA's own chronology of the events between initial U.S. approval of the concentrated (5mg/ml) dosage form in December 1985 and the eventual introduction of [the safe, less concentrated] (1mg/ml) dosage form in July 1987, that FDA had not been informed of Roche's internal evidence that the concentrated dosage form was so dangerous for many patients, especially those getting the drug for diagnostic procedures, so- called conscious sedation where an anesthesiologist is not present," says Public Citizen's Dr. Sidney Wolfe.
The company has denied that the more concentrated form of Versed is unsafe and that it discounted safety concerns for marketing considerations.
The incriminating documents include correspondence between Roche's U.S. affiliate in Nutley, New Jersey and its Swiss headquarters in Basel, Switzerland. The documents also include a summary and analysis of the correspondence between the Basel headquarters and the Nutley division prepared by the Washington, D.C. law firm of Arnold & Porter prior to a Food and Drug Administration investigation into the marketing of the drug.
The Arnold & Porter memorandum, marked confidential, concluded, "One interpretation possible from these documents is that Roche/Nutley disregarded its own concerns for safety of the drug in favor of the marketing and political pressure from Roche/Basel."
"When the drug came out, I was very surprised at the concentration and I ran some of the dosage numbers and found it was a dreadful mistake--that the drug was too concentrated for physicians to use responsibly," says Dr. Robert M. Julien, an anesthesiologist based in Portland, Oregon.
"My feeling was that the company was desperately trying to protect its Valium market with a very expensive brand-named drug," Dr. Julien says. "When it was marketed in early 1987, it was purported to be a Valium replacement and Valium look alike. It is clear that Versed is about four to six times as potent as Valium--although it was purported to be equal to Valium."
Dr. Julien calls Roche "irresponsible" and says that he thinks the company should remove the highly concentrated form from the market.
Public Citizen's Dr. Wolfe is calling on the FDA to punish Hoffman La Roche. "Roche was well aware of this problem and that it was essential to also provide a more dilute dosage form in order to prevent deaths and serious injuries," Wolfe wrote to FDA chief David Kessler. "This important information appears to have been withheld from FDA for a significant amount of time, resulting in dozens of preventable deaths in this country. According to FDA officials, the belated introduction of the more dilute dosage form has been accompanied by a significant reduction in these tragic, preventable deaths. The full force of the law must be applied to the Roche officials responsible for these lost lives. Even a fine of hundreds of thousands of dollars would be far too lenient. We hope that your investigation will also lead to imprisonment for the Roche officials."
PROCTER & GAMBLE: Of Dirty Rivers, Disposable Diapers and Coffee from El Salvador
You would think that a company that makes products with such names as Ivory Snow, Mr. Clean, Sure and Sunny Delight would keep its operations clean, sure and sunny. Think again.
Every day, Procter & Gamble's cellulose plant in Florida dumps 50 million gallons of wastewater into the Fenholloway River, which was once known for its healing mineral springs.
Health officials have told residents not to eat fish from the river because of dioxin contamination. Chemicals have seeped from the river into drinking water wells. Proctor and Gamble (P&G) now supplies boiled drinking water for area residents and for workers at its plant.
Environmental Protection Agency (EPA) officials say that, in parts of the river, fish are no longer found. In other parts, female fish have been found with male characteristics.
The pollution of the river has been going on for years. Earlier this year, Julie Hauserman, a reporter with the Tallahassee Democrat, pushed the plight of the Fenholloway into the public spotlight with a series of articles titled "Florida's Forgotten River."
According to the Democrat, since March 1991, environmentalists have petitioned the EPA to overstep Florida environmental officials and upgrade the river from its industrial classification to a recreational river where fish can survive and people can swim. State officials are now undertaking the most extensive review of P&G's permit since the plant was opened to determine whether it should retain its permit.
"It's the worst river I've ever seen," says David Ludder, an attorney with the Tallahassee-based Legal Environmental Assistance Foundation. Ludder says the contaminates released into the river include a wide range of chemicals such as ammonia, bromide, organic nitrogen, oil and grease, dioxin, lead, mercury, phosphorus, magnesium and phenols. "The color in the discharge has effectively prevented sunlight from reaching the bottom of the river as well as from reaching the bottom of the Gulf of Mexico where the Fenholloway flows," he says. "The result is that plant life and the aquatic organisms that depend on sunlight can't survive. Chemicals have consumed the available oxygen in the water."
Ludder says that P&G has polluted the river without violating state and federal environmental laws, but that enforcement action may be possible for the contamination of the groundwater.
P&G, the maker of Luvs and Pampers disposable diapers, is the nation's largest disposable diaper manufacturer. Earlier this year, attorneys general from 10 states forced P&G to agree to refrain from claiming on labels and in advertising that its diapers are readily degradable.
New York Attorney General Robert Abrams said that the company's advertisements create the overall impression that the diapers are completely biodegradable and make it appear to consumers that they need not worry about the solid waste problems posed by disposable diapers because they will somehow turn into environmentally benign dirt in a matter of months.
"To make an environmentally informed choice, consumers need truthful and accurate information, not slogans aimed at making them feel good," Abrams said. "By promoting their disposable diapers as compostable, when facilities that accept diapers for composting are virtually unavailable, Procter & Gamble is deceiving consumers who are concerned about the trade-offs between using disposable diapers and limiting solid waste."
One last thing--Neighbor to Neighbor is into the third year of its boycott of P&G's Folgers coffee because the company buys its coffee beans from El Salvador, where a small group of elite families controls coffee production (and the rest of the economy) and where death squads and the military have murdered tens of thousands of civilians over the last decade. Earlier this year, P&G announced that it is developing a new blend of coffee that does not contain coffee beans from El Salvador. But for now P&G is still using El Salvador beans in Folgers, so the boycott is still on.