Multinational Monitor

APR 1997
Vol. 18 No. 4


The Campaign to Eliminate the Separation Between Banking and Commerce
by Jake Lewis

The Case for Preserving the Separation Between Banking and Commerce
by Jonathan Brown

Conquering Peru: Newmont's Yanacocha Mine
by Pratap Chatterjee

Taiwan Dumps on North Korea: State-Owned Taipower Schemes to Ship Nuclear Waste
by Jonathan Dushoff


The Political Economy of the Occupation of East Timor
an interview with
Jose Ramos-Horta



Behind the Lines

Don't Let This Merger Take Off

The Front
Slow Motion Bhopal - Indecent Proposal

Their Masters' Voice

Names In the News

Trade Watch

Book Notes


Names In the News

Forced Truly Nationwide

To settle federal insurance redlining charges, Nationwide Insurance will invest more than $13 million in up to 10 communities and change how it underwrites and markets homeowners insurance to ensure that minority neighborhoods get equal access to insurance.

A company agreement with the Justice Department resolves allegations that the insurance company made homeowners insurance unavailable or available on less favorable terms in minority neighborhoods.

Federal officials charged that Nationwide's rules that a home cannot be insured if it is above a certain age or below a certain value were not supported by economic considerations. These rules effectively barred coverage in minority neighborhoods where homes are typically older and undervalued, in part due to discrimination in the real estate market.

Under the agreement, which federal officials called "the most comprehensive settlement ever reached with an insurance company under the federal Fair Housing Act," Nationwide will:

  • inspect the condition of a home to decide if it should be covered, instead of simply refusing coverage because the home is too old or falls below a certain value;
  • not place any geographic restrictions that bar homeowners insurance in minority neighborhoods;
  • increase insurance coverage through targeted advertising and community outreach; and
  • provide $2.2 million in each of the next six years in up to 10 cities where Nationwide primarily conducts business to assist homebuyers in minority neighborhoods with down payments, closing costs, below market mortgage loans, second mortgages and home ownership counseling.

"Insurers should make decisions based on risk, not race," says Attorney General Janet Reno. "This settlement ensures that homeowners of equal risk, regardless of race or ethnic origin, will enjoy equal access to homeowners insurance."

Look Who's Calling

Consumer Groups think it is an awful merger that will hurt consumers.

But NAACP executive director Kweisi Mfume thinks the proposed Bell Atlantic/NYNEX merger "will make a stronger company that is better able to service its constituents."

In full-page ads that ran in the New York Times in March and other papers recently, and that were paid for by the two telephone companies, Mfume says that the newly merged company "can now adopt the best practices of each of its parts to make a better whole."

Bell Atlantic's Shannon Fioravanti says that the company has donated $270,000 to the NAACP since 1984, with most donations in the $10,000 to $15,000 range. But last year, Bell Atlantic gave its largest donation, $65,000 to develop and operate the NAACP's web site.

The NAACP's Dan Wilson says that Bell Atlantic did not pay the NAACP for Mfume's quote that appeared in the ad, and denied that a quid pro quo was involved.

Consumer groups are almost unanimously opposed to the Bell Atlantic/NYNEX merger, which they say will prevent the competition that it is supposed to protect consumers in a deregulated market.

Bribing Bottlers

Two former executives at Coca-Cola's largest bottler were indicted in March on charges of trying to bribe an employee with $10,000 in an effort to defeat a unionizing effort.

James Wardlaw, a former regional vice president and general manager and Eric Turpin, a former regional vice president of human resources of Coca-Cola Enterprises Inc.'s Atlanta region, were indicted.

The company was not named and is cooperating with federal investigators, says U.S. Attorney Kent Alexander.

Federal officials charged that Wardlaw and Turpin paid Jeffrey Wright to influence his co-workers to vote against Local 42 of the Bakery, Confectionery and Tobacco Workers in a National Labor Relations Board election held August 3, 1994.

The union, which was seeking to be certified as the collective bargaining representative for the company's workforce, lost the election.

Coca-Cola Enterprises said in a statement that the charges, "if they are determined to be valid, would directly contradict our company's labor relations philosophies, policies and practices."

Bribing Indonesia

The Foreign Corrupt Practices Act is back. In the first enforcement action in over a decade, the Securities and Exchange Commission (SEC) charged in February that an Indonesian subsidiary of the Texas-based Triton Energy Corp. authorized payments in an effort to affect government policy affecting the company.

The SEC alleged that in 1989 and 1990, Triton officials Philip Keever and Richard McAdoo authorized numerous improper payments to a business agent it expected would then bribe Indonesian officials.

The SEC also alleged that Triton officials concealed the payments by "falsely documenting and recording the transactions as routine business expenditures."

The company, without admitting or denying the allegations, agreed to pay a $300,000 penalty. Keever also entered a consent decree ordering him to pay a $50,000 civil fine.

- Russell Mokhiber



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