Multinational Monitor

MAY 1998
VOL 19 No. 5


The Corporate Right to Cover Up: The Environmental Audit Privilege and the Public Interest
by Sanford Lewis

Veggie Libel: Agribusiness Seeks to Stifle Speech
by Ronald K.L. Collins

First Amendment Follies: Expanding Corporate Speech Rights
by Robert Weissman

Canadians Ungagged: A Victory for Free Speech in Daishowa v. Friends of the Lubicon
by Virginia Rose Smith


SLAPPing Back for Democracy
an interview with George Pring


Behind the Lines

Corporations and Free Speech

The Front
Rejecting the IMF - Milking the Media

The Lawrence Summers Memorial Award

Money & Politics
Corporate Tax Magic

Their Masters' Voice
The Small World of Lobbyist Ann Wexler

Names In the News

Book Notes


The Front

Rejecting the IMF

The International Monetary Fund (IMF) suffered a body blow in April, as the U.S. House of Representatives voted not to authorize $18 billion in new funding for the international lending agency.

In a seeming Alice-in-Wonderland scene, the move to provide the $18 billion was initiated by the Democratic leadership in the House of Representatives, and defeated by opposition from Republicans, including Speaker of the House Newt Gingrich.

The Clinton administration has made securing funding for the IMF -- $14.5 billion for a "quota" increase (the amount countries pay to "belong" to the IMF) and $3.5 billion for a new line of credit known as the New Arrangements to Borrow -- a top legislative priority in 1998 [see "International Monetary Fund 101," Multinational Monitor, January/February 1998]. While the Senate has approved the funding, the House of Representatives has remained reluctant to support the IMF.

 Democrats stressed the urgency of infusing the IMF with new monies in the wake of the Asian financial crisis and pointed to labor and environmental language in the IMF funding bill which they said would protect those interests. Republicans complained about the IMF's role in bailing out big banks and imposing austerity measures on developing countries.

"We are in a new world," lectured House Minority Leader Richard Gephardt, D-Missouri. "And in that new world, technology has put us at a point where when one developing country has a horrible problem it begins to invade the economies of all developing countries in the world." The IMF, he insisted, was necessary to help limit the contagion.

Gephardt also took pains to respond to Gingrich's criticism of Democratic "protectionists" who supported the IMF. "I obviously reject the Speaker's categorization of some of us as protectionists," he said. "I voted for fast track when George Bush was president. I voted for the WTO [World Trade Organization]. I stand ready to vote for fast track for President Clinton if we can have proper provisions to recognize the rights and the needs of workers and the environment."

Gingrich, by contrast, slammed the IMF. "Two major U.S. banks reported yesterday that they had had record profits," he said. "None of the big banks are suffering out of Indonesia. They have made their money. They are not suffering out of South Korea. But what does the International Monetary Fund answer? Raise taxes on the poor."

Gingrich skewered the Democrats for supporting the IMF. "I hear people come to this floor who claim they represent workers, who say they are for an international bank institution that is totally secret, that is run by a bureaucrat whose major policy is to raise taxes on workers in the Third World to pay off New York banks," he said. "That does not sound like populism to me."

Gingrich's comments referred not only to Gephardt, but to many Democrats typically critical of globalization who supported the IMF. Among them was House Minority Whip David Bonior, D-Michigan. Bonior justified his support for the IMF on the grounds that the IMF funding bill included language purportedly intended to protect workers and the environment.

This language instructed the U.S. representative to the IMF (known as the U.S. Executive Director), to use her "voice and vote" to advance certain aims, such as respect for labor rights, environmental protection and defending human rights.

The IMF Grilled

In a hearing of the House Banking Subcommittee on General Oversight and Investigations just two days before the vote, strong evidence emerged suggesting "voice and vote" language would not match its proponents' expectations.

Karen Lissakers, the U.S. Executive Director to the IMF, testified at the House Banking subcommittee hearing, marking the first time the U.S. executive director had ever testified before Congress.

Under questioning, she acknowledged that while the IMF executive board had made approximately 2,000 decisions since 1993, it had held votes perhaps only a dozen times. Almost all IMF decisions, she explained, are reached by consensus -- one the United States apparently does not choose to upset by exercising its de facto veto at the Fund.

"For 20 years, members of Congress have been wasting their time" adopting "voice and vote" language that has no real impact because the IMF does not conduct votes, Bernie Sanders, I-Vermont, angrily told Lissakers.

Sanders focused on "voice and vote" provisions on human rights and labor rights in existing law. He read from the U.S. State Department report on human rights, which labels Indonesia a major violator of human and labor rights, and asked how the United States could support loans to Indonesia.

Treasury Assistant Secretary Timothy Geithner explained that the U.S. State Department compiles a list of human rights-abusing countries for which the United States cannot support loans. This list differs substantially from the information in the State Department's own detailed annual report on human rights. According to Geithner, only five countries are currently on the no-loan list: China, Sudan, Equatorial Guinea, Iran and Mauritania.

Sanders was not impressed. "You are funding a vicious dictator [now-deposed Indonesian President Suharto] who jails his opponents," he said. "It seems to me you very clearly disobeyed the law."

After a three-hour grilling, Lissakers' testimony ended. A slew of progressive and conservative opponents of the IMF then testified.

In written testimony, Marijke Torfs of Friends of the Earth documented the history of the IMF ignoring prior directives from the U.S. Congress [see "Reining in the IMF," Multinational Monitor, January/February 1998].

Consumer advocate Ralph Nader showed how "voice and vote" language in the proposed new legislation closely paralleled language in existing law, asking, "What reason is there to believe that this round of voice and vote language -- so similar to that of prior years -- will in any way affect Fund policy?"

"There is little evidence that the IMF takes seriously the concerns of the U.S. Congress or that the U.S. Executive Director vigorously pursues the voice-and-vote policies articulated by the Congress," Nader said. "If there were, the Congress would not again be debating instructing the U.S. Executive Director to advocate for policies that she is already required to promote."

Conservative critics agreed that instructions to the Fund are meaningless. "The problem is not a paucity of instruction, it is a lack of enforcement," said Edwin J. Feulner, Jr., head of the Heritage Foundation.

"If Congress truly wishes to address the many institutional and theoretical problems of the IMF," he testified, "it must use its constitutionally mandated power of the purse to withhold all U.S. funds -- past, present and future -- from the IMF unless its conditions of reform are met."

There was a remarkable convergence of opinion on the necessary IMF reforms: more openness and transparency; an end to the imposition of recessionary economic policies; restrictions to prevent the IMF from bailing out big banks -- bailouts which present a "moral hazard" by insuring highly risky behavior.

Lingering Support

The left-right united opposition to the IMF, however, does not appear to extend to the Congress. All but a couple dozen Democrat members of the House of Representatives supported the IMF funding request. Many if not most Republicans are eventually likely to support funding, once they have milked the issue for all of its political worth.

Still, the massive congressional opposition to the Fund and the harsh rhetoric from the Republican leadership was unprecedented, a sign that the IMF's base of support is, at least, eroding.

-- Robert Weissman

Milking the Media

Last year, two reporters, Jane Akre and Steve Wilson, were added to the list of road kill on the television superhighway when they were fired from the Fox Television affiliate in Tampa, Florida (WTVT).

In a lawsuit filed against the station in April, Akre and Wilson alleged that Fox executives ordered them to broadcast lies about Monsanto's controversial bovine growth hormone (BGH, also known as bovine somatotropin or BST) now being used by many of the nation's dairy farmers.

The journalists say they were fired from Fox-owned station in Tampa (WTVT) after completing a four-part series on BGH in the Florida milk supply.

The series alleged, among other things, that supermarkets in Florida have been selling milk from cows injected with BGH, despite promises by those supermarkets that they would not buy milk from treated cows until the hormone gained widespread public acceptance.

BGH was approved by the Food and Drug Administration (FDA) in 1993 over the objections of independent scientists who contend that use of the hormone poses health risks to milk drinkers. Such concerns have led the European Union, Australia and New Zealand to prohibit use of BGH in cows.

Wilson says that just prior to the first scheduled air date (February 24, 1997), Monsanto's outside libel attorney sent a threatening letter to Roger Ailes, president of Fox Network News.

As a result of that letter, the series was postponed, and Wilson and Akre agreed to go back to Monsanto to give the company another chance to respond to the allegations in the story.

This drew another letter from Monsanto's lawyer. From then on, things went sour between the reporters and their bosses. Wilson says the letters were the beginning of a successful campaign by Monsanto to kill the story.

A meeting was held at the station March 5, 1997 to discuss the issue, but Wilson and Akre were not invited.

"After that, the script was reworked," Wilson says. "Changes were ordered in the script. We were essentially presented with an order to run the script in the altered fashion that Fox lawyers suddenly thought was the way to tell the story."

Wilson says that Fox first threatened to fire the two reporters when they refused to broadcast what Wilson and Akre considered to be false and misleading information.

According to Wilson, on April 16, 1997, WTVT's vice president and general manager, David Boylan, told Wilson and Akre "you will either broadcast this story the way we are telling you to broadcast it, or we will fire you in 48 hours."

Unlike many of their supine brethren within the industry, Wilson and Akre stood up to the corporate bosses.

Wilson told Boylan, "If you fire us for refusing to broadcast this information that we have already documented to you is false and misleading, we will go directly to the Federal Communications Commission (FCC) and file a complaint. You cannot knowingly broadcast news which you know to be false and misleading."

After the threat to go to the FCC, the station responded by offering about $200,000 to the reporters if they would agree to a gag order.

Wilson and Akre refused and were then assigned to re-write the story 73 times over the course of the remaining nine months on their contract. At least six air dates were set and cancelled by the station. They were fired on December 2, 1997.

In the lawsuit filed against the station, Wilson and Akre allege that the station violated the state's whistleblower statute by firing them after they threatened to report wrongdoing to federal authorities.

In a two-page statement, WTVT said that it "ended the employment of the Wilson/Akre team when it became apparent that their journalistic differences could not be resolved despite the station's extraordinary efforts to complete this story."

The station also denied offering a "hush money" payment to the two reporters.

Wilson was having none of the station's explanation.

"We set out to tell Florida consumers the truth a giant chemical company and a powerful dairy lobby clearly doesn't want them to know," Wilson says. "That used to be something investigative reporters won awards for. Sadly, as we've learned the hard way, it's something you can be fired for these days whenever a news organization places more value on its bottom line than on delivering the news to its viewers honestly."

-- Russell Mokhiber

The Lawrence Summers Memorial Award

The May 1998 Lawrence Summers Memorial Award* honors a quote from the Chamber of Commerce in the early '90s -- the 1990s, not the 1890s as might be thought:

Child labor law violations are "an emotional issue that politicians have used to score easy points. And I might just point out that children may be better off in the sweatshops than on the streets selling drugs."

-- Pete Eide, manager of labor law for the U.S. Chamber of Commerce, commenting on the 40,000 citations that were issued in the previous year against U.S. companies for violating child-labor laws (quoted in UAW Solidarity, January-February 1992).

*In a 1991 internal memorandum, then-World Bank economist and current Deputy Secretary of Treasury Lawrence Summers argued for the transfer of waste and dirty industries from industrialized to developing countries. "Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)?" Summers wrote. "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I've always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City." Summers later said the memo was meant to be ironic.


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