Multinational Monitor

DEC 1999
VOL 20 No. 12


The Ten Worst Corporations of 1999
by Russell Mokhiber

Democracy is in the Streets: Protesters and Police Clash, As WTO Negotiations Collapse
by Robert Weissman


Native Struggles for Land and Life
an interview with
Winona LaDuke


Behind the Lines

The Meaning of Seattle

The Front
A Policy of Conviction - Clinton’s Lack of Conviction

The Lawrence Summers Memorial Award

Names In the News


Names In the News

Valujet Crash Aftermath

A federal jury in Miami in December convicted SabreTech, the maintenance contractor blamed for the 1996 Valujet crash, on eight counts of mishandling hazardous materials, but the company was acquitted on more serious conspiracy charges.

The crash killed all 110 persons on board.

The jury acquitted two SabreTech employees of criminal charges that they lied on repair records.

Describing the crash as an accident, not a crime, defense lawyers for the company claimed victory, despite the convictions.

Kenneth Quinn, a lawyer for SabreTech, called the jury’s verdict “a pretty good vindication of the company.”

“We are very pleased with the not guilty verdicts for our former SabreTech mechanics,” Quinn said. “We are also pleased that the jury dismissed almost two-thirds of the charges against the company, including the government’s outlandish conspiracy and terrorist counts.”

Quinn said the company would appeal the conviction.

At trial, Quinn argued that although mistakes were made, the company’s actions never amounted to a crime. Quinn argued that the crash was probably caused by the condition of the 27-year-old DC-9, which had mechanical and electric problems.

But U.S. Attorney Caroline Miller said Sabretech was “in denial” about the cause of the crash.

“Fundamentally, this is a case about lying,” Miller told jurors in her closing arguments. “One of the lies turned out to be about something very important. SabreTech's urge to have its business done overtook other considerations, including safety considerations.”

ValuJet has changed its name to AirTran. SabreTech now must face murder and manslaughter charges brought by the state of Florida.

Less Hot Air

William Clay Ford Jr., chair of Ford Motor Company, announced in December that he is pulling his company out of the Global Climate Coalition, a controversial group of more than 40 major corporations.

The Global Climate Coalition argues that there is insufficient scientific evidence to confirm serious warming of the earth due to “greenhouse” gases.

Other companies that have left the group in the past two years include British Petroleum, Shell Oil and Dow Chemical.

Activist groups fighting global warming claimed victory. “This may well be the kind of strong and clear statement that can end the debate over global warming,” said Kevin Sweeney, chair of Ozone Action.

“When 2,500 scientists agreed on a statement that global warming is a real and urgent phenomenon caused by humans, the Global Climate Coalition drummed up a small handful of dissenters,” Sweeney said. “Spending millions on advertising, lobbying and other efforts to discredit the best science, the group’s small clique has had a huge presence. …They’ve provided ready sources for journalists who, under the guise of objectivity, lazily assume that ‘another side’ to the science should be presented in each story on the topic.”

“In walking away from the Global Climate Coalition,” Sweeney said, “the auto giant has pulled back the curtain to show that science has never clouded this debate. It was the sophisticated advocacy and self-interest of panicked industrialists that did so.”

State Farm Retaliates

State Farm Mutual Insurance Co. in December terminated contracts with five insurance agents for publicly discussing a company-wide pattern of consumer abuse.

The terminations came the same day a group of active and former agents delivered a letter to insurance commissioners around the country informing them of State Farm’s violations of state insurance regulations, discriminatory policyholder selection criteria, and attempts to fight the release of zip code data commonly used to determine redlining [see “Names in the News,” Multinational Monitor, October/November 1999]

Earlier this year, the group of State Farm agents presented a letter to the Senate Commerce Committee outlining State Farm’s alleged fraudulent use of medical utilization review companies designed to lower payments to victims in auto accidents, use of after-market auto parts, history of misrepresenting life insurance policies as investment vehicles, overcharging on homeowner's insurance and de facto redlining.

The fired agents attended an October 29, 1999 press conference in Washington, D.C. State Farm cited the agents’ participation in the press conference as the reason for the termination.

“Termination is the standard practice anytime an agent or employee questions deceptive or anti-competitive behavior at State Farm,” said agent Patrick Woodson. “The only people who have breached any duty are the thugs at State Farm management. It is clear they will stop at nothing to quiet any principled agents.”

State Farm has completely denied all of the agents’ accusations, saying the agents are operating with “a litigation-inspired motive.”

“These accusations are unfounded, and I find them personally insulting,” said Harold Gray, State Farm’s regional vice president for the area that includes Washington, D.C. “I know from my 26 years of experience that these broad allegations are false. I would not work for a company that stands for any of these practices.”

— Russell Mokhiber


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