JUNE 1999 · VOLUME 20· NUMBER 6

Poll: Suite Crime a Priority
The first national public survey on white collar crime found that nearly four out of 10 respondents (38 percent) reported that a member of their household has been victimized by white collar crime during the past year.

The National White Collar Crime Center survey of more than 1,000 U.S. citizens found that the public views white collar crime as a serious crime problem. And many believe that certain types of white collar crimes are as serious or more serious than certain types of street crimes. 

For example, when asked "which is more serious, robbery or embezzlement?" 27 percent said robbery while 54 percent said embezzlement.

When asked "which is more serious, armed robbery or a store owner who sells a shipment of meat he knows is bad?" 39 percent said armed robbery was more serious, while 42 percent said the store owner's actions were more serious.

The survey found that perceptions of the seriousness of a white collar crime can vary based on the status of the offender. Thus, violations committed by those in positions of authority or public trust were treated as more serious offenses than violations committed by ordinary citizens.

Nearly all of the respondents (95 percent) said they would report a white collar crime if victimized, but only half of those victimized by a white collar crime reported the crime.

The telephone survey was administered to more than 1,000 U.S. citizens between January and April of this year.

State Farm's Black Hole
A consumer fraud lawsuit against State Farm Mutual Insurance Company has been erased from the public record. No docket sheet is available. The court's computers have no record of the case. And almost the entire file of the four-year-long case is under seal. A few public documents confirm that the case in fact exists.

In June, Trial Lawyers for Public Justice (TLPJ) moved to unseal the case.

"This is absolutely outrageous," says TLPJ President Joseph Power. "A lawsuit charging State Farm, one of the nation's largest insurers, with cheating its policyholders has basically been excised from court records. State Farm's customers and the public have a right to know what State Farm is so eager to hide."

The lawsuit, Foltz v. State Farm Mutual Automobile Insurance Company, was filed in federal court in Eugene, Oregon in 1994.

According to the few public documents available on the case, Debbie Foltz charged that State Farm, her automobile insurer, hired the California Institute of Medical Research and Technology, a utilization review company, to defraud her by conducting a sham review of her son's need for medical treatment.

After nearly four years of litigation, the parties reached a confidential settlement of the case. As part of the settlement, a federal court order was apparently entered sealing over 450 documents in the case file, wiping the docket sheet clean and erasing the case from the court's computer system. It is virtually impossible for a member of the public to determine that the case existed, much less view the court record.

Lawyers at TLPJ learned of the case in 1998, when the Supreme Court of Oregon issued a published opinion answering some state law questions that had arisen in the case. When TLPJ lawyers Lawrence Baron and Matthew Whitman attempted to review the Foltz case file at the federal courthouse, the court clerk found no case file in the court's computer system.

Since Baron and Whitman knew the federal case number from the Oregon Supreme Court's opinion, they asked the clerk to search the computer by case number. Again, no case was found.

After a physical search, the clerk turned up a few unsealed documents, but said that the remaining court records -- over 450 in total -- were sealed by the court and unavailable for public viewing.

False Nuclear Advertising
The Nuclear Energy Institute's advertising campaign promoting nuclear power as an environmentally safe source of energy is false and misleading to consumers, Public Citizen alleged in June in a petition to the Federal Trade Commission.

 The petition documents several environmental problems associated with nuclear power, including greenhouse gas emissions, air pollution, highly irradiated nuclear waste -- so-called "low level" nuclear waste -- species destruction and water pollution.

   "The NEI is using the deregulation of the electric industry to falsely promote nuclear power as an environmentally safe alternative," says Wenonah Hauter, director of Public Citizen's Critical Mass Energy Project.

"The nuclear industry is using misleading advertisements to target consumers who likely will pay more for so-called 'green electricity,'" she says. "Consumers will think they're helping the environment when all they're really doing is lining the pockets of the nuclear industry with more money."

Public Citizen's complaint follows a decision last month by the Better Business Bureau's National Advertising Division to refer the questionable advertisements to the FTC. Previously the Better Business Bureau recommended changes to the NEI advertisements because they were potentially misleading.

-- Russell Mokhiber