Multinational Monitor

OCT/NOV 2002
VOL 23 No. 10


Chartering a New Course: Revoking Corporations’ Right to Exist
by Charlie Cray

Global Rules for Corporate Accountability: The Proposal to Establish a Corporate Accountability Convention
by Matt Phillips

Divide and Conquer: Restraining Vertical Integration and Cross-Industry Ownership
by Robert Weissman


Trust-Busting: The State of Antitrust
an interview with
Robert Pitofsky

New Rules for the New Localism: Favoring Communities, Deterring Corporate Chains
an interview with
Stacy Mitchell

Challenging Corporate Personhood: Corporations, the U.S. Constitution and Democracy
an interview with
Jan Edwards

Blowing the Whistle on Corporate Wrongdoing
an interview with
Tom Devine


Behind the Lines

Corporate Mandates

The Front
Titanic Struggle in Kenya - Household’s Predatory Plea

The Lawrence Summers Memorial Award

Names In the News


Behind the Lines

Salvadorans Rise Up

A two-month healthcare worker strike and mass popular mobilization in El Salvador has led to the passage of a bill that will block privatization of the country's healthcare system.

The strike shut down San Salvador's leading hospitals, with 80 percent of doctors reportedly respecting the healthcare workers' picket lines. The healthcare workers union and other public sector workers unions led massive demonstrations of up to 200,000 people during the Fall, as the public rallied behind the anti-privatization cause.

In November, the opposition parties voted unanimously to overturn a proposal from President Francisco Flores and instead to ratify a "State Guarantee of Health and Social Security," proposed initially by the healthcare workers.

"Through struggle, the Salvadoran people have stopped the privatization of health care, and struck a decisive blow against the neoliberal model which strips us of our humanity," said Ricardo Monge, secretary-general of the healthcare workers' union, in celebrating the victory, according to reports from the U.S.-based Committee in Solidarity with the People of El Salvador (CISPES).

Healthcare privatization is only one element of the privatization plans pushed by Flores' right-wing ARENA government. The government also seeks to privatize the country's electricity system.

These privatization proposals take place against the backdrop of efforts to implement Plan Puebla Panama (PPP), an infrastructural mega-project meant to facilitate trade between Central America and the United States, and pending negotiations for a U.S.-Central American Free Trade Agreement, both of which may either require or facilitate privatization. In October, more than 25,000 people participated in 11 highway blockades to protest the free trade deal and Plan Puebla Panama.

Accountability Platform

More than 200 public interest groups in October called for passage of legislation to implement a major corporate reform agenda.

The Unity Platform on Corporate Accountability "represents a cohesive analysis shared by diverse strands of the grassroots corporate accountability movement," says Charlie Cray, director of the Corporate Reform Campaign at Citizen Works. "Despite the inertia in Washington, the popular view is that there needs to be further and deeper change in how we govern corporations."

The statement outlines an agenda for public funding of elections, an overhaul of corporate governance, controls on speculative investment, stronger labor and environmental obligations, an end to international corporate welfare, and a redefinition of financial accountability.

"Corporate greed and abuse remains one of the top issues for most Americans," adds John Cavanagh, director of the Institute for Policy Studies.

Cray says that the platform serves as a beacon of what is possible at a moment when the Bush administration continues its "brazen push to roll back the minimal reforms enacted by Congress so far."

According to an October 2002 study of 1,245 U.S. firms by the Investor Research Center, 72 percent of fees paid by firms to their auditors were actually for non-audit services, the same exact percentage as one year ago.

And the General Accounting Office (GAO) recently reported that corporate restatements rose from 225 in 2001 to an estimated 250 in 2002. Qwest, AOL, Tyco, MTS Systems, and Bristol-Myers Squibb have all recently announced new restatements.

CEOs: Do Worse, Paid More

CEOs of companies under investigation for accounting irregularities earned 70 percent more from 1999 to 2001 than the average CEO at large companies, according to a new report released by United for a Fair Economy.

The report, "Executive Excess 2002: CEOs Cook the Books, Skewer the Rest of Us," found that the CEOs of 23 large companies under investigation earned an average of $62 million from 1999 to 2001, compared with an average of $36 million for all CEOs in the annual Business Week executive pay survey.

The report looked at companies which are under investigation by the Securities and Exchange Commission (SEC), Department of Justice and other agencies and which have had market capitalizations over $1 billion sometime since January 2001 -- Adelphia, AOL Time Warner, Bristol Myers Squibb, CMS Energy, Duke Energy, Dynegy, El Paso, Enron, Global Crossing, Halliburton, Hanover Compressor, Homestore, Kmart, Lucent Technologies, Mirant, Network Associates, Peregrine Systems, PNC Financial Services, Reliant Energy, Qwest, Tyco, WorldCom and Xerox.

Collectively, the CEOs at firms under investigation pocketed $1.4 billion from 1999 to 2001.

While these executives are cushioned by the vast wealth they have accumulated, their shareholders and employees are dealing with massive losses, the report found.

Between January 1, 2000 and July 21, 2002, the value of shares at these firms plunged by $530 billion, about 73 percent of their total value.

Employees of the 23 companies have suffered a total of 162,000 layoffs since January 2001.

Tyco, for example, has laid off 18,400 workers since January 2001. The company paid CEO Dennis Kozlowski $331 million from 1999 to 2001 and gave him over $135 million for luxury living. Kozlowski has since resigned in disgrace.


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