Multinational Monitor

JUL/AUG 2003
VOL 24 No. 7


Grotesque Inequality: Corporate Globalization and the Global Gap Between Rich and Poor
by Robert Weissman

Left Behind: Domestic Inequalities and the Fate of the Poor
by United Nations Development Program

The Hogs of Rosebud
by Winona LaDuke


Inequality in the World Economy, By the Numbers
an interview with Branko Milanovic

Losing the Farm: How Corporate Globalization Pushes Millions Off the Land and Into Desperation
an interview with Anuradha Mittal


Behind the Lines

Patents, Profits, Power and Poverty

The Front
For Wealth, Not Health - A Light Homicide Charge

The Lawrence Summers Memorial Award

Book Notes

Names In the News


The Front

For Wealth, Not Health

Corporate financial support of many of the most prominent U.S. health-related nonprofit organizations threatens the independence and credibility of such groups, according to "Lifting the Veil of Secrecy," a July report by the Center for Science in the Public Interest (CSPI). More than 170 disease-related charities, health-professional societies and university-based institutes enjoy the largesse of food, agribusiness, chemical, pharmaceutical and other corporate interests, but that generosity may exact too high a price, charges the report.

The report recalls the negative publicity generated by the American Medical Association's (AMA) endorsement deal with medical equipment supplier Sunbeam, which eventually forced the group to cancel the deal under pressure.

More recent corporate "partnerships" indicate that the AMA scandal has done little to deter nonprofit leaders from pursuing six- or seven-figure grants that seem to have strings attached. One such arrangement documented is Coca-Cola's $1-million gift to the American Academy of Pediatric Dentistry (AAPD). Before the 2003 donation, the AAPD recognized the connection between sugary drinks and dental disease. When AAPD president David Curtis defended the Coke deal, he told reporters that the "scientific evidence is certainly not clear" on the role soft drinks play.

"What a difference a million dollars makes," CSPI executive director Michael F. Jacobson wrote in the report's introduction, referring to the AAPD's coupling with the world's leading soda manufacturer. "And what a coup for Coca-Cola, turning a potential opponent into an ally. You can bet that the AAPD will not be terribly supportive of measures to reduce soft- drink consumption. At best, it will probably be silent on such matters. At worst, it will support its generous new friend."

Other nonprofit groups with questionable corporate ties include:

  • American Dietetic Association. The leading professional associations for registered dietitians takes outright donations from food companies. It also lets companies fund fact sheets: The National Soft Drink Association "sponsors" the association's fact sheet on soft drinks; McDonald's sponsors "Nutrition on the Go," and so on.
  • International Society for Regulatory Toxicology and Pharmacology. Sponsored by Dow AgroSciences, Eastman Kodak, Gillette, Merck, Procter & Gamble, RJ Reynolds Tobacco, and other corporations that have an interest in weakening government regulation of chemicals, ISRTP publishes a journal with a strong anti-regulatory editorial slant.
  • Society for Women's Health Research. In addition to advocating for more research into women's health, this group leapt to the defense of a major benefactor, Wyeth, when the safety of hormone replacement therapy (HRT) was questioned. The society also lent its name to a Novartis campaign to market a drug for irritable bowel syndrome.

Sometimes, according to the report, corporations create nonprofit organizations from scratch. They may have beneficent-sounding names and seemingly objective programs, but the organizations are designed primarily to advance their sponsors' interests. Some of those include the Foundation for Clean Air Progress (funded by petroleum, trucking and chemical companies), the Coalition for Animal Health (funded by cattle, hog and agribusiness concerns), and the Center for Consumer Freedom (CCF) (originally funded by Philip Morris but now funded by chain restaurants and bars, although it refuses to disclose its contributors.) Part of CCF's focus is to downplay obesity-related health concerns.

The report also identifies more than 30 university-based research centers that draw substantial financial support from companies or corporate trade associations. Among those are several university centers on forestry funded by timber or paper industries and several centers on nutrition funded by food and agribusiness companies. All such centers let corporations put an academic sheen on industry-funded research, according to CSPI.

The most notorious group highlighted by the CSPI report is the Harvard Center for Risk Analysis. Funded by corporations and industry groups as diverse as AT&T Wireless, the California Avocado Commission and the Chlorine Chemical Council, the center's studies generally exonerate technologies alleged to cause problems and provide academic backup for corporate initiatives in beating back government health and safety rules.

Other university-based groups highlighted in the report include:

  • The Center for Study and Improvement of Regulation, housed at the Department of Engineering and Public Policy at the Carnegie Institute of Technology. It is funded by Exxon, Ford, Alcoa and the American Petroleum Institute, among others.
  • The Vanderbilt University Medical Center's Institute for Coffee Studies, established with funds from the Association of Coffee Producing Countries, the National Coffee Association of the USA, and the All-Japan Coffee Association, and additionally funded by Kraft-General Foods, the maker of Maxwell House coffee. The institute unapologetically states that its mission is to "study the possible health benefits of coffee."
  • Mercatus Center at George Mason University, "an education, research and outreach organization [working] with scholars, policy experts and government officials to bridge academic learning and real world practice." Its funders have included Enron, International Paper, Microsoft, Pfizer, Xerox and other corporate giants. The Mercatus Center has opposed federal actions on arsenic in drinking water, labeling of trans fat (which causes heart disease) in food, and other public health and environmental measures.

"People would be far more skeptical of a ëCorporate Polluters Lobbying Association' than an industry-funded ëHarvard University Center on Important Issues,'" says Jacobson. "Companies hope that a nonprofit's or university's good name will burnish their reputations. Call it ëinnocence by association.'"

-- Jeff Cronin works with the communications department at the
Center for Science in the Public Interest

A Light Homicide Charge

In a state courtroom in Wilmington, Delaware in July attorneys for Motiva Enterprises -- a joint venture of Saudi Aramco and Royal Dutch Shell -- appeared before Judge Peggy Ableman and entered a plea of no contest to one felony count of criminally negligent homicide and six misdemeanor counts of assault in the third degree.

The case represented only the second time that a corporation has been charged with homicide in Delaware, according to the Attorney General's office.

The charges arose out of a July 2001 explosion and fire at the company's Delaware City facility that resulted in the death of boilermaker Jeffrey Davis and injuries to six other workers -- Kenneth Creamer, John Beaver, Christopher Greenwell, Shemika Speight, Robert Favazza and Steven Spera.

Earlier this year, the Occupational Safety and Health Administration (OSHA) proposed $259,000 in fines against the oil giant for the same case. "Motiva failed to internally inspect Tank 393 [used to store sulfuric acid] in a timely manner despite its knowledge that the tank was long overdue for inspection, had a history of leaks and showed signs of deterioration," an OSHA spokesperson says. The deadly explosion occurred while workers were welding and cutting metal above Tank 393.

Right before sentencing, Mary Davis, the wife of the killed boilermaker, delivered a letter calling on the judge to reject the no contest plea, and condemning the failure of the state's attorney general to prosecute Motiva for manslaughter and to charge any individual "for my husband's senseless and needless death."

Mary Davis also called on the company to "admit guilt and accept responsibility."

"Your Honor, my husband was a good man and a wonderful father," Mary Davis wrote. "We were married for 30 years. He raised our five children to strive for the highest standards of integrity and values. He had only begun the job of raising our youngest son, Jack, now age 12. He went to the Motiva refinery on July 17, 2001, to do an honest day's work for Motiva. The horrifying fire and explosion caused by a tank known to be emitting highly flammable hydrogen gas left him incinerated and destroyed. We were not even left with his body to bury. Motiva destroyed our hopes, our dreams and our future. We beg that you not be a part of this insult to Jeff's memory. There are certain times when it is more important to do the right thing than the easy thing. Jeff and I have tried to teach our children this lesson. We hope that Your Honor will do the same."

But Judge Ableman accepted the no contest plea from Motiva's President, John F. Boles.

"We are truly sorry and we profoundly apologize for what has happened," Boles said. "There is nothing we can do to bring Mr. Davis back, nor can we ease the suffering of the injured and their families."

Judge Ableman sentenced Motiva to a fine of $11,500 on the homicide charge and $5,750 for each of the assault charges for a total of $46,000 ‚ the maximums allowed under Delaware state law.

She also ordered the company to pay a compensating fine of $100,000 for the death and $25,000 for each assault count. The fines will be paid to the state's crime victim compensation fund.

The state legislature, in response to publicity about the case, passed a new law last month allowing a judge to impose any fine he or she wishes --without limit.

"Money can provide little compensation to the family of Jeff Davis, who died in the explosion, or those who suffered painful and continuing injuries, but I hope this prosecution serves to impress on those who do not take care with their business conduct that there are consequences in the justice system," said Attorney General M. Jane Brady.

"This plea culminates an intensive and complex investigation of nearly two years, during which we relied on federal and state investigators and reports, expert findings and a careful review of the law," Brady said. "Many factual and legal issues were considered in arriving at the decision to charge the company, not individuals, and what charges to bring. Most businesses are honest and conduct their operations lawfully, and when government intervention is necessary, it is through the regulation of their operations that corrections are made."

"While the State of Delaware has repeatedly attempted to use regulation and civil penalties to force Motiva to correct its business operations, adjust its impact on the environment and to assure the integrity of the refinery's mechanical systems, it became clear in this investigation that the company did not take their responsibilities to the plant workers or the community seriously, and disregarded the potential consequences of their decision-making," Brady said

"Unfortunately, the penalty the victims paid for Motiva's conduct is far more serious than that Motiva faces today."

Peter Letang, the deputy attorney general who prosecuted the case, defended the state's decision not to charge individuals.

"There was a systemic economic operation here," Letang says. "To correct the problem, you had to shut the process down. To shut the process down, it would cost a lot of money. During the last quarter, Shell Oil, one of the owners of Motiva, brought in $4.2 billion. And this plant is putting out a lot of fuel."

"The management that was at the plant at the time had been put in place about a year before the explosion," Letang said. "They were beginning to address these issues, but they were nowhere near putting enough money or attention to this. To even a lay person, you don't put hundreds of thousands of gallons of spent sulfuric acid into a corroded tank. You just don't do that. They did, but it was not at anybody's direction. If anybody should have been indicted, it was probably somebody who made policy up in Houston, where the company is based."

-- Russell Mokhiber


The July/August 2003 Lawrence Summers Memorial Award* goes to two of the stalwart appointees of the Bush administration, former Securities and Exchange Commission Chair Harvey Pitt, and current Deputy Defense Secretary Paul Wolfowitz.

Commenting on the one-year anniversary of passage of the Sarbanes-Oxley financial accounting reform bill, Pitt said, "Government is a poor substitute for self-regulation and establishing ethical" standards.

Wolfowitz, touring Iraq in July, told reporters, "I think all foreigners should stop interfering in the internal affairs of Iraq."

Sources: For Pitt: Associated Press, "Sarbanes-Oxley concerns SEC ex-chairman," July 25, 2003. For Wolfowitz: Reuters, "Wolfowitz Warns Iraq's Neighbors Not to Interfere," July 21, 2003.


*In a 1991 internal memorandum, then-World Bank economist 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)?" wrote Summers, who went on to serve as Treasury Secretary during the Clinton administration. "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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