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


Names In the News

Corporate Death Penalty I

Ohio Agriculture Director Fred L. Dailey in July ordered the closure of barns at Buckeye Egg Farm, the controversial factory farm. Dailey's order revokes 12 permits and denies 11 others that allowed the farm to operate.

"Today, I have ordered Buckeye Egg Farm to begin closing their barns within 20 business days," said Dailey. "The pollution and nuisance problems caused by this farm during the last decade were intolerable. The sad legacy of mismanagement of Buckeye Egg Farm is rapidly coming to an end."

The Sierra Club had ranked Buckeye Egg, which produced 4 percent of the U.S. egg supply, as among the worst factory farms in the United States. The company had been cited for and settled lawsuits accusing the company of dumping dead chickens, improperly handling manure, causing infestations of flies and other insects, and hundreds of violations of water permits. It had also been accused by regulators of forcing employees to work in life-threatening conditions.

Dailey ordered all barn closings to be complete by June 2004, and all manure removed no later than September 2004. Closing barns includes removing all birds, cleaning and removing feed from feed bins and feed conveyor lines, and draining all water lines and shutting off all water service.

"I am disappointed that this closure will likely cost jobs and income for many family farmers and other residents of rural Central Ohio," Dailey said. "This extreme action is warranted after nine contempt citations and a history of significant non-compliance with environmental laws."

"I am confident this farm's facilities can be assets to their communities if properly managed," Dailey said. "If a prospective new owner provides us with a complete, comprehensive plan under the new rules, this department will consider it."

Corporate Death Penalty II

The Federal Energy Regulatory Commission (FERC) in June revoked the electric market-based rate authority of Enron Power Marketing, Inc. and Enron Energy Services, Inc.

In addition, six Enron-affiliated companies' blanket gas marketing certificates were terminated, marking the first time the Commission has taken such broad action against a company and its affiliates.

The action stems from an exhaustive Staff Investigative Report released March 26, in which FERC staff alleged that Enron companies gamed western energy markets, severely disrupting the industry in 2000 and 2001.

Enron treated its affiliates essentially as shell corporations under a single corporate umbrella. Affiliates used one another to facilitate misconduct.

Among the company's inappropriate trading schemes was wash trading in natural gas on Enron Online (EOL), the Commission concluded. A "wash trade" is a prearranged pair of trades of the same good between parties, resulting in no net change in ownership. It creates an illusion of a more liquid and active market and it helps bolster false trading revenue figures.

Revocation of market-based rate authority does not necessarily halt a company's participation in wholesale power markets or bilateral contracts.

However, its returns are limited by set cost-of-service tariffs and rates and it must seek Commission permission any time it wants to change its rates. Revocation of blanket gas marketing certificates has much the same effect.

Frist Company Fraud

HCA Inc. (formerly known as Columbia/HCA and HCA -- The Healthcare Company) will pay the United States $631 million in civil penalties and damages arising from false claims the government alleged it submitted to Medicare and other federal health programs.

The settlement, announced in June, resolves HCA's civil liability for false claims resulting from a variety of allegedly unlawful practices, including cost report fraud and the payment of kickbacks to physicians.

Combined with a separate administrative settlement with the Centers for Medicare & Medicaid Services (CMS), under which HCA will pay an additional $250 million to resolve overpayment claims, as well as previous settlements of criminal and civil charges, the government will have recovered $1.7 billion from HCA, by far the largest recovery ever reached by the government in a health care fraud investigation.

"Health care providers and professionals hold a public trust, and when that trust is violated by fraud and abuse ... health care for all Americans suffers," says Robert D. McCallum, Jr., assistant attorney general for the civil division.

This latest settlement resolves fraud allegations against HCA and HCA hospitals in nine False Claims Act qui tam or whistleblower lawsuits pending in federal court in the District of Columbia.

Under the federal False Claims Act, private individuals may file suit on behalf of the United States and, if the case is successful, may recover a share of the proceeds for their efforts.

Under the settlement, the whistleblowers will receive a combined share of $151,591,500, the highest combined qui tam award ever paid out by the government.

HCA was founded by Senate Majority Leader Bill Frist's father and brother. Frist's immediate family holds more than $25 million in HCA stock. Frist has said that he has no involvement in the business of HCA and that his holdings are in a blind trust.

-- Russell Mokhiber


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