Multinational Monitor

SEP/OCT 2006
VOL 27 No. 5


Greasing the Deal: A Royalty Scam
by Mandy Smithberger

Not Very Sporting: Outdoor Sporting Goods Retail Subsidy Scam
by Greg LeRoy

Relocation Racket: How Relocation Consultants Pit Cities and States Against Each Other
by Greg LeRoy

South Africa Embraces Corporate Welfare: Mega Deal Subsidies Over Services for the Poor
by Patrick Bond

The Corporate Beneficiaries of the Medicare Drug Benefit
by Dean Baker

Public Funds Up in Flames: The Incineration Industry Seeks Renewable Energy Subsidies
by Monica Wilson

Green Mountain's Other Faces: The Dirty Side of Clean Energy
by Andrew Wheat


The Big Box Swindle: The True Cost of the Mega-Retailers
an interview with Stacy Mitchell


Behind the Lines

Letter to the Editor

The State of Corporate Welfare

The Front
Climate Changing Africa -- African Inequality

The Lawrence Summers Memorial Award

Book Note
The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer

Names In the News


Behind the Lines

Executive Excess 2006

CEOs in the defense and oil industries hit the jackpot in 2006, according to a September report from the Institute for Policy Studies and United for a Fair Economy, “Executive Excess 2006.”   

Since 9/11 and the surge in U.S. military expenditures, CEOs at the top 34 military contractors have enjoyed average paychecks that are double the compensation they received in the four years leading up to 9/11. In 2005, defense industry CEOs walked off with 44 times more pay than military generals with 20 years experience, and 308 times more than Army privates.

United Technologies CEO George David led the pack with over $200 million in pay since 9/11, despite investigations into the quality of the company’s Black Hawk helicopters. “Americans across the political spectrum should be outraged by the sight of executives cashing in on war windfalls,” says report co-author Sarah Anderson of the Institute for Policy Studies.

Meanwhile petroleum profiteers took in nearly three times the pay of CEOs in comparably sized businesses.

In 2005, the top 15 U.S. oil CEOs got a 50 percent raise. They now average $32.7 million, compared with $11.6 million for all CEOs of large U.S. firms. Executive pay at U.S.-based oil companies also far outpaced pay at oil companies based outside the United States. BP and Royal Dutch Shell paid their CEOs only one-eighth what their U.S. counterparts collected — just $5.6 and $4.1 million in 2005, respectively — even though both companies operate in the same global marketplace as their U.S.-based competitors. CEO William Greehey of Valero Energy took home the oil industry’s biggest executive pay rewards in 2005, pocketing $95.2 million. The average construction worker at an energy company would have to work 4,279 years to equal what Greehey collected last year. Since 1990, the overall CEO-worker pay gap in the United States has grown from 107-to-1 to last year’s 411-to-1. Minimum wage workers have lost 9 percent after inflation in the same 15 years. If the minimum wage had risen at the same pace as CEO pay, it would now stand at $22.61 per hour, over four times the current $5.15.

North Carolina Labor Blues

More than 50 labor organizations in Mexico, the United States and Canada, together representing several million workers, in October charged North Carolina and the United States with violating labor rules established under the North American Free Trade Agreement (NAFTA).

The complaint charges that 650,000 public employees in North Carolina are illegally denied the right to collective bargaining, a violation of labor protections guaranteed by the North American Agreement for Labor Cooperation (NAALC), the labor side agreement to NAFTA. It was formally filed in Mexico by the Authentic Labor Front.

The complaint was filed at the request of UE Local 150, the North Carolina Public Service Workers Union.

“North Carolina’s continued denial of basic worker rights is an international disgrace, and it must be corrected,” says UE Local 150 President Angaza Laughinghouse.

The labor organizations’ filing with the NAALC charges that North Carolina’s near-total ban on public sector organizing violates substantive principles guaranteed in the NAFTA side agreement, including the rights to organize and bargain collectively.

The North Carolina public-sector organizing ban, the petition alleges, has dire effects. “In essence,” according to the petition, the ban “acts as a state-mandated impediment to eliminating race and sex discrimination. ... From establishing truly objective criteria for employment decisions to developing workable anti-harassment mechanisms, the collective bargaining process would offer public sector workers a voice in changing the current system to eradicate the widespread institutional racism and sexism.”

Fueling Climate Change

The World Bank remains a driver of energy policy in developing countries. Following the 2005 G8 meeting of rich countries, the Bank launched an Investment Framework on Clean Energy and Development that promised to combine support for expanded energy access for the poor with financing for alternative energy.

That promise is a sham, charge a coalition of international environment and development organizations in a September report.

Less than 10 percent of Bank energy financing goes to renewables, according to the environmental groups, and less than 2 percent of the energy portfolio of the International Finance Corporation, the private sector arm of the Bank.

At its annual meeting in September, the Bank proposed raising $10 billion for conventional energy technologies, while “selling renewable sources of energy short,” according to the environmental groups. The $10 billion aims to support conventional energy technologies that have lower carbon (greenhouse gas) emissions.

The environmentalists insist that the appropriate focus is on no-carbon options, while noting that the mitigating proposals of the new $10 billion fund would be overwhelmed by the rest of the Bank’s energy portfolio.

“Poor communities in developing countries are already paying the highest price of climate change, living with the impacts of heavy droughts and floods,” says Pantoro Tri Kuswar of Friends of the Earth Indonesia/WALHI. “The World Bank’s focus on fossil fuel projects will not bring electricity to the poor. Instead, the Bank’s proposals will lead to more pollution, conflict and corruption and do little to stop climate change.”

“Being dominated by Northern polluters, the World Bank is an inappropriate institution to lead global efforts to combat climate change,” says Bruce Jenkins of the Bank Information Center. “Rich countries should channel any additional resources for energy sector development through a new Renewable Energy for Development Agency.”

Enviro Justice Runaround

Environmental justice is getting the runaround at the U.S. Environmental Protection Agency (EPA), according to a September report issued by the EPA Inspector General. The Office of the Inspector General is an independent government watchdog for the EPA.

The Inspector General’s report found that EPA is failing to conduct mandated environmental justice reviews of its activities. Less than half of surveyed EPA offices have conducted such reviews.

Environmental justice reviews seek to identify and address disproportionately high and adverse human health or environmental effects on minority and low-income populations.

A 1994 Executive Order issued by President Clinton, still in force and reaffirmed by the Bush administration, directs agencies to make environmental justice part of their mission by reviewing the effects of their programs on minority and low-income populations.

Assistant EPA Administrator Granta Nakayama acknowledged that the reviews had not been conducted, but stated that the agency was incorporating environmental justice considerations into its work, including though program action plans, the agency’s overall Strategic Plan, and enhanced on-line environmental justice mapping and assessment capabilities.

The Inspector General report, however, concluded that without the required reviews, “the Agency cannot determine whether its programs cause disproportionately high and adverse human health or environmental effects on minority and low-income populations.”

Says Senator John Kerry, D-Massachusetts, “This report is further evidence that minority and low income neighborhoods have become America’s industrial dumping grounds and this administration couldn’t care less.”

Branded Monopoly

Hasbro has decided that its popular Monopoly board game needs a modernizing makeover.

So it has replaced the game’s traditional properties, named after streets in Atlantic City, New Jersey, with hot spots around the United States — and replaced some of the original game tokens with brand-name corporate products.

In the original game, players were represented on the board by tokens ranging from a shoe to a hat, an iron to a thimble.

In the “Monopoly: Here and Now” edition, the classic race car has been replaced with a Toyota Prius, and a New Balance running shoe takes the place of the shoe. Other brand-name tokens include McDonald’s French Fries, a Motorola RAZR cell phone, and a cup of Starbucks coffee.

“For the past 70 years, millions of Americans have tasted the thrill of ‘owning it all’ by playing Monopoly,” says Matt Collins, vice president of marketing for Hasbro subsidiary Parker Brothers. “The new Monopoly: Here & Now Edition allows aspiring real estate tycoons to enjoy an elevated game play experience that more closely matches today’s America.”

Gary Ruskin, executive director of the Portland, Oregon-based Commercial Alert, takes a dimmer view.

“Shame on Hasbro for hawking junk food and caffeine to children,” says Ruskin. “Hasbro is toying with the health of our children. Maybe it thinks that the childhood obesity epidemic is just a game, but parents know better.”

Hasbro notes that the traditional version of Monopoly will remain available in stores.

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