Multinational Monitor

JUL/AUG 2008
VOL 30 No. 1


No Escape: Marketing to Kids in the Digital Age
by Jeff Chester and Kathryn Montgomery

The Youngest Market: Baby Food Peddlers Undermine Breastfeeding
by Annelies Allain and Joo Kean

Intoxicating Brands: Alcohol Advertising and Youth
by David Jernigan

How Things Work: The FTC's Revolving Door
by Robert Weissman

Fighting Demons: Addressing the Perils of Financial Innovation
by Richard Bookstaber


Commercializing Childhood: The Corporate Takeover of Kids' Lives
an interview with Susan Linn

Pill Pushers: Pharmaceutical Marketing in an Overmedicated Nation
an interview with Melody Petersen

Reverend Billy and the Church of Stop Shopping
an interview with Bill Talen

The Debt Creators: Shady Lending, Misleading Marketing and Hard Times
an interview with José García


Letters to the Editor

Behind the Lines

Marketing Mania, Commercial Colonization

The Front
Freedom Flows in South Africa | Development and the Desert

The Lawrence Summers Memorial Award

Greed At a Glance

Commercial Alert

Names In the News


Names in the News

Blow: Drink or Drug?

A Las Vegas company must discontinue its cocaine-themed marketing and sale of an energy drink mix that allegedly glorifies drug culture and has raised serious health concerns due to its high caffeine content, Illinois Attorney General Lisa Madigan demanded in May.

In a letter sent to the President of Kingpin Concepts, Inc., Madigan demanded that the company immediately cease all marketing and sales of the energy drink called Blow in the state of Illinois.

“This is blatant promotion of drug culture and addiction,” Madigan says. “I am deeply concerned that the design and marketing of Blow will have a detrimental effect on children in Illinois.”

The product, which is currently sold online, is packaged in “bricks” and vials that can be purchased in combination with a fake VIP Blow credit card. The website does not enforce age restrictions or take other precautions to prevent children from purchasing this product, and the company promotes the mix on MySpace, a social networking site popular with children and teens.

“Blow energy drink mix is an adult product and has never been marketed to minors,” says Lauren Rogat, spokesperson for Blow. “We are shocked and concerned about Ms. Madigan’s personal decision to restrict the freedom of adult consumers to choose which products they support.”

The Attorney General also expressed serious concern about the harmful health effects of the energy drink mix, which contains extremely high levels of caffeine.

Earlier this year, the U.S. Food and Drug Administration (FDA) announced its view that Blow is an unapproved new drug.

“As an advocate for the health and safety of consumers, I share the FDA’s concern that this product may have a harmful impact on the health of its users,” Madigan says. “A vial of Blow contains more than three times the caffeine in other non-alcoholic energy drinks on the market. As a result, this product should be subject to proper testing, review and approval by the FDA.”

The Grossest Perk

One fifth of U.S. CEOs get some portion of their income taxes paid by the company. That’s according to a survey released in April by The Corporate Library. The payments, known as tax gross-ups, are often buried in corporate documents.

The survey of 650 CEOs found that 20 percent of them received tax gross-ups for perquisites such as housing, gifts, security, country club fees and executive retreats.

“The sight of Angelo Mozilo — the CEO of troubled Countrywide Financial — defending his request to the board to have the income tax due when his wife traveled for free on the corporate jet paid by the shareholders gave me pause for thought,” says Paul Hodgson, the author of the report. “So I decided to find out how common this kind of practice was. Jaded though I am, I have to admit to being surprised at the extent of what I like to call the grossest perk.”

Laying Down the Law

For eight days, IBM could not get a contract with the United States government.

On March 27, 2008, Robert Meunier, the debarring official at the Environment Protection Agency (EPA), suspended IBM.

The issuance of an $84 million contract to IBM was imminent. Evidence of wrongdoing — IBM allegedly had secured protected source selection information from an EPA employee — was significant enough for Meunier to act.

Many in the white-collar defense bar say that Meunier should have picked up the phone and called IBM’s attorneys before he came down with the sledge hammer of suspension.

Meunier disagrees.

“No agency, no agency — I’ll repeat it for a third time — no agency — is allowed during the course of a criminal investigation, without the approval of the investigators and the prosecutors, to call the target of an investigation, to invite them in, to discuss the investigation and say, ‘Here is our evidence,’” Meunier says. 

The IBM attorneys, Richard Bednar and his group at Crowell & Moring and Hogan & Hartson’s Ty Cobb, said they could not and would not comment on the case.

Meunier says that the EPA Inspector General and the suspension and debarment attorneys at EPA contacted him about the alleged wrongdoing at IBM.

“If I were not to have suspended IBM, the fruits of the misconduct would have gone directly to the contractor on whose behalf the misconduct occurred,” Meunier said.

Meunier says that this type of suspension occurs every day of the week. The only difference here is that it involved a big company.

The suspension was lifted on April 3, after IBM agreed to withdraw from the contract and cooperate fully with an ongoing federal investigation.

“IBM voluntarily withdrew from the contract on the basis of their own investigation,” Meunier said. “Companies don’t do that unless they are reasonably sure that something went wrong. They have turned over their materials to federal investigators. They have addressed our immediate needs to protect the government. I retain all of my options and privileges — including to once again suspend IBM depending on the course and outcome of the investigation or prosecution.”              

— Russell Mokhiber

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