Multinational Monitor

NOV/DEC 2008
VOL 29 No. 3


The 10 Worst Corporations of 2008
by Robert Weissman

Carbon Market Fundamentalism
by Daphne Wysham

A Last Chance to Avert Disaster
testimony of James Hansen


Plunge: How Banks Aim to Obscure Their Losses
an interview with Lynn Turner

The Financial Crisis and the Developing World
an interview with Jomo K.S.

The Centralization of Financial Power
an interview with Bert Foer

“Everyone Needs to Rethink Everything”
an interview with Simon Johnson

Toxic Waste Build-Up
an interview with Lee Pickard

“Before That, They Made A Lot of Money”
an interview with Nomi Prins


Behind the Lines

Public Ownership, Public Control

The Front
Thirsty for Justice - Whitewashing Honda

The Lawrence Summers Memorial Award

Greed At a Glance

Commercial Alert

Names In the News


Names In the News

Not Kosher

Iowa Attorney General Tom Miller in September filed a criminal complaint alleging more than 9,000 violations of Iowa’s child labor law at the Agriprocessors, Inc. plant in Postville, Iowa. Agriprocessors is the largest kosher meat producer in the United States.

Miller alleged a total of 9,311 child labor violations, involving 32 youths under the age of 18. (Seven of the 32 were under age 16.)

The Attorney General alleged the children were exposed to dangerous and poisonous chemicals, including chlorine solutions. The complaint alleges that the children under 16 were employed in the operation or tending of power-driven machinery, including meat grinders and circular saws.

The complaint also enumerates more than 1,500 violations relating to hours worked, with the children sometimes working more than 40 hours a week, without overtime pay, and before 7 a.m. and after 7 p.m.

The child labor revelations follow an immigration raid that led to the arrest of almost 400 undocumented workers at the plant. After the arrest, employees complained of terrible working conditions.

In July, the company paid for 25 rabbis to visit the plant. They issued an endorsement of workplace practices, stating in a news release that “the reality was markedly different from media reports,” but did not reveal that Agriprocessors had paid for their visit.

Not Cosmetic Accusations

If your director of regulatory affairs becomes a whistleblower, you have a problem. L’Oreal USA has a problem.

Jerome Chevallier became the cosmetic firm’s director of regulatory affairs in July 2003. He was fired in August 2007.

In July, he sued L’Oreal in a state court in Elizabeth, New Jersey. In the lawsuit, Chevallier claims he was fired because he “voiced strong objections and complained about unlawful activities.”

Chevallier says that L’Oreal marketed its Maybelline-brand lip gloss contaminated with DBP to South America. DBP is banned in South America because of its carcinogenicity and risks to reproductive health. He says the company untruthfully marketed a product called Pureology as formulated with vegan inputs, and that it used a banned substance called Triclosan despite saying it wouldn’t.

Chevallier says that in early July 2007 he learned that L’Oreal products in Europe contained a preservative, Kathon CG, above lawful levels and that this information had been omitted from the company’s computer system “so as to avoid regulatory department scrutiny.”

After requesting a recall of the products, Chevallier says he was prohibited from having any further communications with his counterparts in Europe. And after a dust-up with superiors over the incident, he was fired.

L’Oreal says Chevallier was fired for selling free L’Oreal products on eBay.

“L’Oreal USA has investigated this complaint and unequivocally denies these allegations,” the company says in a statement.

“L’Oreal is committed to upholding the highest standards of safety for all the products it manufactures and distributes.  All the products marketed by the L’Oreal Group are in full compliance with FDA regulations as well as the European Union Cosmetic Directive and the requirements for safety in the more than 130 countries where its products are sold.”

Chevallier admits that he did in fact sell free L’Oreal products on eBay, but says that’s not the reason he was fired.

Not Authorized Promotion

The Pennsylvania-based biotech company Cephalon agreed in September to plead guilty to a criminal charge of distributing a misbranded drug and to pay $425 million to resolve lawsuits claiming that it marketed three drugs for uses not approved by the Food and Drug Administration (FDA).  

The lawsuits alleged that Cephalon engaged in a scheme to market the drugs Gabitril, Actiq and Provigil for unapproved uses.

Actiq was approved for use by “opioid-tolerant cancer patients with breakthrough cancer pain.” But, using the mantra “pain is pain,” Cephalon instructed Actiq sales representatives to focus on physicians other than oncologists, including general practitioners, and to promote the drug for many uses other than breakthrough cancer pain.

In the case of Gabitril, which had been approved for use for epilepsy, Cephalon told the sales force to visit not just neurologists, but also psychiatrists, and to promote the drug for anxiety and other psychiatric indications. Cephalon also structured its sales quota and bonuses in such a way that sales representatives could only reach their sales goals if they promoted and sold the drugs for off-label uses.

The lawsuits against Cephalon show it spent millions of dollars on various schemes to promote off-label uses.

“We are pleased to have these long-standing matters behind us, while preserving our ability to participate in all federal and state healthcare programs, thereby maintaining the access of patients in those programs to our medications,” says Jerry Pappert, executive vice president and general counsel of Cephalon.

— Russell Mokhiber


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