The New Corporate Predator

by Charles J. Reid

In the 1886 Supreme Court case, Santa Clara County v. Southern Pacific Railroad Co., the Court declared that a corporation was a "person" as interpreted by the Fourteenth Amendment. In a preface to the Court's argument, Chief Justice Morrison R. Waite observed that all the Justices shared the opinion that the provisions of the Fourteenth Amendment that applied to persons also "applied to these corporations," the corporate defendants affected by the case before the Court.

This 19th Century decision set a momentous precedent. It gave an abstract paper construct, a corporation, the legal rights of a "person," though without binding these legal persons with the same social responsibilities communities place on individual human beings.

Four score and 14 years later, the Court de facto extended the progressively enhanced legal empowerment of corporations, enabling them finally to design contracts that supersede and nullify an individual human being's protections under the U.S. Constitution's Bill of Rights.

The Agency had sued ex-agent Frank Snepp for publishing his book, "Decent Interval," without submitting it to the CIA for pre-publication review. Although the book did not contain any information that was not already part of the public record, when Snepp entered the CIA, he signed a secrecy contract in which he promised not to publish any information or material relating to the agency without prepublication approval. The Court found that Snepp had not only violated his contract, but also breached a fiduciary duty to the government. It imposed a "constructive trust" on the proceeds of his book. Thus, all the money Frank Snepp received from publishing his book had to be turned over to the federal government.

Today, corporations are using the "contract tool" to nullify the rights of citizens under the Constitution of the United States. The best example of this occurs when insurance companies require patients to "waive" their Constitutional rights to due process and submit to "arbitration" in a dispute with a doctor covered by the insurer. This de facto deprives the human patient of immediate legal due process as guaranteed by the same Fourteenth Amendment that gave life to paper corporations.

Through the years and a series of corporate-friendly, perhaps socially irresponsible decisions, the Supreme Court has created a horde of monstrous predators -- legal Dr. Jekyll/Mr. Hydes.

At one level, corporations develop new technologies and economies of scale. These may serve the economic interests of mass consumers by introducing new products and more efficient methods of mass production. On another level, given the absence of political control today, corporations serve to destroy the foundations of the civic community and the lives of people who reside in them -- here in the United States, and everywhere else in the world.

In the struggle to survive, denial is strong. Most Americans are frustrated by the gravity of the problem: legally, corporations have unlimited life, unlimited size, unlimited power, and a whole lot of license to control the political, economic, and cultural destinies and disparities of local communities and of the world. Having no conscience for the community, corporations remain focused solely on their own "rational" self interest in profit, respecting no human being that stands in their way, especially those lacking status, wealth, or power.

Russell Mokhiber is editor of the "Corporate Crime Reporter." Robert Weissman is editor of the "Multinational Monitor." The authors' agenda is clear, and "Corporate Predators" is spiced with the kind of rhetoric one would expect from writers reporting on the evils of corporations. But you can ignore the rhetoric, if you want. Facts speak for themselves.

The book itself is a collection of the columns the authors wrote during 1997 and 1998. The data it contains is a step toward raising public consciousness about the legally accepted institutions that control their future. "Corporate Predators" contains facts and information about corporations that rarely reaches the general public in a unified, coherent way. And the public can change the law, once people grasp the problem and unify to solve it.

"Corporate Predators" exposes the problems in monitoring corporate crimes, for example. In "No Mind, No Crime," the authors write, "While street crime is reportedly being brought under control in America's major cities, all indications are that corporate crime and violence continue to skyrocket." Yet some legal scholars like George Mason Law School Professor Jeffrey Parker argue, "Since a corporation has no mind, is can commit no crime." Then why give it the legal status of a thinking human being?

According to Mokhiber and Weismann, "The FBI does not issue a yearly "Corporate Crime in the United States" report, despite strong evidence indicating corporate crime and violence inflicts far more damage on society than all street crime combined." Indeed, the FBI "Crime in the United States" report ignores corporate and white-collar crimes such as pollution, procurement fraud, financial fraud, public corruption and occupational homicide, while it does document murder, robbery, assault, burglary, and other street crimes.

The authors also note throughout the book that corporate crime and violence goes undetected or unprosecuted either because corporations can modify the laws to excuse them from wrongdoing or they have enough power to influence prosecutorial actions and outcomes.

Yet companies do commit crimes. A few are uncovered and sometimes prosecuted. Their column, "Blue Cross, Blue Shield, Blue Criminal," describes the 1998 case where Blue Cross/Blue Shield of Illinois pled guilty to eight felony counts after admitting concealing evidence in a Medicare claim payment investigation. In another case, Blue Cross/Blue Shield of Florida paid $10 million to settle charges that it falsified and failed to properly screen provider claims. These are not the only states wherein this particular corporation faced criminal charges.

The authors report in "Brinkley Shills for Corporate Criminals" that in 1996 Archer Daniels Midland (ADM) pled guilty to criminal price fixing and paid a $100 million fine. ADM hired David Brinkley to film a series of TV promos to repair the company's image. Our vocabulary has no concept of working for a corporate felon.

In 1998 state testimony showed that General Electric dumped a millions tons of PCBs (polychlorinated biphenyls) into the Hudson River, lining the bottom of a 200 mile strip. The Oil Pollution Act, passed by Congress in 1990, required the National Oceanic and Atmospheric Administration (N.O.A.A.) to develop a new set of rules and procedures to determine exactly how toxic cleanup sums should be calculated.

As described in "Saving or Trashing America's Treasures?" at issue for General Electric are the tons of PCBs that it dumped into the Hudson River. GE wants escape responsibility for the environmental damage it caused and wants the rules changed before it is forced to clean up this toxic environmental mess. The cleanup could cost the company $2 billion to remove from the river. GE says such a cost is unfair, even though its revenues for 1997 alone reached a record $90 billion. Court cases are pending.

In "Dissolving Unocal" the authors describe how a California citizens group petitioned then- state attorney general Dan Lungren to revoke the charter of Union Oil of California for pollution, OSHA violations, worker discrimination, and complicity in human rights violations in Afghanistan and Burma. Of course, Lungren rejected the 127-page petition within a couple days. Revoking a corporate charter has happened only once in California this century. Loyola Law School Professor Robert Benson explains, "California attorneys general haven't often done it because they've become soft on corporate crime."

In "Boom and Bust" the authors describe how large institutional investors -- Merrill Lynch & Co., Goldman Sach & Co., Bear, Stearns, & Co. and Bankers Trust Corp. -- call on the government for taxpayer bailouts when hedge funds with billions invested go bust. Calls placed to the Federal Reserve Chairman or Treasury Secretary lead to orchestrated bailouts that benefit those with the millions in risky investments. The political party affiliation of the office holder has little significance -- the big guy can always get an infusion of worker and middleclass taxpayer capital to reduce his risk irrespective of which political party holds power.

Similar kinds of political arrangements exist in other industries, including oil, pharmaceuticals, gambling, and manufacturing. Meanwhile, forget campaign finance reform. In Buckley v. Valeo (1976) and First National Bank of Boston v. Bellotti (1978), the Supreme Court declared corporate political contributions as a person's exercise of free speech. When the elections are over, it's time to legislate. And as the authors report, "If major corporations don't like a law, they can invest millions in campaign contributions, lobbyists, and political advertisements" to change the law.

Sometimes they just ignore the law. The 1998 proposed merger of Citicorp and Travelers Group is such a case. According to Mokhiber and Weissman, "This merger is flatly prohibited by federal law that prevents banks, securities firms, and insurance companies from owning each other." But the financial services industry fought for years to tear down the regulatory wall separating commercial banking from insurance and investment banking. The merging companies can tie up litigation for two to five years, while they lobby to change the law.

According to Mokhiber and Weissman, "When Teddy Roosevelt-era trustbusters broke up the Standard Oil monopoly, they were motivated by political as much as economic concerns. They understood that concentrated economic power translates into political power, and that concentrated political power in incompatible with democracy." Today, conservatism has buried the trustbusters.

In "One World, One Company" the authors note that a recent United Nations report highlights the importance of recognizing the political implications of mergers and acquisitions, especially American and European takeovers of Third World companies. Such acquisitions do not create new jobs, generate new economic activity, or even represent new investments. Only the company name changes. Meanwhile, the takeovers create private monopolies and oligopolies that sustain local price gouging, degradation in living standards, suppression of local independent innovation, and the maintenance of a hierarchical social structure with great disparities in wealth.

People who've lived in the United States through the corporate downsizing strategies implemented during recessions or as a result of mergers understand how corporate consolidation and intimidation affect local communities.

During the Reagan years, a new climate for Big Business emerged. The decision to fire the striking air traffic controllers broke the Professional Air Traffic Controllers Association (PATCO). Union membership declined nationally. Congress passed the Garn-St. Germain bill, which deregulated the Saving and Loan Associations. Taxpayers paid the $500 billion plus bill for the S&L collapse, resulting in increased dissatisfaction with taxation: the politically desired result from the conservative, pro-business perspective.

Big Business today capitalizes on the political and economic climate Reagan created. Corporations acquired enhanced power from increased capital mobility, foreign competition, rapid technological change, and downsizing. After NAFTA, they could move to Mexico. As Mokhiber and Weissman report, "Employers use threats of plant relocations to bust unions; rely on weak or non-existent unions to permit downsizing; they capitalize on technological change to speed restructuring and to shift production abroad. Many workers are so intimidated that they fear unionizing or even asking for a raise."

Moreover, as corporations have become strident defenders of First Amendment freedoms in an electoral context, with increasing frequency they are intimidating citizens from exercising their own free speech rights. More and more corporations are charging community activists who speak out against alleged corporate wrongdoing with defamation, libel, slander, and other offenses, suing them for large sums of money. As the authors suggest, "Most corporate suits fail, but they have the desired effect of tying up activists' time, and intimidating them and others from speaking out." Free speech is rarely allowed anywhere corporations control the message through their financial power.

Public political culture is becoming less and less a pure human endeavor and more and more a corporate product. Information control is an important corporate mission, as politicians plan to privatize prisons, law enforcement, social security, and even components of the military.

In "Corporate Fronts: An Epidemic with a Cure," the authors tell the story of Sandra Steingraber, whose book, "Living Downstream: An Ecologist Looks At Cancer and the Environment," was savagely reviewed by Dr. Jerry Berke from Ashton, Massachusetts, in the "New England Journal of Medicine." Berke called the book, "a biased work" of an environmentalist. According to the authors, "Steingraber soon learned that the Dr. Jerry Berke who reviewed her book was in fact director of toxicology at W.R. Grace & Co., on of the largest chemical companies in the United States." The chemical pollution of this company was captured in the book, "A Civil Action," now a motion picture starring John Travolta.

Corporations are resorting to new tactics to delude the public. Mokhiber and Weissman describe how corporations set up and fund think tanks like the American Enterprise Institute and Hudson Institute. The set up front groups like Citizens Against Lawsuit Abuse or the Electric Consumers Association. They fund "public interest groups" like the World Wildlife Federation or the Environmental Defense Fund. Corporations have taken over organizations, like the National Consumers League. And they fund many national corporate-friendly conferences with misleading themes, such as "Focus on Youth: The New Consumer Power," sponsored by Visa USA, the Chemical Specialties Manufacturers Association, the Chlorine Chemical Council, Monsanto, General Motors, and others.

At the same time, all media efforts are made to block reports deleterious to corporate interests. The "old boy" network meets advertising.

In a lawsuit filed against WTVT, a Fox Television affiliate in Tampa, Florida, two journalists allege that Fox executives ordered them to broadcast lies about Monsanto's controversial bovine growth hormone (BGH), now being used by many dairy farmers across the country. Jane Akre and Steve Wilson had produced a four-part series on BGH in the Florida milk supply. Several countries around the world prohibit use if BGH in cows. When Akre and Wilson refused to include falsehoods in "adjustments" to the script, they were fired.

This case represents only one of many involving issues focused on the media and a number of corporations. Self-censorship of the media is well known today.

Meanwhile, corporations have extended their national cultural reach and control to museums, schools, and the arts. Corporations regularly sponsor exhibits at the Smithsonian Institution, in Washington, D.C., where they also block information that is critical to their interests. "Fund raisers" at cultural institutions throughout the country are faced with this problem.

With the political control of the American body politic in their pockets, corporations control the political state of the world by inducing foreign policies protecting authoritarian regimes, oligopolies, and investment risks. At the international level, support for corporate interests while sacrificing needs of people has become a permanent component of U.S. foreign policy. Countries like China and India have been able to maintain some modicum of political and economic independence due to the size of their populations and nationalist policies of their political leaders. Other smaller countries from Argentina and Chile to Nigeria and Indonesia have had their authoritarian regimes installed and sustained through American foreign policy designed to protect corporate interests.

Bottom line, at a pure human level, corporations represent the amoral, absence of ethics in human society. Some corporations try to balance their deeds with philanthropic contributions of one sort of another. But this is not recompense for the damage and death done to communities and people throughout the world.

The blind pursuance of corporate interests leads to the devaluation of human beings, as the author describe, when they report that Occidental Petroleum is intent on drilling in the Colombian rainforest on land considered sacred by the U'wa people, who say they will commit collective suicide if the drilling doesn't stop. The same can be said for companies that charge a price that is 10 to 100 times the cost of producing the product, as is the case in the apparel and pharmaceutical industries. This is something the facade of occasional conscience-easing corporate philanthropy cannot hide.

Corporations have large budgets for marketing mendacity promoting dishonest "spins" that have become part of the expectation of doing business. They lie about their products and maintain law-suit budgets to cover losses due to product defect judgments. As Mokhiber and Weissman document, too many corporations get low performance scores for "decent treatment of workers, environmental preservation, respect for human rights, delivery of affordable and quality consumer goods and services and adherence to the law."

Perhaps the most disastrous impact corporations have in our lives is on the human personality. On one hand, the PR-driven marketplace degrades honesty and integrity. On the other hand, democratic values of tolerance and open discussion become diluted in an organizational environment that fundamentally emulates a feudalistic/militaristic structure. The struggle to maintain a job occurs in the context of an asymmetric relationship where obsequious sycophancy is highly prioritized.

Today, the Fortune 1000 corporations control 70 percent of the economy. When the nation was founded, the economy more closely approached a state of pure competition. Then people dealt with people. Now supervisors manage their "human resources" as they manage raw materials, which are discarded when they lose their usefulness.

Read "Corporate Predators." And perhaps drop a line to your favorite Supreme Court Justice and inquire about how this march toward Corporate Feudalism can be legally stopped, on the ethical assumption that we truly ought to "put people first."