Enron, WorldCom, Tyco, Merck, Rite-Aid, Xerox, Global Crossing and many other “great” corporations have recently been caught in scandal, fraud and crime. Company executives once hailed by the mass media as the geniuses behind the “go-go” economy have devastated employees and investors, drained pension and retirement funds and in many cases fleeced the taxpayers.
The Bush Administration and Congress are lining up to feign shock over the recent corporate accounting fraud scandals and have pledged to place the few bad apples in jail. Meanwhile, they give us legislation that does nothing to protect workers and gives a free pass to large-scale looting. This should come as no surprise, considering that Bush and Vice President Dick Cheney come to office steeped in corporate culture.
A rotten tree, not bad apples
Corporate crime has been rising sharply for decades. While the corporate-controlled “mainstream” media is too corrupt, lazy or stupid to cover the true story of corporate crime, the progressive press has done a number of exposés in recent years
Most people don’t realize it, but corporate crime costs our nation more than all street crime combined, said Kevin Danaher, co-founder of Global Exchange and author of the 1997 book, “Corporations are Gonna Get Your Mama: Globalization and the Downsizing of the American Dream.” He cites FBI statistics showing that in 1995 all burglary and robbery cost the U.S. about $4 billion
By contrast, white-collar fraud and crime costs 50 times as much, or $200 billion a year, according to Professor W. Steve Albrecht of Brigham Young University. And this is just the dollar amount. Corporate crime carries higher costs seldom calculated, such as the toll of cancer caused by environmental pollution.
The taxpayers foot the bill for many of the corporate crimes that occur daily. According to Danaher, a study by the public interest group Project on Government Oversight found that major U.S. corporations that get billions of dollars in government contracts are guilty of cheating on these contracts and ripping off the taxpayer. Many of these companies that receive government contracts engaged in fraudulent or criminal activities more than three times. General Electric has defrauded the government 16 times, according to the study. Other companies that committed multiple frauds include Boeing, Grumman, Hughes Aircraft, Martin Marietta and McDonnell Douglas.
Corporate criminals repeatedly violate minimum wage laws. As many as three million workers get less than the minimum wage, estimates Princeton labor economist Alan Krueger. “Violating the minimum wage law has a certain logic to it because an employer, if caught, usually has to pay only the back wages that were due,” Krueger said. “Penalties are generally levied only on repeat or extreme violators.”
A survey of garment shops, among the worst criminal enterprises, found 43 percent paying illegally low wages. Trucking companies, eateries and construction firms are top criminals too.
Employer refusal to pay overtime is another particularly widespread criminal activity. Even an employersupported think tank, the Employer Policy Foundation, estimates workers would get an additional $19 billion a year if the overtime law were followed. The Labor Department has concluded that one out of every 50 workers has been illegally denied overtime pay.
Sometimes corporate malfeasance brings deadly consequences, as Robert Sherill documented in his article, “A Year in Corporate Crime.” (The Nation, 1997) Methane gas exploded in a Pyro Mining Company shaft in 1989, killing 10 workers.
For helping kill 10 men by ignoring hazards in the mine, Pyro executives drew sentences ranging from five months to 18 months. Five months in prison for contributing to the deaths of 10 workers appears to be an extraordinarily light sentence, but data from the federal Mine Safety and Health Administration suggest that these sentences were the longest ever handed down.
Today’s corporate crime du jour is Enron-style accounting fraud, stealing money (lots of it), and depriving investors and employees of their rights. Enron employees worked hard and expected a fair wage and job security in return. Instead, they got a few minutes to clean out their desks and get the hell out of the office. In some cases, management denied severance packages to workers who refused to sign documents giving up the right to sue Enron for defrauding them. Together the Enron and WorldCom collapses due to criminal fraud wiped out the savings of more than 100,000 workers.
All the media hoopla about Bush and the conservative, right-wing Congress getting tough on corporations is almost laughable. Congress always leaves town during the month of August and President Bush is going on vacation at his ranch in Texas. But before they left, these two co-conspirators left American workers with nothing and multinational corporations with big bags of money.
Legislation is the pits
Congress did little to safeguard savings for American workers and their families. Corporate accountability legislation failed to give workers —continued on page 7
