The Company Picnic
A Wall Street Journal poll of 350 major corporations found that the median compensation, including stock options, for CEOs last year was $2,635,799. That was a growth of 3.1 percent. Overall, US wages and benefits climbed 3.5 percent. So, in a way, ordinary workers fared better than the CEOs, didn't they? OK, just kidding. The CEOs pocketed an extra $79,253 or so on the year, while a worker with an income of $40,000 grossed an extra $1,400.
As of the latest count, Bill Gates's net worth was $51 billion, which is greater than the combined net worth of the 106 million Americans at the bottom of the pile. The press keeps going gaga over the stock-market boom, but let's not forget, comrades, that 90 percent of the stock gains went to the wealthiest 10 percent of households, with 42 percent of the bounty going to the superrich 1 percent. So let's hear no more about the growth of your piddling retirement account.
I mention those little differences in prosperity to provoke, I hope, the kind of anger that you need to appreciate this book by Russell Mokhiber and Robert Weissman. Mokhiber is editor of Corporate Crime Reporter, a legal weekly based in Washington, DC; Weissman is editor of Multinational Monitor, which also operates out of Washington and is a window on nasty corporate power. Their purpose in Corporate Predators is to show what happens when big business (as Ralph Nader says in the introduction) "goes on a rampage to control our society." Granted, there's nothing new about that, except in the fresh intensity of the rampage and the increasing collusion of the federal government--far, far more than when Woodrow Wilson complained, three generations ago, that "the government of the United States at present is the foster child of special interests."
The result, as you will see in Corporate Predators, is that while the special interests sometimes do get by with murder and mayhem--the chicken industry, for example, subjects its workers to some of both--more often they traffic in bottom-line crimes such as fraud, the device by which Medicare contractors bilk the government of an estimated $100 billion a year. Among the more avaricious is Blue Cross/Blue Shield, better known in this book as "Blue Criminal" because of the $221 billion it has paid in fines for cheating the government in six states.
In a recent New Yorker cartoon, a CEO says to his board members (who look much like stereotypical Mafiosi), "Tell the public we don't want to hurt them. We just want their money." But of course, in addition to robbing us they do hurt us, and nowhere more than in the way they mistreat the environment, usually with impunity. Mokhiber and Weissman remind us, for example, that while a million tons of chemicals dumped by General Electric have poisoned a 200-mile stretch of the Hudson River and rendered its fish inedible, the company has yet to spend a penny to clean it up. When an Ashland Oil Company tank collapsed and polluted 200 miles of the Monongahela and Ohio rivers, it was let off with a $2.25 million fine, which to Ashland was about as painful as the fine you would pay in New York for a parking violation.
This is also the tenth anniversary of the worst pollution of coastal waters in US history, when an Exxon tanker spilled almost 11 million gallons of oil in Prince William Sound, polluting more than 1,000 miles of shoreline, killing tens of thousands of birds and marine mammals and ruining much of the Alaskan fishing industry. Most of the cleanup costs were paid by taxpayers; Exxon paid a fraction, but it was allowed to deduct 34 percent of that from its taxable income as "a routine cost of doing business." As for the 1994 jury verdict of $5.3 billion in compensatory damages, Exxon hasn't yet paid a cent.
It's awesome the way big business persuades the government to make chumps out of taxpayers, using our guarantee to rescue big banks that gambled on risky investments overseas and lost on Wall Street hedge funds. Talk about chumps! We even pay to develop drugs that the government then gives to pharmaceutical firms, which sell them back to us for billions.
In these pages you'll meet corporations that have--with the help of our carefree government regulators at the Justice Department and the Federal Trade Commission--transformed the antitrust laws into the most embarrassingly bad joke of the century. The first use of the antitrust laws, which are supposed to prevent dangerous concentrations of corporate power and, specifically, price-rigging, was in 1914, to break up the Standard Oil Trust, which by gobbling up dozens of smaller companies had come to control 95 percent of the oil refining industry in this country. The Supreme Court divided the bulk of the Standard assets among seven major oil companies, with Exxon and Mobil being by far the biggest splinters.
But look at what's happening. Exxon and Mobil rejoined in 1998. Earlier, two other massive splinters, Sohio and Amoco, were brought back together when they were purchased by British Petroleum. In other words, the most famous antitrust action of all time--the demolition of Rockefeller's trust--is being rapidly reversed.
While Justice and the FTC have stood by, addled and overwhelmed, there have been record numbers of mergers and acquisitions every year since 1994, topping out last year at a value of $2.5 trillion. Drug companies, banks, high-tech companies, railroads, paper and utility companies, corporations of every brand, seemed eager to tie the knot. Among these were some dangerous concentrations. It seems hardly likely, for instance, that real competition exists among the prime military contractors. A wave of mergers beginning in 1985 left only four: Lockheed Martin, Boeing, Raytheon and Northrop Grumman. These three now represent about two-thirds of all military product sales. (Lockheed, a veritable octopus, has swallowed twenty-six other military contractors since 1990.)
Similar domination exists in the tobacco industry, where three companies--Philip Morris, R.J. Reynolds and Brown & Williamson--have more than 90 percent of sales sewed up. But they can't compare to Microsoft, which alone controls 90 percent of the world's personal computer operating systems; or Boeing, which, after it bought McDonnell Douglas in 1996, became the only--yes, only--manufacturer of commercial jets in the United States.
Not surprisingly, the biggest mergers are done by those that pour the most money into Washington lobbies, which means the pharmaceutical/health, insurance, oil and telecommunications industries.
Some mergers are done by corporations that simply give the government the finger and dare the regulators to do something about it, as when Citicorp and Travelers merged last year, in clear violation of the Glass-Steagall Act, which for more than sixty years has forbidden banks and insurance companies from owning each other.
As for enforcement of antitrust laws to prevent price-fixing, well, occasionally a big corporation is caught rigging prices and is fined. This happened a few years back, for instance, to Archer Daniels Midland, the planet's largest grain dealer, and it pleaded guilty to rigging prices on two of its products. The $100 million fine was a mere pittance to ADM, which had earned nearly twice that much from the rigged prices; and anyway, it has annual revenues of more than $13 billion from its agricultural products (much of it heavily subsidized by taxpayers).
Even so, Dwayne Andreas, ADM's longtime chairman, complained bitterly, and you can understand why, because Justice and the FTC let most corporations rig the "free" market at will. On that point, Andreas supplies perhaps the most candid appraisal ever heard from a capitalist: "There isn't one grain of anything in the world that is sold in a free market. Not one! The only place you see a free market is in the speeches of politicians. People who are not from the Midwest do not understand that this is a socialist country."
Well, you know what he means by socialism. And when it comes to the coziness between big business and government, he's right. Mokhiber and Weissman have put together a useful survey of some of the disgusting corporate practices that are tolerated by our politicians--who get 80 percent of their campaign contributions from business interests. But the field is so very broad that Corporate Predators just touches the edges. Readers who want to know more about how people are being robbed should turn to other books of the same genre, such as Jim Hightower's There's Nothing in the Middle of the Road but Yellow Stripes and Dead Armadillos, William Greider's Who Will Tell the People, Molly Ivins's You Got to Dance With Them What Brung You, Ken Silverstein's Washington on $10 Million a Day and Steve Brouwer's Sharing the Pie.
The first three books on that list are published by corporate-owned giants HarperCollins, Simon & Schuster and Random House, respectively. More and more, though, populists find a voice only through feisty little houses like the one that did Corporate Predators, Common Courage Press. Be grateful to them.