The Year ('97) in Corporate Crime | The Nation


The Year ('97) in Corporate Crime

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Screwing the Workers

About the Author

Robert Sherrill
Robert Sherrill, a frequent and longtime contributor to The Nation, was formerly a reporter for the Washington Post. He...

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Roy Cohn was one of the most loathsome characters in American history, so why did he have so many influential friends?

Of course, misdeeds of the sort mentioned screw the U.S. working class in a general way. But sometimes the screwing gets up close and personal, right in their own workplace. Three Kentucky coal executives were sentenced to prison in the deaths of ten workers, but it took seven years to get the villains behind bars. In 1989 methane gas exploded in a Pyro Mining Company shaft. In the resulting investigation, it was found that prior to the explosion the executives had lied to federal inspectors about the existence of the mine's hazardous conditions. For helping to kill ten men, the executives drew sentences ranging from five months (and a fine of $375) to eighteen months (and a $3,000 fine--or $300 per victim).

Using data from the federal Mine Safety and Health Administration, the Journal reported that these sentences were among the longest ever handed down. "Most criminal complaints filed on behalf of the agency result in no prison time.... The agency estimates that only about 40 people have gone to jail since 1991 because of criminal safety violations at mines." With such light penalties, who's going to worry about obeying regulations?

Following up on a union complaint that Caterpillar's parts factory in York, Pennsylvania, had workplace health hazards, the National Institute for Occupational Safety and Health tried to inspect the place. Caterpillar said no. So NIOSH got a warrant from a federal judge ordering the company to admit the inspectors. Caterpillar still said no--the first time in fifteen years that any company had defied a federal warrant--and it was held in civil contempt. The company finally gave in. It could have been fined heavily, but of course it wasn't.

The minimum-wage law means nothing to many employers. They simply ignore it. The WSJ quotes Princeton labor economist Alan Krueger's estimate that as many as 3 million workers are paid less than the minimum wage and adds, "Violating the minimum-wage law has a certain economic logic to it because an employer, if caught, usually has to pay only the back wages that were due. Penalties are generally levied only on repeat or extreme violators."

A survey of garment makers, among the worst outlaws, found 43 percent paying illegally low wages. But trucking companies, eateries and construction firms are top criminals, too.

Here's one place where the corporate whine about "big" government becomes an especially bad joke. The Labor Department's team of inspectors has shrunk 15 percent in the past six years, and the remaining 500 inspectors are supposed to police 6 million workplaces for minimum-wage and overtime violations, child labor abuses and other corporate tackiness.

Failure to pay for overtime work is especially widespread. The Journal says, "Violations are so common that the Employer Policy Foundation, an employer-supported think tank in Washington, estimates that workers would get an additional $19 billion a year if the rules were observed." [Emphasis in original.] In an analysis of more than 74,000 cases handled by the Labor Department over a four-year period, the paper concluded that one out of every fifty workers had been illegally denied overtime pay.

With Texaco leading the way, discrimination cases (involving age, disability, whistleblowing, race and sex) became boilerplate headlines in 1996. Texaco has had lots of company: Astra USA, WMXTechnologies, Monsanto and Mitsubishi Motors, among others. Discriminators paid out many millions of dollars in penalties, but the corporate world was not visibly repentant or shaken. It's hard to make big corporations feel pain for their sins by merely fining them. Referring to one of Texaco's offers--$176 million--to settle a race discrimination case, the Journal made the point: Yes, if Texaco's offer were accepted, it would be the largest cash settlement ever to resolve such a case, but so what? After all, "it's not a princely sum to dole out over five years for a corporation with revenue of more than $30 billion."

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