Fight the Corpocracy, Take Back Democracy - A Mad As Hell Guide for the 99%

II. CORPORATE AMERIC’AS FALL FROM GRACE A FEW BAD APPLES, OR ROTTEN TO THE CORE?

Goldman Sachs, Bank of America, Enron, Adelphia, Morgan Stanley, Tico, Citigroup, ImClone, Global Crossing, WorldCom, Qwest - to paraphrase Butch Cassidy, who are these guys? A few bad apples in an otherwise honorable barrel? Manifestations of greed by a small number of atypical executives?

Nope and nope. These companies are just today’s installment of a story that’s been developing since the early 1800s, when the corporate system began to become perverted, moving away from its original design of serving the public interest to a narrow role of enriching stockholders and executives. Except that the new perversion sometimes drops even stockholders out of that picture.

These corporations aren’t particularly exceptional, and their executives are not atypical. The corporate system has degenerated to the point that corrupt behavior has become, if not the norm, at least not exceptional. This section’s appendix, “II-A: Who Did What,” is a sampling that reaches back over a century. Except that it would take up this whole book, I could have included thousands more companies in that sidebar.

If you don’t read the business publications like The Wall Street Journal, Business Week, Barron’s, or your newspaper’s business section, you might not recognize how widespread corporate misbehavior now has become. Of course that doesn’t keep it from affecting, and costing, you.

$   Your food, which mostly passes through the precincts of multinational corporations, has virtually become a threat to your life. Salmonella, Listeria, E. coli, botulism. Milk, fish, cantaloupes, cheese, hot dogs, peanut butter. Thanks to continuous weakening of regulations at the persistent bequest of Corporate America.

$   When your pension fund is invested in the stock of a company that tanks because its financial statements turn out to be significantly fabricated, you could end up having to work until they throw the sod over you. Think older Enron employees flipping burgers.

$   When a big corporation bullies your city government into tax breaks and even tax-financed expenditures like new roadways or a rent-free corporate building, you could find that the cost has been passed on to you and your neighbors through doubling your property taxes or adding the proverbial “just 1% more” to your sales taxes.

$   When your children start showing rashes and lesions over their arms and faces, you might learn that those yellowish emissions out of a company’s smokestacks were more toxic than had been admitted.

$   When you contract cancer from workplace exposure, or carpal tunnel syndrome, or recurring headaches from inhaling fumes in the plant, you’ve encountered the unfortunate but too routine product of a warped corporate system that has come to seek the wrong goals, embrace the wrong values, forget its honorable genesis.

And where were the enforcers, the so-called “independent” auditors who are supposed to root out corporate fraud and fabrications? Cozily in bed with the defrauders and fabricators, often proposing more convoluted ways for their clients to mislead the public. Arthur Andersen took the biggest hit -its criminal conviction, for shredding documents and otherwise aiding and abetting the malfeasance of Enron, put it out of business - but daily headlines show that every one of the other big international accounting firms is butt-deep in this slime-pit. PriceWaterhouse/Coopers, Deloitte & Touche, KPMG, Ernst & Young - all of them, it would appear, no better than Andersen. Turning a winking eye on client chicanery, energetically crafting spurious tax shelters and persuading their clients they would at least have “plausible deniability” with the IRS, virtually automating their audits with computerized checklists that reduce the role of the scrupulous, independent watchdog to little more than a lap puppy.

All following in the ignoble footsteps of corporations in putting dollars ahead of people:

Thousands of cases of corporate wrongdoing could be cited, using only public sources. But many, many more fall below the radar of the news media. You’ve surely experienced, as a worker, customer, stockholder, or taxpayer, abuses that never made it into the newspapers. A corporate charter, married to a great deal of money and other resources, produces immense power. That power can be used for good, it can be used for harm, it can be abused through incompetent, inattentive, or venal management to produce enormous, even if unintended, pain and suffering.

Corporations, as we shall see in subsequent pages, were initially conceived and created, roughly during the time of Queen Elizabeth I, to serve a public purpose. This principle of service became corrupted - perverted - during the nineteenth and twentieth centuries, giving us corporations that now serve mainly their executives, sometimes their stockholders, rarely their workers, customers, suppliers, communities, or the public interest.

The system we have is not what we intended.

Workers are used, abused, exploited, and erased - laid off, downsized, reconfigured, RIF’d, fired. Coal companies - 500 of them - doctoring dust samples to hide miners’ exposure to black lung disease. At least twenty-five workers dead when they couldn’t escape from Imperial Food Products’ chicken-processing plant, because management had locked exit doors to “keep workers from stealing chicken parts.” Manville’s lung-destroying asbestos, promoted and marketed for years after the company knew of the threat to workers - and leading one attorney to call this company “the greatest mass murderer in history.” Retirement plans and dreams demolished by companies that fudge their financial data to kick the stock price up, so executives can cash in lucrative options before the market catches on and the stock crashes and employees’ pension plans, loyally invested in the company, are wiped out.

Customers are numbers, dollars, behaviors, tastes - not people. Harm to customers is monetized and factored into a cost-benefit equation. If the benefits to the corporation of marketing unsafe or shoddy products exceed the costs, including costs of defending lawsuits but not costs of injuries or illness to customers, then keep on selling. The soul of the corporation is illuminated in American Home Products’ toxic Phen-Fen, Ford’s exploding Pinto, GM’s rollover Corvair, A.H.Robins’ destructive Dalkon Shield, violent and wrenchingly painful deaths from toxic shock syndrome caused by Playtex’s super-absorbent tampons, and of course the generations of lung cancer willingly - enthusiastically? -promulgated by tobacco companies. (The principal executives of the five leading tobacco companies actually testified before Congress that their companies had no evidence of a relationship between smoking and cancer.)

Suppliers may be other companies, or they may be small family businesses or individuals. Because large corporations often have a substantial size advantage over suppliers, they can bully and exploit these smaller enterprises. Suppliers may be pressured into paying less than living wages, or improperly disposing of toxic effluents. They may be pressured to commit to some large volume, requiring substantial investment in additional equipment, and then left holding the bag as the large corporation decides to walk away from the deal. An economy cannot be deemed healthy that features this kind of relationship on a widespread basis. The corporate system should foster equitable, reciprocal relationships between corporate purchases and their suppliers.

Communities are also lucrative targets in the corporation’s pursuit of riches. Pit one community against another in a bidding war to keep the company in place, even if there was never any intention of moving. Demand huge tax abatements and a basketful of special favors. And move at will, to Alabama or Mexico or wherever you can get the cheapest sweatshop labor and the least regulation. Does the manufacturing process produce hazardous and toxic waste? Bury it on-site, keep quiet, let future generations pay the price (probably after the corporation has merged and split up and reorganized until no practical legal trace of the culprit remains). Think Love Canal, Stringfellow Pits, Times Beach. Look at all the Superfund sites, which the Environmental Protection Agency is kind enough to map (www.epa.gov) so we can see just how threatened our community and our children are.

Congress and legislatures are virtually bought and paid for - that’s how we got to a corpocracy. Consider the largest donors to political campaigns, then ask yourself: what business does any corporation have making campaign contributions? The corporation is supposed to be about delivering goods and services within our Constitutional, legal, and social framework. Changing that framework and the government that administers it is the business of the citizen, not of the corporation.

Corporations used to bear a reasonable share of the national tax burden, about 39% in the 1950s (see my Who Pays? Who Profits? The Truth About the American Tax System). Now it is down to less than 10%. You know who makes up the difference.

Not Exxon, Bank of America, Boeing, Citigroup, Chevron, and numerous other huge corporations that paid no - that’s zero, nada, nil, nothing income...