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Multinational Monitor's Corporate Rap Sheet

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The Ten Worst Corporations of 1994

by Russell Mokhiber

DENNY'S : Blackout

DOLE FOODS : Undermining Delaney

GENERAL ELECTRIC : Term Limits, Anyone?

GENERAL MOTORS : Reckless Homicide?

MONSANTO : Crack for Cows

NIKE : Hot Air

PEPSI : Boycott

PHILIP MORRIS : Death, Disease and Duplicity

UNOCAL : Guilty

UPJOHN : Pattern of Deceit

IN THEIR BOOK, The Bell Curve: Intelligence and Class Structure in American Life, Richard J. Herrnstein and Charles Murray argue that "as a group, criminals are below average in intelligence."

Actually, the opposite is true.

As a group, those criminals who inflict the most damage on society, are above average in official measures of "intelligence." They are the best and the brightest who run the world's multinational corporations. They come from the best communities, get the highest scores on standardized tests, go to the best schools, enter the biggest corporations, and get the highest pay.

Herrnstein and Murray got it wrong because they left white-collar and corporate criminals out of their analysis. This is a significant omission, since it is undisputed that white-collar and corporate criminals inflict far more damage on society than all street criminals combined.

White-collar fraud alone costs $200 billion a year, according to W. Steve Albrecht, a professor of accountancy at Brigham Young University and co-author of the book Fraud: Bringing Light to the Dark Side of Business. In contrast, the Federal Bureau of Investigation reports that for 1992, street robbery cost $565 million and burglary cost $3.8 billion.

Albrecht points out that criminal fraud occurred in 60 percent of all savings and loans seized by the federal government and that 30 percent of all business failures are caused by white-collar crime.

And this "intelligent crime" also is the more violent crime. The handful of the world's corporate criminologists who have studied this issue are in agreement that corporate crime and violence kills far more people than all street crime combined. For example, while the murder rate in the United States is about 24,000 a year, the National Institute of Occupational Safety and Health estimated recently that occupational diseases kill 50,000 Americans a year. In addition, 10,000 people in the United States die on the job every year. These deaths are only occasionally prosecuted as reckless homicides by local prosecutors.

Thousands die every year from asbestos-induced disease. The Dalkon Shield IUD injured thousands of women who used it. Ten years ago, 2,000 to 5,000 persons were killed and 200,000 were injured - 30,000 to 40,000 of them seriously - after a Union Carbide affiliate's factory in Bhopal, India released a deadly gas over the town.

In the United States, Attorney General Janet Reno has set violent crime as her number one priority. By "violent crime" she means violent street crime. She has rarely, if ever, condemned violent corporate and white-collar crime.

The defense bar agrees with Reno. You will not see the American Bar Association White-Collar Crime Committee, which is heavily dominated by white-collar crime defense lawyers, seek the passage of a resolution condemning violent corporate crime.

Of course, most corporate and white-collar violent crime goes unprosecuted. This happens for a wide range of reasons, including the exercise of corporate power in Washington, which works to decriminalize such violent behavior. The federal auto safety law, for example, carries no criminal sanctions, thanks to the auto lobby. For years, auto safety advocates have sought to add criminal sanctions to the law, and for years, the auto lobby has blocked its passage.

So, in honor of the "intelligence" of our corporate leaders, we present The Ten Worst Corporations of 1994.

Keep your eyes open for the really smart corporate moves of the new year. On January 1, nominations will open for the Ten Worst Corporations of 1995.

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Super Polluters

America's #1 Superfund Polluter: General Electric

The most frequent, and perhaps the most notorious, of the Super Polluters is General Electric. Number five in the Fortune 500 with revenues of $89.3 billion and earnings of $8.2 billion in 1997, General Electric has been a leader in the effort to roll back the Superfund law and stave off any requirements for full cleanup and restoration of sites they helped create. GE, owner of NBC, the nation's number one television network, and a host of subsidiaries continues to wage a high profile campaign against efforts to require cleanup of their current Superfund sites (including 200 miles of the Hudson River, the nation's largest Superfund site). They are still fighting EPA efforts to list new Superfund sites where GE is a PRP, most notably in Pittsfield, Massachusetts where GE has contaminated the Housatonic River and parts of the neighboring community. Super Polluters examines the reported practices of GE at both the Hudson River and Pittsfield, MA sites, as well as their legislative efforts to free themselves of liability and responsibility for cleanups.

THE HUDSON RIVER: Cultural Landmark, Superfund Site

Of General Electric's 86 Superfund sites, the most widely publicized and potentially the most costly to remedy, is the so-called "Hudson River PCBs" site, the largest Superfund site in the country, 200 miles long. The Hudson River PCB site is the result of GE dumping more than one million pounds of cancer-causing Polychlorinated Biphenyls (PCBs) into the Hudson River over a 30 year period in what New York Times reporter Elizabeth Kolbert calls "among the most clear-cut and destructive cases of industrial pollution ever recorded." PCBs were widely used as insulators in electric transformers and capacitors in the 40s, 50s and 60s until they were banned in 1977.

Classified by the EPA as a known animal carcinogen and a probable human carcinogen, the PCBs dumped by GE lie at the bottom of the Hudson, where they have contaminated the fish population and devastated the $40 million per year commercial and recreational fishing industry. In addition to their potential to cause cancer, PCBs are being closely studied for their possible effects on immune systems, neurological development, and reproduction. Like many toxic chemicals, PCBs may pose a special health risk to infants and children. An "EAT NONE" health advisory from New York State applies to women of childbearing age and children for all fish species from the Hudson. For other people, the health advisories vary by location and fish species, but generally limit consumption to one meal per week or per month.

At least 40 "hot spots" of PCBs still exist in the river and these hot spots are the major source of continued releases of PCBs into the water column. Environmentalists, citizens and commercial fishermen have pushed EPA to require GE to dredge the river in order to remove the PCB contamination. Dredging, the most commonly selected remedy for PCB-contaminated sediments at Superfund sites, would mean scooping up the contaminated sediments at the bottom of the Hudson River and removing them, probably to a properly lined and monitored hazardous waste landfill.

While local environmentalists including Scenic Hudson view dredging as the best cleanup option, General Electric has fought a pitched 20 year battle to avoid dredging because of the potential cost to the company. GE has long argued that the PCBs will gradually detoxify themselves through "natural attenuation" (essentially dilution over time) and that the contaminated sediments are being covered by "clean" sediments and shouldn't be disturbed.

The Clinton Administration's stance on the issue of dredging the Hudson has been somewhat schizophrenic. In September, 1997, Interior Secretary Bruce Babbitt blasted GE for their trying "to weaken and gut" the Superfund law. At the time, Secretary Babbitt stated that "The fact is, the sickness of this river today is directly traceable to the General Electric Company." However, only 6 months later, in February, EPA announced that they would take an extra 18 months to study the issue further before making a final cleanup recommendation and would make no decision until the end of the year 2000.

At least 41 of GE's 86 Superfund sites include sediment contamination and could therefore require dredging. Because of the potential costs of dredging, GE will fight every effort to impose dredging as a cleanup remedy. The other highly visible fight in that regard is currently taking place in Pittsfield, Massachusetts.

PITTSFIELD: Where GE Dumped and "Donated" PCBs

GE's battle to avoid ever dredging the Hudson River has led the company to work overtime opposing dredging at many of their current or potential Superfund sites, in order to avoid setting any precedent for successful dredging that would increase pressure to dredge the Hudson.

In the last year, the most high profile battle being waged between General Electric and EPA has been over how much to clean up the Housatonic River and surrounding areas of Pittsfield, Massachusetts, and whether it should be listed as a Superfund site.

Like the Hudson River factories, GE's Pittsfield facility built transformers and capacitors using PCBs as a fire retardant from the 1940s up until the late 1970s when they were banned. Like at the Hudson River site, large amounts of PCBs drained, leaked or were dumped into the Housatonic river, which runs through Connecticut to Long Island Sound. General Electric and EPA are now fighting a very public battle over dredging up to 12 miles of the Housatonic river. When negotiations between GE and EPA broke down in April, EPA's regional Administrator John DeVillars announced his intention to list the Housatonic as a Superfund site by November, 1998. The public and legal battle between GE and EPA has continued to escalate since the DeVillars announcement.

GE's contamination of the Housatonic is only part of the story in Pittsfield. Reporters for the

Berkshire Eagle gradually learned that in the 1940s and 1950s, General Electric had "donated" soil, contaminated with extraordinarily high levels of PCBs, to Pittsfield homeowners and schools to use as "fill" for their yards and playgrounds. According to stories in the Wall Street Journal, PCB levels in the contaminated fill have been measured as high as 40,000 ppm. The state of Massachusetts has established a "safe level" for PCBs found in residential landfill of 2 ppm. While EPA and citizens of Pittsfield have pushed GE to pay for removal of the contaminated soil spread throughout the community, GE has consistently pushed to simply "cap" the contaminated sites with two or three feet of dirt, a far less costly remedy -- for GE.

According to reports in the Wall Street Journal and Berkshire Eagle, General Electric may have taken steps to hide the memos revealing the past practice of donating contaminated fill to citizens from investigators and EPA. The Boston Globe reported in March that a report prepared for the Massachusetts Attorney General by a team of scientists found that GE had misrepresented the results of two key studies to downplay the health risks posed by PCBs.

In addition, GE has pulled out all the stops in its effort to avoid having the Housatonic River and Pittsfield plant listed as a Superfund site. Veiled threats to close their plant in Pittsfield, running 30 full page ads in the Berkshire Eagle questioning the health risks of PCBs, and threatening to tie EPA's efforts up in court are just some of their tactics. And when economic blackmail, media power, distorting scientific studies, and the threat of litigation aren't enough, there is always the legislature.

LEGISLATIVE POWERHOUSE

General Electric has been aggressive and persistent in its efforts to obtain legislative "relief," at both the state and national level, from its cleanup responsibilities in Pittsfield, along the Hudson, and at scores of other Superfund sites.

In May, Massachusetts state Representative Peter Larkin (D), offered an amendment to the state budget bill that would have absolved GE of any liability for land transferred to the city's newly created Economic Development Authority. When the amendment was discovered and exposed by MASSPIRG Legislative Director Rob Sargent, Larkin and his staff suggested it was all a mistake or misunderstanding and the amendment was dropped.

Politicians aren't so easily chagrined at the national level. After failing in his initial effort in May to surreptitiously attach an amendment indefinitely delaying EPA's authority to require GE to dredge the Hudson and Housatonic Rivers to completely unrelated transportation legislation, House Rules Committee Chairman Gerald Solomon recently managed to have the special provision included as a so-called "rider" to EPA's budget. Solomon, whose district includes the two GE plants that dumped PCBs into the Hudson, has been a strong protector of General Electric's interests, at the expense of his colleagues whose districts contain some part of the contaminated Hudson river. Legislation containing the special "GE rider" is moving through Congress and may be subject to a vote eventually, although Solomon and General Electric would prefer that their special fix never be put to a vote of Congress in the light of day.

THE MEDIA IS THE MESSAGE

As GE's battles over cleanups on the Hudson and in Pittsfield have intensified and press coverage has increased, GE CEO Jack Welch, perhaps coincidentally, has recently been featured in flattering profiles both on television and in print. On June 7, BusinessWeek magazine ran a front page profile billed as a "Close-up Look at America's #1 Manager." While the 15 page story rhapsodized about General Electric's profitability and both the physical ("muscular," "laser-blue eyes") and professional ("feisty," "remarkably compassionate and caring") attributes of CEO Welch, BusinessWeek never mentioned GE's Superfund troubles, or the trouble GE has given thousands of citizens living near their contaminated Superfund sites. While Welch's "philosophy" of "leadership" was examined ad nauseum, no insight was offered on GE's strategy of seeking to remove their toxic cleanup liability through backdoor legislative efforts in both the Congress and state legislatures.

The confluence of confrontation over Superfund and blatant greenwashed corporate packaging, was demonstrated with even greater clarity one month later. On July 9, EPA Administrator Carol Browner testified before the Environmental Conservation Committee of the New York State Assembly to condemn GE's campaign to deny the health risks posed by PCBs. Browner castigated GE for their public statements that "living in a PCB-laden area is not dangerous." Browner charged that GE's campaign was endangering public health by interfering with state and federal efforts to discourage citizens, particularly children and young women, from eating fish contaminated with PCBs. The testimony marked the first time during her tenure that the Administrator had appeared before a state legislature. Browner's testimony was reported in The New York Times on July 10.

Three days later, on July 13, GE CEO Jack Welch and First Lady Hillary Rodham Clinton were featured on NBC's Today show with host Maria Shriver. The first lady was praising Welch for GE's contribution of $5 million to help restore a museum for Thomas Edison. Neither the first lady or Shriver raised the issue of EPA Administrator Browner's testimony and charges of GE's irresponsible corporate conduct during the part of the segment that was broadcast on the GE-owned TV network.

Nevertheless, media reports on the actions and attitudes of General Electric, as personified by CEO Welch, continue to garner press coverage. The August, 1998 issue of Harper's Magazine, published one week after the Today Show appearance, features a transcript of an exchange between Welch and Sister Patricia Daly, a Dominican nun who rose on behalf of the Interfaith Center on Corporate Responsibility to confront Welch about its pollution record at GE's April shareholder meetings. She called upon Welch and GE to help develop a public education campaign to warn citizens of the Hudson River Valley of the dangers of eating PCB-contaminated fish. Welch responded with the non sequitur that GE's use (but not disposal) of PCBs was legal and stated flatly that "PCBs do not pose health risks." Welch rejected Sister Daly's request, stating, "It is not our job to educate."

Copyright © 1998 Public Interest Research Groups

Updated 30 Jul 1998 pirg@pirg.org

General ELECTRIC :

Term Limits, Anyone?

If corporations had to face the voters to maintain their right to exist, then GE would be high on any responsible citizen's list for termination. GE is the bad boy of big U.S. corporations and people in the United States and around the world deserve a break - if not today, then someday soon. (Who says, by the way, that corporations have the right to live in perpetuity? You and I live and die, but GE lives forever. Why?)

The Multinational Monitor has been putting out the Ten Worst list since 1988, and GE made the cut in 1988, 1991, 1992 and this year, 1994. Why? Because GE is what corporate criminologists call a recidivist corporation - it keeps getting into trouble with the law.

A report released this year by the Washington, D.C.-based Government Accountability Project found that 20 of the 22 largest defense corporations, including GE, that were lobbying Congress to weaken the Federal False Claims Act, have been involved in fraud, waste and abuse in government contracting.

The False Claims Act is one of the country's toughest laws against corporate crime. The law gives whistleblowers a monetary incentive for alerting the government to those who defraud the government. Since the passage of the 1986 amendments to the law, the federal government has recovered over $588 million under the Act.

Obviously, GE and the defense contractors - also known as "the fraud lobby" - don't like the law, because it exposes their wrongdoing. The report found that just since 1990, General Electric has been caught engaging in 16 instances of fraudulent activity, and has twice been convicted of criminal misdeeds.

In June of this year, federal officials began investigating allegations that 7,000 military and commercial jet aircraft engines, including ones that power President Clinton's plane, may be defective. GE, the manufacturer of the engines, denies the allegations, saying the engines in question have flown for more than 200 million hours without an electrical problem such as the one in question. The Cleveland Plain Dealer first reported the investigation. A whistle-blowing GE employee filed a lawsuit against the company claiming that the engines "unnecessarily endanger the health and well-being of pilots, maintenance service personnel and passengers, including the very real likelihood of loss of life."

GE has also been busy in recent years engaging in union busting in Mexico. In May 1993, Fernando Castro Hernandez, a worker at GE's small motor facility in Juarez, Mexico, was demoted after he refused to falsify company safety reports. The GE facility was not unionized, so Castro joined with fellow co-workers and began to organize. In November 1993, Castro and about 120 other pro-union workers were fired. GE told Castro that he was fired for

distributing union fliers and for telling a U.S. reporter that GE used chemicals in its Mexican plant that had been banned in the United States.

When President Clinton was touting the North American Free Trade Agreement (NAFTA) to the U.S. public last year, he promised that labor abuses such as those inflicted on Castro and his co-workers would be stopped by authority of a NAFTA side agreement. President Clinton was wrong. At a hearing about worker rights abuses by GE and Honeywell before the National Administrative Office (NAO), the agency established to enforce the side agreement, GE denied violating Mexican labor laws; the NAO said it did not have the authority to act. This is the only such hearing the NAO has held.

[Contact: John F. Welch, Jr., Chair and CEO, GE, 3135 Easton Turnpike, Fairfield, CT 06431. Telephone (203) 373-2211]

[Contact: Government Accountability Project, 810 1st Street, NE, Suite 630, Washington, D.C. 20002. Telephone (202) 408-0034]

[Contact: United Electrical, Radio and Machine Workers of America, 2400 Oliver Building, 535 Smithfield Street, Pittsburgh, PA 15222. Telephone: (412) 471-8919]

To The Editor of The Daily Gazette:

The purpose of this letter is to respond to and clarify your editorial of March 13, 1999, concerning the pollution of the Hudson River by the General Electric Company. Your Editorial is true as far as it goes. PCB's have yet to be proven as a cancer producing pollutant. Other effects, however, which have been proven to be damaging to the health of humans, and are equally as devastating as cancer, are presented in a recent book by Mr. Thomas O'Boyle. The book is entitled "At Any Cost Jack Welch, General Electric, and the Pursuit of Profit." We can all be assured that Jack Welch would have sued Tom O'Boyle by now if every single word in the book was not accurate. The book is a must read for all Americans, but in particular for anyone living near any GE plant.

Page 185: GE, over a period of more than thirty years, intentionally discharged into the Hudson River more than one million pounds of PCBs -- about thirty pounds a day -- from two factories forty miles north of Troy, at Fort Edward and Hudson Falls. The PCBs entered the river mainly via waste water used to wash off the casings of electrical capacitors that were manufactured at the two plants and were submerged in a PCB bath. In 1976, the state of New York, acting with urgency after the federal declaration of the chemical as a public health menace, attempted to deal with the PCB problem. Abraham Sofaer, a Columbia University law professor who presided over a hearing on the PCB question, judged General Electric guilty of violating state water quality standards: "GE has discharged PCBs in quantities that have breached applicable standards of water quality . . . injured fish, and . . . destroyed the viability of recreational fishing in various parts of the Hudson by rendering its fish dangerous to consume."

"The Sofaer hearing did little to resolve the issue -- two decades later, the debate still rages over what to do about the Hudson, as GE has successfully forestalled retrieval of PCBs from one of the nation's most majestic waterways -- but it was important in another regard: It catapulted Jack Welch in his career. Armed with Sofaer's decision, New York entered into negotiations with GE, judged by Sofaer to be the responsible party. Reg Jones chose Welch to represent the company in the negotiations with the state, a choice that confirmed the import Jones attached to them. Because the Hudson was one of hundreds of sites where GE was potentially liable for expensive environmental remediation, the showdown with New York would set important precedent. Jones was livid over the state's handling of the PCB question, and he had angrily warned then New York Governor Hugh Carey that he would pull all company facilities out of New York if its environmental commissioner, Ogden Reid, forced the two Hudson River plants to go to zero-PCB discharge before Jones thought it feasible."

I know that GE owns Congress, the question is, do they own this country? Perhaps owning Congress is the same as owning the Nation.

John P. Shannon
262 Jones Road
Saratoga Springs, NY 12866

518-587-3245