Hall of Shame

Much of what corporations do escapes us. For all the advertising, these companies keep most of what they do out of plain view. They love secrecy, and there is a very good reason.  If we knew what they were up to, not only would it be bad for business, it might even spark a revolution!

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In the wake of this summer’s sweeping phone-hacking scandal in Britain, the U.S. Attorney’s office launched an investigation into Rupert Murdoch’s News Corp. to determine if the company has been engaged in a pattern of corrupt business practices in America.

Allegations include a Murdoch-owned marketing firm hacking into a competitor’s password-protecting website in order to steal proprietary information. As part of a civil lawsuit, which was abruptly settled for $30 million, News Corp. admitted its computers were used for the hacking attacks. A News Corp. whistle blower has also gone on the record alleging the same U.S. marketing firm routinely engaged in predatory pricing and other anti-competitive practices. Media Matters reported in September that in the wake of the hacking scandal, U.S. investigators for the first time had reached out to the News Corp. whistleblower.

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Bank of America
The Securities and Exchange Commission said Bank of America defrauded schools, hospitals and dozens of other state and local government entities by illegally investing the earnings of municipal bond sales — the bonds that pay for public services.  Overall, Bank of America has paid at least $428.6 million in fines for various legal violations since 2009.

Bank of America spent millions of dollars attempting to woo state and federal officials through professional lobbying efforts and campaign contributions.. The company has two corporate political action committees that target the levels of government differently.
BofA spent $6.52 million to lobby the federal government — including the Securities and Exchange Commission, which led the fraud investigation — on a range of financial issues during 2009 and 2010. In 2010, Bank of America has employed 21 professional lobbyists (most of whom previously worked for the government) who lobbied on nearly 70 specific bills and dozens of other federal government issues, federal lobbying documents show.

Bank of America, which reported $2.2 trillion in assets for 2009, rates among the most consistently powerful federal lobbying forces in the nation.

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AIG
There’s surely no one party responsible for the ongoing global financial crisis. But if you had to pick a single responsible corporation, there’s a very strong case to make for American International Group (AIG), which has already sucked up more than $150 billion in taxpayer supports. Through “credit default swaps,” AIG basically collected insurance premiums while making the ridiculous assumption that it would never pay out on a failure — let alone a collapse of the entire market it was insuring. When reality set in, the roof caved in.

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Cargill

When food prices spiked in late 2007 and through the beginning of 2008, countries and poor consumers found themselves at the mercy of the global market and the giant trading companies that dominate it. As hunger rose and food riots broke out around the world, Cargill saw profits soar, tallying more than $1 billion in the second quarter of 2008 alone. In a competitive market, would a grain-trading middleman make super-profits? Or would rising prices crimp the middleman’s profit margin? Well, the global grain trade is not competitive, and the legal rules of the global economy– devised at the behest of Cargill and friends — ensure that poor countries will be dependent on, and at the mercy of, the global grain traders.

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Chevron
In 2001, Chevron swallowed up Texaco. It was happy to absorb the revenue streams. It has been less willing to take responsibility for Texaco’s ecological and human rights abuses.

In 1993, 30,000 indigenous Ecuadorians filed a class action suit in U.S. courts, alleging that Texaco over a 20-year period had poisoned the land where they live and the waterways on which they rely, allowing billions of gallons of oil to spill and leaving hundreds of waste pits unlined and uncovered. Chevron had the case thrown out of U.S. courts, on the grounds that it should be litigated in Ecuador, closer to where the alleged harms occurred. But now the case is going badly for Chevron in Ecuador — Chevron may be liable for more than $7 billion. So, the company is lobbying the Office of the U.S. Trade Representative to impose trade sanctions on Ecuador if the Ecuadorian government does not make the case go away.

“We can’t let little countries screw around with big companies like this — companies that have made big investments around the world,” a Chevron lobbyist said to Newsweek in August. (Chevron subsequently stated that the comments were not approved.)

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Fox News
from Huffington Post, by Robert F Kennedy Jr. Feb 28, 2011

As America’s middle class battles for its survival on the Wisconsin barricades — against various Koch Oil surrogates and the corporate toadies at Fox News — fans of enlightenment, democracy and justice can take comfort from a significant victory north of Wisconsin border. Fox News will not be moving into Canada after all! The reason: Canada regulators announced last week they would reject efforts by Canada’s right wing Prime Minister, Stephen Harper, to repeal a law that forbids lying on broadcast news.

Canada’s Radio Act requires that “a licenser may not broadcast….any false or misleading news.” The provision has kept Fox News and right wing talk radio out of Canada and helped make Canada a model for liberal democracy and freedom. As a result of that law, Canadians enjoy high quality news coverage including the kind of foreign affairs and investigative journalism that flourished in this country before Ronald Reagan abolished the “Fairness Doctrine” in 1987. Political dialogue in Canada is marked by civility, modesty, honesty, collegiality, and idealism that have pretty much disappeared on the U.S. airwaves. When Stephen Harper moved to abolish anti-lying provision of the Radio Act, Canadians rose up to oppose him fearing that their tradition of honest non partisan news would be replaced by the toxic, overtly partisan, biased and dishonest news coverage familiar to American citizens who listen to Fox News and talk radio. Harper’s proposal was timed to facilitate the launch of a new right wing network, “Sun TV News” which Canadians call “Fox News North.”

Harper, often referred to as “George W. Bush’s Mini Me,” is known for having mounted a Bush like war on government scientists, data collectors, transparency, and enlightenment in general.  He is a wizard of all the familiar tools of demagoguery; false patriotism, bigotry, fear, selfishness and belligerent religiosity.

Harper’s attempts to make lying legal on Canadian television is a stark admission that right wing political ideology can only dominate national debate through dishonest propaganda. Since corporate profit-taking is not an attractive vessel for populism, a political party or broadcast network that makes itself the tool of corporate and financial elites must lie to make its agenda popular with the public. In the Unites States, Fox News and talk radio, the sock puppets of billionaires and corporate robber barons have become the masters of propaganda and distortion on the public airwaves. Fox News’s notoriously biased and dishonest coverage of the Wisconsin’s protests is a prime example of the brand of news coverage Canada has smartly avoided.

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Countrywide

In October 2010 the SEC agreed to a settlement with Countrywide Financial Corp. CEO Angelo Mozilo in it’s case involving charges of civil fraud and insider trading allegations. Countywide reaped huge profits — and, eventually, produced huge losses for its shareholders — through a high-wire strategy that focused on selling huge volumes of subprime loans and other risky products.

The government alleged that he added $141.7 million (before taxes) to his personal fortune through corporate misconduct. Mozilo agreed to personally pay a $22.5 million fine — 16 percent of the alleged ill-gotten gains. In addition, Mozilo agreed to turn over another $45 million to former Countrywide shareholders, who lost billions when the company’s stock price plummeted as loan defaults soared. But the $45 million won’t come out of Mozilo’s pocket. Under the terms of his employment contract, it will be paid instead by Countrywide’s insurers and by Bank of America, which bought Countrywide in 2008.

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BP

Officially, BP disputed the government’s estimate of oil spilled into the Gulf of Mexico by BP’s Macondo well that blew out on April 20. Citing multiple estimates and lack of actual measurement of the flow. Remember that EPA fines are determined by the amount of oil released into the environment, so it remains in BP’s interest to minimize that amount. As feared, it appears that they are going to win this battle.

If BP gets away with reducing the flow estimate to half of the current estimate, it will be a masterful manipulation of government regulators and inexperienced administration officials. It appears that with the media now completely ignoring this tragedy, BP will successfully lowball the flow to minimize its liability.

If BP is now claiming that the flow rate was half the estimated 60,000 barrels per day, that means that when they were capturing 25,000 barrels per day, they were capturing close to all of the flow.

It appears that when inexperienced administration officials faced BP’s steely-eyed negotiators on this issue, they were buffaloed into shutting in the well without measuring the flow. Once again, said steely-eyed negotiators out-negotiated the government negotiators.

BP turned a profit of $1.79 billion in the third quarter of 2010, at the height of the oil spill crisis. Bob Dudley, BP CEO, is expected to soon communicate to his shareholders that the $39 billion reserve established by the company in 2010 will be more than enough to cover the costs of the blowout and resulting spill clean up.

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ExxonMobil

Big Oil giant Exxon Mobil, which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS:

Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.

Mother Jones’ Adam Weinstein notes that, despite benefiting from corporate welfare in the U.S., Exxon complains about paying high taxes, claiming that it threatens energy innovation research. Pat Garofalo at the Wonk Room notes that big corporations’ tax shelter practices similar to Exxon’s shift a $100 billion annual tax burden onto U.S. taxpayers. In fact, in 2008, the Government Accountability Office found that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.”

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GE

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.
GE has designed 91 nuclear power plants in 11 countries, yet its nuclear reactors around the world have a fatal flaw. In the event of a nuclear meltdown, there is a 90 percent chance that radiation from GE-designed reactors would be discharged directly into the atmosphere. While the US Nuclear Regulatory Commission is aware of the problem, it continues to license GE nuclear reactors.

GE’s history with nuclear power is an ugly one. In the 1940s-1960s the company ran experiments on humans with radiation, including irradiating the reproductive organs of prison inmates in Walla Walla, Washington, without warning them of the risk of cancer. Other tests were run on the elderly and hospital patients. General Electric intentionally released large amounts of radiation into the air from the Hanford Nuclear Reservation in Richland, in order to see the distance it would travel. These atrocities were revealed in hearings in 1986 held by Representative Edward Markey of Massachusetts. The company has also been accused of knowingly poisoning its workers at the Knolls Atomic Power Laboratory in Schenectady, New York with radiation and asbestos.

General Electric is currently attempting to overturn the US Superfund Law of 1980, which allows the government to hold polluters responsible for cleaning up their toxic chemicals. GE argues that it is “unconstitutional” for the Environmental Protection Agency to force the company to pay $500 million for the cleanup of the Hudson River, where GE dumped carcinogenic PCBs, or polychlorinated biphenyls, over three decades. In March 2004, a federal appeals court has revived GE’s lawsuit. It shouldn’t come as a surprise that GE is trying to change the Superfund Law: the company is responsible for 78 Superfund sites around the US.

Last week, Forbes magazine published what the top U.S. corporations paid in taxes last year. “Most egregious,” Forbes notes, is General Electric, which “generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.”

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Massey Energy Co

There is no greater threat to the future habitability of the earth than coal. And there is no human being more singularly focused on getting coal out of the ground, no matter the human or environmental cost, than Don Blankenship, CEO of Massey Energy Co.

Massey is the biggest and most aggressive practitioner of mountaintop-removal mining, which is just what it sounds like. More than 3 million pounds of explosive are detonated under the southern Appalachians every day, blowing off several ridgetops a week. The Appalachians are some of the world’s oldest mountains, and home to what may be the greatest biodiversity of any temperate region in the world.

The coal is stripped from underneath with gigantic steam shovels that tower 20 stories tall and can lift 100 tons of dirt with each scoop. Everything that isn’t coal (“overburden”) is dumped into the hollows and valleys below. More than 460 mountains and well over 1,000 miles of stream have been lost this way. And those figures, which are probably low given the age of the available data, are likely to double in the next decade, according to the EPA.

Some blast sites are “recovered,” hastily covered over with a layer of fast-growing grass, but the destruction is so deep that no forest will ever take root again.

Gigantic trucks carry the coal away to be washed with corrosive chemicals in nearby plants, a process that leaves behind toxic, tarry black sludge called slurry. In West Virginia alone, there are over 100 billion gallons of slurry stored in open ponds or abandoned underground mines, often less than a mile from houses and schools. The slurry seeps into groundwater and occasionally breaks from behind earthen dams to flood the towns below.

Southern Appalachians are regularly showered with coal dust, flooded with runoff, and forced to endure black, brackish public water unfit for consumption or bathing. Illness of every kind is ubiquitous.

Massey’s safety record at its underground mines is appalling, but few miners are killed in mountaintop-removal operations, for the simple reason that very few are employed. The work is largely done by machines. This helps explain the decline in mining jobs in a region where mining is frequently the only industry at all. It explains why West Virginia has the nation’s third-lowest per-capita income and second lowest average wages. Why 37% of residents of McDowell County, the state’s biggest coal producer, live in poverty.

In the areas where mountaintop removal is concentrated, the destruction — to land, to water and air quality, to property values — is so extensive it all but precludes the development of other industry. Coal has locked rural West Virginia into a death spiral.

Appalachian culture is one of America’s oldest, with families that date back seven or eight generations on the same land. They are being systematically purged from the landscape, their native culture irrevocably lost.

At the center of this, one of the most spectacular acts of geographic and cultural self-immolation ever undertaken by a free country, is Massey CEO Don Blankenship, the highest paid executive in the coal industry. He’s a West Virginia native, from Mingo County, the son of a poor single mother. From unremarkable roots he’s ascended the corporate ladder at Massey, made its powerful board his courtesans, ruthlessly suppressed mineworker unions (just 3% of Massey employees remain unionized), threatened and bullied critics, and single-handedly purchased at least one state-wide election — the 2004 race of state Supreme Court Justice Warren McGraw, who had the gall to rule against Massey. During the campaign, McGraw was accused of allowing child rapists to go free and defeated after 12 years of service by a virtually unknown challenger.

The bigger polluters, the multinationals, pour money and effort into polishing their public images and disguising their agendas. Not so a local thug like Blankenship. In 2005, when WV governor Joe Manchin threatened to keep a closer eye on Massey operations, Blankenship sued him in retaliation, represented by Robert Luskin, Karl Rove’s lawyer.

Today, Blankenship wields political clout via his grotesquely titled 527 PAC, “…And for the Sake of the Kids,” into which he’s poured millions of dollars of his own money. (When he founded the PAC he promised to start a foundation for the actual kids, but years later that hasn’t happened.) He’s going after the only other liberal Supreme Court judge in WV, and has vowed to shift the balance of power in the state legislature to Republicans. His interest is in maintaining WV’s low taxes, paltry social services, and lax regulatory enforcement. But the attack ads now airing in the state prominently feature abortion, gay marriage, and drunk drivers. Massey has learned something from recent Republican successes.

Every December, Massey funds a lavish Christmas Extravaganza in a small WV town. Blankenship arrives in a limo, dons a Santa hat, and moves among residents — his own people, whose ancestral land he is destroying, whose families he is impoverishing, whose children he is sickening — and passes out gifts.

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ConocoPhillips

After being booted from the FTSE4Good index in 2003 for not meeting human-rights standards, the company launched a new sustainability campaign that included “commitments to the public” on citizen engagement and the environment.

Alternative energy investment,less than 1% of 2006 profit came from what it calls “emerging businesses” and sources other than fossil fuels; investment in renewables R&D is less than 1% of its $15.6 billion capital budget.

Even among Big Oil, ConocoPhillips’s environmental record lags. The EPA has linked it to dozens of Superfund hazardous waste sites, while a University of Massachusetts study ranked it the third worst corporate air polluter. By 2006, the company had accrued environmental cleanup costs of more than $1 billion, largely for pollution at domestic refineries.

Conoco produced 853 million barrels of oil and equivalents, and released 68.7 million tons of carbon dioxide—a below-average efficiency rate. ConocoPhillips requires cost-of-carbon evaluations for all new projects that could release more than 50,000 metric tons of carbon dioxide, and plans to spend only $1 billion by 2011 to further cut air emissions.
Pfizer American pharmaceutical giant Pfizer Inc. and its subsidiary, Pharmacia & Upjohn Company Inc., have agreed to pay $2.3 billion, the largest health care fraud settlement in the history of the Department of Justice, to resolve criminal and civil liability arising from the illegal promotion of certain pharmaceutical products, the Justice Department announced today.

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Pfizer
Pfizer is the world’s largest researched-based pharmaceutical company

Pfizer has agreed to plead guilty to a felony violation of the Food, Drug and Cosmetic Act for misbranding Bextra with the intent to defraud or mislead. Bextra is an anti-inflammatory drug that Pfizer pulled from the market in 2005. Under the provisions of the Food, Drug and Cosmetic Act, a company must specify the intended uses of a product in its new drug application to FDA.

Once approved, the drug may not be marketed or promoted for so-called “off-label” uses – i.e., any use not specified in an application and approved by FDA. Pfizer promoted the sale of Bextra for several uses and dosages that the FDA specifically declined to approve due to safety concerns. The company will pay a criminal fine of $1.195 billion, the largest criminal fine ever imposed in the United States for any matter. Pharmacia & Upjohn will also forfeit $105 million, for a total criminal resolution of $1.3 billion.

In addition, Pfizer has agreed to pay $1 billion to resolve allegations under the civil False Claims Act that the company illegally promoted four drugs – Bextra; Geodon, an anti-psychotic drug; Zyvox, an antibiotic; and Lyrica, an anti-epileptic drug – and caused false claims to be submitted to government health care programs for uses that were not medically accepted indications and therefore not covered by those programs. The civil settlement also resolves allegations that Pfizer paid kickbacks to health care providers to induce them to prescribe these, as well as other, drugs. The federal share of the civil settlement is $668,514,830 and the state Medicaid share of the civil settlement is $331,485,170. This is the largest civil fraud settlement in history against a pharmaceutical company.

As part of the settlement, Pfizer also has agreed to enter into an expansive corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services. That agreement provides for procedures and reviews to be put in place to avoid and promptly

“This historic settlement will return nearly $1 billion to Medicare, Medicaid, and other government insurance programs, securing their future for the Americans who depend on these programs,” said Kathleen Sebelius, Secretary of Department of Health and Human Services. “The Department of Health and Human Services will continue to seek opportunities to work with its government partners to prosecute fraud wherever we can find it. But we will also look for new ways to prevent fraud before it happens. Health care is too important to let a single dollar go to waste.”

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Constellation Energy

Although it is too dangerous, too expensive and too centralized to make sense as an energy source, nuclear power won’t go away, thanks to equipment makers and utilities that find ways to make the public pay and pay.

Constellation Energy Group, the operator of the Calvert Cliffs nuclear plant in Maryland — a company recently involved in a startling, partially derailed scheme to price gouge Maryland consumers — plans to build a new reactor at Calvert Cliffs, potentially the first new reactor built in the United States since the near-meltdown at Three Mile Island in 1979.

It has lined up to take advantage of U.S. government-guaranteed loans for new nuclear construction, available under the terms of the 2005 Energy Act. The company acknowledges it could not proceed with construction without the government guarantee.

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Morgan Stanley
Morgan Stanley is one of the world’s top investment banks, offering its clients everything from stock portfolio management to credit services. Like others in the securities industry, however, it lobbied for money from the federal government in 2008 and 2009 when the industry—along with the economy—was floundering. The investment bank received billions in taxpayer money from the bailout bill. Morgan Stanley invests in and advises virtually every industry affected by federal legislation. The company, which splits its contributions evenly between Democrats and Republicans, has been a major proponent of privatizing Social Security. Morgan Stanley also has lobbied in favor of proposals to deregulate the securities industry, so that investment firms can further extend their reach into financial services.

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KBR

Brown & Root’s open-ended logistics contracts from the Army and Navy –indeed much of the military privatization campaign — are grounded in a 1992 study the company did for the Defense Department that several analysts said formed the template for privatization of logistics for a downsized U.S. military. Soon after the company delivered the classified study, which reportedly concluded that the Pentagon could save hundreds of billions of dollars by outsourcing, Brown & Root won its first competitively bid logistics contract.

Vice President Dick Cheney was defense secretary when the first Brown & Root study was done, and he became chief executive of its parent company, Halliburton, when he retired.

The Nation reported that the Department of Defense paid KBR more than $80 million in bonuses in 2007 and 2008 for contracts to install electrical wiring that has resulted in the electrocution deaths of US soldiers according to documents revealed on May 20, 2009 in a Senate Hearing. Charles Smith, a former Army official who managed the contracts under which KBR performed electrical work in Iraq called the company’s work “dangerously substandard” and the bonuses they received “highly inappropriate”. Since 2003, some 18 US soldiers have died as a result of KBR’s negligent electrical work. A master electrician hired by the Army to review electrical work in Iraq during 2008 reported finding improper wiring in “every” building the company had wired in the country, equaling thousands. Work was not done to code and in some cases properly wired buildings were rewired making them unsafe. Multiple others have testified against KBR alleging that everywhere in Iraq, KBR would double-bill US taxpayers by performing incomplete or incorrect electrical wiring only to bill taxpayers again later for repairs to the faulty work.

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KBR/Halliburton
KBR remains under investigation in numerous countries for a massive (est’d $180 million) bribery scheme related to the Bonny Island, Nigeria natural gas consortium that the company coordinated. For a chronology of the bribery scandal see Halliburton Watch’s detailed timeline.

The Army’s top civilian contracting official, Bunnatine Greenhouse, blew the whistle on the preferential treatment received by KBR/Halliburton in Iraq in late 2004. Greenhouse was demoted in August, 2005 after testifying before the Senate Democratic Policy Committee about what she called a “clubby” relationship between Halliburton’s KBR subsidiary and the Army Corps of Engineers.

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Monsanto

Monsanto insists that genetically engineered crops “will help immensely in closing the gap between hungry people and adequate food supplies.” That may be “good business” for Monsanto, but the claim has it’s detractors.

Not so. Monsanto’s recombinant Bovine Growth Hormone is designed to increase milk production, but the US already has an oversupply of milk, so increased production merely drives down the price that farmers receive.

Roundup Ready soybeans are not designed to increase yield, though their ease of use might allow farmers to plant more soy beans, however, most soybeans end up in oil or become minor ingredients in a wide variety of processed foods never seen by undernourished peasants in Bangladesh or Chad.

None of Monsanto’s transgenic canola, sugar beets, cotton, corn or potatoes are designed to put food in the mouths of hungry children. Monsanto’s Yieldgard corn ends up in animal feed.

Monsanto has a budget of 10 million dollars and a staff of 75 devoted solely to investigating and prosecuting farmers. Kem Ralph of Covington, Tennessee is believed to be the first farmer to have gone to jail for saving and replanting Monsanto’s Roundup Ready soy seed in 1998. Ralph spent four months behind bars and must also pay the company 1.8 million dollars in penalties.

A Charleston attorney has filed more than 70 cancer lawsuits against Monsanto and related companies over its old plant in Nitro. The complaints state that the “plaintiffs allege the same series of occurrences involving the negligent and otherwise unlawful release of dioxin from properties owned and/or controlled by the defendants caused or significantly contributed to their cancers,”

“During the years that Monsanto was operating its trichlorophenol plant, it adopted an unlawful practice of disposing of dioxin waste materials by a continuous process of open ‘pit’ burning,” the complaints state. “This practice was largely denied by Monsanto whose representatives characterized the practice as an ‘incineration process’ when asked by regulatory authorities.

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Halliburton

May 2002. Improperly booked $100 million in annual construction cost overruns before customers agreed to pay for them. SEC Legal watchdog group Judicial Watch filed an accounting fraud lawsuit against Halliburton and its former CEO, Vice President Dick Cheney, among others. Halliburton follows the guidelines set by experts, including GAAP (generally accepted accounting principles).

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Comcast, formerly Adelphia Communications

April 2002. Founding Rigas family collected $3.1 billion in off-balance-sheet loans backed by Adelphia; overstated results by inflating capital expenses and hiding debt. SEC; Pennsylvania and New York federal grand juries Three Rigas family members and two other ex-executives have been arrested for fraud. The company is suing the entire Rigas family for $1 billion for breach of fiduciary duties, among other things. Did not return repeated calls for comment.

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AOL Time Warner

July 2002. As the ad market faltered and AOL’s purchase of Time Warner loomed, AOL inflated sales by booking barter deals and ads it sold on behalf of others as revenue to keep its growth rate up and seal the deal. AOL also boosted sales via “round-trip” deals with advertisers and suppliers. SEC; DOJ Fears about the inquiry intensified when the DOJ ordered the company to preserve its documents. AOL said it may have overstated revenue by $49 million. New concerns are afoot that the company may take another goodwill writedown, after it took a $54 billion charge in April. No comment.

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Wal-Mart
In 2006, the retail giant Wal-Mart imported $26.7 billion of Chinese goods into the United States. The cost of those goods to Americans went far beyond the sticker prices, however. Wal-Mart’s reliance on Chinese goods cost the United States over 308,000 jobs in 2006 – or about 77 jobs for every Wal-Mart store in the United States.

These calculations come from a new analysis by the Economic Policy Institute’s leading expert on international trade, economist Robert Scott. His findings are published in a new issue brief published today, The Wal-Mart Effect.

Wal-Mart’s increased dependence on cheap imports from China is reflected in the nation’s increasing trade imbalance with that country. The United States buys imports from other countries, especially China, at a much higher rate than it sells exports, causing a trade deficit and the loss of domestic jobs. Wal-Mart was responsible for 9.3 percent of U.S. China imports from 2001-2006, and for 11.2 percent of U.S. job losses due to the trade deficit with China. The growth of Wal-Mart’s share of the trade deficit with China alone eliminated nearly 200,000 U.S. jobs in this period.

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Eli Lilly
Eli Lilly and Company agreed to plead guilty to charges that it promoted the drug Zyprexa for uses that had not been approved by the FDA. As part of the resolution, Eli Lilly was left with the largest corporate criminal fine in history for a individual corporation: $515 million. Additionally, Eli Lilly must pay up to $800 million in a civil settlement with the federal government and the states.

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Arthur Andersen
November 2001. Shredding documents related to audit client Enron after the SEC launched an inquiry into Enron SEC; DOJ Andersen was convicted of obstruction of justice in June and will cease auditing public firms by Aug. 31. Andersen lost hundreds of clients and has seen massive employee defections. Did not return repeated calls for comment.

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Bristol-Myers Squibb
July 2002. Inflated its 2001 revenue by $1.5 billion by “channel stuffing,” or forcing wholesalers to accept more inventory than they can sell to get it off the manufacturer’s books SEC Efforts to get inventory back to acceptable size will reduce earnings by 61 cents per share through 2003. Bristol will continue to cooperate fully with the SEC. We believe that the accounting treatment of the domestic wholesaler inventory buildup has been completely appropriate.

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CMS Energy
May 2002. Executing “round-trip” trades to artificially boost energy trading volume SEC; CFTC; Houston U.S. attorney’s office; U.S. Attorney’s Office for the Southern District of New York Appointed Thomas J. Webb, a former Kellogg’s CFO, as its new chief financial officer, effective in August. No comment.

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Dell Computer maker Dell will pay $100 million, and chief executive and founder Michael Dell will pay $4 million as part of a settlement with the U.S. Securities and Exchange Commission, Dell and the SEC said Thursday.

Dell failed to properly disclose payments the company received from chipmaker Intel ( INTC – news – people ) for using its products, rather than chips from rival Advanced Micro Devices ( AMD – news – people ), the SEC alleges.

Yahoo! BuzzThose payments grew to 76% of Dell’s operating income during the first quarter of its 2007 fiscal year from just 10% of Dell’s operating income for the full 2003 fiscal year, according to the SEC. The agency alleges that when Intel cut its payments after Dell said it would begin using AMD’s chips, Dell failed to disclose this as the reason for a sharp drop in the company’s earnings in the second quarter of its 2007 fiscal year.

“Dell manipulated its accounting over an extended period to project financial results that the company wished it had achieved, but could not,” Christopher Conte, associate director of the SEC’s Division of Enforcement, said in a statement. “Dell was only able to meet Wall Street targets consistently during this period by breaking the rules.”

The settlement ends what has been a long decade for Dell, which saw the computer maker struggle with accounting issues, customer complaints and management turnover at its Round Rock, Texas-based headquarters.

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Duke Energy
July 2002. Engaged in 23 “round-trip” trades to boost trading volumes and revenue. SEC; CFTC; Houston U.S. attorney’s office; Federal Energy Regulatory Commission The company says an internal investigation concluded that its round-trip trades had “no material impact on current or prior” financial periods. Although the effect [of these trades] on the company’s financial statements was immaterial, we consider improper trades in conflict with the company’s policies. To address this we have made changes to our organization, personnel and procedures.

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Dynegy
May 2002. Executing “round-trip” trades to artificially boost energy trading volume and cash flow SEC; CFTC; Houston U.S. attorney’s office Currently conducting a re-audit. Standard & Poor’s cut its credit rating to “junk,” and the company said it expects to fall as much as $400 million short of the $1 billion in cash flow it originally projected for 2002. Dynegy believes that it has not executed any simultaneous buy-and-sell trades for the purpose of artificially increasing its trading volume or revenue.

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El Paso
May 2002. Executing “round-trip” trades to artificially boost energy trading volume SEC; Houston U.S. attorney’s office Oscar Wyatt, a major shareholder and renowned wildcatter, may be engineering a management shakeup. There have been no allegations or accusations, only requests for information. The company has confirmed in multiple affidavits that it did not engage in “round-trip” trades to artificially inflate volume or revenue.

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Enron
October 2001. Boosted profits and hid debts totaling over $1 billion by improperly using off-the-books partnerships; manipulated the Texas power market; bribed foreign governments to win contracts abroad; manipulated California energy market DOJ; SEC; FERC; various congressional committees; Public Utility Commission of Texas Ex-Enron executive Michael Kopper pled guilty to two felony charges; acting CEO Stephen Cooper said Enron may face $100 billion in claims and liabilities; company filed Chapter 11; its auditor Andersen was convicted of obstruction of justice for destroying Enron documents. No comment.

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Global Crossing
February 2002. Engaged in network capacity “swaps” with other carriers to inflate revenue; shredded documents related to accounting practices DOJ; SEC; various congressional committees Company filed Chapter 11; Hutchison Telecommunications Limited and Singapore Technologies Telemedia will pay $250 million for a 61.5% majority interest in the firm when it emerges from bankruptcy; Congress is examining the role that company’s accounting firms played in its bankruptcy. No comment.

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Homestore.com
January 2002. Inflating sales by booking barter transactions as revenue. SEC The California State Teachers’ Retirement pension fund, which lost $9 million on a Homestore investment, has filed suit against the company. No comment.

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K-mart
January 2002. Anonymous letters from people claiming to be Kmart employees allege that the company’s accounting practices intended to mislead investors about its financial health. SEC; House Energy and Commerce Committee; U.S. Attorney for the Eastern District of Michigan The company, which is in bankruptcy, said the “stewardship review” it promised to complete by Labor Day won’t be done until the end of the year. Did not return repeated calls for comment.

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Merck
July 2002. Recorded $12.4 billion in consumer-to-pharmacy co-payments that Merck never collected. None The SEC approved Medco’s IPO registration, including its sales accounting. The company has since withdrawn the registration for the IPO, which was expected to raise $1 billion. Our accounting practices accurately reflect the results of Medco’s business and are in accordance with GAAP. Recognizing retail co-payments has no impact on Merck’s net income or earnings per share.

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Mirant
July 2002. The company said it may have overstated various assets and liabilities. SEC An internal review revealed errors that may have inflated revenue by $1.1 billion. This is an informal inquiry, and we will cooperate fully with this request for information.

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Nicor Energy, LLC
A  joint venture between Nicor July 2002. Independent audit uncovered accounting problems that boosted revenue and underestimated expenses. None Nicor restated results to reflect proper accounting in the first half of this year. Our focus now is to stabilize this venture and put some certainty to its financial results. The company is evaluating its continued involvement in this venture.

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Peregrine Systems
May 2002. Overstated $100 million in sales by improperly recognizing revenue from third-party resellers SEC; various congressional committees Said it will restate results dating back to 2000; slashed nearly 50% of its workforce to cut costs; is on its third auditor in three months and has yet to file its 2001 10-K and so, consequently, is in danger of being delisted from the Nasdaq. We have been and will continue to cooperate with the SEC and the Congressional committee.

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Qwest Communications International
February 2002. Inflated revenue using network capacity “swaps” and improper accounting for long-term deals. DOJ; SEC; FBI; Denver U.S. attorney’s office Qwest admitted that an internal review found that it incorrectly accounted for $1.16 billion in sales. It will restate results for 2000, 2001 and 2002. To raise funds, Qwest says it is selling its phone-directory unit for $7.05 billion. We are continuing to cooperate fully with the investigations.

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Reliant Energy
Engaging in “round-trip” trades to boost trading volumes and revenue. SEC; CFTC Recently replaced Chief Financial Officer Steve Naeve with Mark M. Jacobs, a managing director of Goldman Sachs and a Reliant adviser. We’re cooperating with the investigations.

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Tyco
May 2002. Ex-CEO L. Dennis Kozlowski indicted for tax evasion. SEC investigating whether the company was aware of his actions, possible improper use of company funds and related-party transactions, as well as improper merger accounting practices. Manhattan district attorney; SEC Said it will not certify its financial results until after an internal investigation is completed. The Bermuda-based company is not required to meet the SEC’s Aug. 14 deadline. Investors looking to unseat all board members who served under Kozlowski may launch a proxy fight to do so. The company is conducting an internal investigation and we cannot comment on its specifics, but we will file an 8-K on the initial results around Sept. 15.

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WorldCom
March 2002. Overstated cash flow by booking $3.8 billion in operating expenses as capital expenses; gave founder Bernard Ebbers $400 million in off-the-books loans. DOJ; SEC; U.S. Attorney’s Office for the Southern District of New York; various congressional committees The company stunned the Street when it found another $3.3 billion in improperly booked funds, which will bring its total restatement up to $7.2 billion, and that it may have to take a goodwill charge of $50 billion. Former CFO Scott Sullivan and ex-controller David Myers have been arrested and criminally charged, while rumors of Bernie Ebbers’ impending indictment persist. WorldCom is continuing to cooperate with all ongoing investigations.

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Xerox
June 2000. Falsifying financial results for five years, boosting income by $1.5 billion SEC Xerox agreed to pay a $10 million and to restate its financials dating back to 1997. We chose to settle with the SEC in April so we can put the matter behind us. We have restated our financials and certified our financials for the new SEC requirements.

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Citi Bank
2004 Citigroup Inc. is under investigation by German financial regulators for possibly manipulating eurozone bond markets. In early August, Citigroup Global Markets sold some 11.8 billion euros ($15.67 billion) in European government bonds on 13 different trading platforms in 11 different markets, causing prices to fall across the board.

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Time Warner
2004 Time Warner Inc. agreed to pay $210 million to settle criminal securities fraud charges brought by the Justice Department against the company’s America Online unit. The media giant also is prepared to pay $300 million to end another probe by the Securities and Exchange Commission.

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Diebold
2004 Basically, Diebold Election Systems have been a bunch of very bad boys. They wrote a program to run elections, and didn’t bother to tell anybody it can be hacked six ways from Sunday, via security that appears to be deliberately flawed. And then they left copies (plus a pile of various election data files) up on a website and didn’t bother to put a password on it. They also took steps to evade the Federal Elections Commission software certification/oversight process! See first “white paper” article on Doug Lewis, below right…we finally have smoking-gun proof of crimes.

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Dow Chemicals
1984 On the night of December 2-3, 1984, over 40 tonnes of poisonous gases leaked from a pesticide factory in Bhopal belonging to US-based multinational Union Carbide Corporation, killing more than 20,000 residents. The management’s cost cutting measures had effectively disabled safety procedures essential to prevent or alert employees of such disasters. More than 120,000 of the city’s residents suffer from chronic gas-related disorders today and 10 to 15 continue to die every month. Additionally, Union Carbide’s routine pollution even prior to the gas disaster had led to the accumulation of several thousand tonnes of toxic waste which now lie abandoned in and around the factory. Soil and groundwater in and around the factory remain contaminated in what the environmental group Greenpeace has called a “global toxic hotspot.”

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Election Systems and Software
2004 Supplies nearly half the voting machines used in the United States. ES&S is a subsidiary of McCarthy Group Inc., which is jointly held by the holding firm and the Omaha World-Herald Co., which publishes the state’s largest newspaper.
Former conservative radio talk-show host and now Republican U.S. Senator Chuck Hagel was the head of, and continues to own part interest in, ES&S (then AIS), who installed, programmed, and largely ran the voting machines that were used by most of the citizens of Nebraska, in elections where Hagel won very unexpected landslide victories. Senator Hagel is a key advocate for the Bush campaign, and with his experience on the Senate Commerce Committee focusing on telecommunications and trade, was once considered as a Vice Presidential running mate for George Walker Bush

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Shell
2004 Shell has been in turmoil since January, when it shocked investors by slashing its reserves by a fifth. The overbookings, and subsequent evidence that the problem had been kept secret for months, infuriated shareholders, who have called for changes in the company’s structure. As well as complaints about its structure, Shell has also come under fire from environmental groups for failing to live up to its “green” image in places such as the Niger delta in Nigeria and Texas in the US.

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Bechtel
2003 Environmental problems abound at previous Bechtel construction sites, especially in the mining industry. One such project is the world’s largest gold mine, the Grasberg mine in the remote highlands of the western half of New Guinea on the sacred mountains of the Amungme peoples, which is operated by Freeport McMoRan of Louisiana. Bechtel helped build the original gold mine in 1970. In 1998 Bechtel helped Freeport expand production and consequently waste dumping from 120,000 tons a day to 260,000 tons a day. On the other side of the island Bechtel built the Ok Tedi gold mine in Papua New Guinea. Eight years ago an environmental review of the Freeport mining operations by the U.S. Overseas Private Insurance Corporation revealed that the mine was having an “irreversible impact” on the surrounding tropical forests.

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Boeing
2003 The lobbying efforts of Boeing, and the revolving door between the US government and the Chicago-based giant, are legendary. But Boeing’s influence-peddling finally turned sour last December when Boeing CEO Philip M. Condit was forced to resign in the wake of revelations of that the company negotiated the hiring of top Air Force procurement official Darlene Druyun while Druyun was setting up a lucrative $27.6 billion leasing deal of Boeing’s 767 air-refueling aircrafts over a period of ten years. The deal, which went through despite controversy, will cost taxpayers up to $10 billion dollars more than if the Air Force has purchased the aircrafts outright.

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Exxon Mobil
2001 Like his predecessors, Exxon Mobil Corp. Chairman and Chief Executive Lee Raymond keeps a relatively low profile. He’s reluctant to grant interviews and make public appearances. But ever since he assailed the Kyoto initiative to combat global warming in a speech a few years ago, Mr. Raymond has been inextricably linked to the issue. Add to that his disdain for gay rights and his unflinching responses to critics of Exxon Mobil’s business in repressive regimes, and Mr. Raymond comes off as a strikingly politically incorrect character for a modern-day, big-company CEO.

Mr. Raymond’s stances have made for a rocky summer for Exxon Mobil. In July, ahead of a meeting of government officials in Bonn, Germany, to discuss rules for implementing the Kyoto pledge to cut greenhouse-gas emissions, activists staged dozens of demonstrations around the world to protest the company’s stance on climate change. Some European Parliament members have joined an effort by environmentalists to boycott Exxon Mobil, and a “Stop Esso” effort in Britain (as the company brands its products there) has won the backing of celebrities such as Ralph Fiennes and Annie Lennox and companies including The Body Shop.

Exxon Mobil also faces a lawsuit, filed in late June in federal court in Washington, D.C., by a labor advocacy group that alleges the company supported the military in Indonesia when it tortured and killed locals near the company’s operations in the Aceh province. Exxon Mobil has denied that the company or its affiliates were involved in the alleged abuses by Indonesian security forces. “Exxon Mobil condemns the violation of human rights in any form,” the company said in a statement at the time.

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Alcoa
2003 The Icelandic government plans to construct a large hydropower project in Iceland’s Eastern Highlands, one of Europe’s largest remaining wilderness areas, in order to supply power to a US aluminum smelter owned by Alcoa. The “Kahranjukar Project” involves building miles of roads, boring a series of tunnels, diverting dozens of rivers to create 3 reservoirs and erect nine dams, including one that is 630 feet — Europe’s highest. The level of the immense reservoir will fluctuate seasonally, from 170 to 250 feet.

If Karahnjukar goes forward, a large wilderness area will be sacrificed so that the world can consume cheaper aluminum. The massive project will be built on the north side of Europe’s greatest glacier, Vatnajokull, a vast ice field beneath which lie several active volcanoes. The project will drown 22 square miles of tundra, presently the grazing grounds for more than 2,000 reindeer and the nesting ground for the pink-footed goose, and affect the flows of close to 60 waterfalls. In early summer, silt from the exposed banks will blow off all over the countryside.

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United Health Care
Bear Sterns
Verizon
Chemical Waste Management
Xe, formerly Blackwater

MANY MORE TO COME…