A Corporate (Crime) State

by Ralph Nader

 

What Business Week magazine calls “the corporate crime wave” shows every sign of worsening, as more major corporations scramble to admit massive deception of investors, looting of pension funds, self-enrichment of top executives, restatement of earnings and giant farewell compensations packages to departing bosses who wrecked their companies to further their own megagreed.

So much of these corporate cesspools are oozing into the public’s view that it is difficult to piece them into an understandable reform movement for workers, consumers and investors to support. The sanitation trucks can’t begin to keep up with the spilling garbage of betrayed trust, pillage and plunder of trillions of dollars.

“Is Wall Street Corrupt” headlined Business Week? Inside the reporters showed the answer to be yes, yes, yes! The founder of the giant Vanguard Mutual Fund, John C. Bogle, declared “Our capitalistic system is in peril,” and just started a shareholder-rights group with Warren E. Buffett. What communism could not do, the big business bosses are doing to the market system and the financial industry.

We are witnessing the corporate destruction of capitalism in favor of a corporate state. The law can’t save it because the laws are controlled by politicians many of whom are controlled in turn by these same business interests and campaign cash. For every honest Congressman Henry Waxman and Senator Paul Sarbanes, there are scores of Congressional and White House politicians huddling with business lobbyists to stifle prosecutions, reforms and investigations.

The lead culprit is the retiring and shameless Senator Phil Gramm (Rep. Texas) whose wife just resigned from the Enron Board and its audit committee. On May 16th, he met with 30 corporate lobbyists to plan the surrender of Washington, D.C.’s national government against the crookery of Wall Street.

In American history, reforms usually followed scandals. Now over the past twenty years, scandals follow scandals because there are no reforms.

Sometimes the Congressional reaction is to weaken the existing laws and safeguards against corporate crime, fraud and abuse a even after imposing massive taxpayer bailouts of the culpable industries. Remember the S&L scandals that are costing taxpayers half a trillion dollars in principal and interest between 1990 and 2020.

Conflicts of interest are at epidemic levels in Wall Street and trust is being destroyed a the key confidence that investors must have in information and advice directed their way. A devastating new report a that has received little notice a by the only major non-conflicted ratings firm left in the country (Weiss Ratings, Inc. from Palm Beach Gardens, Florida) concludes:

1. “A deeper understanding of the crisis can be achieved through an analysis of “buy,” “sell,” and “hold” ratings issued to companies that went bankrupt in 2002: A total of 50 investment banking and brokerage firms issued ratings to 19 companies that filed for chapter 11 in the first four months of 2002…. 94% of the 50 firms continued to indicate that investors should buy or hold shares in failing companies right up to the day these companies filed for bankruptcy. Among the 19 bankrupt companies, 12 continued to receive strictly “buy” or “hold” rating on the date of bankruptcy filing.”

Weiss Ratings receives no financial compensation from the companies it rates, unlike S&P, Moodys, and Duff & Phelps. Here are its unbiased ratings. “Among the 20 largest brokerage firms, 13 may be financially vulnerable if their finances deteriorate further, while seven have the financial wherewithal to withstand a severely adverse business environment.”

Weiss Ratings gives low grades to JP Morgan Chase & Co, Lehman Brothers, Merrill Lynch, UBS Warburg LLC, Barclays Capital, Credit Suisse First Boston Corp. These firms have millions of customers who relied on their highly self-advertised, objective expertise. (For more details see http://www.weissratings.com)

There needs to be an aroused public to take control of their government and direct their public servants, before the November elections, to enact systemic action for reform, not phony legislation that allows crooked business as usual. For suggestions on what these reforms can be, log on to http://www.citizenworks.org

Ralph Nader is the author of Crashing the Party.

 

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! 

Like What You’ve Read? Support CounterPunch
Weekend Edition
August 28-30, 2015
Andrew Levine
Viva Trump?
Jeffrey St. Clair
Long Time Coming, Long Time Gone
Mike Whitney
Looting Made Easy: the $2 Trillion Buyback Binge
Alan Nasser
The Myth of the Middle Class: Have Most Americans Always Been Poor?
Rob Urie
Wall Street and the Cycle of Crises
Ismael Hossein-Zadeh
Behind the Congressional Disagreements Over the Iran Nuclear Deal
Lawrence Ware – Marcus T. McCullough
I Won’t Say Amen: Three Black Christian Clichés That Must Go
Evan Jones
Zionism in Britain: a Neglected Chronicle
John Wight
Learning About the Migration Crisis From Ancient Rome
Andre Vltchek
Lebanon – What if it Fell?
Robert Fantina
Hillary Clinton, Palestine and the Long View
Randy Blazak
Donald Trump is the New Face of White Supremacy
Ben Burgis
Gore Vidal Was Right: What Best of Enemies Leaves Out
Suzanne Gordon
How Vets May Suffer From McCain’s Latest Captivity
Robert Sandels - Nelson P. Valdés
The Cuban Adjustment Act: the Other Immigration Mess
Uri Avnery
The Molten Three: Israel’s Aborted Strike on Iran
John Stanton
Israel’s JINSA Earns Return on Investment: 190 Americans Admirals and Generals Oppose Iran Deal
Bill Yousman
The Fire This Time: Ta-Nehisi Coates’s “Between the World and Me”
Michael Welton
The Conversable World: Finding a Compass in Post-9/11 Times
Brian Cloughley
Don’t be Black in America
Charles Pierson
How the US and the WTO Crushed India’s Subsidies for Solar Energy
Kent Paterson
In Search of the Great New Mexico Chile Pepper in a Post-NAFTA Era
Binoy Kampmark
Live Death on Air: The Killings at WDBJ
Gui Rochat
The Guise of American Democracy
Emma Scully
Vultures Over Puerto Rico: the Financial Implications of Dependency
Chuck Churchill
Is “White Skin Privilege” the Key to Understanding Racism?
Kathleen Wallace
The Id(iots) Emerge
Andrew Stewart
Zionist Hip-Hop: a Critical Look at Matisyahu
Gregg Shotwell
The Fate of the UAW: Study, Aim, Fire
Halyna Mokrushyna
Decentralization Reform in Ukraine
Scott Parkin
Katrina Plus Ten: Climate Justice in Action
Norman Pollack
World Capitalism, a Basket Case: A Layman’s View
Sarah Lazare
Listening to Iraq
John Laforge
NSP/Xcel Energy Falsified Welding Test Documents on Rad Waste Casks
Wendell G Bradley
Drilling for Wattenberg Oil is Not Profitable
Joy First
Wisconsin Walk for Peace and Justice: Nine Arrested at Volk Field
Mel Gurtov
China’s Insecurity
Mateo Pimentel
An Operator’s Guide to Trump’s Racism
Yves Engler
Harper Conservatives and Abuse of Power
Michael Dickinson
Police Guns of Brixton: Another Unarmed Black Shot by London Cops
Ron Jacobs
Daydream Sunset: a Playlist
Charles R. Larson
The Beginning of the Poppy Wars: Amitav Ghosh’s “Flood of Fire”
August 27, 2015
Sam Husseini
Foreign Policy, Sanders-Style: Backing Saudi Intervention
Brad Evans – Henry A. Giroux
Self-Plagiarism and the Politics of Character Assassination: the Case of Zygmunt Bauman
Peter Lee
Making Sense of China’s Stock Market Meltdown