The 10 Worst Corporations of 2008
What a year for corporate criminality and malfeasance!
As we compiled the Multinational Monitor list of the 10 Worst Corporations of 2008, it would have been easy to restrict the awardees to Wall Street firms.
But the rest of the corporate sector was not on good behavior during 2008 either, and we didn’t want them to escape justified scrutiny.
So, in keeping with our tradition of highlighting diverse forms of corporate wrongdoing, we included only one financial company on the 10 Worst list.
Here, presented in alphabetical order, are the 10 Worst Corporations of 2008.
AIG: Money for Nothing
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.
Cargill: Food Profiteers
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.
Chevron: "We can’t let little countries screw around with big companies"
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.)
Constellation Energy: Nuclear Operators
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.
CNPC: Fueling Violence in Darfur
Sudan has been able to laugh off existing and threatened sanctions for the slaughter it has perpetrated in Darfur because of the huge support it receives from China, channeled above all through the Sudanese relationship with the Chinese National Petroleum Corporation (CNPC).
"The relationship between CNPC and Sudan is symbiotic," notes the Washington, D.C.-based Human Rights First, in a March 2008 report, "Investing in Tragedy." "Not only is CNPC the largest investor in the Sudanese oil sector, but Sudan is CNPC’s largest market for overseas investment."
Oil money has fueled violence in Darfur. "The profitability of Sudan’s oil sector has developed in close chronological step with the violence in Darfur," notes Human Rights First.
Dole: The Sour Taste of Pineapple
A 1988 Filipino land reform effort has proven a fraud. Plantation owners helped draft the law and invented ways to circumvent its purported purpose. Dole pineapple workers are among those paying the price.
Under the land reform, Dole’s land was divided among its workers and others who had claims on the land prior to the pineapple giant. However, wealthy landlords maneuvered to gain control of the labor cooperatives the workers were required to form, Washington, D.C.-based International Labor Rights Forum (ILRF) explains in an October report. Dole has slashed it regular workforce and replaced them with contract workers.
Contract workers are paid under a quota system, and earn about $1.85 a day, according to ILRF.
GE: Creative Accounting
In June, former New York Times reporter David Cay Johnston reported on internal General Electric documents that appeared to show the company had engaged in a long-running effort to evade taxes in Brazil. In a lengthy report in Tax Notes International, Johnston reported on a GE subsidiary’s scheme to invoice suspiciously high sales volume for lighting equipment in lightly populated Amazon regions of the country. These sales would avoid higher value added taxes (VAT) in urban states, where sales would be expected to be greater.
Johnston wrote that the state-level VAT at issue, based on the internal documents he reviewed, appeared to be less than $100 million. But, he speculated, the overall scheme could have involved much more.
Johnston did not identify the source that gave him the internal GE documents, but GE has alleged it was a former company attorney, Adriana Koeck. GE fired Koeck in January 2007 for what it says were "performance reasons."
Imperial Sugar: 14 Dead
On February 7, an explosion rocked the Imperial Sugar refinery in Port Wentworth, Georgia, near Savannah. Days later, when the fire was finally extinguished and search-and-rescue operations completed, the horrible human toll was finally known: 14 dead, dozens badly burned and injured.
As with almost every industrial disaster, it turns out the tragedy was preventable. The cause was accumulated sugar dust, which like other forms of dust, is highly combustible.
A month after the Port Wentworth explosion, Occupational Safety and Health Administration (OSHA) inspectors investigated another Imperial Sugar plant, in Gramercy, Louisiana. They found 1/4- to 2-inch accumulations of dust on electrical wiring and machinery. They found as much as 48-inch accumulations on workroom floors.
Imperial Sugar obviously knew of the conditions in its plants. It had in fact taken some measures to clean up operations prior to the explosion. The company brought in a new vice president to clean up operations in November 2007, and he took some important measures to improve conditions. But it wasn’t enough. The vice president told a Congressional committee that top-level management had told him to tone down his demands for immediate action.
Philip Morris International: Unshackled
The old Philip Morris no longer exists. In March, the company formally divided itself into two separate entities: Philip Morris USA, which remains a part of the parent company Altria, and Philip Morris International. Philip Morris USA sells Marlboro and other cigarettes in the United States. Philip Morris International tramples the rest of the world.
Philip Morris International has already signaled its initial plans to subvert the most important policies to reduce smoking and the toll from tobacco-related disease (now at 5 million lives a year). The company has announced plans to inflict on the world an array of new products, packages and marketing efforts. These are designed to undermine smoke-free workplace rules, defeat tobacco taxes, segment markets with specially flavored products, offer flavored cigarettes sure to appeal to youth and overcome marketing restrictions.
Roche: "Saving lives is not our business"
The Swiss company Roche makes a range of HIV-related drugs. One of them is enfuvirtid, sold under the brand-name Fuzeon. Fuzeon brought in $266 million to Roche in 2007, though sales are declining.
Roche charges $25,000 a year for Fuzeon. It does not offer a discount price for developing countries.
Like most industrialized countries, Korea maintains a form of price controls — the national health insurance program sets prices for medicines. The Ministry of Health, Welfare and Family Affairs listed Fuzeon at $18,000 a year. Korea’s per capita income is roughly half that of the United States. Instead of providing Fuzeon, for a profit, at Korea’s listed level, Roche refuses to make the drug available in Korea.
Korean activists report that the head of Roche Korea told them, "We are not in business to save lives, but to make money. Saving lives is not our business."