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The 10 Ten Stories

A Remarkable Week for Corporate Crime

by RUSSELL MOKHIBER

It’s been a remarkable week in corporate crime.

And it’s only Wednesday.

This week drives home the reality – corporate crime inflicts far more damage on society than all street crime combined.

Once again, it’s not the black kid with the hood on the street.

It’s the corporate executive with the lawyer in the suite.

So, without further ado, let’s go to the Top Ten Corporate Crime Stories of the Week.

Number Ten: Sunoco to Pay $2.2 Million to Resolve Double Dipping Charge. The Massachusetts Attorney General alleges that the oil company falsely sought reimbursement from a state reimbursement fund when it was also seeking reimbursement from its insurers.

Number Nine: Merck to Pay $322 Million Criminal Penalty. A federal judge in Boston ordered Merck to pay a $322 million criminal penalty for improperly marketing its Vioxx painkiller a decade ago.

Number Eight: Pharmacy Fraud Kills Three. Gary D. Osborn and his corporation, ApothéCure Inc., pled guilty in federal court in Dallas to criminal violations of the Food, Drug and Cosmetic Act (FDCA). The pleas are in connection with ApothéCure’s interstate shipment of two lots of misbranded colchicine injectable solution that led to the deaths of three people in the Pacific Northwest.

Number Seven: Walgreens to Pay $7.9 Million to Settle Whsitleblower Lawsuit. Walgreens, the largest drugstore chain in the nation, has paid the United States and participating governments $7.9 million to settle allegations that it paid kickbacks to illegally induce the transfer of prescriptions to its pharmacies.

Number Six: Minnesota AG Takes Down Medical Debt Collection Agency. The Minnesota AG said that Accretive – one of the nation’s largest medical debt collectors – overstepped its bounds by embedding debt collectors as employees in emergency rooms and demanding that patients pay before receiving treatment.

Number Five: Military Contractor Rips Off the Army. ATK Launch Systems will pay $36,967,160 to resolve allegations that ATK sold dangerous and defective illumination flares to the Army and the Air Force.

Number Four: Freeport-McMoRan Pays $6.8 Million to Settle Pollution Charge. Freeport-McMoRan Morenci will pay $6.8 million to settle allegations that it polluted areas around its Morenci copper mine in southeastern Arizona. Federal officials alleged that surface waters, terrestrial habitat and wildlife, and migratory birds have been injured, destroyed or lost as a result of releases sulfuric acid and metals at the site.

Number Three: Giant Construction Company Ripped Off NYC. Australian construction giant Lend Lease Construction LMB Inc. – formerly Bovis Lend Lease LMB Inc. – and James Abadie, the former executive in charge of Bovis’s New York office, were criminally charged in a major fraud scheme. The company will pay $50 million and get a deferred prosecution agreement. Federal officials alleged that Abadie explicitly and fraudulently directed his subordinates to carry out the practice of adding unworked hours to labor foremen’s time sheets, knowing that these unworked hours were billed to clients who were unaware that they were the victims of fraud. Affected projects included – the United States Post Office/Bankruptcy Court in Brooklyn, New York, the Bronx Criminal Courthouse in the Bronx, New York, Grand Central Terminal, the Deutsche Bank building deconstruction in New York, New York, Citifield in Queens, New York, and the very United States Courthouse in which Bovis was charged and Abadie pled guilty.

Number Two: First Criminal Prosecution in BP Case is an Individual, not a Corporation. Kurt Mix, a former engineer for BP plc, was arrested on charges of intentionally destroying evidence requested by federal criminal authorities investigating the April 20, 2010, Deepwater Horizon disaster. David Uhlmann, the former head of the Environmental Crimes Section at he Justice Department is puzzled why the government has yet to bring criminal charges against BP and the other companies involved. “The government has a slam dunk criminal case against BP, TransOcean and Halliburton for the negligence that caused the Gulf oil spill,” Uhlmann told Marketplace Radio yesterday “They should bring those criminal charges.”

Number one: Wal-Mart Bribery. The number one slot goes to Wal-Mart. In a shocker, New York Times reporter David Barstow penned a major investigative report on Wal-Mart bribery in Mexico. Paying $24 million in bribes to fuel Wal-Mart expansion in Mexico is a big deal. How Wal-Mart covered up the bribery in Mexico is a big deal. Wal-Mart had a state of the art anti-bribery compliance program. The New York Times story will likely put an end to the Chamber of Commerce’s drive to weaken the Foreign Corrupt Practices Act and drive public support for more corporate crime prosecutions.

One lesson after living through this week in corporate crime?

Support your local police. Urge a crack down on corporate crime.

Russell Mokhiber edits Corporate Crime Reporter.