corporate crime

Table 1. Changing Profile of the Top 200 (1983-1999) Table 2. Top 100 Economies (1999) Table 3. Top 200 (1999)

Sarah Anderson is the Director of the Global Economy Project of the Institute for Policy Studies and the co-author (with John Cavanagh and Thea Lee) of Field Guide to the Global Economy (New Press, 2000)

John Cavanagh is the Director of IPS and a former international economist at the United Nations Conference on Trade and Development.

1. Of the 100 largest economies in the world, 51 are corporations; only 49 are countries (based on a comparison of corporate sales and country GDPs).

2. The Top 200 corporations’ sales are growing at a faster rate than overall global economic activity. Between 1983 and 1999, their combined sales grew from the equivalent of 25.0 percent to 27.5 percent of World GDP.

3. The Top 200 corporations’ combined sales are bigger than the combined economies of all countries minus the biggest 10.

4. The Top 200s’ combined sales are 18 times the size of the combined annual income of the 1.2 billion people (24 percent of the total world population) living in “severe” poverty.

5. While the sales of the Top 200 are the equivalent of 27.5 percent of world economic activity, they employ only 0.78 percent of the world’s workforce.

6. Between 1983 and 1999, the profits of the Top 200 firms grew 362.4 percent, while the number of people they employ grew by only 14.4 percent.

7. A full 5 percent of the Top 200s’ combined workforce is employed by Wal-Mart, a company notorious for union-busting and widespread use of part-time workers to avoid paying benefits. The discount retail giant is the top private employer in the world, with 1,140,000 workers, more than twice as many as No. 2, Daimler-Chrysler, which employs 466,938.

8. U.S. corporations dominate the Top 200, with 82 slots (41 percent of the total). Japanese firms are second, with only 41 slots.

9. Of the U.S. corporations on the list, 44 did not pay the full standard 35 percent federal corporate tax rate during the period 1996-1998. Seven of the firms actually paid less than zero in federal income taxes in 1998 (because of rebates). These include: Texaco, Chevron, PepsiCo, Enron, Worldcom, McKesson and the world’s biggest corporation—General Motors.

10. Between 1983 and 1999, the share of total sales of the Top 200 made up by service sector corporations increased from 33.8 percent to 46.7 percent. Gains were particularly evident in financial services and telecommunications sectors, in which most countries have pursued deregulation.

In 1952, General Motors CEO Charles Wilson made the famous statement that “What is good for General Motors is good for the country.”1 During the past decade and a half, General Motors and other global corporations have obtained much of what they claimed was good for them. They have succeeded in obtaining trade and investment liberalization policies that provide global firms considerable new freedoms to pursue profits internationally. They have also persuaded governments to take a generally hands-off approach to corporate monopolies, claiming that mega-mergers are needed for firms to compete in global markets.

This study examines the economic and political power of the world’s top 200 corporations.2 Led by General Motors, these are the firms that are driving the process of corporate globalization and arguably benefiting the most from it. The report then examines the extent to which these firms are fulfilling the second half of Charles Wilson’s promise by providing “what’s good for the country” and global society in general. The conclusion of our analysis is that widespread trade and investment liberalization have contributed to a climate in which dominant corporations are enjoying increasing levels of economic and political clout that are out of balance with the tangible benefits they provide to society.

The study reinforces a strong public distrust of the economic and political power of corporations. In September 2000, Business Week magazine released a Business Week/Harris Poll which showed that between 72 and 82 percent of Americans agree that “Business has gained too much power over too many aspects of American life.”3 In the same poll, 74 percent of Americans agreed with Vice President Al Gore’s criticism of “a wide range of large corporations, including ‘big tobacco, big oil, the big polluters, the pharmaceutical companies, the HMOs.’” And, 74-82 percent agreed that big companies have too much influence over “government policy, politicians, and policy-makers in Washington.”

Top U.S. firms faced stiff competition from Japanese corporations throughout much of the late 1980s and early 1990s. In 1995, Japanese and U.S. firms were nearly tied in the number of corporations on the Top 200 list, with 58 and 59, respectively. Because the Japanese economy has been in stagnation for nearly a decade, U.S. corporations are once again dominant, comprising 41 percent of the Top 200 in 1999. The countries with the most corporations on the Top 200 list are the United States (82), Japan (41), Germany (20), and France (17) (see Table 1).

In 1999, South Korea was the only country with a corporation on the Top 200 list outside North America, Japan, and Europe. In 1983, Brazil, Israel, South Africa, and India also had firms on the list. The merger boom of the past two decades, particularly among U.S. firms but also in Europe, has further concentrated economic power in companies based in the leading industrial economies. For example, two of the top five firms in 1999 were the products of mega-mergers: Exxon Mobil (No. 2) and Daimler-Chrysler (No. 5).

The types of firms in the Top 200 also reflect trends in the global economy. During the past decade and a half, the World Bank and International Monetary Fund have promoted reforms to lift controls on investment in banking, telecommunications, and other services, opening new markets for the global giants in these sectors. Hence, the former dominance of manufacturing and natural resource-based corporations among the Top 200 has eroded. Between 1983 and 1999, the share of total sales of the Top 200 made up by service corporations increased from 33.8 percent to 46.7 percent. One major firm, General Electric, helped bolster the service sector component of the list. While GE is best known for appliances, its financial services division has grown so large (at least half of sales) that the company has shifted from the manufacturing to the services category.

In 1999, more than half the sales of the Top 200 were in just 4 economic sectors: financial services (14.5 percent), motor vehicles and parts (12.7 percent), insurance (12.4 percent), and retailing/ wholesaling (11.3 percent). 2

Despite some noteworthy shifts, more than half of the firms that were on the Top 200 list in 1983 made the cut again in 1999. Returnees totaled 103, although in 25 cases they were listed under a different name, due to mergers, spin-offs, and name changes. The most stunning ascendance among the Top 200 firms is that of Wal-Mart. In 1983, the retail giant’s sales were $4.7 billion —far below the Top 200 threshold. By 1999, they had climbed to $166.8 billion, making Wal-Mart the second largest firm in the world.

Of the 100 largest economies in the world, 51 are corporations; only 49 are countries (based on a comparison of corporate sales and country GDPs) (See Table 2). To put this in perspective, General Motors is now bigger than Denmark; Daimler-Chrysler is bigger than Poland; Royal Dutch/Shell is bigger than Venezuela; IBM is bigger than Singapore; and Sony is bigger than Pakistan.

The 1999 sales of each of the top five corporations (General Motors, Wal-Mart, Exxon Mobil, Ford Motor, and Daimler-Chrysler) are bigger than the GDP’s of 182 countries.

The Top 200 corporations’ combined sales are bigger than the combined economies of all countries minus the biggest 10. 4

The Top 200 corporations’ sales are growing at a faster rate than overall global economic activity. Between 1983 and 1999, their combined sales grew from the equivalent of 25.0% to 27.5% of World GDP.

The economic clout of the Top 200 is particularly staggering compared to that of the poorest segment of the world’s humanity. The Top 200s’ combined sales are 18 times the size of the combined annual income of the 1.2 billion people (24 percent of the total world population) living in “severe” poverty (defined by the World Bank as those surviving on less than $1 per day).

The 82 U.S. companies on the Top 200 list made contributions to 2000 election campaigns through political action committees (not including soft money donations) that totaled $33,045,832. According to the Center for Responsive Politics, corporations in general outspent labor unions by a ratio of about 15-to-1. The group also found that candidates for the U.S. House of Representatives who outspent their opponents were victorious in 94 percent of their races. Unfortunately, campaign contribution data for non-U.S. firms is not available.

Of course global corporations also spend massive amounts each year influencing the political system through lobbying. The exact amount spent on these activities is not known, but of the Top 200 firms, 94 maintain “government relations” offices located on or within a few blocks of the lobbying capital of the world —Washington, DC’s K Street Corridor.

Campaign contributions and lobbying are only the most visible example of corporate political clout. For example, officials with the U.S. Trade Representative’s (USTR) Office, who are responsible for negotiating international trade and investment agreements, routinely state that their primary responsibility is to represent the interests of U.S. industry, rather than all Americans affected by trade deals. This in spite of the fact that the USTR, upon its creation in 1960, was deliberately placed in the White House, rather than the Commerce Department, in order to prevent it from being overly influenced by business interests. In addition, trade negotiators are required to meet with nongovernmental advisory committees, but these are overwhelmingly dominated by representatives of large corporations. Recently, the U.S. government went a step further and allowed representatives from corporations such as AT&T and IBM to join the official delegation in hemispheric talks on electronic commerce in the Free Trade Area of the Americas, which is due to be finalized by 2005.

The political influence of top firms is also evident in the scarcity of publicly available information on their activities. Leading corporations have fiercely opposed attempts to require them to achieve a higher level of transparency. Just a few examples of information that U.S. firms are not required to reveal to the American public: • a breakdown of their employees by country • toxic emissions at overseas plants • locations of overseas plants or contractors • wage rates at overseas facilities • layoffs and the reasons for layoffs

In most cases, collecting company-specific data in countries outside the United States is even more difficult.

This section looks at the contributions the Top 200 corporations make to society in terms of jobs and taxes. This is not to deny that these firms may influence our lives in many other ways. Particularly in the United States and other rich nations, it is difficult to go through a day without direct contact with many of these companies, whether you are watching a movie, shopping in a super-market, driving a car, or depositing a check.

Nevertheless, given their extreme levels of economic and political power, it is important to take a hard look at whether these corporate giants are indeed upholding their end of the social compact. The corporations themselves, when lobbying for policies to lift barriers to trade and investment, have promised that they will lead not only to improved consumer goods and services but also to significant job creation and an overall improvement in social welfare. It seems only fair that the public should be able to expect—at a minimum—that these colossal firms be major providers of employment opportunities and that they bear their share of the tax burden.

While the sales of the Top 200 are the equivalent of 27.5% of world economic activity, these firms employ only a tiny fraction of the world’s workers. In 1999, they employed a combined total of 22,682,166 workers, which is 0.78% of the world’s workforce.

Between 1983 and 1999, the number of people employed by Top 200 firms grew 14.4%, an increase that is dwarfed by the firms’ 362.4% profit growth over this period.

Corporate analysts may see the dramatic increase in the ratio between profits and employees as a positive sign of increased efficiency. The growing gap between profits and payrolls is at least partly the result of technological changes that has allowed firms to produce more with less people. Automation is not always a negative development, especially in the case of jobs that are dangerous or otherwise undesirable. However, another factor is the trend towards outsourcing, particularly among large industrial firms. By shifting more and more of their production to contractors, companies can distance themselves from potential charges of labor rights abuses and other illegal behavior and keep labor costs low by forcing contractors to compete for business with an ever smaller number of giant purchasers. The giant firms also have more freedom to hire and fire contractors to meet shifting demand. U.S. corporations have been at the forefront of this trend.

Chrysler (known as Daimler-Chrysler since the merger with Daimler Benz), for example, purchases almost all of its parts, from brakes to seats, from suppliers. Hewlett-Packard relies on 10 different contractors and IBM relies on 8 to make their products. In recent years, Japanese electronics firms, including Mitsubishi, NEC, Fujitsu, and Sony, have also begun to outsource.

Still, Americans may be less concerned about the growing gap between profits and employees because of the country’s record low unemployment rate. What is often ignored in the mainstream media is the fact that unemployment problems remain prevalent elsewhere in the world, including in many countries where the Top 200 firms are enjoying strong profits. (U.S. firms overall earned 19 percent of their profits overseas in 1995).5 In the European Union, the 1999 unemployment rate was 10 percent, compared to 4.2 percent in the United States.6 The International Labor Organization estimates that one billion people worldwide are unemployed or underemployed.7 Joblessness around the world hurts the United States because it reduces the capacity of consumers in other countries to purchase U.S. products and can lead to social instability that has international ramifications.

A full 5 percent of the Top 200s’ combined workforce is comprised of Wal-Mart employees. The discount retail giant’s workforce has skyrocketed from 62,000 in 1983 to 1,140,000 in 1999, making it the largest private employer in the world. The next largest, Daimler-Chrysler, has a workforce of 466,938—less than half the size of Wal-Mart’s. Although Wal-Mart is indeed providing many new jobs, the company is notorious for its strategy of employing armies of workers on a part-time basis to avoid paying benefits. The firm is also adamantly anti-union. In March, Wal-Mart announced it was closing the meat department in 180 stores two weeks after the meat cutters at one Texas store voted to form a union — the first successful organizing drive at an American Wal-Mart.

The Institute on Taxation and Economic Policy (ITEP) recently released a study of federal tax rates paid by several hundred major, profitable U.S. corporations. Forty-four of the U.S. corporations on the Top 200 list were included in the study, which revealed that not a single one of them had paid the full standard 35 percent corporate tax rate during the period 1996-1998. Seven of the firms had actually paid less than zero in federal income taxes in 1998, because they received rebates that exceeded the amount of taxes they paid. These include: Texaco, Chevron, PepsiCo, Enron, Worldcom, McKesson and the world’s biggest corporation—General Motors.8 According to ITEP, companies use a variety of means to lower their federal income taxes, including tax credits for activities like research and oil drilling and accelerated depreciation write-offs.

While company-specific data on tax avoidance outside the United States does not exist, the trend towards lower corporate tax burdens is also evident internationally. According to the OECD, over the past two decades the share of total taxes made up by corporate income tax in the industrialized OECD countries has remained about 8 percent, despite strong increases in corporate profits. The organization attributes this decline in tax rates to the use of “tax havens” and intense competition among industrialized countries as they attempt to lure investment by offering lower taxes.9

As citizen movements the world over launch activities to counter aspects of economic globalization, the growing power of private corporations is becoming a central issue. The main beneficiaries of the market-opening policies of the major multilateral institutions over the past decade and a half are these large corporations, especially the top 200.

Peter Montague is the director of the Environmental Research Foundation and writes a weekly column known as "Rachel's Environment & Health Weekly."

As everyone now knows, the World Trade Organization's (WTO) meeting in Seattle was interrupted by protestors who were mostly peaceful. Over-reaction by local police led to the "Battle of Seattle." As an acknowledgment of this over-reaction, the Seattle chief of police has now resigned.

The main goal of the WTO's Seattle meeting was to begin a new round of international talks, the so-called "millennium round," which was expected to last three years. That goal was thwarted. Emboldened partly by protestors in Seattle's streets, Third World envoys to the WTO rejected a new round of talks. So the millennium round will not begin, at least not right away. Delaying the new talks was a sweet victory for the protesters and an important assertion of independence by Third World countries.

But we should not fool ourselves. The WTO is still entirely intact. It was not changed in any fundamental way by the protests. More importantly, the goals and the power of those who created the WTO remain untouched.

The people who created the WTO have one main goal: an integrated global economy unencumbered by government restrictions. This economic goal has two parts: globalized and unencumbered.

The globalization of the world's economies is proceeding steadily and cannot be stopped. The world's economies are being laced (or yoked) together by communication technologies (radio, TV, telephones, fiber optic cables, satellites and computers, among others). A flood of invention is inexorably weaving (or chaining) the strands of the world's economies into a single huge network of relationships.

No one can stop globalization from happening. However, governments could take many steps to reduce the harmful consequences for human societies. Unfortunately the people who created the WTO are ideologically opposed to any government involvement. They have their own utopian vision, a globalized economy unencumbered by government restrictions -- global free trade. Economists have a name for such an economy: LAISSEZ FAIRE. In a LAISSEZ FAIRE economy, the owners of capital are free to make all the important decisions -- they decide what to make, how to make it, where to get the raw materials, whom to employ (under what conditions and at what wages), and where to sell their products or services. In a LAISSEZ FAIRE economy, the role of government is limited to enforcing property rights, assuring a stable currency, providing a system of justice for resolving disputes, and maintaining a military apparatus to enforce civil and international peace.

Government has one other key role in a LAISSEZ FAIRE economy: to maintain such an economy, government must relentlessly thwart democratic tendencies among the governed. (For example, When President Reagan destroyed the Air Traffic Controllers union in 1981, he was using the powers of government to bolster a wannabe LAISSEZ FAIRE regime.)

If governments don't relentlessly oppose democratic tendencies, people will soon direct their government to (for example) limit the length of the workday, guarantee their right to form a trade union, insist that everyone deserves health care, and set minimum wages, all of which doom laissez faire. This is why laissez faire economies are incompatible with political democracy: laissez faire economies do not arise spontaneously and can only be sustained if the state aggressively suppresses democratic tendencies.

In sum, the WTO isn't mainly about trade. It is mainly about establishing the kind of economy, worldwide, in which the owning class gets to make all important decisions without interference from governments or from anyone else. Today the key institution of the owning class is the corporation, so the aim of the WTO is to ensure that corporations are empowered to make all the important decisions without interference.

To put it another way, the main work of the WTO isn't promoting world trade -- it is getting rid of rules made by governments, rules that restrict the freedom of corporations to make decisions affecting production and labor. Government rules are described as "restrictions on trade" but this "trade" language is a euphemism for "restrictions on corporate freedom." To summarize, then, the WTO isn't chiefly concerned with trade -- it is chiefly concerned with "Who gets to decide?" When governments are weakened, corporations are strengthened. The WTO was set up to weaken governments.

There are two other realities that we need to remember, if we want to make sense out of the WTO: (1) The developed countries have exhausted many of their reserves of raw materials, and (2) they have built too much productive capacity, so there aren't enough customers for all the goods they can produce. Thus, to maintain reasonably profitable operations, corporations need to mine the Third World's raw materials, and they need to sell goods and services to people in the Third World.

Take the U.S. as an example. The U.S. has depleted many of its domestic reserves of raw materials, such as petroleum, chromium, cobalt, manganese, nickel, and tin, among others. Therefore, it is important for U.S. corporations to be free to extract such materials from Third World countries and ship them elsewhere. Furthermore, the U.S. produces far more food each year than Americans can eat. So agribusiness corporations need to "open new markets" in the rest of the world to sell our excess production, competing head-to-head with local farmers abroad. When foreign governments are reluctant to import hormone-treated meat, or genetically-modified corn oil from the U.S., our agribusiness corporations insist that those governments are restricting their corporate freedoms and they turn to the WTO to whittle those governments down to size.

And of course the U.S. is not alone in this need: Japan, Canada, and the European Union (EU) have exhausted many of their own raw materials and/or have built excess capacity, so they too need access to the mineral reserves and markets of the Third World.

The WTO has established numerous ground rules that facilitate extraction and marketing in Third World countries. Under WTO rules,

(1) governments are not allowed to pass laws that favor local firms and discriminate against foreign-owned corporations;

(2) governments are not allowed to prevent foreign nationals from buying a controlling interest in local companies;

(3) governments are not allowed to subsidize domestic industries. For example, Canada is considering asking the WTO to outlaw the U.S. food stamp program because Canada views the U.S. program as a government subsidy to U.S. farmers. (Food stamps create a market for food among poor people that would not exist in a true LAISSEZ FAIRE economy).[6,pg.164] For its part, the U.S. is demanding that the WTO outlaw subsidies to farmers in many European countries. These various claims before the WTO may seem contradictory, but they all serve to weaken governments, thus enhancing the freedom of corporations. That is the key idea that elucidates the purpose and behavior of the WTO.

(4) The WTO's tariff schedules provide for rising tariff rates as value is added to a product. A tariff is a tax on imported goods. The lowest tariff rate is set for a raw material. The tariff rate increases for processed and manufactured goods.Thus, furniture manufactured from local timber in a Third World country faces a relatively high tariff when it is imported into a developed country. On the other hand, raw logs exported from a developing country face a relatively low tariff when they cross the border into a developed country. Thus the WTO's tariff schedule promotes policies of "rip and ship" in Third World countries, and discourages those countries from manufacturing. These WTO tariff schedules can be viewed as a way of "recolonizing" nations that had won political freedom in recent decades.

(5) Governments are not allowed to pass laws that would provide favorable terms of trade to particular trading partners. For example, through the Lome Convention the European Union (EU) created favorable terms of trade for some of its former colonies in Africa, the Caribbean, and the Pacific. Now this arrangement has been successfully overturned by the WTO.

The EU agreed to buy 8 percent of all its bananas from Caribbean countries. These banana sales are crucial to the economies of some of the Caribbean nations involved. For example, in the Windward Island nations of St. Lucia, Dominica, St. Vincent and the Grenadines, 94 percent of all banana exports go to the EU and bananas account for 63 percent to 91 percent of all export earnings. Caribbean bananas are grown on small family farms set on hilly terrain, so they are more costly than bananas grown by low-wage labor on huge Central American plantations.

The Chiquita company -- a U.S. firm which produces no bananas in the U.S. but employs thousands of people at rock-bottom wages on plantations in Colombia, Costa Rica, Honduras and Panama --supplies 50 percent of the EU's banana imports each year. But Chiquita wanted even more market share, so the corporation donated $500,000 to the U.S. Democratic Party. A few days later the Clinton/Gore administration filed a complaint with the WTO on behalf of Chiquita.

St. Lucia and St. Vincent did not have local experts they could send to Geneva, Switzerland to argue their case before the WTO, so they hired outside counsel to represent them. The WTO ruled that only official government representatives -- not hired experts -- could appear before WTO tribunals. So St. Lucia and St. Vincent were unrepresented in the WTO proceedings.

To no one's surprise, the WTO ruled in favor of the U.S. The EU initially refused to comply with the WTO ruling, insisting it had a right and a moral duty to aid its former colonies by providing a market for their bananas.

Chiquita then donated $350,000 to the Republican Party and the Republican-dominated Congress prepared legislation to impose tariffs on goods imported from the EU as punishment for refusing to comply with the WTO's ruling. Not to be outdone by the Republicans in currying favor with corporations, the Clinton/-Gore administration then pressured the EU into revoking its Lome Convention preferences for Caribbean bananas.

The Caribbean nations that produce bananas are democratic countries with long-established traditions of human and worker rights. They have been good friends to the United States. Now their economies have been devastated and destabilized by "globalized free trade," basically sacrificed on the alter of LAISSEZ FAIRE economics and corporate freedoms.

By Jim Hightower

http://www.purefood.org/corp/cynicism.cfm 6-8-1
http://www.rense.com/general11/bio.htm

"No matter how cynical you get," says Lily Tomlin, "it's almost
impossible to keep up."

The current Champion of Cynicism is the infamous biotechnology
industry. It's game is to fool with the very DNA of the world's food
supply by putting animal genes into tomatoes, pesticides into corn,
etc.

They've done this without testing for its longterm impacts on our
health and environment, then rushed their products to market without
informing the public or even labeling these Frankenfoods.

So, naturally, consumers worldwide are in outraged rebellion, the
stocks of these companies are collapsing, and such corporate
manipulators as Monsanto are in disgrace. How does the biotech
industry plan to salvage it's image? By launching a multimillion-
dollar PR campaign that exploits the illnesses of impoverished, Third
World children.

Their PR weapon is a new product named "Golden Rice," which has been
doctored in the labs of European biotech giant Syngenta to produce
extra beta-carotene, which the body can convert into vitamin A.
Noting that about 500,000 children go blind each year from Vitamin A
deficiency, suddenly the biotech firms saw a killer opportunity to
hush their critics, seize the moral high ground...and sell their
tampered foodstuffs as "medicine." So now we get tv ads with soft-
focused shots of poor children and a heart-tugging message that says
we must support bio-engineered foods or Third World kids will go
blind.

But, wait - scientists are now pointing out that Golden Rice's
humanitarian pitch is a cynical corporate ruse. It turns out that a
four year old would have to eat at least 27 BOWLS of this rice every
day to get their minimum daily allowance of Vitamin A! Far better,
cheaper, and less dangerous, say the scientists, is simply to provide
Vitamin A supplements to these children.

This is Jim Hightower saying...Golden Rice is only golden for biotech
profiteers..not for the poor children its purveyors are exploiting.

Organic Consumers Association http://www.purefood.org

Corporate cash & campus labs The credibility of university research is on the line as industry steps up its funding

Staff writer of The Christian Science Monitor It was to be a landmark university-corporate research partnership: Novartis, a Swiss-based pharmaceutical conglomerate, would pay $25 million over five years to the University of California at Berkeley. But what the company was to get in return shocked faculty, students, and outsiders alike. In exchange for funding, Novartis would be allowed to sift through the research of the department of plant and microbial biology at Berkeley's College of Natural Resources - licensing up to about one-third of the researchers' output. Students declared it a sellout. Legislators scheduled hearings. Professors protested the secrecy of the negotiations. One professor decried the deal for creating an "apartheid" of have and have-not faculty. Outside observers were no less impassioned. "What if the [Novartis-Berkeley] experiment were to succeed?" wrote Robert Rosenzweig, former president of the Association of American Universities, in response to the deal. "What would be the next part of the university to be sold to a corporation?" Portending the turmoil to come, company and university officials announcing the November 1998 deal at a press conference had to duck to avoid being hit by a pie. Despite protests, the deal went through, and administrators report that it is working. Yet misgivings persist. "This is a public university that is supposed to work for all sectors of society," says Miguel Altieri, associate professor at Berkeley. "Obviously the sectors we're going to be working for in the future are the ones that bring in the money." Such comments only hint at the vortexes created by university-corporate partnerships. Critics cite fears over limits on academic freedom, conflicts of interest among researchers, and bias creeping into scientific research. Over the long run, observers also worry that research priorities might shift away from breaking scientific ground to more short-term, product-related efforts. And there is the possibility, too, that the public will lose confidence in higher-education research. Nelson Kiang, professor emeritus at the Massachusetts Institute of Technology, has watched the changes during his long career. What's different today is that "the sheer number of corporations involved in sponsoring research has exploded," he says. "The ethos of the university is the free exchange of ideas. Now we're running into two sets of ideas from two cultures. When they start to interact intimately, accommodations have to be made. At the moment, there's no agreed upon way to do that." Acknowledging a deep divide between corporate America and American universities, a two-year study issued last week by the Business-Higher Education Forum - a partnership between the American Council on Education and the National Alliance of Business - outlined problems and recommendations for smoothing the rocky road between the two worlds. "Some research collaborations have experienced serious, high-profile difficulties," stated Hank McKinell, chairman of the board of the New York-based pharmaceutical company Pfizer and co-chair of the report task force. "The report is intended to help clarify the issues." Bullies in the lab? One such issue is academic freedom. Corporate and academic priorities clash when scientists want to share research discoveries, but contracts often require secrecy for 30 to 90 days or longer while patents are weighed. Betty Dong at the University of California, San Francisco, discovered data that led her to question the effectiveness of a medication being used daily by millions of people. But when she went to report it, she was blocked for seven years by the company that paid for the study. David Kahn, another researcher at the same school, was sued last November for $10 million by the company that sponsored his study, after he published a report that the AIDS drug he was testing was ineffective. "They're like bullies in a sandbox who take away their toys when you don't agree with them," Dr. Kahn told The Chronicle of Higher Education. Few foresaw these clashes two decades ago. Such research partnerships had long been a staple of American higher education, going all the way back to the 1862 federal legislation that created the land-grant university. But university research started melding with the business world at a much faster pace with the 1980 passage of the Bayh-Dole Act. Bayh-Dole sped up the patenting process for university research, supercharging university-corporate partnerships with profits and competition. In the 1970s, just a few hundred patents resulted from university research each year. But in fiscal 1999, more than 120 US research universities filed a total of 7,612 patent applications, according to the Association of University Technology Managers. Licenses to industry generated $641 million in gross income for the universities - and about $40 billion in economic activity overall. "You used to have big corporations with labs that would do their own basic research," Mr. Kiang says. "But ... it's much more effective to turn the universities into R&D labs for them. By sprinkling money around ... they don't have to compete for the best brains in the academic world, they simply buy them at low cost." The federal government is still by far the dominant funding source for university research. In 1998, corporations were responsible for less than 8 percent of the funding. That may not sound like much, but it represents a seven-fold growth since 1970. According to the new report, the flood of patents has been a big boost to America's increasingly knowledge-based economy. Federal Reserve Chairman Alan Greenspan told governors last year: "The payoffs, in terms of the flow of expertise, new products, and startup companies ... have been impressive." Indeed, for every challenged program like the Novartis-Berkeley union, the Business-Higher Education Forum report documents other collaborations that are working well. At Washington University in St. Louis, for instance, a funding deal with Monsanto (now Pharmacia) has been harmoniously in place for two decades. Smaller companies have prospered, too. Ribozyme Pharmaceuticals gave the University of Colorado a five-year, $500,000 unrestricted research grant. In return, the university shared research that helped the company grow. Despite this robust productivity, some fear that a key product of universities - unbiased research - is at risk. In some fields, especially medical research, scientists complain that corporate cash appears to be undermining the credibility of research results. In 1996, Tufts researcher Sheldon Krimsky studied nearly 800 scientific papers published in prominent biology and medical journals. In 1 out of 3 cases, he found that a chief author of the paper had a financial interest in the company for which research was being done. In most cases, the connections were not disclosed to readers. Mildred Cho, a senior research scholar at the Center for Biomedical Ethics at Stanford University, took a different tack. Her 1996 study found that 98 percent of university studies of new drug therapies funded by the pharmaceutical industry reported that those new therapies were more effective than standard drugs. By comparison, just 79 percent of studies without industry financing found the new drugs to be more effective. Other researchers are disquieted, too. "There has been in some fields a substantial, industrial-commercial influence," says David Blumenthal, director of Massachusetts General Hospital's Institute for Health Policy and a professor at Harvard Medical School. In a 1998 study, he and colleagues found that 43 percent of scientists - many of them at university medical centers or schools - had received at least one research-related gift. About two-thirds said the gift had been important to their research. Such conflicts are hardly confined to the medical field. In his 1997 book, "The Heat Is On," Ross Gelbspan cites professors for not disclosing that coal and oil companies had funded their studies, which were used to undercut arguments in favor of reducing greenhouse gases. Meanwhile, back at Berkeley, the Novartis funding is winning converts. Despite what one university official described as "lingering resentment," only two of 31 faculty members in the Berkeley department have declined to seek grants ranging from $60,000 to $200,000 to fund their research, according to the just-issued report. A need for more disclosure Will the scientists who do accept corporate funding disclose that information when they publish their research? Pressure has been building at the federal level for tough new disclosure requirements since the 1999 death of Jesse Gelsinger, a teenage volunteer in the clinical trial of a gene-therapy drug at the University of Pennsylvania. In that case, a researcher had a financial interest in the drug's success. (The death this month of a volunteer in a Johns Hopkins University asthma study is being investigated, but no information has surfaced suggesting any conflict of interest in that federally funded study). At a meeting last fall, scientists debated whether and how much to disclose about such interests to potential patient volunteers, but could not agree. Researchers receiving federal grants must disclose any income greater than $10,000 from a corporation. But that rule does not apply when companies do all the funding. And even when scientists do report, it is usually only to the university itself, which often does not disclose such financial ties. One ray of hope: The New England Journal of Medicine recently admitted that it had failed to disclose 19 authors' conflicts of interest - and toughened its disclosure policy. More disclosure at all levels is needed, Dr. Blumenthal argues. The long-term risk, he says, is nothing less than a loss of public confidence that could permanently undermine support for universities. "There is a need for guidelines and protections to assure the public that commercial motives are not excessive," he says. "It won't be hard to do that if we could get the universities to take the long view.... But in the heat of battle, it's hard to do."

Every so often one hears a conservative politician attack someone who has the nerve to point out that the deck is stacked in favor of the rich. They accuse them of fomenting "Class Warfare." Yes, there is a class war going on now and the same thing has been done before by those with power. Let's look at the 1970's and 1980's as examples of "Class Warfare." In the early 1970's, the ruling class knew it had a problem. One of the most terrible things that the rich faced was the fact that wages and benefits were eating into profits. Workers were living better while their own profits declined. Plus, people began to challenge the polluting of the air, water and land by wealthy corporations. This deeply distressed the elite's and they decided something had to be done about it. The first salvo fired at the quality of life of regular people came during the administration of Jimmy Carter and was accelerated by the government under Ronald Reagan. When Paul Volcker was appointed by the Carter Administration to the Chairmen of the Federal Reserve Board, he told the New York Times, "The standard of living for the average American has to decline." And decline it did.

The recession of 1981 did what it was supposed to do. From 1979-1981 real wages for Americans fell by 8% and workers were forced to make wage concessions to retain their jobs. Small businesses were hit especially hard, however, they were viewed as collateral damage by the powers that be. In addition to all this, the Reagan Administration began to look for a way to attack the power of trade unions. This would be necessary to regain control and Reagan had found his target. It would be the striking air traffic control workers (PATCO). During the election, Reagan had pledged his support to PATCO, but upon entering office he broke that pledge, which was nothing new for Reagan, and fired the striking workers. It must be remembered, and is often forgot, that the workers were arguing about safety issues. This sent a signal to corporations that the administration was prepared to back them. The administration backed them by hiring temp workers at low wages and legalizing homework, which led to a 500% increase in the number of sweatshops employing underage workers. In addition to all of this (not to mention it was the middle of a recession) Reagan abolished the Comprehensive Employment and Training Act, which thereby threw 400,000 out of work. But the amiable Reagan was not through. His administration slashed the budget for child nutrition by 34% and school milk programs by 78%.

What was happening to the wealthy class during this time of hardship? They were doing great. The Reagan tax cuts gave them a 25% tax saving while the middle class and the poor saw their overall taxes increase by 20%. That is "Class War." Real wages for Americans declined while the national debt grew, thanks to the military increase, to astronomical heights. Now the same people are back calling for lower taxes and in- creased military spending so they can line the pockets of the corporations who so generously gave them money during the election. The oil companies, for their part, gouge the public as they did in the 1970's and 80's. Funny, didn't they do this before and why do you never hear the news media call this "Class Warfare." I think we know the reason.

Forgotten History - Tuesday, June 19, 2001 "Little known facts and overlooked history"

Why Is Killing for Capital Not a Capital Crime?
by Jeff Milchen and Jonathan Power

Robert Sterling
Editor, The Konformist
http://www.konformist.com

Published on Tuesday, June 19, 2001
Why Is Killing for Capital Not a Capital Crime?
by Jeff Milchen and Jonathan Power

By knowingly sacrificing human lives for corporate profit, executives
at the Ford and Firestone Corporations recently surpassed Timothy
McVeigh's body count for American citizens lives taken over the past
five years. Unlike McVeigh, these executives have received no
punishment for their actions. Indeed, there has not been a single
indictment of either corporation, nor of any culpable corporate
officers to date.

The National Highway Traffic Safety Administration (NHTSA) has
recorded 185 deaths (McVeigh killed 168), and more than 700 injuries,
amid thousands of complaints involving rollover-prone Ford Explorers
that crashed following sudden tread separation on factory-installed
Firestone tires. The deadly duo also was implicated in at least 48
deaths in Venezuela and the Middle East.

Last August, the tire manufacturer Bridgestone/Firestone Inc.
announced a voluntary recall of 6.5 million tires, most of them
original equipment on Explorers. By that time, Firestone had been
replacing the defective tires in 16 other countries for up to a year,
all the while concealing the danger from U.S. citizens.

Ford and Firestone officials received complaints as early as 1997 and
knew of at least 35 deaths and 130 injuries before the federal
government launched a probe early last year. How do we know? They
were defending lawsuits from scores of survivors and the families of
dead victims.

It is clear that executives at Ford and Firestone willfully and
knowingly kept unsafe products on the market that they knew would
kill many more innocent people—ultimately more than McVeigh's bomb.

The two cases provide graphic illustration of a dual standard for
accountability and justice in America. Nearly every candidate for
public office talks tough on street crime, but then ignores the fact
that corporate crime costs our society more than street crime in both
dollars and lives taken. If you loan your friend a car you know to be
unsafe while withholding that information, you could be convicted of
involuntary manslaughter in the event of a fatal accident. Yet we
permit corporate officers to commit the same offense with impunity if
they do it on the job.

Corporate executives regularly deploy cost-benefit analyses that
weigh the potential cost of civil lawsuits or fines for the rare
criminal convictions (such fines are tax-deductible as a cost of
doing business) against the cost of recalls or other safety measures.
Their job simply is to decide which option is more profitable, as
demonstrated by a 1973 memo that Ford executives wrote about the Ford
Pinto gas tank problem.

Then-president Lee Iacocca and other Ford executives estimated a
human life's value at $200,000--a number created by the NHTSA at the
auto industry's urging--and calculated the company's cost from severe
burn injuries at $67,000 per incident.

Next they calculated the cost of saving an estimated 180 people from
being burned to death (actually, more than 500 were killed) and
preventing scores of serious injuries by recalling the Pintos and
fixing the fuel tank. Ford executives chose to sacrifice 180 lives,
maim hundreds more and shatter families' lives rather than spend $11
per auto (Ford's estimate) to make them far safer.

So how can we prevent corporate crimes from killing more innocent
people? First, we must change laws that exempt corporate employees
from liability for crimes committed on company time. Officials like
Ford CEO Jacques Nasser, Masatoshi Ono (who since resigned as
Firestone Inc.'s CEO) and their respective boards must be held
accountable for fatalities, injuries, and illnesses caused by their
actions.

But we'd deceive ourselves to think that serious corporate crime
could be blamed on a few bad actors. Rather, we must change radically
a system that permits cost/benefit analyses to take precedence over
human health and life.

To reclaim democratic authority over corporations, we can learn much
from our country's founders. They protected citizens from recidivist
corporations by regularly exercising a corporate "death penalty,"
i.e. revoking the charter of a corporation if its products or actions
harmed society, and refused to let individuals hide from personal
accountability behind the corporate form.

By their nature, terrorist acts like the Oklahoma City bombing often
are unpredictable and difficult to prevent, but the criminal actions
in corporate boardrooms that kill many more Americans are neither. A
smart cost-benefit analysis would direct us to focus more attention
on these larger, preventable threats.

Let's better protect ourselves by reinstating appropriate punishments
for criminal corporations and those who run them.

Jeff Milchen is the founder of ReclaimDemocracy.org, a non-profit
organization devoted to revitalizing grassroots democracy and
revoking illegitimate power of corporations. Jonathan Power is a
volunteer with the organization.

Exxon accused of rights abuses

Esso parent group cited in US case over Indonesian violations

Audrey Gillan in Washington
The Guardian
Friday June 22, 2001
http://www.guardian.co.uk/Archive/Article/0,4273,4208451,00.html

       ExxonMobil, the world's largest oil company, has been accused
of complicity in human rights abuses committed by security forces in
Indonesia, it emerged yesterday.

       A Washington-based organisation, the International Labour
Rights Fund - which represents workers abroad - lodged a complaint
against the company in a court in Washington DC on Wednesday.

       The lawsuit - brought on behalf of 11 villagers - alleges that
ExxonMobil was complicit in murders, rape, torture and kidnapping
during the recent campaign by the Indonesian military to quash
insurgency by separatists in the impoverished Aceh region of western
Indonesia.

       The company had shut down its Arun natural gas operation in
Aceh in March this year amid fears for the lives of its employees,
but the lawsuit contends that it had employed security from among the
same men who were perpetrating civil rights abuses.

       It alleges that ExxonMobil provided barracks where the
military tortured detainees, and lent machinery such as excavators -
which were then used to dig mass graves.

       An ExxonMobil spokesman said that the company had not been
served with the lawsuit and did not have confirmation that it had
been filed.

       He denied any complicity in human rights abuses.

       "We have visited this organisation's website where this
lawsuit is posted," he said.

       "Based on what we see on the website, we would say that
ExxonMobil condemns the violation of human rights in any form. As
such, our company rejects and categorically denies any suggestion or
implication that it or its affiliate companies were in any way
involved with alleged human rights abuses by security forces in Aceh."

       The case filings claim that the first plaintiff, John Doe I,
anonymous because of fears for his life, was riding his bicycle cart
to the local market to sell his vegetables when he "was accosted by
soldiers who were assigned to ExxonMobil's TNI Unit 113. The solders
shot him in the wrist, threw a hand grenade at him and then left him
for dead".

       Another man, John Doe II, is alleged to have been stopped by
soldiers working for ExxonMobil while riding his motorbike. The
filings say: "The soldiers put his motorbike in their truck and then
beat him severely on his head and body.

       "The soldiers then tied his hands behind his back, put a
blindfold on him, and threw him in their truck and took him to what
he later learned was Rancong Camp.

       "The soldiers detained and tortured him there for a period of
three months, all the while keeping him blindfolded.

       ExxonMobil - which trades in Britain as Esso - has been the
focus of criticism for its expensive public relations programme
challenging the Kyoto protocol to reduce potentially harmful
emissions, and even the existence of global warming itself.

       The group gave $1.2m to the election coffers of the Republican
party, and now has the ear of President George Bush and the rest of
his administration, influenced to a considerable degree by the oil
lobby.

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June 16, 2001—Before Jim Jeffords shifted the political landscape, I
had heard some reports that Congress was considering legislation that
would help President Gump carry out another part of his campaign
promise to screw the rest of the country as completely and thoroughly
as he did Texas.

It seems we have a "litigious" and "sue happy" country and people
have just got to learn that the courts are not set up to be another
form of Lotto. People just gotta learn how to bear the slings and
arrows of outrageous fortune with a smile on their lips and a song in
their hearts, and not run crying to court every time they fall down
and get a little "boo-boo." Every little thing that goes wrong
doesn't mean it's payday.

I mean, life just ain't fair. If you don't believe me, just think
back to when Newt was the top dog. That was practically their slogan.
Life isn't fair, it's a rough world, take responsibility for your
actions, it's a jungle out there, yadda, yadda, yadda. You're on your
own, bub. Don't let the door hit you on the ass on the way out, cause
I don't want to hear about it in court.

Unless you're a corporation, and then it's everybody else, drop 'em,
bend over and grab your ankles time.

And every now and then there is a movement to make that idea the law
of the land. One of the best ways is to pass "tort reform." It's
billed as a way to rescue the overburdened courts from all the
trigger-happy knee jerks out there that run to court every time
someone else belches and doesn't say "excuse me."

It's gotten so corporations have to put so much time, energy and
money into defending themselves in court, that it takes them away
from their natural humanitarian instincts. People are going so far as
to slam on the brakes of their Ford Pintos and causing someone to
rear-end them. And then they have the nerve to run to court trying to
get money because they got burned a little! And then those outrageous
damages make these companies have to charge everybody else more.
Because there are waaaay too many troublemakers out there
rigging "accidents" and looking to the courts for a free ride.

Or maybe not.

I'm going to give you some facts you may not have heard about the
case of one of the most famous freeloaders ever to cash in for no
reason whatsoever. I want to talk about this one because in all the
years I've heard people comment on this, I've only heard one person
who actually knew what she was talking about in regard to the facts.
Rush Limbaugh did a good job of firing people up about her without
actually telling the truth about this woman.

Her name is Stella Liebeck. Remember her? The one that faked being
burned by coffee she got from McDonald's and really cleaned up? That
Stella Liebeck. You know all about her because it was all over the
news about seven years ago.

She was 79 years old at the time. She was in the passenger seat of
her grandson's car when they pulled into the drive-through of a
McDonald's. He pulled away from the window and stopped the car so
that she could pull the lid off her coffee to add cream and sugar.
The entire contents of the cup spilled in her lap and burned her to
the extent that she was hospitalized for eight days with third-degree
burns over six percent of her body. The affected area included the
insides of her thighs, buttocks, groin, and genital areas. She had to
go through that really fun thing where they scrape the skin off and
had to have skin grafts. She was clearly faking it right?

Her hospital bills were in the neighborhood of $20,000. But
everything was fine, because it was because of McDonald's product
that she was going through all this. They would be more than happy to
step up and do the right thing and pay her medical costs. Right? No
problem for the company that gave a home to Ronald McDonald and the
Hamburglar, and gives Ann Coulter all the free french fries she can
cram down her deep, deep throat, right?

No. They told her that if she wanted her hospital bills paid, she
would have to take them to court. And she did.

Among the things the jury heard:

McDonald's had buried claims over the previous 10 years by people who
had been burned by their coffee. Many were also victims of severe
scaldings, and many were children who had been burned when containers
of coffee fell off of counters.

McDonald's policy was to keep their coffee at between 180 and 190
degrees, claiming that the high heat made the coffee taste better.

McDonald's actively enforced that policy even though they had never
studied the effects of those temperatures on skin.

McDonald's claimed that their microscopic warning, something to the
effect of "Contents may be hot," on their styrofoam cups was
sufficient warning. The cups were insulated, designed to keep the
coffee hot without transmitting heat to the holder's hand, which
would let them feel the extremely high temperature and hopefully
realize that they really needed to be careful.

McDonald's studies indicated that a certain number of people would be
injured badly and a certain number of them would sue. McDonald's
determined that it would be in the range of acceptability to let
those people be scalded and stonewall any litigation (cost-benefit
analysis).

McDonald's had no intention of reducing the temperature of their
coffee. Stella Liebeck's expert witness testified that at the
temperature of McDonald's coffee, serious injury occurs to tissue in
two to seven seconds.
The jury was appalled at McDonald's behavior and awarded Stella
$200,000 in compensatory damages. They reduced the amount to $160,000
because they found her to be 20 percent at fault. In punitive damages
they awarded the equivalent of about two days worth of McDonald's
coffee sales or $2.7 million. The award was reduced on appeal, but
still was in the half million dollar range.

But you knew all of that from top-notch media coverage right?

One thing you probably won't hear from the media is that these kinds
of awards are actually not common. And, like Stella's, they usually
are reduced or overturned on appeal. Juries tend to have a habit of
looking at things from the corporate view, for some reason. Even when
they find for the injured party, the attitude seems to be that while
the injury is real, they are not going to take too big a bite out of
the corporation's profits. The outcome of Stella's case was
relatively unusual.

"Tort reform" would limit the amount of damages a plaintiff can be
awarded, usually in the range of $250,000. This is a dangerous idea,
folks. In the case of a surviving relative suing for a wrongful death
due to a corporation's shoddy product or wrongdoing, money will not
bring that person back. But financial compensation is the best the
legal system can do, and certain parties want to curtail that in the
worst way.

Also, the prospect of massive financial loss to a corporation is
often the only hammer there is to get it to change its behavior. In
the McDonald's case, for instance, it was found that the McDonald's
in Albuquerque where the incident happened had already lowered the
temperature of its coffee the day after the judgment. That loss in
court was the only thing that forced them to start to care about the
health and welfare of their customers. And that was after losing only
about the equivalent of two day's sales of one of many products.

Our legal system is set up so that judges assess the legal facts in a
case (as in an appellate court) and juries judge the facts of a case
and make their decision based on that, with the judge issuing
instructions on how to interpret the facts in relation to the law.
The jury in the coffee case made their decision based on viewing the
photos of Stella's injuries and observing the nonchalant and callous
behavior of McDonald's representative in court. They felt that a wake
up call to McDonald's in the form of financial loss was very much
called for. I am sure that seeing photos of Stella's injuries went a
long way toward helping them make up their minds about damages. "Tort
reform" would take away their discretion to fix punitive damages.

McDonald's is nowhere close to alone in making decisions based on
cost-benefit analysis. (Cost-benefit means that we pay the cost and
they get the benefit). The auto makers use it; the tobacco industry
uses it; the pharmaceutical companies, the federal government and an
endless list of others. In the case of the auto makers, it works
something like this: a design defect becomes known to the execs. They
estimate the number of lives that could potentially be lost, and
calculate how much money it would take to fix the problem in each
vehicle. Then a set number is plugged in to represent the cost in
lawsuits and damages. If the cost of fixing the problem is less than
the threat of losses through the legal system, the problem is fixed.
If it would cost more to fix the problem, the rest of us can go
straight to Hell; the product is going to be put on the market, with
full knowledge that there are problems.

Juries are the wild card in the equation. Sometimes they can force a
company to do the right thing by making it too costly to keep doing
the wrong thing. Tort reform would make cost-benefit analysis
estimates a sure thing for corporations. It could be built into a
company's bottom line with absolute confidence because they would
know for sure how much their wrongdoing would cost them, since tort
reform would set caps on the damages they would have to pay.

Real tort reform would affirm citizen's right to sue. Even without
the type of reform being pushed, it already is extremely difficult
for an average citizen to sue a corporation. A favorite tactic is to
use the attorneys who are on retainer or on the payroll to file
stalling motions with the court in an effort to drag out the case,
making it too costly for most people to pursue to a just end. Many
times plaintiffs are forced to settle their case for a fraction of
the amount they were seeking, because they could not afford real
justice. And most, if not all, of that often goes to cover their own
legal fees.

Another tactic that real reform would go a long way to curtailing is
sealed judgments. Many times when a company does lose a court case or
settles it, one key term of the settlement is that the terms remain
secret. This may not sound so bad on the surface, but the cost is
huge. If a judgment or settlement is secret, it becomes difficult if
not impossible for other injured parties to use that case as a
precedent in their own case. Or to even know that the same company
has been sued for the same thing before and lost. That makes it very,
very difficult to use documents or evidence in subsequent lawsuits if
everything was allowed to be sealed. And, news of a settlement could
encourage others to bring their own claims, founded or not.

Companies use the threat of frivolous lawsuits against them as
justification for backing the skewed version of tort reform. They
claim that the cost of litigation and paying huge judgments raises
the cost of their products and services for everyone else. The
problem is, once again, they don't often have to pay these amounts.
They almost routinely are lowered substantially on appeal. But if the
lawsuits are frivolous, where do the judgments come from to begin
with? And one more thing they don't want you to know: most lawsuits
against corporations are not brought by private citizens, but by
other corporations. And a large number of the ones they want to
retain the right to bring are frivolous, like the kind they claim you
make.

Click on this link to find out how some of the loudest voices calling
for "tort reform" really feel about it when they or someone close to
them has been damaged: http://www.tompaine.com/features/2001/05/08/.

And please make sure you let your representatives know what you think
if and when the idea comes up again for consideration on a national
level.

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Konformist Newswire, please visit:

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http://www.tompaine.com

Editor's Note: This article originally appeared in Sierra, the
national magazine of the Sierra Club.

When research scientist Arpad Pusztai appeared on British television
in August 1998 to talk about his studies of genetically engineered
potatoes, he was suspended and later fired from his job at the Rowett
Research Institute in Scotland. After a distinguished 36-year career
there, his research was terminated, his data seized, and a contract
clause was invoked that put his pension in jeopardy. At that point,
the contract became a gag order forbidding him to discuss his work or
defend himself in the ensuing six months -- during which his
scientific reputation was trashed by a fierce cadre of pro-biotech
scientists in Britain and around the globe.

What had Pusztai done? With the prior approval of his boss, this
world authority on a class of plant compounds called lectins had made
the case for food safety testing for all genetically engineered
crops. At the time, Pusztai's team was conducting the only
independent scientific research in the world designed to test the
safety of genetically engineered foods. Originally an enthusiastic
supporter of genetic engineering, Pusztai had not expected to find
any negative results. So Pusztai was both surprised and alarmed to
find that rats fed potatoes genetically engineered with a specific
lectin developed disturbing changes in the size and weight of some of
their vital organs. He also found evidence of weakened immune
systems. A control group of rats fed ordinary potatoes and another
fed spuds with the lectin added but not genetically spliced in showed
no such results.

When the interviewer asked if the lack of safety testing for
genetically engineered foods concerned Pusztai, he said it did. When
asked if he would eat his own genetically engineered potatoes,
Pusztai said he would not, and that he didn't think it was fair to
use people as guinea pigs for an untested new technology.

Pusztai's remarks helped galvanize a growing consumer revolt in
Europe that has cost the biotech industry dearly. Opposition to
genetically engineered foods is now strong there and in many other
parts of the world as well. In response, a well-funded and -organized
biotech hype machine has emerged to promote biotech food as the
solution to world hunger and squelch concerns about its safety.
Groups like the U.S.-based Biotechnology Industry Organization (BIO),
the industry's main trade and lobbying group, are desperately trying
to prevent a similar consumer revolt from happening in the United
States. Through sponsorship of scientific research in the nation's
universities as well as high-powered lobbying on Capitol Hill, the
biotech promoters are doing their best to neutralize critics. Their
academic sponsorships channel research away from biotech's potential
negative effects, while their closed-door meetings in Washington
ensure that consumers don't get adequate food testing or labeling,
and organic farmers won't get the regulations they need to keep their
crops free of genetic contamination.

Few academics are willing to openly criticize biotechnology for fear
of retribution from the biotech boosters, say biotech skeptics like
John Ikerd, a retired agricultural economist from the University of
Missouri. In his view, the enormous public resources devoted to
biotechnology programs are corporate giveaways that come at the
expense of other kinds of research. His own work focused on
sustainable agriculture systems for smaller-scale family farms rather
than serving the big agribusiness models land-grant universities have
been promoting for more than 50 years. Ikerd's type of research is
viewed as a threat to corporate agriculture, he says, because it
enables farmers to reduce their reliance on the fertilizers,
pesticides, and other products that agribusiness companies sell.

Ikerd's candor was not well received at his university. "You become
labeled as not a team player, as not one of the trusted members of
the faculty," he says. "You are not on committees you used to be on,
you're not involved in the leadership of the department, and you
don't get write-ups in the university publications. You have to
decide before you speak out that you don't care about these
repercussions. It's like being a whistleblower."


Corporate funding of university research increased fivefold -- from
$850 million to $4.25 billion -- between 1985 and 1995.
A survey measuring attitudes toward biotechnology among Cornell
University agricultural and nutrition-science faculty and extension
staff (who advise farmers) found that nearly half have reservations
about the health, safety, and environmental impacts of genetically
engineered food crops and doubt they are the answer to global hunger.
Strong biotech supporters numbered 37 percent, while 8 percent
thought agricultural biotech might have useful applications and help
with global hunger but expressed concerns about food safety issues in
light of inadequate testing. Though their numbers were fewer, the
biotech promoters said they felt very comfortable publicly voicing
their views, while the concerned majority did not express that
sentiment.

Ann Clark, a pasture scientist at the University of Guelph in Canada,
is among those who have been chastised for expressing reservations. A
little over a year ago, she publicly criticized the lack of food
safety testing for transgenic crops. "Within two hours of the press
conference releasing the report, my dean had called me unethical,"
Clark said. "He said I was paid to be a pasture scientist and that I
should stick with that. It became quite ugly, because the national
media picked it up, and people whose views aren't parallel to mine
have used [the dean's remarks] extensively."

Clark has tenure, so she isn't worried about losing her job. But she
says her treatment has had a chilling effect on the debate about
biotechnology within Canadian universities. "There aren't many
academics who will say something if they know their administrators --
the people who sit in judgment on their performance -- are going to
publicly lambaste them," she said. That initial incident has made
Clark more determined than ever to raise questions about
biotechnology. Besides continuing to speak openly, she has a number
of papers on her website that discuss the growing dominance of
biotech in publicly funded universities and question the quality of
the science driving biotech's advancement.

Whether they work directly for biotech companies or receive corporate
grants for their work in universities or government research
institutes, scientists are generally forbidden to disclose their
results because of secrecy clauses in their contracts. Such clauses
are likely to proliferate as public support for research and
education is replaced by corporate money -- a shift that is already
well under way. Writing in the March 2000 issue of the Atlantic
Monthly, Eyal Press and Jennifer Washburn report that corporate
funding of university research increased fivefold -- from $850
million to $4.25 billion -- between 1985 and 1995. By 1997, corporate
contributions constituted 40 percent of the overall academic research
budget.

Sarah Bantz, a graduate student in agricultural economics at the
University of Missouri, is researching private money coming into her
university over a 30-year period. To get access to corporate
contracts, she had to promise not to reveal any specifics about them.
She says that of all the biotech research undertaken at the
University of Missouri, only one study is assessing health, safety,
or environmental impacts. "Virtually all the research is for product
development, one way or another," she says.

Traditionally, universities have been reservoirs of independent
thinking where tenured faculty had the academic freedom to analyze
and interpret science and its implications for society without
pressure from financially interested parties. But as funding ties
between private industry and universities grow, the pool of
independent research is shrinking. "It would be as if we had to draw
our scientists from corporations every time we wanted to convene a
body of experts to help us resolve a technical, scientific problem
with public-policy implications in society," says Tufts University
professor Sheldon Krimsky, an authority on the social implications of
science and technology. "Corporations will have much more direction
and control over what technologies get introduced and what are
considered to be safe and unsafe."

Organic farmer David Vetter is facing off with the biotech boosters,
too, but they act as if he doesn't exist. Vetter's 280-acre Nebraska
farm is a patchwork of sweet corn, popcorn, soybeans, barley, a
variety of grasses, legumes, and grazing paddocks for cattle.
Visitors, including Fred Kirschenmann, director of the Leopold Center
for Sustainable Agriculture at Iowa State University, come away
impressed by the care that goes into the operation. "It strikes you
when you step out on that farm," says Kirschenmann. "You can see it
in the fields. It's just good stewardship."


"As an organic grower, I can no longer guarantee that my crops are GE-
free."
Vetter may be a good caretaker, but he can't control the wind. Cross-
fertilization between corn plants occurs regularly in the Corn Belt
as winds carry pollen from field to field. Prior to the first large-
scale commercial plantings of genetically engineered crops in 1996,
wind pollination did not pose particular problems for organic
farmers. Their biggest challenge was trying to keep pesticides from
blowing onto their fields. But with the advent of transgenic crops --
and growing public disquiet, bolstered by some alarming preliminary
data on the health and environmental effects of such crops -- farmers
like Vetter face a real threat to their livelihood. Vetter has been
testing for transgenic contamination since 1998. Last year, he found
it.

Transgenic contamination is already widespread: 100 percent of the
organic corn samples sent in to be tested from the Midwest this year
showed some degree of genetic contamination, which could result in
organic corn growers losing their certification -- and probably their
markets.

So far, Vetter's customers say they will reluctantly accept a certain
amount of transgenic contamination, as long as it stays at very low
levels. But Vetter is worried. The loss of the organic market for his
corn would hit him hard -- its revenue equals the net profit his farm
generates. In the meantime, he's saddled with a hefty bill: It cost
him $1,500 to test one $4,000 load of corn for contamination. "It's
extremely frustrating when you have to pay those kinds of costs,
through no fault of your own, because somebody's introduced
technology they can't manage," Vetter says.

Years ago, Vetter began planting double rows of pines, with 60 feet
of untilled sod in between, creating a buffer zone to protect his
crops from pesticides drifting over from neighboring farms. The
buffer hasn't prevented transgenic pollution, though, and this time
he's adamant that responsibility for his genetically contaminated
crop should fall squarely on both those who have introduced
bioengineered corn into agriculture and the government agencies that
have allowed the widespread use of essentially unregulated
genetically engineered crops. "It's now clear that we won't be able
to have both genetically engineered and non-GE crops," Vetter
says. "As an organic grower, I can no longer guarantee that my crops
are GE-free. The only resolution I can see is a ban on biotech
crops."

Michael Phillips, executive director for food and agriculture at the
Biotechnology Industry Organization, is trying to make sure that
Vetter and farmers like him don't get their way. Phillips and his
staff see their task as creating a barrier between biotech critics
and Washington legislators, while also working to educate decision-
makers on what they claim to be biotech's benefits. So far, BIO has
been extremely successful in its mission. Consumer-oriented biotech
legislation -- mandatory labeling of genetically engineered
ingredients on food packages, which independent consumer polls
consistently indicate the public wants, and a pre-market safety
approval process for biotech foods -- has not gotten far on Capitol
Hill. Phillips has said that pre-market approval is "something the
industry would never support." He and his colleagues at BIO have also
worked to defeat the establishment of any tracking system that could
require transgenic seed purchases to be registered. Such registration
could establish liability for the kind of contamination that Vetter
experienced.

Prior to joining BIO in 1999, Phillips was director of the National
Academy of Sciences Board on Agriculture and Natural Resources. When
Phillips left the academy for BIO, he was in the middle of directing
a study to assess the health and environmental safety of crops
genetically engineered to contain pesticides. The revolving door took
him swiftly from a group that provides policy-makers with independent
scientific advice to one that lobbies on behalf of chemical-intensive
agriculture.


"Come on in BIO, here's everybody you need to lobby."
Because of the success of such advocacy, Congress has been reluctant
to regulate pesticides or promote organic farming and other
alternatives to chemical-intensive agriculture. But it does
generously fund biotechnology. The 2001 budget allocates $310 million
for biotech in agriculture and rural-development programs. Federal
support for organic farming is less than $5 million.

In agriculture and beyond, biotech has huge moneymaking potential.
Harvard Business School professor Ray A. Goldberg predicts the new
genetic technologies will revolutionize the global economy by turning
traditionally distinct industry sectors -- agriculture, health care,
energy, and computing -- into one gargantuan life-science industry
with "virtually unlimited commercial [patent and ownership]
possibilities." Asked to quantify the value of future biotech
markets, Goldberg says he had been thinking it could reach $16
trillion. But then he changed his mind, saying that there really
isn't any way to put a number on future markets for "virtually
everything."

In autumn 1999, Phillips's organization held "Biotechnology School,"
weekly or bi-weekly meetings between BIO staff and members of the
House Committee on Agriculture and their staffs. At these sessions,
BIO taught its congressional pupils what biotechnology is, how it's
being used in food and agriculture, and where the science is leading.
According to one congressional source who requested anonymity, BIO's
school exemplified "typical industry access" to Congress that citizen
groups simply don't have. "The agriculture committee is going to
control the biotech debate in Congress, and they basically
said, 'Come on in BIO, here's everybody you need to lobby. And you
can do it every week or as much as you want,'" the source said. "This
offer is not extended to environmental or food-safety groups -- no
way, no how."

BIO has also set up congressional biotechnology caucuses -- one in
the House and one in the Senate -- that work with the industry to
advance its issues. Adam Kovacevich, a spokesperson for Cal Dooley, D-
Calif., one of the four co-chairs of the House Biotech Caucus,
describes the 65-member group as a "forum for advocacy"
that "educates fellow members of Congress on the positive
implications of biotechnology." Two of the co-chairs, one Republican
and one Democrat, sit on the House Agriculture Committee, and the two
others, also one from each party, are on the House Commerce
Committee, which has jurisdiction over medical applications of
biotechnology.

Though the caucus is not promoting any particular bill, it alerts
caucus members to any legislative or regulatory activity that could
affect biotechnology. This activity clearly helps keep legislators in
the biotech camp. In the last session of Congress, a bill requiring
labels on genetically engineered foods was introduced by
Representative Dennis Kucinich, D-Ohio. Only one member of the
biotech caucus, Mark Udall, D-Colo., supported the ill-fated bill.
Udall's district includes the environmentally aware community of
Boulder as well as an area with a lot of biotech companies, says
Jennifer Barrett, a legislative assistant in his office. "He
cosponsored the labeling bill because he's concerned that consumers
should have all the information they need about the food they are
eating," she says.

The caucus also organizes forums where invited experts brief members
on various biotech issues. Richard Caplan, who works on biotech
issues for the U.S. Public Interest Research Group, contacted
Dooley's office, offering to present his perspective on biotech food
issues. His offer was ignored.

An aid to one of the leaders of the biotech caucus defended the
group's orientation. "We're primarily interested in getting out the
facts and the science," he said. "We're trying to make this a debate
that's based not so much on passion and assumptions but on the actual
science." But without the voices of researchers like Arpad Pusztai,
farmers like David Vetter, and public-interest advocates like Richard
Caplan, one wonders whether it's a debate at all or just nonstop
communiqués from the biotech hype machine.


Reprinted with permission from the July/August 2001 issue of Sierra.
This story is protected by copyright and cannot be reprinted without
the permission of the author.


© 1999-2001 The Florence Fund


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Who owns the US Government?

Below are "Contributions From Selected Industries to Federal Candidates
and Parties, 1990-2000" in the U.S.

$117,711,747 - Oil and Gas
$ 58,426,889 - Automotive
$ 51,070,027 - Electric Utilities
$ 35,242,032 - Chemical and Related Manufacturing
$ 24,756,971 - Forestry and Forestry Products
$ 17,945,784 - Mining
$ 6,950,843 - Total Environmental Contributions

Source: Center for Responsive Politics
as printed in Sierra Club Magazine, March/April 2001 issue, page 19.

1 Janus Capital Corporation 236,950,573 2 Fidelity Management & Research 135,392,735 3 Barclays Global Investors 128,446,055 4 Alliance Capital Management L.P. 123,150,941 5 Capital Research & Management 96,781,707 6 State Street Global Advisors 92,863,179 7 Vanguard Group, Inc. 66,991,643 8 Putnam Investment Management, Inc. 63,296,299 9 American Century Investment Mgmt. 47,560,849 10 Deutsche Asset Management Americas 46,323,724 11 College Retirement Equities Fund 42,921,934 12 Wellington Management Company, LLP 39,155,589 13 AIM Management Group, Inc. 37,136,961 14 J.P. Morgan Investment Mgmt. Inc. 35,518,975 15 American Express Financial Advisors 31,107,961 16 Goldman Sachs Asset Management 30,831,164 17 Mellon Bank (Private Asset Management) 29,147,699 18 Legg Mason Inc. 27,563,859 19 Jennison Associates LLC 25,541,606 20 Zurich Scudder Investments, Inc. 20,209,135 21 Merrill Lynch Investment Managers (NJ) 18,736,157 22 Northern Trust Global Investments 18,663,609 23 Montag & Caldwell, Inc. 18,532,791 24 T. Rowe Price Associates, Inc. 16,682,834 25 New York State Common Retirement System 16,322,479 These are the top defence contracters. Last updated 08/22/01 FY2000: 1. Lockheed Martin Corp. $15.1 billion 2. Boeing Co. $12.0 billion 3. Raytheon: $6.3 billion 4. General Dynamics: $4.2 billion 5. Northrop Grumman: $3.1 billion These are the top shareholders of lockheed. State Street Corporation 83,814,356 $3,071,796,147 United States Trust Company of New York 78,046,158 $2,860,391,691 Capital Research and Management Company 25,511,200 $934,985,480 FMR Corporation (Fidelity Management & Research Corp) 18,306,873 $670,946,895 Brandes Investment Partners L.P. 13,587,367 $497,977,001 Barclays Bank Plc 12,296,809 $450,678,050 Dodge & Cox Inc 12,141,350 $444,980,478 Franklin Resources, Inc 11,791,060 $432,142,349 Putnam Investment Management, Inc. 9,951,977 $364,739,957 Morgan Stanley Dean Witter & Company 8,107,857 $297,152,959 Check out the overlap. Fidelity. Barclays. Capital Research and Management. State Street. Putnam. It pays to have the propaganda machine running at full steam. Fatter than usual defence contracts. Share prices through the roof. Wake up to Uncle Scam's tricks.

Enron Met With Cheney, Aides Rep. Waxman Seeking Details Get Quote, By PETE YOST .c The Associated Press

WASHINGTON (Jan. 8) - Enron Corp. representatives met six times with Vice President Dick Cheney or his aides on the nation's energy policy, including a discussion in mid-October just before the company's sudden collapse.

In a letter to Congress, vice presidential counsel David Addington disclosed the number of meetings between the Bush White House and the former energy giant whose CEO, Ken Lay, has been among President Bush's top political supporters. The company entered into the largest bankruptcy in U.S. history on Dec. 2.

Rep. Henry Waxman, D-Calif., released the White House's Jan. 3 letter on Tuesday. He is seeking details of the meetings and information about any telephone calls or e-mails between the vice president's office and Enron.

``Mr. Addington's letter is a recognition that Congress and the public have a legitimate interesting in learning about contacts between Enron executives and the White House,'' Waxman said in a letter to Cheney.

For the past nine months, Cheney had refused to tell congressional Democrats Waxman and Rep. John Dingell of Michigan which power industry executives and lobbyists met with Cheney and his energy task force. The task force last May recommended expanded oil and gas drilling on public land and a rejuvenated nuclear power system.

``An employee of the vice president's staff ... met on Oct. 10, 2001, with Enron representatives and reports that they discussed energy policy matters and did not discuss information concerning the financial position of the Enron Corp.,'' the letter from Cheney's counsel said.

On Oct. 16, Enron announced huge losses, the first in a series of admissions that eventually drove down the price of the company's stock to less than a dollar a share.

Addington said Enron's financial condition wasn't discussed at any of the earlier five meetings.

Cheney met with Lay for half an hour on April 17 to discuss ``energy policy matters, including the energy crisis in California,'' said the letter, citing the only previously publicized meeting between Enron and the vice president or his staff.

The day after meeting with Lay, Cheney said the Bush administration would not support price caps on wholesale energy sales in California, Waxman noted.

In a separate encounter which the White House did not count as a meeting, Cheney and Lay were on a panel June 24 at the American Enterprise Institute World Forum in Beaver Creek, Colo., where the topic was energy. Addington said there was no discussion of Enron's financial position.

``These meetings began on Feb. 22, just over a month after the start of the Bush administration,'' Waxman said. ``They ended on Oct. 10, just six days before Enron announced the $1.2 billion in reduction in shareholder equity.'' Waxman urged an accounting of the contacts between Enron and other White House officials in addition to the energy task force.

The White House letter says the other meetings between Cheney's aides and Enron officials occurred on March 7, April 9 and Aug. 7. The April 9 meeting was with two dozen representatives of utilities, including Enron. The Aug. 7 meeting was with officials of an Enron German subsidiary.

The White House disclosures about Enron were prompted by a Dec. 4 letter from Waxman.

Enron spokesman Vance Meyer said the company has always acknowledged discussions with the vice president and his staff and that Enron, like other companies, has meetings with any number of policy-makers during the normal course of business. Asked about the administration's decision to identify the Enron meetings, White House spokeswoman Claire Buchan said that ``we always cooperate with members of Congress provided they are not getting into open-ended investigations and fishing expeditions.''

Enron sought protection from its creditors in bankruptcy court Dec. 2 amid revelations that questionable partnerships had helped keep billions of dollars in debt off its books. The company acknowledged it overstated profits for four years. One official on the Cheney energy task force, Lawrence Lindsay, served on an Enron advisory board in 2000, and Bush political adviser Karl Rove sold stock in the company in June.

Lindsay received $50,000 from Enron, according to his financial disclosure form.

Rove owned $68,000 worth of Enron stock when he spoke to Lay about a prospective appointee to the Federal Energy Regulatory Commission.

The Center for Public Integrity says that Bush received $146,500 from Enron executives during his two races for Texas governor, with Lay responsible for $122,500 of the total. Enron directors and employees have given $623,000 t

by Sarah Anderson and John Cavanagh of the Institute for Policy Studies