Names In the News

White Collar Crime Spree

One in three U.S. households is now the victim of white collar crime, according to new research conducted by the National White Collar Crime Center. The findings also reveal a growing public concern with the seriousness of white collar crime and the criminal justice system's ability to control it.

The survey, which was conducted between January and April 1999 by the Training and Research Institute of the National White Collar Crime Center in Morgantown, West Virginia, is the first of its kind in nearly two decades.

Findings from the report show that during a 12-month period, one in every three households (36 percent) was victimized by a form of white collar crime.

With regard to perceptions of the seriousness of white collar crime, the survey dispels early work that indicated the public was not concerned about fraud and white collar crime affecting them. The research shows that the public now views certain white collar crime offenses as equal to or more serious than certain traditional street crimes.

The Center asked: Which is more serious, armed robbery causing serious injury, or neglecting to recall a vehicle that results in a serious injury? Forty-eight percent said armed robbery, 39 percent said defective products and 13 percent said "equal."

The difference was somewhat more pronounced when the white collar crime offender's criminal intent was more evident. The Center asked: Which is more serious: armed robbery causing serious injury, or allowing tainted meat to be sold which results in one person becoming ill? Forty-five percent said tainted meat, 36 percent said armed robbery and 19 percent said equal.

Unlike prior surveys on perceptions of white collar crime, the Center's survey results showed white collar crimes need not result in physical injury for the public to view the crimes as serious.

When asked to compare street theft with fraud, slightly more respondents believed the fraud to be more serious (44 percent) than did those who found the street theft to be more serious (38 percent).

Burying Discrimination

American General Life and Accident Insurance Company, one of the largest U.S. life insurers, will provide $206 million worth of relief to millions of poor and minority policyholders nationwide to settle charges of racial discrimination and other unfair practices.

Florida's Insurance Commissioner Bill Nelson says policyholder refunds and other restitution will be made by American General to resolve allegations that several companies it acquired charged blacks more than whites for burial and other insurance, and that, even after the sale of race-based policies was halted in the 1960s, the insurers continued collecting higher premiums from African Americans. The agreed-upon relief also settles a private class action lawsuit.

The agreement imposes a $7.5 million sanction on the Nashville-based company to be split among various states based on the number of affected policyholders in each. American General also announced it voluntarily will contribute another $2 million to the National Association for the Advancement of Colored People.

The agreement -- the first stemming from Nelson's investigation of burial insurance sales by five companies --will cover about 4.9 million race-based policies or the policyholders' beneficiaries nationwide.

"It's tragic that this kind of discrimination and exploitation occurred in the first place," Nelson says. "It's incomprehensible that this practice continued up until recent days."

In the agreement, American General neither admits nor denies that it violated any state insurance laws.

Fronting for PhRMA

Citizens for Better Medicare (CBM) is a front group set up by the pharmaceutical industry, Public Citizen alleged in June.

"It's bad enough that the drug companies price-gouge our seniors," says Public Citizen President Joan Claybrook. "Now they are spending millions from their ill-gotten profits in a shameless campaign to scare the elderly into opposing a common-sense program that would help them obtain the drugs they need at a fair price."

Over the past year, the prescription drug industry has buffeted the United States with wave after wave of deceptive advertising, part of a sophisticated campaign to protect the industry's multibillion-dollar profits, according to the Public Citizen report, "Citizens for Better Medicare: The Truth Behind the Drug Industry's Deception of America's Seniors."

Last year, the drug companies' regular lobby, the Pharmaceutical Research and Manufacturers of America (PhRMA), created the innocuous-sounding Citizens for Better Medicare to serve as its front group.

Through CBM, it has budgeted at least $65 million for television advertising since July 1999. This air battle has been supplemented with radio, print and Internet ads and telemarketing calls along with direct mail appeals from CBM and its member groups.

"Public Citizen researched CBM's self-described 'broad-based bipartisan group' and found a collection of shills, seedy direct-mail operatives and industry-funded research and lobby groups working in tight coordination with the drug lobby," says Frank Clemente, director of Public Citizen's Congress Watch.

CBM's director, Tim Ryan, was the marketing director for PhRMA before joining CBM.

-- Russell Mokhiber