Behind the Lines

Predatory Turkeys

During Thanksgiving week, members of the community group ACORN delivered “Turkey of the Year” awards to Jackson-Hewitt, the second largest tax preparer in United States, in more than two dozen cities.

The ACORN protesters targeted the company “for stealing millions of dollars from low-income neighborhoods” through the sales of Refund Anticipation Loans (RALs) and other overpriced bank products.

Jackson-Hewitt’s business targets low-income families — 73 percent of its customers make less than $29,000 per year, according to ACORN, and 70 percent of its customers are sold RALs and other high-cost bank products.

RALs are high-cost, short-term loans secured by taxpayers’ expected refunds, especially for Earned Income Tax Credits (EITC) — a tax credit available only to the working poor. Consumers pay three fees for a RAL: a fee for commercial tax preparation, a fee to the preparer to process the RAL and a loan fee to the lender, explain the National Consumer Law Center and the Consumer Federation of America in a January 2004 report.

“The total cost can range from $180 to over $250, and eat away at about 10 percent of the consumer’s refund,” according to the report. “RAL volume has increased steadily over the past few years. In the 2002 filing reason, an estimated 12.7 million consumers received RALs, paying approximately $1.14 billion in loan fees. EITC recipients made up 55 percent of RAL borrowers, even though they accounted for only 15 percent of taxpayers.” Including tax preparation, loan and other fees, the report concludes EITC filers lose $1.75 billion total.

Unocal Caves on Burma

Unocal agreed in December to settle long-running litigation against the company charging it with complicity in human rights violations in Burma.

Though terms of the settlement remain confidential, the settlement appears to be a landmark victory in efforts to use U.S. courts to hold companies accountable for association with human rights violations overseas.

In the Burma case, plaintiffs whose names remained confidential to protect them from retaliation charged that they had been subjected to brutal human rights violations in connection with Unocal’s construction of a natural gas pipeline from Burma to Thailand [see “Oil in Burma: Fueling Oppression,” Multinational Monitor, October 1992; “Blood in the Pipeline,” Multinational Monitor, January/February 1995; “Corporate Bullies: The Ten Worst Corporations of 1998,” Multinational Monitor, December 1998]. The abuses were committed by the Burmese military, in connection with efforts to clear the pipeline route.

A variety of organizations, including the Center for Constitutional Rights in New York, the Washington, D.C.-based EarthRights and the Washington, D.C.-based International Labor Rights Fund, along with private attorneys represented the plaintiffs.

Unocal defended itself in the cases by arguing that the case should not be heard in U.S. courts; that it was not responsible for the actions of the Burmese military; and that the U.S. parent company should not be held liable for the actions of its subsidiaries.

Over the course of eight years litigation, the courts considered these issues, resolving enough of them in favor of the plaintiffs to permit the cases to proceed. In September, a California judge ruled that the issues should be presented to a California jury.

In December, the parties announced they had issued a settlement, with the plaintiffs’ counsel saying only that they are thrilled with the outcome.

A joint statement from Unocal and the plaintiffs announced a settlement in principle. “Although the terms are confidential,” the statement said, “the settlement in principle will compensate plaintiffs and provide funds enabling plaintiffs and their representatives to develop programs to improve living conditions, healthcare and education and protect the rights of people from the pipeline region. These initiatives will provide substantial assistance to people who may have suffered hardships in the region. Unocal reaffirms its principle that the company respects human rights in all of its activities and commits to enhance its educational programs to further this principle. Plaintiffs and their representatives reaffirm their commitment to protecting human rights.”

US: Efficiency Laggard

The United States trails China and every other major economy in automobile fuel efficiency requirements.

That is the conclusion of a December paper issued by the Pew Center on Global Climate Change.

The paper notes and addresses a variety of complications in comparing fuel efficiency standards across countries (for example, it is challenging to equalize between miles-per-gallon standards and regulations that focus on levels of emission of greenhouse gases per mile driven), but reaches a clear conclusion: the United States lags behind the rest of the world.

The paper compared regulatory requirements in the United States, Canada, Australia the European Union, Japan and China.

It concludes that the European standards are the most rigorous, followed by those of Japan and China.

The U.S. standard will improve if California-only requirements are implemented, but even so the California rules by themselves will lag behind European Union regulatory requirements.

Canada joins the United States as the other global laggard in motor vehicle fuel efficiency.