The Multinational Monitor


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Beat the Devil

by Russell Mokhiber and Robert Weissman











HOW IS IT THAT CORPORATIONS -- defilers of the planet, corrupters of governments and of youth, abusers of their workers, global bureaucracies driven by the bottom line imperative of profits -- can get away with their criminality? Stanton Glantz, a professor of medicine at the University of California San Francisco, has a theory -- we let them get away with it.

We negotiate with them. We cut deals with them. We do everything but beat them. "The way to beat these guys," he says, "is to beat them."

Glantz has been fighting the tobacco industry for more than 20 years. He is opposed to the proposed tobacco deal that some of the power players in the tobacco control movement have cut and will seek in 1998 to pass through Congress.

If the deal is passed into law, the tobacco industry will pay billions of dollars to the states, will agree to certain marketing restrictions and, in return, will be granted immunity from civil prosecution.

"The industry wants to stabilize the market here in the United States so they can push their drug overseas," Glantz notes. "They want to take the unpredictability out of the calculus here. We want to keep it unpredictable."

Opponents of the deal have organized a new coalition, "Save Lives, Not Tobacco." The new organization, comprised of the American Lung Association, Public Citizen, the American Public Health Association, other national groups and virtually all of the grassroots anti-tobacco groups, is opposed to granting immunity to the tobacco industry.

On the other side of the issue are the National Center for Tobacco Free Kids and the American Cancer Society. They have banded together in a coalition called Effective National Action to Control Tobacco (ENACT). ENACT is willing to consider making concessions to industry on immunity in exchange for what it believes will be an effective national package to control smoking.

Glantz says that "the tobacco control community now has a real opportunity to end the tobacco industry in this country."

"If that opportunity is lost, it will be because the National Center for Tobacco-Free Kids lost it for us," he says.

Glantz and Save Lives, Not Tobacco argue that no tobacco control regulatory gains could be great enough to merit imposing limits on tobacco company legal liability. Lawsuits against the tobacco industry have generated the disclosures which have revealed the true mendacity of the industry -- its conscious efforts to target kids, conceal scientific evidence of the hazards of smoking and manipulate nicotine levels in cigarettes. These disclosures in turn spurred the Food and Drug Administration to undertake an historic effort to regulate the industry. Lawsuits have led to media focus on the industry. Lawsuit settlements have included industry concessions of state and local public health regulations. Lawsuits have spurred grassroots campaigns against the tobacco industry, and helped generate the political momentum against the industry. Lawsuits have played a key role in getting the tobacco control movement to where it is today, and are the thing the industry most fears.

Save Lives, Not Tobacco insists that taxes should be imposed on tobacco products, and strict new public health regulations should be adopted, without any concessions made to industry.

The tobacco dispute is unique in its stakes; huge sums of money are being discussed, and an effective once-and-for-all regulatory policy urged by some activists. But it is very typical in evidencing the overwhelming urge to compromise with their adversaries that overcomes many well-intentioned activists. (Frequently, this is a problem where big national groups sell out more aggressive groups.) Labor-management cooperation, market-based pollution reduction strategies, deals to support some stricter pesticide regulations in exchange for elimination of the Delaney Clause (prohibiting the addition of cancer-causing substances to processed foods), support for the North American Free Trade Agreement in exchange for labor and environmental "side agreements" -- all of these in their own way show the fallacy of the impulse to cut deals with big corporate interests.

Corporate accountability activists of all sorts would do well to take heed of Glantz's advice: "The way you beat the industry is to beat them."

For those who have a tendency to forget just how venal big corporations can be, we present Multinational Monitor's "10 Worst Corporations of 1997" as a painful reminder.

Don't negotiate with the devil. Beat the devil.

Crusading for dirty air

American Electric Power (AEP), a Columbus, Ohio-based independent electricity generator, is a different kind of energy company. It claims to be a socially responsible corporation, and one which takes seriously the environmental challenges facing humanity. Have any doubts? Just ask AEP. The company will tell you. And it has plenty of evidence to back it up.

Vice President of Environmental Affairs Dale Heydlauff recently won The Nature Conservancy's President's Conservation Achievement Award, one of the organization's two highest honors. Heydlauff won the award for working out a plan for AEP to team up with The Nature Conservancy to protect two million acres of endangered forest in Bolivia.

AEP celebrates the Bolivia project as a "win-win" venture that illustrates how it successfully combines business imperatives with environmental concerns. "This project has been important to AEP from the standpoint that it has provided us with a cost-effective means to address global climate change concerns while preserving an enormous valuable ecosystem for use and enjoyment by future generations," said Heydlauff in accepting the award.

Unfortunately, most environmental groups do not share The Nature Conservancy's fuzzy feelings for AEP, or AEP's benign self-conception. That's because AEP operates 19 coal-fired electric generating plants, reportedly the largest private group of coal plants in the world. A single AEP plant, in Gavin, Ohio, produces more nitrous oxide than all of the coal- and oil-burning plants in New York state.

As the coal-burning leader, AEP helped lead the campaign against adoption of new clean air rules in the United States earlier this year. The polluters' campaign -- conducted along with AEP by companies such as General Motors, Mobil Oil and Texaco and trade associations such as the American Petroleum Institute and the Chemical Manufacturers Association -- made all of the typical puffed-up arguments against new environmental standards. The EPA standards "do not pass scientific scrutiny," AEP alleged, denying that dirty air causes significant health damage. Implementing the standards would impose untold costs on industry and lost jobs, the industry claimed. And, AEP alleged, there were cost-effective alternatives available to achieve the EPA's goals. "Equivalent improvements in public health can be realized through complete attainment of the existing ozone standards without causing the disruption that will occur by implementing the proposed standard," said AEP CEO Linn Draper in one of his many missives opposing the new clean air standards.

AEP and friends' claims notwithstanding, there is compelling scientific evidence of the human health costs of air pollution. Asthma, the leading serious chronic illness in children, is up 118 percent since 1980. More than 40,000 premature deaths annually are attributed to particulate soot pollution. High levels of ozone in 13 U.S. cities were linked to more than 10,000 hospital admissions for respiratory illness and more than 30,000 emergency room visits in 1993 and 1994, according to the U.S. Public Interest Research Group (PIRG).

AEP and its allies' munificently funded attempt to block the new clean air regulations failed. Thanks to the determined advocacy of citizen groups such as PIRG, the American Lung Association, the Natural Resources Defense Council and the Sierra Club, and an uncommon display of backbone by a Clinton administration official, EPA Administrator Carol Browner, the administration decided to implement the new clean air rules.

The new standards will reduce permissible amounts of ozone smog and fine particle soot. "Tens of thousands of hospital visits could be prevented each year nationwide by implementing [these] stringent air quality standards for these two pollutants," wrote more than 1,300 public health professionals in a March 1997 letter to President Clinton.

"I committed felonies every day"

How is it that in the course of a few short years, Columbia/HCA grew into one of the nation's largest hospital chains, controlling more than 340 at last count? Mark Gardner thinks he knows the answer. Gardner was a manager at three Columbia hospitals over three years. He saw first hand how the company cut costs, slashed staff and put profits before patients.

While with the hospital conglomerate, "I committed felonies every day," he says.

"Let me tell you this -- this company is a ruthless, greedy company -- period," Gardner told ABC's 20/20. "Employees are the largest operating expense. Cut that to the bone. Cut nursing to the bone. I mean, cut it to as low as your conscience will allow."

Gardner told 20/20 that staffing at Columbia's Sunrise facility in Las Vegas was so bad that his wife decided that if she ever became ill, she would go to the hospital across town.

The television magazine show interviewed nine Columbia Sunrise workers at the Las Vegas facility -- the largest Columbia hospital and the most profitable in the company's chain.

Telemetry technician Susan Marks said that she sometimes had to watch the monitors of 72 heart patients.

"I've been told you either do it or there's the door," she said.

Gardner, who was a vice president at Columbia Sunrise, said that a homeless man was brought to the hospital by paramedics. The man had no insurance. "No tests were run," Gardner explained. "No blood tests. No x-rays. Nothing. He was given a glass of juice and dismissed, discharged." Gardner said the man left the emergency room, walked about 30 feet, fell down on the hospital lawn and died.

Gardner believes that Columbia/HCA routinely violates the law.

Federal officials apparently agree with Gardner's take on the Nashville-based giant. Federal officials have raided Columbia hospitals in Tennessee, Georgia, Florida and Texas. In affidavits, the feds charge that the company engaged in a "systematic corporate scheme" to defraud federal health programs.

The affidavits, filed in July, argue that the company sought to cover-up its alleged wrongdoing by stamping as "confidential" documents that were not reviewed by lawyers and thus did not come under the lawyer/client privilege.

One internal auditor who was critical of Columbia's practices was told to soften his language and stop using the word "fraud."

Federal officials are reportedly looking at allegations of fraud in Columbia's cost reporting and billing practices. According to the affidavit, in one instance, corporate executives were involved in creating expenses for one hospital that never were incurred.

In August 1997, the New York Times reported more than a dozen people have filed secret whistleblower lawsuits against the company, contending that the company has engaged in various schemes to defraud national health care programs like Medicare.

How has the company responded to what is perhaps the largest federal criminal investigation of corporate wrongdoing?

First, it cleaned house, and replaced old management with new. Generous severance agreements were handed to outgoing CEO Rick Scott and president David Vandewater. According to a union that is challenging the agreements, the severance agreements contain no cap on Columbia's payment of legal fees and no requirement that the executives repay those fees to the company if they are ultimately tried and convicted for violations of law.

Then the industry, in a high profile move that eventually backfired, tried to pressure the feds to back off.

In July 1997, the head of the American Hospital Association (AHA) called on Attorney Janet Reno to impose a six-month moratorium on the widening crackdown on Medicare fraud in the hospital industry.

"America's health care providers are under siege by federal law enforcement," wrote AHA president Richard Davidson in a letter to Reno.

Columbia/HCA Healthcare Corp. also began running full-page newspaper ads titled "Why are Columbia hospitals right for right now?"

The feds answered with a resounding "no" to the industry's call for a moratorium by serving 35 sealed warrants on Columbia/HCA facilities in six states.

Also in July, in response to the call for a moratorium on the investigation, June Gibbs Brown, the Inspector General at the Department of Health and Human Services, released the first comprehensive audit of Medicare, showing that the government overpaid providers by 14 percent -- or $23 billion.

Then, in late July, a federal grand jury in Ft. Myers, Florida indicted three executives of Columbia/HCA on charges of medicare fraud, false statements and conspiracy.

The grand jury indicted Jay Jarrell, chief executive officer of Columbia/HCA's south Florida Division; Michael Neeb, chief financial officer of the company's north Florida Division; and Robert Whiteside, director of a Columbia/HCA unit in Nashville, Tennessee.

Each of the defendants are charged with conspiracy to submit false cost reports to Medicare on behalf of Fawcett Memorial Hospital in Port Charlotte, Florida.

Andrew Stern, president of the Service Employees International Union (SEIU), agrees with Gardner that "the profit machine that was Columbia/HCA appears to have been built on a shaky two-legged stool of alleged financial fraud and patient care ethical fraud."

By the end of the year, Columbia/HCA was in full-scale retreat. In August, the company announced it would abandon its empire building and emphasize "local community services." It implemented an "action plan" that sought to limit some of the structural causes of abuse in the company. Among its provisions: discontinuing sales of interests in hospitals to doctors, adoption of a compliance plan and increased disclosures in Medicare reports.

"We are no longer in the branding business. We are in the people business," said new CEO Dr. Thomas Frist in November. "Compassion, kindness, honesty, integrity, fairness, loyalty, respect and dignity are our essential and timeless values." In mid-November, the company announced that it was considering spinning off more than 100 hospitals.

Sweatshop America

Sweatshops became a hot domestic issue in the United States this year, as federal police from the Department of Labor sought to crack down on corporations that exposed their workers to unsanitary and unsafe working conditions. The Department's sweatshop poster boy: DeCoster Egg Farms of Turner, Maine, one of the nation's largest egg producers.

At DeCoster's Turner facility, 3.5 million chickens produce from 12 to 14 million eggs a week. Estimated annual sales at Turner are more than $40 million. DeCoster also owns farms in Iowa, Ohio and Minnesota.

In 1996, then-Labor Secretary Robert B. Reich proposed more than $3.6 million in penalties against DeCoster for numerous alleged egregious and willful violations of health and safety and wage and hour laws. In May 1997, the company settled the case by paying $2 million, agreeing to pay full restitution of back wages owed to workers and agreeing to third-party monitoring.

A key feature of the agreement between DeCoster and the Occupational Safety and Health Administration (OSHA) provides that a consultant will conduct an unannounced, unscheduled inspection of DeCoster facilities within 12 months. If the consultant determines that less than 90 percent of the previously cited conditions are in compliance with safety and health standards, the remaining balance of proposed penalties -- $1,805,000 -- will become due.

"The conditions at this migrant farm site are as dangerous and oppressive as any sweatshop we have seen," Reich said at the time. "Fear and intimidation kept these workers in this unsafe, unhealthy atmosphere and living in totally unsanitary conditions."

"Workers toiled 10 to 15 hours a day, with no equipment to protect them from disease, picking up dead chickens with their bare hands and handling manure potentially infected with the Salmonella virus," Reich said. "They were exposed to life-threatening electrical hazards and workers injured on the job often went untreated."

Workers at the Turner, Maine facility said they doubted that the OSHA action would improve conditions.

"For us it is the same," Felipe Limon told reporters. "For us nothing changes. We have a job we survive from and that's all. In reality, we gain nothing."

Company owner Austin DeCoster said that the Occupational Safety and Health Administration (OSHA) had "completed a `wall to wall' inspection of my farm which has taken a team of six inspectors over five months to complete. I am very disappointed in the results of the inspection."

"This case is particularly abominable," said Reich, "because DeCoster had a chance to clean up its act. Instead, the company misled OSHA officials and made little or no effort to improve its shameful conditions."

In addition, the Wage and Hour Division of the Employment Standards Administration cited DeCoster for violations of the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act.

In June 1996, an employee of DeCoster lost three fingers in the machinery he was using to scrape chicken manure from the pits in chicken barns. He was not the first company worker injured from contact with unguarded machinery and machine parts at the site, OSHA said.

Labor Department officials alleged that DeCoster's workers lived with exposure to live electrical parts and inoperable smoke alarms. Often 12 people lived in one 10-by-60-foot trailer. Overused septic tanks filled up, causing toilet contents to back up several inches into shower tubs. Flushing toilet paper was not allowed, so feces-covered toilet paper often overflowed from waste baskets in the bathrooms. Without adequate and operable shower or laundry facilities, workers were often unable to clean themselves or their soiled clothes, the Labor Department charged.

DeCoster was identified as a prospective participant in OSHA's reinvention partnership program, Maine 200, because of the number of workers' compensation claims that were filed. OSHA offered the company an opportunity to work in partnership to provide good safety and health for its workers. Based on reports submitted to OSHA by DeCoster, it appeared that the employer was making appropriate efforts to improve safety and health conditions for its 320 workers. But the Maine consultation service notified OSHA in December 1995 that DeCoster was not cooperating to correct serious hazards. OSHA then scheduled a monitoring visit for January 1996.

"DeCoster's actions warrant stiff penalties," said then-OSHA director Joseph Dear. "The company reneged on its Maine 200 commitment and has subjected its employees to extremely hazardous working conditions. The unsanitary and unsafe conditions in the temporary housing are abominable by any standard of decency."

Colonists Still

The colonial mentality dies hard. Just look at the French oil company Elf Aquitaine. Frustrated by Republic of Congo President Pascal Lissouba, Elf Aquitaine allegedly decided to throw its support behind a rebel movement to overthrow him. (Note: this concerns the former French colony, not the formerly Belgian colony known until recently as Zaire.)

In October, ending four months of bloody fighting, a guerrilla movement led by Denis Sassou Nguesso succeeded in toppling Lissouba's democratically elected government. Sassou Nguesso ruled Congo from 1979 to 1992, earning a reputation of a "Pierre Cardin Marxist" who maintained expensive tastes and looted the nation's treasury. His self-proclaimed Marxism did not interfere with his maintaining cozy relations with Elf. Sassou Nguesso was defeated in the 1992 election, Congo's first, that brought Lissouba to power.

Oil is the lifeblood of the Congo, accounting for more than half of the government's income. Elf Aquitaine has had a presence in Congo since the 1950s, and is responsible for more than two-thirds of the country's oil production.

Early in his presidency, Lissouba angered Elf by negotiating contracts with U.S. oil company Occidental Petroleum (which also appears on this year's "10 Worst" list). Under intense pressure from Elf and the French government, Lissouba backed out of his dealings with Occidental.

Elf and France apparently never forgave Lissouba for his American opening. France seems to expect its former colonies to maintain permanent allegiance to their old colonial master.

Three months into the fighting, Congo national assembly spokesperson Saturnin Okabe went on official radio to denounce "past, present and future foreign interference by the company Elf-Congo [Elf's Congo subsidiary] as well as by great powers and neighboring countries."

Lissouba now accuses Elf of providing up to $250 million to Sassou Nguesso's forces, and of helping ship arms from Angola to Sassou Nguesso. These accusations, in general terms, are echoed by "diplomatic sources" in many independent news reports.

"Those who armed Mr. Nguesso are as guilty as he," Lissouba told Agence France Presse, a reference to both Elf and Angola, which acknowledged intervening in the Congo.

In November, Lissouba filed suit against Elf in French courts, seeking damages for property destruction and loss of life. The four-months civil war left thousands dead and hundreds of thousands displaced from their homes.

Lissouba also alleges that, after taking power, Sassou Nguesso cut deals with Elf to pay the company off, although subsequent reports suggested Sassou Nguesso wanted more money in order to pay off foreign debts. "If he decides to increase the oil income Congo pays Elf by 20 percent, our country will again vegetate," Lissouba told Le Figaro in October. "If the idea is to ransack Congo, then I'm glad I was ousted."

Elf Aquitaine did not respond to requests for comment.

Swooshes and Sweatshops

It is one thing for a consumer group, or a labor union, or a citizens group, to allege that Nike's Asian contractors are paying workers low wages, abusing them and exposing them to dangerous working conditions. It is another for Ernst & Young, one of the world's largest accounting firms, to do it. For a whole year, Nike denied that its contractors in Asia abused and mistreated workers. The company said that the information was being sent out by fringe activists on the Internet.

The "fringe" began their activism in 1996, when Roberta Baskin of CBS News 48 Hours reported that Nike workers in Vietnam earned an average of 20 cents per hour, that 15 women workers were hit on the head by their supervisor, that 45 women were made to kneel on the ground for 25 minutes with their hands in the air and that a Korean supervisor fled the country after accusations that he sexually molested female workers.

With the leak of an Ernst & Young report, the fringe became mainstream. The Ernst & Young audit of a Nike contractor facility in Vietnam found that workers were exposed to carcinogens that exceeded local legal standards by 177 times in parts of the plant and that more than 100 workers at one section of the facility have respiratory ailments.

The audit was leaked to the San Francisco-based Transnational Research and Action Center (TRAC).

Nike hired Ernst & Young to conduct an audit of labor and environmental conditions inside its subcontractors' factories in Vietnam to see if the factories were in compliance with Nike's corporate code of conduct.

"While the Ernst & Young Report declares that Nike is in compliance with its own code of conduct, it simultaneously documents a series of hazardous and unjust working conditions inside the plant," says TRAC executive director Joshua Karliner.

Nike tried its best to spin the leak of the Ernst & Young report to its favor. A Nike spokesperson emphasized that the report highlighted many positive practices in the Vietnamese plants, and that the critical nature of the report showed that Nike was not trying to "whitewash" its contractors' practices in Asia. Nike is making progress, the spokesperson asserted. "One of our mottos is: there is no finish line" on labor conditions, he said. The Ernst & Young report came at the end of a very bad year for Nike. A number of reports from citizen and labor groups documented serious and repeated abuses of workers throughout Asia. In March 1997, a Vietnam Labor Watch report documented labor law violations, low wages, unsafe working conditions and sexual harassment at Nike contractor facilities in Vietnam.

In September 1997, the Hong Kong Christian Industrial Committee issued a report documenting abuses of workers at Nike contractor facilities in China. As bad as things are for Nike workers in Vietnam, they are worse in China.

On September 15, 1997, The New Republic ran a devastating article titled "The Young and the Feckless." Earlier in the year, Nike hired former United Nations Ambassador Andrew Young to investigate the allegations of worker abuse in Asia. Young came back with a report that found "no evidence or pattern of widespread or systematic abuse or mistreatment of workers."

In the New Republic article, author Andrew Glass says Young's investigation was "classic sham, marred not just by shoddy methodology but by frequent misrepresentations."

"The report lists consultants who were never consulted and includes photos of union representatives who, it turns out, were not union officials," Glass wrote. "Young deliberately avoided the most obvious and controversial question -- whether Nike paid its employees fair wages -- and, when gathering testimony, he relied almost exclusively on translators employed by the Nike factories."

Activists have chosen Nike as the company that best represents the worst of the global economy. Seeking a political economy that allows its workers to be paid the least and treated the worst, Nike over the years has emigrated from South Korea, to Taiwan to Vietnam and now to the lowest common denominator country, China, the world's largest shoe maker.

In addition, there is something sinister about a company that promotes racial harmony in the United States and abuses its workers in Asia. Even a civil rights leader turned big business consultant like Andrew Young can't fool everybody all the time.

In October 1997, 15 U.S. women's groups, led by author Alice Walker and Representative Maxine Waters, D-California, told Nike CEO Phil Knight that they were not fooled by a Nike advertising campaign which features women empowered by athletics.

"While the women who wear Nike shoes in the United States are encouraged to perform their personal best, the Indonesian, Vietnamese and Chinese women making the shoes often suffer from inadequate wages, corporal punishment, forced overtime and/or sexual harassment," they wrote.

Thuyen Nguyen of the New Jersey-based Vietnam Labor Watch is helping organize the worldwide boycott of Nike. The boycott campaign makes five demands of Nike: 1) Pay a living wage; 2) Stop boot-camp style assembly lines, 3) Stop using child labor; 4) Investigate all reported acts of abuse; 5) Allow truly independent monitoring of factories.

Uncompromising Resistance

There are those who compromise with corporate evil and there are those who don't. The most inspirational noncompromising position of the year comes from South America, where more than 5,000 U'wa Indians from a remote area of Colombia threatened to commit collective suicide by jumping off a cliff if Occidental Petroleum Corporation goes forward with plans to drill for oil on lands considered sacred to the tribe.

Leaders of the U'wa toured the United States to publicize their threat.

Officials of the oil company said that they will not go on the reservation without permission by the tribe.

But Shannon Wright, Amazon campaign coordinator for the San Francisco-based Rainforest Action Network, says that the U'wa were "tricked into signing a document which the company claims demonstrates their agreement to the operation, but which the U'wa thought was simply a record of their presence at a meeting."

The U'wa have lost a number of court challenges in Colombia and they consider the government to be an ally of the oil companies.

At Occidental's annual meeting in Santa Monica in May, protesters carried banners reading "No blood for oil" and "Don't destroy the U'wa Indians."

Occidental Petroleum president Dale Laurance agreed to meet members of the U'wa tribe. But Laurance said he would not meet with U.S.-based environmental groups who were organizing a tour of the United States for U'wa council chief Roberto Cobaria.

An Occidental spokesman questions whether the tribe's mass suicide threat was a publicity move. But Wright says that legend has it that a group of U'wa tribe members committed mass suicide in the seventeenth century to protest against Spanish colonialism.

Wright said "everyone I know who works closely with the U'wa feels strongly that they are serious about" the mass suicide threat. "There are many cliffs right there on their land, up in the Andes," she says.

Occidental's Cano Limon oil field in Colombia produces 180,000 barrels of oil a day, but that field is being depleted and the company is looking to explore in other regions of the country.

Wright says the U'wa oppose the drilling on their ancestral lands for two reasons. "First, they have witnessed the horrible legacy of oil companies on the lands of other tribes -- the contamination of land, water, air -- the costs are greater than the benefits."

And second, she says, is a "cultural, spiritual opposition."

"They say that oil in the earth is sacred and it is unconscionable to pull it out of the earth," Wright says.

Wright reports that upon returning to Columbia, Cobaria was viciously assaulted by armed men who threatened him with death.

According to Wright, Cobaria was pulled from his bed in the middle of the night by a group of hooded men with rifles. The assailants restrained the tribal leader, demanding that he sign an authorization agreement or else be killed.

According to Wright, after refusing to sign, Cobaria was threatened with hanging, then beaten and pushed off an embankment into a river where he nearly drowned.

"They said if you don't sign the agreement you will lose your life," Cobaria says. "And I said, `I guess I will lose my life then, kill me right now, because I can't make this agreement. I can't sign anything away from my tribe.'"

Commercial drilling is scheduled to begin in April 1998.

Wright points out that the Royal Dutch Shell Group, Shell Oil's parent company, owns a 37.5 percent share in the Oxy project to drill in the U'wa's territory.

Oil development has opened up the U'wa's previously isolated territory to outsiders, and has brought Colombia's violent political conflict along with it.

"The U'wa now live under constant threat of violence, caught between Colombia's brutal military, paramilitary groups and guerrilla armies," Wright says. "Whether it is through the pollution of their sacred land, the increased violence the project will bring to them, or by their own hand, allowing the oil exploration to go forward means the death of the U'wa."

Tobacco's Houdini

So, you are the head of the largest company in the world's deadliest industry. You face unprecedented legal challenges in your home country, with your potential liability running into the hundreds of billions of dollars.

You remain in one of the most profitable industries in the world, but Wall Street fails to value your company commensurately, discounting the value of your stock because of your potential legal liability.

Along with your colleagues, you have endeavored to distort scientific understanding, hold regulators at bay and prey on society's most vulnerable, its children. Secrecy has been integral to all of these efforts, but now thousands -- perhaps even millions -- of your treasured secret documents appear on the verge of disclosure.

For decades, your lavish campaign contributions have assured you victory after victory in the national legislature. But now those contributions are increasingly seen to tarnish recipients, and political opponents are learning to use the campaign contributions as a campaign issue. In the last presidential election, the public heaped scorn and ridicule on a major party candidate who spouted lines scripted by your public relations firms.

Legally, politically and in the public relations sphere, you have suffered serious setbacks in the last couple years -- and all indications are that things are going to get worse.

But you didn't become CEO of one of the most dynamic companies in the world for nothing. You invent or approve a plan that is stunningly bold.

You initiate a process to negotiate a settlement to the lawsuits which you and the rest of the industry face, your greatest concern.

You and your competitors agree to pay what looks at first glance like an astounding sum to settle the cases: $368 billion over 25 years. You don't mention that the payments will be tax deductible and the cost to you will be discounted over time -- so the real cost to the industry (passed on to customers, in any case) will actually be about one-third the announced total. You don't explain how the ability to collude with your competitors -- enshrined in a written settlement agreement with 40 state attorneys general -- will actually enable you to profit from the price increase.

The agreement also includes various marketing and advertising restrictions, which may reduce consumption of your goods. But your competitors and close industry analysts know those marketing restrictions will have another effect: they will tend to lock in market share, meaning you are likely to maintain your commanding lead in market share indefinitely, without challenge.

In exchange for the payment and the marketing restrictions, you and your competitors get to see your wildest dreams come true: the flood of litigation which is lapping up against your walls and threatens to drown you altogether disappears. With crafty drafting of the settlement agreement, you have ensured there is little chance of you ever facing a serious lawsuit threat again. You are free to intensify your corporate acquisition and marketing strategies abroad -- where you will experience all of your future growth.

Going into the negotiations with your legal adversaries, you understood that such a spectacular release from unbounded liability would be sure to generate enormous opposition and outrage. So, in a masterstroke, you suggested that the settlement negotiations actually include a man identified as one of your preeminent critics. He was coopted more easily than you could have anticipated, and became the most effective advocate of the deal you designed.

You still face uncertainty, because the deal you and your colleagues designed has not yet been made into law, and opposition is rapidly mounting to your scheme. But there remains a good chance you will accomplish most of what you set out to achieve, which is more than you could have thought possible a year ago.

You are Geoffrey Bible, chief executive officer of Philip Morris, the world's leading tobacco company and one of Multinational Monitor's 10 Worst Corporations of 1997.

Hog Waste

Earlier this year, a federal judge in Norfolk, Virginia fined Smithfield Foods and two of its subsidiaries $12.6 million for discharging illegal levels of pollutants from their slaughterhouse into the Pagan River, in violation of the federal Clean Water Act. The state of Virginia had long coddled corporate polluters like Smithfield, and the fine represented a victory of sorts for federal officials who busted through the corporate-controlled state bureaucracy to fine the giant water polluter.

The company had claimed that an agreement it signed in 1991 with then-Virginia Governor L. Douglas Wilder allowed the company to discharge above legal limits as long as it hooked its slaughterhouse waste to a public wastewater system "as soon as possible."

The company calls the fine "outlandish." "A fine of $12.6 million for doing what we were told to do?" says Smithfield lawyer Anthony F. Troy. "Thank God we weren't doing things that we weren't supposed to do."

But federal officials say that agreement was made with the understanding that the company would comply with phosphorous limits by January 1993, which the feds say the company did not meet. The feds also say that, in any event, they are not bound by the state agreement.

The federal Environmental Protection Agency (EPA) had threatened to suspend the state's water pollution program because of lax enforcement.

The feds consider Smithfield to be a flagrant water polluter.

In 1995, Smithfield Chair Joseph W. Luter III gave $125,000 to Virginia Governor George Allen's political action committee. It was a time when Smithfield was working to negotiate a settlement of a state lawsuit.

Allen had turned the state into a corporate polluter's dream political economy. Only a day after the federal fine, Allen fired 29 senior managers and staff members of the state's environmental agency.

In imposing the largest civil fine ever in a Clean Water Act case, Judge Rebecca Beech Smith said that Smithfield's violations "had a significant impact on the environment and the public, and thus in total their violations of the effluent limits were extremely serious."

The subsidiaries, Smithfield Packing Company and Gwaltney of Smithfield Ltd., each operate a hog slaughtering and processing plant in Smithfield, Virginia where the violations occurred. The treatment plants at these facilities process the waste generated during the hog slaughtering and meat processing operations.

A May 1997 ruling in favor of the United States found the company's failure to install adequate pollution control equipment and properly treat wastewater resulted in more than 5,000 violations of permit limits for phosphorous, fecal coliform and other pollutants.

These violations, which occurred for more than five years, degraded the Pagan River, the James River and the Chesapeake Bay. Another ruling found Smithfield had falsified documents and destroyed water quality records.

The plants' water discharge permits set limits designed to protect the quality of Virginia's waterways.

EPA found serious, chronic violations of discharge limits for several pollutants including phosphorous, ammonia, cyanide, oil, grease and fecal coliform.

Sampling of the Pagan River revealed excess fecal coliform levels, an indicator of the presence of intestinal wastes from warm-blooded animals.

Fecal coliform is an organism found in animal and human waste that is often associated with bacteria known to cause serious illness in humans. The Pagan River has been closed to shellfish harvesting since 1970 due to high coliform levels.

Because Smithfield delayed installing essential pollution control equipment and continued dumping waste into the river for five years, the Environmental Protection Agency and the Department of Justice took federal enforcement action to impose appropriate penalties, and prevent future violations.

Pushing Globalization

Economic globalization is not inevitable. The best proof of this is the enormous efforts multinational corporations undertake in order to create new institutions to lock in, defend and intensify globalization. If globalization was inevitable, there would be no reason for the corporations to waste time and money on their enormous effort. But since the future shape of the global economy is in fact so uncertain, multinationals do spend millions of dollars and countless lobbyist and even executive hours trying to promote it.

This year, a coalition of labor unions, environmental groups and citizen organizations led by Public Citizen dealt the multinationals a historic defeat. As a result of the citizen campaign, the U.S. Congress denied President Clinton the fast-track authorization he sought to negotiate new trade agreements.

Fast track is a procedural mechanism which increases presidential power and sharply diminishes the ability of Congress to affect the content of trade deals.

The fast-track defeat did not come easily. The Clinton administration set up its signature "war room" in the White House to coordinate efforts to persuade legislators to support fast track, and again engaged in massive legislative horse-trading in an attempt to win votes. Big corporations, with Speaker of the House of Representatives Newt Gingrich's blessing, actually set up a lobbying coordinating office in the U.S. Capitol in the days before the scheduled fast-track vote.

Business spent millions on advertisements, lobbyists and state-by-state organizing to promote fast track. TRW, a Cleveland-based manufacturing and service company in the auto, space and defense sectors, led the business campaign. TRW Chief Executive Officer Joseph Gorman served as the general chair of America Leads on Trade (ALOT), the main business free-trade lobby group. TRW Vice President James Christy served as ALOT's chair.

Gorman took an unusually direct role in the business campaign. "Joseph T. Gorman's September calendar has `trade' written all over it," BusinessWeek wrote in September. Gorman met with President Clinton, lobbied members of Congress and testified before congressional committees.

He delivered all the usual tired bromides, plus a few brazenly original arguments, to demonstrate the importance of international trade and the critical importance of fast track.

"The United States must continue its aggressive pursuit of trade agreements to ensure that markets around the world are open to American companies, workers and farmers," Gorman told the House Ways and Means Committee. "We can't hide from the realities of globalization," he added. A more gutsy argument: "Investment abroad brings back significant benefits here at home." And to distance new fast-track authority from the unpopular North American Free Trade Agreement (NAFTA): "The debate over fast track is not about NAFTA ... The United States must recognize the importance of being the leader in new negotiations and separate the debate over NAFTA from the debate over fast track."

The people of the United States were not persuaded by these misleading claims. And because of citizen opposition, neither was the House of Representatives. When it became clear that there was not enough backing for fast track to win passage, supporters pulled the bill before it could be voted on.

$6 Million Plea

Bill Clinton, the president of the United States, and Donald Tyson, the chairman of the board of Tyson Foods, Inc. are good buddies. Don Tyson underwrote Clinton's early career as a politician in Arkansas.

"In the late seventies and eighties, a younger Bill Clinton gave speeches about the plight of Arkansas chicken farmers, practically never uttering the words `Tyson Foods' in public," explains Charles Lewis, executive director of the Center for Public Integrity.

"Clinton's relationship with Tyson Foods and many other powerful business interests in Arkansas has been well-documented, and if there is one thing we have learned from the continuing Whitewater affair, like other successful statewide politicians in Arkansas, Governor Clinton was an accommodator of the largest, monied interests in the state," says Lewis.

"Millions of dollars in private favors at public expense accrued to various companies and individuals during his tenure, and the Clintons' personal financial interests, the conduct of official Arkansas business and the agendas of the state's largest corporations and law firms, were all intertwined and sometimes indistinguishable."

Of course, Washington and Little Rock play by similar rules. One key difference -- Washington has independent prosecutor Donald Smaltz, a man who believes that corporate crime should be prosecuted. Result: Tyson Foods is today a convicted corporate criminal.

In December, Tyson Foods, the world's largest chicken products company, pled guilty to giving former Secretary of Agriculture Alphonso Michael Espy over $12,000 in gratuities and will pay $6 million in fines and investigative expenses.

To get the plea, prosecutors were forced to give Don Tyson immunity from prosecution. And prosecutors agreed not to seek to have the company debarred from lucrative government contracts.

The one-count criminal information charged that Tyson Foods gave four gratuities to Espy during 1993 and 1994 while Tyson had a number of matters before the Department of Agriculture (USDA). The matters included an emergency interim final rule issued on August 16, 1993 by the USDA that required processors, including Tyson Foods, to place safe handling instructions on all raw meat and poultry packaging.

U.S. District Court Judge Ricardo M. Urbina accepted Tyson Foods' plea of guilty, which was entered by Don Tyson.

"The gravaman of this investigation, from its inception, has been unlawful gift-giving by prohibited corporate sources to a sitting member of the cabinet," says Independent Counsel Donald Smaltz.

"Such conduct must continue to invite outrage, never passivity, from those who are regulated, the public and our lawmakers. Tyson continued its practice of unlawfully giving gratuities to Espy until it was first exposed by the press in March 1994."

Smaltz said that unlawful gratuities that Tyson Foods gave Espy were: * Four tickets to the January 18, 1993 Presidential Inaugural Dinner, worth $6,000 in total.

* Air transportation on a Tyson Foods jet, meals, lodging and entertainment at the Don Tyson/John Tyson birthday party in Russellville, Arkansas on May 14-16, 1993. Total cost -- about $2,556.

* A January 4, 1994 Tyson Foundation scholarship check for Espy's girlfriend in the amount of $1,200 to cover the first semester of an eight-semester program.

* Airline tickets for Espy's girlfriend, skybox tickets, food, and limousines for the Dallas Cowboys/Green Bay Packers January 16, 1994 playoff game. Approximate value: $2,271. Under the plea agreement, Tyson Foods must establish an ethics compliance committee; implement a code of conduct; appoint a new chairman of the audit committee of the board of directors; and require that the audit committee review the expenditures for the corporate officers and contracts of all lobbyists or consultants.

In addition, Tyson Foods is required to prepare quarterly ethics compliance reports setting forth the steps it has taken to comply with the agreement.

On August 27, 1997, former Secretary Espy was charged in a 39-count criminal indictment. Trial is set for March 30, 1998.

The trial of Tyson Foods lobbyist Jack Williams is currently set for trial on February 2, 1998.

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