Watch this video where Mokhiber explains how corporates avoid penalties for their crimes.
Category: Capitalism
Is Corporate Crime Simply The Way Things Are?
Parenti claims corporate crime is far more endemic than commonly thought. Parenti’s reporting of corporate crimes and their penalties is scathing.
Net Netrality Endangered By The Mushy Middle!
Americans are conditioned by their upbringing to compromise, to share, and to make deals. This makes it easier to get along with people and facilitates the development of relationships. But anyone who has eaten an entire bag of M&M’s knows that there can be too much of a good thing.
Now, there are people in this society, some of them famous, who say over and over again, that what we ought to do, is get the two sides together and compromise.
Net neutrality is the current target of these people. Now, here are our choices, we can allow corporate ownership of the internet or we can maintain it as a public property, so to speak, allowing all equal access. I have to tell you, I don’t see a lot of middle ground. They say if the internet goes to corporate ownership, we will have the right to complain. Well, I have the right to complain about lots of stuff, but the people who are concerned with my complaints are not many. More to the point, throw my complaint up against the power and influence of a giant multi national corporation and that phrase about snowballs and the nether regions leaps to mind.
It’s not hard for me to figure that this web site with no advertisement and no income production is not going to be a priority for a corporate controlled internet. I will wind up with long, long waits for those wishing to see my site and for many there will be no wait at all because they will never be able to see my site. My voice will disappear. That gives me a stake in the outcome and it doesn’t make me friendly to a compromise that really allows no other option but surrender to private ownership of the internet.
Sometimes, you can’t compromise. Sometimes, you can’t give int.
This is one of those times.
James Pilant
Corporate Criminals Talk About Going To Prison
This is a little about four and half minute video where “white collar” criminals talk about the experience of going to prison. There isn’t really much for me to say. The film speaks for itself.
Julian Friedland (Business Ethics Memo) Comments On My Blog
Julian Friedland maintains a blog, Business Ethics Memo. I had occasion to write and he wrote back.
This is what he had to say –
Hi James,
Thanks for the link and compliment. I would be curious to know what academic training you have, i.e. business, philosophy, etc.
Your blog is engaging some of the most important and timely issues today. However, I would council you to beware of your tone, which can be a tad shrill at times.
Instead of name calling (“incredibly stupid,” “evil” etc.) you might consider taking a more charitable view of the other side, which might help take the debate to a deeper level and alienate fewer readers. For example, there are reasons schools are invading student privacy, and some might be legitimate. How do we determine the difference here?
I know folks are shouting more and more in media these days (especially on the right), but I think educators like us should strive to maintain a better example. That said, I am all for calling a spade a spade from time to time. But in my humble opinion, that can be done without name calling.
Also, you might consider opening up the blog to comments.
BTW: I am writing an article on some of the citizens united implications for increased CSR. It’s entitled Sustainability, Public Health, and the Corporate Duty to Assist.
Did you catch my piece in the Chronicle of Higher Ed last November? It’s subscription only (linked on my blog) so in case your library doesn’t offer access, I’m pasting it below.
Best,
Julian
Earn Thousands At Home – Set Up Your Own Internet Company – Oh, Good Grief, You’d Think This One Would Get Old!
But it doesn’t and people still wind up losing thousands of dollars and sometimes, their life savings. I am including a video explaining one of the basic internet offers. It has two of the basic elements of these kinds of deals. First, it is a retiree. The elderly are a favorite target. They tend to have savings or equity in a home. They are often lonely. Their children have moved away. Their friends have gone to retirement homes or just can’t get around. The second element (one that as a business law teacher drives me crazy), he didn’t read the contract. Basic Rule. Read the contract, okay!!
It’s nice non-boring professional newscast video a little more than four minutes long. It has a lot of useful information and I know something about scams.
And They Don’t Pay Their Share Of Taxes Either
I wrote in the previous post about how the fifty companies that laid off the most workers paid their CEO’s a total of 598 million dollars. But if you read the study itself, you discover that they also shirk their duties as good corporate citizens.
This is from the study –
Under current law, U.S. corporations face a 35
percent statutory tax rate on corporate profits. Of the 50
layoff leaders, only two reported paying this statutory
rate in 2009 and most paid substantially less, according
to an IPS analysis of domestic earnings and federal tax
payments in company 10-K reports.20 Hewlett-Packard,
under Hurd, remitted $47 million in federal corporate
income tax, a mere 2 percent of the company’s reported
$2.6 billion in pretax domestic net income.
Citizens for Tax Justice has used forensic accounting
methods to demonstrate that corporations
often pay an even lower tax rate than they report to
the SEC. Overall, as a result of various tax avoidance
schemes, U.S. corporate income taxes have plummeted
from almost a third of all non-Social Security federal
tax revenues in the 1960s to only a sixth of total taxes
today.22
In some extreme cases, major U.S. corporations
are actually paying less in taxes to Uncle Sam than
they pay, in compensation, to their CEOs. At Occidental
Petroleum, for instance, CEO Ray Irani made $31.4
million last year. That represented almost twice as much
as the $16 million the international oil firm paid in federal
corporate income tax for all the services the federal
government provides.
It is almost too obvious to mention that when corporations avoid their taxes, the burden falls on the middle class.
What is meant by CSR, corporate social responsibility? Are they just code words, that mean, “Get off my back and stop complaining,” or “Can’t you crazed citizens and nosy government officials recognize our good works and let the magnificent engine of capitalism grind on?”
I wonder if it is just a public relations thing. I bet you do too.
James Pilant
Job Cutting CEO’s Average 12 Million In Salary (not counting other benefits)
The fifty largest job cutting companies in the United States paid their chief executive officers a total of 598 million dollars.
Read some more –
The nation’s biggest job-cutting companies paid their top executives an average of $12 million last year, according to a report released today.
The 50 U.S. chief executives who laid off the most employees between November 2008 and April 2010 eliminated a total of 531,363 jobs, according to the Institute for Policy Studies, a research group that works for social justice and against wealth concentration.
In “CEO Pay and the Great Recession,” the institute said the $598 million in combined pay for the 50 executives would have paid one month’s worth of average-sized unemployment benefits for each of the laid-off workers.
The top 50 layoff firms reported a 44 percent average profit increase for 2009, the report said.
“These numbers all reflect a broader trend in Great Recession-era Corporate America: the relentless squeezing of worker jobs, pay and benefits to boost corporate earnings and maintain corporate executive paychecks at their recent bloated levels,” the authors wrote.
The complete article is here.
The complete study is found here.
Job killing has been profitable for many years now but the scale of the rewards are almost unimaginable. Reflect that 12 million dollars yearly is a million a month. In a thirty day month, that’s about 33,000 dollars a day or 4,166 dollars and hour or 69.44 a minute.
James Pilant
Gary Bender Adds His Thoughts On This Post: Business ‘Ethics’ Wrong Focus – Really?
Gary Bender is a friend of mine and more than that, he is well read and thinks. So I enjoyed his comment and share it with you.
Gary Bender writes –
Mr. DiLorenzo writes “Dishonest business people will be punished financially as customers cater to their competitors while suppliers refuse to do business with them. In cases of negligence, such as the BP oil spill, chief executives often lose their jobs, the company is sued, and the firm’s stock price plummets, as was in fact the case with BP. Such market feedback mechanisms do not guarantee ethical behavior, but they do reward it with customer loyalty – and profits. No such feedback mechanism exists in government, which is where much larger ethical problems exist.”
This is the usual nonsense we hear from the teabaggers and other blame-the-Democrats-I-mean-government right-wingers.
No, customers are not watchdogs. They buy for complex reasons that have little to do with the ethics of merchants. Likewise, suppliers sell to anyone.
As far as malfeasance, BP will continue to make huge profits long after the gulf spill is forgotten. Sure, a few people will lose their jobs, probably fewer than lost their lives in the explosion, and stock prices will rebound. Those who are intelligent enough to invest for the longterm will barely notice the stock dip.
It is in government where the people do have a feedback mechanism – their votes. Unfortunately, in the American two-party system, greedy capitalist are able to have more influence on government than the voters. Mr. DiLorenzo is one of those who would like to see more corporate influence on government. I believe that Benito Mussolini called the marriage of government and corporations fascism.
To suggest that capitalism and government are disjoint in America is disingenuous. To suggest that greed in capitalism is of no concern is downright evil.
Citizens United v. Federal Election Commission
I have been giving this Supreme Court decision some thought. Those of you with a legal bent will recall that this case ruled that corporations can give unlimited sums of money to political organizations seeking to influence elections. The court essentially recognizes corporations as persons under the law.
Is that a different animal than the previous creature? I mean if a corporation is more like a person than a contract, does it have citizen like responsibilities? Does it have a character, an ethos? … beyond earning money?
If a corporation is not a mutual agreement, a contract, between a number of individuals but an entity with rights, what does that imply?
It would seem to suggest that corporations are business and political organizations. What I mean to say is, this decision ratifies the idea of a corporation as essentially a small political party. Now, that may appear on its face to be no big deal. But let’s look more closely. Let’s say that a large corporation has 30,000 members counting stockholders and employees. There are many, many corporations with far larger numbers. Nevertheless, let’s use this as our example. The company has yearly profits of a little more than one billion dollars, again not particularly large considering the number and profitability of modern companies.
Thirty thousand members is not a large group compared to Democrats or Republicans or even Libertarians. However the Republicans and Democrats and other interest groups managed to spend about three and one-half billion dollars in the last election cycle’s presidential race. Our hypothetical company can play a major role in the presidential election with only a relatively small contribution of effort. If the company devoted 200 million dollars to the election they could have a major effect on the outcome. But what about the primaries? Well, let’s consider the Iowa primaries, a single state but often a make or break state for presidential candidates earlier on. What if our hypothetical company throws in a mere 20 million dollars to dispose of one candidate in a horse race of seven? How likely is that to be successful, particularly when the numbers are close in the first place?
Citizens United took corporations from a very significant though limited role in American politics and essentially created hundreds of small political parties unified under central leaderships with powerful legislative needs and freed them to use virtually unlimited funds to gain those ends.
I argue that some corporations will take on dual role, not just to make money but to forward pro business ideologies as well as traditional business needs and desires. Would shareholders be willing to tolerate a loss in profit during one quarter of a year every two years? And what if the company was able to prove that by its political advocacy it had made a return on the money of 50 or 100 percent?
Could you form an oil company or a manufacturing company whose sole purpose is to turn money into political power? Would there be people interested in doing this?
They would be investing in a political movement. Look at their advantages. Their money in the form of public shares would always be available. They could get it back provided the company was profitable. Yet, the continued investment in political action could get a far higher return than regular campaign contributions especially considering the unified leadership of a CEO and the other corporate officers who we may assume will have considerable political experience.
We might very well have a de facto multiparty state with all that that implies.
James Pilant
Pilant's Business Ethics Blog 
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