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Time for Comprehensive Corporate Reform
By Ralph Nader, Washington, DC
After years of indifference to reports of corporate crime and abuse in the mainstream media, a significant shift toward alarm, indignation and revulsion is occurring in Congress by some senior members of both parties.
This does not mean that strong legislation and strong law enforcement are inevitably on the way; the Bushites in the executive branch remain indentured to their Big Business patrons. It does mean that more legislators are moving to aggregate the endless cases of corporate crime and fraud into a broader awareness that these represent patterns and trends, not just isolated anecdotes. In other words, it is not just Enron or Arthur Andersen.
Aggregation means that lawmakers take the conditions to the next stage, which invites, though it may not require, action and remedy. For years, politicians like Ronald Reagan would cite cases of welfare fraud by the poor, not all of which were true. Then these politicians began to aggregate and pattern these abuses into a broader policy-producing plans. That's when the cause of "welfare reform" became irresistible.
Similarly, for years, there were individual reports of street crimes in the cities. Then there came a time when these were aggregated into a battle cry accusing politicians of being "soft on crime." Tougher crackdowns were demanded. Thus was born a successful political hammer by Republicans which led to reinstatement of the death penalty, "three strikes" sentencing laws, zero tolerance and a corporate prison building boom.
Now, could it be the corporations' turn? In March, the bastion of American capitalism, Fortune Magazine, moved up to the aggregation stage. In its March 18 issue, Fortune devoted its cover story to the theme: "It's time to stop coddling white-collar crooks. Send them to jail." Inside the pages rang with rage: "White-collar Criminals: They Lie, They Cheat, They Steal and They've Been Getting Away with It for Too Long." Around these headlines were pages of details, data and recounting of big-shot crooks who rarely have been prosecuted and even more rarely have gone to jail.
About the same time, Business 2.0's April cover story listed dozens of documented cases of what the Washington Post called "colossal avarice and stupidity in America's corporate suites." Big corporations are largely out of control, not only from the law, consumers, workers and communities, but even from their own owners—the shareholders, who have long since been stripped of any power to control the company they own, as top managers decide their own massive paychecks through a rubber-stamp board of directors.
Beyond aggregation is looming a powerful critique of giant U.S. business corporations—they are unpatriotic, especially in their demonstrations of greed post 9/11 when they swarmed all over Capitol Hill demanding special privileges and handouts.
On March 22, the New York Times began its story on corporate tax shelters in Bermuda this way: "Senior Senators from both parties used blunt language today to denounce companies that use Bermuda as a mail drop to reduce their American income taxes by tens of millions of dollars, calling them 'greedy' and 'unpatriotic' tax evaders whose actions could not be tolerated 'in a time of war.'"
Both Senator Max Baucus (D-MT), chairman of the powerful Finance Committee, and the Committee's ranking Republican, Senator Charles E. Grassley (R-IA), named names of companies, held up their products to ridicule and promised to introduce legislation to end this flight from responsibility while, in Grassley's words, "making profits off the taxes of middle-class Americans who are paying their taxes honestly."
Some of the named corporations—Stanley Works and Ingersoll-Rand—simply responded by saying that what they are doing is legal and necessary "to compete on a level playing field with international peers." Of course, corporate lobbyists drafted and lobbied this law through Congress. And please note the use of the globalization pretext, which you will hear over and over again from U.S. corporations, keeping America down by saying they have to be globally competitive under "pull down" trade agreements that they helped write and enact.
Several years ago, I wrote the CEOs of the one hundred largest U.S. corporations, noting that they were created by government charters in the U.S. and rose to wealth and size with American workers, taxpayer subsidies and giveaways, and at times the support of the U.S. armed forces abroad. In return, I requested that they signal their appreciation and loyalty, as corporations, by having the CEO rise at the annual shareholders' meeting and pledge allegiance of the corporation (not its directors or officers) "to the United States and the Republic for which it stands … with liberty and justice for all."
Only one company, Federated Department Stores (which owns Bloomingdale's, Macy's and other retailers), thought it was a good idea; all of the 60 or more other companies that responded rejected the idea outright, including, of course, General Motors and even Costco.
The charge that more large U.S. corporations have no allegiance to this country or community—other than to control them, use them and milk them—will increasingly resonate throughout the land with workers, taxpayers and, now more and more, elected officials. So, too, will ring throughout the land the cry for comprehensive corporate reform.
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