Corporate Corruption News Articles

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The chaos at the Fukushima Daiichi nuclear plant — explosions, fires, ruptures — has not shaken the bipartisan support in partisan Washington for the U.S.'s so-called nuclear renaissance. Republicans have dismissed Japan's crisis as a once-in-a-lifetime fluke. President Obama has defended atomic energy as a carbon-free source of power, resisting calls to halt the renaissance and freeze construction of the U.S.'s first new reactors in over three decades. But there is no renaissance. Even before the earthquake-tsunami one-two punch, the endlessly hyped U.S. nuclear revival was stumbling, pummeled by skyrocketing costs, stagnant demand and skittish investors, not to mention the defeat of restrictions on carbon that could have mitigated nuclear energy's economic insanity. Obama has offered unprecedented aid to an industry that already enjoyed cradle-to-grave subsidies, and the antispending GOP has clamored for even more largesse. But Wall Street hates nukes as much as K Street loves them, which is why there's no new reactor construction to freeze. Once hailed as "too cheap to meter," nuclear fission turns out to be an outlandishly expensive method of generating juice for our Xboxes.

Note: For many reports from major media sources on the government and corporate corruption that allows the nuclear industry to continue, click here and here.

The Federal Reserve will disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view. The justices ... left intact a court order that gives the Fed five days to release the records, sought by Bloomberg News' parent company, Bloomberg. The order marks the first time a court has forced the Fed to reveal the names of banks that borrowed from its oldest lending program, the 98-year-old discount window. "I can't recall that the Fed was ever sued and forced to release information" in its 98-year history, said Allan H. Meltzer, the author of three books on the U.S central bank and a professor at Carnegie Mellon University in Pittsburgh. The disclosures, together with details of six bailout programs released by the central bank in December under a congressional mandate, would give taxpayers insight into the Fed's unprecedented $3.5 trillion effort to stem the 2008 financial panic. Under the trial judge's order, the Fed must reveal 231 pages of documents related to borrowers in April and May 2008, along with loan amounts. News Corp.'s Fox News is pressing a bid for 6,186 pages of similar information on loans made from August 2007 to November 2008.

Note: For a treasure trove of reports from major media sources on the hidden activities of the Fed and the biggest Wall Street and international banks, click here.

Nuclear plants in the United States last year experienced at least 14 "near misses," serious failures in which safety was jeopardized, at least in part, due to lapses in oversight and enforcement by US nuclear safety regulators, says a new report. They occurred with alarming frequency – more than once a month – which is high for a mature industry, said the study of nuclear plant safety performance in 2010 by the Union of Concerned Scientists, a Washington-based nuclear watchdog group. The report, the first in what the UCS expects will become an annual study, details both successes and failures by the US Nuclear Regulatory Commission, which it calls "the cop on the beat." Charged with overseeing America's fleet of 104 nuclear reactors, the NRC made some "outstanding catches," but was also inconsistent in its oversight, seeming at times to nod off when most needed. "The chances of a disaster at a nuclear plant are low," the report states. "But when the NRC tolerates unresolved safety problems – as it did last year at Peach Bottom, Indian Point, and Vermont Yankee – this lax oversight allows that risk to rise. The more owners sweep safety problems under the rug and the longer safety problems remain uncorrected, the higher the risk climbs."

Note: For many reports from reliable sources on government corruption, click here.

For 18 months, operators at the Diablo Canyon nuclear plant near San Luis Obispo didn't realize that a system to pump water into one of their reactors during an emergency wasn't working. It had been accidentally disabled by the plant's own engineers, according to a report ... from the Union of Concerned Scientists watchdog group, [which] lists 14 recent "near misses" - instances in which serious problems at a plant required federal regulators to respond. The report criticizes both plant operators and the Nuclear Regulatory Commission for allowing some known safety issues to fester. The problem at Diablo Canyon ... involved a series of valves that allow water to pour into one of the plant's two reactors during emergencies, keeping the reactor from overheating. A pair of remotely operated valves in the emergency cooling system was taking too long to move from completely closed to completely open. So engineers shortened the distance between those two positions, according to the report. Unfortunately, two other pairs of valves were interlocked with the first. They couldn't open at all until the first pair opened all the way. No one noticed until the valves refused to open during a test in October 2009, 18 months after the engineers made the changes.

Note: For lots more from reliable sources on government and corporate corruption, click here and here.

The landmark Blackstone Hotel in downtown Chicago, which has hosted 12 U.S. presidents, opened in 2008 after a two-year, $116 million renovation. Buffed marble staircases greet guests spending up to $699 a night for rooms with views of Lake Michigan. What's surprising isn't the opulent makeover: It's how the project was financed. The work was subsidized by a federal development program intended to help poor communities. The biggest beneficiary of taxpayer help for the Blackstone revamp was Prudential Financial Inc., the second-largest U.S. life insurer. The company got $15.6 million in tax credits from the U.S. Department of the Treasury for helping to fund the project. JPMorgan Chase & Co., the second-largest U.S. bank by assets, also took in money by serving as a lender and the monitor of Blackstone construction financing, city records show. Since 2003, some of the world's biggest financial companies, including Goldman Sachs Group Inc., U.S. Bancorp, JPMorgan Chase and Prudential, have taken advantage of a federal subsidy that will cost taxpayers $10.1 billion -- and most of the public has never heard of it. Investors have used the program, called New Markets Tax Credits, to help build more than 300 upscale projects, including hotels, condominiums, office buildings and a car museum, on streets far from poverty, according to ... records released through a federal Freedom of Information Act request. JPMorgan spokesman Tom Kelly .. declines to discuss specifics. “We think these projects help the community,” Kelly says.

Note: For other revealing major media articles showing blatant corruption in the government and corporations, click here and here.

Zero-percent financing deals sound tempting when you are making a big purchase. But they can have costly consequences. Justin Miller financed a new Tempur-Pedic bed through Citibank. Miller said the deal was a credit plan offering 12 months interest free. Even though he had the cash, he decided to finance $5,600. But after Miller made the last payment, he received a bill from Citibank for $1,332.70. A year’s worth of interest Citibank calculated at 25 percent. “I thought this is crazy, either this is some kind of joke or some kind of scam,” Miller said. But according to the statement, the plan expired December 2nd. Miller’s payment was due four days later, after the interest free deal expired on December 6th. “The statement due date was different from what they call the plan due date,” Miller said. In fact Miller believes the due date was intentional to fool customers into making their last payment after the interest rate expires. Jose Quinonez with Mission Asset Fund said it’s a common practice. Quinonez adds banks rarely go out of their way to tell customers about expiration dates on interest-free deals. “My recommendation to people is to make sure to pay off the whole balance completely in full by the 11th month, not wait till the 12th month to pay it off,” he said. Citibank refused to discuss the specifics of Miller’s case, but it told CBS 5 ConsumerWatch the terms of the deal are clearly explained in the seven page contract.

Of the 500 big companies in the well-known Standard & Poor’s stock index, 115 paid a total corporate tax rate — both federal and otherwise — of less than 20 percent over the last five years, according to an analysis of company reports done for The New York Times by Capital IQ, a research firm. Thirty-nine of those companies paid a rate less than 10 percent. Arguably, the United States now has a corporate tax code that’s the worst of all worlds. The official rate is higher than in almost any other country, which forces companies to devote enormous time and effort to finding loopholes. Yet the government raises less money in corporate taxes than it once did, because of all the loopholes that have been added in recent decades. Over the last five years ... Boeing paid a total tax rate of just 4.5 percent. Southwest Airlines paid 6.3 percent. And the list goes on: Yahoo paid 7 percent; Prudential Financial, 7.6 percent; General Electric, 14.3 percent. Economists have long pleaded for an overhaul of the corporate tax code. But it won’t be easy. Companies that use loopholes to avoid taxes don’t mind the current system, of course, and they have more than a few lobbyists at their disposal.

Note: For a treasure trove of reliable reports on corporate corruption, click here.

When it comes to paychecks, Wall Street's law of gravity is back in full force: What goes down must come back up. In 2010, total compensation and benefits at publicly traded Wall Street banks and securities firms hit a record of $135 billion, according to an analysis by The Wall Street Journal. The total is up 5.7% from $128 billion in combined compensation and benefits by the same companies in 2009. At 25 large financial firms that have reported full-year results, revenue rose to $417 billion, another all-time high. "Things are shifting back to where they were before," said J. Robert Brown, a law professor at the University of Denver who studies compensation and corporate-governance issues. Buried in the numbers, though, are signs of how Wall Street's pay culture is bending in response to pressure from regulators and shareholders. Last year, deferred compensation made up as much as half of total pay, up from about a third previously, estimates Alan Johnson, managing director of Johnson Associates Inc., a New York pay consultant. Banks and securities firms are deferring a larger percentage of compensation than they used to, trying to counter criticism that yearly cash bonuses encourage unwise risk-taking by executives, traders and other employees aiming for a big payday.

Note: For the NY State Comptroller's analysis of Wall Street bonuses in 2010, click here and here.

Fifty years ago this month, President Dwight D. Eisenhower, in his farewell address to Americans, cautioned that the "military-industrial complex" must never be allowed to "endanger our liberties or democratic processes." Despite his warning, William Hartung argues, defense contractors like Lockheed Martin have ballooned in size, scope, and influence. Hartung, the director of the Arms and Security Initiative at the New America Foundation, recently spoke with U.S. News about his new book, Prophets of War. "The military-industrial complex [is] really about the conjunction between the military itself, the weapons contractors, and in some degree the Congress. And it deals with how they kind of work in tandem to lobby for perhaps higher levels of military spending than we might otherwise need," [explained Hartung]. "The biggest Pentagon contractor [is} Lockheed Martin. They got $29 billion in Pentagon awards, which is about $6 billion more than the next company. And they are involved in almost the full gamut of weapons programs. Other than pistols or semi-automatic rifles, they make almost everything the Pentagon would want." Defense contractors ... actually help to finance think tanks that then advocate policies - whether it be regime change in Iraq or a different approach to nuclear weapons policy - that, if pursued, would be of benefit to the company. Then there's the relationship with Congress. They are very strategic in how they give money." Military spending is twice what it was under Eisenhower.

Note: For more on Lockheed's near stranglehold on business, see this NY Times article and another article on Donald Trump's full support of the military-industrial complex. For more along these lines, see concise summaries of deeply revealing news articles about corruption in government and in the corporate world.

Two of the US's biggest mortgage lenders have had mortgage foreclosures cancelled in a case that could affect other banks. The Supreme Court in Massachusetts ruled against US Bancorp and Wells Fargo in a widely watched case. Backing a lower court ruling made in 2009, it said two foreclosure sales were invalid because the banks did not prove that they owned them at the time. The decision is among the earliest to address the validity of foreclosures done without proper documentation - so-called robo-loans because they were carried out by people who were unqualified and who often did not check a single line in the paperwork. Marty Mosby, an analyst at Guggenheim Securities said: "A ruling like this will slow down the foreclosure process. They're going to have to be really precise and get everything in order. It doesn't leave a lot of wiggle room." The case also applies retrospectively to people who have already been foreclosed. Glenn Russell, a lawyer for one of the couples in the case said: "I'm ecstatic. The fact the decision applies retroactively could mean thousands of homeowners can seek recovery for homes wrongfully foreclosed upon." Analysts said the decision may also threaten banks' ability to package mortgages into securities, and may raise the spectre that loans transferred improperly will need to be bought back.

Note: For lots more from major media sources on the criminal profiteering by the largest banks and Wall Street financial firms, click here.

More than 20% of patients who received an implantable cardioverter-defibrillator -- a high-tech device that produces electrical impulses to regulate heartbeats and prevent life-threatening arrhythmias -- in recent years were not good candidates to receive the device, a new study suggests. Researchers at Duke University looked at more than 111,000 patients who received ICD implants between 2006 and 2009. More than 25,000 of those patients did not meet evidence-based criteria for receiving the device, according to the study. The risk of dying in the hospital was significantly higher for patients who received the ICD but did not meet the criteria, and 1 out of 121 patients in this category experienced complications following the implant, the study found. Dr. Robert Michler, chairman of Cardiovascular and Thoracic Surgery at Montefiore-Einstein Heart Center, said the data should act as a "wake-up call" for physicians, surgeons and patients. "Doctors are well-intentioned, but not all doctors should be determining the use of what is a very sophisticated therapy," Michler says. He says that in this case electophysiologists should be making the final determination if the patient needs the device.

Note: For powerful information from a top MD on how the profit motive corrupts the medical industry and endangers our health, click here.

A genetically engineered fish infused with genes from other species, including an eel-like creature, could soon be on dinner plates in the Bay Area and around the United States. The U.S. Food and Drug Administration is considering an application by AquaBounty Technologies Inc. of Massachusetts to bioengineer a sterile salmon that would grow extremely fast and, if all goes as planned, never set so much as a fin in a natural body of water. It would be the first genetically engineered animal to be approved for human consumption. The proposal, which is awaiting an environmental assessment and a preliminary decision by the FDA, has created a furor among environmentalists, who have dubbed the species "Frankenfish." They claim the doctored salmon could spread disease in humans or circulate mutant genes in the wild if an accident or sabotage ever set them loose. "The effect of what happens if these genetically engineered fish escape is largely unknown and has been largely unquestioned by the FDA," said Colin O'Neil, the regulatory policy analyst for the Center for Food Safety, an environmental nonprofit based in Washington, D.C. "These fish have been demonstrated to be less healthy. Consumers clearly do not want to eat genetically engineered salmon."

Note: For a superb summary of the dangers posed by genetically-modified foods, click here.

America's big businesses are less and less American. They're going abroad for sales and employees. That's one reason they've showed record-breaking profits in 2010 while creating almost no American jobs. Consider one of the most popular products for Christmas gifts of all time - Apple's iPhone. Researchers from the Asian Development Bank Institute have dissected an iPhone, whose wholesale price is around $179, to determine where the money actually goes. Only about $11 of that iPhone goes to American workers, mostly researchers and designers. Even old-tech American companies made big money abroad in 2010 - and created scads of jobs there. General Motors, for example, is now turning a nice profit, and American investors are bullish about its future. That doesn't mean GM will be creating lots more blue-collar jobs in America, though. 2010 was a banner year for GM's foreign sales - already two-thirds of its total sales, and rising. In October, GM became the first automaker to sell more than 2 million cars a year in China. The company is now making more cars in China than in the United States. Meanwhile, back home in the United States, GM has slashed its labor costs. New hires are brought in at roughly half the wages and benefits of former GM employees, under a two-tier wage structure accepted by the United Auto Workers. Almost all of GM's U.S. suppliers have also cut their payrolls.

Note: Robert Reich, former U.S. secretary of labor, is professor of public policy at UC Berkeley and the author of the new book Aftershock: The Next Economy and America's Future. He blogs at www.robertreich.org.

About eight of every 10 registered lobbyists who work for scanner-technology companies previously held positions in the government or Congress, most commonly in the homeland security, aviation or intelligence fields, a Washington Post review of lobbying-disclosure forms and other data shows. Industries routinely employ well-connected lobbyists to seek favorable legislation and regulations in the nation's capital. But the extent of the connections to the federal government is particularly notable given the relatively small size of the scanner industry, which is dominated by half a dozen specialized businesses with heavy investments in airport and border security technology. The roster of lobbyists for L-3 Communications includes former U.S. senator Alfonse M. D'Amato (R-N.Y.) and Linda Daschle, a former federal aviation official who is married to Thomas A. Daschle (D-S.D.), a former Senate majority leader. L-3 has won nearly $900 million worth of TSA business, including for its "millimeter-wave" machines used for airport body scans. Former homeland security chief Michael Chertoff, a longtime advocate for increased use of passenger scanners, worked until recently as a consultant for Rapiscan, which provides "backscatter" X-ray scanners to the TSA. Privacy and civil liberties advocates and other critics argue that the industry's lobbying ties have encouraged a frenzy of TSA spending on technologies that are often untested or ineffective.

Note: For key reports from major media sources on corporate and government corruption, click here and here.

Excerpts from complaint by New York State Attorney General (and Governor-Elect) Andrew Cuomo: E&Y [Ernst and Young] substantially assisted Lehman Brothers Holdings Inc., now bankrupt, to engage in a massive accounting fraud, involving the surreptitious removal of tens of billions of dollars of securities from Lehman’s balance sheet in order to create a false impression of Lehman’s liquidity, thereby defrauding the investing public. As the financial crisis deepened in 2007 and 2008 and Lehman’s liquidity problems intensified, E&Y ... assisted Lehman in defrauding the public about the Company’s deteriorating financial condition, particularly its leverage. As the public auditor for Lehman, E&Y had the absolute obligation to ensure that Lehman’s financial statements ... did not mislead the public. Instead of fulfilling this obligation ... E&Y sat by silently while Lehman deceived the public by concealing [fraulent] transactions and misrepresenting the Company’s leverage. By doing so, E&Y directly facilitated a major accounting fraud, and helped Lehman mislead the public as to its true financial condition. E&Y, which reaped over $150 million in fees from Lehman, must be held accountable for its role in this fraud.

Note: For key reports from reliable sources detailing the fraud that led to the financial crisis and bailout of Wall Street by taxpayers, click here.

More than 100 American cities could go bust next year as the debt crisis that has taken down banks and countries threatens next to spark a municipal meltdown, a leading analyst has warned. Meredith Whitney, the US research analyst who correctly predicted the global credit crunch, described local and state debt as the biggest problem facing the US economy, and one that could derail its recovery. "Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy," Whitney [said]. "There's not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars' worth of defaults." American cities and states have debts in total of as much as $2tn. US states have spent nearly half a trillion dollars more than they have collected in taxes, and face a $1tn hole in their pension funds, said the CBS programme, apocalyptically titled The Day of Reckoning.

Note: For a treasure trove of reports from major media sources on the dire impacts of the financial crisis and government bailout of financial capitalists at taxpayers' expense, click here.

Nigeria announced today that in exchange for $250 million, the African nation has dropped bribery charges against Dick Cheney, eight others and Halliburton, the oil-services company he headed before becoming vice president. African and U.S. media say Halliburton and Cheney have not commented on the deal, which the head of Nigeria's anti-corruption agency said was offered by Texas-based Halliburton. As The Wall Street Journal points out, "U.S. regulators collected $1.28 billion in penalties and criminal fines in the Bonny Island case after settling charges of violating the Foreign Corrupt Practices Act, a 1977 law that bans the bribery of foreign officials to obtain business." Femi Babafemi, a spokesman for the Economic and Financial Crimes Commission, said that the $250 million would include roughly $130 million frozen in a Swiss bank, and that remainder would be paid as fines, Agence France-Presse reported Tuesday. But a source told AFP $100 million was in Switzerland and $30 million was in Monaco, saying the money was paid to an intermediary but never passed on as part of the bribery scheme.

Note: It sounds like Cheney and Halliburton basically bribed their way out of a potentially very damaging court case. For lots more from major media sources on corporate and government corruption, click here and here.

Bank of America will pay $137.3 million to settle allegations that it defrauded schools, hospitals and dozens of other state and local government organizations, federal officials said [on December 7]. The settlement stems from a long-running investigation into misconduct in the municipal bond business that raises money for localities to pay for public services. Bank of America is accused of depriving local organizations of millions of dollars by engaging in illegal behavior when investing the proceeds of municipal bond sales. The bank is paying $107.8 million to these organizations in restitution, $25 million to the Internal Revenue Service for abuses related to the tax-free status of municipal bonds and $4.5 million to state attorneys general for costs related to their investigations. A number of bankers and other professionals from a variety of financial firms have pleaded guilty in the probe, which centered on companies conspiring to win municipal securities business in violation of statutes requiring fair competition. The banking giant is accused of taking part in a conspiracy in which it and other banks paid kickbacks to win the business of municipalities seeking to invest the proceeds of bond sales before the money is ready to be spent.

Note: For key reports on financial fraud from reliable sources, click here.

As a result of an amendment that I was able to include in the Wall Street reform bill, we have begun to lift the veil of secrecy at the Fed. It is unfortunate that it took this long, and it is a shame that the biggest banks in America and Mr. Bernanke fought to keep this secret from the American public every step of the way. But, the details on this bailout are now on the Federal Reserve's website. This is a major victory for the American taxpayer and for transparency in government. After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed's multi-trillion-dollar bailout of Wall Street and corporate America. What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country.

Note: The author is Senator Bernie Sanders (I-VT). For key reports from reliable sources on the massive federal bailout of the biggest banks and financial firms, click here.

The nation’s workers may be struggling, but American companies just had their best quarter ever. American businesses earned profits at an annual rate of $1.659 trillion in the third quarter, according to a Commerce Department report. That is the highest figure recorded since the government began keeping track over 60 years ago. The next-highest annual corporate profits level on record was in the third quarter of 2006, when they were $1.655 trillion. Corporate profits have been doing extremely well for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history. As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output. That is the highest share since the fourth quarter of 2006, when they accounted for 11.7 percent of output.

Note: Long-term unemployment is at a record high, yet corporations are raking in record profits. With record profits, why aren't corporations hiring more new employees? For many reports from reliable souces on corporate profiteering, click here.

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