Corporate Corruption News Articles

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Jim Rogers, one of the world's most prominent international investors, ... called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded. Co-founder with George Soros of the Quantum Fund, [Rogers] said the government's $700 billion rescue package for the sector doesn't address how banks manage their balance sheets, and instead rewards weaker lenders with new capital. "Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt," said Rogers. "What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent," he said. "What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics." While not saying how long the U.S. economic recession will last, he said conditions could ultimately mirror those of Japan in the 1990s. "The way things are going, we're going to have a lost decade too, just like the 1970s," he said. "Governments are making mistakes," he said. "They're saying to all the banks, you don't have to tell us your situation. You can continue to use your balance sheet that is phony.... All these guys are bankrupt, they're still worrying about their bonuses, they're still trying to pay their dividends, and the whole system is weakened."

Note: For a treasure trove of reliable reports exposing the realities of the Wall Street bailout, click here.

The more details emerge, the clearer it becomes that Washington's handling of the Wall Street bail-out is not merely incompetent: it is borderline criminal. In a moment of high panic in September, the US treasury pushed through a radical change in how bank mergers are taxed - a change long sought by the industry. Despite the fact that this move will deprive the government of as much as $140bn in tax revenue, legislators found out only after the fact. According to the Washington Post, more than a dozen tax attorneys agree that "[the] treasury had no authority to issue the [tax change] notice". Of equally dubious legality are the equity deals the treasury has negotiated with many of the banks. According to Congressman Barney Frank, one of the architects of the legislation that enables the deals: "Any use of these funds for any purpose other than lending - for bonuses, for severance pay, for dividends, for acquisitions of other institutions ... is a violation of the act." Yet this is exactly how the funds are being used. Then there is the nearly $2 trillion that America's central bank, the Federal Reserve, has handed out in emergency loans. Incredibly, the Fed will not reveal which corporations have received these loans or what it has accepted as collateral. Bloomberg news service believes this secrecy violates the law and has filed a federal suit demanding full disclosure. Yet the Democrats are either openly defending the administration or refusing to intervene. Obama owes it to the people who elected him to call this what it is: an attempt to undermine the electoral process by stealth.

Note: For many key articles revealing the hidden realities of the bailout, click here.

An outraged sheriff in Illinois who refuses to evict ... renters from foreclosed homes criticized mortgage companies ... and said the law should protect victims of the mortgage meltdown. Sheriff Thomas J. Dart said earlier he is suspending foreclosure evictions in Cook County, which includes the city of Chicago. The county had been on track to reach a record number of evictions, many because of mortgage foreclosures. "Many good tenants are suffering because building owners have fallen behind on their mortgage payments," he said Thursday on CNN's "American Morning." "These poor people are seeing everything they own put out on the street. ... They've paid their bills, paid them on time. Here we are with a battering ram at the front door going to throw them out. It's gotten insane," he said. Mortgage companies are supposed to identify a building's occupants before asking for an eviction, but sheriff's deputies routinely find that the mortgage companies have not done so, Dart said. "This is an example where the banking industry has not done any of the work they should do. It's a piece of paper to them," Dart said. "These mortgage companies ... don't care who's in the building," Dart said. "They simply want their money and don't care who gets hurt along the way. "On top of it all, they want taxpayers to fund their investigative work for them. We're not going to do their jobs for them anymore. We're just not going to evict innocent tenants. It stops today. When you're blindly sending me out to houses where I'm coming across innocent tenant after innocent tenant, I can't keep doing this and have a good conscience about it."

Note: For many reports of corporate corruption from reliable sources, click here.

Treasury Secretary Paulson's edict to create a $700 billion fund to buy worthless mortgage securities from agitated wealthy bond investors is nothing short of a final step on the path to the end of the republic. The secretary claims he can only be effective if his decisions are beyond judicial review. Our government and its owners appear to be testing how much the American public will tolerate. A few years ago, no one could have imagined that the silent majority would quietly accept thefts of this magnitude from a government that stopped tiny payments to single mothers with poor children in the name of welfare reform because the program's $10 billion cost was breaking the federal budget. If the public allows this theft, then it will signal to powerful forces that they can essentially do anything, because the American public has become so mushy-headed that it will stand up for nothing. When power discovers that those from whom it would exact payment are powerless, its viciousness increases infinitely. Our enemy has revealed itself, and it is our own government. Because the American public has not been introduced to methods for controlling its government for generations, I will suggest one called a general strike. This fundamental democratic power is where everyone decides to send a message to the government by not going to work, to school, shopping, nowhere. This is the critical time when charlatans among us will promise they can save us from the inevitable if we only allow them the power they need to save us. They are lying.

Note: This article's author Sean Olender is an attorney in San Mateo, California. Mr. Oleander predicted the bailout of Fannie Mae and Freddie Mac months before it happened based on clearly disempowering moves by the government. To see his prescient article on this from Feb. 2008, click here.

The market was 500 trades away from Armageddon on Thursday [September 18], traders inside two large custodial banks tell The Post. Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed. According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The Fed's dramatic $105 billion liquidity injection on Thursday (pre-market) was just enough to keep key institutional accounts from following through on the sell orders and starting a stampede of cash that could have brought large tracts of the US economy to a halt. Cracks started to show in money market accounts late Tuesday when shares in one fund, the Reserve Primary Fund - which touted itself as super safe - fell below the golden $1 a share level. By Wednesday, banks sensed a run on their accounts. They started stockpiling cash in anticipation of withdrawals. Banks, which usually keep an average of $2 billion in excess reserves earmarked for withdrawals, pumped that up to an astounding $90 billion, Lou Crandall, chief economist at Wrighton ICAP, told The [Wall Street] Journal. And for good reason. By the close of business on Wednesday, $144.5 billion - a record - had been withdrawn. How much money was taken out of money market funds the prior week? Roughly $7.1 billion, according to AMG Data Services. By Thursday, that level ... had grown to $100 billion.

Note: For insight into the banking and financial powers that runs today's governments, click here.

A flagship European scheme designed to fight global warming is set to hand hundreds of millions of pounds to some of Britain's most polluting companies, with little or no benefit to the environment. Dozens of multinational firms stand to benefit from the windfall, which comes from the over-allocation of carbon permits under the European emissions trading scheme. The permits are given to companies by the government, and are supposed to account for their carbon pollution over the next five years. But figures published by the European Commission show that many companies have been allocated far too many permits, which they can sell for cash. The scheme is supposed to only distribute as many permits as companies require, with one permit allocated for each tonne of CO2 produced. The figures ... suggest that up to 9m extra annual permits have been allocated to 200 companies across almost all sectors of the British economy, from steel and cement making, to car manufacturing and the food and drink industry. Dozens of household names such as Ford, Thames Water, Astra Zeneca and Vauxhall are among the companies that could benefit. Campaigners say the allocations were ... influenced by industry group lobbying. A source at a major UK car manufacturing firm, which has been allocated more than double the number of permits it needs, told the Guardian they were given out based on "magical logic".

Note: For revealing reports from major media sources on government corruption, click here.

Exxon Mobil Corp. jumped into the political fray Thursday as its $11.7 billion record quarterly earnings — and $8 billion in share buybacks — raised hackles in Washington. "They tell us they want to do more domestic production," said Sen. Charles Schumer, D-N.Y. "They tell us they need to drill offshore. They tell us that they can find oil on the mainland. And what do they do with their profits? They buy back stock, simply to increase their share price." Democrats argue that producers already hold 68 million acres of federal lands on which they are not producing oil or gas. Irving-based Exxon Mobil, the world's largest oil company, was the fourth major oil giant to release quarterly results. Hours earlier, Royal Dutch Shell, based in the Netherlands, announced a 33 percent increase in profit. Houston-based ConocoPhillips last week announced a 13 percent increase in net income during a quarter in which oil prices rose from about $100 to $140 a barrel. London-based BP announced a 28 percent profit increase on Tuesday. Analysts ... focused less on Exxon Mobil's profits than on its 8 percent drop in production. The world's largest oil companies ... are benefiting from record-high oil prices. Exxon Mobil increased spending on capital and exploration projects by 38 percent in the quarter to $7 billion. It also spent $8 billion buying back its own shares and reported $39 billion in cash on hand. A Democratic analysis of the top five oil company's expenditures from 2004 through 2007 found that the majors plowed about $181 billion into stock buybacks, nearly three times as much as they spent on U.S. production activity.

It seemed an ideal marriage, a scientific partnership that would attack mental illness from all sides. Psychiatrists would bring ... their expertise and clinical experience, drug makers would provide their products and the money to run rigorous studies, and patients would get better medications, faster. But now the profession itself is under attack in Congress, accused of allowing this relationship to become too cozy. After a series of stinging investigations of individual doctors’ arrangements with drug makers, Senator Charles E. Grassley, Republican of Iowa, is demanding that the American Psychiatric Association, the field’s premier professional organization, give an accounting of its financing. "I have come to understand that money from the pharmaceutical industry can shape the practices of nonprofit organizations that purport to be independent in their viewpoints and actions," Mr. Grassley said. In 2006 ... the drug industry accounted for about 30 percent of the association’s $62.5 million in financing. One of the doctors named by Mr. Grassley is the association’s president-elect, Dr. Alan F. Schatzberg of Stanford, whose $4.8 million stock holdings in a drug development company raised the senator’s concern. Commercial arrangements are rampant throughout medicine. In the past two decades, drug and device makers have paid tens of thousands of doctors and researchers of all specialties. Worried that this money could taint doctors’ research plans or clinical judgment, government agencies, medical journals and universities have been forced to look more closely at deal details.

Note: For many powerful reports of corporate corruption, click here.

Despite a steady stream of negative news coverage, Taser International’s business has sailed above it all, rolling with the punches before coming out on top of a growing industry. Perhaps most importantly, the company has been remarkably successful inside the courtroom. With 69 straight trial victories, according to one count, Taser had assembled a nearly unmatchable record — 3 more wins than this year’s much-vaunted Boston Celtics, with none of the embarrassing losses. None until [Friday, June 4], that is, when an unfavorable verdict represented the first chink in the taser-proof body armor. From The Herald of Monterey County, Calif., the local paper on the case: A federal jury has held Taser International responsible for the death of a Salinas man in U.S. District Court in San Jose ... and awarded his family more than $6 million in punitive and compensatory damages. An attorney for the family called the verdict a "landmark decision," and indicated that it was the first time Taser International had been held responsible for a death or injury linked to its product. During trading on Monday, the company’s stock dropped almost 12 percent. "Investors will assume heightened operating risk in the Taser model in the short-term," one analyst told Barron’s. Bloomberg News reported last month that more than half of Taser’s top 10 shareholders sold some of their shares this year.

Note: Do a search in Google News and you will find that no major media outlets reported that Taser International had 69 straight victories with no losses in the courts till now. Even the above was in a NY Times blog and not in the paper. How interesting that they don't seem to want us to know this.

What are the consequences of a world in which regulators rescue even the financial institutions whose recklessness and greed helped create the titanic credit mess we are in? Will the consequences be an even weaker currency, rampant inflation, a continuation of the slow bleed that we have witnessed at banks and brokerage firms for the past year? Or all of the above? Stick around, because we’ll soon find out. And it’s not going to be pretty. Agreeing to guarantee a 28-day credit line to Bear Stearns, by way of JPMorgan Chase, the Federal Reserve Bank of New York conceded last Friday that no sizable firm with a book of mortgage securities or loans out to mortgage issuers could be allowed to fail right now. It was the most explicit sign yet of the Fed’s “Rescues ‘R’ Us” doctrine that already helped to force the marriage of Bank of America and Countrywide. But why save Bear Stearns? “Why not set an example of Bear Stearns, the guys who have this record of dog-eat-dog, we’re brass knuckles, we’re tough?” asked William A. Fleckenstein, president of Fleckenstein Capital in Issaquah, Wash., and co-author with Fred Sheehan of Greenspan’s Bubbles: The Age of Ignorance at the Federal Reserve. After years of never allowing any of our financial institutions to fail, they have become so enormous that nobody will be allowed to sink beneath the waves. Otherwise, a tsunami would swamp the hedge funds, banks and other brokerage firms that remain afloat. If Bear Stearns failed, for example, it would result in a wholesale dumping of mortgage securities and other assets onto a market that is frozen and where buyers are in hiding. This fire sale would force surviving institutions carrying the same types of securities on their books to mark down their positions, generating more margin calls and creating more failures.

Note: This excellent article should be read in its entirety by anyone who wants to understand the impending financial meltdown and the government's response to it.

Lawmakers and watchdog groups had harsh words Monday for the U.S. Department of Agriculture after the agency ordered a recall of 143 million pounds of beef from a Southern California slaughterhouse. Beef products dating to Feb. 1, 2006, that came from Westland/Hallmark Meat Co. of Chino (San Bernardino County) are subject to the recall, which is the largest such action in U.S. history. The notice came after the Humane Society of the United States shot undercover video showing crippled and sick animals being shoved with forklifts - treatment that has also triggered an animal-abuse investigation. A congresswoman who chairs a House subcommittee that determines funding levels for the USDA sent a letter ... to the agency's undersecretary for food safety demanding an explanation of the Westland case before a March 5 budgetary review hearing. Rep. Rosa DeLauro, D-Conn., chairwoman of the House Agriculture, Food and Drug Administration Appropriations Subcommittee, called the scenes in the video inhumane and said the video "demonstrates just how far our food safety system has collapsed." DeLauro has called for an investigation into the government's ability to secure the safety of meat in the nation's schools. Westland was a major supplier of beef for the National School Lunch Program. She also asked how the agency is addressing staff shortages among slaughterhouse inspectors - an issue also raised by several food safety experts and watchdog groups. According to Felicia Nestor, a senior policy analyst with Food and Water Watch, a consumer advocacy group based in Washington, anywhere from 7 to 21 percent of slaughterhouse inspector positions have been left vacant by the USDA, depending on the district. "They just don't fill vacancies," Nestor said.

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

Contract personnel working for the Defense Department now outnumber U.S. forces in Iraq and Afghanistan; there are 196,000 private-sector workers in both countries compared to 182,000 troops. Contractors are responsible for a slew of duties, including repairing warfighting equipment, supplying food and water, building barracks, providing armed security and gathering intelligence. The dependence has come with serious consequences. A shortage of experienced federal employees to oversee this growing industrial army is blamed for much of the waste, fraud and abuse on contracts collectively worth billions of dollars. "We do not have the contracting personnel that we need to guarantee that the taxpayer dollar is being protected," said William Moser, the State Department's deputy assistant secretary for logistics management. "We are very, very concerned about the integrity [of] the contracting process. We don't feel like ... we can continue in the same situation." The office of the Special Inspector General for Iraq Reconstruction has 52 open cases related to bribery, false billing, contract fraud, kickbacks and theft; 36 of those cases have been referred to the Justice Department for prosecution, according to the inspector general's office. The Army Criminal Investigation Command is busy, too. The command has 90 criminal investigations under way related to alleged contract fraud in Iraq, Kuwait and Afghanistan. Two dozen U.S. citizens have been charged or indicted so far — 19 of those are Army military and civilian employees — and more than $15 million in bribes has changed hands.

Note: For many more revelations of war profiteering, click here.

The U.S. Department of Agriculture yesterday asked U.S. farmers to keep their cloned animals off the market indefinitely even as Food and Drug Administration officials announced that food from cloned livestock is safe to eat. Bruce I. Knight, the USDA's undersecretary for marketing and regulatory programs, requested an ongoing "voluntary moratorium" to buy time for "an acceptance process" that Knight said consumers in the United States and abroad will need, "given the emotional nature of this issue." Yet even as the two agencies sought a unified message -- that food from clones is safe for people but perhaps dangerous to U.S. markets and trade relations -- evidence surfaced suggesting that Americans and others are probably already eating meat from the offspring of clones. Executives from the nation's major cattle cloning companies conceded yesterday that they have not been able to keep track of how many offspring of clones have entered the food supply, despite a years-old request by the FDA to keep them off the market pending completion of the agency's safety report. At least one Kansas cattle producer also disclosed yesterday that he has openly sold semen from prize-winning clones to many U.S. meat producers in the past few years, and that he is certain he is not alone. "This is a fairy tale that this technology is not being used and is not already in the food chain," said Donald Coover, a Galesburg cattleman and veterinarian who has a specialty cattle semen business. "Anyone who tells you otherwise either doesn't know what they're talking about, or they're not being honest." Last year, [only] 22 percent of Americans who responded to a major survey said they had a favorable impression of food from clones.

Note: For lots more reliable information on how big business takes huge risks with the food we eat, click here.

"I am not my brother's keeper," Howard "Cookie" Krongard, the State Department's inspector general, testified to the House Oversight and Government Reform Committee yesterday. As Cookie surely must know, that excuse hasn't worked since Genesis. In this case, the players weren't Cain and Abel, but Cookie and his brother Buzzy. Cookie, under fire for allegedly quashing probes of the infamous Blackwater security contractor, began his testimony by angrily denying the "ugly rumors" that his brother, former CIA official Alvin "Buzzy" Krongard, is on Blackwater's advisory board. But during a recess, Cookie called Buzzy and learned that -- gulp -- the ugly rumors are true: His brother is on the board. When the lawmakers returned, Cookie revised and extended his testimony. "I had not been aware of that," Cookie told the congressmen. "I hereby recuse myself from any matters having to do with Blackwater." The lawmakers reacted with Old Testament fury. The swaggering Cookie -- he alternately addressed the lawmakers with his thumb in his waistband, slouching in his chair, rolling his eyes and making baffled glances -- had spent the morning aggressively denying the allegations lodged against him: that he had impeded investigations into contracting fraud, including weapons smuggling by Blackwater, and that he had abused his underlings. But then came Buzzy's bombshell -- and Cookie's credibility crumbled. Either he had lied to Congress, or his own brother had lied to him. It was only the latest bit of strangeness for the powerful but eccentric Brothers Krongard. Buzzy [is] known for his cigar chomping, martial arts and recreational workouts with SWAT teams. "Krongard once punched a great white shark in the jaw," his hometown Baltimore Sun reported when he took the No. 3 job at the CIA a decade ago. More recently, Buzzy joined the advisory board of Blackwater, the firm known for its ready trigger fingers in Iraq.

Note: Alvin "Buzzy" Krongard was the Executive Director (the third-highest position) at the CIA on 9/11, and had until 1998 been the head of the firm used to buy many of the "put" options on United Airlines stock made just prior to 9/11 that were never claimed, though this received little media coverage.

Pharmaceutical ingredients exported from China are often made by chemical companies that are neither certified nor inspected by Chinese drug regulators, The New York Times has found. Because the chemical companies are not required to meet even minimal drug-manufacturing standards, there is little to stop them from exporting unapproved, adulterated or counterfeit ingredients. The substandard formulations made from those ingredients often end up in pharmacies in developing countries and for sale on the Internet, where more Americans are turning for cheap medicine. [At a pharmaceutical trade show in Milan], the Times identified at least 82 Chinese chemical companies that said they made and exported pharmaceutical ingredients — yet not one was certified by the State Food and Drug Administration in China, records show. Nonetheless, the companies were negotiating deals at the pharmaceutical show, where suppliers wooed customers with live music, wine and vibrating chairs. In China, chemical manufacturers that sell drug ingredients fall into a regulatory hole. Pharmaceutical companies are regulated by the food and drug agency. Chemical companies that make products as varied as fertilizer and industrial solvents are overseen by other agencies. The problem arises when chemical companies cross over into drug ingredients. “We have never investigated a chemical company,” said Ms. Yan [Jiangying], deputy director of policy and regulation at the State Food and Drug Administration. “We don’t have jurisdiction.” China has an estimated 80,000 chemical companies, and the United States Food and Drug Administration does not know how many sell ingredients used in drugs consumed by Americans. The Times examined thousands of companies selling products on major business-to-business Internet trading sites and found more than 1,300 [Chinese] chemical companies offering pharmaceutical ingredients.

Note: For many other reliable reports concerning health, click here.

Bristol-Myers Squibb Co. and a former subsidiary have agreed to pay more than $515 million to settle federal and state investigations into their drug marketing and pricing practices. The civil settlement ... resolves a broad array of allegations against Bristol-Myers Squibb, dating from 1994 through 2005. Among them was a charge that the ... company illegally promoted the sale of Abilify, an anti-psychotic drug, for pediatric use and to treat dementia-related psychoses. Neither use is approved by the U.S. [FDA]. Although physicians are permitted to prescribe drugs for off-label uses, drug companies are prohibited from marketing them for uses that have not been approved by the FDA. U.S. Attorney Michael Sullivan said when pharmaceutical companies market drugs for unapproved uses, there is a potential risk that patients could be harmed, because the drugs have not been tested as rigorously as they are during the FDA approval process. The government also alleged the company paid illegal inducements in the form of consulting fees and trips to luxury resorts to influence doctors and other health care providers to buy and prescribe the company's drugs. The company's former generic drug subsidiary, Apothecon Inc., also was accused of giving illegal enticements to induce retail pharmacy and wholesale customers to buy its products. Bristol-Myers Squibb misreported its best price for the anti-depression drug Serzone, violating a law that requires drug companies to report their lowest price to Medicaid, prosecutors said. The company was selling Serzone to a larger commercial purchaser at a lower price, prosecutors said. Bristol-Myers Squibb and Apothecon also inflated prices for an assortment of oncology and generic drugs knowing that federal health care programs established reimbursement rates based on those prices, Sullivan said.

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The Bush administration acknowledged for the first time that telecommunications companies assisted the government's warrantless surveillance program and were being sued as a result, an admission some legal experts say could complicate the government's bid to halt numerous lawsuits challenging the program's legality. "[U]nder the president's program, the terrorist surveillance program, the private sector had assisted us," Director of National Intelligence Mike McConnell said in an interview with the El Paso Times. His statement could help plaintiffs in dozens of lawsuits against the telecom companies, which allege that the companies participated in a wiretapping program that violated Americans' privacy rights. David Kris, a former Justice Department official, ... said McConnell's admission makes it difficult to argue that the phone companies' cooperation with the government is a state secret. "It's going to be tough to continue to call it 'alleged' when he's just admitted it," Kris said. McConnell has just added to "the list of publicly available facts that are no longer state secrets," increasing the plaintiffs' chances that their cases can proceed, Kris said. McConnell's statement "does serious damage to the government's state secrets claims that are at the heart of its defenses," said Greg Nojeim, senior counsel at the Center for Democracy and Technology. Bruce Fein, an associate deputy attorney general in the Reagan administration, said that McConnell's disclosure shows that "an important element of a program can be discussed publicly and openly without endangering the nation. These Cassandran cries that the earth is going to fall every time you have a discussion simply are not borne out by the facts," he said.

Nearly two dozen gas station owners in California [have] sued Shell Oil, Chevron (CVX) and Saudi Refining ... claiming the companies conspired to fix prices for 23,000 franchise owners nationwide. The plaintiffs ... say chairmen of the three oil companies met privately nearly every month starting in March 1996 for the "purpose of forming and organizing a combination." The lawsuit alleges executives destroyed documents from the meetings, and a defunct joint venture violated U.S. antitrust laws and caused artificially high wholesale gas prices in nearly every state from 1999 to 2001. The lawsuit hinges on a marketing deal that, plaintiffs say, allowed former rivals to collude on prices starting in 1998, when Shell and Texaco formed Equilon Enterprises [and] Motiva Enterprises LLC. Equilon and Motiva began operating when ... crude oil prices hit their lowest levels since the Great Depression, according to ... lawyer Joseph M. Alioto, who [represents] the plaintiffs. Yet gas prices soared for franchise owners, forcing them to pass on the cost to consumers or cut profit margins. "These executives get together and say, 'OK, we're going to raise Texaco's price to Shell's price, then we're going to raise both of them 50 to 75%, and we're going to do it after we've already had all these cost savings,'" Alioto said. [He] argues wholesale prices were higher by at least 20 cents a gallon and possibly as much as 40 cents per gallon from 1999 to 2001. Station owners had little choice but to pay higher prices. Franchises typically sign long-term contracts with oil suppliers, making it tough to switch to another brand or an independent supplier.

Ken Silverstein says he lied, deceived and fabricated to get the story. But it was worth it, he insists. Those on the receiving end don't agree. As Washington editor of Harper's magazine, Silverstein posed as Kenneth Case, a London-based executive with the fictional Maldon Group, claiming to represent the government of Turkmenistan. He had fake business cards printed, bought a London cellphone number and created a bogus Web site -- all to persuade Beltway lobbying firms to pitch him on representing Turkmenistan. "For me to deny, or try to shade the fact that I tricked them would be stupid," Silverstein says. "Obviously we did. If our readers feel uncomfortable, they're free to dismiss the findings of the story." Says Harper's Editor Roger Hodge: "The big question in our mind was whether anybody was going to fall for it." They did. According to Harper's, executives at the Washington firm APCO Worldwide laid out a communications plan that included lobbying policymakers -- possibly including a trip for members of Congress -- and generating "news items." Senior Vice President Barry Schumacher told Silverstein the firm could drum up positive op-ed pieces by utilizing certain think tank experts. The proposed fee: $40,000 a month. Another Washington firm, Cassidy & Associates, asked for at least $1.2 million a year and touted a proposed trip to Turkmenistan for journalists and think tank analysts. Hodge says the caper is part of "a long history of sting operations" by journalists. But that undercover tradition has faded in recent years. No newspaper today would do what the Chicago Sun-Times did in the 1970s, setting up a bar to entrap crooked politicians. Fewer television programs are doing what ABC did in the 1990s, having producers lie to get jobs at a supermarket chain to expose unsanitary practices.

Note: To read the hard-hitting, in-depth article in Harper's magazine, click here.

The revelation that the diabetes drug Avandia can potentially cause heart disease is the latest in a string of pharmaceutical disappointments. Vioxx was pulled from the market in 2004 because it doubled the risks for heart attacks and strokes. Eli Lilly recently paid $750 million to settle lawsuits alleging that Zyprexa causes diabetes. Many have criticized the Food and Drug Administration as being too lax about monitoring drug safety. While those criticisms have merit, there is another culprit: the transformation of continuing medical education into an enterprise for drug marketing. The chore of teaching doctors how to practice medicine has been handed to the pharmaceutical industry. As a result, dangerous side effects are rarely on the curriculum. Most states require that doctors obtain a minimum number of credit hours of continuing medical education each year to maintain their medical licenses. Not so long ago, most of these courses were produced and paid for by universities and medical associations. But this has changed drastically over the past decade. Drug-industry financing of continuing medical education has nearly quadrupled since 1998, from $302 million to $1.12 billion. Half of all continuing medical education courses in the United States are now paid for by drug companies, up from a third a decade ago. Because pharmaceutical companies now set much of the agenda for what doctors learn about drugs, crucial information about potential drug dangers is played down, to the detriment of patient care. For example, GlaxoSmithKline footed the bill for dozens of educational courses intended to emphasize the benefits of Avandia over other drugs.

Note: For a concise, reliable overview of medical corruption, click here.

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