Corporate Corruption News Articles

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Note: Explore our full index to revealing excerpts of key major media news articles on dozens of engaging topics. And read excerpts from 20 of the most revealing news articles ever published.

More than a year and a half after Iceland's major banks failed, all but sinking the country's economy, police have begun rounding up a number of top bankers while other former executives and owners face a $US2 billion ($2.24 billion) lawsuit. Since Iceland's three largest banks - Kaupthing, Landsbanki and Glitnir - collapsed in late 2008, their former executives and owners have largely been living untroubled lives abroad. But the publication last month of a parliamentary inquiry into the island nation's profound financial and economic crisis signalled a turning of the tide, laying much of the blame for the downfall on the former bank heads who had taken "inappropriate loans from the banks" they worked for. Overnight, the administrators of Glitnir's liquidation announced they had filed a $US2 billion lawsuit in a New York court against former large shareholders and executives for alleged fraud. "I think this lawsuit is without precedence in Iceland," Steinunn Gudbjartsdottir, who chairs Glitnir's so-called winding-up board, told reporters in Reykjavik. The bank also said it was "taking action against its former auditors PricewaterhouseCoopers (PwC) for facilitating and helping to conceal the fraudulent transactions engineered by [its principal shareholder] and his associates, which ultimately led to the bank's collapse in October 2008."

Note: Yet American and British bankers who played a major role in the economic collapse are getting record pay. For an incisive article in Rolling Stone titled "Why Isn't Wall Street in Jail?" click here. For key reports on financial fraud from major media sources, click here.

You'd think that General Motors Co., having been rescued by U.S. taxpayers, would be more up-front with them. In an ad that has been blanketing the airwaves since last week, General Motors Chairman and chief executive Ed Whitacre boasts that "we have repaid our government loan, in full, with interest, five years ahead of the original schedule." In a press release, Whitacre said GM was able to repay the loans "because more customers are buying vehicles like the Chevrolet Malibu and Buick LaCrosse." Neither the ad nor the press release mentioned that GM repaid its government loan with other government money, or that U.S. taxpayers could lose money on the roughly $50 billion they still have invested in General Motors. In a letter to Treasury Secretary Timothy Geithner last week, Sen. Chuck Grassley, R-Iowa, said the repayment "appears to be nothing more than an elaborate TARP money shuffle."

Note: For lots more on the bailout shell game from reliable sources, click here.

In recent years, the idea of giving small loans to poor people became the darling of the development world, hailed as the long elusive formula to propel even the most destitute into better lives. Actors like Natalie Portman and Michael Douglas lent their boldface names to the cause. Muhammad Yunus, the economist who pioneered the practice by lending small amounts to basket weavers in Bangladesh, won a Nobel Peace Prize for it in 2006. The idea even got its very own United Nations year in 2005. But the phenomenon has grown so popular that some of its biggest proponents are now wringing their hands over the direction it has taken. Drawn by the prospect of hefty profits from even the smallest of loans, a raft of banks and financial institutions now dominate the field, with some charging interest rates of 100 percent or more. “We created microcredit to fight the loan sharks; we didn’t create microcredit to encourage new loan sharks,” Mr. Yunus recently said at a gathering of financial officials at the United Nations. “Microcredit should be seen as an opportunity to help people get out of poverty in a business way, but not as an opportunity to make money out of poor people.” The noisy interest rate fight has even attracted Congressional scrutiny, with the House Financial Services Committee holding hearings this year focused in part on whether some microcredit institutions are scamming the poor.

Note: An excellent introduction to the power of microloans to pull people out of poverty is available here. For key news reports on the exciting prospects of microlending, click here.

Nine months after being labelled "a great vampire squid wrapped around the face of humanity", Goldman Sachs has issued a wide-ranging justification of its conduct before, during and after the financial crisis. In a letter to shareholders issued alongside Goldman's 2009 annual report, the Wall Street bank denied that it "bet against its clients" when it changed its position in the housing market in 2007, shortly before prices began to collapse. The eight-page letter, signed by chief executive Lloyd Blankfein and president Gary Cohn, also contained a detailed defence of the $12.9bn (Ł8.5bn) payout which Goldman received from AIG after the failed insurance giant was bailed out by the US government. The letter appears to be a detailed response to some of the allegations made nine months ago by Rolling Stone journalist Matt Taibbi. His article, which argued that Goldman had repeatedly profited by inflating unsustainable financial bubbles ... included the claim that the company [is] "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money". Goldman ... actually profited from the fiasco by short-selling the market before the credit crunch struck in summer 2007.

Note: Read Matt Taibbi's article on Goldman Sachs here.

As Newton resident Lisa Dodson, a Boston College sociology professor in the thick of a research project, was interviewing a grocery story manager in the Midwest about the difficulties of the low-income workers he supervised, he asked her a curious question: “Don’t you want to know what this does to me too?’’ She did. And so the manager talked about the sense of unfairness he felt as a supervisor, making enough to live comfortably while overseeing workers who couldn’t feed their families on the money they earned. That inequality, he told her, tainted his job, making him feel complicit in an unfair system that paid hard workers too little to cover basic needs. The interview changed the way Dodson talked with other supervisors and managers of low-income workers, and she began to find that many of them felt the same discomfort as the grocery store manager. And many went a step further, finding ways to undermine the system and slip their workers extra money, food, or time needed to care for sick children. She was surprised how widespread these acts were. In her new book, The Moral Underground: How Ordinary Americans Subvert an Unfair Economy, she called such behavior “economic disobedience." Dodson concluded that [many] were following the American tradition of civil disobedience - this time, against the economy - and creating a “moral underground."

Did you know you could be fired for not removing a political sticker from your car — or even having a beer after work? Lewis Maltby says it's more than possible — it has happened. His new book, Can They Do That? explores rights in the workplace. As he tells NPR's Ari Shapiro, "Freedom of speech is protected by the First Amendment — but only where the government is concerned. What most Americans generally don't know is that the Constitution doesn't apply to private corporations at all." In terms of monitoring its employees, the list of things a corporation can't do is a short one — it's basically confined to eavesdropping on a personal oral conversation, Maltby said. "Anything else is open season." And outside the workplace, personal blogs or social media pages on services like Twitter or Facebook offer no refuge. Asked if workers can be fired for things they write on those sites, Maltby said, "Absolutely. Happens every day. I've been getting calls from people for 20 years who've been abused in all sorts of ways," Maltby said. "When I tell them, 'Sorry, you don't have any legal rights,' they literally don't believe me," Maltby said.

Since the attempted bombing of a U.S. airliner on Christmas Day, former Homeland Security secretary Michael Chertoff has given dozens of media interviews touting the need for the federal government to buy more full-body scanners for airports. What he has made little mention of is that the Chertoff Group, his security consulting agency, includes a client that manufactures the machines. An airport passengers' rights group ... criticized Chertoff, who left office less than a year ago, for using his former government credentials to advocate for a product that benefits his clients. "Mr. Chertoff should not be allowed to ... privately gain from the sale of full-body scanners under the pretense that the scanners would have detected this particular type of explosive," said Kate Hanni, founder of FlyersRights.org, which opposes the use of the scanners. Chertoff's advocacy for the technology dates back to his time in the Bush administration. In 2005, Homeland Security ordered the government's first batch of the scanners. Today, 40 body scanners are in use at 19 U.S. airports. The number is expected to skyrocket at least in part because of the Christmas Day incident. The Transportation Security Administration this week said it will order 300 more machines.

Note: For lots more on the profiteering that underlies "the war on terror," click here.

Retired retail executive Richard Goldman was astonished when he heard about the $27 billion pollution lawsuit against Chevron Corp. in Ecuador. Astonished at the soil and water contamination surrounding Ecuador's oil fields. And astonished that he'd never heard of it before. So Goldman, one of the founders of the Men's Wearhouse clothing chain, has created a nonprofit group that will use social-networking tools to spread word of the case and put pressure on Chevron. The group, Ethos Alliance, will ask visitors to its Web site to tell others about the issue, hoping that viral communication via the Internet will reach people that news stories about the suit haven't. The site will raise money for humanitarian relief projects in Ecuador's oil patch, encouraging visitors to donate $5 apiece to build a water treatment plant and buy medicine for a health clinic. The Web site, www.ethosalliance.org, goes online today. Ethos also will urge Chevron to settle the long-running lawsuit, something the San Ramon company has vowed not to do. Ethos plans to tackle other issues of corporate responsibility in the future, uniting the alliance's online members with businesses willing to join the cause. Ethos is the latest example of social or political causes using social networking to increase their reach. Earlier this year, a one-day fundraising effort organized via Twitter collected $250,000 for drinking water projects in the developing world.

France's highest court has ruled that US agrochemical giant Monsanto had not told the truth about the safety of its best-selling weed-killer, Roundup. The court confirmed an earlier judgment that Monsanto had falsely advertised its herbicide as "biodegradable" and claimed it "left the soil clean". The company was fined 15,000 euros (Ł13,800; $22,400). Roundup is the world's best-selling herbicide. Monsanto also sells crops genetically-engineered to be tolerant to Roundup. French environmental groups had brought the case in 2001 on the basis that glyphosate, Roundup's main ingredient, is classed as "dangerous for the environment" by the European Union. Earlier this month, Monsanto reported a fourth quarter loss of $233m (Ł147m), driven mostly by a drop in sales of its Roundup brand.

Note: For an article on the dangers of Monsanto's RoundUp, click here.

A freelance cameraman's appendix ruptured and by the time he was admitted to surgery, it was too late. A self-employed mother of two is found dead in bed from undiagnosed heart disease. A 26-year-old aspiring fashion designer collapsed in her bathroom after feeling unusually fatigued for days. What all three of these people have in common is that they experienced symptoms, but didn't seek care because they were uninsured and they worried about the hospital expense, according to their families. All three died. Research released ... in the American Journal of Public Health estimates that 45,000 deaths per year in the United States are associated with the lack of health insurance. If a person is uninsured, "it means you're at mortal risk," said one of the authors, Dr. David Himmelstein, an associate professor of medicine at Harvard Medical School. The researchers examined government health surveys from more than 9,000 people aged 17 to 64, taken from 1986-1994, and then followed up through 2000. They determined that the uninsured have a 40 percent higher risk of death than those with private health insurance as a result of being unable to obtain necessary medical care. The researchers then extrapolated the results to census data from 2005 and calculated there were 44,789 deaths associated with lack of health insurance.

Note: For key reports on important health issues from reliable sources, click here.

Chevron Corp., California's largest company and one of the world's largest oil producers, will soon face a day of reckoning. After 16 years of litigation, a case the company inherited in a merger, Aguinda vs. Texaco Inc., is nearing an end. The legal battle that began in the United States in 1993 and resumed in Ecuador in 2003 has pitted the multinational against an unlikely adversary, a coalition of indigenous tribes and communities. A verdict is expected early next year. The plaintiffs are poised to prevail, and Chevron acknowledges that it is likely to lose. The case is historic by several measures. Never before have indigenous peoples brought a multinational oil corporation to trial in their own country. Moreover, a victory would mark a turning point in the relations between native populations around the world and the foreign corporations that do business in their homelands. And the potential damages are staggering: A court-appointed expert has determined that they could run to $27 billion, almost 10 times that initially awarded to plaintiffs after the Exxon Valdez oil spill. Today, a swath of the Ecuadorean Amazon the size of Rhode Island remains contaminated beyond imagining. At one site after another, oil hangs in the air, slides on the water's surface and saturates the land. Pipelines and waste pits left behind years ago still drip and ooze. Advocates for the plaintiffs have called the former Texaco concession area the "Amazon Chernobyl." Were it in the United States, it would easily qualify as a Superfund site. Neither side in the case disputes the devastation, only who should pay for it.

Note: For the inspiring story of the courageous Ecuadorian lawyer behind this David vs. Goliath lawsuit, click here. A smear campaign by Chevron against the judge in this case has more recently swayed opinion in favor of Chevron again. Contact your political and media representatives at this link to express your opinion.

Across the globe, as mining and oil firms race for dwindling resources, indigenous peoples are battling to defend their lands – often paying the ultimate price. It has been called the world's second "oil war", but the only similarity between Iraq and events in the jungles of northern Peru over the last few weeks has been the mismatch of force. On one side have been the police armed with automatic weapons, teargas, helicopter gunships and armoured cars. On the other are several thousand Awajun and Wambis Indians, many of them in war paint and armed with bows and arrows and spears. The Indians this week warned Latin America what could happen if companies are given free access to the Amazonian forests to exploit an estimated 6bn barrels of oil and take as much timber they like. After months of peaceful protests, the police were ordered to use force to remove a road block near Bagua Grande. In the fights that followed, at least 50 Indians and nine police officers were killed, with hundreds more wounded or arrested. The indigenous rights group Survival International described it as "Peru's Tiananmen Square". "For thousands of years, we've run the Amazon forests," said Servando Puerta, one of the protest leaders. "This is genocide. They're killing us for defending our lives, our sovereignty, human dignity." Peru is just one of many countries now in open conflict with its indigenous people over natural resources. Barely reported in the international press, there have been major protests around mines, oil, logging and mineral exploitation in Africa, Latin America, Asia and North America. Hydro electric dams, biofuel plantations as well as coal, copper, gold and bauxite mines are all at the centre of major land rights disputes.

Note: Click on the link above to read this important article in its entirety. It reports on numerous struggles around the world by indigenous people to protect their livelihoods and traditions from corporate and governmental predation.

The most stunning and least reported news about President Obama's press conference with health industry executives this week wasn't those executives' willingness to negotiate with a Democrat. It was that Democrat's eagerness to involve those executives in a discussion about health care reform even as they revealed their previous plans to pilfer $2 trillion from Americans. That was the little-noticed message from the made-for-TV spectacle administration officials called a health care "game changer": In saying they can voluntarily slash $200 billion a year from the country's medical bills over the next decade and still preserve their profits, health care companies implicitly acknowledged they were plotting to fleece consumers, and have been fleecing them for years. With that acknowledgment came the tacit admission that the industry's business is based not on respectable returns but on grotesque profiteering and waste - the kind that can give up $2 trillion and still guarantee huge margins. Chief among the profiteers at the White House event were insurance companies, which have raised premiums by 119 percent since 1999, and one obvious question is why - why would Obama engage those particular thieves? It's a difficult query to answer, because Obama is a health care mystery, struggling to muster consistent positions on the issue. Listening to a 2003 Obama speech, it's hard to believe he has become such an enigma. Back then, he declared himself "a proponent of a single-payer universal health care program" - i.e., one eliminating private insurers and their overhead costs by having government finance health care.

Note: For lots more on health issues from reliable sources, click here.

The pressures were already immense when David B. Kellermann was promoted to the top financial position at the mortgage giant Freddie Mac last September. Mr. Kellermann's boss and other top executives were ousted when the Treasury secretary seized Freddie Mac and its sibling company, Fannie Mae; others left on their own and were not replaced. Early on Wednesday, Mr. Kellermann went to the basement of his brick home and hanged himself, according to people familiar with the situation who were not authorized to speak. His body was removed five hours later, through a throng of neighbors, television crews and others. "David was such an honest and humble person," said Tim Bitsberger, Freddie Mac"s treasurer until he left in December. "It just doesn't make sense," Mr. Bitsberger said. The roots and causes of suicide are often unclear. It is not known if Mr. Kellermann succumbed to the pressures of his job. But in the aftermath of his death, it is plain that at Freddie Mac, as at many of the companies in the center of this economic storm, there are forces so strong they can overwhelm almost anyone. Mr. Kellermann ... was at the intersection of some of the most difficult issues facing the company. Mr. Kellermann was also working in a poisonous political atmosphere. He was recently involved in tense conversations with the company's federal regulator over its routine financial disclosures. Freddie Mac executives wanted to emphasize to investors that they believed the company was being run to benefit the government, rather than shareholders.

Note: For a revealing archive of reports on the hidden realities underlying the Wall Street bailout, click here.

While American consumers have been struggling, credit card companies have been enjoying a field day. Not only are most of them receiving federal bailout money, but they've been jacking up interest rates (there were rate hikes on nearly 25 percent of accounts between 2007 and 2008) and switching the terms of agreements with consumers. Why the rush to gouge consumers in the depths of a recession? In July 2010, the Federal Reserve will impose new, consumer-friendly disclosure and administrative restrictions on the credit card industry. Scrambling to get ahead of the deadline, the card companies have been raising interest rates, slicing credit lines and, in too many cases, simply dumping customers with little rhyme or reason. Defaults and delinquencies have skyrocketed - and consumers are livid. "It's off the charts in terms of their ire about paying higher interest rates, particularly when their money, as they see it, is being given to the banks to prop them up," said Rep. Jackie Speier, D-Hillsborough. Speier's staff says her office has been "flooded" with calls from furious constituents. Speier is ... a co-sponsor of HR627, better known as "The Credit Cardholders' Bill of Rights." The bill - which has the support of the Obama administration - would prevent card issuers from raising interest rates without advance notice and end the practice of "double-cycle billing" so that consumers do not have to pay interest on debts they've already paid.

Note: For a highly revealing archive of reports on the hidden realities underlying the Wall Street bailout, click here.

With economic activity contracting in 2009's first quarter at the same rate as in 2008's fourth quarter, a nasty U-shaped recession could turn into a more severe L-shaped near-depression (or stag-deflation). The scale and speed of synchronized global economic contraction is really unprecedented (at least since the Great Depression), with a free fall of GDP, income, consumption, industrial production, employment, exports, imports, residential investment and, more ominously, capital expenditures around the world. And now many emerging-market economies are on the verge of a fully fledged financial crisis, starting with emerging Europe. In the meantime, the massacre in financial markets and among financial firms is continuing. The debate on "bank nationalization" is borderline surreal, with the U.S. government having already committed--between guarantees, investment, recapitalization and liquidity provision--about $9 trillion of government financial resources to the financial system (and having already spent $2 trillion of this staggering $9 trillion figure). Thus, the U.S. financial system is de facto nationalized, as the Federal Reserve has become the lender of first and only resort rather than the lender of last resort, and the U.S. Treasury is the spender and guarantor of first and only resort. And even with the $2 trillion of government support, most of these financial institutions are insolvent, as delinquency and charge-off rates are now rising at a rate ... that means expected credit losses for U.S. financial firms will peak at $3.6 trillion. So, in simple words, the U.S. financial system is effectively insolvent.

Note: The author of this insightful analysis, Nouriel Roubini, has a very informative blog, available here.

What allowed some people to see the financial crash coming while so many others missed its gathering force? I put that question recently to Nouriel Roubini, who has come to be known as "Dr. Doom" because of his insistent warnings starting in 2006 that we were heading into a global firestorm. Roubini gave two kinds of answers. The first involves standard number-crunching of the sort that economists routinely do -- and that Roubini just did better and sooner. It's his second answer that's more interesting, because it goes to the heart of what we should take away from this crisis: Roubini decided to discard the assumption of market rationality that underlies most economics and to embrace the psychological insights of what's known as "behavioral economics." Everyone else had those same numbers. Why did Roubini act? The answer is that he decided to trust his gut, which told him there was trouble ahead, rather than Wall Street's "wisdom of the crowd," which -- as reflected in stock prices -- said everything was rosy. He concluded that the markets were not pricing in the degree of risk that was actually present in housing. "The rational man theory of economics has not worked," Roubini said last month at a session of the World Economic Forum at Davos. That's why he and other prominent economists are paying more attention to behavioral economics, which starts from the premise that economic decisions, like other aspects of human behavior, are influenced by irrational psychological factors.

Note: To visit Nouriel Roubini's highly informative blog, click here. For lots more on the financial crisis and bailout, click here.

The U.S. Treasury looks to have overpaid financial institutions to the tune of $78 billion in carrying out capital injections last year, the head of a congressional oversight panel for the government's $700 billion bailout program told lawmakers. Elizabeth Warren, a Harvard law professor, said her group estimated the Treasury paid $254 billion in 2008 in return for stocks and warrants worth about $176 billion under the Troubled Asset Relief Program, or TARP. Warren said the Treasury, under then-Secretary Henry Paulson, misled the public about how it would price them. "Treasury simply did not do what it said it was doing ... They described the program one way, and they priced it another," Warren said at a hearing before the Senate Banking Committee. She added that Paulson "was not entirely candid" in describing TARP's bank capital injection program. Neil Barofsky, another watchdog for the TARP program, told the Senate committee his office is turning to criminal investigations. "That's going to be a large focus of my office," he said. Warren told the banking committee that after three months on the job, her panel is still not getting enough answers from Treasury. She described the bailout as "an opaque process at best." Barofsky raised concerns about potential fraud in one of several programs funded by bailout money -- the Federal Reserve's Term Asset-Backed Loan Facility (TALF).

Note: Was the overpayment by Treasury to Wall Street banks for nearly-worthless assets they created a mistake? Or was it the real, hidden purpose of TARP to pay the banks more for the assets than they are worth? For many revealing reports from reliable sources on the realities behind the Wall Street bailout, click here.

The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis. When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in. “Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”

Note: How is it possible that trillions of taxpayer dollars are being thrown around, yet Congress is not being told where the money is going? For revealing information on how the Fed manipulates government, click here.

The Treasury Department is dramatically expanding the scope of its bailout of the financial system with a plan to take ownership stakes in the nation's insurance companies, signaling new concerns about a sector of the economy whose troubles until now have been overshadowed by the banking industry, government and industry sources said. Insurers, including The Hartford, Prudential and MetLife, have pushed the Bush administration to include them in the plan. Many firms have taken losses from mortgage-related securities and other investments and are struggling to replenish their coffers. The new initiative underscores the growing range of problems that Treasury is scrambling to address with the $700 billion allocated by Congress this month. The shape of the plan has changed repeatedly since Treasury Secretary Henry M. Paulson Jr. introduced it last month as an effort to rescue banks by buying their troubled mortgage-related assets. That original mandate has now been pushed aside by a plan to take equity stakes in banks and insurance companies, and other businesses are lobbying to be included. The government has been forced to expand the plan partly because the federal guarantees previously given some institutions, such as banks, have put other companies and financial sectors at a disadvantage, making them less attractive to uneasy investors. The cost of saving the country's largest insurer continues to rise. Senior managers at troubled insurance giant American International Group warned the Federal Reserve yesterday that the company would probably need more taxpayer money than the $123 billion in rescue loans the government has provided.

Note: For lots more highly revealing reports on the Wall Street bailout, click here.

Important Note: Explore our full index to revealing excerpts of key major media news articles on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.