Corporate Corruption News Articles

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A Washington law firm filed a lawsuit yesterday against KBR, one of the largest U.S. contractors in Iraq, alleging that the company and its Jordanian subcontractor engaged in the human trafficking of Nepali workers. Agnieszka Fryszman, a partner at Cohen, Milstein, Hausfeld & Toll, said 13 Nepali men, between the ages of 18 and 27, were recruited in Nepal to work as kitchen staff in hotels and restaurants in Amman, Jordan. But once the men arrived in Jordan, their passports were seized and they were told they were being sent to a military facility in Iraq, Fryszman said. As the men were driven in cars to Iraq, they were stopped by insurgents. Twelve were kidnapped and later executed, Fryszman said. The thirteenth man survived and worked in a warehouse in Iraq for 15 months before returning to Nepal. The lawsuit, filed in a federal court in California on behalf of the workers' families and the survivor, claims that the trafficking scheme was engineered by KBR and its Jordanian subcontractor, Daoud & Partners, according to Fryszman. This spring, an administrative law judge at the Department of Labor, which has jurisdiction over cases that involve on the job injuries at overseas military bases, ordered Daoud to pay $1 million to the families of 11 of the victims.

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Sovereign wealth funds, the massive investment pools run by foreign governments, are now among the biggest speculators in the trading of oil and other vital goods like corn and cotton in the United States, according to interviews with brokers who handle their investments at leading Wall Street banks, veteran traders and congressional investigators. Some lawmakers say the unregulated activity of sovereign wealth funds and other speculators such as hedge funds has contributed to the dramatic swing in oil prices in recent months. The agency regulating the market said it had not picked up on this activity by sovereign wealth funds. In a June letter, the Commodity Futures Trading Commission told lawmakers that its monitoring showed that these funds were not a significant factor in commodity trading. But the CFTC is not detecting the growing influence of foreign funds because they invest through Wall Street brokers known as "swap dealers" who often operate on unregulated markets. For this reason, the extent of their activities may be known only to the swap dealers at investment banks such as Goldman Sachs, Lehman Brothers and Morgan Stanley, which handle such transactions. The foreign funds involved in commodity trading are ... mainly from countries ... in Asia that do not already make money from producing oil. While it is difficult to quantify how large foreign funds have become, they now represent 12 percent or more of the overall commodity business for some of the largest investment banks, said an industry veteran who spoke on condition of anonymity.

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A group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of the largest fields in Iraq, American officials say. The disclosure, coming on the eve of the contracts’ announcement, is the first confirmation of direct involvement by the Bush administration in deals to open Iraq’s oil to commercial development and is likely to stoke criticism. In their role as advisers to the Iraqi Oil Ministry, American government lawyers and private-sector consultants provided template contracts and detailed suggestions on drafting the contracts, advisers and a senior State Department official said. At a time of spiraling oil prices, the no-bid contracts, in a country with some of the world’s largest untapped fields and potential for vast profits, are a rare prize to the industry. The contracts are expected to be awarded Monday to Exxon Mobil, Shell, BP, Total and Chevron, as well as to several smaller oil companies. The deals have been criticized by opponents of the Iraq war, who accuse the Bush administration of working behind the scenes to ensure Western access to Iraqi oil fields even as most other oil-exporting countries have been sharply limiting the roles of international oil companies in development. Though enriched by high prices, the companies are starved for new oil fields. American military officials say the pipelines [in Iraq] now have excess capacity, waiting for output to increase at the fields.

Note: For many revealing reports from reliable sources on the real reasons behind the war in Iraq, click here.

America is ruled by an “intelligence-industrial complex” whose allegiance is not to the taxpaying public but to a cabal of private-sector contractors. That is the central thesis of Spies for Hire: The Secret World of Intelligence Outsourcing by Tim Shorrock, ... an investigative journalist. His book [provides a] disturbing overview of the intelligence community, also known as “the I.C.” Mr. Shorrock says our government is outsourcing 70 percent of its intelligence budget, or more than $42 billion a year, to a “secret army” of corporate vendors. Because of accelerated privatization efforts after 9/11, these companies are participating in covert operations and intelligence-gathering activities that were considered “inherently governmental” functions reserved for agencies like the Central Intelligence Agency, he says. Some of the book’s most intriguing assertions concern the permeating influence of the consulting firm Booz Allen Hamilton. In 2006, Mr. Shorrock reports, Booz Allen amassed $3.7 billion in revenue, much of which came from classified government contracts exempt from public oversight. Among its more than 18,000 employees are R. James Woolsey, the former C.I.A. director, and Joan Dempsey, a former longtime United States intelligence official who declared in a 2004 speech, “I like to refer to Booz Allen as the shadow I.C.” The “revolving door” between Booz Allen and the I.C. is personified by Mike McConnell, who joined the firm after serving as head of the National Security Agency under President Bill Clinton, only to return as director of national intelligence under President Bush.

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Gary Rinehart clearly remembers the summer day in 2002 when the stranger walked in and issued his threat. Rinehart was behind the counter of the Square Deal, his “old-time country store,” as he calls it, on the fading town square of Eagleville, Missouri, a tiny farm community 100 miles north of Kansas City. As Rinehart would recall, the man began verbally attacking him, saying he had proof that Rinehart had planted Monsanto’s genetically modified (G.M.) soybeans in violation of the company’s patent. Better come clean and settle with Monsanto, Rinehart says the man told him—or face the consequences. But Rinehart wasn’t a farmer. He wasn’t a seed dealer. He hadn’t planted any seeds or sold any seeds. He owned a small—a really small—country store in a town of 350 people. On the way out the man kept making threats. Rinehart says he can’t remember the exact words, but they were to the effect of: “Monsanto is big. You can’t win. We will get you. You will pay.” Scenes like this are playing out in many parts of rural America these days as Monsanto goes after farmers, farmers’ co-ops, seed dealers—anyone it suspects may have infringed its patents of genetically modified seeds. As interviews and reams of court documents reveal, Monsanto relies on a shadowy army of private investigators and agents in the American heartland to strike fear into farm country. They fan out into fields and farm towns, where they secretly videotape and photograph farmers, store owners, and co-ops; infiltrate community meetings; and gather information from informants about farming activities. Farmers say that some Monsanto agents pretend to be surveyors. Others confront farmers on their land and try to pressure them to sign papers giving Monsanto access to their private records.

Note: For a revealing summary on the health impacts of genetically modified food, click here.

Despite more than 100 published studies by government scientists and university laboratories that have raised health concerns about a chemical compound that is central to the multibillion-dollar plastics industry, the Food and Drug Administration has deemed it safe largely because of two studies, both funded by an industry trade group. The compound, bisphenol A (BPA), has been linked to breast and prostate cancer, behavioral disorders and reproductive health problems in laboratory animals. The FDA's position on the compound was called into question earlier this month when a National Institutes of Health panel issued a draft report linking BPA to health concerns. As part of his investigation, Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, wants to examine the role played by the Weinberg Group, a Washington firm that employs scientists, lawyers and public relations specialists to defend products from legal and regulatory action. The firm has worked on Agent Orange, tobacco and Teflon, among other products linked to health hazards, and congressional investigators say it was hired by Sunoco, a BPA manufacturer. From 1997 to 2005, 116 studies of the compound were published, many of them focused on its effects in low doses. Of those funded by government, 90 percent showed a health effect linked to BPA. None of the industry-funded studies found an effect; all of them said BPA is safe. There is a clear bias in studies funded by industry, said [David] Michaels, who ... runs the Project on Scientific Knowledge and Public Policy at George Washington University and wrote the book Doubt is Their Product, which details how various industries have used science to stave off regulation.

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For 30 years, Lew Ellingson loved being a telephone man. His job splicing phone cables was one that he says gave him “a true sense of accomplishment,” first for Northwestern Bell, then US West and finally Qwest Communications International. But by the time Mr. Ellingson retired from Qwest last year at 52, he had grown angry. An insider trading scandal had damaged the company’s reputation, and the life savings of former colleagues had evaporated in the face of Qwest’s stock troubles. “It was a good place,” he said wistfully. “And then something like this happened.” Now, Mr. Ellingson is the public face of a proposed ballot measure in Colorado that seeks to create what supporters hope will be the nation’s toughest corporate fraud law. Buttressed by local advocacy groups and criticized by a Colorado business organization, the measure would make business executives criminally responsible if their companies run afoul of the law. It would also permit any Colorado resident to sue the executives under such circumstances. Proceeds from successful suits would go to the state. If passed by voters in November, the proposal would leave top business officers [with] unprecedented individual accountability, said Mr. Ellingson. “If nothing else, these folks in charge of the corporations and companies will think twice about cutting corners to make themselves look more profitable than they really are,” he said. The plight of Mr. Ellingson’s former employer, Qwest, based in Denver, was a motivation for the proposal. Last April, a jury in Denver convicted Qwest’s former chief executive, Joseph P. Nacchio, of 19 of 42 counts of insider trading. Mr. Nacchio was sentenced to six years in prison and ordered to pay a fine of $19 million and forfeit $52 million in money he earned from stock sales in 2001.

Note: As reported in the Washington Post, Joseph P. Nacchio, the former Qwest CEO, has claimed that he was singled out for prosecution because he refused to cooperate with the National Security Agency's electronic surveillance of American citizens, which began before 9/11.

Executives at the two biggest phone companies contributed more than $42,000 in political donations to Senator John D. Rockefeller IV this year while seeking his support for legal immunity for businesses participating in National Security Agency eavesdropping. The surge in contributions came from a Who’s Who of executives at the companies, AT&T and Verizon, starting with the chief executives and including at least 50 executives and lawyers at the two utilities, according to campaign finance reports. The money came primarily from a fund-raiser that Verizon held for Mr. Rockefeller in March in New York and another that AT&T sponsored for him in May in San Antonio. Mr. Rockefeller, chairman of the Senate Intelligence Committee, [has emerged] as the most important supporter of immunity in [the Senate]. Mr. Rockefeller’s office said ... that the sharp increases in contributions from the telecommunications executives had no influence on his support for the immunity provision. “Any suggestion that Senator Rockefeller would make policy decisions based on campaign contributions is patently false,” Wendy Morigi, a spokeswoman for him, said. AT&T and Verizon have been lobbying hard to insulate themselves from suits over their reported roles in the security agency program by gaining legal immunity from Congress. The effort included meetings with Mr. Rockefeller and other members of the intelligence panels. Mr. Rockefeller received little in the way of contributions from AT&T or Verizon executives before this year, reporting $4,050 from 2002 through 2006. From last March to June, he collected a total of $42,850 from executives at the two companies. The increase was first reported by the online journal Wired, using data compiled by the Web site OpenSecrets.org. [Telecommunications] industry executives have given significant contributions to a number of other Washington politicians, including two presidential contenders, Senators Hillary Rodham Clinton and John McCain.

Over the past four years, the amount of money the State Department pays to private security and law enforcement contractors has soared to nearly $4 billion a year from $1 billion, ... but ... the department had added few new officials to oversee the contracts. Auditors and outside exerts say the results have been vast cost overruns, poor contract performance and, in some cases, violence that has so far gone unpunished. A vast majority of the money goes to companies like DynCorp International and Blackwater [Worldwide] to protect diplomats overseas, train foreign police forces and assist in drug eradication programs. There are only 17 contract compliance officers at the State Departments management bureau overseeing spending of the billions of dollars on these programs, officials said. Two new reports have delivered harsh judgments about the State Departments handling of the contracts, including the protective services contract that employs Blackwater guards whose involvement in a Sept. 16 shooting in Baghdad has raised questions about their role in guarding American diplomats in Iraq. The ballooning budget for outside contracts at the State Department is emblematic of a broader trend, contracting experts say. The Bush administration has doubled the amount of government money going to all types of contractors to $400 billion, creating a new and thriving class of post-9/11 corporations carrying out delicate work for the government. But the number of government employees issuing, managing and auditing contracts has barely grown. Thats a criticism thats true of not just State but of almost every agency, said Jody Freeman, an expert on administrative law at Harvard Law School.

Li Runsen, the powerful technology director of China’s ministry of public security, is best known for leading Project Golden Shield, China’s intensive effort to strengthen police control over the Internet. But last month Mr. Li took an additional title: director for China Security and Surveillance Technology, a fast-growing company that installs and sometimes operates surveillance systems for Chinese police agencies, jails and banks, among other customers. The company has just been approved for a listing on the New York Stock Exchange. The company’s listing and Mr. Li’s membership on its board are just the latest signs of ever-closer ties among Wall Street, surveillance companies and the Chinese government’s security apparatus. Wall Street analysts now follow the growth of companies that install surveillance systems providing Chinese police stations with 24-hour video feeds from nearby Internet cafes. Hedge fund money from the United States has paid for the development of not just better video cameras, but face-recognition software and even newer behavior-recognition software designed to spot the beginnings of a street protest and notify police. Executives of Chinese surveillance companies say they are helping their government reduce street crime, preserve social stability and prevent terrorism. They note that London has a more sophisticated surveillance system, although the Chinese system will soon be far more extensive. Wall Street executives also defend the industry as necessary to keep the peace at a time of rapid change in China. They point out that New York has begun experimenting with surveillance cameras in Lower Manhattan and other areas of the city.

These days, fewer Americans are buying the claim that the United States has the best medical system in the world. Consumers are buying lower-cost online drugs from foreign sources, and some even become "medical tourists" to obtain affordable treatment in other countries. Studies show Americans aren't healthier, nor are they living longer than people in industrialized nations that spend half per capita of what we do on care. A 2007 ... study that compared the United States with five other nations -- Australia, Canada, Germany, New Zealand and the United Kingdom -- ranked the U.S. health system last. And a 2000 report by the World Health Organization ... put the United States 37th out of 190 nations in health care services -- between Costa Rica and Slovenia. France was rated No. 1. In a New York Times/CBS poll conducted in March, health care ranked as the top domestic concern. We spend far more, but our health care is falling behind, studies say. "We, unlike any other country, have 46 million people who are uninsured, and that raises a whole host of health and financial issues," said Ken Thorpe, professor of health policy at Emory University. "Ours is really is a sick-care system." Thorpe said. He argues ... that it is far more cost-effective to prevent people from getting sick or at least catch illnesses early through better monitoring. Karen Davis, president of .... a nonprofit foundation that supports health care research said, "We tend to have more medical errors than other countries, in part because of this highly specialized, fragmented system. More things can go wrong and do go wrong."

Note: For many highly informative major media articles on the U.S. health crisis, click here.

The knee-jerk attitude that the U.S. is the best place on earth to be sick, fueled by the reputations of great institutions like the Mayo Clinic and by America's leadership in drug and technology development, is beginning to be challenged by rigorous international comparisons. There is increasing evidence that, despite justified pride in individual institutions and medical breakthroughs, the world's biggest medical spender isn't buying its citizens the longest, healthiest lives in the world. It's not just moviemakers and comics saying so. The dire message that the U.S. healthcare system is, by some measures, an also-ran on the worldwide stage is being delivered by doctors, researchers — even insurance industry giants. On screen, slamming U.S. medical care is coming of age with Michael Moore's documentary "Sicko." Through the eyes of people who have faced healthcare catastrophes, he tells graphic stories of the problems with America's system. Considerably more sobering are the warnings from an official at the National Institutes of Health, who declared in the May 16 issue of the Journal of the American Medical Assn. that the U.S. healthcare system is "a dysfunctional mess." Amid stacks of reports, all with ... measures of access, equity, efficiency and medical outcomes, two statistics stand out. The U.S. spends more on medical care than any other nation, and gets far less for it than many countries. The U.S. spends an annual $6,102 per person — more than any other country and more than twice the average of $2,571. Yet Americans have the 22nd highest life expectancy among those nations at 77.2 years. People in Japan, the world leader in longevity, live an average of 81.8 years.

Senators who raised millions of dollars in campaign donations from pharmaceutical interests secured industry-friendly changes to a landmark drug-safety bill. The bill, which passed 93-1, grants the Food and Drug Administration broad new authority to monitor the safety of drugs after they are approved. It addressed some shortcomings that allowed the painkiller Vioxx to stay on the market for years after initial signs that it could cause heart attacks. However, the powers granted to the FDA in the bill's original version were pared back during private meetings. And efforts to curb conflicts of interest among FDA advisers and allow consumers to buy cheaper drugs from other countries were defeated in close votes. A measure that blocked an effort to allow drug importation passed, 49-40. The 49 senators who voted against drug importation received about $5 million from industry executives and political action committees since 2001 — nearly three quarters of the industry donations to current members of the Senate. Sen. Bernie Sanders, I-Vt. [was] the lone vote against the bill. "You have a culture in which big money has significant influence. Big money gains you access, access gives you the time to influence people." The pharmaceutical companies spend more money on lobbying than any other single industry — $855 million from 1998 to 2006. The biggest drug trade group, Pharmaceutical Research and Manufacturers of America, praised the bill after it passed. The group's spokesman, Ken Johnson, said its critics "never point out that a great deal of this money is spent trying to defeat bills … that are designed to cripple this industry."

Note: For lots more reliable, verifiable information on drug company manipulations, click here.

Highly educated workers have done better than those with less education, but a college degree has hardly been a ticket to big income gains. The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004. So who are the winners from rising inequality? It's not the top 20 percent, or even the top 10 percent. The big gains have gone to a much smaller, much richer group than that. A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, "Where Did the Productivity Growth Go?," gives the details. Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains. But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. Should we be worried about the increasingly oligarchic nature of American society? Yes, and not just because a rising economic tide has failed to lift most boats. Both history and modern experience tell us that highly unequal societies also tend to be highly corrupt.

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Exxon Mobil, the nation's largest energy company, today reported a 27 percent surge in profits for the fourth quarter as elevated fuel prices gave rise to the most lucrative year ever for an American company. Exxon's profits are expected to generate new scrutiny of the company's operations in Washington, where legislators have recently expressed concern over Big Oil's good fortune as soaring oil and natural gas prices pressure consumers. Exxon said its profits climbed more than 40 percent last year, while its tax bill rose only 14 percent. Exxon's revenue last year allowed it to surpass Wal-Mart as the largest company in the United States. [The company's] revenue of $371 billion surpassed the gross domestic product of $245 billion for Indonesia, an OPEC member and the world's fourth most populous country with 242 million people.

Note: This article fails to mention the huge profits reaped by oil companies as a result of gas price gouging immediately after Katrina.

In a case that echoes the Jack Abramoff influence-peddling scandal, two Northern California Republican congressmen used their official positions to try to stop a federal investigation of a wealthy Texas businessman who provided them with political contributions. Reps. John T. Doolittle and Richard W. Pombo joined forces with former House Majority Leader Tom DeLay of Texas to oppose an investigation by federal banking regulators into the affairs of Houston millionaire Charles Hurwitz, documents recently obtained by The Times show. The Federal Deposit Insurance Corp. was seeking $300 million from Hurwitz for his role in the collapse of a Texas savings and loan that cost taxpayers $1.6 billion. The investigation was ultimately dropped. Doolittle and Pombo — both considered protégés of DeLay — used their power as members of the House Resources Committee to subpoena the agency's confidential records on the case, including details of the evidence FDIC investigators had compiled on Hurwitz. Then, in 2001, the two congressmen inserted many of the sensitive documents into the Congressional Record, making them public and accessible to Hurwitz's lawyers, a move that FDIC officials said damaged the government's ability to pursue the banker. The FDIC's chief spokesman characterized what Doolittle and Pombo did as "a seamy abuse of the legislative process."

Companies with ties to the Bush White House and the former head of FEMA are clinching some of the administration's first disaster relief and reconstruction contracts in the aftermath of Hurricane Katrina. At least two major corporate clients of lobbyist Joe Allbaugh, President Bush's former campaign manager and a former head of the Federal Emergency Management Agency, have already been tapped to start recovery work along the battered Gulf Coast. One is...Halliburton Co. (Research) subsidiary Kellogg Brown and Root. Vice President Dick Cheney is a former head of Halliburton. Allbaugh formally registered as a lobbyist for Halliburton subsidiary Kellogg Brown and Root in February. Allbaugh is also a friend of Michael Brown, director of FEMA who was removed as head of Katrina disaster relief and sent back to Washington amid allegations he had padded his resume. Halliburton continues to be a source of income for Cheney, who served as its chief executive officer from 1995 until 2000. According to tax filings released in April, Cheney's income included $194,852 in deferred pay from the company.

The maker of a billion-dollar antipsychotic medication has acknowledged misleading doctors and other healthcare providers about the safety of its product, minimizing potentially deadly side effects. On Wednesday, drug maker Janssen Pharmaceutica wrote a two-page letter to doctors, warning them that the company, in promotional material, had "minimized potentially fatal risks, and made misleading claims" that the medication was more safe in treating mental illness than other drugs in the same category. Risperdal is the leading drug used to combat schizophrenia and other types of psychotic disorders, earning Janssen about $2.1 billion in annual sales. The drug was first marketed about eight years ago, and is prescribed to more than 10 million people worldwide. The "important correction of drug information" came shortly after federal regulators had accused Janssen of "disseminating" advertising and marketing material that was "false or misleading."

Don't miss the highly revealing article on this vital topic by the New England Journal of Medicine's former editor in chief Marica Angell. Click here

Rats fed on a diet rich in genetically modified corn developed abnormalities to internal organs and changes to their blood, raising fears that human health could be affected by eating GM food. Details of secret research carried out by Monsanto, the GM food giant...shows that rats fed the modified corn had smaller kidneys and variations in the composition of their blood. According to the confidential 1,139-page report, these health problems were absent from another batch of rodents fed non-GM food. Although Monsanto last night dismissed the abnormalities in rats as meaningless and due to chance...a senior British government source said ministers were so worried by the findings that they had called for further information. The full details of the rat research are included in the main report, which Monsanto refuses to release on the grounds that "it contains confidential business information which could be of commercial use to our competitors".

Note: For lots more reliable, verifiable information on this vital topic, see our summary of Seeds of Deception.

Dr. Walter Bernard Coffey of San Francisco was again asking the State of New York's Department of Social Welfare permission to open a cancer research laboratory and clinic at Huntington, L. I. His cohorts surrounded him. Opposed were Dr. John Augustus Hartwell, president of the New York Academy of Medicine, spokesman for organized Medicine, and his cohorts. The simple question was: Should the State authorize the cancer clinic? But in the train of that simple question came a most extraordinary range of considerations—the nature and cause of cancer; the nature and authenticity of the Coffey-Humber cancer treatment; medical ethics, human nature, public policy, money, fame, and even national politics. Dr. Coffey ... is chief surgeon of Southern Pacific Co. He has 600 doctors working under him. They care for 70,000 railroad men and their families. Dr. John Augustus Hartwell, 61, president of the New York Academy of Medicine ... and most of his associates want Drs. Coffey & Humber and their cancer extract kept away from New York. They fear that the hope of a Coffey-Humber cancer cure will persuade the cancerous to abandon the orthodox treatment of surgery, X-rays and radium. Very quickly after a sufferer gets a Coffey-Humber injection, his pain quiets, and in 71% of the cases disappears. In most of the cases who do not die (Drs. Coffey & Humber will treat only the moribund, cases rejected as hopeless by at least two reputable doctors), the cancer becomes necrotic, ceases to smell, and sloughs off leaving a clean hole. That undeniably happens. Why that happens is debatable.

Note: To read how permission for the innovative cancer clinic was eventually refused, click here. If you want to understand how politics and big money prevented the legitimate study of promising cancer cures back in the 1930s, this article is a highly revealing "must read."

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.