Corporate Corruption News Articles

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Three Polish doctors and six nurses are facing criminal prosecution after a number of homeless people died following medical trials for a vaccine to the H5N1 bird-flu virus. The medical staff, from the northern town of Grudziadz, are being investigated over medical trials on as many as 350 homeless and poor people last year, which prosecutors say involved an untried vaccine to the highly-contagious virus. Authorities claim that the alleged victims received Ł1-2 to be tested with what they thought was a conventional flu vaccine but, according to investigators, was actually an anti bird-flu drug. The director of a Grudziadz homeless centre, Mieczyslaw Waclawski, told a Polish newspaper that last year, 21 people from his centre died, a figure well above the average of about eight. Investigators are also probing the possibility that the medical staff may have also have deceived the pharmaceutical companies that commissioned the trials. The news of the investigation will come as another blow to the reputation of Poland's beleaguered and poverty-stricken national health service. In 2002, a number of ambulance medics were found guilty of killing their patients for commissions from funeral companies.

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The battle over dioxin contamination in [the Saginaw, Mich.] region had been raging for years when a top [EPA] official turned up the pressure on Dow Chemical to clean it up. On Thursday, following months of internal bickering over Mary Gade's interactions with Dow, the [Bush] administration forced her to quit as head of the U.S. Environmental Protection Agency's Midwest office. Gade told the Tribune she resigned after two aides to national EPA administrator Stephen Johnson took away her powers as regional administrator and told her to quit or be fired by June 1. Gade has been locked in a heated dispute with Dow about long-delayed plans to clean up dioxin-saturated soil and sediment that extends 50 miles beyond its Midland, Mich., plant into Saginaw Bay and Lake Huron. Gade, appointed ... regional EPA administrator in September 2006, invoked emergency powers last summer to order the company to remove three hotspots of dioxin near its Midland headquarters. She demanded more dredging in November, when it was revealed that dioxin levels along a park in Saginaw were 1.6 million parts per trillion, the highest amount ever found in the U.S. Dow then sought to cut a deal on a more comprehensive cleanup. But Gade ended the negotiations in January, saying Dow was refusing to take action necessary to protect public health and wildlife. Dow responded by appealing to officials in Washington, according to heavily redacted letters the Tribune obtained under the Freedom of Information Act. On Thursday, Gade said of her resignation: "There's no question this is about Dow. I stand behind what I did and what my staff did. I'm proud of what we did."

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In a major shift of policy, the Justice Department, once known for taking down giant corporations, including the accounting firm Arthur Andersen, has put off prosecuting more than 50 companies suspected of wrongdoing over the last three years. Instead, many companies, from boutique outfits to immense corporations like American Express, have avoided the cost and stigma of defending themselves against criminal charges with a so-called deferred prosecution agreement, which allows the government to collect fines and appoint an outside monitor to impose internal reforms without going through a trial. In many cases, the name of the monitor and the details of the agreement are kept secret. Deferred prosecutions have become a favorite tool of the Bush administration. But some legal experts now wonder if the policy shift has led companies, in particular financial institutions now under investigation for their roles in the subprime mortgage debacle, to test the limits of corporate anti-fraud laws. Firms have readily agreed to the deferred prosecutions, said Vikramaditya S. Khanna, a law professor at the University of Michigan who has studied their use, because “clearly it avoids a bigger headache for them.” Some lawyers suggest that companies may be willing to take more risks because they know that, if they are caught, the chances of getting a deferred prosecution are good. “Some companies may bear the risk” of legally questionable business practices if they believe they can cut a deal to defer their prosecution indefinitely, Mr. Khanna said. Legal experts say the tactic may have sent the wrong signal to corporations — the promise, in effect, of a get-out-of-jail-free card.

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When the nation's intelligence agencies wanted a computer network to better share information ... they turned to a big name in the technology industry to supply some of the equipment: Google Inc. The Mountain View company sold the agencies servers for searching documents. Many of the contracts are for search appliances - servers for storing and searching internal documents. Agencies can use the devices to create their own mini-Googles on intranets made up entirely of government data. Additionally, Google has had success licensing a souped-up version of its aerial mapping service, Google Earth. Spy agencies are using Google equipment as the backbone of Intellipedia, a network aimed at helping agents share intelligence. [The system] is maintained by the director of national intelligence and is accessible only to the CIA, FBI, National Security Agency and an alphabet soup of other intelligence agencies and offices. Google supplies the computer servers that support the network, as well as the search software that allows users to sift through messages and data. Because of the complexities of doing business with the government, Google uses resellers to process orders on its behalf. Google takes care of the sales, marketing and management of the accounts. Google is one of many technology vendors vying for government contracts. On occasion, Google is the target of conspiracy theories from bloggers who say it is working with spy agencies more closely than simply selling search equipment.

Former Attorney General John Ashcroft responded angrily Tuesday to Congressional Democrats who suggested that a no-bid private contract directed to him by the Justice Department last year amounted to a “back-room sweetheart deal” worth tens of millions of dollars to his consulting firm. “There is not a conflict; there is not an appearance of a conflict,” Mr. Ashcroft said at a hearing of a House Judiciary subcommittee exploring the circumstances of the contract. He repeatedly tried to talk over the panel’s Democratic chairwoman, Representative Linda T. Sánchez of California, who offered the severest questioning. Mr. Ashcroft stepped down from the Justice Department three years ago and now runs a Washington consulting and lobbying firm that bears his name. Ms. Sánchez opened the hearing by suggesting the appearance of a conflict of interest in the department’s decision last year to steer a monitoring contract worth $28 million to $52 million to Mr. Ashcroft’s firm as part of an out-of-court settlement with a medical supply company under criminal investigation. The Indiana company, Zimmer Holdings, hired the Ashcroft firm as the settlement monitor at the direction of Christopher J. Christie, the United States attorney in New Jersey, who had pursued the investigation and had worked under Mr. Ashcroft at the Justice Department. “You don’t believe that it may be a conflict of interest in a former employee hiring the former boss, or suggesting that he be hired, for a very lucrative contract?” she said of the 18-month contract, which requires Mr. Ashcroft to make sure that Zimmer complies with the terms of its settlement of kickback allegations. Ms. Sánchez described the contract as a “back-room sweetheart deal” in which “Mr. Ashcroft was selected with no public notice and no bidding.”

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Under pressure from the chemical industry, the Environmental Protection Agency has dismissed an outspoken scientist who chaired a federal panel responsible for helping the agency determine the dangers of a flame retardant widely used in electronic equipment. Toxicologist Deborah Rice was appointed chair of an EPA scientific panel reviewing the chemical a year ago. Federal records show that she was removed from the panel in August after the American Chemistry Council, the lobbying group for chemical manufacturers, complained to a top-ranking EPA official that she was biased. The chemical, a brominated compound known as deca, is [commonly] used in the plastic housings of television sets. Rice, an award-winning former EPA scientist ... has studied low doses of deca and reported neurological effects in lab animals. The EPA is in the process of deciding how much daily exposure to deca is safe - a decision, expected next month, that could determine whether it can still be used in consumer products. The role of the expert panel was to review and comment on the scientific evidence. Sonya Lunder, a senior analyst at the Environmental Working Group, an advocacy group in Washington, said it was unprecedented for the EPA to remove an expert for expressing concerns about the potential dangers of a chemical. "It's a scary world if we create a precedent that says scientists involved in decision-making are perceived to be too biased," she said. In 2004, the EPA gave Rice and four colleagues an award for what it called "exceptionally high-quality research" for a study that linked lead exposure to premature puberty in girls.

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Federal officials are routinely asking courts to order cellphone companies to furnish real-time tracking data so they can pinpoint the whereabouts of drug traffickers, fugitives and other criminal suspects, according to judges and industry lawyers. In some cases, judges have granted the requests without requiring the government to demonstrate that there is probable cause to believe that a crime is taking place or that the inquiry will yield evidence of a crime. Privacy advocates fear such a practice may expose average Americans to a new level of government scrutiny of their daily lives. The requests and orders are sealed at the government's request, so it is difficult to know how often the orders are issued or denied. "Most people don't realize it, but they're carrying a tracking device in their pocket," said Kevin Bankston of the privacy advocacy group Electronic Frontier Foundation. "Cellphones can reveal very precise information about your location, and yet legal protections are very much up in the air." In a stinging opinion this month, a federal judge in Texas denied a request by a Drug Enforcement Administration agent for data that would identify a drug trafficker's phone location by using the carrier's E911 tracking capability. E911 tracking systems read signals sent to satellites from a phone's Global Positioning System (GPS) chip or triangulated radio signals sent from phones to cell towers. "Law enforcement routinely now requests carriers to continuously 'ping' wireless devices of suspects to locate them when a call is not being made . . . so law enforcement can triangulate the precise location of a device and [seek] the location of all associates communicating with a target," wrote Christopher Guttman-McCabe, vice president of regulatory affairs for CTIA -- the Wireless Association.

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A wave of foreclosures and evictions is about to sweep the United States in the wake of the sub-prime mortgage lending crisis. This could destabilise the US housing market and may also lead to further turmoil in financial institutions, who collectively own $1 trillion (Ł480.6bn) worth of sub-prime debt. Cleveland, Ohio, is an industrial city on the banks of Lake Erie in the US "rust belt". It is the sub-prime capital of the United States. One in ten homes in the city is now vacant, and whole neighbourhoods have been blighted by foreclosed, vandalized and boarded-up homes. Cleveland is facing a rising crime wave, and the cost of demolishing the vacant houses alone will cost the city $100m of its tax base. According to Jim Rokakis, the County Treasurer for Cleveland's Cuyahoga County, "Wall Street strategies that made the cycle of no-money-down, no-questions-asked lending possible have sucked the life out of my city". As the credit crunch continues to bite "families all over the country continue to lose homes in record numbers, stripping families of their wealth and destroying entire neighbourhoods," says Michael Calhoun of the Center for Responsible Lending, which tracks these issues. There have already been 1.7 million foreclosure proceedings in the US in the first eight months of 2007, and up to 2 million families are expected to lose their homes over the next two years, according to estimates by the US Congress's Joint Economic Committee. Many of these mortgages were sold by unscrupulous and little regulated mortgage brokers, who received handsome commissions for selling expensive and unsuitable products. Some customers were not told that their interest rates would go up sharply after two years; others were promised they could refinance their home before higher rates took effect. Others found that when they had difficulties paying, huge unexplained fees were added to their bills, putting them further in debt.

The US arms industry is backing Hillary Clinton for President and has all but abandoned its traditional allies in the Republican party. Mrs Clinton has also emerged as Wall Street's favourite. Investment bankers have opened their wallets in unprecedented numbers for the New York senator over the past three months and, in the process, dumped their earlier favourite, Barack Obama. An analysis of campaign contributions shows senior defence industry employees are pouring money into her war chest in the belief that their generosity will be repaid many times over with future defence contracts. Employees of the top five US arms manufacturers – Lockheed Martin, Boeing, Northrop-Grumman, General Dynamics and Raytheon – gave Democratic presidential candidates $103,900, with only $86,800 going to the Republicans. "The contributions clearly suggest the arms industry has reached the conclusion that Democratic prospects for 2008 are very good indeed," said Thomas Edsall, an academic at Columbia University in New York. Republican administrations are by tradition much stronger supporters of US armaments programmes and Pentagon spending plans than Democratic governments. Relations between the arms industry and Bill Clinton soured when he slimmed down the military after the end of the Cold War. His wife, however, has been careful not to make the same mistake. After her election to the Senate, she became the first New York senator on the armed services committee, where she revealed her hawkish tendencies by supporting the invasion of Iraq. Her position on Iran is among the most warlike of all the candidates – Democrat or Republican. While on the armed services committee, Mrs Clinton has befriended key generals and has won the endorsement of General Wesley Clarke, who ran Nato's war in Kosovo. The arms industry has duly taken note.

Note: For a revealing personal account of the "War Racket" by a U.S. general, click here.

More than 14 months after the Agriculture Department began an investigation into how the U.S. supply of long-grain rice became tainted with an unapproved genetically engineered variety -- an event that continues to disrupt U.S. exports -- the government announced yesterday that it could not figure out how the contamination happened. Agency officials said documents from several years ago that might have helped them determine what went wrong had been lost or destroyed. Lacking clear evidence of who was responsible, they said, the government will not take enforcement action against any person or entity, including Bayer CropScience, the company whose gene-altered products slipped into the food supply. The widespread, low-level contamination with experimental genes that make the rice pesticide-tolerant, one of several such events in recent years, prompted countries around the world to cut off imports of U.S. long-grain rice. Rice prices plummeted, and many farmers, scientists and biotechnology activists called for an overhaul of the oversight system for gene-altered crops. While some countries have begun to accept U.S. rice with added testing, the European Union and Russia have not -- a trade loss valued in the hundreds of millions of dollars a year. Critics assailed the report as yet more evidence that the nation's regulatory system for gene-altered crops is broken. "This underlines the anxiety people have about more such incidents occurring," said Margaret Mellon of the Union of Concerned Scientists, a science-based advocacy group that has called for a more rigorous approval process for biotech crops.

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A globalized world that could bring down the Berlin Wall, and deliver fresh fruit in the middle of the coldest winter months, wasn't supposed to foster one of the darkest of human practices — slavery. This version of the world was supposed to make life for everyone, everywhere, better. Better medicine, better prices, better democracies. Not so, says John Bowe in his incredible book, Nobodies: Modern American Slave Labor and the Dark Side of the New Global Economy. Not only is slavery a reality, but how we've executed this rush toward globalization may have created the very conditions necessary for slavery to gain a toehold in the modern world. Nobodies is investigative, immersion reporting at its best. The line between observer and participant blurs, and the reality of time, place and subject come crashing out in full detail. Bowe is a master storyteller whose work is finely tuned and fearless. When the time is appropriate, he goes so far as to question his own assumptions, ideals and practices without holding back. "Go out into this newly globalized world you're profiting from," he writes, "go visit the people being 'lifted' out of poverty, the workers who are making your products. Go live in their huts, eat their rice and plantains, squat on their floors, and listen to their babies cry. Sniff some glue and pray with them. Try to get justice from their police if someone hurts you. And then come back and let's talk about freedom." There's a chill in the air when he writes: "If you can read this page, you are on top of the world and billions of people are beneath you. Your ignorance and your lack of a program will likely equal the squalor of your grandchildren's existence."

Ten days ago, the Consumer Product Safety Commission announced another in a series of well-publicized recalls of Chinese-made goods: children's art sets containing crayons, markers, pastels, pencils, water colors -- and lead -- distributed by Toys "R" Us. "Consumers should immediately take the products away from children," warned a news release from the federal government's watchdog for thousands of household items. "The CPSC is committed to protecting consumers and families." But 13 months earlier, in July 2006, the CPSC ... authorized a Los Angeles company to export to Venezuela 16,520 art sets that violated the same CPSC standard protecting children from dangerous art supplies. The following month, the agency authorized a Miami company to export to Jamaica 5,184 sets of wax crayons that also violated the standard. For decades the federal agency has allowed American-based companies to export products deemed unsafe here. Those products can present an even greater danger in a country that has only a handful of government employees devoted to consumer protection, said R. David Pittle, a former acting CPSC chairman who spent 22 years as a senior vice president for Consumers Union. "If the United States doesn't have very many inspectors, how many do you think there are in Honduras or Jamaica or Trinidad or Bulgaria?" Pittle asked. Using the CPSC's database of exports of non-approved products and hundreds of pages of documents obtained through the federal Freedom of Information Act, The Bee found that between October 1993 and September 2006, the CPSC received 1,031 requests from companies to export products the agency had found unsafe for American consumers. The CPSC approved 991 of those requests, or 96 percent.

The Defense Department is paying private contractors more than $1 billion in more than 30 separate contracts to collect and analyze intelligence for the four military services and its own Defense Intelligence Agency, according to contract documents and a Pentagon spokesman. The disclosure marks the first time a U.S. intelligence service has made public its outside payments. Intelligence payments to contractors have climbed dramatically since the terror attacks in September 2001, but none had been made public, according to a report filed in April by the Office of the Director of National Intelligence. Outside contracting ... places critical security tasks and sensitive information in the hands of private parties, says Steven Aftergood, a government secrecy specialist at the Federation of American Scientists, a Washington privacy group. "Private contractors don't have to undergo congressional oversight or justify their budgets to appropriators," Aftergood says. "We're starting to create a new kind of intelligence bureaucracy, one that is both more expensive and less accountable (than government's own intelligence agencies)." Most of the contracts, which extend up to five years, pay for analysis of intelligence data and for related services, such as translation and interpretation of photo and electronic intelligence. A small fraction, which [a Pentagon spokesman] declined to specify, pay for private spies. Private contractors often hire former intelligence officers, sometimes leasing them back at higher salaries to the agencies that first recruited and trained them.

US cash dispenser and security company Diebold has admitted that it has failed to find a buyer for its troubled electronic voting machine business. Diebold and other manufacturers of such voting machines have been hit by criticism that they are unreliable and vulnerable to tampering. Growing unease about the machines in the US has led to a number of delayed orders from states. Diebold said that as a result, its 2007 revenues would fall $120m (Ł61m). It added that it would now allow the unit to operate more independently, with a separate board of directors and, possibly, a new management structure. Diebold said it had not ruled out another attempt at a full or partial sale. Some 50 million Americans, about 30% of registered voters, used electronic machines to cast their vote in the 2004 presidential election. The machines were introduced in the aftermath of the problems caused by antiquated punch-card systems in the 2000 presidential election. However, there has since been growing concern that electronic machines may be equally as unreliable.

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One of the largest American contractors working in Iraq, Bechtel National, met its original objectives on fewer than half of the projects it received as part of a $1.8 billion reconstruction contract, while most of the rest were canceled, reduced in scope or never completed as designed. But the report, by the Special Inspector General for Iraq Reconstruction, an independent agency, places a large share of the blame for the failures on the government overseers at the United States Agency for International Development who administered the contract. [USAID] assigned just two people in Iraq to oversee the giant contract, which included some 24 major projects and 150 subcontractors and stipulated that all invoices be approved or denied in just 10 days. The report is the first of a planned series of audits of Western contractors that have received large slices of the roughly $40 billion in American taxpayer money that has been spent on the troubled program to rebuild Iraq. Stuart Bowen Jr., who heads the special inspector general's office, said the United States government clearly shared responsibility with the company for the project failures. "I would say there's fault on both sides," Bowen said in an interview Wednesday. He added that neither the aid agency nor the United States Army Corps of Engineers, which also oversaw aspects of the contract, ever came close to filling all their staff positions in Iraq. "This isn't so much an indictment of Bechtel as it is a criticism of the system," said Stephen Ellis, a vice president at Taxpayers for Common Sense in Washington.

A proposed new FBI program would skirt federal laws by paying private companies to hold millions of phone and Internet records which the bureau is barred from keeping itself, experts say. The $5 million project would apparently pay private firms to store at least two years' worth of telephone and Internet activity by millions of Americans, few of whom would ever be considered a suspect in any terrorism, intelligence or criminal matter. The FBI is barred by law from collecting and storing such data if it has no connection to a specific investigation or intelligence matter. In recent years the bureau has tried to encourage telecommunications firms to voluntarily store such information, but corporations have balked at the cost of keeping records they don't need. "The government isn't allowed to warehouse the information, and the companies don't want to, so this creates a business incentive for the companies to warehouse it, so the government can access it later," said Mike German, a policy expert on national security and privacy issues for the American Civil Liberties Union (ACLU).  "It's a public-private partnership that puts civil liberties to the test." In March, an FBI official identified the companies as Verizon, MCI and AT&T. Even the bureau's own top lawyer said she found the [FBI's] behavior "disturbing," noting that when requesting access to phone company records, it repeatedly referenced "emergency" situations that did not exist, falsely claimed grand juries had subpoenaed information and failed to keep records on much of its own activity.

The U.S. Department of Agriculture gave interim approval Friday to a controversial proposal to allow 38 nonorganic ingredients to be used in foods carrying the "USDA Organic" seal. Manufacturers of organic foods had pushed for the change, arguing that the 38 items are minor ingredients in their products and are difficult to find in organic form. But consumers opposed to the use of pesticides, chemical fertilizers, antibiotics and growth hormones in food production bombarded the USDA with more than 1,000 complaints last month. "If the label says organic, everything in that food should be organic," wrote Kimberly Wilson of Austin, Texas, in one typical comment. "If they put something in the food that isn't organic, they shouldn't be able to call it organic. No exception." The list approved Friday includes 19 food colorings, two starches, hops, sausage casings, fish oil, chipotle chili pepper, gelatin, celery powder, dill weed oil, frozen lemongrass, Wakame seaweed, Turkish bay leaves and whey protein concentrate. Manufacturers will be allowed to use conventionally grown versions of these ingredients in foods carrying the USDA seal, provided that they can't find organic equivalents and that nonorganics comprise no more than 5% of the product. A wide range of organic food could be affected, including cereal, sausage, bread, beer, pasta, candy and soup mixes. The Organic Consumers Assn. ... has led the opposition to the USDA proposal. Ronnie Cummins, executive director of the consumers group, said ... that the USDA was caving in to pressure from large food companies. USDA officials "don't seem to care what the public wants. They're just more interested in what's convenient for the big companies."

The Bush administration said Tuesday it will fight to keep meatpackers from testing all their animals for mad cow disease. The Agriculture Department tests less than 1 percent of slaughtered cows for the disease, which can be fatal to humans who eat tainted beef. But Kansas-based Creekstone Farms Premium Beef wants to test all of its cows. Larger meat companies feared that move because, if Creekstone tested its meat and advertised it as safe, they might have to perform the expensive test, too. The Agriculture Department regulates the test and argued that widespread testing could lead to a false positive that would harm the meat industry. A federal judge ruled in March that such tests must be allowed. U.S. District Judge James Robertson noted that Creekstone sought to use the same test the government relies on and said the government didn't have the authority to restrict it. The ruling was to take effect June 1, but the Agriculture Department said Tuesday it would appeal -- effectively delaying the testing until the court challenge plays out. Mad cow disease, or bovine spongiform encephalopathy, is linked to more than 150 human deaths worldwide, mostly in Britain. There have been three cases of mad cow disease in the U.S.

Investigations led by a Republican lawyer named Stuart W. Bowen Jr. in Iraq have sent American occupation officials to jail on bribery and conspiracy charges, exposed disastrously poor construction work by well-connected companies like Halliburton and Parsons, and discovered that the military did not properly track hundreds of thousands of weapons it shipped to Iraqi security forces. And tucked away in a huge military authorization bill that President Bush signed two weeks ago is what some of Mr. Bowen’s supporters believe is his reward for repeatedly embarrassing the administration: a pink slip. An obscure provision...terminates his federal oversight agency, the Office of the Special Inspector General for Iraq Reconstruction. The clause was inserted by the Republican side of the House Armed Services Committee. It has generated surprise and some outrage among lawmakers who say they had no idea it was in the final legislation. Susan Collins, a Maine Republican who followed the bill closely as chairwoman of the Senate Committee on Homeland Security and Government Affairs, says that she still does not know how the provision made its way into what is called the conference report, which reconciles differences between House and Senate versions of a bill. Neither the House nor the Senate version contained such a termination clause before the conference, all involved agree. Mr. Bowen’s office has 55 auditors and inspectors in Iraq and about 300 reports and investigations already to its credit, far outstripping any other oversight agency in the country.

The level of nicotine that smokers typically consume per cigarette has risen 10 percent in the past six years, making it harder to quit and easier to be addicted, said a report that the Massachusetts Department of Health released on Tuesday. The study shows a steady increase in the amount of nicotine delivered to the smokers? lungs regardless of brand, with overall yields increasing 10 percent. Massachusetts is one of three states to require tobacco companies to submit information on nicotine testing to its specifications and is the sole state with data as far back as 1998. The study found that the three most popular brands with young smokers, Marlboro, Newport and Camel, delivered significantly more nicotine than they did six years ago. Nicotine consumed in Kool, a popular menthol brand, rose 20 percent.

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