Corporate Corruption News Stories

Excerpts of Key Corporate Corruption News Stories in Major Media

Below are key excerpts of revealing news articles on corporate corruption from reliable news media sources. If any link fails to function, a paywall blocks full access, or the article is no longer available, try these digital tools.

Note: This comprehensive list of news stories is usually updated once a week. Explore our full index to revealing excerpts of key major media news stories on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.

The international security contractor formerly known as Blackwater [and now called Academi LLC] has agreed to pay a $7.5 million fine to settle federal criminal charges related to arms smuggling and other crimes. The list of 17 violations includes possessing automatic weapons in the United States without registration, lying to federal firearms regulators about weapons provided to the king of Jordan, passing secret plans for armored personnel carriers to Sweden and Denmark without US government approval, and illegally shipping body armor overseas. Federal prosecutors said the company, which has held billions in US security contracts in Iraq and Afghanistan, repeatedly flouted US laws. ‘‘Compliance with these laws is critical to the proper conduct of our defense efforts and to international diplomatic relations,’’ said Thomas G. Walker, the US attorney for the Eastern District of North Carolina. ‘‘This prosecution is an important step to ensuring that our corporate citizens comply with these rules in every circumstance.’’ Blackwater was founded in 1997 by former Navy SEAL Erik Prince. The company rose to national attention after winning massive no-bid security contracts from the US government at the Iraq War’s start. In 2010, after several high-profile controversies, the company reached a $42 million settlement with the Department of State over repeated violations of the Arms Export Control Act and the International Trafficking in Arms Regulations.

Note: For deeply revealing reports from reliable major media sources on corporate corruption, click here.

In late 1986, four executives of the Monsanto Company, the leader in agricultural biotechnology, paid a visit to Vice President George Bush at the White House. In the weeks and months that followed, the White House complied, working behind the scenes, to help Monsanto — long a political power with deep connections in Washington — get the regulations that it wanted. It was an outcome that would be repeated, again and again, through three administrations. What Monsanto wished for from Washington, Monsanto — and, by extension, the biotechnology industry — got. Even longtime Washington hands said that the control this nascent industry exerted over its own regulatory destiny — through the Environmental Protection Agency, the Agriculture Department and ultimately the Food and Drug Administration — was astonishing. Dr. Louis J. Pribyl, one of 17 government scientists working on a policy for genetically engineered food, ... knew from studies that toxins could be unintentionally created when new genes were introduced into a plant's cells. The government was dismissing that risk and any other possible risk as no different from those of conventionally derived food. That meant biotechnology companies would not need government approval to sell the foods they were developing. "This is the industry's pet idea, namely that there are no unintended effects that will raise the F.D.A.'s level of concern," Dr. Pribyl wrote in a fiery memo to the F.D.A. scientist overseeing the policy's development. "But time and time again, there is no data to back up their contention."

Note: For a powerful essay showing the grave risks and dangers of GMOs, click here. Explore over 40 scientific studies that have demonstrated the health dangers of GM foods. For deeply revealing reports from reliable major media sources on genetically modified foods, click here.

The U.S. government said it will stop issuing permits for new nuclear power plants and license extensions for existing facilities until it resolves issues around storing radioactive waste. The government's main watchdog, the Nuclear Regulatory Commission, believes that current storage plans are safe and achievable. But a federal court said that the NRC didn't detail what the environmental consequences would be if the agency is wrong. There are 14 reactors awaiting license renewals at the NRC, and an additional 16 reactors awaiting permits for new construction. Nuclear waste disposal has been a daunting political question that is still unanswered after decades of study. Nuclear watchdog groups -- which don't agree with the NRC's assertion that the waste is currently safely stored -- are hoping the new review will provide an opportunity to push for stricter standards at nuclear power plants. There are currently 104 operating nuclear reactors at 64 plants across the country. Half are over 30 years old. '"The court is ordering them to do this analysis that should have been done a long time ago," said Edwin Lyman, a senior scientist at the Union of Concerned Scientists. In particular, UCS and others want less of the waste to be stored in pools of water, which they believe are vulnerable to sudden draining and possible meltdown.

Note: For deeply revealing reports from reliable major media sources on corruption in the nuclear power industry, click here.

Kevin Ferry: There are Libor subpoenas raining down on the New York branches of these foreign banks today. So I think you really have to watch it. The [British Bankers' Association] is now saying they are going to go into ‘overhaul’ mode. So as if we don’t have enough things going on, you’re going to start opening up a Pandora’s Box here in the Libor sector of the market. I think what they’re going to do ... is basically put the old system in a coma, and work to devise something that’s a little bit better, and it’s going to be tricky. Doug Dachille: So what are they going to do with the euro/dollar futures and all the outstanding notion of principal of contracts linked to Libor? I mean is everybody going to convert their Libor interest rate swaps to cost of fund funds or Fed fund basis swaps or some other index? KF: Are you asking me? I’ve asked that question as high as I could ask it and I get blank stares. DD: It’s not clear that every bank has exactly the same Libor exposure, so it’s not clear that that cartel, in setting Libor and manipulating it, actually is as powerful as the cartel that manages oil prices. Yet I don’t hear any outrage of people routinely trading commodity derivatives and commodity futures, as much as I hear the outrage over euro/dollar futures and Libor-based interest rate swaps. Everybody assumes that’s what goes on when you trade commodity futures, but nobody ever really thought that was going on when you were trading euro/dollar futures.

Note: The text above is an excerpt from a CNBC news video. Click on the link above for the full report. For deeply revealing reports from reliable major media sources on corruption in the financial sector, click here.

Rejecting entreaties from consumers and activists, Wal-Mart Stores Inc. says it has no objection to selling a new crop of genetically modified sweet corn created by biotech giant Monsanto. Environmental and health activists expressed surprise and disappointment at Wal-Mart’s decision. Earlier this year, Whole Foods, Trader Joe’s and General Mills said they would not carry or use the genetically modified sweet corn. “A lot of people who were their customers explicitly said we don’t want you to carry this product, and I think it’s unfortunate that they chose not listen to that feedback,” said Patty Lovera, assistant director of the consumer group Food and Water Watch. In March, the group presented Wal-Mart with a petition signed by 463,000 people asking it to boycott the product, she said. Monsanto’s genetically modified sweet corn is resistant to a common herbicide, which allows farmers to kill weeds without killing the corn. It also contains a toxin that fends off certain pests. Critics say they would like the U.S. Food and Drug Administration to require some pre-market safety testing and labeling of genetically modified foods, saying the lack of study makes it impossible to know whether they pose health risks. “There has been a doubling of food allergies in this country since 1996,” said Michael Hansen, a senior scientist at Consumers Union, the policy arm of Consumer Reports. “Is it connected to genetically engineered foods? Who knows when you have no labeling? That is the problem.”

Note: Strangely, this article was taken down from the Tribune website shortly after its original posting. To read the complete article, click here. For deeply revealing reports from reliable major media sources on the dangers of genetically modified foods, click here.

Pennsylvania remains the largest U.S. state without a tax on natural gas production, thanks in part to a study released under the banner of the Pennsylvania State University. The 2009 report predicted drillers would shun Pennsylvania if new taxes were imposed, and lawmakers cited it the following year when they rejected a 5 percent tax proposed by then-Governor Ed Rendell. What the study didn’t do was note that it was sponsored by gas drillers and led by an economist with a history of producing industry-friendly research on economic and energy issues. As the U.S. enjoys a natural-gas boom from a process called hydraulic fracturing, or fracking, producers are taking a page from the tobacco industry playbook: funding research at established universities that arrives at conclusions that counter concerns raised by critics. Cary Nelson, president of the American Association of University Professors, who made the tobacco analogy, said companies and their trade associations are “buying the prestige” of universities that are sometimes not transparent about funding nor vigilant enough to prevent financial interests from shaping research findings. The Penn State report is not the only example. A professor at the University of Texas at Austin led a February study that found no evidence of ground-water contamination from fracking. He did not reveal that he is a member of the board of a gas producer. Company filings examined by Bloomberg indicate that in 2011, he received more than $400,000 in compensation from the company, which has fracking operations in Texas.

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

In a welcome about-face Tuesday morning, Twitter restored the account of journalist Guy Adams, who posted a series of critical comments about NBC's handling of the Olympics. While it's encouraging to hear NBC backed away - even if it required an enormous online backlash - it remains disturbing that Twitter revoked the account in the first place. Let's be perfectly clear: Twitter suspended a user for committing an act of journalism. The mind-boggling move undermines the San Francisco startup's credibility as a supposed advocate of open communications, and whittles away the goodwill of professional and citizen journalists who are the lifeblood of the service. In a series of tweets in recent days, Adams colorfully assailed, among other things, NBC's ridiculous decision to force West Coast viewers to watch the Olympics on a time delay, presumably so the network could charge prime-time advertising rates. It's been an infuriating experience for fans who can't duck the spoilers blasting at them from all quarters of the Internet. Adams, a correspondent for London's Independent newspaper, simply supplied them an appropriate outlet for those frustrations in the tweet that supposedly got his account deactivated.

Note: For deeply revealing reports from reliable major media sources on corporate corruption, click here.

Former Citigroup Chairman & CEO Sanford I. Weill, the man who invented the financial supermarket, called for the breakup of big banks in an interview on CNBC Wednesday. “What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail,” Weill told CNBC’s “Squawk Box.” He added: “If they want to hedge what they’re doing with their investments, let them do it in a way that’s going to be mark-to-market so they’re never going to be hit.” He essentially called for the return of the Glass–Steagall Act, which imposed banking reforms that split banks from other financial institutions such as insurance companies. He said banks should be split off entirely from investment banks, and they should operate with a leverage ratio of 12 times to 15 times of what they have on their balance sheets. Banks should also be completely transparent, Weill said, with everything on balance sheet. “There should be no such thing as off balance sheet,” he said.

Note: For deeply revealing and reliable major media reports on corruption and criminality in the operations and regulation of the financial sector, click here.

The Deputy Governor of the Bank of England encouraged Barclays to try to lower interest rates after coming under pressure from senior members of the last Labour government, documents have disclosed. A memo published by Barclays suggested that Paul Tucker gave a hint to Bob Diamond, the bank’s chief executive, in 2008 that the rate it was claiming to be paying to borrow money from other banks could be lowered. His suggestion followed questions from “senior figures within Whitehall” about why Barclays was having to pay so much interest on its borrowings, the memo states. Barclays and other banks have been accused of artificially manipulating the Libor rate, which is used to set the borrowing costs for millions of consumers, businesses and investors, by falsely stating how much they were paying to borrow money. The bank claimed yesterday that one of its most senior executives cut the Libor rate only at the height of the credit crisis after intervention from the Bank of England. The memo, written on Oct 29, 2008, by Mr Diamond and circulated to two other senior bank officials, said: “Mr Tucker reiterated that he had received calls from a number of senior figures within Whitehall to question why Barclays was always toward the top end of the Libor pricing.” Government sources suggested that Baroness Vadera, one of Gordon Brown’s closest colleagues, was responsible for the contact with the Bank of England.

Note: For deeply revealing and reliable major media reports on corruption and criminality in the operations and regulation of the financial sector, click here.

The world's super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy. James Henry, a former chief economist at consultancy McKinsey and an expert on tax havens, has conducted groundbreaking new research for the Tax Justice Network campaign group – sifting through data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and private sector analysts to construct an alarming picture that shows capital flooding out of countries across the world and disappearing into the cracks in the financial system. "This offshore economy is large enough to have a major impact on estimates of inequality of wealth and income; on estimates of national income and debt ratios; and – most importantly – to have very significant negative impacts on the domestic tax bases of 'source' countries," Henry says. John Christensen of the Tax Justice Network [commented] "Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people. This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich." In total, 10 million individuals around the world hold assets offshore, according to Henry's analysis; but almost half of the minimum estimate of $21tn – $9.8tn – is owned by just 92,000 people.

Note: Henry's report, entitled The Price of Offshore Revisited, is available here. For more on this, click here.

The former head of Anglo Irish Bank, Sean FitzPatrick, has been arrested by Irish police in connection with alleged financial irregularities at the bank. He is the third former senior executive from Anglo Irish Bank to appear in court within the past 24 hours. All three men face 16 charges in relation to an alleged failed attempt to prop up Anglo's share price after a stock market collapse. Anglo was nationalised at a cost of about 30bn euros (Ł23.4bn) to Irish taxpayers. Anglo was badly exposed by the bursting of the Irish property bubble and suffered the largest corporate loss in the history of the Republic of Ireland. It is the third time Mr FitzPatrick has been arrested as part of the three-and-a-half year long investigation into the collapse of Anglo Irish Bank. Willie McAteer - the second in command at the bank before his resignation in January 2009 - appeared in court alongside Pat Whelan, a former head of lending and operations at the bank. The former bank is being wound down and is currently being run by the Irish Bank Resolution Corporation Limited (IBRC).

Note: For deeply revealing and reliable major media reports on corruption and criminality in the operations and regulation of the financial sector, click here.

Regulators on both sides of the Atlantic failed to act on clear warnings that the Libor interest rate was being falsely reported by banks during the financial crisis, it emerged last night. A cache of documents released yesterday by the New York Federal Reserve showed that US officials had evidence from April 2008 that Barclays was knowingly posting false reports about the rate at which it could borrow in order to assuage market concerns about its solvency. An unnamed Barclays employee told a New York Fed analyst, Fabiola Ravazzolo, on 11 April 2008: "So we know that we're not posting, um, an honest Libor." He said Barclays started under-reporting Libor because graphs showing the relatively high rates at which the bank had to borrow attracted "unwanted attention" and the "share price went down". The verbatim note of the call released by the Fed represents the starkest evidence yet that Libor-fiddling was discussed in high regulatory circles years before Barclays' recent Ł290m fine. The New York Fed said that, immediately after the call, Ms Ravazzolo informed her superiors of the information, who then passed on her concerns to Tim Geithner, who was head of the New York Fed at the time. Mr Geithner investigated and drew up a six-point proposal for ensuring the integrity of Libor which he presented to the British Bankers Association, which is responsible for producing the Libor rate daily. Mr Geithner, who is now US Treasury Secretary, also forwarded the six-point plan to the Governor of the Bank of England, Sir Mervyn King.

Note: For deeply revealing reports from reliable major media sources on regulatory and financial corruption and criminality, click here. For our highly revealing Banking Corruption Information Center, click here.

The global bank HSBC has been used by Mexican drug cartels looking to get cash back into the United States, by Saudi Arabian banks that needed access to dollars despite their terrorist ties and by Iranians who wanted to circumvent United States sanctions, a Senate report says. The 335-page report released [on July 16] also says that executives at HSBC and regulators at the Office of the Comptroller of the Currency ignored warning signs and failed to stop the illegal behavior at many points between 2001 and 2010. The problems at HSBC, Europe's largest financial institution, [are] indicators of a broader problem of illegal money flowing through international financial institutions into the United States. The report on HSBC is the latest of several scandals that have recently rocked global banks and highlighted the inability of regulators to catch what is claimed to be widespread wrongdoing in the financial industry. The British bank Barclays recently admitted that its traders tried to manipulate a crucial global interest rate, and multiple major banks are under investigation. JPMorgan Chase disclosed last week that its employees may have tried to hide trades that are likely to cost the bank billions of dollars. The Office of the Comptroller of the Currency has come under particularly harsh criticism for showing too much deference to the banks it regulates.

Note: For deeply revealing reports from reliable major media sources on regulatory and financial corruption and criminality, click here. For our highly revealing Banking Corruption Information Center, click here.

Motorists may have been paying too much for their petrol because banks and other traders are likely to have tried to manipulate oil prices in the same way they rigged interest rates, an official report has warned. Concerns are growing about the reliability of oil prices, after a report for the G20 found the market is wide open to “manipulation or distortion”. Traders from banks, oil companies or hedge funds have an “incentive” to distort the market and are likely to try to report false prices, it said. Petrol retailers use oil price “benchmarks” to decide how much to pay for future supplies. The rate is calculated by data companies based on submissions from firms which trade oil on a daily basis – such as banks, hedge funds and energy companies. However, like Libor ... the market is unregulated and relies on the honesty of the firms to submit accurate data about all their trades. This is one of the major concerns raised in the G20 report, published last month by the International Organisation of Securities Commissions (IOSCO). In the study for global finance ministers, including George Osborne, the regulator warns that traders have opportunities to influence oil prices for their own profit. It points out that the whole market is “voluntary”, meaning banks and energy companies can choose which trades to make public. IOSCO says this “creates opportunity for a trader to submit a partial picture in order to influence the [price] to the trader’s advantage”.

Note: For deeply revealing reports from reliable major media sources on regulatory and financial corruption and criminality, click here.

Efforts to write benefits for biotech seed companies into U.S. legislation, including the new Farm Bill, are sparking a backlash from groups that say the multiple measures would severely limit U.S. oversight of genetically modified crops. From online petitions to face-to-face lobbying on Capitol Hill, an array of consumer and environmental organizations and individuals are ringing alarm bells over moves they say will eradicate badly needed safety checks on crops genetically modified to withstand herbicides, pests and pesticides. The measures could speed the path to market for big biotech companies like Monsanto and Dow Chemical that make billions of dollars from genetically altered corn, soybeans, cotton and other crops. "They are trying to change the rules," said George Kimbrell, senior attorney at the Center for Food Safety, which has lawsuits pending against government regulators for failing to follow the law in approving certain biotech crops. "It is to the detriment of good governance, farmers and to the environment." As early as next week the U.S. House of Representatives could take up one of the more controversial measures - a provision included in the 2013 Agriculture Appropriations bill known as Section 733 that would allow biotech crops to be planted even if courts rule they were approved illegally. Opponents call it the "Monsanto Rider" because Monsanto's genetically altered alfalfa and sugar beets have been subject to court challenges for illegal regulatory approvals.

Note: For deeply revealing reports from reliable major media sources on the dangers of genetically modified organisms, click here. Multiple reliable sources show that you may be eating genetically modified food daily which scientific experiments have repeatedly demonstrated can cause sickness and even death in lab animals. Click here to verify.

The U.S. Department of Justice has reached a settlement in the largest health care fraud case in U.S. history. The ruling, which included accusations of false advertising, forced the once widely respected British drugmaker, GlaxoSmithKline ... to pay a record-shattering $3 billion to various plaintiffs and the Department of Justice. Despite this $3 billion settlement, advertising fraud is on the rise in the United States. Expert public relations teams are called in to spin stories and confuse consumers. It is clear there is not enough being done to prevent, stop or resolve matters of false advertising in this country. The effect of the GlaxoSmithKline case has yet to be fully seen. If GlaxoSmithKline is [creative and deceptive] then we might see it roll out ads that skew the $3 billion loss in its favor - blatantly distorting the ruling as an endorsement of its products. At this point, even as regulators secure record-breaking settlements, the American people are losing, and the corporate spin teams are winning, the fight. Record settlements mean little if the deception continues. While winning lawsuits is a first step, what really matters is changing corporate behavior.

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

The Barclays Libor scandal may have shocked the British public, but Joseph Stiglitz saw it coming decades ago. And he's convinced that jailing bankers is the best way to curb market abuses. [Former World Bank Chief Economist] Stiglitz wrote a series of papers in the 1970s and 1980s explaining how when some individuals have access to privileged knowledge that others don't, free markets yield bad outcomes for wider society. That insight (known as the theory of "asymmetric information") won Stiglitz the Nobel Prize for economics in 2001. And he has leveraged those credentials relentlessly ever since to batter at the walls of "free market fundamentalism". It is a crusade that [includes] his new book The Price of Inequality. When traders working for Barclays rigged the Libor interest rate and flogged toxic financial derivatives – using their privileged position in the financial system to make profits at the expense of their customers – they were unwittingly proving Stiglitz right. "It's a textbook illustration," Stiglitz said. "Where there are these asymmetries a lot of these activities are directed at rent seeking [appropriating resources from someone else rather than creating new wealth]. That was one of my original points. It wasn't about productivity, it was taking advantage." He argues that breaking the economic and political power that has been amassed by the financial sector in recent decades, especially in the US and the UK, is essential if we are to build a more just and prosperous society. The first step, he says, is sending some bankers to jail.

Note: For key investigative reports on the criminality and corruption in the financial industry and biggest banks, click here.

Once more the big banks are exposed in systematic fraudulent activity. When Barclays agreed to a $450 million fine for trying to rig the Libor, its CEO offered the classic excuse: Everyone does it. Once more the question remains: Will CEOs and CFOs, as well as traders, be prosecuted? Or will they depart with their multimillion dollar rewards intact, leaving shareholders to pay the tab for the hundreds of millions in fines? The Barclays settlement exposed that traders colluded to try to fix the Libor rate. This is the rate used as the basis for exotic derivatives as well as mortgages, credit card and personal loan rates. Almost everyone is affected. Fixing the rate even a few hundredths of a percentage point could make Barclays millions on any single day — money taken out of the pockets of consumers and investors. Once more the banks were rigging the rules; once more their customers were their mark. The collusion was systematic and routine. Investigations are underway not only in the United Kingdom but also in the United States, Canada and the European Union. Those named in the probes are all the usual suspects: JPMorgan Chase, Citibank, UBS, Deutsche Bank, HSBC, UBS and others. This wasn’t rogue trading, ... it was more like a cartel. The Economist writes that what has been revealed here is “the rotten heart of finance,” a “culture of casual dishonesty.”

Note: For key investigative reports on the criminality and corruption in the financial industry and biggest banks, click here.

The rapidly spreading scandal of LIBOR (the London inter-bank offered rate) ... is beginning to assume global significance. The number that the traders were toying with determines the prices that people and corporations around the world pay for loans or receive for their savings. It is used as a benchmark to set payments on about $800 trillion-worth of financial instruments, ranging from complex interest-rate derivatives to simple mortgages. The number determines the global flow of billions of dollars each year. Yet it turns out to have been flawed. Over the past week damning evidence has emerged, in documents detailing a settlement between Barclays and regulators in America and Britain, that employees at the bank and at several other unnamed banks tried to rig the number time and again over a period of at least five years. And worse is likely to emerge. Investigations by regulators in several countries, including Canada, America, Japan, the EU, Switzerland and Britain, are looking into allegations that LIBOR and similar rates were rigged by large numbers of banks. As many as 20 big banks have been named in various investigations or lawsuits alleging that LIBOR was rigged. The scandal also corrodes further what little remains of public trust in banks and those who run them.

Note: For key investigative reports on the criminality and corruption in the financial industry and biggest banks, click here.

Just when you thought Wall Street couldn't sink any lower - when its excesses are still causing hardship to millions of Americans and its myriad abuses of public trust have already spread a miasma of cynicism over the entire economic system - an even deeper level of public-be-damned greed and corruption is revealed. Libor is the benchmark for trillions of dollars of loans worldwide - mortgage loans, small-business loans, personal loans. It's compiled by averaging the rates at which the major banks say they borrow. So far, the scandal has been limited to Barclays, a big, London bank that just paid $453 million to U.S. and British bank regulators, whose top executives have been forced to resign, and whose traders' e-mails give a chilling picture of how easily they got their colleagues to rig interest rates in order to make big bucks. But Wall Street has almost surely been involved in the same practice, including the usual suspects - JPMorgan Chase, Citigroup and Bank of America - because every major bank participates in setting the Libor rate, and Barclays couldn't have rigged it without their witting involvement. In fact, Barclays' defense has been that every major bank was fixing Libor in the same way, and for the same reason. And Barclays is "cooperating" (i.e., providing damning evidence about other big banks) with the Justice Department and other regulators in order to avoid steeper penalties or criminal prosecutions, so the fireworks have just begun.

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

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