corporatehallofshame

The Corporate Hall of Shame

ABBOTT LABORATORIES In December 2003, the company raised the U.S. price of its anti-AIDS drug Norvir (generic name ritanovir) by 400 percent. That is, unless the product is used in conjunction with other Abbott products — in which case the price increase is zero. Norvir has become an increasingly important treatment in recent years. Scientists have discovered that while Norvir is generally too toxic for safe use as a protease inhibitor (one category of anti-AIDS drugs), in lower doses it works well as a booster to increase the efficacy of other protease inhibitors. As a result, Norvir is frequently prescribed along with other protease inhibitors.

The Norvir price increase does not apply when the product is used as a booster with another Abbott protease inhibitor (in the combined product Kaletra). Thus the impact of the Norvir price increase is to make Kaletra far cheaper than rival combinations of Norvir and non-Abbott protease inhibitors. Norvir is especially important for patients in need of a “salvage therapy” of new and powerful treatments because their virus has become resistant to other medicines.

Lynda Dee, co-chair of the Aids Treatment Activists Coalition’s Drug Development Committee, called the price increase for these patients, who may have no choice as to the medications they need to survive, “pharma terrorism perpetrated against the patients who need new drugs the most.” Making the Abbott price jump especially pernicious in the eyes of consumer advocates was that the drug was invented on a grant from the U.S. federal government.

AIG In October, 2004 New York Attorney General Eliot Spitzer moved against a major insurance broker, Marsh & McLennan, alleging that the company steered unsuspecting clients to insurers with whom it had lucrative payoff agreements, and that the firm solicited rigged bids for insurance contracts. By threatening criminal action, Spitzer forced the company’s CEO to resign — and replaced him with a former work colleague.

Major insurance companies — ACE, American International Group, The Hartford and Munich American Risk Partners — were named in the complaint as participants in steering and bid rigging. Other insurance companies are still under investigation.

Thus, when the world’s largest insurer, American International Group Inc. (AIG), was charged by federal prosecutors with crimes in November, it quickly cut a deal with the Justice Department that ended a criminal probe into its finances with a deferred prosecution agreement.

Under the deal with AIG, an AIG subsidiary was charged with a crime for the next 12 months, but then the charge will be dismissed with prejudice — if AIG abides by the deferred prosecution agreement. As part of the agreement, AIG and two subsidiaries will pay an $80 million penalty, and $46 million into a disgorgement fund maintained by the SEC. Companies are getting off the criminal hook with these agreements, which were originally intended for minor street crimes. Now they are being used in very serious corporate crime cases.

COCA-COLA Check out KillerCoke.Org. You’ll find a raft of information on Coke and its bottlers’ operations in Colombia. There is extensive documentation of rampant violence committed against Coke’s unionized workforce by paramilitary forces, and powerful claims of the company’s complicity in the violence.

“To date, there have been a total of 179 major human rights violations of Coca-Cola’s workers, including nine murders. Family members of union activists have been abducted and tortured. Union members have been fired for attending union meetings. The company has pressured workers to resign their union membership and contractual rights, and fired workers who refused to do so.”

“Most troubling to the delegation were the persistent allegations that paramilitary violence against workers was done with the knowledge of and likely under the direction of company managers. The physical access that paramilitaries have had to Coca-Cola bottling plants is impossible without company knowledge and/or tacit approval. Shockingly, company officials admitted to the delegation that they had never investigated the ties between plant managers and paramilitaries. The company’s inaction and its ongoing refusal to take any responsibility for the human rights crisis faced by its workforce in Colombia demonstrates — at best — disregard for the lives of its workers.”

“Coca-Cola’s complicity in the situation is deepened by its repeated pattern of bringing criminal charges against union activists who have spoken out about the company’s collusion with paramilitaries. These charges have been dismissed without merit on several occasions.”

DOW CHEMICAL At midnight on December 2, 1984, 27 tons of lethal gases leaked from Union Carbide’s pesticide factory in Bhopal, India, immediately killing an estimated 8,000 people and poisoning thousands of others. Today in Bhopal, at least 150,000 people, including children born to parents who survived the disaster, are suffering from exposure-related health effects such as cancer, neurological damage, chaotic menstrual cycles and mental illness. Over 20,000 people are forced to drink water with unsafe levels of mercury, carbon tetrachloride and other persistent organic pollutants and heavy metals.

Twenty years after this disaster, the company responsible for this catastrophe and its former executives are still fugitives from justice. Union Carbide and its former chairman, Warren Andersen, were charged with manslaughter for the deaths at Bhopal, but they refuse to appear before the Indian courts.

In 1980, investigators found 25 workers with brain tumors at the company’s Freeport, Texas facility — 24 of which were fatal. Rocky Flats, The top secret Colorado site managed by Dow Chemical from 1952 to 1975 remains an environmental nightmare for the Denver area. In May 1979: an explosion ripped through Dow Chemical’s Pittsburgh facility, killing two workers and injuring more than 45 others. The Tittabawassee is a river and river basin polluted by Dow in its hometown, Midland, Michigan. Perchloroethylene is the hazardous substance used by dry cleaners everywhere. Dow tried to undermine safer alternatives. A February 1971 headline in the Houston Post read: “Brazos River is Dead.” In 1970 and 1971, Dow’s operation there was sending more than 4.5 billion gallons of wastewater per day into the Brazos and on into the Gulf of Mexico. Dow Chemical paid a University of Pennsylvania dermatologist to test dioxin on prisoners at Holmesburg Prison in Philadelphia. Tests were conducted in 1964 on 70 inmates.

2,4-D — An herbicide produced by Dow Chemical, 2,4-D is still in used for killing lawn weeds, crop weeds and range weeds, and along utility company rights-of way and railroad tracks. One of the key ingredients in Agent Orange, the toxic defoliant used in Vietnam, 2,4-D is the most widely used herbicide in the world.

In Canada, Dow had been producing chlorine using the mercury cell method since 1947. Much of the mercury was recycled, but significant quantities were discharged into the environment through air emissions, water discharges, waste sludge and in end products. In March 1970, the governments of Ontario and Michigan detected high levels of mercury in the fish in the St. Clair River, Lake St. Clair, the Detroit River and Lake Erie. Dow was sued by state and local officials for mercury pollution.

GLAXOSMITHKLINE In March 2004, days after the Medicines and Healthcare Products Regulatory Agency — the UK’s drug regulatory agency — advised that Paxil dosages should be kept to low levels, an expert participating in the Paxil review resigned, claiming the agency had possessed evidence for more than a decade suggesting that Paxil dosages should be kept low, but failed to act on it.

According to an investigation by Senator Charles Grassley, R-Iowa, the FDA actually tried to get Mosholder (of the FDA Office of Drug Safety) to present data that deceptively underrepresented the risk of suicidality. More than two million prescriptions for Paxil were written for children and adolescents in the United States in 2002. Nearly 900,000 of these prescriptions were for youngsters whose primary diagnosis was a mood disorder, the most common of which is depression.

In April 2004, the Lancet, the prestigious British medical journal, published a paper showing that clinical test data did show problems with prescribing Paxil and other SSRIs to children. The Lancet would later name this article the scientific paper of the year. In June, New York State Attorney General Eliot Spitzer filed suit against Glaxo, charging the giant drug maker with suppressing evidence of Paxil’s harm to children, and misleading physicians.

“By concealing critically important scientific studies on Paxil, GSK impaired doctors’ ability to make the appropriate prescribing decision for their patients and may have jeopardized their health and safety,” said Spitzer in announcing the suit. Spitzer’s complaint cited a 1998 GSK memo which states that the company must “manage the dissemination of these data in order to minimi[z]e any potential negative commercial impact.”

The New York complaint asserted as well that “GSK has repeatedly misrepresented the safety and efficacy outcomes from its studies of paroxetine as a treatment for MDD [Major Depressive Disorder] in a pediatric population to its employees who promote paroxetine to physicians.”

Later in June, GSK announced a new policy, whereby it would post on the Internet summaries of the results of clinical trials it conducts. In August, the company settled with Spitzer for $2.5 million, plus a commitment to maintain the policy of posting clinical trial results, for all drugs marketed by the company.

The next month, the Star-Ledger of New Jersey reported on a Glaxo memo from the year before, instructing the company’s sales force not to talk to doctors about company data showing dangers from prescribing Paxil to kids. Glaxo says sales people do not discuss off-label uses with doctors.

In October, the FDA ordered Glaxo and other SSRI makers to include a “black box” warning — the agency’s strongest warning — with their pills. The warning says SSRIs double the risk of suicide in children, though some medical researchers say the number should be higher. At least one GSK clinical trial showed 7.5 percent of youth taking Paxil suffering from suicidality (versus zero percent among those taking a placebo).

Glaxo continues to insist that it disclosed information to appropriate authorities as soon as it discerned important results from its clinical studies.

Thanks largely to Glaxo and other drug companies’ bombardment of the airwaves with ads touting the wonders of drug treatments for all kinds of emotional disorders, childhood use of antidepressants and other pills is skyrocketing — even for drugs that haven’t been shown to help kids. No one should understate the sometime difficulties of adolescence and the trauma that many youth must deal with. But overdosing kids is no answer —

MERCK: 55,000 DEAD It’s not as if people in power didn’t know about the impending disaster — what David Graham, a Food and Drug Administration (FDA) drug safety official, calls “maybe the single greatest drug-safety catastrophe in the history of this country.’’

Testifying before a Senate committee in November, Dr. Graham put the number in United States who had suffered heart attacks or stroke as result of taking the arthritis drug Vioxx in the range of 88,000 to 139,000.

As many as 40 percent of these people, or about 35,000-55,000, died as a result, Graham said.

The unacceptable cardiovascular risks of Vioxx were evident as early as 2000 — a full four years before the drug was finally withdrawn from the market by its manufacturer, Merck, according to a study released by The Lancet, the British medical journal.

“This discovery points to astonishing failures in Merck’s internal systems of post-marketing surveillance, as well as to lethal weaknesses in the U.S. Food and Drug Administration’s regulatory oversight,” The Lancet editors wrote.

McWANE: DEATH ON THE JOB David Barstow and Lowell Bergman exposed the egregious safety record of McWane Inc., a large, privately held Alabama-based sewer and water pipe manufacturer. Nine McWane employees have lost their lives in workplace accidents since 1995. More than 4,600 injuries were recorded among the company’s 5,000 employees. According to the series, one man died when an industrial oven exploded after he was directed to use it to incinerate highly combustible paint. Another was crushed by a conveyor belt that lacked a required protective guard. Three of McWane’s nine deaths were the result of deliberate violations of safety standards. In five others, safety lapses were a contributing factor.

RIGGS BANK: THE PINOCHET CONNECTION Being a military dictator is not as easy as it looks. You need suppliers of weapons. You need an army to work with you. And, if you are a crook — as most military dictators are — you need a bank to hold on to your money. That’s where Riggs Bank in Washington, D.C. comes in.

An explosive report from the U.S. Senate Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, issued in July, revealed that Riggs illegally operated bank accounts for former Chilean dictator Augusto Pinochet, and routinely ignored evidence of corrupt practices in managing more than 60 accounts for the government of Equatorial Guinea.

An ongoing internal investigation by Riggs has revealed that the bank’s dealing with Pinochet dates back to 1985, while the Chilean despot remained in power, according to a November Washington Post report.

Riggs has not so far been cited for civil or criminal violations in connection with the Pinochet money-laundering scheme. In May, the bank paid $25 million in fines in connection with money-laundering violations related to the Equatorial Guinea and Saudi Arabian governments.

The bank is the subject of ongoing criminal investigations by the U.S. Department of Justice and the U.S. Attorney’s Office for the District of Columbia, according to recent filings with the Securities and Exchange Commission.

WAL-MART: THE WORKFARE COMPANY You only have to look at the cover of Wal-Mart’s 2004 Annual Report to know the company is facing trouble unlike any it has had to handle before. "It’s my Wal-Mart,” asserts the slogan on the cover of the annual report. At the bottom are these claims: “Good Jobs * Good Works * Good Citizen * Good Investment.” Missing is any reference to “Always Low Prices.”

Stepped up and novel community and legal challenges confronting the company are making the mammoth retailer expend energy on repositioning its image. Hence the annual report, the major image-oriented television ads, the sponsorships on National Public Radio — listened to by few of its shoppers — and the huge surge in campaign contributions. Wal-Mart and its managers gave more than $2 million to federal candidates in the last U.S. electoral cycle, more than any oil company, and almost triple the level the company donated in the 2000 elections.

The company faces a class action lawsuit on behalf of 1.6 million women workers, alleging rampant employment discrimination at Wal-Mart. The Service Employees International Union (SEIU) has announced plans to spend $25 million a year with the ultimate goal of unionizing Wal-Mart, the largest private U.S. employer.

Boeing Aside from 747s, Boeing makes "smart" bombs, F-15 fighters, and Apache helicopters. Boeing has paid tens of millions in fines for selling flawed parts that led to thousands of unnecessary landings and at least one fatal crash and has been plagued by scandals connected to the company’s influence-peddling.

The lobbying efforts of Boeing, and the revolving door between the US government and the Chicago-based giant, are legendary. But Boeing’s influence-peddling finally turned sour last December when Boeing CEO Philip M. Condit was forced to resign in the wake of revelations of that the company negotiated the hiring of top Air Force procurement official Darlene Druyun while Druyun was setting up a lucrative $27.6 billion leasing deal of Boeing’s 767 air-refueling aircrafts over a period of ten years. The deal, which went through despite controversy, will cost taxpayers up to $10 billion dollars more than if the Air Force has purchased the aircrafts outright.

Lockheed Martin The world's #1 military contractor, responsible for the U-2 and SR-71 spy planes, F-16, F/A-22 fighter jet, and Javelin missiles. They've also made millions through insider trading, falsifying accounts, and bribing officials. This Bethesda, Maryland-based company is the world's #1 military contractor as well as the world’s largest arms exporter. Lockheed Martin built the U-2 and the SR-71 Blackbird spy planes. Today they make F-16, F/A-22 jet fighter, Hellfire and Javelin missiles, as well as designing nuclear weapons. Its F-117 stealth attack fighters were used to “shock and awe” the population of Iraq at the start of the US invasion, while since the start of that war the Air Force has increased production of Lockheed’s PAC-3 Patriot missile – which cost $91 million per copy.

In 2002 the company was effectively taxed at 7.7% compared to an average tax rate for individuals of 21-33%.

Lockheed Martin spent more than $9.8 million lobbying members of Congress and the Clinton administration, more than double the $4.2 million the company spent during 1999. Among the company's newest lobbyists: Haley Barbour, the former chairman of the Republican National Committee. During the 1999-2000 election cycle, Lockheed Martin contributed just over $2.7 million in soft money, PAC and individual contributions to federal candidates and parties. More than two-thirds of that money went to Republicans. Lockheed Martin spends more on lobbying Congress than any of its competitors, spending a whopping $9.7 million in 2002. Only General Electric and Philip Morris reported more lobbying expenses. And in the 2004 election cycle, Lockheed has already given more than $400,000.

General Dynamics General Dynamics was accused of having paid former South Korean president Roh Tae Woo $100 million in a bid to get the country to purchase 120 F-16 fighter jets in 1991. South Korea ultimately bought 120 fighters for $6 billion, after reversing the government’s earlier decision to buy McDonnell Douglas’ F-18 despite the preference for the latter of many in the South Korean Air Force. The division of General Dynamics that produces F-16 was eventually bought by Lockheed Martin, in one of its many consolidations and both companies were investigated by the US government for foreign bribery.

More recently, General Dynamics received a subpoena in early 2004 on charges of having falsely stated that submarine parts sold to the US Navy were tested properly. The company has also been subpoenaed in an investigation by the Department of Defense’s inspector general over whether it had produced shoddy parts for military use.

The company’s record for labor rights isn’t much better. Workers took General Dynamics to court, arguing that the company was violating the federal Age Discrimination in Employment Act of 1969 for not guaranteeing retirement health benefits to workers under fifty. The case is still pending.

The Secretary of the Navy, Gordon England, is a former General Dynamics executive. The Boston Globe noted at the time of his nomination that "Gordon England had no military experience, but he had just the right qualification to become President Bush’s pick for secretary of the Navy: Two decades in the corporate world." Former Pentagon and military officials populate General Dynamic’s Board of Directors, including Jay L. Johnson, Chief of Naval Operations in the U.S. Navy, Paul G. Kaminski, Under Secretary of U.S. Department of Defense for Acquisition and Technology, and George A. Joulwan, former U.S. Army Supreme Allied Commander, Europe.

Former Secretary of State Colin Powell had an interest in the company as well. He received $1 million of stock in General Dynamics, as well as more than $20 million in other corporate investments, when he joined the board of America Online.

Raytheon The company has paid millions of dollars in fines for illegal activities. In October 1994, Raytheon paid $4 million to settle government charges that it had inflated the cost of a $71.5 million radar contract. In October 1993, Raytheon paid out $3.7 million to settle U.S. government charges that it had inflated the cost of Patriot missiles. The year before the company paid out $2.75 million for overpricing missile test equipment. In March 1990, Raytheon pleaded guilty in federal court to Judge Albert Bryan, Jr. in Virginia for illegally obtaining secret Air Force budget and planning documents. The company paid a million dollars in fines. In October 1987, the Justice Department signed on to a $36 million lawsuit originally filed by a former Raytheon employee, which alleged that Raytheon submitted false claims for work done on missiles.

United Technologies From its origins in 1925 as Pratt & Whitney Aircraft, has consistently relied on the beneficence of those in power. Like other military contractors, UT has accrued private profits at public expense; so much so during WW2 that then-United Technologies president Eugene Wilson described the company’s fortunes as “unconscionable profits”. But lapses of guilt didn’t put an end to UT’s takings and the US government’s largesse and assistance. William S. Cohen, Secretary of Defense under the Clinton Administration, pushed to allow United Technologies’ Sikorsky to sell military parts to China, in spite of the ban on defense sales following the Tiananmen Square massacre. Sikorsky had sold Black Hawk helicopters to China in 1984. Former Secretary of State Alexander Haig has played a similar role in China for UT, working as an adviser for the company and helping set up a dozen joint ventures there.

Halliburton The biggest windfall in the invasion of Iraq has most certainly gone to the oil services and logistics company Halliburton. The company, which was formerly run by Vice President Dick Cheney, has won over $8 billion in contracts in Iraq in 2003 alone. And while Halliburton’s dealings in Iraq have been dogged everywhere by scandal – including now a criminal investigation into overcharging by Halliburton subsidiary Kellogg Brown and Root for gas shipped into Iraq – Vice President Cheney manages to be doing quite well from the deal. He owns $433,000 unexercised Halliburton stock options worth more than $10 million dollars.

General Electric GE’s history with nuclear power is an ugly one. In the 1940s-1960s the company ran experiments on humans with radiation, including irradiating the reproductive organs of prison inmates in Walla Walla, Washington, without warning them of the risk of cancer. Other tests were run on the elderly and hospital patients. General Electric intentionally released large amounts of radiation into the air from the Hanford Nuclear Reservation in Richland, in order to see the distance it would travel. These atrocities were revealed in hearings in 1986 held by Representative Edward Markey of Massachusetts. The company has also been accused of knowingly poisoning its workers at the Knolls Atomic Power Laboratory in Schenectady, New York with radiation and asbestos.

General Electric is currently attempting to overturn the US Superfund Law of 1980, which allows the government to hold polluters responsible for cleaning up their toxic chemicals. GE argues that it is “unconstitutional” for the Environmental Protection Agency to force the company to pay $500 million for the cleanup of the Hudson River, where GE dumped carcinogenic PCBs, or polychlorinated biphenyls, over three decades. In March 2004, a federal appeals court has revived GE’s lawsuit. It shouldn’t come as a surprise that GE is trying to change the Superfund Law: the company is responsible for 78 Superfund sites around the US.

The company has been involved in countless scandals, but strangely enough, they don’t seem to affect General Electric’s ability to win government contracts – but then, this is typical of all military contractors. According to a survey by the Center for Public Integrity, from 1990-2002, 30 of the US government’s top contractors were found guilty of fraud in 400 cases, leading to settlements and fines amounting to at least $3.4 billion. General Electric paid $982.9 million for 63 cases in this period.

Adelphia Communications April 2002. Founding Rigas family collected $3.1 billion in off-balance-sheet loans backed by Adelphia; overstated results by inflating capital expenses and hiding debt. SEC; Pennsylvania and New York federal grand juries Three Rigas family members and two other ex-executives have been arrested for fraud. The company is suing the entire Rigas family for $1 billion for breach of fiduciary duties, among other things. Did not return repeated calls for comment.

AOL Time WarnerJuly 2002. As the ad market faltered and AOL's purchase of Time Warner loomed, AOL inflated sales by booking barter deals and ads it sold on behalf of others as revenue to keep its growth rate up and seal the deal. AOL also boosted sales via "round-trip" deals with advertisers and suppliers. SEC; DOJ Fears about the inquiry intensified when the DOJ ordered the company to preserve its documents. AOL said it may have overstated revenue by $49 million. New concerns are afoot that the company may take another goodwill writedown, after it took a $54 billion charge in April. No comment.

Arthur Andersen November 2001. Shredding documents related to audit client Enron after the SEC launched an inquiry into Enron SEC; DOJ Andersen was convicted of obstruction of justice in June and will cease auditing public firms by Aug. 31. Andersen lost hundreds of clients and has seen massive employee defections. Did not return repeated calls for comment.

Bristol-Myers Squibb July 2002. Inflated its 2001 revenue by $1.5 billion by "channel stuffing," or forcing wholesalers to accept more inventory than they can sell to get it off the manufacturer's books SEC Efforts to get inventory back to acceptable size will reduce earnings by 61 cents per share through 2003. Bristol will continue to cooperate fully with the SEC. We believe that the accounting treatment of the domestic wholesaler inventory buildup has been completely appropriate.

CMS Energy May 2002. Executing "round-trip" trades to artificially boost energy trading volume SEC; CFTC; Houston U.S. attorney's office; U.S. Attorney's Office for the Southern District of New York Appointed Thomas J. Webb, a former Kellogg's CFO, as its new chief financial officer, effective in August. No comment.

Duke Energy July 2002. Engaged in 23 "round-trip" trades to boost trading volumes and revenue. SEC; CFTC; Houston U.S. attorney's office; Federal Energy Regulatory Commission The company says an internal investigation concluded that its round-trip trades had "no material impact on current or prior" financial periods. Although the effect [of these trades] on the company's financial statements was immaterial, we consider improper trades in conflict with the company's policies. To address this we have made changes to our organization, personnel and procedures.

Dynegy May 2002. Executing "round-trip" trades to artificially boost energy trading volume and cash flow SEC; CFTC; Houston U.S. attorney's office Currently conducting a re-audit. Standard & Poor's cut its credit rating to "junk," and the company said it expects to fall as much as $400 million short of the $1 billion in cash flow it originally projected for 2002. Dynegy believes that it has not executed any simultaneous buy-and-sell trades for the purpose of artificially increasing its trading volume or revenue.

El Paso May 2002. Executing "round-trip" trades to artificially boost energy trading volume SEC; Houston U.S. attorney's office Oscar Wyatt, a major shareholder and renowned wildcatter, may be engineering a management shakeup. There have been no allegations or accusations, only requests for information. The company has confirmed in multiple affidavits that it did not engage in "round-trip" trades to artificially inflate volume or revenue.

Enron October 2001. Boosted profits and hid debts totaling over $1 billion by improperly using off-the-books partnerships; manipulated the Texas power market; bribed foreign governments to win contracts abroad; manipulated California energy market DOJ; SEC; FERC; various congressional committees; Public Utility Commission of Texas Ex-Enron executive Michael Kopper pled guilty to two felony charges; acting CEO Stephen Cooper said Enron may face $100 billion in claims and liabilities; company filed Chapter 11; its auditor Andersen was convicted of obstruction of justice for destroying Enron documents. No comment.

Global Crossing February 2002. Engaged in network capacity "swaps" with other carriers to inflate revenue; shredded documents related to accounting practices DOJ; SEC; various congressional committees Company filed Chapter 11; Hutchison Telecommunications Limited and Singapore Technologies Telemedia will pay $250 million for a 61.5% majority interest in the firm when it emerges from bankruptcy; Congress is examining the role that company's accounting firms played in its bankruptcy. No comment.

Halliburton May 2002. Improperly booked $100 million in annual construction cost overruns before customers agreed to pay for them. SEC Legal watchdog group Judicial Watch filed an accounting fraud lawsuit against Halliburton and its former CEO, Vice President Dick Cheney, among others. Halliburton follows the guidelines set by experts, including GAAP (generally accepted accounting principles).

Homestore.com January 2002. Inflating sales by booking barter transactions as revenue. SEC The California State Teachers' Retirement pension fund, which lost $9 million on a Homestore investment, has filed suit against the company. No comment.

Kmart January 2002. Anonymous letters from people claiming to be Kmart employees allege that the company's accounting practices intended to mislead investors about its financial health. SEC; House Energy and Commerce Committee; U.S. Attorney for the Eastern District of Michigan The company, which is in bankruptcy, said the "stewardship review" it promised to complete by Labor Day won't be done until the end of the year. Did not return repeated calls for comment.

Merck July 2002. Recorded $12.4 billion in consumer-to-pharmacy co-payments that Merck never collected. None The SEC approved Medco's IPO registration, including its sales accounting. The company has since withdrawn the registration for the IPO, which was expected to raise $1 billion. Our accounting practices accurately reflect the results of Medco's business and are in accordance with GAAP. Recognizing retail co-payments has no impact on Merck's net income or earnings per share.

Mirant July 2002. The company said it may have overstated various assets and liabilities. SEC An internal review revealed errors that may have inflated revenue by $1.1 billion. This is an informal inquiry, and we will cooperate fully with this request for information.

Nicor Energy, LLC, a joint venture between Nicor July 2002. Independent audit uncovered accounting problems that boosted revenue and underestimated expenses. None Nicor restated results to reflect proper accounting in the first half of this year. Our focus now is to stabilize this venture and put some certainty to its financial results. The company is evaluating its continued involvement in this venture.

Peregrine Systems ) May 2002. Overstated $100 million in sales by improperly recognizing revenue from third-party resellers SEC; various congressional committees Said it will restate results dating back to 2000; slashed nearly 50% of its workforce to cut costs; is on its third auditor in three months and has yet to file its 2001 10-K and so, consequently, is in danger of being delisted from the Nasdaq. We have been and will continue to cooperate with the SEC and the Congressional committee.

Qwest Communications International February 2002. Inflated revenue using network capacity "swaps" and improper accounting for long-term deals. DOJ; SEC; FBI; Denver U.S. attorney's office Qwest admitted that an internal review found that it incorrectly accounted for $1.16 billion in sales. It will restate results for 2000, 2001 and 2002. To raise funds, Qwest says it is selling its phone-directory unit for $7.05 billion. We are continuing to cooperate fully with the investigations.

Reliant Energy ) May 2002. Engaging in "round-trip" trades to boost trading volumes and revenue. SEC; CFTC Recently replaced Chief Financial Officer Steve Naeve with Mark M. Jacobs, a managing director of Goldman Sachs and a Reliant adviser. We're cooperating with the investigations.

Tyco May 2002. Ex-CEO L. Dennis Kozlowski indicted for tax evasion. SEC investigating whether the company was aware of his actions, possible improper use of company funds and related-party transactions, as well as improper merger accounting practices. Manhattan district attorney; SEC Said it will not certify its financial results until after an internal investigation is completed. The Bermuda-based company is not required to meet the SEC's Aug. 14 deadline. Investors looking to unseat all board members who served under Kozlowski may launch a proxy fight to do so. The company is conducting an internal investigation and we cannot comment on its specifics, but we will file an 8-K on the initial results around Sept. 15.

WorldCom March 2002. Overstated cash flow by booking $3.8 billion in operating expenses as capital expenses; gave founder Bernard Ebbers $400 million in off-the-books loans. DOJ; SEC; U.S. Attorney's Office for the Southern District of New York; various congressional committees The company stunned the Street when it found another $3.3 billion in improperly booked funds, which will bring its total restatement up to $7.2 billion, and that it may have to take a goodwill charge of $50 billion. Former CFO Scott Sullivan and ex-controller David Myers have been arrested and criminally charged, while rumors of Bernie Ebbers' impending indictment persist. WorldCom is continuing to cooperate with all ongoing investigations.

Xerox June 2000. Falsifying financial results for five years, boosting income by $1.5 billion SEC Xerox agreed to pay a $10 million and to restate its financials dating back to 1997. We chose to settle with the SEC in April so we can put the matter behind us. We have restated our financials and certified our financials for the new SEC requirements.

Citi Bank 2004 Citigroup Inc. is under investigation by German financial regulators for possibly manipulating eurozone bond markets. In early August, Citigroup Global Markets sold some 11.8 billion euros ($15.67 billion) in European government bonds on 13 different trading platforms in 11 different markets, causing prices to fall across the board.

Time Warner 2004 Time Warner Inc. agreed to pay $210 million to settle criminal securities fraud charges brought by the Justice Department against the company’s America Online unit. The media giant also is prepared to pay $300 million to end another probe by the Securities and Exchange Commission.

Diebold 2004 Basically, Diebold Election Systems have been a bunch of very bad boys. They wrote a program to run elections, and didn't bother to tell anybody it can be hacked six ways from Sunday, via security that appears to be deliberately flawed. And then they left copies (plus a pile of various election data files) up on a website and didn't bother to put a password on it. They also took steps to evade the Federal Elections Commission software certification/oversight process! See first "white paper" article on Doug Lewis, below right...we finally have smoking-gun proof of crimes.

Dow Chemicals 1984 On the night of December 2-3, 1984, over 40 tonnes of poisonous gases leaked from a pesticide factory in Bhopal belonging to US-based multinational Union Carbide Corporation, killing more than 20,000 residents. The management's cost cutting measures had effectively disabled safety procedures essential to prevent or alert employees of such disasters. More than 120,000 of the city's residents suffer from chronic gas-related disorders today and 10 to 15 continue to die every month. Additionally, Union Carbide's routine pollution even prior to the gas disaster had led to the accumulation of several thousand tonnes of toxic waste which now lie abandoned in and around the factory. Soil and groundwater in and around the factory remain contaminated in what the environmental group Greenpeace has called a "global toxic hotspot."

Election Systems and Software 2004 Supplies nearly half the voting machines used in the United States. ES&S is a subsidiary of McCarthy Group Inc., which is jointly held by the holding firm and the Omaha World-Herald Co., which publishes the state’s largest newspaper.
Former conservative radio talk-show host and now Republican U.S. Senator Chuck Hagel was the head of, and continues to own part interest in, ES&S (then AIS), who installed, programmed, and largely ran the voting machines that were used by most of the citizens of Nebraska, in elections where Hagel won very unexpected landslide victories. Senator Hagel is a key advocate for the Bush campaign, and with his experience on the Senate Commerce Committee focusing on telecommunications and trade, was once considered as a Vice Presidential running mate for George Walker Bush

Shell 2004 Shell has been in turmoil since January, when it shocked investors by slashing its reserves by a fifth. The overbookings, and subsequent evidence that the problem had been kept secret for months, infuriated shareholders, who have called for changes in the company's structure. As well as complaints about its structure, Shell has also come under fire from environmental groups for failing to live up to its "green" image in places such as the Niger delta in Nigeria and Texas in the US.

Bechtel 2003 Environmental problems abound at previous Bechtel construction sites, especially in the mining industry. One such project is the world's largest gold mine, the Grasberg mine in the remote highlands of the western half of New Guinea on the sacred mountains of the Amungme peoples, which is operated by Freeport McMoRan of Louisiana. Bechtel helped build the original gold mine in 1970. In 1998 Bechtel helped Freeport expand production and consequently waste dumping from 120,000 tons a day to 260,000 tons a day. On the other side of the island Bechtel built the Ok Tedi gold mine in Papua New Guinea. Eight years ago an environmental review of the Freeport mining operations by the U.S. Overseas Private Insurance Corporation revealed that the mine was having an "irreversible impact" on the surrounding tropical forests.

Exxon Mobil 2001 Like his predecessors, Exxon Mobil Corp. Chairman and Chief Executive Lee Raymond keeps a relatively low profile. He's reluctant to grant interviews and make public appearances. But ever since he assailed the Kyoto initiative to combat global warming in a speech a few years ago, Mr. Raymond has been inextricably linked to the issue. Add to that his disdain for gay rights and his unflinching responses to critics of Exxon Mobil's business in repressive regimes, and Mr. Raymond comes off as a strikingly politically incorrect character for a modern-day, big-company CEO.

Mr. Raymond's stances have made for a rocky summer for Exxon Mobil. In July, ahead of a meeting of government officials in Bonn, Germany, to discuss rules for implementing the Kyoto pledge to cut greenhouse-gas emissions, activists staged dozens of demonstrations around the world to protest the company's stance on climate change. Some European Parliament members have joined an effort by environmentalists to boycott Exxon Mobil, and a "Stop Esso" effort in Britain (as the company brands its products there) has won the backing of celebrities such as Ralph Fiennes and Annie Lennox and companies including The Body Shop.

Exxon Mobil also faces a lawsuit, filed in late June in federal court in Washington, D.C., by a labor advocacy group that alleges the company supported the military in Indonesia when it tortured and killed locals near the company's operations in the Aceh province. Exxon Mobil has denied that the company or its affiliates were involved in the alleged abuses by Indonesian security forces. "Exxon Mobil condemns the violation of human rights in any form," the company said in a statement at the time.

Alcoa 2003 The Icelandic government plans to construct a large hydropower project in Iceland's Eastern Highlands, one of Europe's largest remaining wilderness areas, in order to supply power to a US aluminum smelter owned by Alcoa. The "Kahranjukar Project" involves building miles of roads, boring a series of tunnels, diverting dozens of rivers to create 3 reservoirs and erect nine dams, including one that is 630 feet -- Europe's highest. The level of the immense reservoir will fluctuate seasonally, from 170 to 250 feet.

If Karahnjukar goes forward, a large wilderness area will be sacrificed so that the world can consume cheaper aluminum. The massive project will be built on the north side of Europe's greatest glacier, Vatnajokull, a vast ice field beneath which lie several active volcanoes. The project will drown 22 square miles of tundra, presently the grazing grounds for more than 2,000 reindeer and the nesting ground for the pink-footed goose, and affect the flows of close to 60 waterfalls. In early summer, silt from the exposed banks will blow off all over the countryside.

Monsanto Aspartame is the technical name for the brand names, NutraSweet, Equal, Spoonful, and Equal-Measure. Aspartame was discovered by accident in 1965, when James Schlatter, a chemist of G.D. Searle Company was testing an anti-ulcer drug. Aspartame was approved for dry goods in 1981 and for carbonated beverages in 1983. It was originally approved for dry goods on July 26, 1974, but objections filed by neuroscience researcher Dr John W. Olney and Consumer attorney James Turner in August 1974 as well as investigations of G.D. Searle's research practices caused the US Food and Drug Administration (FDA) to put approval of aspartame on hold (December 5, 1974). In 1985, Monsanto purchased G.D. Searle ( see: Corporate Enablers, Donald Rumsfeld) and made Searle Pharmaceuticals and The NutraSweet Company separate subsidiaries.

Aspartame is, by far, the most dangerous substance on the market that is added to foods. Aspartame accounts for over 75 percent of the adverse reactions to food additives reported to the US Food and Drug Administration (FDA). Many of these reactions are very serious including seizures and death as recently disclosed in a February 1994 Department of Health and Human Services report.(1) A few of the 90 different documented symptoms listed in the report as being caused by aspartame include:
Headaches/migraines, dizziness, seizures, nausea, numbness, muscle spasms, weight gain, rashes, depression, fatigue, irritability, tachycardia, insomnia, vision problems, hearing loss, heart palpitations, breathing difficulties, anxiety attacks, slurred speech, loss of taste, tinnitus, vertigo, memory loss, and joint pain.

According to researchers and physicians studying the adverse effects of aspartame, the following chronic illnesses can be triggered or worsened by ingesting of aspartame:(2)
Brain tumors, multiple sclerosis, epilepsy, chronic fatigue syndrome, parkinson's disease, alzheimer's, mental retardation, lymphoma, birth defects, fibromyalgia, and diabetes.

Aspartame is made up of three chemicals: Aspartic acid, phenylalanine, and methanol. The book, Prescription for Nutritional Healing, by James and Phyllis Balch, lists aspartame under the category of "chemical poison." As you shall see, that is exactly what it is.

ASPARTIC ACID (40% OF ASPARTAME)
Dr Russell L. Blaylock, a professor of Neurosurgery at the Medical University of Mississippi, recently published a book thoroughly detailing the damage that is caused by the ingestion of excessive aspartic acid from aspartame. [Ninety nine percent of monosodium glutamate 9MSG) is glutamic acid. The damage it causes is also documented in Blaylock's book.] Blaylock makes use of almost 500 scientific references to show how excess free excitatory amino acids such as aspartic acid and glutamic acid in our food supply are causing serious chronic neurological disorders and a myriad of other acute symptoms.(3)

MANY MORE TO COME...