FTCR tracks the worst instances of big industries putting their commercial gain above the interests of individuals and society.
Santa Monica, CA — The Foundation for Taxpayer and Consumer Rights (FTCR) today released its top 10 list of corporateering in 2003. The ranking tracks the worst instances of big industries putting their commercial gain above the interests of individuals and society. FTCR also announced the top five counter-corporateering advances.
“The notion that the free market is more important than the free society was pushed to new heights during 2003,” said FTCR president Jamie Court, who coined the term corporateering in his 2003 book Corporateering: How Corporate Power Steals Your Personal Freedom And What You Can Do About It (Tarcher/Putnam). “When the market is treated as more important than society, then individuals become shareholders in America rather than citizens with inalienable rights. At the same time, the counter-corporateering movement had a handful key victories this year that could set a new tone in 2004.”
Corporateering’s Top 10 Lessons
#10: Mutual Fund Managers Didn’t Operate In The Mutual Interest. Thanks to New York Attorney General Elliot Spitzer the public found that “mutual fund” was a misnomer and not all investors were created equal. Some in the industry allowed big investors to break the rules and make big profits through illegal late-day trading — allowing after-hours trades at earlier prices — and market-timed trades — quick purchases and sales for short-term profit. Insiders profited at the cost to average investors. The illusion of mutual funds as a means for Main Street to unite for wealth and power on Wall Street was shattered.
#9: Any Company Could Hold Almost Half The Media World In Their Hand. New FCC rules put the media owners in the cat-bird seat to consolidate, for example allowing one company to own up to 45% of the nation’s broadcast market. A Congressional compromise will barely change the rules of the game. When tv and radio stations merge, that means fewer newsgathering resources and a less free press.
#8. Energy Profiteering Paid Big. Despite the well-documented profiteering of energy pirates during California’s electricity crisis, the Federal Energy Regulatory Commission (FERC) refused to invalidate outrageous contracts, return ample money to the ratepayers and issue more than a slap on the wrist to the companies involved.
#7. HMOs Made A Bigger Killing. The industry recorded a banner year for profits, becoming one of the best bets on Wall Street, while insurance became more unaffordable for average Americans due to skyrocketing premiums. The greed is best summed up in the pending merger of Wellpoint (parent of California Blue Cross) and Anthem, in which Wellpoint CEO Leonard Schaeffer stands to gain more than one third of a billion dollars from the deal.
#6. Marketing Erotica To Pre-teens Went Mainstream. Abercrombie & Fitch led the kiddie-corporateering ring with catalogues for children featuring group sex scenes, scantly clad in-store models and pre-teen “eye candy” thong underwear. Marketing sex and violence to children became a growth industry.
#5. Banks and Insurers Stamped Out State Privacy Rights On Capitol Hill. After losing a big financial privacy fight in California, banks and insurers went to Washington DC and convinced Congress and the President to wipe out all state financial privacy laws that are tougher than the weak Fair Credit Reporting Act. Under current federal law, corporations can trade our private financial information with their partners without consent like it is stock and bonds.
#4. Innocent Victims of Medical Malpractice Lost Rights to Pay For Insurers’ Bad Investments. Since the insurance industry racked up big losses during the Wall Street drought, injured patients in a handful of states had to pay with the loss of their legal rights to hold wrongdoers fully accountable. Nevada, Oklahoma, Texas, and Florida were among the states limiting how much victims could collect rather than limiting how much malpractice insurers could put into risky investments like Enron.
#3. No-Bid Contacts In Iraq Took Taxpayers For Ride. Halliburton, Bechtel and other corporate heavies won no-bid contracts to rebuild Iraq at huge cost to the American taxpayer. Halliburton, formerly headed by Vice President Dick Cheney, received Pentagon contracts worth $1.7 billion and recently government auditors found the company overcharging the US for fuel. The war has been better to no one than these corporateers.
#2. Medicare Was Prevented From Negotiating Cheapest Drugs Through Bulk Purchasing. Drug company campaign spending last election was key to giving the GOP both houses of Congress and the white house. That may be why the Medicare prescription drug law actually precluded the government from negotiating bulk discounts using the Medicare program’s purchasing power. Taxpayers could be paying one third of current drug costs based on Canada’s example.
#1. State Farm Convinced The Supreme Court That Juries Shouldn’t Have Control Over Punitive Damages. Punitive damages are designed to punish wrongdoers for malice and oppression. In State Farm v. Campbell, the Supreme Court overturned $145 million in punitive damages against State Farm Insurance Company and ruled that in the future punitive damages had to be in a single digit ratio to compensatory losses, preferably low single digits. This reversed a long-standing practice of allowing juries to make independent decisions about how to punish corporations and allowing them to correlate the amount of punitive damages with a company’s ill-gotten gain from a reprehensible practice. Now that corporations can calculate their punishment as a tangible cost of doing business, it’s likely products will become more dangerous and companies more callous to the public’s complaints.
Counter-Corporateering’s Top 5 Victories
FTCR noted fewer advances on the counter-corporateering front, but recognized the following gains.
#5. Corporate executives now have to sign on the dotted line. Thanks to post-Enron reforms, executives now have to personally vouch for their company’s books. That’s led to a lot of request for filing extensions and CEOs taking the numbers more seriously. Many companies are even hiring compliance officers to make sure books are not cooked.
#4. Whistleblowers began getting more respect. Reflecting a gaining cultural respect for dissent in the workplace, California enacted a law (sponsored by FTCR) increasing protections for whistleblowers and punishes corporations from withholding vital financial information.
#3. Spammers were put on notice. Congress acted to begin stopping the electronic assault of commercial pitches in our email. Though far from perfect, the counter-strike has begun.
#2. The public’s right to campaign finance reform trumped the corporation’s claim of free speech protection. The Supreme Court ruled that federal campaign finance reform rules were more important than the purported First Amendment right of industries to speak through unlimited campaign contributions. This was a major reversal of court rulings since 1976.
#1. Telemarketers have to pay $11,000 for every privacy violation. The establishment of a federal “do not call” registry answered the public’s anger at corporations invading our homes. It has also begun a precedent of making corporations pay hefty fines for not respecting our personal space and time.