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Citizens Fight Back Against Corporate Criminals
by Robert Weisberg

In a country that loves its paradoxes, none is more perplexing than our simultaneous love of the free market and our animosity toward corporations. We watch the stock market with dollar signs in our eyes, we love superstores and mega-medicine's miracle cures but the idea of big companies fills us with memories of oil-covered seabirds, Asian peasants gluing sneakers with their tongues and CEOs with hundred-million-dollar bonuses. A study by the Media Research Center showed that businessmen have an image problem up there with pedophiles and nun beaters. With corporate crime costing the nation an estimated $200 billion per year, however, fighting it is clearly not just a top priority for seabirds.(1)

Pentagon fraud, on-the-job safety violations, workplace discrimination and ecological crimes like pollution touch all our lives. And while a lot of corporate misbehavior falls into the immoral-but-not-illegal category — such as unnecessary layoffs or marketing video gore to kids — we should still be concerned. It may be legal for companies to pay workers in other countries less than it costs them to support their families, but it pressures employers here to skirt the law in order to compete — leading to sweatshops and other workplace abuses, like bosses who finish the last of the office coffee and don't make more.

The traditional way to curb corporate bad behavior is to beat malefactors over the head with government regulations or union protests. But heavy-handed anti-corporate actions are less effective than ever.

Unions, once American working people's best line of defense against corporate rapacity, are making a spirited comeback, but union horizons are limited. Given how few of us now work in traditionally unionized industries, not to mention the growing percentage of hard-to-organize temps in our workforce, it's unlikely that union power alone will ever again be a match for multinational muscle.

It is still possible to get workplace safety and anti-pollution regulations passed by Congress — especially around election time — but given recent trends in regulatory roll-backs, the likelihood of any serious increase in government oversight can be classified "Fuggeddaboutit." Furthermore, Congress' failure to pass campaign finance reform means that candidates' love affair with corporate campaign cash can only deepen. In times like these, asking Uncle Sam to watch corporate crime seems a bit like asking the President to watch the interns.

Class-action lawsuits filed on behalf of wronged consumers have been another traditional method of whipping delinquent companies into line. Groups like Ralph Nader's Public Citizen have had a financial impact on willfully negligent auto companies through big-ticket jury awards. Big Tobacco, threatened with a billowing cloud of class action lawsuits, seems ready to make some financial amends for their alleged (our lawyer made us put that word in) health crimes. But if Congress, under the banner of "tort law reform," makes it harder for individuals to sue companies for damages, the corporate crime virus will be nearly immune to cure by lawsuit.

Frustrated by the relative decline in citizen power, some activists — only half humorously — have proposed applying three-strikes-and-you're-out laws to corporate criminals. Others, both left and right, propose a kind of corporate death penalty. Adapting an idea used earlier this century, progressives are suggesting that states use their power to revoke corporate charters when companies violate the public interest.(2) In New York State, the very Republican Dennis Vacco, reluctantly ousted Attorney General, moved to revoke the state charter of two tobacco-friendly research groups on the grounds that they fraudulently misrepresented themselves as "independent" scientific organizations.

If corporations suffer a bad image, so do many activists. One often gets the impression that standing up to corporate crime means swapping antibiotics for ylang ylang and throwing one's self in the path of a large moving vehicle. But the real bulwark against corporate power abuses isn't the media-stereotyped protester, but the quietly rebellious shopper. Even threatened shifts in consumer loyalties can discourage corporations from illegal and immoral action. Luckily, the Internet, which is less dependent on big advertisers than television or magazines, is a great repository of strategies that allows ordinary citizens to curb corporate scofflaws.

It wasn't against the law for The Gap and Nike to have Third World peasants make their apparel under abysmal conditions and for a fraction of the wages paid stateside, but that didn't make the scandals any less juicy, and clothing companies responded to public disapproval by reforming some of their practices. The future of sweatshop control now means building on these victories — requiring U.S. companies to pay living wages worldwide plus allowing independent monitors inspecting factories for abuses to arrive unannounced. In the end, good labor practices benefit everybody because every foreign sweatshop brought up to international standards of decency creates well-paid and happy consumers for our exports, and clothing companies that pay their workers living wages don't end up as punchlines on Jay Leno.

Historically more successful than the advertising-dependent media acknowledge, consumer boycotts are the ultimate expression of public anger, and there isn't a crime-prone company that won't shake in its corporate loafers when faced with a well-organized threat to its bottom line. Boycotts worked for both Martin Luther King, Jr. and the religious right, though in the latter case it was probably forcing Time Warner executives to listen to their own records that did the trick.

On an individual level, more and more people are doing "The Wall Street Walk," withdrawing their investments from rogue companies, or investing in Socially Responsible mutual funds. Funds on the Left screen out companies in the oil, tobacco, defense, alcohol and Third-World-torture industries, while right-wing funds eschew companies that support birth control, gay rights and abortion.

Activists who buy enough stock in a corporation to get a say in designing company policy are the new wave in corporate crime control. A site called Corporate Governance(3) claims that corporations that act accountably not only improve the world but also increase shareholder wealth. It's a cool theory, although the site's designers don't have the salesmanship needed to put it over to the public. With a writing style that's clear as mud and pages duller than a proxy statement, it's going to be hard for them to convince individual shareholders that simply slashing jobs, salaries and government oversight won't make for faster money. Nevertheless, several groups, notably The Interfaith Council on Corporate Responsibility (ICCR) have applied Corporate Governance techniques with great success — having particularly good luck with CEOs who used to be altar boys and are still afraid of nuns.(4)

Finally, when all else fails, activists are hitting CEOs where they really live. Accused mega-corporate criminal Bill Gates walked out of a hotel in Brussels last February and had his face redecorated by several cream pies tossed by an anarchist performance art group. Considering what image-conscious CEOs spend on clothes in a week, pie tossing could be the smartest consumer tactic in these entertainment-obsessed times. Stock price (and thus CEO bonuses) are primarily determined by the perception of a company's respectability, so unless advances are made in meringue-resistant gabardine, a pie may be the best available way of giving corporate criminals their just desserts.

(1) "There were a succession of studies in the late 70s and early 80s... One, sponsored by the U.S. Department of Justice, found that of the nation's 582 largest publicly owned companies, 371 (64 percent)... had racked up an impressive 1,554 crimes. A Fortune survey a year later found that 11 percent of 1,043 companies that had appeared on its vaunted Fortune 500 lists in recent years had been convicted of bribery, criminal fraud, tax evasion, antitrust violations, or illegal political contributions."

(2) Richard Grossman, of the Program on Corporations, Law, and Democracy, is the leading proponent of this idea. He says, "I'm not talking about better government regulation. I'm talking about...denying these corporations the political and civil rights of persons... As long as we don't think and act like sovereign, self-governing people, we'll continue to be subordinate and subservient to corporations — what Thomas Hobbes called 'these worms in the body politic.'"

(3) "...creating wealth and maintaining a free society...require that... accountability be built into the governance structures of corporations themselves."

(4) The Interfaith Council on Corporate Responsibility (ICCR) was able to affect the behavior of oil giant Texaco. Also ICCR's impact on Ford's environmental policies...

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