Switzerland’s Stephan Schmidheiny is a billionaire.
He’s worth an estimated $3 billion.
But he’s also a convicted criminal.
Last year, Schmidheiny was convicted in Italy of causing an environmental disaster through his asbestos company — Eternit – that caused an estimated 3,000 deaths. He was sentenced to 16 years in prison — bumped to 18 years by an Italian appeals court.
Schmidheiny is also considered a philanthropist. He set up a billion dollar endowment for a non profit called Avina.
He’s been called the Bill Gates of Switzerland.
He has funded sustainable development groups throughout the Americas, was founder of the World Business Council for Sustainable Development and was author of Changing Course: A Global Perspective on Development and the Environment.
In 1996, because of his philanthropy, Yale University awarded Schmidheiny an honorary degree.
Now,17 years later, and in light of his conviction in Italy, a group of victims of Schmidheiny’s crimes is calling on Yale to revoke the honorary degree.
In a letter to Yale University President Peter Salovey, the Italian asbestos victims group, represented by their attorney Christopher Meisenkothen of the law firm Early, Lucarelli, Sweeney & Meisenkothen, calls on Yale to rescind Schmidheiny’s honorary degree.
“The honor bestowed upon Mr. Schmidheiny by Yale University is inconsistent with the serious crimes for which he has been convicted and is inconsistent with the actual history of Eternit’s catastrophic operation in Casale Monferrato, which has left more than 2,000 people dead from mesothelioma and other asbestos-related diseases and has left the environment contaminated with lethal asbestos,” Meisenkothen wrote. “Yale University was likely unaware of Mr. Schmidheiny’s past when it honored him in 1996, but these new facts that have come to light will, we hope, cause Yale to rethink, and ultimately rescind, the honor bestowed on Mr. Schmidheiny.”
In the letter, Meisenkothen also requested the opportunity to “address The Yale Corporation at its first meeting of the academic year, which we understand will occursometime in late September or early October.”
He also called on Yale to “release a list of the donations made to Yale by Stephan Schmidheiny, members of the Schmidheiny family, the Eternit Company and the Avina Foundation – Mr. Schmidheiny’s foundation,” and requested copies of “any meeting minutes from the 1990s wherein discussions occurred concerning the decision to award the honorary degree,” and “a copy of the complete citation from the 1996 commencement program that awarded Mr. Schmidheiny the honorary degree.”
For its part, Yale says it’s not about to revoke the honorary degree to Schmidheiny because of “the legal proceedings in Italy.”
“Yale awarded an honorary Doctor of Humane Letters degree to Stephan Schmidheiny for his advocacy of sustainable economic growth and development,” said Yale spokesman Thomas Conroy. “The decision to award this degree was made by a committee that considered Mr. Schmidheiny’s full record as a philanthropist who used his wealth to fund sustainable development in Latin America and elsewhere, and a path-breaking international advocate of change in the way businesses address environmental sustainability, as well as a businessman who inherited and dismantled a decades-old family asbestos processing concern. Yale does not believe that the ongoing legal proceedings in Italy provide cause to reconsider the judgment made by the committee in 1996. Yale has never revoked an honorary degree, and any decision to do so would have to be made by the Yale Corporation, which is the body that confers degrees. Yale has revoked a degree previously awarded only when there has been academic or other fraud.”
Barry Castleman disagrees.
Castleman is a public health worker and author of Asbestos: Medical and Legal Aspects (Wolters Kluwer Law and Business).
Castleman testified against Schmidheiny at the trial in Italy.
He also wants Yale to revoke the honorary degree.
Other universities have revoked honorary degrees for less, he says.
Last year, Tufts University revoked the honorary degree to the cyclist Lance Armstrong for performance enhancing drugs.
“Schmidheiny has been convicted of creating an environmental disaster causing thousands of deaths,” Castleman told Corporate Crime Reporter in an interview last week.
“That’s where his money came from. Just because you spend money on good causes doesn’t mean you have paid your debt to society for having committed this awful crime causing all of these deaths. Giving the blood money away to a good cause doesn’t quite cut it.”
“Schmidheiny could do more for public health than anybody I know just by going to jail and sending a message — that you can’t buy your way out of personal responsibility for crimes like this.”
Why isn’t death on the job treated criminally here in the United States?
“Congressman George Miller tried to introduce a corporate criminal liability bill back in 1979,” Castleman said. “I testified at the hearing on that bill on the history of asbestos and what we knew about the cover up. Miller said at the time that the corporate opposition to his bill was pretty overwhelming. And it hasn’t been introduced since.”
“The hearing was conducted by Congressman John Conyers. With the changes in the law that enabled the criminal case to go forward against the W.R. Grace officials in Libby, Montana, there have been some improvements. But for the most part, the idea of prosecuting corporate criminals for doing anything other than the more conventional types of financial crimes hasn’t taken hold.”
“It’s important that we have this kind of public conversation about toxic corporate crime in this country. We should ask whether people like Schmidheiny in American companies should similarly be held personally responsible for making business decisions to go on selling and polluting with stuff like this when they know how dangerous it is and whether they should have a greater responsibility than just buy a bunch of product liability insurance coverage so when the lawsuits come they will be covered.”
“Schmidheiny’s a guy who went on running the business pretty much the way it had been run,” Castleman said. “They never put warning labels on the products, because they didn’t have any regulations requiring warning labels and they didn’t have product liability laws. So there was no economic downside to selling these products without warning labels, as far as I can tell.”
“He convened a conference of his managers in Neuss Germany in 1976, upon taking over the reins of the company. And even before that he went to Sweden to deal with the fact that the unions were shutting down the asbestos industry and they had a partial interest in an asbestos cement plant there. And he heard about the public health doctor Irving Selikoff at the time.”
“But in 1976 in Neuss, they had this meeting. And they were getting very frank presentations about the lethality of asbestos. Somehow the Italian prosecutors got the files of the public relations firm that had been representing Schmidheiny for decades. They were called the Bellodi files. And the Bellodi files including the Neuss document.”
“The appeals court said — you knew how lethal this stuff was.”
“By the time of this conference, there had been at least 16 or 17 reports published in the medical and scientific literature about how people get mesothelioma. It was well established that even the dust brought home by the workers could pose a mortal threat to their family members.”
“If they would have told the workers about the dangers, they wouldn’t have been able to sell it. And this is the thrust of my statements to the court.”
“I sent the court a supplemental statement and told them — the basic crime here is the suppression of the knowledge, the suppression of the dangers of asbestos, the cover up. And I emphasized their lack of government regulation specifically requiring warning labels, as OSHA had here in 1972, and because of their lack of product liability laws. And without those two public health safeguards, they had an open road to sell that stuff with no warnings and no economic downside.”
(For the complete transcript of the Interview with Barry Castleman, see 27 Corporate Crime Reporter 37(12), September 30, 2013, print edition only.]