Dirty Money: Corporate Criminal Donations to the Two Major Parties
Remarks by Russell Mokhiber, Editor of Corporate Crime Reporter.
July 3, 2003, National Press Club, Washington, D.C.
My name is Russell Mokhiber.
I am the editor of Corporate Crime Reporter.
Corporate Crime Reporter is a legal newsletter. It is published 48 times a year. Corporate Crime Reporter is now in its 17th year of existence. Our subscribers include prosecutors, defense attorneys, trial lawyers, law schools that teach corporate and white collar crime, and large media outlets.
Today, we are releasing this report -- Dirty Money: Corporate Criminal Donations to the Two Major Parties.
I will give a brief overview of the report.
I will then be followed by Theresa Amato. Ms. Amato is President of Citizen Works, a public interest group based here in Washington, D.C.
She will be followed by Robert Weissman. Mr. Weissman is the editor of the Multinational Monitor magazine, a publication founded by Ralph Nader.
They will make brief remarks. And then we will take questions.
Three years ago, Corporate Crime Reporter released a report titled The Top 100 Corporate Criminals of the 1990s.
We pulled together every corporation convicted of a crime during the 1990s, and ranked them by the amount of the criminal fine. That report, and others that we have issued over the years, can be found at our web site: www.corporatecrimereporter.com.
Last year, during the height of the corporate crime wave, scores of lawmakers felt it necessary to give back to Enron PACs or to Enron executives money that had been donated to their campaigns.
These politicians felt a sense of shame.
Here was Enron, a runaway corporation that epitomized the fast and loose business ethics of recent years.
That runaway corporation crashed, leaving thousands unemployed and without pensions. Enron executives were being indicted left and right.
And so, scores of public officials who had financially benefitted from Enron's largesse, felt a sense of shame, and felt threatened by an angry public, so they decided to give the money back to Enron -- or better yet, to donate it to charity.
It was the right thing to do.
Politicians should not take money from crooked companies, or crooked executives, or PACs set up by crooked companies.
But let us remember one thing.
Enron has not been indicted. Enron is not technically a corporate criminal. And yet scores of politicians, because of the political heat, because of the scorching white glare of publicity, decided that Enron money was too hot to handle. And rightly so.
I thought to myself at the time -- isn't this strange -- almost in unison, the politicians in Washington were announcing that they were getting rid of their Enron tainted money.
But what about the convicted corporations that every year donate millions to both political parties?
This report grew out of that question -- how much money are your common criminal corporations dumping into the Republican and Democratic parties?
To find out, we typed in the top 130 or so corporate criminals of the last 13 years into the Federal Election Commission's database.
We found that 31 corporate criminals gave more than $9 million to the Democratic and Republican parties during the 2002 election cycle, which runs from January 1, 2001 to December 31, 2002.
These corporate criminals gave $7.2 million to Republicans and $2.1 million to Democrats.
Many of these corporate criminals are large, multinational corporations, with billions of dollars in assets.
The crimes they have committed have inflicted damage, that in some cases, would take armies of street criminals to inflict.
To get a sense of this, let's look at the top two corporate criminal donors to the Republican and Democratic parties.
Archer Daniels Midland -- ADM -- tops the list.
ADM pled guilty in 1996 to one of the largest antitrust crimes ever. The company paid a $100 million criminal fine -- at the time, the largest criminal antitrust fine ever.
The company was convicted of engaging in conspiracies to fix prices, to eliminate competition, and to allocate sales in the lysine and citric acid markets worldwide.
Federal officials said that the time that as a result of ADM's crime, seed companies, large poultry and swine producers -- and ultimately farmers paid millions more to buy the lysine additive.
In addition, manufacturers of soft drinks, processed foods, detergents, and others, paid millions more to buy the citric acid additive, which ultimately caused consumers to pay more for those products.
So, here we have a major American corporation, convicted of an egregious antitrust crime that cost us all tens of millions of dollars.
And it turns around and freely gives $1.7 million to Democrats and Republicans.
It gives this $1.7 million in just the last two years.
And the two major political parties are not ashamed.
They do not blush.
They do not care. Because it is apparently okay in Washington to take money from corporate criminals.
The second largest corporate criminal donor is Pfizer, the pharmaceutical giant, the maker of Lipitor, and Viagra and Zoloft.
In 1999, Pfizer pled guilty to fixing prices in the food additives industry. The company paid $20 million in fines.
No free market philosophy for ADM and Pfizer -- when in doubt, fix prices.
In the last two years, Pfizer gave $1.1 million to the Democrats and Republicans. Convicted criminal. The parties looked the other way.
What about Pfizer's rap sheet?
Why did the political parties take the money so readily?
Rounding out the top five criminal donors:
Chevron was convicted in 1992 of a environmental crimes and paid a $6.5 million criminal fine. Chevron gave $875,400 in the 2002 election cycle to both parties.
Grumman, which was convicted in 1990 of false statements -- lying -- gave $741,250 to both political parties in the most recent election cycle.
And American Airlines, convicted in 2000 of illegal storage of hazardous waste at Miami airport, paid a fine of $8 million, and then turned around and donated $655,593 to the Democrats and Republicans.
So I have a question: Where is Ann Coulter? Where is Rush Limbaugh? Where is Bill Bennett? Where is Hannity and where is Colmes? Where are the conservative drumbeaters, condemning criminality at every turn?
Why aren't they raving about the convicted criminals in our midst?
These convicted criminals are companies with massive resources, with the ability to manipulate the system to avoid the criminal penalty even when they are caught redhanded.
Yet these companies were caught and they were forced to plead guilty to serious crimes -- something they spend millions of dollars every year seeking to avoid.
And let us remember -- big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.
For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.
For every company convicted of polluting the nation's waterways, there are scores of others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.
For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally to candidates and political parties.
These companies profit from a system that effectively has legalized bribery -- legal money that as we see today, often comes from the coffers of convicted criminal corporations.
For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way here in Washington to ensure that dangerous pesticides remain legal.
For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don't even get investigated for reckless homicide when a worker is killed on the job.
This is because only a few district attorneys across the country regularly investigate workplace deaths as homicides.
Because of their immense political power, big corporations have the resources to defend themselves in courts of law and in the court of public opinion.
So, this list could have been, and may be in the future -- much larger.
But for the purposes of this report, we restricted the group of companies that we looked at to parent companies convicted of crimes.
We did not include parent corporations whose wholly owned subsidiaries were convicted of criminal activity.
It is interesting to note that in recent years, major American corporations under criminal investigation, to avoid the collateral consequences of conviction, find a subsidiary that is weak or about to fold, and get prosecutors to agree to plead that unit to the crime.
This is occurring with increasing frequency in the health care field, where big companies face the prospect of being debarred from the Medicare or Medicaid system if they are convicted of a major crime.
So, a wholly owned subsidiary pleads guilty to the crime.
Also not included in this report were companies who agreed to what are known as deferred prosecution agreements.
These are agreements, intended for minor criminal acts, whereby the criminal record is wiped clean after a year or so of good behavior.
Increasingly, corporations wishing to avoid the stigma and collateral consequences of conviction, are demanding deferred prosecution agreements from federal prosecutors -- and in many cases getting them.
Nor did the report include corporate PAC donations, or donations from the executives of the convicted corporations.
This report focuses exclusively and narrowly on donations from corporations convicted of crimes.
Again, the full 45-page report is available on our web site, www.corporatecrimereporter.com.
We urge you to check it out, and urge the Democratic and Republican parties to get rid of this dirty money.
It is tainted money.
It is criminal money.
If they want to launder it, there are scores of charities who could put the money to good use.
We urge the parties to get the report off of our web site, and to do the right thing -- get rid of the dirty money.
Thank you. And we'll now hear from Theresa Amato. Theresa is the President of Citizen Works, a public interest group based here in Washington, D.C.