Corporate crime without shame
By Russell Mokhiber and Robert Weissman
July 28— President George W. Bush’s man in charge
of the Corporate Fraud Task Force, Larry Thompson, went to the White
House this week to let the world know that Bush was cracking down on
corporate crime.
Thompson, who is the second in command under Attorney General John Ashcroft,
told the assembled reporters that in the year since the task force was
created, it had obtained over 250 corporate fraud convictions or guilty
pleas, including guilty pleas or convictions of at least 25 former CEOs,
and that it had charged 354 defendants with some type of corporate fraud
in connection with 169 cases.
“We have over 320 investigations pending, involving in excess of
500 individuals and companies as subjects of these investigations,”
Thompson said.
But forcing corporate criminals and their executives to plead guilty
is only half the game. The other half is punishment.
What Thompson didn’t say is that only one high-level corporate
executive has gone to jail in that year.
That was Sam Waksal, the former ImClone CEO, who reported on July 27
to Schuylkill Federal Correctional Institution in Minersville, Pennsylvania.
Waksal was sentenced last month to seven years and three months in prison
and ordered to pay about $4.3 million after pleading guilty to insider
trading.
What Thompson also didn’t tell reporters was that he has helped
rig the system so that corporations have a way to get out of a criminal
jam once they commit the crime.
Thompson says that he wants to hold corporations accountable for the
criminal culture and conduct they promote.
Yet in a memo issued under his name in January 2003, Thompson opened
a loophole for corporations to get away with criminal behavior without
effective criminal sanction.
The memo, titled “Federal Prosecution of Business Organization,”
gives prosecutors discretion to grant corporations immunity from prosecution
in exchange for cooperation.
These immunity agreements, known as deferred prosecution agreements,
or pre-trial diversion, were previously reserved for minor street crimes.
They were never intended for major corporate crimes.
In fact, the US Attorneys’ Manual explicitly states that a major
objective of pretrial diversion is to “save prosecutive and judicial
resources for concentration on major cases.”
Since Thompson’s memo, there have been a rash of deferred prosecution
agreements in cases involving large corporations, including a settlement
with a Puerto Rican bank on money laundering charges and a Pittsburgh
bank on securities law charges.
And some corporate crime defense attorneys believe that it is possible
to enter these agreements with the Justice Department so as to avoid
any publicity.
“This is a favorable change for companies,” said Alan Vinegrad,
a partner at Covington & Burling in New York. “The memo now
explicitly says that pre-trial diversion, which had been reserved for
small, individual, minor crimes, is now available for corporations.”
Vinegrad said that while there have been a handful of publicized pre-trial
diversion cases by corporations, it is conceivable that the Justice
Department can cut these kind of deals with companies without filing
a public document — and therefore without any publicity to the
case.
Vinegrad said that one such case has been handled by his office.
“Sometimes the agreement does not require — depending on how
they get done — the filing of any public documents in court,”
Vinegrad said. “There wouldn’t be that relatively easy means
of finding out what happened.”
Larry Thompson argues that corporations must be criminally prosecuted
if they commit crimes. At the same time, he says that if they commit
crimes, but cooperate with the government, they can wipe the slate clean,
settle the case — maybe even without public notice — and avoid
punishment without admitting criminal wrongdoing.
The Justice Department also allows corporations to plead out minor units
to major crimes when the parent companies should be held responsible.
The reason the parent companies aren’t forced to plead guilty is
because they then would lose federal contracts.
The fines imposed in connection with such cases generally are minor
wrist slaps.
Corporations most fear losing government contracts, major adverse publicity
and their executives going to jail.
Little of that happens with this Justice Department.
Source: Multinational Monitor
House bars secret-search provision of
PATRIOT Act
By Katrin Dauenhauer
Washington, DC, July 23 (IPS)— Taking a clear stand
against anti-privacy provisions in the PATRIOT Act, the House of Representatives
in an overwhelmingly bipartisan effort last night agreed to an amendment
that would bar federal law enforcement from carrying out secret “sneak
and peek” searches without notifying the target of the warrant.
The Otter Amendment, added to the Commerce, Justice, and State Departments
funding bill and named after Rep. C.L. “Butch” Otter, an Idaho
Republican, passed by an extraordinary margin of 309 to 118, with 113
Republicans voting in favor.
“Not only does this provision allow the seizure of personal and
business records without notification, but it also opens the door to
nationwide search warrants and allowing the CIA and National Security
Agency to operate domestically,” Otter said.
The PATRIOT Act, which significantly expands the government’s domestic
spying powers, was passed with overwhelming bipartisan support within
weeks of the Sept. 11, 2001 terrorist attacks. The House amendment represents
the first major change to the act since it was signed into law by President
George W. Bush.
Civil liberties activists immediately hailed the decision as a huge
win.
“Congress took a courageous stand last night in its response to
widespread public concern over civil liberties — hopefully this
is the first trickle in a flood of PATRIOT fixes,” said Laura W.
Murphy, director of the American Civil Liberties Union’s (ACLU)
Washington Legislative Office.
“Congress is beginning to respond to what regular Americans have
been saying at backyard barbecues and across their kitchen tables for
months now: we can — and must — be both safe and free,”
she said.
The amendment would effectively prohibit any implementation of the controversial
section 213 of the PATRIOT Act, which enables federal agents to obtain
so-called “sneak and peek” warrants with far less evidence
than was required before the bill was passed.
Under these warrants — also referred to as “black bag”
warrants — agents have the permission to search homes, confiscate
certain types of property and monitor computers, without notifying the
subject of the search.
The amendment still has to get past the Senate and Bush before it becomes
law.
The vote in the House of Representatives on July 22 was preceded by
a unanimous vote in the Senate the previous week to deny funding for
the domestic cyber-surveillance system known as the Terrorism Information
Awareness (TIA) project — recently renamed from “Total Information
Awareness.”
The provision blocking funding for the program was included in the Senate
version of a military spending bill currently being considered in Congress.
In contrast to the House version, which only restricted TIA’s use
against US citizens, the Senate version denies funding for “research
and development on the Terrorism Awareness System.”
The program would use “data-mining” technology to scan vast
amounts of personal “transactional” data, including monitoring
and looking for suspicious patterns in telephone records, credit card
transactions, broadcasts, internet use, medical files, relationships,
travel details and legal information, among others.
Democratic Senators Ron Wyden, from Oregon, and Russ Feingold, from
Wisconsin, had pledged last winter to block funding of TIA until Congress
has a chance to thoroughly review the project’s implications.
A fellow senator, Jon Corzine of New Jersey, has complained that TIA
takes an “Orwellian approach” — in fact, one of the program’s
first logos (since discarded) featured an all-seeing eye casting its
gaze out over the globe.
The language agreed to in the Senate last week is even more forceful
than that suggested by Wyden and Feingold, and stands in clear contrast
to the Bush administration’s active support for the program and
the Pentagon’s aggressive lobbying on behalf of TIA.
“Make no mistake, the Pentagon can’t erase history by changing
a name — it’s the same program and contains the same pitfalls,”
said Barry Steinhardt, director of the ACLU’s Liberty and Technology
Program. “Luckily the Senate historically stood up to the administration
and Pentagon and said ‘no’ to a surveillance society.”
“Terrorism Information Awareness, as it’s now called, seeks
to catch bad guys by spying on law-abiding Americans, making it ineffective
and inherently offensive to civil liberties,” Steinhardt added.
“Those lawmakers who sought to shut it down deserve applause for
supporting Americans’ right to privacy.”
Opposition to the program, as well as to several sections of the PATRIOT
Act, is growing and has been unusually broad ideologically, including
groups as diverse as the ACLU and the American Conservative Union.
Earlier this week, the ACLU kicked off a “Campaign to Defend Our
Libraries,” with the aim of warning patrons about Section 215 of
the PATRIOT Act. The section grants law enforcement the ability to obtain
— without an ordinary criminal subpoena or search warrant and without
probable cause — a court order giving them access to “business
records” and “any tangible thing,” including records
from libraries, booksellers, doctors, universities, internet service
providers and financial institutions.
Critics see the section as too broad and structured in a way that allows
ordinary citizens to be caught up in the net of intelligence investigations.
“The New Mexico Library Association is on record expressing its
concerns about the PATRIOT Act,” said Eileen Longsworth, president
of the association. “The NMLA encourages the library community
to educate itself and library customers about the PATRIOT Act, and the
potential dangers to individual privacy and confidentiality of library
records resulting from the enforcement of this act.”
Bills are currently pending in the House and Senate that seek to restore
privacy in libraries and bookstores.
Opposition to the PATRIOT Act is also coming from state legislatures.
On July 22, the city council of Charlottesville in Virginia blocked
some implementation of the act, joining more than 140 communities, encompassing
more than 16 million people in 27 states, that have passed resolutions
against it.
AIDS activists disrupt Rove speech at
Republican soirée
Washington, DC, July 25— Chanting and holding signs
reading “Dying for AIDS drugs? Karl says drop dead” and “Bush’s
lies kill, generic medicines now!” angry AIDS activists staged
a noisy disruption of an appearance by top White House advisor Karl
Rove at the National Conference of the College Republican National Committee,
at the Washington Hilton.
“President Bush is breaking his promise to fully fund a $3 billion
global AIDS bill signed into law in June. Bush is breaking his promise
that countries can put access to medicines and public health ahead of
the patent rights of greedy drug companies. The deadly global AIDS fraud
perpetrated by this White House has gone far enough,” said Sean
Barry, a protester.
“Rove pulls the strings in this Administration, and Rove has the
blood of people with HIV on his hands.”
Two days ago, lawmakers in the House of Representatives, under the direction
of the White House, opposed efforts to fully fund the bill President
Bush signed into law in June that would provide $3 billion in global
AIDS funding in 2004, with $1 billion for the nearly bankrupt Global
Fund, the only multilateral program spending money on treatment for
dying people with AIDS.
Experts point out that life saving programs in the hardest hit countries
around the world could readily absorb the $3 billion promised by Bush;
the White House, on the other hand, claims funding the Global Fund with
$1 billion in 2004 would be profligate.
“President Bush just went to Africa, ground zero of the AIDS catastrophe,
and is immediately breaking his promise to fund the Global Fund with
$1 billion in 2004. The White House wants to ‘go slow’ on
fighting a threat to humanity Secretary of State Colin Powell calls
worse than terrorism. That’s criminal,” said Danae McElroy,
a protester.
The disruption of Rove’s speech comes on the heels of the global
AIDS funding vote in Congress, and on the lead up to crucial talks at
the World Trade Organization, at the Cancun Ministerial (Sept. 10-14),
where US and drug company intransigence has blocked a deal on access
to medicines in poor countries that lack capacity for efficient domestic
manufacturing. Karl Rove has been linked to intense negotiations with
US drug companies in determining White House policy on what is considered
a make-or-break issue for the Cancun Ministerial. “While Bush lies
about life saving AIDS funding, he’s preventing countries from
implementing policy that assures they can maximize medicines access
by purchasing low cost generics,” said Sasha Post, a protester.
“The US promised they would permit countries to put public health
before patent rights — for killer Karl, that’s just one more
promise to walk away from.”
The activists are demanding:
• support funding for the Global Fund immediately, by keeping Bush’s
promise to spend $3 billion fighting global AIDS in 2004, with $1 billion
for the Global Fund
• support a deal at the WTO on access to generics for countries
with inefficient domestic manufacturing capacity that is simple to implement,
doesn’t exclude countries with moderate levels of development,
isn’t restricted to a list of diseases, and doesn’t force
poor countries to enact onerous “safeguards” to prevent diversion
to rich country markets
• stop bilateral and regional trade policies that increase countries’
obligations to protect drug company patent rights at the expense of
public health and access to important medicines.
Source: ACT UP
