Is it a few bad apples or…… • Organizational subcultures affect members through influencing definitions of the situations they face on the job. Indeed, a well-socialized executive tends to display a narrow, pragmatic approach to work... C.W.Mills wrote about the numbness this created among corporate managers.... “Amoral” --
Why Should we be worried??? Corporate Crime, Environmental Racism, and Toxic Terror “Hey Grandma, What’s a Halliburton?
Costs of Crimes • Street crimes are more dangerous than white collar crimes. • Burglary and Robbery – $ 3.8 Billion • Health Care $100 billion to $400 Billion per year • Savings and Loan $300 to $500 Billion • Securities Fraud - $14 Billion
What is the difference • White Collar is done for personal gain • “crimes in suits” • Sophistication of the crime • Resources available to commit the crime • Influence/respect – attributes that fend off suspicion
Is corporate greed deviant? Deviance comes in many forms….
So pervasive that….. Clinard and Yeager Study of Corporate Crime • Administrative Violations • Environmental Violations • Financial Violations • Labor Violations • Manufacturing • Unfair Trade Practices 42% charged in multiple cases……..
Corporations choose crimes that involve…. • Least detection • Least identification • Weakest victims • Greatest profit • “Large Organizations harbor a unique social world all its own” Coleman
Types of corporate crime • Against Workers – • Against Government • Against Environment • Against Consumers
Crimes Against the Government Project On Government Oversight - Misconduct
Halliburton – a combination of crimes against govt. and workers • Overcharged the US government by as much as $61 million for fuel in Iraq. • 27,000 military contractors, or about one in nine, were evading taxes and still continuing to win new government business. • Halliburton earned $2.3 billion in profits just by moving headquarters to Dubai • Total instances of Misconduct before losing Military contract - 14 • Total amount of misconduct costs = 997.5 m • FIRED FOR EGREGIOUS MISCONDUCT… ???
Halliburton Returns through KBR • A subsidiary of Halliburton knowingly exposed United States soldiers to toxic materials in Iraq.CBS interviewed Commander James Gentry of the Indiana National Guard, who is dying of a rare form of lung cancer that he believes is the result of "months of inhaling hexavalent chromium" after his battalion was assigned in April 2003 to protect contractors from Kellogg Brown & Root (KBR) working in Iraq at a local water plant. Other members of his unit are also suffering from cancers or rashes associated with the toxic chemical, which was all over the plant.
Crimes against Workers • 500,000 employees exposed to dangerous or toxic work conditions • U.S. has highest rates of workers killed among industrial nations • Source: Kerbo 2011
KBR • CBS obtained documents which indicate that KBR knew about the danger months before the soldiers were informed. KBR employee depositions show there were "concerns about the toxins in one part of the plant as early as May of 2003," while later minutes detail symptoms of exposure, including bloody noses and rashes. KBR, a spinoff by Halliburton in 2007 as a separate corporation, has previously been accused of providing contaminated water to troops in Iraq, taking kickbacks, and sending workers to Iraq against their will. Source: CBS Evening News • http://www.progressivefuture.org/blog/benjamin-carter-v_-hallibuton-company-and-kellogg-brown--root-aka-kbr
“KBR, the Army's largest contractor in Iraq and Afghanistan, is linked to "the vast majority" of suspected combat-zone fraud cases that have been referred to investigators, as well as a majority of the $13 billion in "questioned" or "unsupported" costs, the Pentagon's top auditor said yesterday.” • “The commissioners cited a May 1 letter to Defense Secretary Robert M. Gates from Sens. Claire McCaskill (D-Mo.) and Susan Collins (R-Maine), calling on the Pentagon to do more to recover more than $100 million in overcharges and excessive profits associate with KBR employees suspected of fraud.” • Source: Washington Post 5/5/09http://www.washingtonpost.com/wp-dyn/content/article/2009/05/04/AR2009050403283.html
Troops sue KBR over toxic waste in Iraq, Afghanistan • This misconduct began in 2003 and continues unabated to date," it alleges. • "Every type of waste imaginable was and is burned on these pits, including trucks, tires, lithium battery, Styrofoam, paper, rubber, petroleum-oil-lubricant products, metals, hydraulic fluids, munitions boxes, medical waste, biohazard materials (including human corpses), medical supplies (including those used during smallpox inoculations), paints, solvents, asbestos insulation, items containing pesticides, polyvinyl chloride pipes, animal carcasses, dangerous chemicals and hundreds of thousands of plastic water bottles," the lawsuit claims. • New evidence of Gulf War Syndrome among returning veterans!!
KBR • Total contracts with Govt. 3631.1m • Instances of Misconduct – 26 • Total Fines to date 132.7 m
“Defense industry CEOs walked off with 44 times more pay than military generals with 20 years experience, and 308 times more than Army privates.” • Executive Excess
Environmental crimes • typically involve the unauthorized disposal of hazardous material or discharge of pollutants into the air, water, or ground.
Crimes Against the Environment • Polluting in low income and minority communities • EPA estimates by 2020, 4/5 of all U.S. waste sites will be full • New trend – private laboratory falsifying pollution test results to allow companies to claim EPA standards • Water samples, petroleum storage tanks, soil and pesticide • Source: Profit without Honor 5th Edition. 2011
“Environmental Racism” toxic dumps are not randomly distributed but are located in communities with high percentages of minorities / poor • 1/3 of all hazardous waste landfills in the 48 contiguous states were located in 5 southern states (equals over 50% of the landfill capacity) 60% of the landfills were in zip code areas comprised of predominantly African Americans, though they only make up about 20% of the South’s population.
Emelle Alabama – world’s largest toxic waste dump “Cadillac of Waste Dumps” Warren County, NC - 32,000 cubic yards of polychlorinated biphenyls (PCBs) both locations predominantly poor minorities * both communities protested but could not fight big business even though the companies had been repeatedly sued for millions of dollars by EPA and state agencies in the past * NIMBY - unless you live in a poor, powerless, minority community
EPA estimates: • “… of the 100 billion tons of hazardous waste produced each year in the U.S., 90% is disposed of in an “environmentally unsafe manner.” • “… there are as many as 30,000 waste sites today that pose significant health hazards to us and are directly related to water contamination.” • World Health Organization --- 75% of all diseases are waterborne.
1. Sale of Dangerous Chemicals to under-developed and developing nations • 450,000 baby pacifiers have been exported since a ban was proposed by the CPSC (caused choking deaths) • 120,000 banned teething rings were exported • Source: Profit without Honor 2011
2. Export of Hazardous Waste • U.S. It costs approximately $5,000 per ton to dispose • Developing Countries – some will accept our waste for as low as $ 3.00 per ton • Source: Profit without Honor 2011
“Illegal disposal of toxic waste is 2nd in profits only to trafficking in illegal drugs in the U.S.” • Source: Thompson and Hickey 2011
3. Construction of Polluting Factories • “maquiladoras” • Westinghouse, General electric, Ford, General Motors, Johnson and Johnson, 400 in Juarez alone • Employees as young as 13 and 14 earning well below a “living wage” and still falling -- average page is $1.25 per hour • Many workers have to travel hours each way by bus from colonias like Anapra, subdivisions that have sprung up without paved roads, water or sewer service. The homes look like preschool art projects, glued and stapled together from cardboard and plywood and tin. Bootleg power lines drop from overhead wires, loop down to the ground and are held in place by a rock, then snake through the sand to a house. Some wires are live, and arc and spit when it rains. The young women who live here are favored by the maquila bosses for their nimble fingers and obedience. But more than 200 women, many of them maquila workers, have been murdered since 1993 — often raped, strangled and mutilated during their long, dark treks home to remote colonias. Most large maquilas have begun providing bus service, but it has failed to stop the killings. • http://www.time.com/time/covers/1101010611/fcities.html