Friday, August 26, 2005
 
"Shareowner Resolution Asks Monsanto to Create Ethics Oversight Committee"
The company stonewalls inquiries related to the resolution, which springs from a $1.5 million settlement with the SEC and DOJ earlier this year regarding a bribe Monstanto paid in Indonesia.

Earlier this week, Harrington Investments Inc. (HII) filed a shareowner resolution with Monsanto (ticker: MON) asking its board to create an ethics oversight committee of independent directors to monitor compliance with laws as well as the Monsanto Pledge and Code of Business Conduct. Why make such a request?

The resolution recounts the company's $1.5 million settlement with the US Department of Justice (DOJ) and Securities and Exchange Commission (SEC) in January 2005 over violations of the Foreign Corrupt Practices Act (FCPA). In a nutshell, a senior Monsanto manager authorized a $50,000 bribe to get a senior Indonesian Ministry of Environment official to repeal a 2001 environmental impact assessment decree obstructing market entry for genetically engineered crops.

Thursday, August 25, 2005
 
Halliburton: Another Very Special Company

In the first chapter of The Challenge To Power, I write a great deal about one of America’s most beloved companies: Halliburton. Our brave Vice President, Dick Cheney (remember the duct tape episode?), ran Halliburton from 1995 to 2000. As early as 1991, Cheney told a group of his oil company buddies that he was against getting rid of Sadam Hussein because the corporation needed Hussein’s money and our country needed his oil.

Also, when Cheney was running Halliburton, two subsidiaries, Dresser-Rand and Ingersol Dresser Pump Company, sold Hussein $73 million in oil field supplies. At that time, this fortuitously did not violate U.S. sanctions against Iraq for supporting a terrorist state because the company had conveniently located the subsidiaries “off shore.” Alas, Halliburton’s subsidiary in the Cayman Islands received an embarrassing grand jury subpoena last year for documents regarding their Iranian operations; since then, the office of Foreign Assets Control has referred their investigation of Halliburton to the U.S. Department of Justice. Thanks to the foresight in locating at least 44 of Halliburton’s subsidiaries in tax havens, the company also pays very little in federal taxes; in fact, Halliburton received an $85 million rebate in 1999.

Halliburton, of course, receives plenty of Defense Department contracts, from building prison cells in Guantanamo, Cuba, to running mess halls, dorms, and laundry services for U.S. military troops all over the world. The company has a lock on rebuilding Iraq’s oil industry even if Halliburton consistently over-bills the U.S. government. When Cheney was the company’s “leader,” Halliburton paid the government $2 million in fines for overbilling; in August 2004, the company paid $7.5 million to the SEC for failing to disclose how the company accounted for certain cost overruns, which resulted in the company issuing misleading profit numbers in 1998 and 1999.

Cost overruns, overbilling and faulty accounting are “business as usual” at Halliburton. The company is under investigation by the Pentagon to determine whether they overcharged the military $1.2 billion in fuel sales in Iraq, and a Pentagon audit found that Cheney’s old company failed to adequately account for about $4.2 billion the company was paid for providing logistical support for troops in Iraq and Kuwait. Oh, I forgot to add that the FBI is investigating the company employees who were reported to have accepted $6 million in illegal kickbacks. Halliburton has also been accused of overcharging on contracts in Afghanistan, another flowering oasis of company profits.

Following Halliburton’s disclosure of $2.4 million in “improper” payments by a company employee to a Nigerian tax official, an ongoing investigation has now pulled Chicago Bridge and Iron into the company’s web of crime partners. Chicago Bridge and Iron is a Halliburton subcontractor on the multibillion dollar TSKJ Bonner Island liquefied natural gas plant project. The SEC, the U.S. Department of Justice, and French and Nigerian officials are all investigating. The investigation has widened to not only looking for a violation of the U.S. Corrupt Practices Act, but a violation of U.S. antitrust laws. It seems that the former chairman of Halliburton’s Kellogg Brown & Root unit announced that he took payments from a British lawyer who was responsible for funneling between $130-140 million from the construction consortium to Nigerian officials.

What makes you feel warm inside is to know that Halliburton continues to receive large multi-billion dollar taxpayer-funded contracts, uses tax havens to avoid paying U.S. taxes to support the government that they bilk, overcharges on contracts, bribes foreign government officials, engages in business with terrorist nations, and “cooks the books,” all while former company executive Cheney receives $180,000 a year in deferred compensation.

Don’t you get a nice fuzzy feeling knowing that our government has so recognized what a good patriotic job Halliburton is doing for our country in Iraq and Afghanistan – at a cost of $10.5 billion – that the U.S. Army recently approved $9.4 million in bonus payments to the company’s Kellogg Brown & Root subsidiary?

Last year, Medea Benjamin, representing Global Exchange, and Pratap Chatterjee, representing Harrington Investments, Inc., were denied entry into the shareholders meeting in Houston, Texas. Both were holding shares of Halliburton and were serving as proxies for owners of the company, but were still denied entry. In fact, Medea was physically accosted and searched by corporate-paid security personnel. They were not allowed to attend the Halliburton meeting because they wanted to question the company’s management on all of the multiple ongoing government investigations. This year Medea was able to gain entry on behalf of Global Exchange and questioned management. The answers, of course, were evasive and promised to be supplied in the future. Don’t count on it. Corporations believe they are answerable to no one, certainly not the U.S. government or the legal owners of the company.

America is being privatized and corporatized at an increasing rate. American citizens are losing their sovereignty. In fact, we may have given up our nation’s sovereignty to the corporate-controlled World Trade Organization (WTO). Perhaps supreme power no longer rests with the people through our elected government, but with a sovereign that is corporate. Perhaps it is high time to reverse this loss of sovereignty and deconstruct the beast that we created. Perhaps it is time to return to a market economy and democratic control of capital: stay tuned.

Wednesday, August 17, 2005
 
"It's Time To Fix Social Security"

In his op-ed, "It's Time To Fix Social Security," Jay Ambrose argued that Congress needs to begin to seriously address the issue of the long-term viability and solvency of our federal Social Security system. He also praised George Bush's privatization plan and blamed the Democrats for "demagogic obstructionism" in preventing the President's individual private account plan from being enacted into law.

Conversely, in his op-ed, "Social Security Lessons," Paul Krugman claimed that Bush 'lied' about the current system, and used taxpayer money to promote his partisan agenda, attempting to transform '... Social Security from a social insurance program into a mutual fund.'"

Both Ambrose and Krugman were clearly partisan in their rhetoric, but each touched upon important points. Ambrose was correct in his demand that Congress address Social Security solvency, but was absurd in blaming only the Democrats. For successive Administrations and throughout dozens of Congressional sessions, Democrat and Republican politicians in power have ignored the need for long-term viability of our most important retirement safety net for literally millions of Americans.

Krugman was correct in his claim that the current Administration, which has a long and despicable record of attempting to privatize everything that doesn't move and some things that do, is working hard to shift the responsibility for Social Security from the public to the private sector, a private sector driven only by self-interest and money, not collective responsibility and care.

A solvent retirement or pension plan needs to be actuarially sound and committed to growing sufficiently to be able to pay benefits to current and future beneficiaries. Normally, retirement plans adjust their actuarial tables based on projected mortality rates, beneficiary levels, new money coming into the system, portfolio appreciation, and interest rate assumptions. In the case of the Social Security fund, investments are only made in U.S. treasury securities (100% principal and interest guaranteed), and any shortfall in meeting benefit payments will come out of the federal budget.

Thanks to the intelligence of George Bush and his Republican Party majorities in Congress, our country is presently running enormous and growing annual federal budget deficits (propped up, I might add, by a Social Security Fund surplus) in addition to outrageous monthly foreign account deficits. Also one of the major reasons why the deficits are growing is the cost of the war in Iraq and the privatization of government. Add to this plague on our federal budget, interest on the national debt and huge tax breaks given by Congress to the wealthy that run corporate America, it is no wonder that we can't feed, educate, care for, and employ our country's citizens.

As we have all known, fewer and fewer workers are paying into Social Security to support an increasing number of beneficiaries. This will be another drain on the budget once the current Social Security fund surplus is depleted, we have a "pay as you go" retirement system, and the return on U.S. Treasury bonds barely keeps up with the rate of inflation. The answer, however, is not privatizing Social Security with personal accounts as King George would have us believe.

There are several reasons why the current Administration, many Congressional representatives (supported by lobbyist money), and the corporate elite in this country want to privatize Social Security. First, creating private accounts that allow future beneficiaries to invest in stock mutual funds will inevitably, in the long run, be a gold mine for the financial services and mutual fund industry. It is a great big payback for all those corporate and wealthy citizens that contributed millions to King George and our current crop of politicians. Don't believe such personal account investments will be limited to "conservative" stock index funds. Once the financial services industry gains access to Social Security assets, those highly paid lobbyists in Washington, D.C., will make sure politicians open Social Security accounts up to permissible investments in everything from hedge funds to emerging markets. It won't be long before "partial" Social Security privatization becomes "full" privatization. Never underestimate the power of money and greed.

Secondly, privatization of Social Security will shift the burden from a public sector life-saving insurance and retirement program to a private sector roulette-style lotto game, where few will win and most will lose. There will be no minimal benefit level; every man and woman will be for himself and herself. This will reinforce authoritarian capitalism's reach beyond simple "privatization"”; it will be Thomas Hobbes's materialistic dream come true. His most famous philosophic phrase will become reality: that life (in America) in the state of nature will be "solitary, poor, nasty, brutish and short."

Finally, corporations and the wealthy have so skewed the budget priorities away from human services, education and welfare, to now paying for war, corporate contractors and rich folks' tax breaks, that any future federal support for Social Security diminishes their ability to dig deeper into American taxpayer pockets. God forbid, we subsidize our country’s retirees, when we can subsidize General Electric, Lockheed and Halliburton instead.

To strengthen Social Security, why not create a Social Security Retirement Board (SSRB), independently appointed and/or elected, whose members have fiduciary duties and responsibilities, among other things, to invest beneficiary assets into a diversified portfolio of stocks, bonds, real estate, private equity and other investments to increase portfolio performance? Such investments could include small businesses, alternative energy, federal mortgage securities supporting moderate income housing, as well as community investments to strengthen and increase wealth in local neighborhoods and in rural and urban communities across the country.

Similar to fiduciaries of private pension plans covered by ERISA, SSRB trustees should each be financially and legally liable and responsible to beneficiaries in carrying out their duties to meet the investment goals and the long-term obligations of Social Security.

The Board’s duties and responsibilities would be similar to large public employee pension plans, such as CALPERS, CALSTRS, and the New York State Retirement System, all of which have excellent long-term investment performance and have successfully been meeting their investment goals and objectives for current and future beneficiaries.

If the President is really concerned about making sure that the Social Security system is financially solvent and sound, what could be more important than increasing the performance of retirement assets? But this must be accomplished collectively, responsibly investing for all the beneficiaries, not putting each individual alone open to speculation and with each beneficiary hoping to win the lotto. Assets need to be managed by legally and financially liable fiduciaries, whose responsibility it is to invest beneficiary assets to meet the goals and objectives of providing retirement income, not as a transfer of Social Security assets to the financial community as a payback for political contributions and lobbyist lunches.

Until and unless we stand together as Americans, taking care of our elderly parents, family, and friends as one nation united, we shall continue to be divided by fortune, income, and class, where the overriding American philosophy will be individual self-interest.


Powered by Blogger eXTReMe Tracker