[GRRN] Fw: A Law and Order Regulation for Corporations

Gary Liss (gary@garyliss.com)
Mon, 30 Aug 1999 13:06:48

>From: Robin Salsburg <zerowaste@juno.com>
>A Law and Order Regulation for Corporations
>By Russell Mokhiber and Robert Weissman
>If you commit a felony, you lose the right to vote.
>What happens to corporations that break the law? They don't have the
>right to vote. But do they lose any rights or privileges?
>In what may be one of its most important corporate accountability
>initiatives (there haven't been many), the Clinton administration is
>suggesting that chronic violators of labor, environmental, tax, antitrust
>or employment laws should be denied the privilege of entering contracts
>with the federal government.
>Vice President Gore first floated the idea in a 1997 speech to the
>AFL-CIO. A business outcry persuaded the administration to put the
>proposal on hold, but two years later it decided to move forward.
>In July the administration proposed regulations that would clarify
>procurement officers' duty to ensure that government contractors have a
>"satisfactory record of integrity and business ethics." Under the
>regulations, corporations that repeatedly or seriously transgress worker
>rights, health, safety, environmental, tax or antitrust laws would be
>deemed ineligible for federal government contracts.
>Big business is up in arms about the proposal -- a sign that it may be of
>consequence. The U.S. Chamber of Commerce along with an alphabet-soup
>of business trade associations have organized the National Alliance
>Against Blacklisting to block the proposal.
>The Alliance is planning a full-blown campaign against the regulations.
>is revving up arguments about how the regulations would bestow on
>procurement officers the power to act arbitrarily, how corporations could
>be unfairly penalized for failing to comply with confusing and technical
>federal rules, and how the regulations improperly side the federal
>government with labor in labor-management disputes.
>The business groups are right about one thing: the Clinton administration
>has hit upon a potentially powerful tool to discipline large
>The federal government spends approximately $200 billion a year on
>procurement, buying goods and services from firms that employ
>approximately 20 percent of the U.S. workforce. Government contracts make
>up a significant revenue stream for many firms, including many of the
>largest companies in the country. In refusing to contract with polluting,
>consumer-cheating, racially or sexually discriminating, tax-avoiding,
>clearcutting, price-fixing and other miscreant companies, the government
>can leverage its buying power to promote more responsible corporate
>Consider the issues of worker rights and worker safety. A 1995 study by
>the General Accounting Office (GAO), the congressional research agency,
>found that 80 federal contractors, receiving more than $23 billion in
>federal government business in fiscal year 1993, had violated the
>Labor Relations Act. Six contractors -- McDonnell Douglas, Westinghouse,
>Raytheon, United Technologies, AT&T and Fluor -- received almost 90
>percent of the $23 billion.
>A 1996 GAO study found that 261 federal contractors, receiving more than
>$38 billion in federal government business in fiscal year 1994, received
>penalties of at least $15,000 for violating Occupational Safety and
>Act regulations. The biggest of these contractors included General
>Electric, Lockheed Martin, Westinghouse, United Technologies, General
>Motors, Boeing and Textron.
>The current U.S. labor law regime imposes virtually no meaningful
>penalties on businesses that violate worker rights. The standard sanction
>imposed against a company that fires a worker for supporting a union is
>order to reinstate the worker with back pay -- there are no punitive
>damages available. Serious violators of workplace health and safety
>regulations typically walk away with small fines.
>By contrast, the threat of losing major government contracts is a much
>more serious and costly penalty. The proposed procurement regulations
>would make federal contractors much more wary of recklessly disregarding
>worker rights and worker safety.
>Given the generally weak penalties for corporate law-breaking in the
>United States, the same holds in other spheres. Too frequently,
>corporations are able to brush off fines and sanctions for law-breaking.
>When corporations calculate, overtly or implicitly, whether they should
>respect the law, they consider the odds of getting caught and the size of
>the likely penalty if they are caught. Other factors go into such
>decisions of course -- potential civil liability, the social pressure to
>comply with the law or simple respect for the law -- but no one seriously
>doubts that enforcement vigor and the size of sanctions affect corporate
>adherence to the law.
>If the regulation, really a very modest step, is enacted, the answer to
>the question, "Do corporate law breakers lose any privileges or rights?"
>will finally be, "Yes."
>(c) Russell Mokhiber and Robert Weissman
>Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
>Reporter. Robert Weissman is editor of the Washington, D.C.-based
>Multinational Monitor. They are co-authors of Corporate Predators: The
>Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common
>Courage Press, 1999, http://www.corporatepredators.com).
>Focus on the Corporation is a weekly column written by Russell Mokhiber
>and Robert Weissman. Please feel free to forward the column to friends or
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>(russell@essential.org or rob@essential.org).
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Gary Liss
Fax: 916-652-0485