Poverty Wages and Large Corporations

There was a time when landing a job with a large corporation was, even for blue collar workers, a ticket to a comfortable life—good wages, generous benefits and a secure retirement. Women and workers of color did not share fully in this bounty, but they generally did better at big firms than small ones.

All this began to unravel in the 1980s, when big business used the excuse of global competition to chip away at the living standards of the domestic workforce. This took the form of an assault on unions, which had played a key role in bringing about the improvements in the terms of employment. In meatpacking, for instance, what had been a high-wage, high-union-density industry turned into a bastion of precarious labor.

When large corporations off-loaded a substantial portion of their employment costs, they created a higher burden for the public sector. As their pay and benefits shrank, workers turned to the social safety net to fill the gap. Programs such as Medicaid and Supplemental Nutrition Assistance Program (food stamps) that were originally designed for employees of small firms and for the unemployed became a lifeline for the workforce at some Fortune 500 companies.

From a social point of view, this was a good thing—but it also created a situation in which taxpayers were in effect subsidizing the labor costs of mega-corporations. This became an issue in the early 2000s with regard to Walmart, and there were unsuccessful efforts in states such as Maryland to require large firms to spend more on employee healthcare.

Although the issue receded from public attention, figures such as Sen. Bernie Sanders have sought to keep it alive, putting the main focus on the employment practices of Amazon.com. In 2018 Sanders helped pressure the giant e-commerce firm to raise its wage rates by introducing legislation that would have taxed large companies to recoup the cost of government benefits given to their employees.

Now the chair of the Senate Budget Committee, Sen. Sanders is continuing his effort from a position of even greater influence. He just held a hearing on whether taxpayers are subsidizing poverty wages at large corporations. As in 2018, just highlighting the issue had a concrete impact. At the hearing the chief executive of Costco announced that his company would raise its minimum pay rate to $16 an hour. This came a week after Walmart hiked its rate to $15 but only for a portion of its workforce.

After years of wage stagnation, it is heartening to see that large companies are beginning to feel some pressure to boost their wage rates. Yet rises of only a few dollars an hour will not do the trick. Pay needs to be substantially higher than $15 an hour. That’s why the real solution to the problem is not voluntary corporate action but rather collective bargaining. Amazon and Walmart could assist their workers much more by dropping their opposition to unionization.

Having a voice at work would solve not only the pay problem but also the crisis in healthcare coverage and other benefits.  The scope of that crisis was made plain by another speaker at the Senate Budget Committee hearing. Cindy Brown Barnes of the Government Accountability Office summarized research showing that an estimated 12 million adults enrolled in Medicaid and 9 million adults living in households receiving food stamp benefits earned wages at some point in 2018.

The GAO had more difficulty determining the portion of these populations employed at large corporations. That is because only a limited number of the state agencies administering Medicaid and food stamps collect and update employer information on recipients.

The partial data is still revealing. Among the six states providing employer information for Medicaid recipients, Walmart was in the top ten in all, while McDonald’s and Amazon were in five. Among the nine states providing employer information for food stamp recipients, Walmart was in the top ten in all, while McDonald’s was in eight and Amazon was in four.

These findings provide valuable information for the Sanders campaign against poverty wages. Companies such as Amazon—which recently reported that its annual revenues in 2020 were up 38 percent and its profits nearly doubled to $21 billion—can well afford to pay employees a living wage and provide the benefits necessary for a decent standard of living.

Public safety net programs are essential to society, but those who are employed by mega-corporations should not have to make use of them.

A Reckoning for Texas

Electric utilities come in in numerous forms. Some are cooperatives or municipals devoted to serving the interests of their members. Others are investor-owned entities that are unabashedly focused on the pursuit of profit. Texas has some of both, but the Lonestar State stands out for its decision to operate a statewide power grid cut off from all other states. This move is now causing massive hardship amid the polar vortex.

Hare-brained energy market approaches have been around for some time in Texas. Houston was the headquarters of Enron, which made use of federal deregulation to promote aggressive energy trading schemes that turned out to thoroughly fraudulent. It was only a few months after Enron declared bankruptcy that the Texas legislature adopted a statewide electricity market deregulation scheme.

Since then, the old-line utilities have been broken up, bought and sold like so many Monopoly properties. For instance, Dallas Power & Light morphed into TXU Electric Delivery, which in turn became Oncor Electric Delivery. Oncor was then taken over by California-based Sempra Energy.

Houston Lighting and Power was split up into several companies, including CenterPoint Energy. When the storm hit, CenterPoint was focused on a complicated financial deal involving its subsidiary Enable Midstream Partners.

Amid this wheeling and dealing, Texas utilities seemed to have forgotten about their most important responsibility: serving their customers. They created the now ridiculously named Electric Reliability Council of Texas to coordinate their efforts, but neither that non-profit nor the individual companies thought to prepare for the kind of extreme weather situation that is now crippling the state.

There have been signs that Texas climate was becoming erratic. In 2018 hailstones the size of tennis balls caused $1 billion in damages in North Texas. Houston had its earliest snow ever. Bloomberg is reporting that ERCOT was warned a decade ago that Texas utility facilities needed to be winterized to assure service during colder weather.

ERCOT deserves no sympathy, but it is absurd for politicians like Gov. Greg Abbott to put all the blame on the non-profit when he has long been a climate change denier, a deregulation proponent and a renewable energy basher.

The current disaster should serve as a wake-up call to Texas politicians as well as Texas utilities that they should focus less on ideological posturing and financial maneuvers and pay more attention to the needs of the residents of the state.  

The Opposite of Sustainability

Oil giant Royal Dutch Shell is one of the many global corporations, especially those based in Europe, that profess to be devoted to sustainability in their operations. Shell claims that its commitment in this area dates back to 1997.

For most large corporations, these assertions of environmental virtue are dubious at best. In the case of Shell, they are especially far-fetched, given the company’s history in countries such as Nigeria.

In the early 1990s Shell began to face protests over its oil operations in Nigeria. In 1994 the Movement for the Survival of the Ogoni People, then led by Ken Saro-Wiwa, began blockading contractors working on Shell’s facilities to bring attention to the large number of pipeline ruptures, gas flaring and other forms of contamination that were occurring in the Ogoniland region. The group described Shell’s operations as “environmental terrorism.”

The Nigerian government, a partner with Shell in the operations, responded to the protests with a wave of repression, including the arrest of Saro-Wiwa, who was hanged in 1995. Shell denied it was involved, but critics pointed to the role played by the company in supporting the military dictatorship. Protests against the company continued.

A lawsuit brought on behalf of the Saro-Wiwa family was later filed in U.S. federal court under the Alien Tort Claims Act. In 2009, just before a trial was set to begin, the company announced that as a “humanitarian gesture” it would pay $15.5 million to the plaintiffs to settle the case. By contrast, a 2011 United Nations estimated that an environmental cleanup of the Niger Delta would cost $1 billion and take 30 years.

A separate Alien Torts Claims case brought on behalf of the Ogoni people against Royal Dutch Shell in 2002 made its way through the U.S. legal system to the Supreme Court, which in 2013 ruled that the U.S. courts could not be used to bring claims against overseas acts by foreign companies.

Another case–this one brought by Friends of the Earth Netherlands and four Nigerian farmers–was filed in a Dutch court, alleging that spills from Shell pipelines damaged the livelihood of the farmers. The case, which represented the first time a Dutch multinational has been sued in the Netherlands for overseas activities, was mostly dismissed in 2013 but the plaintiffs persisted.

Recently the Hague Court of Appeal finally issued a decision on the case, ruling that Shell has to pay compensation to the farmers and install equipment to prevent future pipeline leaks. The amount of the compensation has yet to be determined.

It is unlikely that Shell, which generates more than $300 billion in annual revenue and ranked number 5 in the most recent Fortune Global 500 list, will have difficulty paying whatever the Dutch court mandates. Perhaps the bigger problem is that Shell has never acknowledged responsibility for the ecological damage and still insists that the leaks were caused by sabotage.

Until it fully owns up to its culpability for human rights and environmental damage in Nigeria, Shell has no business presenting itself as practitioner of sustainability.

Toxic Corporations

Given the Biden Administration’s focus on the climate crisis, the announcement by General Motors that it will transition to an all-electric fleet, and the growing emphasis on sustainability among institutional investors, one might be tempted to think the United States is embarking on an environmental rebirth.

Despite some good signs, it is worth remembering that many large corporations—including ones that tout green credentials—are still spewing vast amounts of dangerous emissions into the air, land and water. Perhaps the best reminders of this reality are the data compilations produced by the Political Economy Research Institute at the University of Massachusetts-Amherst.

PERI recently released the latest version of its Toxic 100 lists, which cover air, water and greenhouse gas emissions. The lists are based on data from the EPA’s Toxics Release Inventory and its Greenhouse Gas Reporting Program. The EPA publishes the data only for individual U.S. facilities, whereas PERI combines the emission amounts by parent company and thus reveals which large corporations account for the largest pollution shares. PERI’s approach is much like the one we use in Violation Tracker. It helps a lot that database wizard Rich Puchalsky of Grassroots Connection works on both projects.

There are a total of about 220 parent companies that appear on one or more of the three PERI lists. The Netherlands-based chemical company LyondellBasel Industries, which owns heavily polluting plants in Texas and other states, is at the top of the air list. Military contractor Northrop Grumman tops the water list, mainly because of the massive emissions at its subsidiary Alliant Techsystem’s facility in Virginia. The parent with the most greenhouse gas emissions is, ironically, Vistra Energy, which is heavily involved in renewable power generation and storage.

I was interested to see which corporations appeared on all three lists. I found that 16 firms have that dubious distinction. Not surprisingly, they include the country’s largest petroleum, chemical and steel producers.

Five of the group appear in the top 50 on each of the three lists: Dow Inc., Koch Industries, Berkshire Hathaway, ExxonMobil and Marathon Petroleum. Dow is the only one of these to be in the top ten of two different lists. It ranks fourth in water emissions and fifth in air emissions (as well as 44th in greenhouse gases). Koch Industries is in the top 25 of all three lists.

Dow’s position as the worst overall polluter comes as no surprise, given that the company has a toxic history that dates back decades and includes its notorious role in the production of napalm and Agent Orange during the Vietnam War. Its reputation only worsened after its 2001 acquisition of Union Carbide, which refused to pay adequate compensation for the thousands of victims of the 1984 disaster at its pesticide plant in Bhopal, India. Dow was also embroiled in a major scandal involving faulty silicone breast implants.

The blots on Dow’s record are not all in the distant past. In 2019, for instance, it reached a $98 million settlement with the U.S. Justice Department, the State of Michigan and the Saginaw Chippewa Indian Tribe to restore areas damages by hazardous releases from Dow’s operations in Midland, Michigan.

You wouldn’t learn any of this background by reading the history section of the company’s website, which includes a page headlined “Sustainability from the Start: Dow’s Rich History of Environmental Stewardship.” As for the present, the site declares: “At Dow, we’re working to deliver a sustainable future for the world by connecting and collaborating to find new options for materials that make life better for everyone.”

This sort of greenwashing language is all too typical in the materials large corporations publish about themselves. PERI’s Toxic 100 shows that these companies have a long way to go before they can accurately depict themselves as paragons of environmental virtue.

Solving the Corporate Identity Crisis

Like the Republican Party, Corporate America is embroiled in a battle between its evil impulses and its better angels. Nowhere is this clearer than with regard to environmental policy.

On one side are the ESG proponents such as BlackRock’s CEO Larry Fink, who according to the New York Times, is using his firm’s role as a massive institutional investor to pressure corporations to embrace sustainable practices. In his annual letter to companies, he called not just for vague aspirations but specific plans that are incorporated in long-term strategies and reviewed by boards of directors.

General Motors has just announced that it will phase out gasoline-powered cars and trucks and will sell only zero-emissions vehicles by 2035. The company will spend $27 billion developing about 30 types of electric vehicles.

At the same time, fossil fuel companies are going ballistic over the Biden Administration’s plan to suspend oil and gas leasing on federal lands, despite the fact that some 90 percent of exploration occurs on private property and is not affected by the executive order. Biden has also not called for a ban on fracking, despite allegations during the presidential campaign that this was his real plan.

The conflict within the business world was epitomized by the U.S. Chamber of Commerce, which issued a press release that welcomed the Biden Administration’s focus on climate change while rejecting the leasing action.

There is also a corporate identity crisis with regard to employment practices, especially those in the high-tech sector. For many years, Silicon Valley companies had reputations as great places to work and were even accused of coddling their employees.

Now companies such as Amazon have replaced Walmart as the exemplars of bad employers. That image has intensified as groups of workers have begun to turn to collective action to address their concerns. Rather than embracing the right of employees to have a real voice at work, high-tech employers are adopting old-fashioned union-busting tactics. Amazon has even taken a move from the Donald Trump playbook by opposing mail-in voting during a representation election in Alabama.

The one clear lesson from the corporate inconsistencies is that ESG and other voluntary business practices are no substitute for strong government oversight. We should not have to wait until big business decides whether it really wants to help save the planet or will cling to fossil fuels as long as possible.

We should also not have to wait until giant companies decide whether they will treat their workers with respect or continue to regard them as little more than vassals.

It is thus encouraging that the Biden Administration is taking decisive action to restore effective regulation of both the environment and the workplace as well as areas such as consumer protection. Once agencies such as the EPA, the NLRB and the CFPB go back to enforcing the law in an aggressive manor, corporate ambivalence will become much less relevant and we can be confident that the entire private sector will feel pressured to do the right thing.

Regulatory Renewal

One of the biggest betrayals committed by Donald Trump was his inclusion of a traditional Republican attack on regulation in a purportedly populist agenda. He managed to get many of his working-class followers to believe that weakening oversight of business was in their interest while it was actually a boon to the large corporations he pretended to challenge.

Some initial steps by President Biden indicate that he is ending that charade and will return regulatory agencies to their intended missions, especially when those involve helping working families. This intention can be seen both in his nominations for new agency heads and early confrontations with some Trump holdovers.

One of those confrontations took place at the Consumer Financial Protection Bureau, an agency that was created by the 2010 Dodd-Frank Act and which incurred the wrath of business-friendly Congressional Republicans for its aggressive enforcement actions against financial sector abuses. Those politicians took special aim at the provisions in Dodd-Frank that gave the CFPB’s director a great deal of independence.

The Trump Administration worked hard to defang the CFPB and in 2017 succeeded in putting the agency under the control of OMB Director Mick Mulvaney, who was openly contemptuous of its mission.  In 2018 Trump named Kathy Kraninger, a Mulvaney crony with no experience in financial regulation, to head the agency. After being confirmed on a party-line vote, Kraninger went on to weaken the CFPB’s rules against predatory lending and reduced enforcement activity against large banks.

Immediately upon taking office, Biden demanded Kraninger’s resignation. Ironically, Biden was able to take that action because opponents of the agency’s independence had prevailed in a Supreme Court decision. The new administration turned the tables and used the ruling to facilitate the reinvigoration of the agency.

While Kraninger agreed to resign, Biden had to fire Peter Robb, the powerful general counsel of the National Labor Relations Board. A veteran management-side lawyer whose anti-union activity dates back to his involvement with the Reagan Administration’s attack on the air traffic controller’s union, Robb has spent the past three years doing his best to thwart the agency’s mission of promoting collective bargaining. He even tried to limit worker free speech by asking a federal court to bar the use of large inflatable rats on picket lines.

Robb’s term was not supposed to expire until November, but the Biden Administration apparently decided it was worth alienating Republicans in order to stop the damage Robb has been inflicting on labor rights.

Replacing these key policymakers at the CFPB and the NLRB will go a long way in reorienting the agencies back to their mission of protecting working families from the predatory practices of the financial services industry and the abusive practices of employers. They fit together with the overall change of direction signaled in the executive order Biden issued on his first day reversing Trump’s deregulatory framework.

These personnel and broad policy moves will hopefully be just the first steps in an extended campaign by the Biden Administration to end the demonization of regulation and to use the powers of the federal government to promote economic justice.  

Corporate Consequences

The coming weeks will determine how big a price Donald Trump and his Republican enablers will pay for fabricating claims about election fraud and instigating the deadly attack on the Capitol.

Yet it is just as important for the country to determine what the consequences should be for the large corporations that directly or indirectly aided Trump’s rise to power.

At the moment, Corporate America is frantically trying to distance itself from Trump and his confederates. Trump himself has become a pariah. Social media platforms have banished him. His banks have severed ties. The PGA Championship will no longer be held at his golf course in New Jersey. The Wall Street Journal urged him to resign. The National Association of Manufacturers called for the use of the 25th Amendment to oust him from office.

Corporations are also turning on Congressional Republicans who perpetuated Trump’s lies about election fraud and sought to overturn Biden’s victory. Companies such as Marriott, Dow Chemical, and Morgan Stanley announced they would halt campaign contributions to the Republicans who objected to certifying the electoral college results as the Capitol was still reeling from the insurrection.

It is fine for big business to come out now in favor of democracy, but that does not completely free it of responsibility for the series of events that led to necessity to fill the Capitol with armed troops to protect it against another assault from U.S. citizens.

That culpability comes in various forms. Although he is hardly a major player, MyPillow CEO Mike Lindell, who continues to support Trump, deserves some commercial form of impeachment. It’s too late to do anything about the recently deceased Sheldon Adelson, who used his casino fortune to prop up Trump and other retrograde Republicans, but there are other major contributors who should be held to account.

Yet there are many other corporations that may not have explicitly supported Trumpism but which were bought off with tax cuts and regulatory rollbacks. This was part of one of the other big lies of the Trump Administration: that it was pursuing populist policies aimed at helping working people.

Trump cynically perpetuated this falsehood while collaborating with the likes of Mitch McConnell to advance the usual pro-business Republican agenda. There were a few variances in areas such as trade, but the new positions were less pro-labor than they were simply xenophobic and incoherent. Whatever benefits workers may have enjoyed under Trump were far outweighed by the harm caused by the weakening of workplace safety enforcement, continued anti-union animus and the like. Trump’s incompetent response to the pandemic and the insufficient relief efforts have only compounded the problem.

Soon the country will be finished with Trump and attention will turn to the priorities of the new Administration. Biden included numerous progressives in his transition team and has chosen some decent people to serve in his cabinet, yet his closest advisors include individuals with strong corporate ties. Although he moved a bit to the left during the campaign, Biden himself is firmly centrist and far from anti-business.

Having distanced itself from Trump, big business may feel that it is entitled to push its agenda with the new administration. Nothing is further from the truth.

If anything, corporate interests, having received undue benefits during the Trump years, should now take a back seat to truly worker-friendly and other progressive policies. Corporate America should, in effect, pay a kind of reparations for its failure to stand up to Trumpism. A Biden Administration that is allowed to provide real help to struggling Americans may do more than anything else to help reunify the country.

Accountability for Trump’s Corporate Enablers

NAM CEO Jay Timmons presents award to Ivanka Trump in February 2020.

Republican members of Congress who abetted the plot to overturn the election will go down in infamy along with the disgraced 45th President himself. That applies both to the dead enders who still repeat the lies and those Senators and Representatives who abandoned the shameful crusade only after a mob whipped up by Trump invaded the Capitol.

There is another group of enablers who should be called to account: Corporate America. Sure, big business is now frantically trying to distance itself from Trump, with the National Association of Manufacturers going so far as to urge that Vice President Pence and the Cabinet invoke the 25th Amendment. Amid the chaos on Wednesday, the Business Roundtable called on Trump to put an end to the violence. In late November, a group of more than 160 chief executives urged the Trump Administration to accept Biden’s victory and cooperate in the transition process.

Yet, as with Congressional Republicans, these gestures came after four years of enabling Trump’s anti-democratic practices. While Trump moved steadily along the path to authoritarianism, large companies allowed themselves to be bought off with tax giveaways and regulatory rollbacks. There were occasional confrontations with corporations such as Carrier and General Motors over layoffs and offshoring, but these were bogus, reality-TV-type confrontations that amounted to nothing.

More significant were the policies adopted by a purportedly populist President that weakened labor unions, rolled back OSHA enforcement, curtailed fair labor standards and installed employer-friendly Secretaries of Labor.

Corporate America has also benefited from Trump’s retrograde environmental policies, especially the efforts to roll back limits on greenhouse gas emissions. On their way out the door, officials such as Andrew Wheeler of the EPA are trying to limit the options the Biden Administration will have to restore pollution controls.

Specific corporations have also been the beneficiaries of Trump’s policies. Military contractors such as Lockheed Martin have profited from the Administration’s use of arms sales to countries such as Saudi Arabia as a key element of its foreign policy. Telecommunications equipment companies such as Cisco benefitted from Trump’s campaign against its Chinese competitor Huawei.

Even companies chosen by Trump for his faux confrontations have profited from him or have assisted his accumulation of power. News corporations such as CNN gave Trump’s early rallies undue coverage and helped propel his political rise. Social media corporations for the most part have allowed Trump to disseminate hate speech and dangerous falsehoods.

Some prominent corporate figures have directly supported Trump, both with endorsements and substantial campaign contributions. These include Stephen Schwarzman of The Blackstone Group, Kelcy Warren of the pipeline company Energy Transfer Partners, and casino magnate Sheldon Adelson.

Other corporations and trade associations have sucked up to Trump and his family over the past four years. Last February, NAM, the organization now promoting the 25th Amendment, gave its Alexander Hamilton Award to Ivanka Trump.

On the whole, big business has offered little more than mild rebukes to Trump’s dangerous tendencies while reaping substantial benefits. Like Congressional Republicans, Corporate America needs to be held to account.

The 2020 Corporate Rap Sheet

For all of his populist bluster, Donald Trump has done little during his four years in office to stem the power of big business. He criticizes corporations only when he feels personally slighted or when it fits into one of his many outlandish conspiracy theories.

Fortunately, career officials at regulatory agencies and career prosecutors at the Justice Department, as well as those at the state level, have continued doing their jobs. The following is a selection of significant cases resolved during 2020.

Opioid market abuses: The Justice Department announced an $8 billion global resolution of its criminal and civil investigations into abuses by Purdue Pharma LP. The company agreed to plead guilty to three felony counts and pay criminal fines and forfeitures of $5.5 billion and $2.8 billion in a civil settlement. Given that the company is going through bankruptcy, it is unclear how much of this will actually be paid.

Bogus bank accounts: As part of the ongoing prosecution of Wells Fargo for pressuring employees to meet unrealistic sales goal by creating bogus accounts without customer permission, the Justice Department announced that the bank would pay $3 billion to resolve criminal and civil charges. Wells was allowed to enter into a deferred prosecution agreement to avoid a guilty plea.

Foreign bribery: Goldman Sachs and its Malaysian subsidiary admitted to conspiring to violate the Foreign Corrupt Practices Act in connection with a scheme to pay over $1 billion in bribes to Malaysian and Abu Dhabi officials to obtain lucrative business for Goldman Sachs, including its role in underwriting approximately $6.5 billion in three bond deals for 1Malaysia Development Bhd.  Goldman Sachs agreed to pay more than $2.9 billion and disgorge $606 million as part of a coordinated resolution with criminal and civil authorities in the United States, the United Kingdom, Singapore, and elsewhere.

Emissions cheating: The Department of Justice, the Environmental Protection Agency, and the California Air Resources Board announced a $1.5 billion settlement with German automaker Daimler AG and its American subsidiary Mercedes-Benz USA, LLC resolving alleged violations of the Clean Air Act and California law associated with emissions cheating.

False claims and kickbacks: Novartis agreed to pay over $642 million in separate settlements resolving claims that it violated the False Claims Act.  The first settlement pertained to the company’s alleged illegal use of three foundations as conduits to pay the copayments of Medicare patients.  The second settlement resolved claims arising from the company’s alleged payments of kickbacks to doctors.

Tax evasion: Bank Hapoalim of Israel agreed to pay a total of more than $600 million in penalties to resolve criminal allegations by the Justice Department that it conspired with U.S. taxpayers to hide assets and Income in offshore accounts. The parent company entered into a deferred prosecution agreement while its Swiss subsidiary pled guilty.

Illegal robocalls: Dish Network agreed to pay $210 million to resolve a long-running federal-state lawsuit alleging that the company engaged in illegal telemarketing through unwanted robocalls to thousands of people on the Do Not Call registry.

Spoofing: The Commodity Futures Trading Commission and the Justice Department announced that JPMorgan Chase would pay $920 million to resolve civil and criminal allegations involving deceptive conduct that spanned at least eight years and involved hundreds of thousands of spoof orders in precious metals and U.S. Treasury futures contracts on the Commodity Exchange, Inc., the New York Mercantile Exchange, and the Chicago Board of Trade.

Predatory lending: Banco Santander’s U.S. arm agreed to pay $550 million to resolve multistate litigation alleging that the bank, through its use of proprietary credit scoring models to forecast default risk, knew that certain consumer segments were likely to default, yet issued high-interest automobile loans to them anyway.

Corruption: A criminal investigation of Commonwealth Edison was resolved with a deferred prosecution agreement under which ComEd agreed to pay $200 million and admit it arranged jobs, vendor subcontracts, and monetary payments associated with those jobs and subcontracts, for various associates of a high-level elected official for the state of Illinois, to influence and reward the official’s efforts to assist ComEd with respect to legislation.

Defrauding investors: SCANA Corp. and its subsidiary SCE&G agreed to settle a Securities and Exchange Commission lawsuit charging them with defrauding investors by making false and misleading statements about a nuclear plant expansion that was ultimately abandoned.  The company agreed to pay a $25 million penalty and $112.5 million in disgorgement.

Mortgage abuses: Nationstar Mortgage, which does business as Mr. Cooper, agreed to pay $86.8 million to resolve federal and multistate allegations that the mortgage servicer engaged in unlawful practices in the wake of the 2008 financial crisis. The settlement addressed alleged misconduct regarding servicing transfers, property preservation, loan modifications, and other issues, which in some cases led to improper foreclosure or borrowers being locked out of their homes.

Labor relations violations: CNN agreed to pay $76 million in backpay, the largest monetary remedy in the history of the National Labor Relations Board, to resolve a case that originated in 2003 when CNN terminated a contract with Team Video Services and hired new employees to perform the same work without recognizing or bargaining with the two unions that had represented the TVS employees.

Additional details on these cases can be found in Violation Tracker. Some will appear next week in an update to the database that will increase the number of its cases to 444,000 and the penalty total to $650 billion.

AstraZeneca’s Vaccine Stumbles

It’s difficult to decide whether to be more suspicious of the Trump Administration or the major drugmakers when evaluating the coming covid vaccine rollout.

The administration, eager to take credit for the unusually quick development of at least two products, is now revealed to have passed up the opportunity to lock in larger supplies of the Pfizer offering, prompting the company to make deals with other countries. Trump tried to cover up the error with an America First executive order, but that action is said to be unenforceable. Unless some of the other vaccines in development come to fruition soon, it may take a lot longer than promised to inoculate the U.S. population. The situation is worsened by the decision of the administration to leave states to work out distribution plans on their own.  

Pfizer, meanwhile, was getting showered with praise as its vaccine began to be administered in the United Kingdom, yet it soon had to contend with reports of several serious allergic reactions. The company, it turns out, had excluded people with a history of significant adverse reaction to vaccines from late-stage trials. UK officials are now telling those with serious allergies to put off getting the shot.

Then there is AstraZeneca, whose vaccine developed with the University of Oxford appears to be effective, but exactly how effective is in doubt given that researchers initially screwed up the doses given during the clinical trial and had to improvise.

Back in September, AstraZeneca had to halt the clinical trial after a participant fell ill. The company apparently infuriated the Food and Drug Administration by failing to warn it about the problem before the story became public. The New York Times called the incident “part of a pattern of communication blunders by AstraZeneca that has damaged the company’s relationship with regulators, [and] raised doubts about whether its vaccine will stand up to intense public and scientific scrutiny.”

AstraZeneca’s shortcomings did not start with its covid project. Like Pfizer, AstraZeneca has been accused of engaging in illegal marketing. In 2010 it paid $520 million to the U.S. Justice Department to resolve allegations that it promoted its anti-psychotic drug Seroquel for uses not approved as safe and effective by the FDA. Among other things, the company was accused of having paid doctors to give speeches and publish articles (ghostwritten by the company) promoting those unapproved uses.

The company has also been embroiled in controversies over pricing. In 2007 a federal judge ruled in a national class action case that AstraZeneca and two other companies had to pay damages in connection with overcharging Medicare and private insurance companies. The judge singled out AstraZeneca for acting “unfairly and deceptively” in its pricing of the prostate cancer drug Zoladex. The company was later hit with a $12.9 million judgment.

The combination of Trump Administration incompetence and the questionable track record of companies like AstraZeneca and Pfizer is giving ammunition to vaccine skeptics. We can only hope that the FDA review process makes a convincing case for the safety of the vaccines and that the new Biden Administration shows greater skill in working out the details for their distribution.