Corporate Crime

Were Big Banks Fools or Knaves in WMD Conspiracy?

morgenthau1 The big U.S. banks have been accused of helping bring about the near destruction of the world financial system. According to an indictment just announced by Manhattan District Attorney Robert Morgenthau, the banks also played a role, albeit unwittingly, in a conspiracy involving the proliferation of actual weapons of mass destruction.

Morgenthau (photo) brought a 118-count indictment against Chinese national Li Fang Wei and his metallurgical company LIMMT for conspiring to deceive half a dozen major U.S. banks into transferring funds used in the sale of banned weapons material to the Iranian military. The banks are JP Morgan Chase, Bank of New York Mellon, Citibank, Bank of America, Wachovia and American Express Bank.

The banks themselves were not charged, but it is remarkable how easily they were duped by Li, whose company had been placed on a Treasury Department blacklist in 2006 because of its dealings with the Iranians, which allegedly included the sale of components for long-range missiles capable of delivering WMDs.

Morgenthau’s press release says that “U.S. banks employ sophisticated anti-fraud and anti-money laundering computer systems to detect illegal payments from sanctioned entities and people.” Yet it seems that all Li had to do to circumvent that system was to tell his customers that the English-language name of his firm had changed (he used dubious aliases such as Blue Sky Industry Corporation). In some instances he did not even bother to change his telephone and fax numbers.

Morgenthau went out of his way to exonerate the banks, but he couldn’t resist mentioning that there are “parallels” between the LIMMT case and his office’s ongoing investigation of “stripping,” a practice in which banks remove identifying information from wire transfers to enable clients to avoid restrictions on transactions involving countries under U.S. sanctions. In January, Morgenthau’s office announced that British bank Lloyds TSB would pay $350 million in fines and forfeitures in connection with a deferred prosecution agreement involving the practice. Lloyds was accused of helping Iranian and Sudanese clients circumvent the Treasury blacklist.

Is it possible that by alluding to the Lloyds case Morgenthau was hinting that the banks in the LIMMT matter were not purely innocent parties? After all, there have been numerous other cases in which large banks have been accused of helping shady clients by failing to enforce rules designed to thwart money laundering. For instance, a decade ago Citibank was accused of doing nothing to stop the brother of Mexico’s former president from transferring large sums allegedly linked to drug smuggling and influence peddling. In 2004 Japan ordered the closure of Citi’s private banking operations in that country for violations that included a failure to implement money-laundering prevention procedures. In 2007 the NASD, now the Financial Industry Regulatory Authority, fined a securities subsidiary of Bank of America $3 million for violating anti-money laundering rules in failing to collect adequate information on certain high-risk accounts.

The banks may have been the fools in the LIMMT case, but they have often been knaves when it comes to the enforcement of international banking rules that may stand in the way of profit.

Are Banks Fleeing Accountability?

It may be a coincidence, but some banks are repaying the aid they received from the federal government just as some real accountability is finally being injected into the massive financial bailout that has been going on since last fall. The repayment moves so far involve relatively small regional banks, but there have been reports that Goldman Sachs, the recipient of a $10 billion federal capital infusion, is eager to buy out Uncle Sam’s holding.

The stricter accountability that the banks may be responding to is coming not from the Treasury Department but rather from the watchdog bodies that were created in the bailout legislation enacted last year—especially the Office of the Special Inspector General for the Troubled Asset Relief Program. The SIGTARP himself, Neil Barofsky (photo), just offered some remarkable testimony to the Senate Finance Committee.

First of all, he provided a clear estimate of how much the federal government is potentially on the hook for in the dozen different bailout-related programs: up to $2.976 trillion, not counting the yet-to-be-determined cost of the capital that will be offered to banks after they are subjected to a stress test. (A breakdown of the costs can be found in the attachment at the back of his prepared testimony.)

Second, Barofsky reported that he demanded and received reports (still being analyzed) from every one of the 364 TARP recipients about how they are using federal funds and whether they are complying with restrictions on executive compensation.

Barofsky is also conducting special audits on external influences over the TARP application process, the various forms of assistance going to Bank of America, the controversial bonus payments at AIG and the payments AIG made to counterparties using federal bailout funds.

Whereas other federal officials have presented the TARP programs as impenetrable black boxes, Barofsky wants to shine a light on everything—even the initiatives that were designed before he took office and do not explicitly provide for SIGTARP oversight.

Barofsky emphasizes that his office is the only TARP watchdog that has criminal law enforcement powers, and he clearly intends to use them. He’s launched “more than a dozen criminal investigations” of possible bailout fraud and is working with the New York division of the High Intensity Finance Crime Area program, an initiative launched in the Treasury Department in 1999 to coordinate the prosecution of money laundering. Barofksy has even set up a whistleblower hotline (877-SIG-2009).

He is also working with the other TARP watchdogs, two of whom just testified with him in the Senate: Prof. Elizabeth Warren, head of the Congressional Oversight Panel, and Gene Dodaro, acting head of the Government Accountability Office.

Together, these entities are beginning to cut through the cloud of obfuscation that former Treasury Secretary Henry Paulson and, to an extent, his successor Timothy Geithner have built up around the bailouts. And some day in the not too distant future, some of the miscreants who caused the crisis and then abused the bailout may find themselves behind bars. That would be real accountability.

The Corporate Crime Fighting Budget

The call to boost taxes on the wealthy to start paying for healthcare reform is not the only refreshing thing about the budget outline just released by the Obama Administration. There is also a marked shift toward tighter regulation of business. Here are some features of what might be called the Corporate Crime Fighting Budget:

Cracking down on corporate polluters. The Environmental Protection Agency—a joke during the Bush Administration—is slated for a 34 percent increase in funding. This would result in a hike in the budget for core functions such as enforcement to $3.9 billion, an all-time high for the agency.

Cracking down on abusive employers. Obama wants the Department of Labor—another agency enervated by the Bush crowd—to get a smaller increase than EPA, but the additional funds are intended to rebuild DOL’s responsibilities in workplace monitoring. The budget document proposes to “increase funding for the Occupational Safety and Health Administration, enabling it to vigorously enforce workplace safety laws and whistleblower protections, and ensure the safety and health of American workers; increase enforcement resources for the Wage and Hour Division to ensure that workers are paid the wages that are due them; and boost funding for the Office of Federal Contract Compliance Programs, which is charged with pursuing equal employment opportunity and a fair and diverse Federal contract workforce.”

Prosecuting white-collar crooks. The section on the Justice Department in the budget document says that the Administration will seek [not yet quantified] “resources for additional FBI agents to investigate mortgage fraud and white collar crime and for additional Federal prosecutors, civil litigators and bankruptcy attorneys to protect investors, the market, the Federal Government’s investment of resources in the financial crisis, and the American public.”

Thwarting purveyors of tainted food. The Administration plans to “take steps to improve the safety of the Nation’s supply of meat, poultry and processed egg products and to ensure that these products are wholesome, and accurately labeled and packaged.” The proposed budget for the Agriculture Department “provides additional resources to improve food safety inspection and assessment and the ability to determine food safety risks. This will lead to a reduction in foodborne illness and improve public health and safety.” The Food and Drug Administration, which is under the auspices of the Department of Health and Human Services, would also get a hike in funding.

Restricting plunderers of national resources. The section of the budget document on the Interior Department outlines the Administration’s intention to rein in the windfalls long enjoyed by extraction companies with leases to drill and mine on public lands. The plan includes “a new excise tax on offshore oil and gas production in the Gulf of Mexico to close loopholes that have given oil companies excessive royalty relief” as well as the imposition of user fees and more realistic royalties for oil and gas drilling on federal lands.

Controlling drug and healthcare price gouging. The general framework for healthcare reform released by the Administration as part of the budget document contains plans to slow down the growth in Medicare costs. This includes a proposal to force providers of privatized coverage under the name of Medicare Advantage to participate in competitive bidding. Medicare drug costs would be reined in by tightening oversight of Part D spending and by preventing brand-name pharmaceutical companies from paying generic drug producers to keep their low-cost products off the market.

To these should be added tax proposals that would put an end to various boondoggles that have enriched oil companies, hedge funds and other anti-social elements. Some of Obama’s proposals (especially regarding healthcare) do not go nearly far enough, but the budget as a whole represents a major break from the priorities of the Bush Administration. Though you would hardly know that from the geeky, matter-of-fact way it is being promoted by Budget Dirtector Peter Orszag (photo).

Budget documents are, of course, merely wish lists conveyed by the executive to the legislative branch. In the short term, the main impact of Obama’s blueprint will be to launch a massive wave of business lobbying. Now it is up to Congress to resist the entreaties of those paid persuaders and make it clear that the days of unchecked corporate giveaways have come to an end.

Not Quite Beyond Petroleum

For the past eight years, the oil giant formerly known as British Petroleum has tried to convince the world that its initials stand for “Beyond Petroleum.” An announcement just issued by the U.S. Environmental Protection Agency may suggest that the real meaning of BP is Brazen Polluter.

The EPA revealed that BP Products North America will pay nearly $180 million to settle charges that it has failed to comply with a 2001 consent decree under which it was supposed to implement strict controls on benzene and benzene-tainted waste generated by the company’s vast oil refining complex in Texas City, Texas, located south of Houston. Since the 1920s, benzene has been known to cause cancer.

Among BP’s self-proclaimed corporate values is to be “environmentally responsible with the aspiration of ‘no damage to the environment’” and to ensure that “no one is subject to unnecessary risk while working for the group.” Somehow, that message did not seem to make its way to BP’s operation in Texas City, which has a dismal performance record.

The benzene problem in Texas City was supposed to be addressed as part of the $650 million agreement BP reached in January 2001 with the EPA and the Justice Department covering eight refineries around the country. Yet environmental officials in Texas later found that benzene emissions at the plant remained high. BP refused to accept that finding and tried to stonewall the state, which later imposed a fine of $225,000.

In March 2005 a huge explosion (photo) at the refinery killed 15 workers and injured more than 170. The blast blew a hole in a benzene storage tank, contaminating the air so seriously that safety investigators could not enter the site for a week after the incident.

BP was later cited for egregious safety violations and paid a record fine of $21.4 million. Subsequently, a blue-ribbon panel chaired by former secretary of state James Baker III found that BP had failed to spend enough money on safety and failed to take other steps that could have prevented the disaster in Texas City. Still later, the company paid a $50 million fine as part of a plea agreement on related criminal charges.

In an apparent effort to repair its image, BP has tried to associate itself with positive environmental initiatives. The company was, for instance, one of the primary sponsors of the big Good Jobs/Green Jobs conference held in Washington earlier this month. Yet as long as BP operates dirty facilities such as the Texas City refinery, the company’s sunburst logo, its purported earth-friendly values and its claim of going beyond petroleum will be nothing more than blatant greenwashing.

Another Crooked Philanthropist?

A recent article in the Wall Street Journal discussed the ways a person can enhance his or her profile on Google by creating positive material that will displace unflattering references from the top of the search results. R. Allen Stanford, who has just been accused by the U.S. Securities and Exchange Commission of engaging in a “massive, ongoing fraud,” seems to have done something similar in the management of his public image.

Until word got out recently that federal authorities were combing through records at the Houston offices of his Stanford Financial Group operation, Stanford (center in photo) had successfully cultivated his image as a flamboyant Caribbean-based financier, a leading promoter in the world of cricket and an active philanthropist. He began referring to himself as Sir Allen after being knighted by the government of Antigua.

While investors were most interested in the spectacular yields his firm provided on so-called certificates of deposit (which were actually more exotic investments), Stanford seemed to work hardest in his efforts on behalf of St. Jude Children’s Research Hospital in Memphis and his Stanford 20/20 cricket tournaments. He brought his interests in philanthropy and sports together in 2007, when Stanford Financial took over the primary sponsorship of a PGA golf tournament benefitting the children’s cancer hospital. In 2007 the event became known as the Stanford St. Jude Championship.

Until this month, Stanford’s public record in news databases such as Nexis was dominated by articles concerning his charitable and sporting side activities. A little digging, however, unearthed what Stanford may have been trying to suppress: a series of unflattering articles in the late 1990s and early 2000s about his efforts to block legislation in Congress to crack down on offshore money laundering, especially in the Caribbean, where Stanford’s offshore bank, Stanford International Bank, is based.

In June 1999 Shelley Emling of Cox News Service wrote a story suggesting that Stanford was involved in weakening money laundering regulations in Antigua, where he had taken up residence. An article by David Ivanovich published on July 16, 2000 in the Houston Chronicle provided more details on Stanford’s role in strengthening Antigua’s bank secrecy practices, which were a source of frustration for U.S. officials trying to prevent money laundering.

In 2002 Stanford was in the news again after Public Citizen published a report listing Stanford Financial Group as a major provider of soft money contributions to promote the campaign against new U.S. money laundering proposed during the Clinton Administration. The report found that major recipients of the contributions included 527 groups affiliated with Senator Thomas Daschle and Democratic Caucus Chairman Martin Frost.

The Center for Responsive Politics points out that Stanford continued to invest in the political process even after the money laundering controversy died down. The group calculates that Stanford Financial’s PAC and the firm’s employees have given $2.4 million to federal candidates since 1989, and the firm has spent $4.8 million on federal lobbying efforts during the past decades.

It is difficult to know if these contributions helped Stanford thwart earlier investigations of his money management practices. One also wonders how many other possible business crooks are out there deflecting attention from their misdeeds by wrapping themselves in heartwarming activities such as fundraising on behalf of pediatric cancer victims. It is unfortunate that worthy endeavors such as St. Jude have to depend on wealthy supporters who may have much less noble ulterior motives.

The Banality of Corporate Evil

Our culture worships spunky small businesses and entrepreneurship. Stewart Parnell epitomized that ideal and was living the good life in Lynchburg, Virginia until last month, when his Peanut Corporation of America (PCA) was linked to one of the biggest salmonella outbreaks—at least eight deaths and more than 500 illnesses—ever to occur in the United States.

According to federal officials, PCA knowingly shipped contaminated peanuts as well as peanut butter and paste on numerous occasions, including 32 truckloads meant for the school lunch program. PCA also provided tainted raw materials for many large food processors, which have issued a cascade of product recalls. PCA is now the subject of a criminal investigation, and this week Parnell (photo) was compelled to appear at a Congressional hearing, where he grim-facedly invoked the Fifth Amendment and declined to answer questions.

He had reason to look grim. The House Energy and Commerce Committee released several e-mail messages sent by Parnell, including one in which he told his plant manager to make shipments (his exact words were “let’s turn them loose”) despite some test results showing evidence of salmonella. In another he complained that those problematic results were “costing us huge $$$$$.”

This was also a week when the chief executives of the country’s largest financial institutions were called before Congress and pelted with questions about bonuses paid out amid the massive federal bailout of the industry. But these days everyone expects executives of large corporations to be reprobates.

The Parnell situation is more chilling. He is the head of a privately held company with annual revenues of only about $25 million, which makes it a small business by contemporary standards. PCA had almost no public profile until last month, and Parnell’s only previous time in the national spotlight (though a much dimmer one) was in 2005, when Bush Administration Agriculture Secretary Mike Johanns appointed him to the Peanut Standards Board. (Parnell was just ousted from the panel by the USDA, which also announced that it is seeking to debar PCA from doing business with the federal government.)

According to the Atlanta Journal-Constitution, PCA was built by Parnell’s father, Hugh Parnell, as an outgrowth of his ice cream sandwich business. The company later got caught up in the takeover wave that swept through the small world of peanut processing. The Journal-Constitution reports that PCA was sold in 1995 to Morven Partners, the vehicle set up by billionaire investor John Kluge to take over various nut companies such as Jimbo’s Jumbos.

Jimbo’s, by the way, was mentioned in one of the e-mails released this week by the House. In it Parnell said: “We need to find out somehow what our competition (JIMBOS) is doing [about salmonella] and at the very least mimic their policy.”

Stewart Parnell and his brother Hugh Brian Parnell, the Journal-Constitution goes on to report, became management consultants for Morven until the late 1990s, when Stewart repurchased PCA.

Hugh Brian Parnell told reporters that work and family occupy his brother Stewart’s time. “He doesn’t drink, smoke or socialize,” Huge was quoted as saying. “He’s a family man. You never see him without a grandchild around.” The Associated Press quotes a neighbor of Stewart’s as saying: “He’s always been an upstanding, generous person and a pillar of the community.” Parnell and PCA didn’t have a much of a presence in the business community in Lynchburg, where the company has its modest headquarters. “This episode is the first time I’ve heard of them,” the president of the city’s chamber of commerce was quoted as saying.

Even less is known about Parnell’s associate David Royster III, who reportedly financed the acquisitions that allowed PCA to reach its current size. Royster is one of the younger members of a family that operates a variety of apparently respectable businesses in Shelby, North Carolina.

The apparent fact that supposed pillars of the community can engage in outrageously reckless business practices shows that there is sometimes a fine line between the aggressive pursuit of profit and behavior that can legitimately be called evil. Those who would venerate entrepreneurship should keep in mind that it can also have a dark side.

Merger of Miscreants

Monday may be remembered as the day when American big business announced some 50,000 layoffs, but one large company seemed to take a step toward growth. Pharmaceutical giant Pfizer unveiled plans that day to acquire its smaller competitor Wyeth in a stock and cash deal estimated at $68 billion. Pfizer crowed that the merger would create “the world’s premier biopharmaceutical company.”

While the deal may grow Pfizer’s revenues, it’s unclear who will benefit. The combined workforce of the two companies will be slashed by nearly 20,000 jobs. This will continue a policy of downsizing pursued by Pfizer CEO Jeffrey Kindler (photo) since he came to the giant drug firm from McDonald’s, of all places, in 2006.

Although Pfizer claims that the merged company will be better positioned to “respond more quickly and effectively to meet changing health care needs,” it is doubtful that patients will gain much from the creation of the mega-corporation. Pfizer has been feasting on the profits generated by Lipitor, but the company’s patent rights to the cholesterol drug expire in 2011 and there is nothing major in its pipeline to replace it. Even the Wall Street Journal editorial page sees the Wyeth acquisition as a sign of the “decline of innovation” in the drug industry.

Rather than developing new breakthrough products, companies like Pfizer seem mostly preoccupied with their legal issues. Kindler’s background, after all, is in litigation rather than science or even finance. Apart from patent issues, he has had to contend with the company’s regulatory problems. In fact, while everyone was focused on the merger, Pfizer announced that it had agreed to pay $2.3 billion (a record amount) to settle federal charges in connection with its off-label marketing of the now-withdrawn painkiller Bextra. The revelation was buried in a long press release announcing the company’s fourth-quarter financial results.

Bextra is not Pfizer’s only controversy. In October, for example, the New York Times published a story alleging that the company had manipulated the publication of scientific research to bolster the use of its epilepsy treatment Neurtonin for other disorders while suppressing research that didn’t support those uses. In 2006 the company was accused of testing an unapproved drug on children in Nigeria.

Pfizer’s bride-to-be Wyeth (formerly known as American Home Products) also has a record that is far from unblemished. The summary of legal proceedings in the company’s last annual financial report goes on for 14 pages. Most of the lawsuits are product liability cases involving hormone therapy, childhood vaccines, the anti-depressant Effexor, the contraceptive Norplant and, most importantly, the combination diet drug known as fen-phen, which was withdrawn from the market more than a decade ago after reports that its use was linked to possibly fatal heart valve damage. The findings unleashed a wave of tens of thousands of lawsuits against the company, including a case in Texas in which a jury awarded a single plaintiff more than $1 billion in damages. The company set up a $3.75 billion fund as part of the attempted resolution of a national class action case. Another $1.3 billion was added to the fund in 2006. Many plaintiffs opted out of the class and negotiated individual settlements with the company.

Big mergers are often justified with the claim that the combination will enhance product innovation. The main synergy likely to emerge from the marriage of Pfizer and Wyeth will be in its litigation department.

Citigroup (1998-2009) R.I.P.

Citigroup was born illegitimate and, having recently become a ward of the federal government, is now in the process of being dismembered. It’s amazing what a difference a decade makes. In April 1998 financial wheeler dealer Sandy Weill (photo) defied federal laws preventing marriages among banks, brokerage houses and insurance companies and pushed through a then-astounding $70 billion merger between his Travelers Group and commercial banking giant Citicorp. Weill won his bet that Glass-Steagall restrictions would fall, and he created what was then the world’s largest financial institution.

The deal was a desperate attempt to achieve the 1990s dream of the financial supermarket—institutions that would meet the public’s every monetary need, from checking accounts and business loans to mutual funds, homeowners insurance and credit cards. It was also a reach for supposed greatness by Weill and his Citicorp counterpart John Reed. As Business Week put it at the time: “In addition to chutzpah, Reed, 59, and Weill, 65, are propelled by their shared desire to go out in a blaze of glory.”

“Glory” is not exactly the way to describe the subsequent ten years of controversy, scandal and unwise investment and lending practices. Weill and Reed, each with the title of co-chief executives, bickered openly with each other. The company’s private banking operation was caught up in a money laundering investigation. Its credit card operations had to pay $45 million to settle lawsuits charging that consumers were improperly charged late fees. The bank was accused of enabling some of Enron’s accounting fraud. It was also embroiled in the WorldCom accounting scandal and had to pay $2.65 billion to settle lawsuits brought by investors in the failed telecommunications company.

But one of the worst moves was the decision in 2000 to acquire Associates First Capital, a pioneer in the subprime lending market that would later help to weaken the entire banking system. The acquisition, like the creation of Citigroup itself, was part of the mindset of trying to cover all corners of the financial services industry and of pumping up business even when transactions were excessively risky. The company touted plans to clean up the disreputable subprime business, but even that was a sham. According to the Wall Street Journal (7/18/02), branch offices were notified ahead of time when undercover “mystery shoppers” were being sent in to investigate loan origination practices.

Chuck Prince, who was named CEO in 2003, tried to clean up Citigroup in part by selling off pieces of the supermarket such as the Travelers life insurance business. Ultimately, though, Prince himself was disposed of as well. Yet the leviathan’s problems continued. Now his successor, Vikram Pandit, is taking a similar approach of lopping off parts of the company in the vain hope this will do the trick.

The just-announced decision to spin off the Smith Barney brokerage business into a joint venture with Morgan Stanley will bring in a much needed cash infusion of $2.7 billion. Yet it appears Citi is still living in a state of denial. It put out a press release headlined “Morgan Stanley and Citi to Form Industry-Leading Wealth Management Business Through Joint Venture.” What it really should have said is: “we screwed up royally, and despite getting tens of billions of taxpayer dollars, we’ve got to sell off some of our assets that are still worth something.” We’ll see how long the bravado continues as the company is forced to cut off more of its many limbs.

Satyam’s Fraudulent “Maquiladora of the Mind”

It was only a few years ago that a group of offshore outsourcing companies based in India seemed poised to take over a large portion of the U.S. economy. Business propagandists insisted that work ranging from low-level data input to skilled professional work such as financial analysis could be done faster and much cheaper by workers hunched over computer terminals in cities such as Bangalore. The New York Times once described one of these offshoring companies as “a maquiladora of the mind.”

Among the most aggressive of the Indian firms was Satyam Computer Services Ltd., which signed up blue-chip clients such as Ford Motor, Merrill Lynch, Texas Instruments and Yahoo. In a 2004 report I wrote for the U.S. high-tech workers organization WashTech, I found that Satyam was also among the offshoring companies that were doing work for state government agencies. It was hired, for example, as a subcontractor by the U.S. company Healthaxis to develop a system for handling applications for medical insurance services provided by the Washington State Health Care Authority. As it turned out, Healthaxis’s contract was terminated, allegedly because of late delivery and poor quality in the work done by Satyam.

The Washington State fiasco may have been an early omen of things to come. Satyam has just admitted that for years it cooked its books and engaged in widespread financial wrongdoing. The revelation came in a letter sent to the company’s board of directors by Satyam founder and chairman B. Ramalinga Raju (photo), who simultaneously tendered his resignation.

Raju wrote that what started as “a marginal gap between actual operating profit and the one reflected in the books” eventually “attained unmanageable proportions” as the company grew. The fictitious cash balance grew to more than US$1 billion. “It was like riding a tiger,” Raju colorfully wrote, “not knowing how to get off without being eaten.”

While admitting that he engaged in very creative accounting, Raju insisted he did not personally benefit from the fraud, denying for instance that he had sold any of his shares in the company. I guess it is meant to be some consolation that among his sins Raju is not guilty of insider trading.

Apart from Raju, the party most on the hot seat is the company’s auditor, PriceWaterhouseCoopers, whose Indian unit gave Satyam’s financial reports a clean bill of health. The Satyam scandal is being called India’s Enron. It should probably also be called India’s Arthur Andersen as this seems to be another case in which an auditor was either oblivious to widespread accounting misconduct by one of its clients or complicit in it.

Some soul-searching is probably also in order for the many large U.S. corporations that have not hesitated to take jobs away from American workers and ship the work off to Indian companies such as Satyam. The revelation that much of the work has been going to a crooked company is all the more galling.

Wanted: The Big Fish

In its waning days, the Bush Administration’s Environmental Protection Agency wants us to think that it is a serious crime-fighting organization. The agency’s enforcement division recently announced plans to “enlist the public in tracking down fugitives accused of violating environmental laws and evading arrest.” The innovation is a web page called EPA Fugitives, an online version of the wanted posters traditionally displayed in post offices.

There’s nothing wrong with such an initiative, but the two dozen culprits featured on the site are all decidedly small fish. Some are charged with serious offenses such as the dumping of hazardous wastes, while others are accused of less than monumental crimes such as illegally importing automobiles that don’t meet emissions standards or “aiding and abetting false entries into an Oil Record Book” of a ship.

Where is the agency’s zeal for highlighting the environmental crimes of large corporations? It’s been greatly diminished amid a general downplaying of enforcement activity. Last year the Environmental Integrity Project put out a report showing a sharp decline in enforcement efforts during the Bush Administration. “The bad news here is that it now costs less to pollute,” EIP Director Eric Schaeffer said at the time.

This is not to say that the EPA has let large corporations entirely off the hook. In fact, just this week the agency announced a settlement with Exxon Mobil under which the oil giant will pay $6.1 million in civil penalties for violating the terms of a 2005 consent decree concerning air pollution caused by the company’s refineries in Texas, California and Louisiana.

It apparently takes truly brazen actions such as those of Exxon to trigger real action by the EPA against a big company (though a $6 million fine is not much of a hardship for a company currently earning about $5 billion a month). If you look at the archive of the agency’s press releases on enforcement actions, the offending parties are most often small firms and individuals.

Perhaps the Obama Administration’s EPA should consider a new web page of its own: a rogue’s gallery of the large corporations that are doing the most to pollute the environment and exacerbate the climate crisis.