Environment

What the Shell?

ogoniland — United Nations Environment Program photo of oil contamination in Nigeria.

It seems that the multinational oil giants are taking turns having spills. After BP’s big mess in the Gulf of Mexico last year and Exxon Mobil’s accident in Montana this year, it is now Royal Dutch Shell that is spewing oil where it should not be going.

More than 50,000 gallons have leaked from a Shell pipeline off the coast of Scotland in the worst North Sea oil spill in more than a decade. Shell has had difficulty locating the source of the leak and identifying its cause.

Just as the Exxon Mobil accident could be seen as a warning about the perils of the giant Keystone XL pipeline project extending from Canada to Texas, so can the Shell accident be viewed as a reminder about the dangers of another petroleum initiative: the proposal by Royal Dutch Shell’s U.S. subsidiary, Shell Oil, to begin drilling exploratory wells in the Chukchi Sea off the northern coast of Alaska. The North Sea accident occurred only days after the U.S. Interior Department gave Shell conditional approval for the Alaska project.

The gods seem to strike back each time the Obama Administration decides to give a green light to offshore oil activity. BP’s gulf disaster happened only days after Obama opened vast coastal areas to new drilling.

There are countless environmental reasons why Shell’s Alaska initiative is a bad idea. It should also be blocked for another reason: Shell cannot be trusted.

For the past three decades or more, Shell has been involved in a long series of accidents, spills and other mishaps at many of its offshore and onshore facilities around the world. It also has a checkered history with regard to human rights and was implicated in a scandal about false reporting about its oil reserves. Here are some of the more notorious features of the company’s track record, which I compiled for a profile on the Crocodyl wiki:

A 1988 explosion at a Shell refinery in Louisiana killed seven workers, whose families sued the company and collected more than $40 million in damages.
In 1989 Shell paid $19 million to settle federal charges relating to a spill at its refinery in Martinez, California that the company did not disclose for four weeks.
In 1995 Shell agreed to pay $3 million to settle a lawsuit brought by the California Public Interest Research Group charging that the company had dumped illegal amounts of selenium into San Francisco Bay and the Sacramento-San Joaquin River Delta.
In 1995 Royal Dutch Shell was also the target of a boycott and other protests in Europe over a plan by the company and its joint venture partner Exxon to sink an obsolete offshore oil storage facility known as Brent Spar in the North Sea rather than dismantling it. Environmental groups, led by Greenpeace, warned that the structure, which contained oil sludge, heavy metals and some low-grade radioactive waste, could damage the food chain for fish in the area. The company gave in the pressure and brought the Brent Spar to shore.
In 1998 Shell Oil agreed to pay $1.5 million to settle federal charges that its refinery in Roxanna, Illinois was responsible for illegal discharges of pollutants into the Mississippi River.
In 2001 Shell Oil and three other major petroleum companies settled a lawsuit filed in California by agreeing to clean up some 700 sites in the state that had been contaminated by the gasoline additive MTBE.
In 2005 Shell was fined £900,000 in connection with the 2003 deaths of two workers on a North Sea oil platform as the result of a major gas leak.
In the late 2000s, Royal Dutch Shell found itself facing increasing criticism for its huge liquefied natural gas project on the island of Sakhalin in the Russian Far East. Pacific Environment, a San Francisco-based advocacy group, collaborated with Russian activists to form Sakhalin Environment Watch, which challenged the offshore Sakhalin project because it threatened the survival of the world’s most endangered species of whales—Western Pacific Grays. In 2008 the British newspaper The Observer reported that it had obtained dozens of internal e-mails showing that Shell officials in London sought to influence the conclusions of a purportedly independent environmental review of the Sakhalin project.
Shell has also been heavily involved in the environmentally disastrous tar sands industry in Canada.

Shell’s tarnished human rights record dates back to the 1980s, when it was targeted for its investments in apartheid-era South Africa. 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. A lawsuit charging Royal Dutch Shell with human rights violations in Nigeria 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.

A report recently released by the United Nations Environment Program estimates that a clean-up of oil industry contamination in Ogoniland will cost at least $1 billion and take up to 30 years.

On its corporate website, Shell insists that “we are qualified to do the job right — to explore for offshore oil and gas in Alaska in a very safe and careful way.” On the Other Earth, perhaps. But not on this one.

Perilous Pipelines

exxonpapertowels — ExxonMobil's paper towel mobilization

At the height of the controversy last year over the BP oil spill in the Gulf of Mexico, top executives from four competing oil giants appeared before Congress and distanced themselves from their British rival.

“We would not have drilled the well the way they did,” smugly stated ExxonMobil CEO Rex Tillerson. “It certainly appears that not all the standards that we would recommend or that we would employ were in place,” chimed in Chevron chairman John Watson.

Now that ExxonMobil is at the center of an oil pipeline spill into Montana’s flooded Yellowstone River, Tillerson should be feeling somewhat less self-satisfied. And the rest of us have another reminder that poor safety practices in the petroleum industry are far from an anomaly.

It is also a reminder that companies professing concern about the environment can end up being major offenders. In 2008 the ExxonMobil refinery in Billings served by the Silvertip pipeline that just burst received certification from the Wildlife Habit Council for its efforts to conserve ecosystems and protect wildlife in and around company operations. Some of that wildlife is now covered in crude oil.

When people hear about oil spills, they tend to think of the large offshore incidents such as the BP mess in the gulf and ExxonMobil’s 1989 disaster in Alaska’s Prince William Sound. Equally dismal is the history of onshore spills caused by ruptures in the vast network of pipelines that carry crude oil from drilling sites to refineries.

A year ago this time, the news media were transmitting images very similar the ones now coming out of Montana. In July 2010 a burst pipeline released more than 800,000 gallons of oil into the Kalamazoo River in southern Michigan.

The company involved in the Michigan accident–Enbridge Inc., operator of the world’s largest crude oil pipeline system–had been warned by federal regulators that it was not properly monitoring corrosion on the pipeline. Over the past decade, Enbridge’s pipelines have been involved in a long list of ruptures and leaks in places such as Minnesota, North Dakota, Wisconsin and Alberta.

Enbridge, which is based in Canada, has annual revenues of more than $15 billion, has not felt much pain from the fines imposed by the U.S. regulators at the Pipeline and Hazardous Materials Safety Administration, which are often below $100,000. However, in response to a November 2007 explosion in Clearbrook, Minnesota that took two lives, Enbridge was fined $2.4 million.

What’s even more troubling than Enbridge’s past record is that the company is seeking to greatly expand its network, with a special focus on the environmentally disastrous tar sand fields of northern Alberta. Bringing the filthy oil output of the tar sands down to the United States is also the objective of the huge Keystone XL pipeline that would pass through eastern Montana (and the Yellowstone River) on its way to Texas.

Moreover, it would traverse the Ogallala Aquifer, which, NRDC points out, serves as the primary source of drinking water for millions of Americans and provides 30 percent of the nation’s ground water used for irrigation. Keystone XL, an expansion of an existing pipeline that opened last year, is awaiting federal approval. Earlier this year the existing pipeline was shut down for about a week after a series of a dozen leaks at pumping stations.

For companies such as TransCanada, Enbridge and ExxonMobil, the sky’s the limit when it comes to what they are willing to spend on projects such as Keystone XL (its price tag is $7 billion). Yet when it comes to cleaning up their messes, things suddenly become austere. The main tools that ExxonMobil’s crews in Montana seem to be employing are glorified paper towels. If the fines for violations were more substantial, the pipeline companies might take safety more seriously.

Toxic Legacies

Bunker-Hill_smelter — Bunker Hill smelter circa 1984

In his novel Bleak House, Charles Dickens invented the interminable lawsuit Jarndyce and Jarndyce to satirize the dysfunctional British court system. A real-life Jarndyce case just settled in U.S. federal court illustrates the glacial pace at which hazardous waste cleanup disputes get resolved and undermines the arguments of those who want to weaken environmental enforcement.

Hecla Mining Company has agreed to pay $263 million plus interest to resolve a lawsuit dating back 20 years. In 1991 Hecla and other mining companies were sued by the Coeur d’Alene Tribe over damages to natural resources in Idaho’s Silver Valley caused by some 100 million tons of toxic mining waste released into local waterways over the decades. A smelter used by the companies caused massive lead emissions that contaminated soil and showed up at high levels in the bloodstream of local children. The federal government joined the case in 1996.

The lawsuit was filed after years of efforts by the mining companies to evade responsibility for cleaning up one of the country’s most polluted areas, which was designed the Bunker Hill Superfund site in 1983. The federal government began spending several hundred million dollars on the cleanup—costs that the lawsuit was meant to recoup. (The eventual cost would surpass $2 billion.)

The corporate defendants made that recovery process as difficult and time-consuming as possible. One company, Gulf Resources and Chemical, went bankrupt in the 1990s, leaving little in the way of assets. Another, Asarco, also filed for bankruptcy in 2005 in an apparent attempt to sidestep huge environmental liabilities around the country, but the U.S. Justice Department was later able to get the company that took it over, Grupo Mexico, to pay $1.8 billion for cleanup costs at more than 80 toxic sites in 19 states, including $436 million for the Bunker Hill site.

The new Hecla settlement is welcome news, but the fact that it has taken nearly three decades from designation of the Bunker Hill site to this financial resolution indicates there is something seriously wrong with the Superfund system (and the courts).

Ironically, the Bunker Hill story is in many ways a best-case scenario in that the federal government was able—eventually—to recover a substantial portion of its cleanup costs. In numerous cases, responsible corporate parties no longer exist or don’t have adequate assets.

Congress anticipated this problem when it established the Superfund program in 1980. It created a trust fund for the program that received revenues generated by excise taxes on two highly polluting industries—petroleum and chemicals—as well as a corporate environmental income tax. The sources boosted the trust fund balance to nearly $4 billion by end of 1996.

The authority for these “polluter pays” taxes expired in 1995, and the balance began to dwindle, reaching zero in 2004. In recent years, Congress has kept the fund alive through modest appropriations, but these are subject to political whims.

Last year the Obama Administration called for reinstatement of the Superfund tax, giving a boost to the lonely efforts of Oregon Rep. Earl Blumenauer and New Jersey Senator Frank Lautenberg. However, given the current composition of Congress, that proposal seems to be going nowhere.

Unfortunately, the choice is not simply between a Superfund program financed by polluting industries and one funded by the general public. If some conservative groups had their way, the Superfund program would be eliminated outright or weakened by transferring responsibility to the states.

Think how that would have played out in Idaho, where state officials kept their distance from the Bunker Hill case until the last minute, when they signed on to get a cut of the money from Hecla. For years, those officials (along with members of the state’s Congressional delegation) vilified the Environmental Protection Agency for aggressively pursuing the Bunker Hill cleanup while they said little about the companies that caused the mess.

That anti-EPA attitude is, alas, all too common today among corporate apologists both in Washington and in many states. The Superfund program, for all its limitations, remains one of our main tools for dealing with the legacy of corporate environmental irresponsibility. It needs to be on as firm a footing as possible.

Making Honeywell Feel the Heat

How would you describe the situation of a corporation involved in union-busting, mishandling of radioactive waste, production of nuclear weapons and the effort to lower corporate tax rates while cutting Social Security and Medicare? If you are Barron’s, you’d say the firm is “in its sweetest spot in more than a decade.”

That’s the way the investment weekly describes Honeywell International in a recent article that gushes over the company’s financial results and predicts that its stock is “poised for liftoff.” Honeywell, a $33 billion transnational, is viewed differently in Metropolis, Illinois, where some 230 members of the United Steelworkers union have been locked out of their jobs for more than nine months.

Apologists for the attacks on public employees often try to disavow anti-union motivations by saying they have no problem with collective bargaining in the private sector. Honeywell is a glaring reminder that challenges to worker rights can be found among employers of all types these days.

The dispute in Metropolis—which calls itself the hometown of the fictional character Superman—brings together a variety of current hot-button issues, including unions, nuclear power, environmental protection, healthcare coverage and pensions. Honeywell’s plant is the sole facility in the country that converts uranium ore into the uranium hexafluoride gas used in the production of both nuclear power and nuclear weapons. This is a risky process that involves highly toxic materials.

These dangers were highlighted in December 2003, when an accidental release of toxic gas forced the evacuation of nearby residents and the shutdown of the plant for four months. The U.S. Nuclear Regulatory Commission (NRC) issued two violations relating to the way the company handled the incident.

Given such hazards, the members of Steelworkers Local 7-669 have long focused on safety issues, both for themselves and for the surrounding community. The union has been particularly concerned about the high rate of cancer among the workforce and thus has sought to negotiate good health coverage for active workers and retirees. During contract renegotiations last year, Honeywell sought to eliminate retiree health benefits, reduce pensions for new hires, cap severance pay and contract out maintenance. When the union balked but declined to strike, the company abruptly locked out the workers in June. And in a move made all the more reckless by the dangerous nature of the work, the company brought in poorly trained replacements to keep the plant operating.

In September, a loud explosion was heard at the plant but there were no reports of toxic releases. A Steelworkers report notes that the company was cited by the NRC for improperly coaching replacement working during on-site job evaluations by federal inspectors. Honeywell’s safety image was further tarnished just a few weeks ago, when the U.S. Justice Department and the EPA announced that the company had paid a criminal fine of $11.8 million to resolve a charge of illegally storing hazardous and radioactive materials in Metropolis.

The $11 million is the latest addition to the more than $650 million in fines and damages Honeywell has paid since 1995 in connection with 32 instances of misconduct collected by the Project On Government Oversight in its Federal Contractor Misconduct Database (the company ranks 17^th in amount paid out).

Honeywell’s record of corporate irresponsibility goes back even farther. From the late 1960s through the late 1980s, the old Honeywell (prior to its 1999 takeover by AlliedSignal, which adopted the name) was targeted by antiwar activists because of its production of cluster bombs and land mines that were widely used in Vietnam and later because it was unwilling to take responsibility for clearing munitions that remained after the war was over.

Despite this checkered history, Honeywell has remained a large federal contractor. It is involved, for example, in both the clean-up of the Cold War-era Savannah River nuclear weapons complex in South Carolina and the construction of a new nuclear arms production facility in Kansas City.

And if all the above is not enough controversy, Honeywell CEO David Cote was named by President Obama (before the lockout) to the National Commission on Fiscal Responsibility and Reform, which issued a report in December that, among other things, proposed cuts in corporate tax rates. Cote issued a personal statement complaining that the report did not take a harder line on Medicare and Medicaid, and he recently called for cuts in Social Security. He also just told Bloomberg Television that he would love to see corporate income taxes entirely eliminated.

For many people, the Honeywell name is still associated with thermostats. But today, it is a poster child for much that is wrong with corporate America—mistreatment of workers, environmental recklessness, military profiteering, and unwillingness to pay a fair share of taxes. It should be made to feel more of the heat itself.

Putting Off Corporate Absolution

I was just beginning to recover from President Obama’s dismaying speech at the U.S. Chamber of Commerce when I found myself in the middle of another effort to gloss over the misdeeds of big business. This occurred at the annual conference of the BlueGreen Alliance, which brought together some 1,600 labor and environmental activists to discuss the prospects for a sustainable economy but also invited representatives of some supposedly enlightened corporations.

When we gathered for lunch on the first day we first had to listen to a presentation by David Kiser, a vice president at International Paper, which is listed in the conference program as one of the “Platinum Sponsors” of the event. Kiser went on about IP’s commitment to “environmental stewardship” and “caring for employees.”

I had to restrain myself from laughing out loud. IP has one of the worst track records of any major corporation when it comes to both labor and environmental practices. Some of the earliest anti-corporate research I ever did was to assist a campaign launched by the Paperworkers union (now part of the Steelworkers, which co-founded the BlueGreen Alliance) to resist company demands for contract concessions in the 1980s.

After workers at an IP mill in Mobile, Alabama voted against the concessions, they were locked out by the company. The Mobile workers then made a coordinated bargaining pact with their counterparts at three other IP mills—in Jay, Maine, Lock Haven, Pennsylvania, and De Pere, Wisconsin—where contracts were expiring and the rank and file had decided to strike rather than concede.

IP responded by bringing in replacement workers from around the country, many of them recruited by BE&K, an Alabama-based construction company that had diversified into strikebreaking. The campaign by the striking and locked-out locals was eventually crushed by the company.

Yet during that campaign, workers at the mill in Jay, Maine (photo, from 1973) drew national attention to the environmental hazards of IP’s operations, which were a major contributor to the dioxin problem due to chlorine used in the paper bleaching process. The labor and environmental issues intersected in February 1988, when unskilled strikebreakers hired by the company accidentally broke the valve on a tank containing chlorine dioxide gas in pressurized liquid form. About 112,000 gallons of the liquid poured out and vaporized into a huge green cloud that floated out from the mill, forcing the evacuation of some 3,000 people from homes, schools and businesses. If the weather had been warmer and the winds weaker, many could have died.

Paperworker union members helped enact local ordinances in Jay that cracked down on IP’s emissions and pressured Maine state officials to file suit against the company for environmental violations. IP paid $885,000 to settle the charges. Later, the U.S. EPA also brought action against the company, which in 1991 pleaded guilty to five felony charges and paid a fine of $2.2 million. Over the following decade, IP was implicated in state and federal environmental violations in states such as New York, Massachusetts, Wisconsin, Mississippi, Florida, California, Georgia and Virginia.

Since the early 2000s the company has been trying to rehabilitate its environmental image by actions such as donating land to conservation groups and appointing the head of one such group to its board of directors. Yet the company remains a heavy polluter. In the EPA’s most recent Toxics Release Inventory, IP mills rank first and second among all paper facilities in the total volume of releases and account for 15 of the industry’s top 50 polluters, with total toxic releases of more than 43 million pounds.

IP’s labor relations are a lot less tumultuous these days, but in the last decade the company has slashed its U.S. hourly workforce from 45,000 down to 24,000.

The International Paper of 2011 is not the same as the IP of 1988, but I still find it difficult to regard the company as an ally in the effort to shape the green economy of the future. It takes a long time for the impact of past transgressions to dissipate.

This was brought home to me at another session at the BlueGreen Alliance conference. An official of the EPA was talking about how Recovery Act money is being used to help clean up a Superfund hazardous waste site in New Jersey where a long-defunct company had dumped large quantities of radioactive thorium once used in the production of gas lamps. Thorium, the EPA guy noted, has a half life of 14 billion years.

When the impact of business misbehavior can endure for eons, it will take more than a few social responsibility gestures to redeem corporate sinners.

Aiding Corporate Outlaws

In a move akin to asking burglars for suggestions on how to make security systems less effective, Rep. Darrell Issa, chairman of the Oversight and Government Reform Committee in the new Republican-dominated House of Representatives, is consulting corporations and trade associations on regulatory policy.

Seeking to revive the anti-regulatory fervor of the Reagan era, Issa is throwing around fabricated numbers ($1.7 trillion) about the cost of business compliance with government rules and bogus claims about the negative impact of regulation on job creation. And in an unambiguous signal that corporate interests are now to be considered paramount, he has been sending letters to scores of companies and associations asking for their deregulatory wish lists.

Issa’s office declined to disclose a complete list of those sent the love letters, but Politico reports that the recipients include trade groups such as the National Association of Manufacturers and the American Petroleum Institute, and individual companies such as Toyota, Duke Energy, Bayer and FMC Corp.

Of all these names, FMC is probably the least well known, but it is a good example of the kind of corporation that will probably benefit the most if Issa and his colleagues have any success – i.e. a company with an abysmal track record.

FMC is a $3 billion chemical company that produces pesticides, insecticides, herbicides and specialty chemicals for food processing and other industries. Headquartered in Philadelphia, the company dates back to the invention of an insecticide pump by John Bean in the 1880s. From the 1920s onward it functioned as a conglomerate, acquiring a wide range of food processing and chemical firms (it was also a military contractor for a period of time).

It was through these acquisitions that FMC assumed responsibility for some of the most hazardous production facilities and waste sites in the country. For example:

In 1977 FMC’s South Charleston, West Virginia plant was shut down under court order for discharging carbon tetrachloride (used in cleaning agents) into drinking-water supplies of communities along with Kanawha and Ohio rivers. After FMC and two of its executives were indicted in federal court on charges of conspiring to conceal excessive discharges at the plant, the company agreed to pay a fine of $35,000 and to place $1 million in escrow to finance future water pollution studies. In 1983 an explosion at the plant killed one worker and injured three others. OSHA later determined that safety violations by the company contributed to the conditions that caused the accident.

In 1983 FMC agreed to spend $6 million to clean up a hazardous waste site in Minnesota that threatened the drinking water supply of Minneapolis. The cleanup at the munitions plant in the town of Fridley, where chemical wastes were buried for more than two decades, involved the treatment of up to 58,000 cubic yards of soil for contaminants such as trichloroethylene.

In 1995 about 6,250 pounds of phosphorus trichloride spilled from an overfilled tank onto the ground, reacted with rainwater and sent a toxic cloud of hydrochloric acid from the FMC plant in Nitro, West Virginia.

In 1998 the EPA fined FMC $209,600 for underreporting Toxic Release Inventory data related to a phosphorous processing plant on the Shoshone-Bannock Fort Hall Reservation near Pocatello, Idaho. Later that year, FMC and the EPA reached agreement on a consent decree to resolve other violations at the plant by requiring the company to spend approximately $158 million on remedial measures. FMC also agreed to a penalty of $11.8 million, a record at the time for violations of the Resource Conservation and Recovery Act.

In 1999 FMC reached agreement with the EPA and the Justice Department regarding the cleanup of the Avtex Fibers Superfund site in Front Royal, Virginia, which FMC owned and operated from 1963 to 1976. Avtex bought the facility in 1976 but shut it down in 1989 under the weight of some 2,000 environmental violations related to many years of contamination with asbestos, lead and other toxic substances. FMC agreed to spend about $100 million for the clean-up of the site, considered the biggest environmental problem area in the state.

By 2000, FMC had been named as a potentially responsible party in connection with about 30 locations on the federal government’s National Priority List of hazardous waste sites.

Add to all of this FMC’s involvement over the years in cases involving price fixing, sex discrimination, defrauding the federal government and other violations of laws and regulations. In 2000 it paid $80 million to settle a whistle-blower lawsuit challenging the safety of the Bradley Fighting Vehicles the company was producing for the U.S. Army.

In recent years FMC has restructured itself, spinning off many of its operations. But it continues to battle with the federal government over regulatory issues. Its biggest fight has concerned the controversial pesticide carbofuran, sold by FMC under the name Furadan. In 2006 the Bush EPA finally acknowledged the product was so dangerous for humans and for animals that it should be completely banned, as the European Union has done. The slow process of removing the product from the market has continued ever since, with FMC kicking and screaming in protest.

The company has been largely unsuccessful in its legal challenge up through the appellate level and has been considering an appeal to the U.S. Supreme Court. It may now hope for relief from Congress instead.

The deregulatory juggernaut is nothing more than an effort to aid and abet the country’s worst corporate outlaws. We’ll be in big trouble if Issa and his ilk succeed.

It’s Not Paranoia if Dow Chemical Really is Breaking Into Your Office

Wall Street has been in a state of high alert over reports that the next big document dump by the transparency extremists at WikiLeaks will concern a major U.S. bank. The stock price of Bank of America recently plunged for a while on speculation that it was the target.

Yet the bigger espionage story of recent days is one in which a major U.S. corporation is alleged to be the culprit rather than the victim. Greenpeace has just filed a racketeering complaint in DC federal court alleging that Dow Chemical and a smaller chemical company – a North American subsidiary of South Africa’s Sasol Ltd. – conspired with a leading public relations firm, Ketchum Inc., and a smaller pr outfit called Dezenhall Resources Ltd., to spy on Greenpeace.

This is said to have occurred from 1998 to 2000, a period when Greenpeace was campaigning against the dioxin risks created by manufacturing facilities such as those run by Dow and Sasol North America, which at the time was known as CONDEA Vista and was owned by the German energy giant RWE.

What’s the big deal, you might ask. Don’t environmental groups monitor big corporations all the time? In fact, the web page on which Greenpeace presents its materials about the lawsuit contains a prominent link to its archive of its corporate investigations. Shouldn’t companies be able to keep tabs on their opponents?

The difference between what Greenpeace does and what Dow et al. allegedly did is the small matter of adherence to the law. The defendants are accused not of using legitimate information-gathering techniques but rather of engaging in illegal activities such as trespass, invasion of privacy, conversion (a form of theft) of confidential documents – even misappropriation of Greenpeace’s “trade secrets.”

The complaint alleges these firms hired private security consultant Beckett Brown International (BBI; later known as S2I Corporation) to do their dirty work. The now defunct BBI, at the time run and staffed by former employees of the Secret Service and federal intelligence agencies, is said to have hired subcontractors who broke all kinds of laws to get at internal information about the operations, strategic plans and finances of Greenpeace and apparently a number of other groups such as Friends of the Earth and the Center for Food Safety. Prominent environmental activists allied with Greenpeace, such as the legendary Lois Gibbs, are also said to have been spied on.

One of the most troubling allegations in the complaint is that BBI employed off-duty DC police officers to gain access to private premises (including locked areas in which Greenpeace kept its trash and recycling materials before they were collected) by showing their badges as if they were on official business. Greenpeace says it has recovered more than 1,000 pages of its internal documents – a fraction, it says, of what was taken. Greenpeace alleges that most of the papers came not from BBI incursions against its dumpsters but rather from direct break-ins at the group’s DC offices. Electronic surveillance is also charged.

BBI apparently did not have much of a reputation to protect, but the case is presumably a significant setback for Dezenhall Resources, which calls itself “the nation’s leading high-stakes communications consultancy.” Its principal Eric Dezenhall, a White House staffer during the Reagan Administration, has written several books (fiction and non-fiction) and frequently publishes commentaries in the Huffington Post and the Daily Beast. He helped Forbes compile its list of the year’s biggest corporate blunders.

Having worked for clients such as Michael Jackson and Enron executive Jeffrey Skilling, Dezenhall fancies himself a pr gunslinger; others have called him the “pit bull” of public relations. Now that he is on the hot seat himself, Dezenhall seems less inclined to take the offensive. When the Washington Post contacted him about the Greenpeace suit, his response was “no comment.”

That was also the response of spokespeople for Dow Chemical, Sasol and Ketchum. Dow, of course, has been no stranger to controversy from its role as a producer of napalm and Agent Orange during the Vietnam War to its refusal to adequately compensate the victims of the Bhopal tragedy after taking over Union Carbide. Just think of all the juicy secrets that would come out if WikiLeaks ever got hold of its archives. But for now the Greenpeace suit is shedding light on an egregious case of corporate misconduct.

Full Graphic Disclosure

Forget Joe Camel and the Marlboro Man. Federal regulators want people to think of disease, birth defects and death when they pick up a package of cigarettes. The Food and Drug Administration, implementing legislation passed by Congress last year, has just released three dozen proposed enhanced warning labels that manufacturers would have to print on each pack of cancer sticks.

In the place of the plain text warnings that have appeared on tobacco packaging for years, these labels would be much larger and much more visually striking. The proposals include, for example, photos of a smoker in an open coffin, a mother blowing cigarette smoke at her infant child, and a sickly cancer victim.

The main objective of the warnings is to encourage existing smokers to quit and the dissuade children from picking up the dangerous habit. But apart from consumer behavior modification, the labels can be seen as a form of disclosure—disclosure of the harmful effects of a product.

The need for bold messages about deleterious aspects of the things we buy is not limited to cigarettes. It might make sense to apply the FDA’s approach to a whole range of goods and services. For example:

SUV models shown to be prone to rollovers should come not just with a plain-text sticker showing miles per gallon, but also full-color photos of mangled vehicles with bleeding drivers and passengers.
Electric bills sent by utilities relying on coal-fired power plants should be required to include photographs of floods, droughts and other effects of catastrophic climate change.
The pumps at gas stations should be adorned with photographs of oil spills and refinery disasters.
A variety of products sold by Wal-Mart should have packaging containing images of the oppressive Chinese sweatshops in which they were produced.
Stores selling gold jewelry should display photographs showing the despoiled land around the cyanide-leaching facilities in which the precious metal is mined.
Producers of dangerous pharmaceuticals should be required not just to mention possible injurious side effects, which most people have tuned out, but to show images of actual victims.
Health insurance providers should have to send out pictures of policyholders who died because an expensive treatment was rejected by the company.
Perhaps manufacturers of the worst junk food should be required to air commercials with actors who are morbidly obese.
And, of course, gun sellers should have to hand out gory photos of victims of accidental discharges.

Given the exalted status of commercial free speech in this country, these ideas could never come to pass. Yet there is still a serious issue to address: How do we turn dry data about corporate harms into messages people pay attention to?

The objective, however, is not just to change consumer behavior but also that of producers. All disclosure is meant to highlight an activity that is subject to abuse and hopefully curb those abuses. The Environmental Protection Agency’s Toxics Release Inventory is designed to get manufacturers to clean up their production processes – and has had a positive impact. Campaign contribution disclosure is meant discourage the big-money takeover of elections (there’s obviously been a lot less progress on that front, especially now that much corporate electoral spending can take place anonymously). Disclosure of executive compensation is supposed to check the relentless march toward lavish CEO salaries, bonuses and stock options (another less than rousing success).

The fact that disclosure does not immediately cure the problem it is meant to highlight does not undermine the case for transparency. It may simply mean that the form of the disclosure is not compelling enough. That’s the beauty of the FDA approach to cigarettes.

In replacing the misleading feel-good images that marketers have long sought to associate with even the most noxious products, the aggressive warning labels begin to force corporations to be honest about what they sell and consumers to come to grips with the true nature of much of what they consume. This form of anti-advertising may begin to liberate us from the illusions of our manufactured desires.

The Dark Side of Family Business

Americans love entrepreneurship, and no form of it is more celebrated than the family business. Most of us distrust big banks and giant corporations, but who doesn’t have warm feelings about mom and pop companies or family farms? These are the types of firms that politicians of all stripes want to shower with tax breaks and other forms of government assistance.

The problem is that family enterprises, like pet alligators, may start out as small and cuddly but can grow into large and dangerous monsters. We’ve seen two examples of this recently in connection with the family-owned oil company Koch Industries and the egg empire controlled by the DeCoster Family.

Koch Industries and its principals David and Charles Koch are the subject of a detailed article in The New Yorker by Jane Mayer. Much of the information in the piece has previously come out in blogs, websites and muckraking reports by environment groups, but she does a good job of consolidating those revelations and presenting them in a prestigious outlet.

Mayer describes how the Kochs, who are worth billions, have for decades used their fortune to bankroll a substantial portion of rightwing activism and are currently the big money behind groups such as Americans for Prosperity that are helping coordinate the purportedly grassroots Tea Party movement. What makes the Kochs especially insidious is that they use the guise of philanthropy to fund organizations promoting policy positions – environmental deregulation and global warming denial – that directly serve the Koch corporate interests, which include some of the country’s most polluting and greenhouse-gas-generating operations. The Kochs also contribute heavily to mainstream philanthropic causes such as the Metropolitan Opera and the Sloan-Kettering Cancer Center to win influential allies and gain respectability.

The DeCosters, whose egg business is at the center of the current salmonella outbreak, are not in the same social circles as the Kochs, but they have an even more egregious record of business misconduct. Hiding behind deceptively modest company names such as Wright County Egg, the family, led by Jack DeCoster, has risen to the top of the egg business while running afoul of a wide range of state and federal regulations.

As journalists such as Alec MacGillis of the Washington Post have recounted, the DeCosters have paid millions of dollars in fines for violating environmental regulations (manure spills), workplace health and safety rules (workers forced to handle manure and dead chickens with their bare hands), immigration laws (widespread employment of undocumented workers), animal protection regulations (hens twirled by their necks, kicked into manure pits to drown and subjected to other forms of cruelty), wage and hour standards (failure to pay overtime), and sex discrimination laws (female workers from Mexico molested by supervisors).

Their lawlessness dates back decades. A November 11, 1979 article in the Washington Post about Jack DeCoster’s plan to expand from his original base in Maine to the Eastern Shore of Maryland states that he was leaving behind “disputes over child labor, union organizing drives and citations for safety violations.” In 1988 the Maryland operation was barred from selling its eggs in New York State after an outbreak of salmonella. In 1996 the Occupational Safety and Health Administration fined the DeCosters $3.6 million for making its employees toil in filth. Then-Labor Secretary Robert Reich said conditions were “as dangerous and oppressive as any sweatshop we have seen.”

The DeCosters were notorious enough to be featured in a 1999 report by the Sierra Club called Corporate Hogs at the Public Trough. The title referred to the fact that concentrated animal feeding operations (CAFOs) such as those operated by the DeCosters were receiving substantial federal subsidies despite their dismal regulatory track record.

Articles about Jack DeCoster invariably describe him as self-made and hard-working. “Jack doesn’t fish, he doesn’t hunt, he doesn’t go to nightclubs,” a farmer in Maine told the New York Times in 1996. “He does business — 18 hours a day.” He was recently described as a “born-again Baptist who has contributed significant amounts of money to rebuild churches in Maine and in Iowa.”

Like the Kochs, DeCoster apparently thinks that some philanthropic gestures will wipe away a multitude of business transgressions. Yet no amount of charitable giving can change the fact that these men grew rich by disregarding the well-being of workers, consumers and the earth. Such are the family values of these family businessmen.

Obama’s Oil Magic

BP has been selling off small pieces of itself to help pay for its liability costs in the Gulf of Mexico. Here’s another way it can economize: eliminate its public relations staffers and outside consultants such as the well-connected Podesta Group. The oil giant doesn’t need them any longer, now that the Obama Administration has taken over responsibility for burnishing the image of the beleaguered oil giant.

BP’s new mouthpieces include Carol Browner, whose official title is Director of the White House Office of Energy and Climate Change Policy, and Jane Lubchenco, head of the National Oceanic and Atmospheric Administration. Browner has taken to the airwaves to deliver the mind-boggling message that the BP mess — which had just been declared by federal scientists to be the largest oil spill in history — has largely disappeared: “The vast majority of the oil is gone,” she told NBC’s Matt Lauer. “It was captured. It was skimmed. It was burned. It was contained. Mother Nature did her part.”

Lubchenco presided over the preparation of a five-page report claiming that one-quarter of the 200 million gallons of crude released from BP’s Macondo well “naturally evaporated or dissolved”; another quarter was dispersed “naturally” or chemically; and a third quarter was either directly recovered, burned off or skimmed from the surface, leaving a “residual” of 26 percent, among which is whatever BP collects from the shore.

In other words: Abracadabra, the oil is gone.

If BP had tried this kind of magic trick, it would have been laughed off the stage. The administration, exploiting the legitimacy of NOAA and Browner, a former head of the Environmental Protection Agency, is being taken (somewhat) seriously. In doing so, it is acting as a sort of front group for BP, giving more credence to the company’s claims of having carried out an effective clean-up operation. The remarkable claims about evaporation and dissolution could also help to reduce BP’s ultimate liability costs.

At the same time, the White House is clearly trying to protect itself. The NOAA report can be seen as a justification for the administration’s capitulation to BP on the issue of chemical dispersants. Only a few days before the announcement of the NOAA calculations, the House Select Committee on Energy Independence and Global Warming had released documents showing that the Coast Guard had repeatedly approved BP requests to apply large quantities of Corexit, despite EPA’s claim to have ordered the company to restrict its use of the controversial chemicals.

It is difficult to avoid the impression that BP and the administration have conspired to disguise the full extent of the disaster through the use of the dispersant, which reduces the amount of sludge arriving on shore but is having as yet unknown effects on the ecology of the gulf. The White House is so compromised in this situation that it seems unable to recognize the dissonance between the President’s statement that this is the “worst environmental disaster America has ever faced” and the new message, which is essentially “don’t worry, be happy.”

The positive spin is giving ammunition to figures such as Rush Limbaugh, who have been claiming for some time that the impact of the BP spill has been exaggerated. By encouraging these disaster deniers, the administration is undermining the rationale for continuing the deepwater drilling moratorium and even for the transformation of the former Minerals Management Service into a real regulatory watchdog.

If spills — including gigantic ones such as BP’s — can be brought under control so easily with dispersants and Mother Nature, why bother to restrict offshore drilling? After an incident that should have discredited that activity once and for all, the Obama Administration has in effect paved the way for a return to “Drill, Baby, Drill.” Quite a magic trick.