Corporations Are Not Saving the Planet After All

It used to be that you had to go to the websites of groups such as Greenpeace to learn how large corporations are failing to live up to their promises to help solve the climate crisis. Now that fact can be found on the front page of the Wall Street Journal.

The business-friendly newspaper just published an article detailing the ways in which the decarbonization efforts of the world’s largest companies are fizzling out. A big part of the problem is that most companies never developed meaningful climate transition plans and instead relied on dubious carbon offsets instead. The Journal quotes the environmental non-profit CDP as saying that of the nearly 19,000 companies using its disclosure platform, fewer than 100 have credible plans.

Some companies don’t bother to develop any plans—or they keep them to themselves. The Journal cites data showing the percentages of larger publicly traded companies that do not disclose specific plans to meet long-term climate targets. Among those in the coal, oilfield services, and midstream oil sectors the portion is 100 percent. Among integrated oil companies, 93 percent fail to do so.

Big Oil’s detrimental role in dealing with the climate was highlighted in another recent Journal article. It’s well known that Exxon Mobil worked for years to downplay the harmful effects of greenhouse gas emissions. In 2006 the company finally acknowledged those dangers, but the Journal found that within the company the policy did not really change. The newspaper was given access to internal company documents that had been collected by the New York Attorney General but never made public.

These documents, the Journal says, show that Rex Tillerson, who had just taken over as CEO at the time, continued to work behind the scenes to play down the severity of climate change. Exxon executives and scientists were apparently encouraged to go on questioning the mainstream consensus on climate harm.

In other words, it appeared that Exxon, rather than fully abandoning its overt climate denialism, replaced it with a more low-key version while simultaneously reaping the benefits of greenwashing.

Apart from its malignant impact on the climate problem, the fossil fuel industry also continues to be a major source of conventional pollution. We are reminded of this fact by a new report from the Center for American Progress which looks at the long-standing boondoggle surrounding the system by which the industry is allowed to drill on public lands and offshore.

Making extensive use of data from Violation Tracker, the report shows that the top 20 leasing companies are responsible for more than 2,000 environmental violations in their overall operations over the past two decades. Exxon Mobil leads the list with 442 such penalties, while BP has paid out the most—over $30 billion—largely due to its role in the 2010 Deepwater Horizon disaster in the Gulf of Mexico.

CAP’s report recommends that proposed new standards issued by the federal Bureau of Land Management for companies seeking leases be strengthened to include language specifying what defines a bad actor, adding: “Such bad actors should not be eligible for new leases or permits until they have resolved all outstanding issues and demonstrated that they are capable of changing their practices. Further, leases of companies found not to be a qualified or responsible lessee should be subject to cancellation.”

Tougher standards such as these will help to get the message through to the fossil fuel giants that they need to change their ways once and for all.

Fronting for Rogue Corporations

Only days before the world gathers in Glasgow to discuss the climate crisis, Greenpeace has leaked a trove of documents suggesting that some countries are coming to that gathering with sinister motives. According to the environmental group, several leading coal, oil, beef and animal feed-producing nations are trying to water down the International Panel on Climate Change’s findings to protect their domestic industries.

Among the countries said to be involved are Saudi Arabia, Australia and Brazil. It seems clear these efforts reflect not only the inclinations of their political leaders but also the interests of major corporations headquartered in those nations.

Saudi Arabia is, of course, the home to the Saudi Aramco—one of the world’s largest oil and gas producers and thus one of the biggest contributors to greenhouse gas emissions. Australia is the home to mining companies such as BHP Group, the world’s largest producer of coal. Brazil is the headquarters of meat-producing giant JBS.

Along with their outsized role in CO2 emissions, these companies damage the environment in other ways and have run afoul of regulatory requirements. Take the case of Saudi Aramco. As documented in Violation Tracker, its U.S. subsidiary Motiva Enterprises has racked up more than $170 million in penalties over the past two decades for violations of the Clean Air Act and other environmental laws. In addition to cases brought by the EPA, Motiva has been the target of lawsuits and enforcement actions by attorneys general and environmental regulatory agencies in states such as Texas and Louisiana.

In its U.S. operations, BHP has been cited for violations both by the EPA and by the Bureau of Safety and Environmental Enforcement, the federal agency that oversees offshore oil and gas drilling. It has also paid fines to environmental agencies in Louisiana and Arkansas.

JBS, which has taken over several major beef and poultry producers in the United States, has been cited 59 times for environmental violations, paying a total of $5.6 million in penalties. Earlier this year, its Pilgrim’s Pride poultry subsidiary pleaded guilty and was been sentenced to pay approximately $107 million in criminal fines for its participation in a conspiracy to fix prices and rig bids for broiler chicken products.

JBS will also show up in Violation Tracker UK, which will be launched next week. Its Moy Park Limited subsidiary has been fined over £1.2 million since 2010, most of which came from workplace safety violations but also included £82,000 in nine environmental cases.

These examples suggest that the behind-the-scenes efforts of Saudi Arabia, Australia and Brazil are not just a matter of differences in climate policy. By resisting stronger controls on greenhouse gas emissions, these countries are serving the interests of corporations that repeatedly violate environmental regulations and other laws that serve the public good.

Note: Violation Tracker UK will go public on October 26. It will contain information on more than 60,000 cases brought by over 40 UK regulators such as the Environment Agency and the Health and Safety Executive. The database aggregates cases linked to more than 650 parent corporations based in the UK and over 30 other countries.

Oil Giants Pressed for Changes Instead of Promises

A substantial number of large corporations would have us believe they are in the forefront of the efforts to address issues such as climate change, inequality and racial injustice. They brag about their commitment to corporate social responsibility and claim to be devoted to high-minded ESG (environmental, social and governance) principles in their operations.

There are two big reasons to be skeptical about this self-congratulatory stance. The first is that Big Business is often the cause of those problems, not the solution. The second is that the remedial measures companies claim to be taking often turn out to be illusory.

Two recent developments suggest that that corporations may be unable to go on running these cons. In an unprecedented ruling, a court in the Netherlands ordered petroleum giant Royal Dutch Shell to cut its carbon dioxide emissions sharply to align with the Paris agreement on climate change. This was said to be the first time a company faced a legal mandate of this kind. What made the decision even more significant is that Shell was held responsible not only for its own emissions but also those of its supply chain. This suit, brought by environmental groups, was a legal breakthrough for the climate movement.

Yet, the ruling was also consequential in that it challenges the notion that corporations should be allowed to make their own decisions on how to address environmental and social goals. And in that sense it rocks the foundations of ESG, which is built on the idea of voluntary measures. Companies have gotten a great deal of mileage out of making claims about what they have done or plan to do. Many of these statements cannot be verified, and there is no enforcement mechanism for holding corporations to their promises.  

Much of what goes by the name of corporate social responsibility is a method of warding off more stringent government regulation by claiming that the private sector can address the issues on its own.

Shell is a prime example of a company that says one thing and does another. On its website, the company claims that its commitment to sustainability dates back to 1997 and that it works “to embed this sustainability commitment into our strategy, our business processes and decision-making.”

Yet during this same quarter-century, Shell has been embroiled in an ongoing controversy over its practices in Nigeria. Environmental groups alleged that the company’s operations were responsible for a large number of pipeline ruptures, gas flaring and other forms of contamination that also contributed to greenhouse gas emissions. The Nigerian government responded to protests with a wave of repression, including the arrest and killing of prominent activist Ken Saro-Wiwa. Shell denied it was involved, but critics pointed to the role played by the company in supporting the military dictatorship.

A lawsuit 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 dragged on for years, but in early 2021 the Hague Court of Appeal finally issued a decision on the case, ruling that Shell had to pay compensation to the farmers and install equipment to prevent future pipeline leaks.

Shell is not the only oil major on the hot seat. After years of leading the corporate climate denial effort, Exxon Mobil claimed to be changing its stance. It may have abandoned the overt denialism, but it resisted taking significant steps to reduce its carbon footprint. Now, institutional investors have run out of patience.

Led by an upstart hedge fund called Engine No.1, investors succeeded in electing two members to the Exxon board against the wishes of CEO Darren Woods. Those directors vowed to use their position to press the company to move toward carbon neutrality.

The two will be a minority on the board, but their election will make it harder for Woods to ignore the calls for Exxon to do more to address the climate crisis.

The revolt within Exxon and Shell’s legal setbacks will not by themselves transform business, but they are indications that large corporations may find it increasingly difficult to rely on vague commitments and instead may have to take concrete, enforceable measures to address climate change and other urgent issues.  

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.

A Boom Decade for Corporate Misconduct

Business journalists are looking back with amazement at the stock market’s track record over the past decade. Yet the 2010s were also a boom period for corporate crime and misconduct.

In Violation Tracker my colleagues and I have documented more than 240,000 cases for that period representing $442 billion in fines and settlements—more than twice the $161 billion total for the previous decade. (The numbers are not adjusted for inflation.)

The cases from the 2010s include 574 with a penalty of $100 million or more, 147 with a penalty of $500 million or more, and 67 with a penalty of $1 billion or more.

The top tier of these mega-cases is dominated by four corporations. BP is linked to the largest single case on the list—the $20.8 billion settlement with the federal government and five states to resolve civil claims stemming from the massive 2010 Deepwater Horizon oil spill in the Gulf of Mexico. BP paid out numerous other mega-penalties and smaller ones to put its total for the decade at nearly $28 billion.

The second biggest single penalty during the decade was Bank of America’s $16.65 billion settlement with the Justice Department in 2014 to resolve claims relating to fraud in the period leading up to the financial crisis, including such behavior on the part of Merrill Lynch and Countrywide Financial, which BofA acquired during that crisis. BofA also had plenty of other penalties during the decade—including two in excess of $10 billion—bringing its total for that period to an eye-popping $62 billion.

The third of the penalty leaders is Volkswagen, which in 2016 reached a $14.7 billion settlement with the federal government and the state of California to resolve allegations relating to systematic cheating on diesel pollution emission testing through the use of defeat devices. VW paid out several other multi-billion penalties related to the cheating and racked up a penalty total of more than $23 billion for the decade.

Rounding out the list of companies with individual penalties in excess of $10 billion is JPMorgan Chase, which in 2013 reached a $13 billion settlement to resolve federal and state claims relating to the sale of toxic mortgage-backed securities by the bank itself and by its acquisitions Bear Stearns and Washington Mutual. JPMorgan also had several other penalties of $1 billion or more, along with smaller ones, that pushed its penalty total for the decade to more than $29 billion.

Other big domestic banks had a substantial share of mega-penalties. These include Citigroup, with a $7 billion toxic securities settlement in 2014 (and a penalty total of $16 billion for the decade) and Wells Fargo, with a similar $5.3 billion settlement in 2012 (and a penalty total of $15 billion stemming from issues such as the creation of bogus accounts to generate illicit fees).

The decade also saw a slew of mega-cases involving foreign banks such as BNP Paribas, Deutsche Bank, Royal Bank of Scotland and Credit Suisse for offense such as violations of economic sanctions and their own toxic securities abuses.

Financial services companies of all kinds dominated the mega-penalty list, accounting for 41 of the 67 billion-dollar cases. Also worthy of mention are the pharmaceutical companies, including settlements by GlaxoSmithKline for $3 billion and Johnson & Johnson for $2.2 billion, both for marketing drugs for purposes not approved as safe by the Food and Drug Administration. That industry will end up paying much more when the pending multistate opioid litigation is resolved.

The list could continue. Suffice it to say that the decade’s major cases made it clear that corporate misconduct perseveres through good times and bad.

Should Taxpayers Foot the Bill for Rebuilding the Gulf Coast’s Petrochemical Industry?

Much of the Gulf region remains flooded, people are still being rescued, and the full magnitude of the damage is not yet known. But soon the center of attention will be the rebuilding effort and how to pay for it.

Texas Gov. Greg Abbott is talking about the need for a federal aid package well in excess of $100 billion. Whatever the amount turns out to be, the critical issue will be how the money is distributed.

It’s already clear that the petrochemical facilities clustered in southeastern Texas have been hard hit by the flooding, and there will no doubt be calls to use both federal and state financial resources to help repair these plants.

While there should be no hesitation about using public funds to help the people of the Gulf rebuild their lives, we shouldn’t automatically do the same for the petro giants.

The first reason is that these companies can well afford to rebuild on their own dime. Exxon Mobil, which owns the giant refinery in Baytown, earned more than $130 billion in profits during the past five years. The Motiva refinery in Port Arthur, another massive facility, is owned by Aramco, which in turn is owned by the fabulously wealthy government of Saudi Arabia.

Second, taxpayers made enormous financial contributions to the construction and operation of these facilities. As shown in Subsidy Tracker, the Motiva refinery was awarded a $257 million state and local subsidy package in 2006 to help underwrite its expansion. Earlier this year, Exxon and SABIC, another Saudi company, were granted a $460 million package to jointly build a petrochemical plant near Corpus Christi.

Apart from being subsidized, many of the Gulf region’s petrochemical plants have horrible compliance records regarding toxic emissions and worker safety. The most notorious example is the refinery in Texas City between Houston and Galveston that was previously owned by BP and subsequently sold to Marathon Petroleum. In the wake of a 2005 explosion at the facility that killed 15 workers, BP was fined a then record amount of $21 million by OSHA for a pattern of egregious safety violations in Texas City. The company failed to make the necessary corrections and was later hit with an even larger penalty. BP also had to pay nearly $180 million to settle a federal environmental case involving the refinery.

As shown in Violation Tracker, in 2013 Shell Oil had to pay more than $117 million to resolve Clean Air Act violations at its Deer Park refinery outside Houston. The chemical plant in Crosby, Texas owned by the French company Arkema, where flooding has caused explosions, was fined $107,918 earlier this year by OSHA for serious safety violations (company later negotiated a reduction down to $91,724).

Providing more subsidies for these facilities would in effect negate the impact of the penalties the corporations paid for their negligence.

Finally, there is the difficult question of whether all these facilities should be rebuilt at all, especially if taxpayer funds are involved. The Gulf refineries play a significant role in an energy system that exacerbates the climate crisis, which likely contributed to the intensity of Harvey. We may not be free of fossil fuels yet, but does it make sense to use public resources to prolong the life of facilities linked to extreme weather events that threaten our future?

Principles versus Interests

The website of every large corporation these days has a section labeled Corporate Social Responsibility containing high-minded language about its commitment to sustainability, community development, human rights and the like.

For the most part, these positions serve mainly as a form of corporate image-burnishing and have little real-world applicability. Now, however, a group of large U.S. and foreign banks are being challenged to live up to their CSR principles in connection with one of the most contentious projects of our day: the Dakota Access Pipeline.

Following a recent decision by the Army Corps of Engineers to block the final permit needed to route the pipeline (usually referred to as DAPL) under North Dakota’s Lake Oahe and dangerously closely to the Standing Rock Sioux Reservation, the project is stalled. Yet that could quickly change with the incoming Trump Administration.

Meanwhile, attention has turned to a syndicate of 17 lenders that have committed a $2.5 billion line of credit to the project.  Among the leaders of the pack are Citigroup and TD Securities, owned by Canada’s Toronto-Dominion Bank. Of the 17, all but two are endorsers of a CSR document known as the Equator Principles. (The list of endorsers is here; the two members of the syndicate not among them are China’s ICBC Bank and Suntrust Robinson Humphrey.)

The principles were drawn up in 2003 by a group of major banks facing increasing pressure from environmental and human rights groups over their involvement in controversial projects undertaken by mining, petroleum and timber corporations.

In adopting the principles, banks committed to providing loans only to those projects whose sponsors could demonstrate that they would be performed in a “socially responsible” manner and according to “sound environmental principles.” Sponsors were also supposed to conduct assessments that took into consideration issues such as the impact on indigenous communities.

The current version of the Equator Principles states that projects affecting  indigenous  peoples  should include “a  process  of Informed Consultation and Participation, and will need to comply  with the rights and protections for  indigenous peoples contained in relevant national law, including  those  laws implementing host country obligations under international law…Projects with adverse impacts on indigenous people will require their Free, Prior and Informed Consent.”

It is highly questionable that Equity Transfer Partners and the other companies involved in DAPL have met this test. On the contrary, the harsh response of the project sponsors and local law enforcement agencies to the peaceful protests at the site has demonstrated an utter disregard for the concerns of Native water protectors.

It is no surprise that opponents of the pipeline are calling the lenders to task. In November a group of more than 500 civil society organizations from 50 countries issued a joint letter to the 17 lenders citing the Equator Principles and calling on them to suspend their financial support of the project until the concerns of the Standing Rock Sioux Tribe are fully addressed.

So far there is no sign that the lenders are prepared to withdraw their support of the pipeline. This means there will be more clashes ahead — both between police and protestors, and between the profit interests of the lenders and their purported principles.

Why Don’t More Corporate Executives Commit Suicide?

The business news is abuzz with reports that the fatal car crash of fracking executive Aubrey McClendon a day after he was indicted on federal bid-rigging charges may have been intentional. The high speed at which McClendon’s SUV was apparently travelling at the time of the collision and the absence of skid marks are generating speculation that he deliberately drove into a bridge support.

If McClendon did indeed take his own life for reasons connected to his indictment, it would not be the first case of scandal-induced corporate suicide. In 2002, for instance, J. Clifford Baxter, former vice chairman of the notorious energy company Enron, was reported to have shot himself in the head, leaving a note saying “where there was once great pride now it’s gone.”

Yet in comparison to the high degree of corporate misconduct, executive suicides are quite rare. Part of the reason is that so few executives are prosecuted individually, as was McClendon, and thus are less likely to feel the intense shame that usually prompts acts of self-destruction. And when those prosecutions do occur, some executives remain defiant, depicting themselves of victims of overzealous prosecutors.

A prime example of such defiance was former Massey Energy CEO Don Blankenship, who insisted he was targeted for political reasons despite the extensive evidence against him in a case stemming from the deaths of 29 miners in the Upper Big Branch disaster in 2010. Blankenship was convicted of conspiracy to violate federal mine safety laws but acquitted of lying to regulators.

It’s significant that McClendon’s possible suicide occurred after he was indicted on the relatively abstract charge of conspiring to rig bids for oil and natural gas leases in Oklahoma. While the charges are serious, they do not directly involve harm to people and the environment.

On the other hand, Chesapeake Energy, which McClendon co-founded in 1989 and ran until 2013, has been involved in numerous cases involving allegations of such harm in the course of fracking. In the Violation Tracker my colleagues and I at Good Jobs First created, we found more than 30 cases since 2010 in which the company has paid more than $10 million in EPA fines and settlements. Apparently, there was no shame in that.

Although it would be ghoulish to suggest that anyone commit suicide, there is no shortage of other executives who should also at least be feeling more intense shame for their actions. A number of them are at companies in the business of producing vehicles like the one in which McClendon was driving at the time of his death. McClendon’s Chevrolet Tahoe is produced by General Motors, which had to pay a fine of $900 million to resolve criminal charges in connection with an ignition switch defect linked to more than a dozen deaths.

Then there’s the case of Japan’s Takata, which is embroiled in a controversy over the production of millions of defective airbags that in some cases ruptured and sent shrapnel flying at drivers and passengers. Or else Volkswagen, which has admitted wholesale cheating on auto emissions tests, leading to untold additional amounts of air pollution.

There are plenty of additional past and present examples from industries such as chemicals, mining, tobacco and asbestos. The answer is not for more top executives to take their own lives, but for them to end their reckless behavior to protect the lives of the rest of us.

Will Big Oil Survive Long Enough to Pay for Its Climate Sins?

“Times are tough, you’d almost call them brutal right now. But we will adapt. We will make it.” So insisted the deputy chief executive of BP at a conference in Houston where industry leaders put on a brave face amid a worsening crisis for the petroleum sector.

Other speakers were even more explicit about the Darwinian environment. “We will be one of the last guys standing,” declared the CEO of Suncor Energy, which once prospered from the tar sands boom in Alberta and is now selling off assets.

Several dozen oil and gas producers have had to file for bankruptcy protection since the beginning of last year. More such moves are expected. The business consulting firm Deloitte has issued a report estimating that more than one-third of all petroleum exploration and production companies are in precarious financial condition, with dozens likely to make the trip to bankruptcy court.

Even the oil majors are in trouble. Chevron reported a fourth-quarter loss of $588 million, while BP lost over $2 billion in the quarter and more than $5 billion for 2015 as a whole. Exxon Mobil and Shell are still in the black but their profits are down sharply. The industry’s problems are already depressing stock prices and are starting to cause heavy losses at the banks that lent extravagantly to the energy sector during the boom time.

It’s difficult to summon much sympathy for the oil companies, given the damage they have wrought. As shown in the Violation Tracker database I and my colleagues created, the petroleum industry has racked up more than $31 billion in environmental, health and safety penalties since the beginning of 2010, far more than any other industry. Much of this is the result of the massive fines and settlements paid by BP in connection with the Deepwater Horizon disaster in the Gulf of Mexico.

Yet there is one reason to hope for the survival of the petroleum producers: we need them to survive in some form so they can be taken to court over the role they’ve played in denying the reality of the climate crisis.

As Bill McKibben notes in a recent article, we’re now at the beginning of an investigation of what may prove to be one of the biggest corporate scandals in American history — the climate coverup.

At the center of the scandal is Exxon Mobil, the biggest fossil fuel corporation on earth and the one that is probably most culpable for suppressing evidence of the impact of its products on climate change. As path-breaking research by Inside Climate News showed, Exxon — reported to be the subject of current investigations by state prosecutors in New York and California — knew about global warming as early as the 1970s and quietly used that knowledge for its own benefit while keeping it from policymakers and the public.

Forty years later, the nature of the climate crisis is public information, but Exxon Mobil and the other oil companies continue to do business as usual. In fact, their obsession with exploration and production even at a time of softening demand has helped bring about the current price nosedive.

Exxon Mobil today has assets of more than $340 billion. Soon it may have to stop using those resources to produce more harmful fossil fuels and instead pay out substantial sums in damages to communities struggling to deal with the climate mess the industry has caused.

The Corporate Wrongdoers Sticking with ALEC

ALECexposedLogo_400x400vt_logo-full_1If a group of major drug dealers, identity thieves and bank robbers were to put out a statement calling for relaxation of the criminal code, no one would take it very seriously.

Yet complaints about the regulatory system coming from large corporations — including many with repeated environmental and safety violations — are regarded as important pronouncements by too many policymakers and political candidates. Corporate interests don’t simply complain. They use their money and influence to urge lawmakers to alter the rules in their favor.

One of the main vehicles by which big business pushes its deregulatory agenda is the American Legislative Exchange Council. ALEC, which is currently holding one of its periodic gatherings of corporate lobbyists and legislators, takes aim at agencies such as the EPA, which it likes to call a “regulatory train wreck.”

Since my colleagues and I at the Corporate Research Project of Good Jobs First released our Violation Tracker database recently, I’ve been comparing notes with the ALEC watchers at the Center for Media and Democracy. What we’ve found is a substantial overlap between the corporations that remain loyal to ALEC (more than 100 have left in response to public pressure) and the companies in Tracker with the largest penalty totals. Mary Bottari of CMD has posted a piece that focuses on the energy companies in the two groups. Here I look at the full overlap.

The current list of ALEC corporate members includes 11 corporations that rank in the Violation Tracker top 100 (in a few cases the membership is held by a subsidiary). These parents and their subsidiaries have racked up a total of $1.7 billion in federal environmental, health and safety penalties and settlements since the beginning of 2010:

  • Pfizer: $563,357,650
  • Novartis: $422,569,368
  • WEC Energy Group: $310,621,475
  • Duke Energy: $112,150,534
  • Honeywell International: $93,641,829
  • Berkshire Hathaway: $46,810,063
  • Exxon Mobil: $46,285,706
  • Energy Transfer: $25,467,251
  • Dominion Resources: $14,168,658
  • Norfolk Southern: $11,675,325
  • Chevron: $11,373,376

Pfizer is in the news because of its deal to merge with a smaller drug company and move its legal headquarters to Ireland, all to dodge federal taxes. It has amassed more than half a billion dollars in penalties in the past five years largely because of cases involving the illegal marketing of drugs for purposes not approved as safe by the Food and Drug Administration. In 2009, the year before Violation Tracker’s coverage begins, Pfizer had to pay $2.3 billion to settle Justice Department civil and criminal charges relating to the illegal marketing of the painkiller Bextra and three other medications. John Kopchinski, a former Pfizer sales representative whose complaint helped bring about the federal investigation, told the New York Times: “The whole culture of Pfizer is driven by sales, and if you didn’t sell drugs illegally, you were not seen as a team player.”

Novartis has also been accused of illegal marketing of drugs and has had to pay more than $400 million in penalties. Not yet included in Violation Tracker is a case in which federal prosecutors are seeking $3 billion in penalties from the company for paying illegal kickbacks to get pharmacies to encourage use of expensive drugs for kidney-transplant patients covered by Medicare and Medicaid.

WEC Energy Group, whose subsidiaries North Shore Gas and Peoples Gas are ALEC members, is on the top violators list mainly because of a $307 million settlement another subsidiary, Wisconsin Public Service Corporation, reached with the Justice Department and the EPA to resolve Clean Air Act violations at two of its power plants. Most of the settlement involves mandatory spending on new pollution control technology at the facilities.

Duke Energy earned its spot on the top violators list mainly because of a case from earlier this year in which three of its subsidiaries pled guilty to criminal violations of the Clean Water Act and paid $102 million in penalties in connection with a massive coal ash spill into the Dan River in North Carolina.

The largest portion of Honeywell International‘s $93 million in penalties comes from a 2013 case in which it agreed to pay a $3 million civil penalty and spend $66 million on new pollution control equipment to resolve Clean Air Act violations at its plant in Hopewell, Virginia.

Conglomerate Berkshire Hathaway is on the list because one of its major subsidiaries, BNSF Railway, is an ALEC member. While it has not been involved in any large cases like those above, since 2010 BNSF has accumulated more than 600 violations from the Federal Railroad Administration with total penalties of $7 million (the FRA’s fines tend to be less than onerous). BNSF was also pressured by OSHA to change its practices that the agency said discouraged workers from reporting on-the-job injuries.

Exxon Mobil‘s penalty total comes largely from its subsidiary XTO Energy, which focuses on fracking. For example, in 2013 XTO had to pay $20.1 million to the EPA to settle Clean Air Act violations linked to the discharge of wastewater in Pennsylvania.

These cases illustrate the track record of the companies that are sticking with ALEC, presumably with the hope that the organization can bring about policy changes that will allow them to continue business as usual and pay less in the way of penalties. ALEC may be correct that the regulatory system is a “train wreck,” but that’s because the rules are too weak, not too stringent.