May 2025 Archives

The Other Corporate Restraints

Donald Trump thinks that young girls should get by with fewer dolls, but there is apparently no limit to the number of regulatory gifts he is offering Corporate America. Long-standing rules are being brushed aside, while laws such as the Foreign Corrupt Practices Act are not being enforced. Entire agencies such as the Consumer Financial Protection Bureau have been put in limbo. Investigations launched by the Biden Administration are being abandoned. Trump even pardoned a cryptocurrency company and its founders fined for anti-money-laundering deficiencies.

Big Business is not, however, escaping all oversight. That’s because there are two areas beyond Trump’s control that are still acting as checks on corporate abuses: state government regulation and private litigation.

The U.S. Justice Department may be focusing more on legitimizing Trump’s acceptance of a $400 million airplane from Qatar, but state prosecutors continue to go after misconduct in the business world. This is true even in red states. The Texas Attorney General’s office recently announced that it is collecting more than $1 billion from Google to settle allegations that the company unlawfully amassed private data on users regarding geolocation, incognito searches, and biometrics.

Hawaii’s AG negotiated a $700 million settlement with Bristol-Myers Squibb and Sanofi, resolving long-running litigation over the safety and efficacy of the blood thinner Plavix.

New Jersey’s AG and its Department of Environmental Protection announced a settlement of up to $450 million with 3M to resolve litigation over the company’s role in contamination of drinking water supplies with toxic PFAS substances, also known as forever chemicals.

Meanwhile in the courts, drug distributors McKesson, Cardinal Health, and Cencora (formerly AmerisourceBergen) together agreed to pay $300 million to a group of employee benefit plans to settle class action litigation alleging they contributed to the opioid epidemic in their marketing of the dangerous drugs.

A state jury in Louisiana recently determined that oil giant Chevron should pay $745 million in damages for harm caused to the coastline over many years of drilling activity. In the latest of a series of antitrust settlements in the meat industry, Tyson Foods and two other companies agreed to pay $64 million to settle allegations they conspired to fix prices on pork products provided to food service providers.

Defying the Trump Administration’s campaign to prohibit any efforts to address systemic racism and sexism, private anti-discrimination lawsuits move forward. Google just agreed to pay $50 million to settle allegations that it paid thousands of black workers less than their white counterparts and limited their opportunities for advancement.

A federal judge in California just granted preliminary approval to a class action settlement in which Walt Disney Company agreed to pay $43 million to resolve allegations that the compensation given to women in middle management was substantially lower than what was received by men in substantially similar jobs.

These are but a few of the steady stream of cases being brought by AGs and class action lawyers. It is far from desirable for the federal government to retreat from its primary role in business oversight. But until that policy shift can be reversed, the states and the courts are making sure that corporate misconduct does not go unchallenged.

More Consolidation Is Not What The Oil Industry Needs

Reports have circulated in recent days that UK petroleum giant Shell is considering a bid to take over its rival BP. Shell’s management is not offering confirmation, but investors and analysts are considering the implications of a possible marriage of two of the remaining oil majors once known as the Seven Sisters.

Such a combination would bring together a pair of companies that have been mired in controversies for many years. BP, of course, is still closely identified with the 2010 Deepwater Horizon catastrophe in which an offshore well blowout killed eleven workers and caused an enormous oil spill in the Gulf of Mexico. The company has paid out more than $30 billion in fines and settlements linked to the accident.

BP’s U.S. operations were also tainted by a massive explosion in 2005 at a refinery in Texas City, Texas in which 15 workers were killed and 180 injured (the facility was later sold to Marathon Petroleum). The company also experienced serious spills at its operations in Alaska.

More recently, in 2023 BP agreed to pay $242 million to the U.S. Environmental Protection Agency to resolve both air and water pollution violations at its Whiting Refinery in Indiana. The allegations focused on releases of benzene, a carcinogen.

Shell’s biggest controversy has been in Nigeria, where for the past few decades it has faced protests and lawsuits over the environmental impact of its operations in the Niger Delta. In 2015 it paid $84 million to compensate the Bodo community for the effects of oil spills. In the United States, Shell has paid over $1 billion in fines and settlements in cases involving pollution, underpayment of federal leasing royalties, accounting violations, and foreign corrupt practices.

There is no reason to believe that a combined Shell-BP would be any less harmful to the environment. Along with their regulatory and legal infringements, the two companies have a history of participating in trade associations and lobbying groups that resisted regulation of greenhouse gas emissions and promoted climate skepticism. And both companies have been accused of trying to obscure those activities by engaging in greenwashing. Meanwhile, a recent academic study estimated that the major oil companies have caused trillions of dollars in economic harm from their greenhouse gas emissions. BP’s contribution to that amount was put at $1.45 trillion.

Consolidation has long been a way the oil industry dealt with its challenges. Chevron bought Gulf Oil in 1984, Texaco in 2001, and Unocal in 2005. It is now seeking to take over Hess. Exxon acquired Mobil in 1999. Conoco and Phillips Petroleum merged in 2002 to form ConocoPhillips, which in 2024 bought Marathon Oil.

Oil companies have faced allegations that they use their market power in anti-competitive ways. BP, for example, paid over $300 million to resolve civil and criminal allegations that it manipulated the propane market.

Instead of merging, oil companies should be thinking of ways to transition more quickly from fossil fuels to clean and renewable energy sources.

Identifying the Climate Culprits

A new article in a prestigious scientific journal puts a price tag on the damage fossil fuel companies have done to the earth’s climate through their greenhouse gas emissions. Christopher Callahan and Justin Mankin, writing in Nature, estimate that major petroleum and coal producers have inflicted trillions of dollars in economic harm on the world economy over the decades by helping to generate disasters such as heatwaves, floods, droughts, hurricanes, and wildfires. In the period from 1991 to 2020, they put the total value of that harm at $28 trillion.

They derive their totals by analyzing data on the emissions of 111 fossil fuel producers. About one-third of the harm is attributed to five companies: Saudi Aramco ($2.05 trillion), Gazprom ($2 trillion), Chevron ($1.98 trillion), ExxonMobil ($1.91 trillion), and BP ($1.45 trillion).

Callahan and Mankin are explicit in arguing that their data could be useful in bringing legal actions against the fossil fuel industry. They point out that hundreds of climate lawsuits have been filed but few have succeeded so far.

They foresee greater success in suits that seek to hold specific corporations culpable for specific climate effects. They argue that research advances are making it easier to make those connections and do so themselves in linking the emissions of those 111 fossil fuel producers to extreme heat and resulting economic costs.

Drawing these connections is vital because, among other things, regulatory systems have largely failed both in preventing excessive emissions and in holding corporations accountable for their effects. This is illustrated in the data my colleagues and I have collected from 60 countries in Violation Tracker Global.

In the period since 2010, the 74 oil and gas companies we cover have paid about $41 billion in fines and settlements. Very little of those penalties relate directly to greenhouse gas emissions. BP accounts for the lion’s share of the total at nearly $27 billion, largely in connection with the Deepwater Horizon explosion and spill in the Gulf of Mexico in 2010.

Among the other corporations in Callahan and Mankin’s top five, the largest penalty total belongs to Exxon Mobil at just over $1 billion. The other totals are: Saudi Aramco ($103 million), Gazprom ($106 million), and Chevron ($587 million). The grand total for the five oil giants is about $29 billion.

Given regulatory disclosure limitations in some countries, these totals may be somewhat understated. Yet they do not begin to compare to the magnitude of the economic harms attributed to the corporations by Callahan and Mankin, which for the period since 2010 can be put at roughly $10 trillion.

This means that the five oil giants have paid penalties equal to less than 1 percent of the climate harm they have caused—and those penalties in most cases do not address the greenhouse gas emissions responsible for those harms.

It thus remains highly profitable for fossil fuel producers to continue with business as usual. Hopefully, the new approaches promoted by researchers such as Callahan and Mankin will tip the balance in the other direction by empowering legal challenges to the industry.