Dirt Diggers Digest

Unequal Spoils

In his 2009 utopian novel Only the Super-Rich Can Save Us, Ralph Nader conjures up a scenario in which a group of enlightened U.S. billionaires spark a populist uprising against excessive corporate power. Calling themselves Meliorists, people such as Warren Buffett, George Soros, Ted Turner and Bill Gates Sr. use their wealth to bankroll creative efforts to undermine the stranglehold of big business and promote an agenda of universal healthcare, a living wage, sustainable energy, public financing of elections and other forms of popular democracy.

It is unlikely that Donald Trump has read the 733-page volume, but his emerging administration is well on its way to becoming an ugly variation on Nader’s theme. Rather than enlightened billionaires promoting a progressive agenda, Trump is building a government that will be run by wealthy proponents of reactionary policies. After a presidential campaign in which he railed against elites and suggested that he would shake up the system, he is filling his cabinet and other top jobs with individuals who, like himself, have exploited it to the hilt.

Trump’s pick for Treasury Secretary, Steve Mnuchin, worked for 17 years at Goldman Sachs but made his real money purchasing distressed IndyMac Bank amid the financial crisis in 2009, and after engaging in controversial foreclosure practices resold it at a hefty profit. The proposed Commerce Secretary Wilbur Ross, whose personal wealth is estimated by Forbes at $2.9 billion, has an even longer track record as a vulture investor who has turned around failing businesses but often at a high cost to employees. Betsy DeVos, Trump’s choice for Education Secretary, is a school privatization zealot who comes from a wealthy family and is married to an heir to the Amway fortune.

According to news reports, Trump is likely to name even more members of the 0.1 Percent to his administration. Plutocracy, once used as a rhetorical flourish, is increasingly a literal description of where things are heading.

Even those members of the Trump team who are not listed on the Forbes 400 are known for promoting policies that benefit the billionaire class rather than the workers who voted for the Republican ticket. Health and Human Services nominee Tom Price is a pharma-friendly, anti-Obamacare fanatic who seems to want to create a system of bare-bones coverage that is highly profitable to the insurance industry. Seema Verma, named to head the agency that oversees Medicare and Medicaid, is a pro-privatization consultant. And then there are the dozens of industry lobbyists installed on the landing teams for individual federal agencies who are helping target a wide range of regulations that protect consumers, workers and the general public.

Perhaps out of an awareness that his supporters may be starting to look askance at this power grab by corporate interests, Trump has taken pains to fulfill his campaign promise to help workers at the Carrier Corporation plant in Indianapolis whose jobs were being sent to Mexico.

The president-elect has just announced a deal in which some 800 of the 1,400 affected workers will save their jobs. This is welcome news for those workers and their families, who probably don’t care that Mike Pence used his soon-to-expire powers as governor to grant the company the kind of special “incentives” that Trump frequently denounced during the campaign.

For the rest of the country, it difficult to avoid thinking that Trump and Pence are using the Carrier situation mainly as a way to boost their popularity and distract people from the overwhelmingly pro-business bent of the rest of the transition.

We are likely to see more of this as the Trump Administration creates a new form of inequality: big and lucrative policy gains for the powerful and smaller, mainly symbolic benefits for the rest of the population. The question is: will Trump’s working class enthusiasts settle for crumbs while the powerful gorge themselves?

The Trump Transition and Wage Theft

If Donald Trump really were a champion of the working class, one place you would expect to see it reflected would be in his plans for the Labor Department. The supposed champion of blue collar Americans should be making sure that the agency most concerned with the world of work is reoriented to their needs.

Given what we have learned about the Trump transition so far, it will come as no surprise to hear that things seem to be moving in a very different direction. The person put in charge of the DOL transition is J. Steven Hart, chairman of the firm of Williams & Jensen, which calls itself “Washington’s Lobbying Powerhouse.” Hart is a lawyer and an accountant who worked in the Reagan Administration but his firm now lobbies mainly on behalf of large corporations such as the health insurer Anthem and Smithfield Foods.

He may provide other services for big business. In a 2007 article in The Washingtonian about DC’s top lobbyists, Hart was described as “the man corporations call when they are having trouble with labor unions.” There is not much in the public record on Hart’s activity as a union buster, which may mean only that he worked behind the scenes.

One thing that is known, according to the BNA Daily Labor Report, is that Hart has lobbied recently on behalf of the International Association of Amusement Parks and Attractions (IAAPA) on the rule formulated by the Labor Department to update overtime eligibility to thwart abusive employer practices. That association has made no secret of its strong opposition to the rule, which is scheduled to take effect on December 1. It put out a press release denouncing the rule as “burdensome” and vowing to work with other business interests to fight it.

The board of directors of the IAAPA includes a representative of the Walt Disney Company, which had has compliance problems with the Fair Labor Standards Act. For example, in 2010 Disney agreed to pay more than $433,000 in back wages to settle DOL allegations regarding off-the-clock work.

The overtime rule is a glaring example of the contradictions in the emerging Trump Administration. The rule would be of enormous benefit to many struggling lower-income workers who are denied overtime compensation under exemptions that were supposed to apply only to high-paid salaried employees. Their plight has amounted to a form of wage theft.

One group of employers that have frequently been implicated in overtime abuses are dollar store chains such as Family Dollar and Dollar Tree. These cases often involve assistant managers who are not really managers and are compelled to perform routine tasks in stores that are chronically understaffed. After losing an overtime lawsuit and hit with $36 million in damages, Family Dollar appealed the case all the way to the Supreme Court (and lost).

It’s likely that Trump supporters are a lot more familiar with dollar stores than those who voted for Clinton. Do they really want to make it easier for those corporations to engage in wage theft against relatives and friends?

A Mandate for Corporate Misconduct?

Many analysts of the presidential election are depicting it as a victory for workers, at least the disaffected white portion of the labor force. It remains to be seen whether Trump can deliver much in the way of concrete economic benefits for them.

Trump’s triumph may actually turn out to be a bigger boon for corporations. Although his candidacy was not actively supported by much of big business, which remains nervous about his posture on trade, Trump put forth other arguments that evoke less a populist uprising than the lobbying agenda of the U.S. Chamber of Commerce , which has just issued a statement embracing the election results for preserving “pro-business majorities” in the Senate and the House.

Trump’s position on big business has been difficult to pin down. He has often criticized crony capitalism but it has usually been part of attacks on Hillary Clinton or the Obama Administration. He has criticized some companies for sending jobs offshore yet has made tax proposals that would be a windfall for Corporate America.

One area in which Trump’s position has been unambiguously pro-corporate is the issue of regulation, where his stance has been indistinguishable from the Chamber and its allies. Trump has expressed a broad-brush condemnation of federal rules as job-killing, using the usual bogus numbers on their economic costs while ignoring the benefits. He has vowed both to eliminate many of the Obama Administration’s initiatives and to put a moratorium on most new rules. Trump has called for slashing the budget of the Environmental Protection Agency and for repealing much of Dodd-Frank, which could mean the demise of the Consumer Financial Protection Bureau.

Trump’s embrace of traditional Republican regulation bashing is all the more troubling as it comes at a time when corporate misconduct remains rampant. It is remarkable that so little attention was paid during the campaign to the scandals involving companies such as Volkswagen, whose emissions fraud has been pursued by the EPA, and Wells Fargo, which was fined $100 million by the CFPB for creating millions of bogus accounts. By threatening these agencies , Trump is undermining future cases against other corporate miscreants.

It’s possible that Trump’s attacks on regulation are nothing more than campaign rhetoric, but he is now allied with those pro-business majorities in Congress that are dead serious about dismantling as much of the federal regulatory framework as possible. Corporate lobbyists must be salivating at what lies ahead.

Is that what Trump supporters signed up for? Do residents of oil and gas states whose water supplies have been contaminated want the EPA to dwindle? Do blue collar workers confronted by predatory lending practices want the CFPB to disappear? Do families with serious health problems want to go back to a system in which insurance companies can discontinue their coverage? Do victims of wage theft want to see funding cut for the Wage & Hour Division of the Labor Department?

Trump has promised to drain the swamp in Washington, yet when it comes to regulation at least he has jumped into the muck feet first and is already becoming part of the problem rather than the solution.

Note: For a reminder of the myriad ways in which the Trump Organization itself has run afoul of federal, state and local regulations, see my Corporate Rap Sheet on the company.

Corporate Criminals and Public Office

Donald Trump’s candidacy is based to a great extent on the notion that a successful businessman would make an effective President. Democrats have shot holes in Trump’s claims of success, but they have not done enough to attack the underlying claim that private sector talents are applicable to the public realm.

The conflation of business and government acumen is all the more dangerous at a time when the norm in the corporate world is increasingly corrupt. The observation by Bernie Sanders during the primaries that “the business model of Wall Street is fraud” applies well beyond the realm of investment banking. Have those calling for government to operate more like business been paying attention to Wells Fargo, Volkswagen and EpiPen-producer Mylan?

It used to be that the main threat was that unscrupulous corporations would use investments in the political and legislative process to bend policymaking to favor their interests. Trump has shown that a corporate miscreant can use a pseudo-populist platform to try to take office directly.

Trump is not unique in this regard. Take the case of West Virginia, where a controversial billionaire coal operator is leading the polls in the state’s gubernatorial race. Jim Justice brags that he is a “career businessman” not a career politician, yet that career includes racking up some $5 million in fines imposed by the Mine Safety and Health Administration, according to Violation Tracker. To make matters worse, NPR and Mine Safety News reported in 2014 that Justice resisted paying these fines. An NPR update says that $2.6 million in MSHA fines and delinquency penalties remain unpaid even as the Justice mining operations continue to get hit with more safety violations.

On top of this, NPR estimates that the Justice companies face more than $10 million in federal, state and county liens for unpaid corporate income, property and minerals taxes. About one-third of the total is owed to poor West Virginia counties. Like Donald Trump, Justice has failed to follow through on charitable commitments yet has managed to pump several million dollars into his campaign.

Did I mention that Justice is the Democratic candidate? He is not, however, supporting Hillary Clinton though he is tight with conservative Democrat Sen. Joe Manchin. Justice’s Republican opponent is state senate president Bill Cole, whose super PAC received a $100,000 contribution from a super PAC funded by the Koch brothers. This was after Cole spoke at the Koch’s private conservative donors conference in Palm Springs last February, reportedly using his remarks to emphasize his commitment to getting a “right to work” law passed in West Virginia. While in the legislature Cole has also been cozy with the American Legislative Exchange Council and has pushed the crackpot supply-side economic prescriptions of Arthur Laffer. Cole is also an enthusiastic supporter of Trump.

It is difficult to know which is worse: a candidate in the pocket of unscrupulous corporate special interests or one who is himself one of those corporate miscreants. It is troubling to think that our elections increasingly come down to such an untenable choice.

Resisting Insurance Industry Blackmail

healthcare-profits Other than the Wikileaks email offensive against the Clintons, the closest thing Republicans have had to an October surprise in their favor has been the news about rising premiums for those getting health coverage through the Obamacare exchanges.

The media treatment of these increases has displayed a bias that Trump is not likely to throw a tantrum about: the coverage is all too often skewed in a way that boosts the arguments of the repeal and (maybe) replace crowd. Too many reporters and pundits seem to take it for granted that the insurance companies have good reasons for boosting rates and that their decision to do so is a reflection of flaws in the system.

As a supporter of the single payer model, I do not hesitate to admit that the Rube Goldberg mechanism created by the Affordable Care Act to deal with the uninsured is far from ideal. In fact, one of its main flaws — the central role given to private insurance — is what’s behind the current problem.

Let’s not forget that the ACA was in a sense an attempt to rehabilitate insurance companies such as Aetna and Humana that were among the worst corporate villains of the 1990s and early 2000s, given their ruthless efforts to deny coverage.

The Obama Administration has gone too far in treating the companies as partners rather than adversaries in the implementation of the ACA. Although the insurers ultimately went along with restrictions on their practices — in exchange for being given a captive customer base — they have not changed their stripes entirely.

They are clearly impatient with the ACA’s growing pains and have lost none of their yearning for profit maximization. Whereas in the past the insurers would refuse to pay for specific treatments and would decline to renew the policies of certain subscribers, now they drop out of certain exchanges or they jack up their premiums.

At the same time, the biggest insurers are seeking to exercise greater dominance over the entire system by acquiring their competitors. Those commenting on the rate increases usually fail to mention that Aetna announced plans to acquire Humana, and Anthem proposed to buy Cigna. The two proposed deals, worth a total of about $85 billion, would reduce the number of major for-profit health insurance companies to just three.

Fortunately, the Justice Department announced its opposition to the mergers back in July. Yet there is no reason to believe that the companies have given up. In fact, both the retrenchment in their exchange activity and the premium hikes should be seen as bargaining chips in the battle over the mergers. Anthem, for example, made this pretty clear during an investor call July when it linked an expansion in its involvement in the exchange market to approval of the Cigna deal.

Faced with a choice between giving three companies (UnitedHealthcare being the third) tremendous market power and seeing the big insurers leave the Obamacare exchanges entirely, the company would be better off with the latter — especially if the foolhardy decision to eliminate a public option is finally rectified.

Criminal Enterprises

Most cases of corporate misconduct are forgotten soon after a fine or settlement is announced, but the Wells Fargo phony account scandal seems to have real staying power. The company had to pay $185 million in penalties. CEO John Stumpf was forced to resign and pay back $41 million in compensation after being lacerated in two Congressional hearings. The city of Chicago and the California Treasurer cut some business ties with the bank.

Now Wells is facing a more serious legal challenge. It’s been reported that California Attorney General Kamala Harris is considering criminal identity theft charges against the bank over the millions of bogus accounts and the related fees that were improperly charged to customers. The AG’s office has demanded that Wells turn over a mountain of documents about accounts created not only in California but also in other states when California employees were involved.

It’s too soon to say for sure, but this case and other potential criminal actions could have a catastrophic effort on Wells. Criminal cases against major banks are rare, and most of those are resolved through deferred prosecution or non-prosecution agreements that allow the corporation to avoid a conviction. An exception came last year when Citicorp, JPMorgan Chase and two foreign banks pleaded guilty to charges of manipulating the foreign exchange market. They had to get special waivers to continue operating in certain areas that normally exclude felons.

The Wells case may do more damage, given the scope of the misconduct and the fact that it involves the bank’s core business. In this way it is comparable to the scandal surrounding Volkswagen and its systematic fraud concerning emissions testing.

These two situations pose a challenging question: What should be done about a large corporation engaged in flagrant misconduct? Another monetary penalty is not going to make much difference. As Violation Tracker shows, even before the recent case Wells had paid out more than $10 billion in fines and settlements in some two dozen cases involving a variety of abuses.

Stumpf’s ouster was an important step, but is there any reason to think that the executives who remain are all that different? A boycott of the company’s services is merited, but it would have to be much bigger in scope to have a real impact.

The usual way that regulators and prosecutors handle criminal enterprises is to force them out of business, but these are usually relatively small operations. What should be done with an institution such as Wells, which has more than 260,000 employees, some 8,600 branches and offices, and 70 million (presumably real) customers?

The answer for dealing with Wells Fargo might be to break it up into a number of smaller companies that are kept under close supervision and barred from operating in riskier areas. In other words: use a variation of Glass-Steagall as a way of discouraging fraudulent behavior. Even better would be if these smaller institutions operated under employee ownership.

My point is that we need to get more creative in dealing with systemic corporate crime so we’re not forced to endure an endless series of scandals.

Tech vs. Jobs

On those rare occasions when the current presidential race deals with policy rather than personalities, the focus tends to be on trade and immigration. Yet there is a potentially much greater threat to the well-being of U.S. workers that is receiving little attention: the technology revolution.

Corporations such as Apple and Facebook promote the idea that digital technology is enriching our lives. In some ways it has: it is easier than ever to keep in touch with far-flung friends and acquaintances, to purchase a vast array of products, to access an endless variety of music and video, and much more.

Yet one thing the tech industry has failed at miserably is giving people opportunities to make a decent living. A front-page article in the Wall Street Journal presents the dismal facts: The tech industry has enriched its investors but does little for the U.S. workforce. In fact, the Journal points out, domestic employment in the computer and electronics hardware industry has fallen nearly 50 percent since the beginning of the century, while the much smaller software workforce has seen only modest increases.

More evidence can be found in a report on data centers just published by my Good Jobs First colleague Kasia Tarczynska. It shows that these facilities, which make up what is known as the cloud, each create only a few dozen jobs. Yet state and local officials, desperate to show they are doing something to encourage employment growth, shower tech giants with subsidies that average nearly $2 million per job.

One tech company that has been hiring a lot is Amazon, which has doubled its workforce (to more than 200,000) over the past couple of years while creating the distribution network necessary for rapid delivery. There are two problems, however. The first is that most of these new positions are lousy warehouse jobs. Amazon has developed a reputation for brutal working conditions — and is aggressively fighting unionization. The second is that many of these jobs will not last for long. Amazon is investing heavily in automation, including the purchase of Kiva Systems, a firm specializing in warehouse robotics. And it continues to experiment with drones designed to replace UPS drivers.

Not only is the tech industry failing to create many jobs in its own operations, but it also is on the verge of destroying large numbers of positions in other sectors. The prime example is the rush toward self-driving vehicles. While there has been some (probably not enough) debate on safety, little has been said about the employment impacts. According to the Bureau of Labor Statistics, some 9.5 million people work in occupations relating to transportation and material moving. A substantial portion of these — especially truck, bus and taxi drivers — are threatened by the rush to autonomous vehicles.

After being decimated by offshoring, the U.S. manufacturing sector has been recovering, but as a consequence of digital technology and robotics today’s plants require far fewer warm bodies.

Advances in artificial intelligence mean that automation-induced job loss will not be limited to blue collar occupations. Even the professions are not immune.

The tension between technological progress and the needs of workers is, of course, an old story. Yet one lesson never seems to sink in: society needs to prepare for the upheaval and make sure that there is a just transition for the workers who are displaced.

Trump’s Accountant, Bogus Tax Shelters and My Lost Inheritance

Jack Mitnick may end up denying the presidency to Donald Trump. He also helped deprive me of my inheritance.

As the world now knows, the accountant confirmed to the New York Times the authenticity of leaked Trump tax return documents prepared by him that reported an annual loss of some $916 million in 1995 that may have allowed the mogul to avoid federal taxes for nearly two decades.

Trump was not Mitnick’s only client in the 1990s. He and his firm Spahr Lacher & Sperber also did work for my maternal grandfather Julius Nasso, who owned a concrete construction company in New York City. That firm did quite well for its work on projects such as Madison Square Garden and the Javits Convention Center.

My grandfather, who died in 1999, prospered from the business, but his wealth, I regret to say, was also enhanced through the use of dubious tax shelters involving coal leases. That’s where Mitnick comes in. From what I know, Mitnick’s firm either set up my grandfather in the shelters or at least prepared tax returns in which they were used to greatly reduce his tax liabilities.

The Internal Revenue Service eventually challenged the shelters, but my grandfather, apparently with Mitnick’s help, refused to settle. It was only after his death that the dispute was resolved by my family with a substantial payment to the IRS. One consequence of this was that the bequests in his will to me and the other grandchildren could not be fulfilled.

I long treated this as a private family matter, but after Mitnick’s name appeared in the Times story I did some research on him. I found that in 1981 Mitnick and other parties were sued by William Freschi Jr. in his role as trustee of the estate of his father, who like my grandfather had invested in coal lease tax shelters. The suit accused Mitnick, who was described as the administrator of Grand Coal Venture, and others of defrauding his father.

The case had a long and complicated legal history, including a racketeering charge and an action by the U.S. Supreme Court. In 1985 Mitnick and the other defendants were found guilty of securities fraud and ordered to pay Freschi $266,500 in damages, plus $126,681.75 in pre-judgment interest. The Court of Appeals, however, later overturned the award against Mitnick but did not completely exonerate him.

Given Mitnick’s close working relationship with Trump — the accountant is mentioned in The Art of the Deal — one cannot help wonder whether he also arranged for Trump to participate in the phony coal tax shelters. Given the other tax dodging tricks available in connection with his real estate holdings, Trump may not have needed them, but this is another question that will be answered only when Trump releases his full tax returns.

In the interest of full disclosure, I should mention that my grandfather’s company operated at times in a joint venture with S&A Concrete, a firm with alleged mob connections that separately did substantial business on Trump projects.

False Claims and Other Frauds

ViolationTracker_Logo_Development_R3 The False Claims Act sounds like the name of a Donald Trump comedy routine, but it is actually a 150-year-old law that is widely used to prosecute companies and individuals that seek to defraud the federal government. It is also the focus of the latest expansion of Violation Tracker, the database of corporate crime and misconduct we produce at the Corporate Research Project of Good Jobs First. The resource now contains 112,000 entries from 30 federal regulatory agencies and all divisions of the Justice Department. The cases account for some $300 billion in fines and settlements.

Through the addition of some 750 False Claims Act and related cases resolved since the beginning of 2010, we were able to identify the biggest culprits in this category. Drug manufacturers, hospital systems, insurers and other healthcare companies have paid nearly $7 billion in fines and settlements. Banks, led by Wells Fargo, account for the second largest portion of False Claims Act penalties, with more than $3 billion in payments. More than one-third of the 100 largest federal contractors have been defendants in such cases during the seven-year period.

Among the newly added cases involving healthcare companies, the largest is the $784 million settlement the Justice Department reached last April with Pfizer and its subsidiary Wyeth to resolve allegations that they overcharged the Medicaid program. DaVita HealthCare Partners, a leading dialysis provider, was involved in the next two largest cases, in which it had to pay a total of $800 million to resolve allegations that it engaged in wasteful practices and paid referral kickbacks while providing services covered under Medicare and other federal health programs.

Wells Fargo accounts for the largest banking-related penalty and the largest False Claims Act case overall in the new data: a $1.2 billion settlement earlier this year to resolve allegations that the bank falsely certified to the Department of Housing and Urban Development that certain residential home mortgage loans were eligible for Federal Housing Administration insurance, with the result that the government had to pay FHA insurance claims when some of those loans defaulted.

Thirty-five of the 100 largest federal contractors (in FY2015) have paid fines or settlements totaling $1.8 billion in False Claims Act-related cases since the beginning of 2010. The biggest contractor, Lockheed Martin, paid a total of $50 million in four cases, while number two Boeing paid a total of $41 million in two cases.

The database has also added new search features, such as the ability to search by 49 different types of offenses, ranging from mortgage abuses to drug safety violations. Users can view summary pages for each type of offense, showing which parent companies have the most penalties in the category. Penalty summary pages for parents, industries and agencies now also contain tables showing the most common offenses. Users can add one or more offense type to other variables in their searches.

Among types of offenses, the largest penalty total comes from cases involving the packaging and sale of toxic securities in the period leading up to the financial meltdown in 2008. The top-ten primary case types are as follows:

Toxic securities abuses: $68 billion
Environmental violations: $63 billion
Mortgage abuses: $43 billion
Other banking violations: $18 billion
Economic sanction violations: $14 billion
Off-label/unapproved promotion of medical products: $12 billion
False Claims Act cases: $11 billion
Consumer protection violations: $9 billion
Interest rate benchmark manipulation: $7 billion
Foreign Corrupt Practices Act cases: $6 billion

We also added a feature allowing for searches limited to companies linked to parent companies with specific ownership structures such as publicly traded, privately held, joint venture, non-profit and employee-owned. That’s in addition to updating the data from the agencies already covered and increasing the size of the parent company universe to 2,165.

The uproar over the Wells Fargo sham accounts scandal is heightening the discussion of corporate crime. Violation Tracker hopes to be a tool in efforts to turn that discussion into lasting change.

Grandstanding Without Results

Members of Congress subjected the CEOs of a pair of rogue corporations to much-deserved castigation in recent days, but the executives will probably turn out to be the victors. John Stumpf of Wells Fargo and Heather Bresch of Mylan endured the barbs knowing that they will not lead to any serious consequences.

The periodic grilling of business moguls amid corporate scandals is a longstanding feature of Congressional oversight. In the 1930s the Senate Banking Committee, led by investigator Ferdinand Pecora, questioned Wall Street titans such as J.P. Morgan about the causes of the stock market crash. In the late 1950s Sen. Estes Kefauver asked pharmaceutical executives about rising drug prices. In the 1960s Sen. Abraham Ribicoff, with the help of a young lawyer named Ralph Nader, interrogated auto industry executives about their seemingly cavalier attitude toward safety.

Jumping to the recent past: In 2010 the CEO of BP was hauled before a House hearing to testify about the Deepwater Horizon disaster. In 2013 the Senate’s Permanent Subcommittee on Investigations questioned Apple CEO Tim Cook about his company’s international tax avoidance. And so forth.

Yet there is a big difference between the older and the more recent hearings. In the 20th Century these events were preludes to legislative reform. The Pecora hearings led to the passage of the Glass-Steagall Act separating speculative activities from commercial banking. Kefauver tried but failed to pass price restrictions but was able to enact stricter drug manufacturing and reporting rules. The Ribicoff hearings led to the passage of the National Traffic and Motor Vehicle Safety Act and the Highway Safety Act.

Those earlier hearings may have been political theatre, but they were followed by serious regulatory changes. Today’s hearings, on the other hand, seem to be nothing more than theatre. For many members of Congress, they are opportunities to pretend to be concerned about corporate misconduct while having no intention to do anything about it.

That’s not surprising, given that the party in control of both chambers of Congress is rabidly anti-regulation. The 2016 Republican National Platform is filled with critical comments about regulation, including an assertion that the Obama Administration “triggered an avalanche of regulation that wreaks havoc across the economy.”

The Consumer Financial Protection Bureau, the lead regulator in the Wells Fargo fake accounts case, is a favorite target of conservative lawmakers. Right after the CFPB’s Wells Fargo announcement, Speaker Paul Ryan sent out a tweet claiming that the agency “tries to micromanage your everyday life.” Senate Banking Committee Chair Richard Shelby tried to block the appointment of Richard Cordray to head the CFPB and subsequently sought to weaken the agency. And during his opening statement at the hearing, he took a pot shot at CFPB for not being aggressive enough in pursuing the case.

Congressional grandstanding against corporate miscreants has been going on for decades, but what was once a device to build public support for real legislative change now serves mainly to conceal the fact that too many legislators are in office to do the bidding of corporations, even the most corrupt ones.