-Caveat Lector-
From: Robert Weissman <[EMAIL PROTECTED]>
To: list CORP-FOCUS <[EMAIL PROTECTED]>
Date: Mon, 27 Sep 1999
Subj: Focus on the Corporation follow-up: Anti-Scofflaw Alert
A few weeks ago, the Focus on the Corporation column was titled
"A Law and Order Regulation for Corporations." The subject was
a proposal to prevent the U.S. government from entering into
contracts with companies that are chronic or serious violators
of labor, environmental, tax, antitrust or employment laws.
This note is a follow up to that column.
For more details, see the Essential Action web page,
http://www.essentialaction.org/anti-scofflaw.
The federal government is now accepting comments on the proposed
regulation. Business groups are weighing in heavily against it;
and so if the proposal is to be enacted, it is vital that
citizens and public interest groups submit comments in support
of the regulation.
It is easy to submit comments -- even a comment that says
nothing more than, "I support the principle that the federal
government should not contract with companies that seriously
transgress the law" is valuable, and comments can be submitted
by e-mail (as well as regular mail).
For background on the proposed regulation, and tips on what
to say in comments, see the Essential Action web page,
http://www.essentialaction.org/anti-scofflaw . You can
e-mail comments directly to the agency from this page.
If you are so eager to send comments that you don't even
want to check the page, you can send them by e-mail to
[EMAIL PROTECTED] -- or by regular mail to:
General Services Administration
FAR Secretariat (MVR)
1800 F Street, NW, Room 4035 ATTN: Laurie Duarte
Washington, D.C. 20045
Be sure to mention in all written comments that you are
commenting in reference to FAR case 99-010.
** Please pass this note on to friends, colleagues and
relevant listserves. **
~~~~~~~
From: Robert Weissman <[EMAIL PROTECTED]>
To: list CORP-FOCUS <[EMAIL PROTECTED]>
Date: Mon, 23 Aug 1999
Subj: A Law and Order Regulation for Corporations
A Law and Order Regulation for Corporations
By Russell Mokhiber and Robert Weissman
If you commit a felony, you lose the right to vote.
What happens to corporations that break the law? They don't have
the right to vote. But do they lose any rights or privileges?
In what may be one of its most important corporate accountability
initiatives (there haven't been many), the Clinton administration
is suggesting that chronic violators of labor, environmental, tax,
antitrust or employment laws should be denied the privilege of
entering contracts with the federal government.
Vice President Gore first floated the idea in a 1997 speech to the
AFL-CIO. A business outcry persuaded the administration to put the
proposal on hold, but two years later it decided to move forward.
In July the administration proposed regulations that would clarify
federal procurement officers' duty to ensure that government
contractors have a "satisfactory record of integrity and business
ethics." Under the regulations, corporations that repeatedly or
seriously transgress worker rights, health, safety, environmental,
tax or antitrust laws would be deemed ineligible for federal
government contracts.
Big business is up in arms about the proposal -- a sign that it may
be of consequence. The U.S. Chamber of Commerce along with an
alphabet-soup full of business trade associations have organized
the National Alliance Against Blacklisting to block the proposal.
The Alliance is planning a full-blown campaign against the
regulations. It is revving up arguments about how the regulations
would bestow on procurement officers the power to act arbitrarily,
how corporations could be unfairly penalized for failing to comply
with confusing and technical federal rules, and how the regulations
improperly side the federal government with labor in
labor-management disputes.
The business groups are right about one thing: the Clinton
administration has hit upon a potentially powerful tool to
discipline large corporations.
The federal government spends approximately $200 billion a year on
procurement, buying goods and services from firms that employ
approximately 20 percent of the U.S. workforce. Government
contracts make up a significant revenue stream for many firms,
including many of the largest companies in the country. In refusing
to contract with polluting, consumer-cheating, racially or sexually
discriminating, tax-avoiding, clearcutting, price-fixing and other
miscreant companies, the government can leverage its buying power
to promote more responsible corporate behavior.
Consider the issues of worker rights and worker safety. A 1995
study by the General Accounting Office (GAO), the congressional
research agency, found that 80 federal contractors, receiving more
than $23 billion in federal government business in fiscal year
1993, had violated the National Labor Relations Act. Six
contractors -- McDonnell Douglas, Westinghouse, Raytheon, United
Technologies, AT&T and Fluor -- received almost 90 percent of the
$23 billion.
A 1996 GAO study found that 261 federal contractors, receiving more
than $38 billion in federal government business in fiscal year
1994, received penalties of at least $15,000 for violating
Occupational Safety and Health Act regulations. The biggest of
these contractors included General Electric, Lockheed Martin,
Westinghouse, United Technologies, General Motors, Boeing and
Textron.
The current U.S. labor law regime imposes virtually no meaningful
penalties on businesses that violate worker rights. The standard
sanction imposed against a company that fires a worker for
supporting a union is an order to reinstate the worker with back
pay -- there are no punitive damages available. Serious violators
of workplace health and safety regulations typically walk away with
small fines.
By contrast, the threat of losing major government contracts is a
much more serious and costly penalty. The proposed procurement
regulations would make federal contractors much more wary of
recklessly disregarding worker rights and worker safety.
Given the generally weak penalties for corporate law-breaking in
the United States, the same holds in other spheres. Too frequently,
corporations are able to brush off fines and sanctions for
law-breaking.
When corporations calculate, overtly or implicitly, whether they
should respect the law, they consider the odds of getting caught
and the size of the likely penalty if they are caught. Other
factors go into such decisions of course -- potential civil
liability, the social pressure to comply with the law or simple
respect for the law -- but no one seriously doubts that enforcement
vigor and the size of sanctions affect corporate adherence to the
law.
If the regulation, really a very modest step, is enacted, the
answer to the question, "Do corporate law breakers lose any
privileges or rights?" will finally be, "Yes."
(c) Russell Mokhiber and Robert Weissman
Russell Mokhiber is editor of the Washington, D.C.-based Corporate
Crime Reporter. Robert Weissman is editor of the Washington,
D.C.-based Multinational Monitor. They are co-authors of Corporate
Predators: The Hunt for MegaProfits and the Attack on Democracy
(Monroe, Maine: Common Courage Press, 1999,
http://www.corporatepredators.com).
-----------------------------------------------------------
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