Above the Law

by MARK GABRISH CONLAN, Editor

Copyright © 2010 by Mark Gabrish Conlan for Zenger’s Newsmagazine • All rights reserved

There is a force in our society that controls trillions of dollars and has such totally unaccountable power it has literally put itself above the law — and no, unlike most people who write that way these days, I don’t mean the federal government. I mean the private business sector, especially the large corporations that dominate the U.S. economy. They fund the political system, paying millions of dollars in campaign contributions to elected officials and candidates, and in return getting legal changes that make them billions in profits. Among the laws they order from their kept politicians — with all the certainty you or I expect from a fast-food order from McDonald’s — are custom-tailored exemptions from the normal expectations of civilized behavior, ranging from paying taxes to not dumping your waste in other people’s backyards. Over and over again, corporate and business leaders tell us that they are the ones who provide the jobs and create all social wealth — and over and over again, we go on believing them and letting them live and operate beyond law, beyond ethics, beyond morality and beyond basic decency.

Just one month’s reading in a major newspaper will offer plenty of articles in support of everything I’ve just said. Los Angeles Times, February 20: “The billionaires’ club of private financiers who took over the remains of IndyMac bank from the Federal Deposit Insurance Corp. turned a profit of $1.57 billion last year on the failed mortgage lender — more than they invested less than a year ago.” And guess who’s on the hook for the failed bank’s losses? The Federal Deposit Insurance Corporation (FDIC), which operated the entity for the eight months between the time the previous owners’ mistakes drove it out of business and the time the new owners took over. This fund, which is supposed to make good on money you and I lose from our bank accounts if our banks go out of business, lost up to $11 billion making those financiers $1.57 billion richer.

Los Angeles Times, also February 20: “After months of public input and consultation with experts, the state’s pharmacy board appeared to be poised to adopt strict new requirements for prescription drug labels last month. But that changed when Gov. Arnold Schwarzenegger placed a drugstore industry executive” — Deborah Veale of CVS, the company that of late has been gobbling already large chains like Sav-On and Long’s — “on the board a day before the vote.” The losers: “consumer advocacy groups and senior citizen and minority organizations.” The winners: the California Retailers Association, who had been fighting the changes — and had also contributed $400,000 to Schwarzenegger’s political campaign.

Los Angeles Times, February 23: David Lazarus’s column in the business section tells the story of 50-year-old Bob Iritano, who has terminal cancer. “It’s not a question of whether he’s going to die,” Lazarus wrote. “The only question is when, and how much longer he’ll be with his family. Iritano, understandably, wants all the time he can get … His health insurer, he believes, has a different time frame in mind. ‘My best guess is they want me dead as soon as possible … They know that the premiums I pay will never cover how much they’ll spend on me.’”

Iritano and his wife contacted Lazarus after his insurer, HealthNet, refused to pay for a procedure — microwave radiation — they’d covered just six months earlier. What’s more, they waited to tell him that until he was already in the hospital, ready to go, surrounded by doctors, nurses and an anaesthesiologist ready to treat him — and a HealthNet rep phoned the O.R. and said they weren’t going to pay for it, and if he went ahead it was going to cost him $20,000 out of pocket. The letter he got from HealthNet later said they thought it would be more cost-effective if he had chemo instead of radiation — even though his doctors were sure he couldn’t handle chemo and trying it would probably kill him.

Los Angeles Times, February 7: “Employing a broad-based lobbying effort, the soft drink industry has smothered a [federal] plan to tax sugared beverages — a plan advocates said would have reduced obesity and helped finance health care reform.” According to reporters Tom Hamburger and Kim Geiger, “the White House staff reviewing funding options never embraced the idea even after President Obama expressed interest last summer.” The soft drink industry went after the proposed tax with all barrels blazing, using tactics ranging from ridiculing the scientists who’d done the research linking soft drink consumption with obesity to tapping the goodwill from years of contributions they’d given “minority advocacy groups, including some committed to fighting obesity” and getting them to oppose the tax.

Los Angeles Times, February 21: “Manufacturing businesses, big financial firms and energy companies are eager for new tax breaks in California — but not if it means officials will take a harder look at how they claim the credits.” The story, by Sacramento-based reporter Evan Halper, said that “a coalition of corporations” was fighting a bill that stood to make them money because they didn’t like the 20 percent fee they’d have to pay if they were later found to have taken a tax credit they weren’t entitled to. “The only reason you would oppose this penalty is if you’re cheating on your taxes,” a frustrated state senator Lois Wolk, chair of the senate’s tax committee, told Halper.

And if you think that corporations have any sense of accountability even to their stockholders — the people they’re supposedly in business to benefit by paying them profits as dividends — think again. Los Angeles Times, February 24: “Since Brian Moynihan took over as chief executive at Bank of America Corp. at the turn of the year, he has sought to convey a flexible and cooperative attitude. But the accommodating approach hasn’t been extended to shareholders seeking to put proposals regarding executive pay on the ballot at the company’s April 28 annual meeting. The bank is ‘being aggressive in doing whatever they can do to keep shareholders off the ballot,’ said John Chevedden of Redondo Beach, a retired aerospace worker who has proposed a number of shareholder resolutions at banks.” Not that the executives at Bank of America would be in any real danger of losing such a vote — most corporations head into their annual meetings with so many shares locked up in favor of the existing management that such resolutions are usually swamped in the final vote — but this company doesn’t even want a few dissident shareholders to be able to stage a token protest vote against their swollen pay packages, stock options and bonuses.

Two more items show how the voter initiative — originally approved in California in 1912 as a way the people could bypass the control of the Southern Pacific Railroad and other mega-companies of the time over the legislative process — has instead become a way for corporations to set themselves even further above the law by tricking the people into giving them what they want when they haven’t been able to persuade elected legislators. Los Angeles Times, February 10: Michael Hiltzik’s column is about Proposition 16 on the June 8 state ballot. The measure would require any public entity to win two-thirds voter approval before it could start, expand or finance a publicly owned power service as an alternative to private utilities like Pacific Gas & Electric (PG&E), the state’s largest private utility — which put up $3.5 million to get the measure on the ballot and had just contributed $3 million more in the face of a letter from nine state legislators, including State Senate President pro tem Darrell Steinberg, questioning whether PG&E’s use of the initiative process violated state law.

“By undermining all competition from public power agencies, [Proposition 16] will benefit no one except PG&E and other private utilities,” Hiltzik wrote. “In official documents, PG&E identifies its campaign finance committee as ‘a coalition of taxpayers, environmentalists, renewable energy, business and labor,’ but at this stage it’s a coalition of one: PG&E. No one else has contributed a dime, according to the most recent campaign finance filings. By the way, PG&E claims it is so strapped for money that it is currently seeking a $1.1-billion rate increase.”

Hiltzik again: Los Angeles Times, February 21. This time his column is about a corporate power grab in the tiny Pacific Coast city of Carpinteria, just south of Santa Barbara, pitting an elected city council against a Denver-based oil company called Venoco. This firm, Hiltzik wrote, “is spending lavishly to pass a ballot initiative specifically exempting itself from the city’s industrial development and environmental rules. That’s because it’s afraid that Carpinteria’s elected officials, left to their own devices, might not greenlight its proposal to operate a 10-story oil derrick round the clock on its property next to a 225-home residential neighborhood and on the edge of the ecologically sensitive coastal bluffs.” When, after four years of negotiation, the city refused to give Venoco the permit they wanted, the company spent its money to put the initiative on the ballot and is counting on stoking public fear and promising voters “royalties” that may never materialize.

All these examples — and they only scratch the surface — indicate an attitude on the part of corporate and business America that the ordinary rules of law, ethics and morals simply do not apply to them. The argument of the corporate leaders and their political, media and intellectual flunkies is that in a capitalist economy, it is the private sector that creates jobs and enables people to survive economically — and therefore they should be allowed to do anything they wanted, free from pesky regulations or social obligations the rest of us take for granted, like paying taxes. And ever since the 1970’s, elected officials — either out of genuine belief in the pro-corporate, anti-society mantras or out of fear the spigots of campaign cash they depend on would be turned off if they did otherwise — have consistently given the corporate desperadoes whatever they wanted: freedom from taxation, from regulation, from controls on so-called “innovations” that — especially in the so-called “FIRE” (finance, investment, real estate) sector that is now the largest part of the U.S. economy — usually just mean creative new ways of screwing ordinary people out of their money.

What’s more, we the people are letting them get away with it big-time. At the turn of the last century, plenty of Americans looked to building up the public sector as a viable way of controlling the abuses of private enterprises. No more: after decades of Right-wing propaganda extolling private enterprise as good, efficient and virtuous, and government as evil and corrupt — and after the failure of the socialist ideal in the face of the dictatorship and misery to which the Soviet Union and other “really existing socialisms” subjected their people — most Americans reflexively regard the business interest as the public interest and reject all organized challenges to it — from labor, environmentalists, people of color or anyone else — as “special interests.”

The ease with which the Right-wing propaganda machine in this country was able to demonize President Obama’s corporate-friendly health insurance reform as “socialism” and a “government takeover” of health care shows just how much most Americans have been brainwashed into the private-good, public-bad idolatry of “the Market.” The Rightists were able to win this stunning propaganda victory even in the face of the most far-reaching collapse of the private sector and the really existing market economy since the Great Depression of the 1930’s. And their successful strategy was to convince the American public that any expansion of government’s role in health care would bring such intolerable evils as long waits, arbitrary denials of treatment and bureaucrats coming between you and your doctor — which are already being done every day, in spades, by the private, for-profit health insurance industry.

Until the American people get over their zombie-like support of and faith in “the Market,” there will be no effective reform either of American politics or of any sector of the U.S. economy. There will only be scofflaw corporations, thumbing their noses at the people while they continue to drive wages down, export jobs to foreign countries, destroy the social safety net, pollute the environment and, through putting the pedal to the metal on global warming, ultimately speed up the extinction of the entire human race. If the people of this country were truly aware of how they’re getting screwed and who’s screwing them, we wouldn’t be seeing misled idiots staging “tea party” rallies trashing the government and calling for lower taxes; instead we’d be seeing a broad-based movement to demand accountability from a runaway private sector.