Corporation Watch

A draft report released by the Federal Communications Commission (FCC) on Nov. 29 found that AT&T's proposed merger with German-owned cellphone carrier T-Mobile would not be in the public interest because it would substantially reduce competition among the four top mobile phone providers and raise prices for consumers.

This followed similar findings from the U.S. Department of Justice, as well as public opposition to the deal from senior members of Congress, and was not a surprise. The real “news” in the report was the FCC's finding that AT&T had publicly lied about the benefits of its proposed merger with T-Mobile — telling the public, media, and federal regulators that the deal was necessary to modernize its wireless phone network and would lower prices and create more jobs*, while its internal documents showed that its public claims were untrue.

A March 24 NY Times article headlined "GE’s Strategies Let It Avoid Taxes Altogether" described how General Electric, the nation’s largest corporation, reported $14.2 billion in 2010 global profits, including $5.1 billion from its operations in the United States, yet not only paid absolutely zero U.S. taxes, but actually claimed a tax benefit of $3.2 billion.

Reporter David Kocieniewski notes that "low taxes are nothing new for GE", and are the result of "an aggressive strategy that mixes fierce lobbying for tax breaks with innovative accounting that enables it to concentrate its profits off-shore. GE’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm".

According to Kocieniewski, nearly a thousand GE employees spend at least half their time exploiting an already porous tax code that allows corporations to avoid paying taxes on income from certain kinds of financial operations abroad, and then use tax credits, write-offs, and depreciation from those activities to off-set taxes on domestic profits.

"But critics say the use of so many shelters amounts to corporate welfare", the article says, and that "the assertive tax avoidance of multinationals like GE not only shortchanges the Treasury, but also harms the economy by discouraging investment and hiring in the United States".

CUNY professor David Harvey gave a presentation in April 2010 to the Royal Society for the Encouragement of Arts, Manufactures, and Commerce (only in Britain could they name something that, right?) called "The Crises of Capitalism", which the RSA then had animated. The result is sort of a "live" cartoon in which Harvey's words are both literally and figuratively animated as he speaks:

In the video, Harvey says that "any sensible person would join an anti-capitalist organization" (like CounterCorp!) and that those who are "seriously involved in the world have a duty to change our mode of thinking", which isn't exactly a radical notion — except maybe in 21st century America, where the corporate, political, and even academic establishment still respond to any deviation from economic orthodoxy with an intolerance bordering on the Catholic Church's inquisition of Galileo almost exactly 400 years ago.

And for those who think the U.S. doesn't suffer from that kind of rigid institutional control of publicly acceptable thought, just try to imagine this cartoon being set to music and shown to children on Schoolhouse Rock ...

An iPhone owner who claims AT&T billed him for data usage that was impossible because he'd disabled all data services on his phone has filed a class-action lawsuit in federal court in California, seeking to include all iPhone and iPad users who were similarly defrauded by AT&T's "rigged" billing system.

Plaintiff Patrick Hendricks claimed in the suit that "AT&T's bills systematically overstate the amount of data used on each data transaction involving an iPhone or iPad account," and charged customers for data transactions even if they didn't use the device, Courthouse News Service (CNS) reported on Jan. 31.

Hendricks' lawyers described AT&T's billing system as "a rigged gas pump that charges for a full gallon when it pumps only nine-tenths of a gallon into your car's tank."

Out here on the pseudo-progressive Left Coast, major private California insurance company Blue Shield announced that healthcare premium hikes of as much as 59% are scheduled to take effect on March 1. A company spokesman told CNN that the gouge increases had "almost nothing to do with the federal health reform law" [emphasis added].

Unfortunately, as CNN noted, "[t]he federal government does not have the authority to review and strike down unreasonable rate increase requests. Historically, that authority lies with individual states. But some states don't have any rate review process at all, and insurers can hike rates as much as they want."

Forbes magazine reported Nov. 29 that Wikileaks, the non-profit transparency collective responsible for releasing classified U.S. government documents on the Iraq and Afghanistan occupations — as well as the more recent U.S. diplomatic cables that have revealed behind-the-scenes international political machinations, embarrassing governments around the world — will turn its focus to corporate skullduggery in 2011.

In an interview with Wikileaks founder and director Julian Assange, Forbes quoted Assange as saying that his organization still has millions of documents it has yet to reveal, and that roughly half of them come from inside corporations — including pharmaceutical companies, finance companies, and energy firms, among other industries.

The San Francisco Chronicle reported on Nov. 20 that corporate serial killer Pacific Gas & Electric (PG&E), whose poisoning of groundwater in the farming community of Hinkley, Calif. (some 100 miles northeast of L.A.) and subsequent effort to cover it up was the basis for the hit anti-corporate film Erin Brockovich, is downplaying evidence that the problem has moved beyond the affected area in the original lawsuits that Brockovich and her firm brought on behalf of the town's cancer-ridden residents.

Brockovich, who at the time was an untrained legal clerk, discovered and pursued evidence that PG&E knew for 30 years that a toxic metal called hexavalent chromium (also known as chromium-6) from one of its plants had been seeping into the town's water sources, leading to the largest toxic tort injury settlement in U.S. history: $333 million for more than 600 Hinkley residents.

A Nov. 20 Wall Street Journal article reported that the FBI and SEC are investigating widespread insider trading on Wall Street, involving a variety of schemes in which non-public information about forthcoming mergers and other corporate activity was disseminated to hedgefund managers and other professional investors in advance, allowing them to essentially place no-lose bets on things they knew were going to happen.

A few things stand out about the investigation:

1. Goldman Sachs is involved in certain aspects of it. (Now there's a tremendous surprise.)
2. The healthcare industry figures prominently. (See parentheses above.)
3. This quote from the U.S. Attorney in Manhattan: "Illegal insider trading is rampant [on Wall Street], and may even be on the rise."
4. It's been going on for at least three years, which means that the conduct under scrutiny was happening well before the current financial crisis. That in turn implies that, even while the greatest rip-off in world financial history was going on in plain sight, some of Wall Street's finest corporate citizens weren't satisfied making millions of dollars through the fixed-casino game of over-leveraged securities, and instead chose to essentially "tunnel into the vault while the bank was closed" to steal even more money.

Northern German Radio (NDR) reported in April that Germany's largest savings bank, Hamburg-based HaSpa, had been using psychological profiling software since 2007 to divide their clients into different classifications, in order to help its salespeople sell them more "products", such as insurance or stocks.

HaSpa said its use of the software, called Sensus, was actually in the "best interests" of its customers, because it allowed the bank to tailor its sales pitches to their individual needs. But in response to the uproar that resulted when its profile-driven sales tactics were revealed to the public, HaSpa said it had discontinued the practice.

An Oct. 21 New York Times article entitled "Top Corporations Aid U.S. Chamber of Commerce Campaign" reveals that a small number of large corporations are bankrolling one of the largest non-party election campaigns in U.S. history, being conducted by the U.S. Chamber of Commerce. The article describes a relatively small coterie of major U.S. corporations who supported the Chamber with donations averaging more than $1.5 million in 2008 — undoubtedly much higher this year, due to the elections — and how it in turn carried water for their specific issues, rather than (as it claims) representing the interests of what it says are 300,000 members and 3 million businesses.