From corporation-watch at countercorp.org Mon Jun 21 17:20:03 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Mon, 21 Jun 2010 14:20:03 -0700 Subject: [Corp. Watch] USDA proposes curbs on corporate meat monopoly Message-ID: USDA Proposes Tougher Meat Industry Anti-Trust Rules by Christopher Leonard (Associated Press, June 18) ? The Obama administration on Friday proposed new anti-trust rules for meat companies that reflect a willingness by the U.S. Department of Agriculture (USDA) to shift the balance of power between farmers and processors, and to regulate an industry long dominated by a handful of corporate giants. The rules would place the sharpest limits on meat companies since the Great Depression, drastically lowering the bar that farmers and ranchers must meet to sue companies whom they accuse of demanding unfairly low prices. The rules would dictate how meatpackers buy cattle on the open market, and prohibit them from showing preference to big feedlots by offering them special incentives not available to smaller producers. They would also limit the control chicken companies have over the farmers who raise birds for them. The companies couldn't require farmers to take on debt to invest in chicken houses, for example, unless farmers were guaranteed to recoup 80 percent of the cost. The law would also make it easier to file suits under the Depression-era Packers and Stockyards Act by stating that farmers don't need to prove industry-wide anti-competitive behavior to file a lawsuit under the act. "I think it's fair to say that what we're proposing is aggressive," Secretary of Agriculture Tom Vilsack said in an interview with the Associated Press. "The reality is, the Packers and Stockyards Act has not kept pace with the marketplace ... Our job is to make sure the playing field is level for producers." Vilsack said increasing consolidation has strengthened the power that big companies have over farmers, giving producers an ever-decreasing share of the money consumers spend at the grocery store. As a result, farms are failing, with the number of hog farms dropping from 660,000 in 1980 to just 71,000 now. The number of cattle farms has fallen from 1.6 million in 1980 to 950,000. "The genesis of all of this starts with recognition that folks generally in rural America are struggling," Vilsack said. "Livestock producers in particular are no strangers to that struggle." Farmers and meat company lobbyists expressed surprise at the scope of the rules, and prominent meat industry trade groups immediately criticized it. "They're basically trying to roll back time," said Mark Dopp, policy director for the American Meat Institute. "This rule attempts on many levels to undercut all the progress that's been made" in the meat industry. Dopp said he needed to read the new regulations before saying how the institute would respond. The National Chicken Council, which represents poultry companies like Tyson Foods and Pilgrim's Pride, said in a statement the rules were "one-sided, unrealistic, and not in accordance with court rulings." Perhaps the most significant provision in the new rules is one that makes it easier for farmers to file suits under the Packers and Stockyards Act, said Peter Carstensen, a law professor at the University of Wisconsin who has studied agriculture competition law for decades. Farmers who now sue under the act must show a company has not only harmed them, but that it has hurt competition in the overall meat industry, Carstensen said. The new law would change that, making it clear that the law only requires a farmer to show a company has engaged in "unfair" or "discriminatory" acts against the farmer. That sole provision could unleash a wave of litigation, and prompt courts to overturn earlier rulings, Carstensen said. "They're inviting the courts to reconsider their previous decisions," he said. Dopp said the provision would open the door for a "swarm of litigation." He said it also directly contradicts several federal appeals court decisions that found competitive harm must be shown for a Packers and Stockyards case. "It's a regulatory end-run. And frankly, I don't think that's an appropriate role for the agency to play," Dopp said. Vilsack said the courts made their rulings in the face of ambiguous rules from the USDA, and that the new rules would clarify the agency's stance. In essence, courts set the bar too high for farmers, he said. "That's tantamount to having your car stolen, but before the police investigate ... you have to prove that that theft impacts not just you, but all of your neighbors. Well, that just doesn't make sense to us," he said. For farmers and ranchers, the new rule will reinvigorate a Packers and Stockyards Act that many have come to see as toothless, said Bill Bullard, chief executive officer of R-Calf USA, a rancher advocacy group. "That is a huge development," Bullard said. "That re-positions the [Packers and Stockyards Act] as the tool to protect producers against unfair and deceptive practices." The American Farm Bureau Federation endorsed the rule, saying it offered overdue protections for farmers who have lost power and profits because of industry consolidation. Farmers and meat companies have until Aug. 23 to submit comments on the rules. Vilsack said there is no set date for implementing them after that deadline. Congress can comment on the rule, but does not have authority to shape the final language. From corporation-watch at countercorp.org Tue Jun 22 01:12:46 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Mon, 21 Jun 2010 22:12:46 -0700 Subject: [Corp. Watch] India seeks fugitive American CEO for world's deadliest corporate disaster Message-ID: <185606A4-BA0A-44D1-A9A3-4F6E36375BF6@countercorp.org> India to Press U.S. over Bhopal Extradition By Harmeet Shah Singh (CNN, June 21) -- India will make "vigorous" efforts to push the United States to extradite the former head of an American chemical company, in connection with the 1984 industrial disaster in Bhopal, India, a government minister said Monday. A court in central India ruled earlier this month that seven top executives from Union Carbide India were guilty for their role in a gas leak at the Bhopal plant. The same court issued an arrest warrant for Warren Anderson, the former chairman of Union Carbide Corporation. Anderson has been declared an "absconder" -- or fugitive -- from the indictment, Indian officials say. "The government will make vigorous efforts to get Anderson extradited," said India's Minister of Urban Development S. Jaipal Reddy on Monday. Reddy sits on a panel that is recommending that Indian authorities use new evidence in support of the extradition plea: testimonies that the parent company was aware of what Indian investigators believe were defects in its Bhopal plant. India's federal police first requested that the United States extradite Anderson in 1993. "However, this request remains unexecuted," India's Central Bureau of Investigation noted in its statement on the day of the Bhopal ruling this month. Currently, India has extradition pacts with 31 countries, including the United States. In the past eight years, India has been able to get 42 wanted people from abroad to face trial, authorities say. Nearly 4,000 people died in the immediate aftermath of the escape of methyl isocyanate, a chemical used to produce pesticides, from Union Carbide's plant in Bhopal in December 1984. More than 10,000 other deaths have been blamed on related illnesses, with adverse health effects reported in hundreds of thousands of survivors. Many of them struggle with ailments including shortness of breath, cancer, near-blindness, fatigue and heart problems. Indian industrialist Keshub Mahindra, then head of Union Carbide India, and six colleagues and their company were convicted earlier this month of negligence causing death, endangering public life, and causing injury. They were granted bail after a judge imposed a two-year prison term and a fine of about $2,000. Originally, the Indian defendants were charged with culpable homicide. Following an appeal, the country's supreme court downgraded the charges to death by negligence in 1996. Indian authorities blamed the tragedy on the maintenance and design of the site. Union Carbide, however, has denied the charges, insisting the leak was an act of sabotage by an employee who it said had tampered with the gas tank. The company paid a $470 million settlement to India in 1989. But the International Campaign for Justice in Bhopal said survivors have received an average of only $500 each in compensation. Sixteen years after the leak, Union Carbide became part of the Dow Chemical Corporation. It claims the issue has been resolved, that Dow has no responsibility for the leak, and neither the company nor its officials are subject to the jurisdiction of Indian courts. From corporation-watch at countercorp.org Tue Jun 22 23:25:02 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Tue, 22 Jun 2010 20:25:02 -0700 Subject: [Corp. Watch] Study: Google search dominance used to marginalize competitors Message-ID: Google Using Search Engine to Muscle into Internet Businesses, Study Finds (Consumer Watchdog, June 2) -- Google has been using its dominant position in online search to muscle its way into other Internet businesses, ultimately limiting consumer choice, Consumer Watchdog said today in a report written under the auspices of its Google Privacy and Accountability Project and "Inside Google" website. The report found that since 2007, when Google adopted a so-called "universal search" system that blends listings from its own news, video, images, book, and local search engines -- and favors these services with prominent listings in the search results -- traffic to Google's sites has soared at the expense of its competitors. "Google claims that its search is neutral," said John Simpson, a consumer advocate with the group. "This study shows that it's not, and demonstrates the damaging impact Google's unfair practices have had on competitors." The non-profit, non-partisan consumer group is sending the study, "Traffic Report: How Google is Squeezing out Competitors and Muscling Into New Markets," to the U.S. Justice Department and European Commission anti-trust officials. In the most comprehensive study of its kind to date, Consumer Watchdog obtained three years of Internet traffic data for more than 100 popular websites from the respected web metrics firm Experian Hitwise. The data allowed an analysis of Google's business practices and performance that is unprecedented in scope, and revealed Google's dramatic gains since 2007. The data shows that Google has established a Microsoft-like monopoly in some key areas of the web. In video, Google has nearly doubled its market share to almost 80%. That is the legal definition of a monopoly according to the federal courts, which have held that a firm achieves "monopoly power" when it gains between 70% and 80% of a market. The Inside Google analysis found that the most striking example of the power of the universal search strategy is Google rival MapQuest, whose marketshare has dwindled from 57.24% in July 2007 to 32% in 2010. The Hitwise data shows that the stark decline in visits to MapQuest was accompanied by a closely matching rise in visits to Google Maps, as Google put its own service above all others for generic address searches. "MapQuest, a unit of AOL, appears likely to soon be reduced from a dominant player in web commerce to an also-ran, due in large part to the steps taken by Google to favor its own locator service," the report said. "Google is now the now the dominant provider of local search information, with more than 51% of the market." Google claims that with the introduction of universal search, the company was attempting to break down the walls that traditionally separated its various search properties and give "the very best answer, even if you don't know where to look." The Inside Google study reaches a different conclusion. "The reality is a bit more crass," it says. "Universal search now populates the top of the results page mainly with results from Google's own product lines. These changes bring the search giant several steps closer to a closed ecosystem, where real consumer choice no longer exists." Consumer Watchdog's Google Privacy and Accountability Project is intended to open Google's largely secretive practices to public scrutiny. The report was written by Glenn Simpson, formerly an investigative reporter with the Wall Street Journal. From corporation-watch at countercorp.org Thu Jun 24 16:31:15 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Thu, 24 Jun 2010 13:31:15 -0700 Subject: [Corp. Watch] Rare conviction, prison time for CEO for stock fraud Message-ID: <45BB6ECF-EC61-4454-BD47-F353D28DD65D@countercorp.org> Ex-Brocade CEO Sent to Prison for Stock Backdating By Paul Elias (Associated Press, June 24) -- A federal judge on Thursday sentenced Brocade Communications Inc.'s former CEO to 18 months in prison for failing to disclose -- and then covering up -- a plan to alter the date of stock-option grants so employees could reap greater compensation. U.S. District Judge Charles Breyer also fined Gregory Reyes $15 million. Reyes is to report to prison September 10. Reyes' lawyers said he is considering an appeal. A jury in March convicted Reyes of nine counts of fraud and making false statements, but acquitted him of a conspiracy charge. The jurors agreed with prosecutors who said Reyes backdated stock option grants so they had a lower price, enabling key employees to pocket more money when they bought and sold the stock. Backdating is legal but must be publicly disclosed because it affects the company's bottom line. Reyes failed to publicly disclose the backdating to the Securities and Exchange Commission (SEC), and then lied to investigators about his actions. Reyes was originally convicted of similar charges in 2008, but the 9th U.S. Circuit Court of Appeals uncovered prosecutorial misconduct and ordered a new trial. Brocade's former human resources manager Stephanie Jensen was convicted on similar charges at a separate trial in 2008. More than 400 family members, friends and other supporters wrote the judge letters urging leniency, citing Reyes community involvement and charitable donations. The judge called the support detailing Reyes' volunteer work and community involvement "remarkable," but "my primary duty is to protect the public and send a message." Breyer said Reyes lied to everyone who questioned him about the stock options, including in court. "It is important to realize that the integrity of the financial market is of great concern to millions of people," Breyer said. "That integrity rests on the shoulders of chief executive officers and chief financial officers being honest in their disclosures." Before the judge imposed the sentence, Reyes stood up to read a prepared statement, but he began crying so hard that his lawyer had to do it. The statement apologized to Reyes' family and friends for the emotional toll his case has taken on them, but it never directly addressed the backdating issue. "I am a shell of the man I once was," the statement said. Brocade, which makes switches that connect companies' servers to their data storage systems, paid $160 million to settle a class-action lawsuit filed by investors. They were angered that the company's failure to report the backdating scheme wiped out hundreds of millions of dollars in profits the company had reported for 1999 through 2004. The San Jose-based company also paid $7 million in 2007 to settle fraud charges alleged in a lawsuit filed by the SEC. From corporation-watch at countercorp.org Fri Jun 25 19:06:54 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Fri, 25 Jun 2010 16:06:54 -0700 Subject: [Corp. Watch] FAIL: So-called financial 'reform' torpedoed by bankster lobbying Message-ID: <7D3DBA80-B1DF-4C75-85CA-E4FDF6BC4082@countercorp.org> This Financial Reform Bill Won't Stop the Next Financial Crisis By Peter Cohan (Daily Finance, June 25) -- Now that the House and Senate have settled their differences on the giant financial regulatory overhaul bill, it's clear that lobbyists for the banking industry got a good return on their investment. But what about the American people? Not so much. With the financial industry spending $600 million since January 2009 to protect its interests, the new regulatory package limits the bank tax to $19 billion over a decade (a mere $1.9 billion a year). Considering that the cost of cash and guarantees to bail out the financial crisis totaled $23.7 trillion, that 0.08% down-payment for the next crisis is a pretty slim cushion. Moreover, while financial reform does force banks to spin off some of their derivatives businesses, it misses most of the financial crisis's major causes. When money talks louder than the public interest, you get the best government money can buy. In this case, it's the so-called Dodd-Frank bill, which Senator Christopher Dodd (D - Conn.) and Representative Barney Frank (D - Mass.) pushed through the final negotiations in the wee hours of June 25 so that President Obama could sign it during an Independence Day ceremony. Dodd-Frank is touted as a way to achieve many objectives: ? Strengthen consumer protection ? Make derivatives trading more transparent ? Create a new process for unwinding failing financial firms ? Make financial institutions stronger to prevent such failures in the future ? Create a 10-member council of regulators, headed by the Treasury secretary, that will issue early warnings when companies are poised to trigger a financial crisis Congressional negotiators created two little problems on the road to achieving those lofty goals. First, the compromises they made to create a passable bill ended up weakening it considerably. And second and far more important, the bill fails miserably at what should be its primary goal: to prevent future financial crises. Here are the three most prominent compromises: ? Weakening the Volcker rule -- Former Fed Chairman Paul Volcker wanted banks to stop proprietary trading and investing in hedge funds. That won't happen. Instead, firms will have up to two years to reduce these activities to 3% of their capital [which most banks were already under anyway]. ? Gutting consumer financial protection -- A consumer financial protection agency designed to keep citizens from being hoodwinked by financial firms won't oversee one of the major sources of such hoodwinking: auto dealers. Thanks to their lobbying power, America's18,000 auto dealers will be exempt. ? Sketchy derivatives protection -- Derivatives, whose $1.2 quadrillion in notional value is 20 times the global GDP, will still remain part of banks, albeit in a somewhat more limited fashion. Banks will be allowed to keep trading in interest rates, foreign exchange, gold and silver derivatives. They can even arrange credit default swaps, which contributed heavily to AIG's need for a $182.3 billion bail-out, as long as they're traded through clearinghouses. Banks can also trade derivatives with their own money to hedge against "market fluctuations." In the end, very little has changed in how banks can use derivatives. But the most disturbing part of the bill is that it won't prevent the next financial crisis. To do that, it would need to do several things differently. Here are the three most important: ? Demand higher capital requirements -- During the peak of the latest bubble, banks were able to borrow as much as $50 for every $1 of capital. That borrowing should be limited to an 8:1 ratio, and government should have the power to take immediate action to punish any financial institution exceeding that level. Without tight control of bank borrowing, the cycle of bubble inflation and bursting is built into the system. ? Link banker pay to return and risk -- Dodd-Frank does nothing to change the way bankers are paid. People do what they get paid to do, and under the bill bankers will still be able to receive enormous bonuses as a reward for putting big deals on the books, without having to pay any of the costs if those deals fail. This "heads I win, tails you lose" set-up ensures that bankers will find new ways to get big bonuses, while shifting the costs of their mistakes onto the public. We ought to require banker pay to go in an escrow account for 10 years to be used to cover the costs of deals that go bad. ? End "too big to fail" -- By creating a 10-person interagency committee to warn us of the next big financial crisis, the bill doesn't do nearly enough to prevent huge institutions from causing a sudden collapse of the financial system. The May 6 flash crash that caused the Dow to drop about 1,000 points in 20 minutes remains a mystery more than six weeks later. With markets operating at such lightning speed, we shouldn't feel any confidence that such an early-warning mechanism will work. Instead we should break up the too-big-to-fail financial institutions. Dodd-Frank misses these key problems, and as such leaves America under Wall Street's yoke. But since it spends an average of $500 million a year on Washington, Wall Street gets the best government money can buy. As for the rest of America, in the words of Marie Antoinette: "Let them eat cake." From corporation-watch at countercorp.org Sun Jun 27 14:53:18 2010 From: corporation-watch at countercorp.org (Corporation Watch) Date: Sun, 27 Jun 2010 11:53:18 -0700 Subject: [Corp. Watch] 'Welcome to McDonald's, would you like tertiary butylhydroquinone with that?' Message-ID: <68118AA2-AFE2-47BC-A244-549134CCA44C@countercorp.org> All McNuggets Not Created Equal By David Martin (CNN, June 25) -- All McDonald's nuggets are not created equal. U.S. McNuggets not only contain more calories and fat than their British counterparts, but also chemicals not found across the Atlantic. CNN investigated the differences after receiving a blog comment asking about them. American McNuggets have 190 calories, 12 grams of fat, and 2 grams of saturated fat in 4 pieces -- and contain the chemical preservative tertiary butylhydroquinone (tBHQ), a petroleum-based product. They also contain dimethylpolysiloxane, "an anti-foaming agent" used in Silly Putty. By contrast, British McNuggets have 170 calories, 9 grams of fat, and 1 gram of saturated fat in 4 pieces, and list neither chemical among their ingredients. "I would certainly choose the British nuggets over the American" says Ruth Winter, author of 'A Consumer's Dictionary of Food Additives.' McDonald's says the differences are based on the local tastes: In the United States, McNuggets are coated and then cooked. In the UK, they are cooked and then coated. As a result, the British McNuggets absorb less oil and have less fat. "You would find that if you looked at any of our core food items. You'd see little, regional differences," says Lisa McComb, who handles global media relations for McDonald's, which has more than 32,000 restaurants in 117 countries. "We do taste testing of all our food items on an ongoing basis." One apparent difference is only a matter of labeling, according to McComb. British McNuggets list ground celery and pepper, which are labeled simply as "spices" in the United States, she says. Marion Nestle, a New York University professor and author of 'What to Eat', says tertiary butylhydroquinone and dimethylpolysiloxane in the McNuggets probably pose no health risks. As a general rule, though, she advocates not eating any food with an ingredient you can't pronounce. Dimethylpolysiloxane is used as a matter of safety to keep the oil from foaming, McComb says. The chemical is a form of silicone also used in cosmetics and Silly Putty. A review of animal studies by the World Health Organization found no adverse health effects associated with dimethylpolysiloxane. tBHQ is a preservative for vegetable oils and animal fats, limited to .02 percent of the oil in the nugget. One gram (one-thirtieth of an ounce) can cause "nausea, vomiting, ringing in the ears, delirium, a sense of suffocation, and collapse," according to 'A Consumer's Dictionary of Food Additives.' In 2003, McDonald's launched smaller, all-white-meat McNuggets after a federal judge dubbed the food "a McFrankenstein creation of various elements not utilized by the home cook." Among the ingredients that remained in the new McNuggets: tBHQ and dimethylpolysiloxane. Christopher Kimball, the founder and publisher of Cook's Illustrated magazine and host of the syndicated cooking show 'America's Test Kitchen', says he suspects these chemicals are required for the nuggets to hold their shape and texture after they are extruded into nugget-shaped molds. "In general, the regulations in Europe around food are much stricter than the U.S.," Kimball says.