Louisiana Voice

With $1.1 million reported U.S. Rep. Steve Scalise, the House Majority Whip, is slightly ahead of Rep. Charles Boustany’s $984,000 but less than half of U.S. Sen. Mary Landrieu’s $2.6 million to rank as the second leading recipient of contributions from political action committees (PACs) among Louisiana’s congressional delegation, according to information provided by the Federal Elections Commission.

While opponents in congressional races are quick to point out opponents’ vulnerability to political influence from special interest groups, each of the state’s eight-member (two senators and six representatives) accept contributions from PACs.

And it’s very important to them that they accept this money in private and out of the public eye. The last thing they want is for us to be watching to see where they get their funding.

It is this practice that is becoming more and more grating to the individual voters who do not have the means to match PACs on a dollar-for-dollar basis. And that imbalance long ago tipped the scales in favor of pharmaceutical companies, Wall Street banks, oil companies, tobacco (disguised under innocent-sounding corporate names) and defense contractors, to name only a few, at the expense of the interests of John Q. Citizen.

The various business and industry lobbyists, once a rare animal in Washington, had by the late 1970s become such a force that they outnumbered the 535 members of Congress 130 to one. The number of companies with offices in the nation’s capital grew from 175 in 1971 to 2,445 a decade later.

By 1978, nearly 2,000 different trade associations employed 50,000 staff members in Washington and in 1980 the U.S. Chamber of Commerce employed 45 full-time lobbyists.

They are all there for one reason and one reason only: to feed the beast and with each election (every two years for House members and every six year for the Senate) the beast grows ever-hungrier and it is the American voter who is being devoured.

Each incumbent has accepted PAC contributions but not all challengers have. For this reason, LouisianaVoice has taken on the project of providing a sampling of PAC contributions to each candidate for the House and Senate where applicable. Contributions to each candidate will be duly reported over the coming weeks.

Our fourth installment, presented here, is on the PAC contributions to U.S. Rep. Steve Scalise.

ALTRIA GROUP PAC: $6,500

• Altria Group, Inc. (previously named Philip Morris Companies Inc.) The name change alternative offers the possibility of masking the negatives associated with the tobacco business,” thus enabling the company to improve its image and raise its profile without sacrificing tobacco profits,
• According to the Center for Public Integrity, Altria spent around $101 million on lobbying the U.S. government between 1998 and 2004, making it the second most active organization in the nation.
• Altria also funded The Advancement of Sound Science Coalition which lobbied against the scientific consensus on climate change.
• Daniel Smith, representing Altria, sits on the Private Enterprise Board of the American Legislative Exchange Council (ALEC).

AMERICAN AIRLINES: $2,000

• American was accused of hiding repeated maintenance lapses from the FAA. Repair issues included such items as faulty emergency slides, improper engine coatings, incorrectly drilled holes, and other examples of shoddy workmanship. The most serious alleged lapse was a failure to repair cracks to pressure bulkheads; the rupture of a bulkhead could lead to cabin depressurization. It is also alleged that the airline retired one airplane in order to hide it from FAA inspectors.
• AMR Corporation filed for Chapter 11 bankruptcy protection in 2011, and American announced capacity cuts in July 2012 due to the grounding of several aircraft associated with its bankruptcy and lack of pilots due to retirements. American notified more than 11,000 workers of possible job loss as part of its bankruptcy reorganization, and cut flights in September and October 2012.
• As of November 2013 American Airlines and American Eagle received $10 million in annual federal subsidies.

AMERICAN BANKING ASSOCIATION PAC: $9,500

• The financial crisis of 2007-2010 led to a sweeping overhaul of the United States financial regulatory system. The ABA spent $4.38 million on lobbying Congress in the first two quarters of 2011 alone. The ABA lobbied the White House, the departments of Agriculture, Treasury and Labor, and regulators such as the Federal Reserve, Commodity Futures Trading Commission and Securities and Exchange Commission.
• As soon as the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law on July 21, 2011, the American Bankers Association announced it would continue to lobby for fewer regulations on the Volcker Rule, derivatives regulations, and other pieces of the bill.

AMERICAN PETROLEUM INSTITUTE: $2,000

• To help fight climate control legislation, API supports the Energy Citizens group. A leaked summer 2009 memo from API President Jack Gerard asked its member companies to urge their employees to participate in planned protests (designed to appear independently organized) against cap-and-trade legislation. “The objective of these rallies is to put a human face on the impacts of unsound energy policy and to aim a loud message at [20 different] states.” Gerard said that API would cover all organizational costs and handling of logistics. In response to the memo, an API spokesman told media that participants will be there (at protests) because of their own concerns, and that API is just helping them assemble. Texas residents who were not employed by the energy industry were turned away from the event.

BANK OF AMERICA CORP. PAC: $2,000

• Bank of America (BOA) received $20 billion in the federal bailout from the U.S. government through the Troubled Asset Relief Program (TARP) in 2009, as well as a guarantee of $118 billion to cover potential losses by the company—in addition to the $25 billion given to them in the fall 2008 through TARP. The additional payment was part of a deal with the U.S. government to preserve BOA’s merger with the troubled investment firm Merrill Lynch. Since then, members of Congress expressed concern that some of the recipients had been accused of misusing the bailout money and that loan applicants (particularly small business owners) were denied loans and credit card holders faced stiffer terms on the debt in their card accounts.
• BOA received an additional $5.2 billion in government bailout money, channeled through American International Group (AIG).
• On August 3, 2009, BOA agreed to pay a $33 million fine, without admission or denial of charges, to the U.S. Securities and Exchange Commission (SEC) over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill Lynch. The bank approved the bonuses before the merger but did not disclose them to its shareholders when the shareholders were considering approving the Merrill acquisition in December 2008. New York State Attorney General Andrew Cuomo commented after the suit and announced settlement that “the timing of the bonuses, as well as the disclosures relating to them, constituted a ‘surprising fit of corporate irresponsibility.”
• In 2010, the bank was accused by the U.S. government of defrauding schools, hospitals, and dozens of state and local government organizations via misconduct and illegal activities involving the investment of proceeds from municipal bond sales. As a result, the bank agreed to pay $137.7 million, including $25 million to the Internal Revenue service and $4.5 million to state attorney general, to the affected organizations to settle the allegations.
• On October 24, 2012, the top federal prosecutor in Manhattan filed a lawsuit alleging that BOA fraudulently cost American taxpayers more than $1 billion when it sold toxic mortgages to Fannie Mae and Freddie Mac. The scheme was called ‘Hustle’, or High Speed Swim Lane.
• In August 2014, BOA agreed to a near-$17 billion deal to settle claims against it relating to the sale of toxic mortgage-linked securities including subprime home loans, in what was believed to be the largest settlement in U.S. corporate history. The bank agreed to pay $9.65 billion in fines and $7 billion in relief to the victims of the faulty loans which included homeowners, borrowers, pension funds and municipalities.

BRIDGE POINT EDUCATION PAC: $3,000

• In 2011, Senator Tom Harkin (D-Iowa) chaired a hearing of the Health, Education, Labor, and Pensions Committee that examined Bridgepoint Education, Inc., which had experienced near-exponential profit growth despite low graduation rates. Bridgepoint purchased two universities both were near bankruptcy—Ashford University in Iowa and the University of the Rockies in Colorado. When it purchased Ashford University in 2005, the university had less than 300 students but today has over 78,000 students, 99 percent of whom are online.
• Harkin was critical of the fact that despite such growth of the company, student success was lacking. Sixty-three percent of students who enrolled at Ashford University during the 2008–2009 school year withdrew before completion of their respective programs. Harkin noted that Bridgepoint recorded more than $216 million in profits in 2010—86.5 percent of which came from federal funds. Harkin said of those figures, “In the world of for-profit higher education, spectacular business success is possible despite an equally spectacular record of student failure. Bridgepoint is a private company, but it is almost entirely dependent upon public funds … I think this is a scam, an absolute scam.”

BRISTOL-MYERS SQUIBB EMPLOYEE PAC: $2,000

• The company was caught up in an accounting scandal in 2002 over a significant restatement of revenues from 1999 to 2001, the result of an improper booking of sales related by offering excess inventory to customers to create higher sales numbers. The company settled with the U.S. Department of Justice and the Securities and Exchange Commission for $150 million. In 2002, the company was involved in illegally maintaining a monopoly on Taxol, its cancer treatment, and it was again sued. The company settled for $125 million.

CAPITAL ONE FINANCIAL CORP.: $5,000

• In July 2012, Capital One was sued for misleading millions of its customers, by charging them for payment protection or credit monitoring when they took out a card. The company agreed to pay $210 million and to refund two million customers.
• In August 2014, Capital One and three collection agencies entered into an agreement to pay $75.5 million to end a consolidated class action lawsuit alleging that the companies used an automated dialer to call customers’ cellphones without consent.
• In 2014, Capital One amended its terms of service to create a right for it to “contact you in any manner we choose”, including a” personal visit . . . at your home and at your place of employment.” It also asserted its right to “modify or suppress caller ID and similar services and identify ourselves on these services in any manner we choose.”

CHESAPEAKE ENERGY CORP. PAC: $10,000

• Former Chief Executive Aubrey McClendon borrowed $1.1 billion against his stake in thousands of company wells. The loans, undisclosed to shareholders, were used to fund McClendon’s operating costs for the Founders Well Participation Program, which offered him a chance to invest in a 2.5 percent interest in every well the company drills. McClendon in turn used the 2.5 percent stakes as collateral on those same loans. Analysts, academics and attorneys who reviewed the loan documents said the structure raised the potential for conflicts of interest and raised questions on the corporate governance and business ethics of Chesapeake Energy’s senior management. The company disagreed that this is a conflict of interest or a violation of business ethics.
• Current CEO Doug Lawler was responsible for laying off over 800 employees—roughly 16 percent of the workforce—within a few months of taking the position. Lawler released waves of employees over the course of a few months. All of the layoffs culminated in October of 2013 when Lawler released a staggering 800 employees nationwide, 640 of whom were from the corporate office in Oklahoma City.
• In June of 2014, the state of Michigan filed felony fraud and racketeering charges against Chesapeake Energy, alleging that the company canceled hundreds of land leases on false pretenses after it sought to obtain oil and gas rights. Chesapeake Energy disputed all charges.

CHEVRON EMPLOYEES PAC: $10,000

• In 2003 a class action lawsuit against Chevron was sued in Ecuadorian court for $28 billion for making residents ill and damaging forests and rivers by discharging 18 billion US gallons of formation water into the Amazon. Chevron claimed that agreements with the Ecuadorian Government exempted the company from any liabilities.
• In 2011, Ecuadorian residents were awarded $8.6 billion, based on claims of loss of crops and farm animals as well as increased local cancer rates. The award was later revised to $19 billion on appeals, which was then appealed to the Ecuadorean National Court of Justice. Chevron described the lawsuit as an “extortion scheme” and refused to pay the fine.
• Chevron’s activities at its century-old Richmond refinery have been the subject of ongoing controversy. The project generated over 11 million pounds of toxic materials and caused more than 304 accidents. The Richmond refinery paid $540,000 in 1998 for illegally bypassing waste water treatments and failing to notify the public about toxic releases. Overall, Chevron is listed as potentially liable for 95 Superfund sites, with funds set aside by the EPA for clean-up.
• Chevron’s operations in Africa have also been criticized as environmentally unsound. In 2002, Angola became the first country in Africa to levy a fine on a major multinational corporation operating within its borders when it demanded $2 million in compensation for oil spills allegedly caused by Chevron.
• On October 16, 2003, Chevron U.S.A. settled a charge under the Clean Air Act, which reduced harmful air emissions by about 10,000 tons a year. In San Francisco, Chevron was ordered to spend almost $275 million to install and utilize innovative technology to reduce nitrogen and sulfur dioxide emissions at its refineries. In 2000, after violating the Clean Air Act at an offline loading terminal in El Segundo, California, Chevron paid a $6 million penalty as well as $1 million for environmental improvement projects.

CITIGROUP: $3,500

• In 2003, Citigroup published an investment brochure advising clients that “There is no ‘average consumer…Economic growth is powered by and largely consumed by the wealthy few.”
• Heavy exposure to troubled mortgages compounded by poor risk management led Citigroup into trouble as the subprime mortgage crisis worsened in 2008. Citigroup announced on April 11, 2007, that it would eliminate 17,000 jobs, or about 5 percent of its workforce. Even after brokerage firm Bear Stearns ran into serious trouble in summer 2007, Citigroup decided the possibility of trouble with its CDO’s was so tiny that they excluded them from their risk analysis. With the crisis worsening, Citigroup announced on January 7, 2008 that it was considering cutting another 5 to 10 percent of its 327,000 member-workforce.
• By November 2008, Citigroup was insolvent, despite its receipt of $25 billion in taxpayer funded federal TARP funds. On November 17, 2008, Citigroup announced plans for about 52,000 new job cuts—on top of 23,000 cuts already made during 2008.

COMCAST: $10,000

• Comcast’s customer satisfaction often ranks among the lowest in the cable industry.
• With $18.8 million spent in 2013, Comcast has the seventh largest lobbying budget of any individual company or organization in the United States. Comcast employs multiple former U.S. congressmen as lobbyists.
• Comcast also supports lobbying and PACs on a regional level, backing organizations such as the Tennessee Cable Telecommunications Association and the Broadband Communications Association of Washington PAC. Comcast and other cable companies have lobbied state governments to pass legislation restricting or banning individual cities from offering public broadband service. Municipal broadband restrictions of varying scope have been passed in a total of 20 US States, including Louisiana.

DUKE ENERGY: $4,000

• In 1999 the EPA initiated an enforcement action against Duke Energy for making modifications to old and deteriorating coal-burning power plants without getting permits under the Clean Air Act.
• In 2002, researchers identified Duke Energy as the 46th-largest corporate producer of air pollution in the United States, with roughly 36 million pounds of toxic chemicals released into the air annually. Major pollutants included sulfuric and hydrochloric acid, chromium compounds, and hydrogen fluoride. The Political Economy Research Institute ranks Duke Energy 13th among corporations emitting airborne pollutants in the United States.

EMPLOYEES OF NORTHROP GRUMMAN PAC: $9,000

• From 1990-2002, Northrop Grumman contributed $8.5 million to federal campaigns. The company gave more than $1 million to federal candidates in 2005-2006 election cycle, compared to $10.6 million given by all defense contractors in the same cycle. This was behind only General Dynamics and Lockheed Martin in the defense industry. Former Northrop Grumman Electronics Systems chief James Roche served as Secretary of the Air Force for two years under George W. Bush. Roche was eventually nominated to head the Army, but was forced to withdraw his nomination among accusations of mismanaging a contract with Boeing and of failing to properly handle the Air Force sexual assault scandals of 2003. At least seven former officials, consultants, or shareholders of Northrop Grumman held posts in the Bush administration.
• Northrop Grumman has dealt with multiple scandals during its history. In 1995, Robert Ferro, an employee for TRW, a company acquired by Northrop Grumman, discovered that satellite components manufactured for the U.S. Air Force were faulty and likely to fail in operation. TRW allegedly suppressed Ferro’s report and hid the information from the Air Force, even after a satellite in space equipped with the faulty components experienced serious anomalies. Ferro later sued Northrop Grumman in federal court under the federal whistle-blower law. In April 2009 Northrop Grumman agreed to pay $325 million to settle the suit. Ferro was awarded $48.8 million of the settlement.
• The company was sued in 1999 for allegedly knowingly giving the Navy defective aircraft. This suit sought $210 million in damages. Then in 2003, the company was sued for allegedly overcharging the U.S. government for space projects in the 1990s. Northrop Grumman paid $111.2 million to settle out of court.
• In 2010, Virginia’s computer operations experienced a week-long computer outage. Northrop Grumman operated these systems under a $2.4 billion contract. As a result, as many as 45,000 citizens could not renew their driver’s licenses prior to their expiration. Computer systems for 26 of the state’s 89 agencies were affected and some data may have been permanently lost.

EXXON MOBIL CORP. PAC: $2,500

• ExxonMobil has drawn criticism from scientists, science organizations and the environmental lobby for funding organizations critical of the Kyoto Protocol and seeking to undermine public opinion about the scientific conclusion that global warming is caused by the burning of fossil fuels. Mother Jones Magazine said the company channeled more than $8 million to 40 different organizations that have employed disinformation campaigns including “skeptical propaganda masquerading as journalism” to influence opinion of the public and of political leaders about global warming and that the company was a member of one of the first such groups, the Global Climate Coalition, founded in 1989. ExxonMobil’s support for these organizations has drawn criticism from the Royal Society, the academy of sciences of the United Kingdom. The Union of Concerned Scientists released a report in 2007 accusing ExxonMobil of spending $16 million, between 1998 and 2005, towards 43 advocacy organizations which dispute the impact of global warming. The report argued that ExxonMobil used disinformation tactics similar to those used by the tobacco industry in its denials of the link between lung cancer and smoking, saying that the company used “many of the same organizations and personnel to cloud the scientific understanding of climate change and delay action on the issue.” These charges are consistent with a purported 1998 internal ExxonMobil strategy memo, posted by the environmental group Environmental Defense, which said:

“Victory will be achieved when

• Average citizens [and the media] ‘understand’ (recognize) uncertainties in climate science; recognition of uncertainties becomes part of the conventional wisdom;
• Industry senior leadership understands uncertainties in climate science, making them stronger ambassadors to those who shape climate policy;
• Those promoting the Kyoto treaty on the basis of extant science appear out of touch with reality.”

• In 2003, the United States Attorney for the Southern District of New York announced that J. Bryan Williams, a former senior executive of Mobil Oil Corp., had been sentenced to three years and ten months in prison on charges of evading income taxes on more than $7 million in unreported income, including a $2 million kickback he received in connection with Mobil’s oil business in Kazakhstan. Documents filed with the court said Williams’ unreported income included millions of dollars in kickbacks from governments, persons, and other entities with whom Williams conducted business while employed by Mobil. In addition to his sentence, Williams must pay a fine of $25,000 and more than $3.5 million in restitution to the IRS, in addition to penalties and interest.

 GENERAL DYNAMICS: $2,000

• In 2008, General Dynamics agreed to pay $4 million to settle a lawsuit brought by the US Government claiming a GD unit fraudulently billed the government for defectively manufactured parts used in US military aircraft and submarines. The US alleged that from September 2001 to August 2003 GD defectively manufactured or failed to test parts used in US military aircraft.

GLAXOSMITHKLINE PAC:  $1,000

• In July 2012 GSK pleaded guilty to criminal charges and agreed to a pay $3 billion to settle the criminal charges as well as civil lawsuits in the largest settlement paid by a drug company at the time. The criminal charges were for promoting Paxil and Wellbutrin for unapproved uses and failing to report safety data about Avandia. GSK paid $1 billion to settle the criminal charges. The remaining $2 billion was part of the civil settlement over unapproved promotion and paying kickbacks, making false statements concerning the safety of Avandia; and reporting false prices to Medicaid.

KOCH INDUSTRIES: $10,000

• From 1999 to 2003, Koch Industries was assessed more than $400 million in fines, penalties and judgments. In 2000, for 300 reported oil spills which had taken place across six states, Koch paid the largest civil fine ever imposed on a company for the illegal discharge of crude oil and petroleum products. The company agreed to pay a $30 million civil penalty, improve its leak-prevention programs and spend $5 million on environmental projects.
• In 1996, an 8-inch-diameter steel pipeline operated by Koch Pipeline Company ruptured near Lively, Texas and began leaking butane gas. The vapor cloud ignited when two residents drove their pickup truck through the flammable vapors to get to a neighbor’s house to report the leak. The two were killed in the explosion. In 1999, a Texas jury found that negligence had led to the rupture of the Koch pipeline and awarded the victims’ families $296 million—the largest compensatory damages judgment in a wrongful death case against a corporation in U.S. history.
• In 2000, a federal grand jury returned a 97-count indictment against Koch Industries for excess emissions of 85 metric tons of benzene, a known carcinogen. In 2001, Koch Industries was fined $20 million, of which $10 million was a criminal fine and $10 million to clean up the environment.
• In 2008, Koch Industries discovered that the French affiliate Koch-Glitsch had violated bribery laws allegedly securing contracts in Algeria, Egypt, India, Morocco, Nigeria and Saudi Arabia after an investigation by Ethics Compliance officer, Egorova-Farines. After Koch Industries’ investigative team looked into her findings, the four employees involved were terminated. Egorova-Farines reported her findings immediately, and even after Koch’s investigators substantiated the findings, her “superiors removed her from the inquiry in August 2008 and fired her in June 2009, calling her incompetent.”
• Koch Industries has spent more than $50 million to lobby in Washington between 2006 and October 2011.
• The company has opposed the regulation of financial derivatives and limits on greenhouse gases. It sponsors free market foundations and causes and is one of the leading benefactors of the American Legislative Exchange Council (ALEC).
• According to the Center for Responsive Politics, many of Koch Industries’ contributions have gone toward achieving legislation on energy issues, defense appropriations and financial regulation reform. Koch Industries has been criticized for the role the company plays in affecting climate change policy in the U.S.

LOCKHEED MARTIN EMPLOYEES’ PAC: $2,000

• Lockheed Martin received $36 billion in government contracts in 2008, more than any company in history. It does work for more than two dozen government agencies from the Department of Defense and the Department of Energy to the Department of Agriculture and the Environmental Protection Agency. It’s involved in surveillance and information processing for the CIA, the FBI, the Internal Revenue Service (IRS), the National Security Agency (NSA), The Pentagon, the Census Bureau and the Postal Service.
• Lockheed is listed as the largest U.S. government contractor and ranks third for number of incidents, and 21^st for size of settlements. Since 1995 the company has agreed to pay $606 million to settle 59 instances of misconduct.
• Through its political action committee (PAC), the company provides low levels of financial support to candidates who advocate national defense and relevant business issues. It was the top contributor to House Armed Services Committee chairman Howard P. “Buck” McKeon (R-California), giving more than $50,000 in the most recent election cycle. It also topped the list of donors to Sen. Daniel Inouye (D-HI), chairman of the Senate Appropriations Committee before his death in 2012.
• Lockheed Martin Employees Political Action Committee is one of the 50 largest in the country. With contributions from 3,000 employees, it donates $500,000 a year to about 260 House and Senate candidates.
• In March 2013, Maryland State Senate Majority Leader Rob Garagiola, while he was said to be dating a Lockheed Martin lobbyist, cosponsored a resolution which would give Lockheed Martin tax rebate worth millions of dollars related to hotel taxes paid at its CLE facility in Bethesda, MD. This was after Montgomery County Council refused to pass a similar resolution.

MARATHON OIL EMPLOYEES PAC: $12,000

• Marathon gave $250,000 to the Supriya Jindal Foundation and Gov. Bobby Jindal’s administration promptly awarded Marathon subsidiaries $5.2 million in state funds.

MERCK & CO.:  $5,000

• A US Justice Department fraud investigation began in 2000 when allegations were brought in two separate lawsuits filed by whistleblowers who alleged that Merck failed to pay proper rebates to Medicaid and other health care programs and paid illegal remuneration to health care providers. In 2008, Merck agreed to pay more than $650 million to settle charges that it routinely overbilled Medicaid for its most popular medicines. The settlement was one of the largest pharmaceutical settlements in history. The federal government received more than $360 million, plus 49 states and Washington, DC, received over $290 million. One whistleblower received a $68 million reward.
• From 2002 through 2005 the Australian affiliate of Merck sponsored the eight issues of a medical journal, the Australasian Journal of Bone and Joint Medicine, published by Elsevier. Although it gave the appearance of being an independent peer-reviewed journal, without any indication that Merck had paid for it, the journal actually reprinted articles that originally appeared in other publications and that were favorable to Merck. The misleading publication came to light in 2009 during a personal injury lawsuit filed over Vioxx. Nine of 29 articles in the journal’s second issue referred positively to Vioxx. In 2009, the CEO of Elsevier’s Health Sciences Division, Michael Hansen, admitted that the practice was “unacceptable.”
• In December 2013, Merck agreed to pay a total of $27.7 million dollars to 1,200 plaintiffs in a class action lawsuit alleging that the company’s osteoporosis drug had caused them to develop osteonecrosis of the jaw.

 MICROSOFT CORP. PAC: $8,500

• One of Microsoft’s business tactics, described by an executive as “embrace, extend and extinguish,” initially embraces a competing standard or product, then extends it to produce their own version which is then incompatible with the standard, which in time extinguishes competition that does not or cannot use Microsoft’s new version. Various companies and governments have sued Microsoft over this set of tactics, resulting in billions of dollars in rulings against the company.
• Microsoft has been criticized for its involvement in censorship in the People’s Republic of China. Microsoft has also come under criticism for outsourcing jobs to China and India. There were reports of poor working conditions at a factory in southern China that makes some of Microsoft’s products.
• To avoid providing stock options and medical and retirement benefits to employees, Microsoft hires thousands of temporary workers (temps) for the designing, editing and testing of its software. When a federal judge (upheld by the U.S. Supreme Court) outlawed the hiring of temps for longer than six months, Microsoft got around the ruling by laying off its temps for 100 days and then rehiring them.

MORGAN STANLEY: $2,000

• In 2003, Morgan Stanley agreed to pay $125 million in order to settle its portion of a $1.4 billion settlement brought by New York Attorney General Eliot Spitzer, the National Association of Securities Dealers, the United States Securities and Exchange Commission, (SEC) and a number of state securities regulators, relating to intentionally misleading research motivated by a desire to win investment banking business with the companies covered.

• Morgan Stanley settled a sex discrimination suit brought by the Equal Employment Opportunity Commission for $54 million in July 2004. In 2007, the firm agreed to pay $46 million to settle a class action lawsuit brought by eight female brokers.
• In July 2004, the firm paid NASD a $2.2 million fine for more than 1,800 late disclosures of reportable information about its brokers.
• In September 2004, the firm paid a $19 million fine imposed by NYSE for failure to deliver prospectuses to customers in registered offerings, inaccurate reporting of certain program trading information, short sale violations, failures to fingerprint new employees and failure to timely file exchange forms.
• The New York Stock Exchange imposed a $19 million fine on January 12, 2005 for alleged regulatory and supervisory lapses, the largest fine ever imposed by NYSE at the time.
• In 2005, a Florida jury found that Morgan Stanley failed to give adequate information to Ronald Perelman about Sunbeam thereby defrauding him and causing damages to him of $604 million. In addition, punitive damages were added for total damages of $1.450 billion after the firm’s attorneys infuriated the court by failing and refusing to produce documents, and falsely telling the court that certain documents did not exist. The ruling was overturned in 2007.
• Morgan Stanley settled a class action lawsuit in 2006 by both current and former Morgan Stanley employees for unfair labor practices instituted upon those in the financial advisor training program. Employees of the program had claimed the firm expected trainees to clock overtime hours without additional pay and handle various administrative expenses as a result of their expected duties. Morgan Stanley settled for $42.5 million.
• In May the firm agreed to pay a $15 million fine after the Securities and Exchange Commission accused the firm of deleting emails and failing to cooperate with SEC investigators.
• FINRA announced a $12.5 million settlement with Morgan Stanley in 2007 over charges that the firm’s former affiliate, Morgan Stanley DW, Inc. (MSDW), failed on numerous occasions to provide emails to claimants in arbitration proceedings as well as to regulators. The company had claimed that the destruction of the firm’s email servers in the September 11, 2001 terrorist attacks on New York’s World Trade Center resulted in the loss of all email before that date. In fact, the firm had millions of earlier emails that had been retrieved from backup copies stored in another location that was not destroyed in the attacks. Customers who had lost their arbitration cases against Morgan Stanley DW Inc. because of their inability to obtain these emails to demonstrate Morgan Stanley’s misconduct received a token amount of money as a result of the settlement.
• In July 2007, Morgan Stanley agreed to pay $4.4 million to settle a class-action lawsuit for incorrectly charging clients for storage of precious metals.
• In August 2007, Morgan Stanley was fined $1.5 million and paid $4.6 million in restitution to customers related to excessive mark-ups in 2,800 transactions. An employee was charged $40,000 and suspended for 15 days.
• Under a 2008 settlement with New York Attorney General Andrew M. Cuomo, the firm agreed to repurchase approximately $4.5 billion worth of auction rate securities. The firm was accused of misrepresenting auction rate securities in their sales and marketing.
• In April 2010, the Commodity Futures Trading Commission announced the firm agreed to pay $14 million related to an attempt to hide prohibited trading activity in oil futures.
• The Department of Justice sought a $4.8 million fine from Morgan Stanley for its part in an electricity price-fixing scandal. Con Edison estimated that the crime cost New York state consumers about $300 million. Morgan Stanley earned revenues of $21.6 million from the fraud.
• Morgan Stanley agreed to pay a $5 million fine to the Commodity Futures Trading Commission and an addition $1.75 million to CME and the Chicago Board of Trade after employees improperly executed fictitious sales in Eurodollar and Treasury note futures contracts.
• On August 7, 2012, it was announced that Morgan Stanley would have to pay $4.8 million in fines in order to settle a price fixing scandal, which has been estimated to have cost New Yorkers $300 million.

MONSANTO CO. CITIZENSHIP PAC: $1,000

• In 2003, Monsanto reached a $300 million settlement for manufacturing and dumping of the toxic chemical polychlorinated biphenyls (PCBs) in Alabama.
• In 2004, Monsanto, along with Dow and other chemical companies, were sued by a group of Vietnamese for the effects of its Agent Orange defoliant, used by the U.S. military in the Vietnam War. The case was dismissed.

• In 2005, the US DOJ filed a Deferred Prosecution Agreement in which Monsanto admitted to violations of the Foreign Corrupt Practices Act and making false entries into its books and records. Monsanto also agreed to pay a $1.5 million fine. The case involved bribes paid to an Indonesian official.
• The Monsanto Company Citizenship Fund has donated more than $10 million to various candidates since 2003. In 2011, Monsanto spent about $6.3 million lobbying Congress and the U.S. Department of Agriculture about regulations that would affect the production and distribution of genetically engineered produce.
• US diplomats in Europe have worked directly for Monsanto.
• Monsanto gave $186,250 to federal candidates in the 2008 election.
• Monsanto spent $8.1 million opposing the passage of Proposition 37 in California, making it the largest donor against the initiative. Proposition 37, which was rejected in November 2012, would have mandated the disclosure of genetically modified crops used in the production of California food products.
• More recently, as of October 2013, Monsanto and DuPont Co. are backing an anti- labeling campaign with roughly $18 million so far dedicated to the campaign.

NATIONAL RIFLE ASSOCIATION POLITICAL VICTORY FUND: $4,500

NEWS CORP. PAC: $1,000

• In 1999, The Economist reported that NewsCorp paid comparatively lower taxes and NewsCorp Investments made $20.1 billion in profits over the previous 11 years but had not paid net corporation tax. It also reported that after an examination of the available accounts, NewsCorp could normally have been expected to pay a corporate tax of approximately $350 million. The article explained that in practice, the corporation’s complex structure, international scope and use of offshore tax havens allowed News Corporation to pay minimal taxes.
• In July 2011, NewsCorp closed down the News of the World newspaper in the United Kingdom due to allegations of phone hackings. The allegations include trying to access former Prime Minister Gordon Brown‘s voice mail, and obtain information from his bank accounts, family’s medical records, and private legal files. Allegations of hacking have also been brought up in relation to former Prime Minister Tony Blair, and the Royal Family.

 PHARMACEUTICAL RESEARCH & MANUFACTURERS OF AMERICA (PhRMA): $2,000

• Former Congressman Billy Tauzin (R-Louisiana) resigned from Congress and began work as the head of the Pharmaceutical Research and Manufacturers of America, or PhRMA, a powerful trade group for pharmaceutical companies. Two months before resigning as chair of the committee which oversees the drug industry, switching from regulator to lobbyist, Tauzin played a key role in shepherding through Congress the Medicare Prescription Drug Bill, a bill which was criticized by opponents for being too generous to the pharmaceutical industry.
• This link was explored at great length in an April 1, 2007 interview by Steve Kroft of 60 Minutes. The report, Under the Influence, pitted Rep. Walter B. Jones (R-N.C.) and Rep. Dan Burton (R-Ind.) against Tauzin and accused him of using unethical tactics to push a bill that “the pharmaceutical lobbyists wrote.” Along with Tauzin, many of the other individuals who worked on the bill are now lobbyists for the pharmaceutical industry.

PFIZER, INC. PAC: $6,500

• In September 2009, Pfizer pleaded guilty to the illegal marketing of the arthritis drug Bextra for uses unapproved by the U.S. Food and Drug Administration (FDA), and agreed to a $2.3 billion settlement, the largest health care fraud settlement at that time. Pfizer also paid the U.S. government $1.3 billion in criminal fines related to the “off-label” marketing of Bextra, the largest monetary penalty ever rendered for any crime. Called a repeat offender by prosecutors, this was Pfizer’s fourth such settlement with the U.S. Department of Justice in the previous ten years.

SAFARI CLUB INTERNATIONAL PAC: $1,000

• SCI has been criticized by the Humane Society for supporting the hunting of endangered African antelope at fenced game ranches in Texas and Florida and for giving awards for the hunting of big cats and elephant, lion, rhino and buffalo in Africa.
• In 2005, controversy erupted over tax write-offs taken by big game hunters for donations of trophies to museums. IRS rules allowed only the fair market value of such donations to be deducted. In most cases, the donations were worth only a fraction of the claimed value, and often accumulated in museum storage facilities.
• For the tax year ending June 2006, SCI reported $2.9 million in revenue from SCI publications, $3.2 million in membership dues, $205,967 in interest on savings and temporary investments, $75,771 from sales of assets other than inventory, $6.9 million from special events such as the annual convention, $156,014 from sales of inventory, and $6,089 miscellaneous income.
• In 2007, the New York legislature earmarked $50,000 of public funds for SCI.

GOLDMAN SACHS GROUP PAC: $4,000

• A federal appeals court upheld the conviction of former Goldman Sachs Group Inc director Rajat Gupta, one of the biggest successes in federal prosecutors’ long-running probe to stop insider trading on Wall Street.
• Federal prosecutors and Securities and Exchange Commission officials also investigated whether a senior Goldman investment banker, Matthew Korenberg, fed inside information to a Galleon Group portfolio manager named Paul Yook, according to separate reports in the New York Times and the Wall Street Journal.

HOME DEPOT PAC: $10,000

• In July 2005, former employee Michael Davis filed a whistleblower lawsuit against the Home Depot, alleging that his discharge was in retaliation for refusing to make unwarranted backcharges against vendors. Davis alleges that the Home Depot forced its employees to meet a set quota of backcharges to cover damaged or defective merchandise, forcing employees to make chargebacks to vendors for merchandise that was undamaged and not defective.
• In the settlement of the litigation, Home Depot changed some of its corporate governance provisions. Home Depot also agreed to pay the plaintiff’s counsel $6 million in cash and $8.5 million in common stock.

UNITEDHEALTH GROUP PAC: $5,000

• In 2010, UnitedHealth Group spent more than $1.8 million on lobbying activities to achieve favorable legislation, and hired seven different lobbying firms to work on its behalf. In addition, its corporate political action committee spent an additional $1 million on lobbying activities in 2010.
• In 2006, the Securities and Exchange Commission (SEC) began investigating the conduct of UnitedHealth Group’s management and directors, for backdating of stock options. Investigations were also begun by the Internal Revenue Service and prosecutors in the U.S. attorney’s office for the Southern District of New York. The investigations came to light after a series of Wall Street Journal stories in May 2006, claiming backdating of hundreds of millions of dollars worth of stock options by UHC management. The backdating apparently occurred with the knowledge and approval of the directors, according to the Journal. On October 15, 2006, CEO William McGuire was forced to resign, and relinquish hundreds of millions of dollars in stock options. In December 2007, the SEC announced a settlement under which McGuire would repay $468 million, as a partial settlement.
• In June 2006, the American Chiropractic Association filed a national class action lawsuit against the American Chiropractic Network (ACN), which is owned by UnitedHealth Group and administers chiropractic benefits, and against UnitedHealth Group itself, for alleged practices in violation of the federal Racketeer Influence and Corrupt Organizations Act (RICO).

WALMART STORIES PAC: $4,000

• Wal-Mart is the beneficiary of $96.5 million in economic development subsidies in Louisiana and $1.2 billion in tax breaks nationwide. http://www.walmartsubsidywatch.org/state_detail.html?state=LA Yet, in 2011, Walmart, four of whose owners are among the 11 richest Americans, decided to roll back health care coverage and to increase premiums for its employees. (Does this sound familiar, Bobby Jindal?) Wal-Mart still boasted that 90 percent of its employees had health coverage, neglecting to mention that more than half of those got their coverage through their spouses’ group coverage. The company provides no health coverage at all for new part time employees despite the company’s 24.7 percent gross profit martin that same year.
• An April 2012 New York Times investigative report revealed that a former Walmart executive alleged that, in September 2005, Walmart de Mexico paid bribes throughout Mexico in order to obtain construction permits, information, and other favors. Concerns were raised that Walmart executives in the United States concealed the allegations. Reportedly, bribes were given to speed up construction permits, which gave Walmart a substantial advantage over its business competitors. A follow-up investigation by The New York Times published December 17, 2012, revealed evidence that regulatory permission for siting, construction, and operation of 19 stores were obtained through bribery.
• A paper published in Farm Foundation in 1997 found that some small towns can lose almost half of their retail trade within ten years of a Walmart store opening.
• A 2004 paper by two professors at Penn State University found that counties with Walmart stores suffered increased poverty compared with counties without Walmarts due to displacement of workers from higher-paid jobs in retail stores which customers no longer choose to patronize. A study in Nebraska looked at two different Walmarts, the first of which had just arrived and was in the process of driving everyone else out of business by cutting their prices to the bone. In the other Walmart, “they had successfully destroyed the local economy, there was a sort of economic crater with Wal-Mart in the middle; and, in that community, the prices were 17 percent higher.”
• The Economic Policy Institute estimates that between 2001 and 2006, Walmart’s trade deficit with China alone eliminated nearly 200,000 U.S. jobs. Another study found that a new store increases net retail employment in the county by 100 jobs in the short term, half of which disappear over five years as other retail establishments close.
• Walmart has been criticized by labor unions, community groups, grassroots organizations, religious organizations, environmental groups, and even Walmart’s own customers and employees. They have protested against the company’s policies and business practices, including charges of racial and gender discrimination. Other areas of criticism include the corporation’s foreign product sourcing, treatment of product suppliers, employee compensation and working conditions, environmental practices, the use of public subsidies, the company’s security policies and slavery. Wal-Mart denies doing anything wrong and maintains that low prices are the result of efficiency.

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