CPR Member Scholar Rena Steinzor reacted to today's announcement of a settlement between General Motors and the Justice Department over charges stemming from the company's failure to disclose a deadly ignition defect it millions of its cars. Steinzor said:
This settlement is shamefully weak. GM and its executives knew for years that they had a big problem with the ignition switch, which caused cars to stall at high speeds, depriving drivers of power steering, brakes, and airbags. The company’s dysfunctional culture convened committees to palaver about it, while nothing was done, a culture described by Mary Barra, GM’s CEO, as “the GM nod.” But daunted by the company’s size and prestige, U.S. attorney Preet Bharara blinked, collecting $900 million as a cost of doing business, but excusing GM from admitting its criminal wrongdoing. This kind of sweetheart deal shows that justice in America is anything but blind.
Steinzor is the author of Why Not Jail? Industrial Catastrophes, Corporate Malfeasance, and Government Inaction.Full text
Labor Secretary Tom Perez came into office pledging to create good jobs and take on the economic injustice that oppresses blue-collar workers, from raising the minimum wage and restoring unpaid overtime to combatting wage theft. Luckily, the head of his Wage and Hour Division, David Weil, the author of a revelatory report on how to make the most of strategic enforcement, has moved out quite aggressively. It’s a pity that other, even more serious crimes, don’t seem to get the same priority from elsewhere in the Labor Department.
Yesterday, Weil and New York State Attorney General Eric Schneiderman announced that they’d filed charges and secured a guilty plea from the owner of nine Papa John’s restaurants who did not pay his workers the minimum wage, stole some of the wages they owed the workers, and fabricated tax returns to cover up his misdeeds.
“My office will not hesitate to criminally prosecute any employer who underpays workers and then tries to cover it up by creating fake names and filing fraudulent tax returns,” said Schneiderman. Added Weil, “This judgment should be a wake-up call for all employers who think they can break the law, not pay their workers, cover it up and get away with it. It is part of our commitment to ensure that employers who play by the rules aren’t unfairly undercut by competitors who cheat, and that workers are guaranteed a fair day’s pay for a fair day’s work.”Full text
The Third Circuit’s decision today is a tremendous victory for the elusive goal of restoring the Chesapeake Bay to the point that it is ecologically healthy. As the Third Circuit made clear, the Farm Bureau’s relentless and self-serving opposition to EPA’s leadership in this area misreads the law. Strong federal pollution controls are the last hope for the largest estuary in the world and for the millions of people who trek to its shores to enjoy its amazing beauty. The decision gives EPA the whip hand in organizing the efforts of recalcitrant states, special interests like the Farm Bureau, and environmental officials at all levels of government who have the expertise and the wisdom to rescue the Bay. With EPA’s leadership secured, the Bay’s health is headed in the right direction—toward a reinvigorated ecosystem no longer choked by dead zones and overwhelmed by runoff.
President Obama’s approval rating is up to 50 percent for the first time in two years after a stellar period of national reconciliation and the safeguarding of Obamacare, his signature, and truly momentous, achievement. The president, in fulfillment of his noble promises to help the middle class, is about to put his weight behind a Labor Department rule that would hike minimum earnings needed to earn overtime pay, a proposal that would affected 5 million Americans. These accomplishments remind people why they voted for him in the first instance and returned him to office by a very comfortable margin.
But for those of us who believe that people should be able to go to work without getting sick or dying, a remarkable series of stories by the Center for Public Integrity can only strengthen the despair that has been building slowly since the president took office. The series describes an Occupational Safety and Health Administration (OSHA) so impotent with respect to pervasive workplace hazards that it is fair to ask whether this 45-year old institution is fundamentally irrelevant to most American workers.Full text
Anyone who cares about the development of sound public policy has grown distraught over congressional gridlock. The House and Senate are dysfunctional to an extent not seen in modern times. Neither is able to develop bipartisan legislation to deal with a slew of urgent social problems, from immigration and the minimum wage to the strengthening of outdated health and safety laws. But the kneejerk glee that accompanies any bipartisan action regardless of content is just as dangerous. Take, for example, the bill to “reinvigorate” the Toxic Substances Control Act (TSCA) that just passed the House by a vote of 398 to 1.
The sad truth is that we don’t require enough testing on toxic chemicals before chemical manufacturers market them in this country, and public health has paid a heavy price for this omission. It’s difficult to think of more than a very small handful of industrial chemicals that have proved less toxic than we originally thought; instead, the more we learn, the more dangerous the vast majority of toxic chemical mixtures prove to be. TSCA (pronounced like the opera Tosca) was written in 1976 and is overdue for an overhaul. But the House bill will not solve the acute problems caused by toxic chemicals in the environment, and could even make matters much worse. This flawed product will meet a Senate bill that is also quite weak, setting up the potential for a “race to the bottom” in conference. Industry advocates are clearly counting on this dynamic when conferees meet. And rumor has it that the White House has signaled presidential eagerness to sign a bill, eliminating that critical counterweight to a bipartisan sell-out.Full text
In her first major criminal settlement since becoming Attorney General, Loretta Lynch has delivered, trussed and on a platter, five of the world’s biggest banks—Citigroup, JPMorgan Chase, Barclays, Royal Bank of Scotland, and UBS. The five will actually plead guilty to specific crimes involving manipulation of foreign currency markets and will pay close to $6 billion in penalties for illegally collaborating to drive trading prices up and down. As one not-so-bright bank executive pronounced slyly in an online chat room that the self-named “cartel” used to communicate, “If you ain’t cheating, you ain’t trying.”Full text
With the announcement that GM Chief Executive Officer Mary Barra received the outsized compensation of $16.2 million in 2014, what should have been a year of humiliation and soul-searching for that feckless automaker instead ended on a disturbingly self-satisfied note. Purely from a public relations perspective, Barra worked hard for her money. Appearing repentant, sincere, and downcast, she persuaded star-struck members of Congress that the company was committed to overhauling a culture characterized by what she called the “GM shrug,” loosely translated as avoiding individual accountability at all costs. Even as she blinked in the television lights, GM fought bitter battles behind the scenes to block consumer damage cases and exploit corporate tax loopholes.
Largely on the basis of her political adeptness, Barra has been taking victory laps in the business press, hailed as the rare (female) CEO who has led her corporation out of a morass that could happen to anyone. This performance and the accolades it inspired provide a troubling coda to what was a destructive year for American drivers. Dubbed “the year of the recall,” automakers recalled an unprecedented 64 million vehicles -- about one in five cars on the road; GM led with 26 million of this total.Full text
Today, the Government Accountability Office (GAO) reiterated its conclusion that EPA’s regulation of toxic chemicals is in crisis, unable to deliver badly needed protection to the American people. These benighted programs are among a couple of dozen of “high priority” failures that cause serious harm to public health, waste resources, or endanger national security, and Congress is giving the report red carpet treatment, with House and Senate hearings on the report scheduled the very day it was released.
In auditor speak, GAO says that “[b]ecause EPA had not developed sufficient chemical assessment information under these programs to limit exposure to many chemicals that may pose substantial health risks, we added this issue to the High Risk List in 2009.” At the time, then-Administrator Lisa Jackson took clear steps to rescue the program. Since then, very little progress has been made, largely because the Obama Administration has narrowed its focus to climate change, and a major overhaul of initiatives swamped by chemical industry nitpicking does not seem to be in the cards until at least 2017.Full text
There were many highlights in President Obama’s recent State of the Union address, but one passage in particular stuck out for us. In this passage, Obama laid out his clear vision of the positive role that government can and must play in our society—and sharing this vision with the American public will be essential for successfully repelling the oncoming Republican onslaught against regulatory safeguards. He cast his positive vision of government in the following terms:
But here’s the thing—those of us here tonight, we need to set our sights higher than just making sure government doesn’t halt the progress we’re making. We need to do more than just do no harm. Tonight, together, let’s do more to restore the link between hard work and growing opportunity for every American.
In other words, we as a society benefit when everyone has the opportunity to achieve his or her full potential. The government is uniquely positioned to ensure that everyone is afforded opportunity; and, when the government is permitted to function effectively, it can and will fulfill this task successfully. Individuals win. Society wins. And the government has a critical role to play in achieving these results.Full text
A year ago, about 300,000 people in and around Charleston, West Virginia, lost their drinking water source when thousands of gallons of a toxic chemical known as MCHM (4-methylcyclohexanemethanol) leaked into the nearby Elk River through a hole in a rusted-out storage tank. Last month, the wheels of justice began to catch up with the owners of the responsible company when they were indicted by U.S. Attorney Booth Goodwin. Coincidentally, the West Virginia indictments came down on the same day that the Justice Department charged 14 people in Massachusetts for their role in producing and distributing meningitis-tainted steroid injections that killed 64 people.
The same-day indictments framed a question business leaders would do well to contemplate: When do corporations and their executives cross the line between unavoidable human error and preventable criminal misconduct? Prosecutors seem increasingly ready to push reckless management to the criminal side of the line as one corporate fiasco after another claims lives and causes hugely expensive damage to communities and local economies.Full text