The year 2003 was not a year of garden variety corporate wrongdoing. The sheer variety, reach, and intricacy of corporate schemes, scandal, and crimes were spellbinding. Not an easy year to pick the ten worst companies, but Multinational Monitor wasn’t deterred by such complications. So here, in alphabetical order, is our list of the ten worst corporations of 2003.
2003 may be remembered as the year of the headache at Bayer. In May, the company agreed to plead guilty to a criminal count and pay more than $250 million to resolve allegations that it denied Medicaid discounts. The company was also beleaguered with litigation related to its anti- cholesterol drug Baycol. Bayer pulled the drug—which has been linked to a sometimes fatal muscle disorder—but is facing thousands of suits from patients who allege they were harmed by Baycol. In June, the New York Times reported on internal company memos which appear to show that the company continued to promote the drug even when its own analysis revealed the dangers of the product. Bayer denied the allegations.
In one of the grandest schemes of corporate welfare in recent memory, Boeing engineered a deal whereby the Pentagon would lease tanker planes—767s that refuel fighter planes in the air—from Boeing. The price tag of $27.6 billion was billions more than the cost of simply buying the planes. The deal may unravel, though, because in November the company fired for wrongdoing both the employee that negotiated the contract for Boeing (the company’s chief financial officer) and the employee that negotiated the contract for the government. How could Boeing fire a Pentagon employee? Simple. She was no longer a Pentagon employee. Boeing had hired her shortly after the company clinched the deal.
A new-age advertising/consulting/strategic advice company, Brighthouse’s claim to infamy is its Neurostrategies Institute, which undertakes research to see how the brain responds to advertising campaigns. In a cutting-edge effort to extend and sharpen the commercial reach in ways never previously before possible, the institute is using MRIs to monitor activity in people’s brains triggered by advertisements.
This radio behemoth specializes in consuming or squashing locally owned radio stations, imposing a homogenized music play list on once interesting stations and offering cultural support for U.S. imperial adventures. It has also compiled a record of “repeated law-breaking”—including prohibitions on deceptive advertising and broadcasting conversations without obtaining permission of the second party to the conversation—on 36 separate occasions over the previous 3 years.
A North Canton, Ohio-based company that is one of the largest U.S. voting machine manufacturers and an aggressive peddler of its electronic voting machines, Diebold fails any reasonable test of qualifications for involvement with the voting process. Its CEO has worked as a major fundraiser for President George Bush. Computer experts revealed serious flaws in its voting technology and activists showed how careless it was with confidential information. In response, it threatened lawsuits against activists who published company documents on the Internet showing its failures.
The company, which initially drafted plans for privatization of U.S. military functions in Iraq—plans drafted during the Bush I administration when former Halliburton CEO Dick Cheney was Secretary of Defense—is pulling in billions in revenues for contract work providing logistical support ranging from oil to food. Tens of millions, at least, appear to be overcharges. Some analysts say the charges for oil provision amount to “highway robbery.”
Fifteen of its top executives have pled guilty in connection with a multi-billion dollar scheme to defraud investors, the public, and the U.S. government about the company’s financial condition. The founder and CEO of the company that runs a network of outpatient surgery, diagnostic imagery, and rehabilitative health- care centers, Richard Scrushy, is fighting the charges. But thanks to the slick maneuvering of attorney Bob Bennett, it appears the company will get off—no indictments, no pleas, no fines, no probation.
The California-based company sought FDA approval for silicone breast implants, even though it was not able to present long-term safety data—the very thing that led the FDA to restrict sales of silicone implants a decade ago. In light of what is unknown and what is known about the implants’ effects—including painful breast hardening, which can lead to deformity, and very high rupture rates—the FDA in January 2004 denied Inamed’s application for marketing approval.
Fresh from a $100 million fine levied because analysts were recommending stocks that they trashed in private emails, the company saw three former executives indicted for shady dealings with Enron. Merill Lynch managed to escape with no prosecution in exchange for “oversight.”
One of the largest U.S. grocery chains, Safeway led the charge to demand givebacks from striking and locked-out grocery workers in Southern California. Along with Albertsons and Ralphs (Kroger’s), Safeway’s Vons and Pavilion stores asked employees to pay for a major chunk of their health insurance. Under the company’s proposals, workers and their families would lose $4,000 to $6,000 a year in health insurance benefits.www.zmag.org/ZMagSite/Apr2004/mokhiber0404.htmlE-mail this article