October 6, 2003
Scandals involving violations of the public trust are regular stories
for the news media. Although the cast of characters, the locale and the
plot of each sinister story will vary there is an underlying conformity
Every major organization -- corporation, union, NGO, municipality, state or nation -- is controlled by an elite group. That group will usually, but not necessarily, be the officers, directors and their close associates. Sometimes the prominent actors may merely be puppets for the real bosses who desire anonymity.
To maintain control the group must not lose the approval of the organization's members, employees, stockholders, or constituents.
Ideally the nominal leader will be a charismatic individual with a stellar reputation, a reputation most likely created by a public relations firm that lauds his ability to achieve the organization's guiding principles. Periodically he will apprise the members of his accomplishments and will reveal his plans for the future. Hopefully this will keep the underlings content and loyal.
The interests of the rulers will often take precedence even if those interests are at odds with those guiding principles or the law. Those interests may be so important to them that they will do anything to realize their objective -- motivations strong enough to knowingly sacrifice lives.
Invariably the organization will have one or more dissident groups that oppose the positions of the ruling faction. So long as their control is secure the ruling faction will be tolerant of the dissidents, perhaps even be accommodating to them. Permitting dissent that is ineffective may strengthen their hold on the membership who may be impressed by a democratic and tolerant leadership.
If the opposition appears to be gaining strength and could become formidable the dissidents will be strenuously attacked and their reputations will be tarnished. Some supposedly scholarly authorities will analyze the relative merits of the leaders and their opponents and report that the leaders' position is superior and the oppositions' faulty.
Examples of duplicitous conduct are reported regularly. Pick up the newspaper and find loads of stories. Some prominent examples of egregious activities follow.
Enron. Corporate executives feathered their nest at the expense of their stockholders, employees and a trusting public. They pulled out all the stops to pull off the biggest scam in history with the assistance of the crème de la crème in government, advertising, accounting, law, public relations, investing, and every other field they could co-opt.
Deregulation opened the door to nefarious conduct that was previously prohibited. 'Kenny-Boy' Lay, the chief honcho, was the top contributor and a close buddy to Dubya Bush. Lay met behind closed doors with administration officials to select many new appointments. With his fine business background he would certainly recommend the most appropriate candidates. His reputation along with other corporate scoundrels' was extolled by highly reputable and authoritative individuals and was widely reported in the media.
Enron's operations were so skillful that no effective opposition emerged to provide warnings. Thus the con anesthetized the stockholders, employees, customers, and the public until the final debacle.
The unrealistic stock value of Enron collapsed and innocent investors along with company employees whose retirement moneys were tied up in the stock lost billions.
The monopolistic manipulation of its energy pricing cost the state of California about eight and a half billion dollars. Foreign governments that entered into contracts with Enron because of US government solicitation were also fleeced.
Incredibly highly respected individuals and firms prostituted themselves, violating the confidence that the unreliable media had so diligently created for them! The fraudulent activities of major banks, accountants, lawyers, investment advisors, etc. were exposed and the firm of Arthur Anderson, one of the top accounting and consulting firms in the world, was destroyed.
The Enron story was just one of many swindles carried out by top names in corporate America. Yes siree, these gangs of corporate managers play hardball and they've got all the influence on their side.
Cigarette Industry. A Johns Hopkins study back in 1938 revealed the harmful effects of cigarettes. But it was not until 1999 that the industry reluctantly acknowledged that fact. During all those years management was able to recruit the major media, the medical profession, and the government to stand behind the industry to deny the truth. Another instance of where the elite forces unite to deceive and harm the innocent and trusting public.
The number of premature deaths and illnesses that resulted reach into the millions. Pause just a second and think of the numbers of those victims -- millions, yes, millions of deaths and illnesses. With such brutal competition the mafia cannot even rate minor league status.
Why should people feel threatened by the underworld? It does its dirty deeds primarily amongst themselves or people who deal with them. However, that pleasurable and benign-seeming little cigarette is oh-so-much more deadly.
Although victims were able to bring scientific proof to the courtrooms, the power of the industry was so formidable that it defeated every lawsuit. It was only after a whistle blower, a top executive within the industry itself, exposed the damaging information that had been continuously concealed that the ironclad defenses were breached.
Did this scandal somehow affect the elite of the industry? Apparently not -- they are still going strong -- appealing to potential new tobacco addicts among the young in America; and with the assistance of the federal government are moving heavily into overseas markets.
Leaded Gasoline. In a situation similar to the duplicity of the cigarette industry, tetraethyl lead (TEL) was foisted on the public as a necessary catalyst in gasoline to prevent engine knocking. Once again government health authorities were aware of toxicity of this product.
The industry knew that other less harmful substances would do the job. The others were not patentable, however, and therefore could not produce the profits that would result from the use of TEL. Three major American corporations -- General Motors, Exxon, and DuPont -- were the contemptible beneficiaries of this murderous business practice.
For over 60 years, their creation, the Ethyl Corporation, polluted the air with lead particles that were so toxic that during that period an estimated 5,000 people died each year from lead-related heart disease.
Lead was also destructive of cars' engines. Since their use has been curtailed engines have lasted far, far longer than they previously did. The new owners of the Ethyl Corporation still market TEL wherever in the world it is legal. Once again corporate profits triumph over every other important consideration. An article, "The Secret History of Lead," exposes the grizzly tale in the entire March 2, 2000 issue of The Nation.
Ford. Testing of the Ford Pinto revealed that a design defect exposed consumers to possible death or injury from fuel tank fires in accidents.
Management considered the nominal expense of correcting the problem, at $11 per car, against possible damages they would incur. According to an internal document, a life was valued at $200,000; a burn injury, $67,000; and a car, $700. An analysis based on those amounts convinced them that it was much more profitable not to make the necessary changes.
twenty-seven deaths resulted from the problem before Ford was required to recall and correct it.
When management utilizes a cost/benefit criteria for safety, a punitive damage award of $125 million by the jury in the famous Pinto case of Grimshaw v. Ford Motor Company should not be deemed unreasonable.
The media, manufacturers and the government have depicted dedicated juries as irresponsible and have successfully limited, in many states, the damages that juries may assess. The unscrupulous can thereby more effectively determine what it might cost to market an unsafe product.
Et cetera. An endless stream of these outrageous stories could be strung out. Pharmaceutical products taken as prescribed are responsible for about one hundred thousand deaths a year. HMOs are another rip off that short changes the care of patients. Industries involved with toxic substances, asbestos, radiation are uncaring of the health and welfare of their employees and the public.
Officers at unions and NGOs, unbeknownst to their members, have enjoyed unconscionable salaries, pensions and perks and have pilfered their organizations' treasuries.
It seems that the larger and wealthier the organization the more destructive its nefarious policies are. The multinational blue chip corporation would certainly fit that description.
Organization elites. The elite leaders in these examples clandestinely pursued interests that violated the principles of their organization and the law.
The most heinous criminals at their worst commit a tiny fraction of what these big wigs can easily accomplish.
The larger, wealthier and more powerful the organization, the more devastating are the actions of elites.
National Governments. Bad as these actors are they are surpassed by far by the real baddies. Governments have life and death control of its citizens. An employee, stockholder, customer or member may at any time sever his relationship with any organization but so long as he is within the jurisdiction of a national government he cannot easily escape its clutches.
Governments have criminal courts that can deny people their life, liberty and property. Their war-making power permits them to cause death and destruction not only to their enemies but to their citizens and residents as well.
Thoughts and comments on governments with illustrative examples will require at least an article of its own. The next issue of Swans should include How Elites Employ Governments To Justify Their Crimes.
· · · · · ·
America the 'beautiful' on Swans
Philip Greenspan on Swans (with bio).
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