Category: Legal Issues – Specific Litigation

Into the Raging Sea

The Book of the Week is “Into the Raging Sea, Thirty-Three Mariners, One Megastorm, and the Sinking of El Faro” by Rachel Slade, published in 2018. This sloppily proofread volume recounts a suspenseful, emotionally charged story about a rare but preventable epic fail. It is a cautionary tale of how TOO MUCH DEREGULATION in the shipping industry turned out to be penny-wise and pound foolish.

Just as a little bit of socialism is good (in the form of public libraries and the like), too much socialism is bad. So too– some deregulation might be good, but too much deregulation leads to conflicts, corruption, monopolies and crashes (financial and physical). With the ship El Faro, one thing led to another: Getting rid of pesky laws that hindered commerce ultimately increased the risk of deaths, as will be explained.

All the money the government and El Faro‘s owner thought they were “saving” with the help of deregulation, was wasted in the accident in various, extremely high costs– rescue-resources, the emotional toll taken on all of the parties involved, litigation, etc. What happened to the ship showcased the extremes of human nature– greed and hubris of shipping-company executives and their accomplices (politicians) versus the braving of life-threatening conditions, by rescuers trying to prevent deaths in the disaster.

At the beginning of October 2015, El Faro was hauling commercial cargo heading for San Juan in Puerto Rico, but ended up in the path of hurricane Joaquin. The whole voyage was one long cluster screw-up.

For starters, the shipping industry had an abusive, hierarchical culture. There had been a long period of deregulation starting in the 1970’s in the interest of political expedience and profit-seeking; safety be damned. But by the 2010’s in the shipping industry, the gravy train was over.

Due to the safety crackdown, El Faro‘s corporate owner had been doing some lean and mean cost-cutting in connection with all of its holdings, at the expense of vessels and their personnel. El Faro had been grandfathered in under older regulations that made its long-term seaworthiness doubtful. But it was lucrative enough not to be scrapped.

Architecturally, the ship had been designed for speed rather than safety, and the physical arrangement of the cargo caused the ship to ride low in the water, and list in rough seas. Rushed workers sloppily loaded the cargo– consisting of cars and other heavy, unwieldy items, and they weren’t entirely secure (both the workers and cargo). The ship’s anemometer was broken. But for deregulation, the government would have taken the ship’s owners to task on these and various other accident-prevention issues.

During this, El Faro‘s last voyage, in which it encountered a horrific storm, the captain could pick and choose from a few different sources of weather forecasts. He happened to choose the most outdated one, unbeknownst to him. Nevertheless, he stubbornly refused to consider any others, or significantly change the ship’s route, even when his subordinates tried to tell him about storm data from other sources. He needed to please his bosses, whom he knew preferred that he get the ship to its destination ASAP, to minimize costs. In transportation, time is money.

Also, the captain lacked social graces. Not only that, he was a survivalist, one of those nutjobs who was prepared for the end of the world, with weaponry and provisions and planned to defend himself if necessary, against other survivalists. Thanks to deregulation, he was still employed.

The sleep-deprived chief mate of the ship was a new employee, just getting to know the captain, so he was eager to impress him and reluctant to question his authority. The second mate was psychologically weary of her job.

Other ship workers were less than loyal, as they had no job security. To add insult to injury, racial tension pervaded the ranks. To boot, the ship was understaffed.

To be fair, the storm formed faster than anyone had anticipated. But obviously, TOO MUCH DEREGULATION played a major role in the incident.

As an aside, “It’s an open secret in the meteorological community that the ECMWF [the European weather service and hurricane software modeler] is consistently better than the NWS [American National Weather Service and hurricane software modeler].” The former collects more data worldwide and gets more funding than the latter. (Apparently, whenever a storm is brewing near the United States, the American weather media still show the projected route of the American model, as a point of pride).

Read the book to learn: other disturbing lessons; the fate of the ship; and fascinating details of the investigation.

Ruth Bader Ginsburg – BONUS POST

The Bonus Book of the Week is “Ruth Bader Ginsburg” by Jane Sherron de Hart, published in 2018.

Born in Brooklyn in March 1933, Bader grew up in a cultured household. She took piano lessons, played the cello, and summered annually at her relatives’ Adirondacks camp. A voracious reader, she was sent to Hebrew school, and skipped an academic grade. However, her mother, with whom she was very close, passed away of cancer when she was seventeen.

The culture and politics of Bader’s generation “… limited aspirations and choices for young women.” The GI Bill, the Federal Housing Administration and Social Security– just to name a few sources of privilege, provided the men with resources denied the women. The far-reaching institutional discrimination they engendered was accepted as a given in American culture.

Bader received a scholarship from Harvard Law School. But, since she married before attending the school, it was naturally assumed that she no longer needed the scholarship because her-father-law would pay the tuition. Obviously, the school would have honored the scholarship if the married Bader had been male.

Unusually, though, Bader’s parents-in-law encouraged her to pursue her dream of becoming an attorney, even though she was female. She was one of nine women in her class of 552 students. She made Law Review, and before graduating, had a daughter. Bader’s husband served as a true equal partner while the two alternated attending law school, and fulfilling childcare and domestic responsibilities. Before he graduated, he had a serious bout of testicular cancer.

In 1959, even though Bader graduated co-valedictorian, she couldn’t find a job due to her gender. Such prejudice was equivalent to the denial of graduate-school acceptance of Jews in the Soviet Union that lasted into the 1980’s.

With the help of a law-school professor’s aggressive recommendations, Bader ended up clerking for a judge, teaching law at Rutgers, then teaching law at Columbia University (benefiting from “Affirmative Action”), and directing legal projects on gender discrimination for the ACLU. She was super-dedicated, and worked around the clock.

Unfortunately, Bader was unable to be a major legal mover and shaker in the Women’s Movement because it was fragmented and complex with infighting. Various organizations were trying to further gender equality through litigation and lobbying, whereas, with the Civil Rights Movement, only the NAACP was trying to change laws.

Read the book to learn of how Bader became a U.S. Supreme Court Justice, a few major cases she argued during her career, the difference between “benign discrimination” and “paternalistic discrimination” and much more about her professional and personal life.

The Gambler – BONUS POST

The Bonus Book of the Week is “The Gambler, How Penniless Dropout Kirk Kerkorian Became the Greatest Deal Maker in Capitalist History” by William C. Rempel, published in 2018.

Born in Fresno, CA in June 1917, Kerkorian was the youngest of four children of Armenian extraction. In the first half of the twentieth century, he pursued his passions of amateur boxing and piloting planes. His entrepreneurial spirit led him to go into the chartered airplane business. He began associating with unsavory characters when he bet on sports in 1961. His FBI dossier related this factoid that was learned via wiretapping.

Kerkorian dreamed big and took the outrageous risks required to fulfill them. Thanks to his cultivating friends in high places, in the early 1960’s, he managed to borrow a steep $5 million to purchase a DC-8 (jetliner) to expand his transcontinental shuttle service for the U.S. military and other lucrative clients.

In 1963, Kerkorian got into the casino business. He launched an IPO for his holding company in 1965. Then he became aggressive in acquiring companies against their will. Like Western Air Lines. He also opened the biggest hotel/casino in the world in July 1969. He got international celebrities to provide entertainment on opening night just to rub it in the faces of the competition, such as Howard Hughes.

However, one casino Kerkorian took over had been run by the Mob. In late 1969, the IRS forced him to sell a yacht and a plane to pay back-taxes. In 1972, a German bank was dunning him for an amount of money he couldn’t possibly pay. He didn’t worry. He simply ordered that his financially struggling company, MGM, issue a ginormous dividend to himself, and all other holders of the company’s stock. This way, he could pay off his personal bank debt; never mind that MGM risked going bankrupt. Of course some shareholders sued.

Read the book to learn of Kerkorian’s many other adventures in business and pleasure.

Deadly Spin

The Book of the Week is “Deadly Spin” by Wendell Potter, published in 2010. This is a book that explains how health insurance companies engage in unethical behavior in the name of profit, that results in needless deaths in the United States.

It follows then, that serving as a top executive at a health insurance company requires sociopathic tendencies, favoring money over people. One reason the insurance companies are so obsessed with their bottom lines (aside from the greed of their top executives) is that they have to answer to Wall Street.

Potter worked for Humana and then CIGNA a combined approximately twenty years as head of their public relations departments. By the late 1980’s, Humana realized it had a conflict in running a for-profit hospital and a managed-care plan simultaneously. The hospital was more than happy to maximize the stays of its most lucrative patients, while the plan’s goal was to minimize costs through preventive health care– promoting wellness.

The author learned to play the game of maximizing his employer’s profits through fighting legislative changes to his industry; and protecting, defending and enhancing his employer’s reputation. For, there was a direct relationship between his employer’s profits and his raises and bonuses. He therefore emotionally detached himself from health insurance plan members, and focused specifically on actuarial tables and legalese to help him project an image of his employer as a reasonable,  if not caring participant in patient care.

Whenever a threat to his former employers’ profits arose, such as the movie “Sicko” or proposed legislation that financially favored patients, his former employers hired a big-name, monster-sized public relations firm, and secretly co-funded and co-founded a political front group, such as “Health Care America” that publicly pretended to favor health care consumers, but truly sought to maximize insurance industry profits. The group was a propaganda machine, and an object lesson in how to lie with statistics.

Other tricks of the trade include:  “…rescinding individual policies, denying claims, cheating doctors, pushing new mothers and breast cancer patients out of the hospital prematurely and shifting costs to consumers.”

Read the book to learn additional details of the hegemony of the health insurance companies. One interesting endnote: “Obama opposed any requirement that everyone buy insurance, one of the few points on which he disagreed with Hillary.”

Indecent Exposure

The Book of the Week is “Indecent Exposure, A True Story of Hollywood and Wall Street” by David McClintick, published in 1982. This volume with the provocative but misleading title had nothing to do with sex. It actually consisted of a suspenseful, albeit long story seen mostly through the eyes of Alan J. Hirschfield, the CEO and officer at Columbia, the movie company. It was about how a lack of honesty, the power of propaganda, and clashing egos basically resulted in the redistribution of wealth among the wealthy. This sort of thing happens all the time.

In February 1977, then-famous actor Cliff Robertson received a document saying he owed taxes in connection with a check he never received. He later found out that the check had been forged and cashed in his name, by David Begelman, a high-level executive at the aforesaid Columbia. Robertson became the victim of cancel culture, for NOT being a tax cheat in Hollywood.

It was common practice for Hollywood studios to send movie actors checks for thousands of dollars (usually unreported to the IRS) that defrayed a small portion of their promotion expenses for a new picture. The IRS had just then begun cracking down on that taxable income. Robertson’s reaction set in motion a series of consequences that affected thousands of people; mostly financially.

Columbia was a public company, and the bad publicity resulting from news of a serious crime committed by one of its executives was a serious public relations problem. Hirschfield, who was on the board of directors, was told by an attorney that he had a duty to inform the executive committee, corporate counsel and the SEC after an internal investigation had been conducted.

As has been the case since the discovery of journalism/tabloidism, (supposedly said by Mark Twain), “A lie can travel halfway around the world while the truth is putting on its shoes.” Begelman’s friends in the Hollywood community (of which the check forger had many) rushed to his defense, having heard only vague rumors that described his transgressions in euphemisms. They really had no clue that he had actually committed several felonies, it turned out. They didn’t want to know.

The friends planted tabloidy messages in the media making the excuse “Everybody Does It” because they took unethical liberties with their own expense accounts, and made Hirschfield the villain, saying he was a power-hungry, vindictive executive, as he technically did compete for power with Begelman in the company hierarchy. Hollywood’s and the public’s gullibility in automatically believing in Begelman’s innocence and Hirschfield’s treachery is human nature.

At the board meeting that initiated the long, heated discussion that would determine whether Begelman was fired, Begelman acted like a prisoner on death row who had suddenly found religion. He implied he might kill himself if removed from his primary job. But actually, anyone who knows this kind of person knows that he would be too arrogant to kill himself.

A preliminary inquiry into Begelman’s history yielded more than one serious crime during his Columbia tenure, and previous lying and other worse misdeeds. Hirschfield argued for termination, saying Begelman was unlikely to change his spots, as dishonesty was a lifelong habit with him. Over the next few years, the Hollywood community and the public, however, still having heard only distorted soundbites that minimized Begelman’s sins, fooled itself into believing they weren’t that bad, and continued to defend him.

Interesting sidenote: In 1982, in a joking context, Hirschfield exclaimed to a female friend who was high on the corporate ladder, in front of some colleagues: “Female executives suck!” She laughed. Clearly, if that was uttered in 2018, hilarity would NOT ensue.

Read the book to learn of the consequences of the stupid actions taken by most of the main characters of this entertaining saga.

Moore’s Law / Elon Musk

The Books of the Week are “Moore’s Law, The Life of Gordon Moore, Silicon Valley’s Quiet Revolutionary” by Arnold Thackray, David C. Brock and Rachel Jones, published in 2015, and “Elon Musk, Tesla, SpaceX, and the Quest for a Fantastic Future” by Ashlee Vance, published in 2015.

The former biography described not only Gordon Moore’s life, but the histories and cultures of his ancestors, his wife’s family, and the places where he lived.

Born in January 1929 in Pescadero California, Moore was the middle son of three. His father spent most of his working life in law enforcement. He, his father and brothers went fishing and hunting. The family moved to Redwood City in 1938.

At eleven years old, Moore fell in love with chemistry. His “… adolescent hobby of making bombs and explosions” or maybe also the cumulative effect of his noisy hunting excursions were thought to have caused his hearing loss later in life. He wed his college sweetheart and completed a PhD in experimental particle physics at California Institute of Technology.

In 1953, the transistor was starting to replace the vacuum tube in various devices, like TV sets. It also became a handy component in military electronics. In 1956, Moore went to work for William Shockley– a reputable scientist but a psycho boss. Shockley had hubris syndrome and, with his friends from Bell Labs, convinced his company’s major investor to fund the development of a diode rather than the silicon transistor.

In 1957, feeling disgusted and entrepreneurial, Moore and seven of his colleagues left the company and, financed by venture capitalists, eventually formed Fairchild Semiconductor in Mountain View, California. What with the space race, aerospace computing was all the rage. Silicon was a substance that had the right physical properties to advance it.

At Fairchild, Moore formed a research and development group that competed with the manufacturing department. Unfortunately, his temperament was non-confrontational, and his avoidance behavior was bad for business. Fortunately, in 1968, he, Bob Noyce and Andy Grove sported the appropriate diverse set of personalities and skills that maximized profits in a new venture they formed, called Intel. Their strategy was to introduce cutting-edge products to the technology market and be the first to do so.

Intel went public in October 1971, but NOT on a “stock exchange” as the authors wrote. Only on NASDAQ (not an exchange). Moore wanted the company to make computer parts, but not the whole computer, or else it would compete with its customers, such as IBM. By the mid 1970’s, Intel had factories in Malaysia and the Philippines. Moore motivated his initial employees through bribery– stock options and a stock purchase program. He even bribed his own son to finish school.

Intel’s labor- and time-saving devices proliferated in everyday products like calculators, color TV’s, telephone networks, cash registers and watches, not to mention inter-continental ballistic missiles. And spaceships. The authors downplayed the role of video games in the advancement of computer components.

Moore wrote about a concept that played out accurately through the decades that came to be known as Moore’s Law. In 1976, the price of silicon transistors– which are put on memory microchips– was less than a penny. That price got lower and lower as technology got better and faster. Unfortunately, according to the book, this economic growth has run its course in the United States and is predicted to come to an end in the next five years or so.

Read the book to learn how Intel cheated by taking a page from Microsoft’s playbook (and partnered with it)– to become a monopoly– in order to dominate the PC world; what the billionaire Moore did after he was forced to retire (very reluctantly; hint– he engaged in philanthropy from which he required measurability and accountability); and much more about his company, lifestyle and family.

Born into a relatively wealthy family in 1971 in Pretoria, South Africa, Elon Musk is the oldest of three children. A voracious reader, he, like Isaac Asimov, was also an insufferable know-it-all, and thus became a social outcast. At about eight years old, he chose to go live with his psychologically abusive, rabid-apartheidist father when his parents split.

Musk engaged in the usual leisure pursuits of nerdy boys of his generation: Dungeons and Dragons, computer programming, rocketry and chemistry explosions. Being super-smart, he learned that the United States was superior to South Africa in terms  entrepreneurial opportunities. He therefore got Canadian citizenship through his mother’s ancestors, and then moved to the United States as a young man.

Musk attended college and graduate school in Pennsylvania. He studied business, physics and economics. He charged admission for alcohol parties to raise money to pay for his tuition. In 1995, he went into business with his brother. Four years later, their website start-up, Zip2, was sold to Compaq for a tidy sum. He then started and/or worked on other projects, including an internet bank, an electric car, spacecraft and devices that harness solar power.

Certain aspects of Musk’s personality in the workplace are comparable to various other famous people. Musk’s dysfunctional managerial style is a blessing and a curse. He, like the late Steve Jobs, is hard-driving on employees to the point of meanness. But his focus and workaholic business ventures have achieved what many said was impossible. His keen entrepreneurial instincts, similar to those of Bill Gates, have seen him through. Also like Gates, he has delivered on what he promised, but usually way over deadline.

When it comes to space exploration, Musk, like Freeman Dyson, shoots not for colonizing the moon, but for colonizing Mars. Musk, like Richard Stallman, believes in the free exchange of information. He truly wants to improve humanity so much so that, according to the author, he eventually shared with the world (!) the intellectual property of his electric car company, Tesla. In 2005, its first car was completed by a mere eighteen workers.

However, in 2007, Musk was very possessive of Tesla. Contrary to the recommendation of an interim CEO, he stubbornly refused to cut the near-bankrupt company’s losses and sell it to an experienced international automaker. He was competing with not only overwhelmingly powerful and politically influential automakers, but also with military contractors and the oil industry.

Read the book to learn of two major automakers who have invested in Tesla; of how the Obama administration helped keep the company afloat; of the myriad benefits the world is deriving from Musk’s  innovations; and of Musk’s personal life.

Grand Delusions – BONUS POST

The Bonus Book of the Week is “Grand Delusions, The Cosmic Career of John DeLorean” by Hillel Levin, published in 1983. This volume described the adventures of a car company engineer and entrepreneur, not to mention swindler.

The book’s first chapter was a summary of his entire career, suspense be damned. The section on his makeover and marriages was disorganized and redundant. One more criticism– the author interviewed only the book’s subject twice, and listed no notes, references or bibliography.

Anyhow, born in January 1925 in Detroit, DeLorean was the oldest of five sons. His father was an alcoholic Romanian; his mother, an Austrian. He kept busy while attending Lawrence Tech in Michigan. He wrote for the school newspaper and was on the student council. He joined a fraternity, danced in night clubs and drove a fast car.

DeLorean held a series of jobs including salesman, trainee in a special program at Chrysler, engineer at Packard, head engineer and then general manager of General Motors’ Pontiac division, and by the late 1960’s, general manager of its Chevrolet division.

After departing from his full-time job under murky circumstances, DeLorean and his sidekick Roy Nesseth posed as entrepreneurs who executed crooked business deals. Victims included an auto-parts patent holder, a farmer/rancher, and a financially struggling Cadillac dealership, among others. By the mid-1970’s, the pair had a bunch of business failures and lawsuits against them.

Journalists were suckered into writing about DeLorean’s past glory as a brilliant engineer. He “… must have learned that if he didn’t say too much, the reporter wouldn’t bother to check any further… They were still looking for dirt on General Motors, and the ex-executive was more than willing to give it to them… The maverick auto engineer was too compelling a character to be deflated with investigative journalism.” DeLorean fooled people just like Bernie Madoff did, although not on as grand a scale.

When he started his own car company, DeLorean let his attorney create a complicated network of sister companies to deliberately obfuscate financial and legal matters. It took the entire second half of the Seventies.

A boatload of fundraising was required to pay lavish executives’ salaries, design their offices, choose a manufacturing site, build the factory, sign up the car dealers, etc. The author erroneously used the term “comptroller” instead of “controller” when discussing the pesky bean-counter who complained about the arrogant, greedy DeLorean’s huge monetary outlays on all things for himself. “As Dewey [DeLorean’s first controller] predicted, the improprieties grew exponentially with the influx of money from the British government.”

DeLorean was the type of man who fancied himself as having some of the traits of James Bond. A man such as this, with a big ego, marries a model or actress at least a decade younger than himself. Like DeLorean, other James-Bond wannabes have assumed prominent leadership roles, and become international celebrities. The list includes but is far from limited to: Charlie Chaplin, Cornelius Vanderbilt IV, John F. Kennedy, Nelson Mandela, Elon Musk and of course, Ian Fleming.

Read the book to learn the details of the combination of honest ineptitude and premeditated, nervy criminality in which DeLorean and his accomplices engaged in the context of how not to become an automaker.

On Trial

The Book of the Week is “On Trial” by Gerald Dickler, published in 1993. This book described thirteen of the most famous court cases in the history of the world. These cases show that there’s nothing new under the sun. Political and religious battles will never cease, due to human nature.

Socrates was tried in 399 B.C. in Athens, when he was seventy. A scholarly wiseass, Socrates believed that most members of Greece’s government were “…crude politicians lacking in wisdom and ill-equipped for high office … I found that the men most in repute were all but the most foolish, and that others less esteemed were really wiser and better.”

Sad to say, some of the personality traits that cause one to be perceived as a good leader and popular are also those that inevitably leads to unethical behavior: dishonesty (also known as public relations), greed (fundraising and pork-barrel-amassing abilities), power hunger (perhaps perceived as taking charge), and bullying (perceived as refusing to suffer fools gladly- or avenging others on the politician’s behalf). In government, people in possession of the above are handsomely rewarded.

Granted, most political candidates run with the best of intentions. However, when they get elected, they realize how fraught with conflicts of interest the job is and can’t help but be hypocrites if they want to get reelected. Excuse the cliche, but fools rush in where wise men fear to tread.

Andrew Johnson wasn’t careful with what he wished for. He was promoted from vice president to president after Abraham Lincoln was assassinated in 1865. He was a Democrat from the South, post-civil war, outnumbered by Republicans from the North, whose goal was to continue rubbing salt into the wounds of the South. The Republicans were mean of spirit, petty and vengeful. They tried to get an impeachment case together first against Lincoln, and then actually voted concerning  Johnson. That means that they voted to have a trial to remove the president from office.

With Johnson, the key question was, “Was the Senate sitting as a court or as a legislative body?” The trial took place in 1868.

People put on trial on political grounds also included King Charles I of England, J. Robert Oppenheimer, and the Reichstag fire perpetrator (for an alleged Communist plot).

Jesus was put on trial for blasphemy. His philosophy happened to clash with that of powerful capitalists and religious leaders in his community. The fact that Jesus proclaimed himself to be the Messiah was the charge on which he was convicted, though.

Galileo was yet another figure who was seen as a heretic, in 1633. Unfortunately, he was trying to teach science in a time of extreme religious strife. The advancement of science occurred after his death, when the religious craziness had subsided and logic and reason came into vogue. More observations led scientists to adopt the heliocentric model of the solar system– that the planets revolve around the sun; not the earth, and not around Pope Urban VIII or any other pope.

Some cases were both religious and political:  John T. Scopes, Nuremberg and Dreyfus.

Dreyfus was a French army captain perceived to be Jewish. He was accused to spying on behalf of the enemy Germany in the 1890’s. Upon his court-martial, he was imprisoned forthwith for more than a decade while a huge number of people jumped on the bandwagon of anti-Semitic hatred-spewing; random events also conspired against him. The case involved hundreds of phony anti-Dreyfus documents, a rumor mill, rioting, looting, etc., etc.

Many of the above trials can be summed up thusly: “As so often happens, the hysteria ground to a halt through its own excesses.”

Read the book to learn more about the court cases– that became very, very famous internationally– because they had far-reaching consequences in history.

Sons of Wichita

The Book of the Week is “Sons of Wichita, How the Koch Brothers Became America’s Most Powerful and Private Dynasty” by Daniel Schulman, published in 2014.

Born in Texas in 1900, Fred Koch was of Dutch ancestry. He pronounced his name “coke” instead of the way the late former mayor of New York City (Ed “cotch”) did. He and his wife Mary bore four sons– Fred Jr., Charles, and David and Bill (fraternal twins), starting in 1933.

Fred was a chemical engineer who moved to Wichita, Kansas and became wealthy in the oil-refining industry. In the early 1930’s, he did business with the U.S.S.R. At the dawn of the 1940’s, he switched to ranching due to legal action over patents that Universal Oil launched against Fred’s company, Winkler-Koch, and also Root Refining. His oil company broke up in 1944.

In 1958, Koch joined the new John Birch Society, a rabidly anti-Communist group who saw Communists everywhere it looked, including those in unions, in charge of government financial programs, and in the United Nations. And the Boy Scouts. It aggressively spread hysteria about these people who were a threat to the American way. Fred had seen the political system in the Soviet Union when he was there, and realized it oppressed people.

Fred, Jr. took after his mother and upon reaching adulthood, moved to New York City and ran with the theater crowd. Charles, his father’s favorite, was groomed to take over the family business, which became Koch Industries. He did so in late 1967, when Fred passed away. The business made acquisitions in the oil industry and its sole goal was growth.

Charles had previously acquired extensive education in chemical and nuclear engineering. In the early 1970’s, he became interested in acquiring knowledge on the political ideology of libertarianism. He became a convert to it in its most extreme form. It espouses the belief that a purely capitalist society is the best economic system. This means total deregulation, no entitlements such as government-administered retirement or medical plans, no unions, no socialism of any kind, no income tax, and a government whose role is only to protect citizens and property from each other and outsiders, and from fraud.

In 1980, David Koch ran for American president on the Libertarian ticket. He knew he couldn’t possibly win but the goal was to plant seeds for future acceptance of his political ideology.

In early 1997, Charles co-founded the Cato Institute, a libertarian think tank. He and his brother David poured money into front groups that aggressively lobbied to reduce the size of government and expand the public’s freedoms. In 2008, the brothers opposed the taxpayer bailouts of companies bankrupted by the subprime mortgage crisis, and opposed deficit spending. They also denied allying with the Tea Party politicians but were secretly supporting them. About a year later, Charles and his henchmen launched fierce opposition to President Barack Obama’s national health care plan.

During his 2012 reelection campaign, Obama viewed the Koch brothers as a bigger threat than his Republican opponent, Mitt Romney. Obama copied the Kochs’ above actions (forming propagandizing front groups) to counteract the libertarians. Successfully.

As a result of their political mentality, Charles and David could have cared less about the environmental destruction and wrongful deaths their company caused due to poorly maintained oil and gas pipelines. Perhaps to salve his conscience, David made huge donations to cultural institutions, especially in New York City. The liberals (hypocritically) gratefully accepted the money, notwithstanding David’s political activities that led to rack and ruin. He also heavily funded medical research on prostate cancer, presumably to enhance the chances of his own physical survival.

Read the book to learn of the lawsuits that started in 1982 that Bill launched against Charles on various causes of action; the details of the Koch Industries’ legal troubles; the brothers’ sibling rivalry; the corporate culture of market-based management that Charles instituted in the family business; and what the siblings did for fun and profit; etc., etc., etc.

The World According to Monsanto – URGENT POST

The Book of the Decade is  “The World According to Monsanto– Pollution, Corruption, and the Control of Our Food Supply” by Marie-Monique Robin, published in 2010.

The author wrote, “When one dissects Monsanto’s activity reports (contained in 10-K forms [annual reports filed with the Securities and Exchange Commission in the United States]) since 1997, one is struck by the place taken up by litigation.”

There are no companies that can fairly be compared to Monsanto in terms of payments to victims for irreparable harm, permanent injury and wrongful deaths caused by the environmental damage done by Monsanto. They couldn’t possibly compete. But the following is a summary of recent expenses of the legal bullying of, and financial punishments handed down, to Monsanto.

Monsanto’s 2017 annual report’s footnotes showed $33 million in expenses associated with “environmental and litigation matters.” The company’s 2015 Restructuring Plan included $167 million of the same kinds of aforementioned expenses and “a SEC settlement.” The cost of goods sold was $101 million. That means, its litigation expenses exceeded the costs of producing its products. Besides, annual reports don’t normally contain the exact phrase “environmental and litigation matters.”

Another item included $32 million of expenses related to “legacy environmental settlements.” Monsanto recorded the settlement of its polychlorinated biphenyls (PCBs) legal troubles for $280 million in fiscal 2016. Lastly (finally!), the “Long-Term Portion of Environmental and Litigation Liabilities” accounts for almost 1 1/2% of the company’s “Total Liabilities” for the year.

What makes Monsanto’s excessive litigation egregious is that it has so much worldwide hegemony that it wins its cases most of the time– the company itself sues everyone who gets in the way of its profit-making, and successfully defends itself against the countless plaintiffs who have legitimate causes of action against it.

Not to mention the fact that it had basically formed a public-private partnership (largely via political contributions and lobbying), with the American government as of the book’s writing. That is why whistleblowers and activists get crushed in its wake.

Sounds familiar… Unfortunately, the reason history repeats itself so often is that human nature doesn’t change. What makes Monsanto’s case so much scarier than the situations with other, similar monstrous entities is that Monsanto has the potential to permanently contaminate nearly the entire world’s food supply, and there have already been significant consequences of that nature due to its unbridled greed. Yes, it is that bad.

Founded as a chemical and plastics company in 1901 in Saint Louis, Missouri– Monsanto went public in 1929. It made DDT, dioxin, aspartame, (and inadvertently but knowingly and ruthlessly, PCBs), among other substances that have done permanent harm to a large number of people.

As of this book’s writing, Monsanto had a presence in 46 nations and owned 90% of the patents for all Genetically Modified Organisms internationally grown. It makes billions of dollars in profit annually.

The author traveled extensively to interview numerous people to gather a voluminous amount of data on Monsanto’s quest to make the maximum amount of money it possibly can, at the expense of humanity. The scientists she interviewed– including friends and foes of Monsanto– all said they wouldn’t eat the genetically modified foods borne of Monsanto products.

The author tells lots of anecdotes about people from all different geographic areas who have been adversely affected by the chemicals and genetically modified organisms sold by Monsanto, plus about several people previously affiliated with the company and U.S. government agencies, who were clearly still loyal to their former employers. One such interviewee displayed the body language of a liar: excessive blinking when answering her pressing questions. She also pored over declassified documents that indicate outrageous corporate wrongdoing.

Monsanto’s employees currently research, apply for patents to, and sell genetically modified seeds for growing soybeans, corn, cotton and rapeseed; plus a herbicide– Roundup, an insecticide– Bt toxin, and the bovine growth hormone rBST.

The author wrote that in 1983, the American federal government set aside funds called the Superfund Program to decontaminate toxic waste sites around the nation. When some of those funds were diverted to “… finance the electoral campaigns of Republican candidates, Congress discovered that documents that would compromise the companies[,] disappeared.”

As might be recalled, the Reagan administration had a reputation for being staunchly pro-business; so much so that it made EPA worker Anne Burford and her colleague Rita Lavelle the scapegoats of a scandal after pressuring them to shred documents (which would have implicated Monsanto) and commit other crimes in connection with the town of Times Beach, Missouri– a dioxin-and-PCBs-contaminated site.

That contamination resulted in the deaths of numerous animals, serious health problems for the people there, and forced permanent evacuation of the eight-hundred family resort town.

The author spoke with several whistleblowers. All were punished by their employers. One from the EPA distributed an inflammatory memo saying Monsanto published false research results on its products. Another from the FDA wrote a report on the flaws in Monsanto’s application for approval of the artificial growth hormone rBST. He was fired in 1989, sued, and years later, won a job back at the FDA, but not one for which he was suited.

Monsanto’s rBST (still currently used at some dairy farms), when injected into cows, causes them to produce more milk (translation: more money). With the hormone, other substances are also likely to get into the milk, such as pus and antibiotics. This is because the injection sites on the cows form abscesses, necessitating the administering of antibiotics to the cows. Further, with rBST, the cows develop serious health problems, like ovarian cysts, mastitis and uterine disorders. Never mind humans who drink their milk.

In an unprecedented move, the FDA changed its own rules and approved rBST in November 1993 without forcing Monsanto to reply to its concerns and recommendations.

In the late 1980’s, a genetically modified dietary supplement sold by prescription only caused serious health problems, killing at least 37 and permanently disabling 1,500. If that kind of harm was done by a regulated item meant to be eaten that was genetically modified around the same time that Monsanto was testing rBST– a part of a product that millions of people would consume, shouldn’t the FDA have been more prudent in its approval process of rBST??

Monsanto sued the dairies that said on their milk-container labels that their milk contained no rBST. The defendants were forced to change their labeling.

In the late 1990’s, there was the TV-journalist-couple who were working on a show with negative coverage on Monsanto, when their employer was taken over by Fox News. They were fired because they refused to switch from telling the truth, to lying about Monsanto.

In 2003, after the couple suffered years of emotionally and bank-account draining litigation, “The [federal] judges considered that no law prohibited a television network or a newspaper company from lying to the public. To be sure, the rules established by the FCC prohibited it, but they did not have the force of law.” No wonder journalism is dead.

Conflicts of interest abounded in the 1990’s , when supposedly scholarly journal (peer-reviewed) articles (like Science, Nature and the Journal of the American Medical Association) declared that Monsanto’s products were safe; those articles were written by people paid by Monsanto.

Reputable scientists pointed out that Monsanto’s scientific testing involved non-standard procedures, and was statistically suspect as it was of too short a duration, and had too small a sample size.

Read the book to learn about:

  • horror stories resulting from Monsanto’s underhanded tactics regarding testing and use of its products, including the herbicide Roundup;
  • its victims in Anniston, Alabama who were subjected to PCBs;
  • which of Monsanto’s products was banned in 2000 in Canada and Europe;
  • how Monsanto is active in the United Nations;
  • how deregulation perpetuates Monsanto’s worldwide hegemony;
  • which ten or so individual American government officials acted on Monsanto’s behalf, but had undisclosed conflicts of interest [there was scant room in the book to list all those who were ethically challenged Monsanto affiliates— wait, that’s redundant];
  • the percentages of all foods genetically modified in specific categories in 2005;
  • how taxpayers footed the bill for Monsanto’s aggressive use of legal and political weaponry against American soybean farmers (whom it seriously harmed by taking away their livelihoods through duress and illegally spying on them in the late 1990’s) from 1999 into 2002;
  • why Monsanto dropped its initiative to introduce a transgenic wheat, even after spending hundreds of millions of dollars in connection therewith;
  • how Mexico has been harmed by Monsanto’s transgenic corn;
  • how Argentina and Paraguay have been harmed by Monsanto’s transgenic soybeans;
  • how India has been harmed by Monsanto’s transgenic cotton;
  • how Canadian farmers have been harmed by transgenic canola;
  • what transpired when, in January 2005, the Securities and Exchange Commission launched a legal proceeding against Monsanto for corruption in Indonesia;
  • why the World Trade Organization should share some blame for allowing the worldwide spread of Monsanto’s tentacles;
  • and much more.

Endnote:  Feel free to browse other posts for additional examples of entities behaving badly under the category “Business Ethics.”