Who’s Getting Paid – BONUS POST

WHO’S GETTING PAID

Sung to the tune of “For What It’s Worth” with apologies to Buffalo Springfield.

There’s politics happening here.

The truth is nowhere near.

There’s a propagandist over there.

For what he says, I no longer care.

Isn’t it time we stop, drinking the Kool-Aid?

Everybody look– Who’s getting paid?

There’s been panic spread everywhere.

We’ll be totally oppressed if we don’t grow a pair.

Only the powerful can change their minds.

No apologies for covering their behinds.

Isn’t it time we stop, drinking the Kool-Aid?

Everybody look– Who’s getting paid?

Why haven’t the 60’s been brought to bear?

No one protesting anywhere.

People are too panicked not to obey.

They think they’ll get sick and need a hospital stay.

Isn’t it time we stop, drinking the Kool-Aid?

Everybody look– Who’s getting paid?

We think our freedoms are deep.

But we’re letting them go without a peep.

When anger reaches critical mass

The country will stop this Halloween nonsense and get back to work!

[Never mind the last choruses]

HISTORY WILL UNFOLD AS IT SHOULD.

King of the Club

The Book of the Week is “King of the Club” by Charles Gasparino, published in 2007.

The subject of this book “… was suffering from the downside of loyalty; he spent so much time surrounding himself with people he could trust that he forgot he also needed smart people who could get a job done in times of crisis, and he was now facing… the greatest crisis of his career.”

Sounds familiar. It was actually “Richard Grasso and the Survival of the New York Stock Exchange.” When he was fifteen years old, Grasso began trading stocks in an account held in his mother’s name, getting stock tips from his drug-store-owner-employer.

The author was rather vague about Grasso’s two years of military service which allegedly began in the mid 1960’s, spent: “…in Fort Meade, Maryland, though he did make periodic trips to Vietnam.” Apparently, Grasso’s eyesight was good enough to get him drafted by the U.S. Army, but not good enough to get him hired by the New York City Police Department, his first-choice employer after the military.

Grasso therefore began work as a back-office Wall-Street clerk at the New York Stock Exchange (NYSE) in early 1968. The author failed to mention whether Grasso was told to put his stocks in a blind trust, or whether his new employer had a “don’t ask, don’t tell” policy.

Grasso meteorically moved up through the ranks. He was innovative in executing new marketing initiatives for the exchange. He also poached companies that were listed on either the American Stock Exchange or the NASDAQ– that provided fierce competition to the NYSE. All three were stock markets of corporate entities that wanted to sell their shares far and wide. But the companies could be listed in only one place. Grasso convinced them that the NYSE was the best place to list.

By 1980, Grasso controlled NYSE listings, its trading floor and almost all its trading operations. In the mid-1980’s, the chair of NASDAQ, Bernie Madoff, claimed his market’s trading was more fair for investors because it executed trades electronically, thus multiple players were interacting continuously while setting impartial prices. The argument went that electronic trading made the market more “efficient”– as no buyers or sellers had significantly better pricing information than others on which to trade, theoretically.

In 1990, Grasso stepped up to the second-most powerful position at the NYSE. He was in charge of the exchange listees and, at the same time, in charge of regulating them. He did the legwork of bringing new business to the exchange. His boss, the chairman, did the public relations work of delivering speeches globally and persuading the federal government to keep conditions favorable for the exchange.

Several of the NYSE’s board of directors were Wall Street executives who passively continued to keep the status quo– lavishly rewarding Grasso monetarily for his undivided attention to lavishly lining their pockets year after year when times were good.

There was honor among thieves, as Grasso’s henchmen turned a blind eye to the various forms of illegal activity that allowed them to make obscene amounts of money on the trading floor. Until there wasn’t honor among thieves– as conditions changed.

From a not-for-profit-organization-legal-standpoint, most of the parties and individuals involved were engaging in various highly unethical activities, at best; conflicts of interest abounded as participants in the exchange network cooperated in a way that maximized profits for everyone until, as usual, some individuals got too greedy.

Being head of the New York Stock Exchange is not unlike leading the U.S. government. The marriage of politics and commerce is always fraught with conflicts of interest. Some are avoidable. It’s a shame that politics in particular tends to attract dishonest attention whores with hubris syndrome whose ethics are in the basement. Of course, they usually use the “everybody does it” excuse and change the subject if they can.

But there ought to be equal justice under the law for any of the accused– after an investigation of where the evidence leads— with NO jumping to conclusions, assumptions or biases prior to a thorough review of all evidence, if any. Along these lines, one would do well to ignore the superlative-laden, repetitive, sensationalist drivel emanating from the teleprompter box, um, er– idiot box.

Anyway, starting in the late 1990’s, unbridled greed led to a bunch of scandals. There was Long Term Capital Management, Enron, WorldCom, the dot-com crash, various major SEC violations committed by big-name brokerages; not to mention 9/11’s impact on the financial markets. All on Grasso’s watch. Yet, his pay kept soaring, anyway. It wasn’t pay-for-performance anymore.

Finally, Grasso got the same treatment, figuratively speaking, as other major historical figures. One week he was flying high and the next, kicked to the curb. Grasso was suffering from a bad case of hubris syndrome. In early September 2003, herd mentality / groupthink seized the board; jealousy (possibly subconscious) of his pay package reached critical mass.

Read the book to learn of the usual occurrences in such a situation (investigation, litigation, political machination and myth propagation) that led to the changing of more things, and more of same.

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.”

Devils on the Deep Blue Sea

The Book of the Week is “Devils on the Deep Blue Sea, The Dreams, Schemes and Showdowns that Built America’s Cruise-Ship Empires” by Kristoffer A. Garin, published in 2005.

As of the book’s writing, Carnival Corporation and Royal Caribbean were two holding companies that dominated the pleasure cruise industry. The chairman and CEO of the former controlled almost half of the passenger capacity.

The passenger capacity of one cruise ship skyrocketed from less than two hundred to seven hundred fifty in the decade after WWII. Vacation culture was changing from wintertime to year-round Caribbean jaunts. Miami, Florida was the place of embarkation.

In autumn 1965, a cruise fire caused 91 deaths, and put the industry on edge. Negligence and incompetence of the captain and crew were to blame. Nevertheless, even at that time, the travel company owner was able to weasel out of legal trouble because the ship was registered in Panama. He didn’t escape financial trouble thereafter, though.

In 1966, Miami got a new passenger terminal. The 1970’s saw the city’s docks fraught with organized crime, thanks to the port director. Starting in the late 1970’s, the TV show “Love Boat” significantly boosted the number of people of all ages who tried cruising. In 1981, the industry experienced labor trouble.

Read the book to learn how the industry evolved; how Ted Arison earned his less-than-stellar reputation; how business-savvy executives seeking to merge with or acquire distressed cruise-line assets did so through the decades, including the Princess Cruises saga; and the tax, employment and supply-chain tricks they use to maximize profits.

Start-Up Nation

The Book of the Week is “Start-Up Nation, The Story of Israel’s Economic Miracle” by Dan Senor and Saul Singer, published in 2009. The authors of this extended essay ponder why Israel had, at the book’s writing, a huger number of tech start-ups than all other industrialized nations, second only to the United States’. The reasons range from the cultural to the political to the economic.

The Israeli corporate and military mentality involves: complete focus; learning from errors (which are tolerated and treated as learning experiences); constant debriefings and self-criticism sessions; endless, heated debate; and empowerment of employees at all status levels to use their initiative and resources– even to the point of upstaging their bosses with their input. This atmosphere encourages independent thinking, and discourages herd mentality and blind obedience.

Militarily, all Israelis serve a minimum of two to three years and then become reservists for two more decades. Close social ties are formed that foster business relationships later. The exceptional rising stars participate in special nine-year training programs that create  “foxes” rather than “hedgehogs.” Foxes use diverse skills from operating and maintaining high-tech equipment to imaginatively solving problems.

After serving their country, many Israelis then attend university. Finally, employers consider quality and quantity of military experience as major hiring criteria.

The authors provided real-life examples of how the traits Israelis possess cause them to gravitate toward entrepreneurial ventures. In 1965, in one instance, kibbutzniks digging a well hoping to find drinking water instead encountered warm, salty water. A creative academic advised them to breed tropical food-fish. By-products of the fish-farm were used for fertilizer for their olive and date trees.

Read the book to learn of additional characteristics of and actions taken by Israelis and their government that have helped them achieve technological advances in various economically rewarding areas, including medicine, auto manufacturing and computing.

Chocolate Nations

The Book of the Week is “Chocolate Nations, Living and Dying for Cocoa in West Africa” by Orla Ryan, published in 2011. This slim volume described the situations in Ghana and Cote d’Ivoire at the book’s writing, with regard to growing the crop that ultimately becomes chocolate. Both countries had command economies and a large number of farmers with small landholdings growing the cocoa-bean trees.

Ghana has grown cocoa at least since the late 1800’s. Even after it declared its independence from Great Britain in 1957, it had a series of tyrannical leaders, each replacing the next via coups. They kept the farmers poverty-stricken by setting the price the government paid for cocoa.  Some farmers illegally sold their harvests to Cote d’Ivoire for better prices. Around 2009, Ghana was producing approximately one fifth of the world’s cocoa; Cote d’Ivoire, about one third.

Even after independence in 1960, the latter’s former colonizer, France, invested in cocoa farming there. However, the dictator became well-liked by encouraging laborers from Burkina Faso and Mali to farm cocoa and coffee in his country. He gave land to those from the Baoule tribe who tilled it.  His excessive spending to support his lifestyle and that of his loyal servants, resulted in huge debts, which he tried to reduce by cutting wholesale prices paid to cocoa farmers.  The nation saw a bloody civil war from 2000 to 2003.

In the first decade of the 21st century, hysteria ruled the airwaves in the United States over the accusation of abusive child labor on the cocoa farms. It was unclear whether the accusation was true, as data were anecdotal, ulterior motives abounded among the accusers (such as NGOs, tabloid reporters and even a politician), and the culture of the cocoa growers provided plausible denial that truant children were being enslaved. For, farming families tended to be large so that the kids’ assistance could help keep the family in business.

It appears that cocoa farming is unlikely to change significantly in the near future in Ghana and Cote d’Ivoire because “For smallholders, the cocoa market can seem little more than a plaything in the hands of a few large companies and speculators.”

Read the book to learn more details.