*Corporate* Perjury and Obstruction of Justice

[Robert Weissman <rob@essential.org>]

Hear ye, hear ye, hear ye. 

Today we hear the case of corporate perjury, corporate fraud and corporate
obstruction of justice.

Members of the Senate, let us turn to exhibit one: the 1994 transcripts of
tobacco industry executives' testimony before a House of Representatives
committee. 

Having raised their right hands and swore to tell the truth, the whole
truth and nothing but the truth, so help them God, each then testified
under oath that nicotine was not addictive. That was a blatant lie under
oath -- albeit one less serious than the industry's decades-long
conspiracy to lie to the U.S. Food and Drug Administration and other
federal and state agencies about cigarettes' health effects and
addictiveness. These are lies with severe consequences: hundreds of
thousands die from smoking-related disease every year.

But lying is not limited to the pariah tobacco industry. Please turn to
exhibit two: the judge's decision in the case United States v. Royal
Caribbean Cruise Lines. In September 1998, Royal Caribbean pled guilty to
felony crimes for dumping oil in the Atlantic Ocean and then lying to the
Coast Guard about it.

Members of the Senate, let us now turn to count two: corporate fraud.
Please consult the next exhibit, Black's Law Dictionary. 

Turn to page 788, where you will find the legal definition of the word
"fraud" -- an intentional perversion of the truth for the purpose of
inducing another to part with some valuable thing. 

In other words, theft through lying. 

Members of the Senate, because the federal government does not track
corporate fraud the way it tracks petty theft, we are left to the judgment
of experts to estimate what this harmful and often criminal lying and
steal costs the American people. 

The estimates are startling. Harvard University's Malcolm Sparrow
estimates that health care fraud alone cost the nation anywhere from $100
billion to $400 billion a year -- 10 to 40 percent of the $1 trillion a
year we spend on health care. Most of this is corporate fraud --
corporations ripping off the Medicare and Medicaid programs. 

The savings and loan scandal, what former Attorney General Dick Thornburgh
called "the biggest white-collar swindle in history," cost the nation
anywhere from $300 billion to $500 billion. 

Then you have an array of lesser frauds that amount in total to real
money. Auto repair fraud: $40 billion a year. Securities fraud --  $15
billion a year. And on down the list. 

Not a day goes by without a major fraud being reported in the mainstream
media, with $100 million frauds coming around once a month or so. 

Last month, for example, Great American Life Insurance Co. paid $115
million to elderly citizens it allegedly deceived into buying high-priced
investments. 

In June 1998, Blue Cross/Blue Shield of Illinois pled guilty to eight
felony counts and paid $144 million to the federal government after
admitting it concealed evidence of poor performance and lied to auditors
in processing Medicare claims for the federal government. Just last week,
the company paid $29.1 million Evelyn Knoob of Carterville, Illinois.
Knoob blew the whistle on the company.

Corporate fraud costs the nation hundreds of billions. Compare that to
street crime and burglary, which, according to the FBI, costs the nation
$3.8 billion a year. 

Finally, we turn to count three, obstruction of justice. Please
incorporate by reference the earlier evidence of Big Tobacco's cover-ups
and Blue Cross/Blue Shield of Illinois and Royal Caribbean's concerted
efforts to thwart law enforcement.

Then please direct your attention to our final exhibit, a series published
last year in the Louisville Courier-Journal that documented coal mine
operators routinely submitting coal dust samples to the Mine Safety and
Health Administration which were impossibly clean. The obvious inference
is that coal companies are regularly cheating on their coal dust tests,
and in the process exposing miners to deadly and black lung-inducing
levels of coal dust.. The inference was substantiated by coal mine
supervisors' admission to the Louisville Courier-Journal of regular
cheating on the tests designed to protect miners' safety. 

Senators, corporate perjury, fraud and obstruction of justice are
undermining efforts to protect health, safety and our environment, and
eating away at the foundations of our economy.

We seek today not a conviction, but a redirection of national policy to
put an end to the scourge of corporate fraud and obstruction. We call on
you to enact legislation to mandate the collection of corporate crime
data. We ask that you work with your colleagues in the House to boost the
budget of federal enforcement agencies. We call for legislation that gives
citizen standing to enforce critical health, safety, environmental and
financial laws, and we demand that you cease efforts to undermine the
civil justice system, our country's strongest safeguard against corporate
fraud. We call for serious penalties for corporate criminals, including
heavy fines, innovative probation plans, loss of the right to bid for
government contracts and charter revocation for recidivist corporations.

Finally, we insist that you clean up the campaign finance system and the
attendant political corruption which enables corporate criminals to bribe
politicians to lessen regulatory and legal restraints on corporate
misbehavior, and to undermine the federal cops on the corporate crime
beat.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor.

(c) Russell Mokhiber and Robert Weissman

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