Introducing
Violation Tracker
By
Phil Mattera, Dirt
Diggers Digest
Violation Tracker, the first national database on corporate crime, has arrived. For me it is the culmination of nine months of work collecting enforcement data, matching some 25,000 companies in the agency records to their corporate parents and designing the site, all of this done with the help of Rich Puchalsky of Grassroots Connection.
My involvement in this kind of project actually goes back 35
years. While a young researcher for Fortune magazine, I was
assigned to a story whose dubious premise was that lawbreaking was a lot more
common among small businesses than large corporations. I had serious doubts
about that notion and set out to collect as much information as I could about
wrongdoing by the Fortune 500.
Even with a narrow definition of misconduct, I found that 117 of the companies that had appeared on the 500 list during the previous decade–including Fortune’s parent company Time Inc.–had been convicted (or signed a consent decree) for bribery, criminal fraud, illegal political contributions, tax evasion or criminal antitrust violations. My editors were not happy, but to their credit they published the full list (as part of an article written by Irwin Ross) in the December 1, 1980 issue of the magazine.
The urge to document and tabulate corporate crime has been with
me ever since. I’ve given in to that urge numerous times, most notably in 2012,
when I began producing Corporate
Rap Sheets on many of the worst violators under the auspices of
the Corporate Research Project of Good Jobs First.
Now I’m able to take it to the next step with Violation Tracker, a database that in its
initial form covers all environmental, health and safety cases with penalties
of $5,000 or more brought since the beginning of 2010 by 13 federal regulatory
agencies, including those they referred to the Justice Department. Additional
violation categories (bribery, price-fixing, financial offenses, wage &
hour infractions, etc.) will be added in the future.
Violation Tracker uses the same parent-subsidiary matching
system my colleagues and I at Good Jobs First created for our Subsidy
Tracker database. In Violation Tracker the companies named in
the individual violations are linked to more than 1,600 parent companies. The
site has summary pages for each of the parents (along with the individual
entries) as well as overviews by industry, agency and parent headquarters
location.
Along with the database the Corporate Research Project is
releasing a report entitled BP and Its Brethren summarizing what
the information in Violation Tracker shows about the biggest violators (using a
broad definition of penalties that includes both fines and other mandatory
outlays such as supplementary environmental projects that are often part of
settlements). Here are some highlights from the report:
The corporations with the most penalties are: BP ($25.4
billion), Anadarko Petroleum ($5.2 billion), GlaxoSmithKline ($3.8 billion),
Johnson & Johnson ($2.4 billion), Abbott Laboratories ($1.5 billion),
Transocean ($1.4 billion), Toyota ($1.3 billion) and Alliant Energy ($1.0
billion). The penalty total of all entries in Violation Tracker is about $60
billion.
BP’s $25 billion puts oil and gas at the top of the ranking of
industries by total penalties. The pharmaceutical industry is second, due to a
series of major cases involving the promotion of medications for uses not
approved as safe by the Food and Drug Administration. Utilities rank third, due
to cases involving power plant emissions. In fourth place is the auto industry,
thanks mainly to a $1.2 billion penalty paid by Toyota and a $900 million fine
against General Motors, both for safety issues. The chemical industry, with a
wide range of violations, is fifth.
Large corporations are responsible for the vast majority of the
penalties. Companies on the Fortune 500 and the non-U.S. portion of the Fortune
Global 500 together account for 81 percent of Violation Tracker’s total penalty
universe.
Foreign companies operating in the United States represent a
large share of the violations. In fact, given that BP is one of those foreign
parents, the penalty total for that group is larger than for
U.S.-based firms: $34 billion vs. $21 billion. Even without BP, foreign parents
account for $9 billion in penalties. Companies that have reincorporated abroad
for tax reasons are excluded from this breakdown.
There are substantial overlaps between the companies penalized
by the different agencies, especially between EPA and OSHA. Some companies show
up on more than one of the lists of top-ten penalized firms by agency. BP shows
up on four: EPA, OSHA, the Pipeline & Hazardous Materials Safety
Administration, and multi-agency cases handled by the Justice Department.
A comparison of the 100 parents with the most penalties in
Violation Tracker to the 100 most-subsidized in Subsidy Tracker finds 16
overlaps, mainly automakers such as Toyota and General Motors.
Along with actual foreign companies, the most penalized parents
include some companies that have “inverted” (reincorporated or merged abroad)
and thus claim to be foreign to dodge U.S. taxes. The tax runaway with the
largest penalty total is Transocean, which leased the ill-fated Deepwater
Horizon drilling rig to BP and which was fined a total of $1.4 billion in
connection with the accident. “Inverted” firms have $2.9 billion in penalties.
Leading federal contractors are among the most-penalized
companies. Of the 100 largest contractors in FY2014, ten are also among the
biggest penalty parents in Violation Tracker, including: four pharmaceutical
producers (GlaxoSmithKline, Merck, Pfizer and Sanofi); two oil giants (Royal
Dutch Shell and Exxon Mobil) and three military contractors (Honeywell, General
Electric and Boeing). Conglomerate Berkshire Hathaway is also on the list.
We’re living in an age of widespread corporate misconduct,
illustrated most recently by the Volkswagen scandal. Violation Tracker is
designed not only to help people keep track of which company was involved in
which wrongdoing but also to serve as a tool for a wide range of campaigns
promoting corporate accountability.
