The
2015 Corporate Rap Sheet
By Phil Mattera in Dirt Diggers
Digest
The ongoing corporate crime wave showed no signs of abating in 2015. BP paid a record $20 billion to settle the remaining civil charges relating to the Deepwater Horizon disaster (on top of the $4 billion in previous criminal penalties), and Volkswagen is facing perhaps even greater liability in connection with its scheme to evade emission standards.
Other
automakers and suppliers were hit with large penalties for safety violations,
including a $900 million fine (and deferred criminal
prosecution) for General Motors, a record civil penalty of $200 million for Japanese airbag maker
Takata, penalties of $105 million and $70 million for Fiat Chrysler, and $70 million for Honda.
Major
banks continued to pay large penalties to resolve a variety of legal
entanglements. Five banks (Citigroup, JPMorgan Chase, Barclays, Royal Bank of
Scotland and UBS) had to pay a total of $2.5 billion to the Justice Department
and $1.8 billion to the Federal Reserve in
connection with charges that they conspired to manipulate foreign exchange
markets. The DOJ case was unusual in that the banks had to enter guilty pleas,
but it is unclear that this hampered their ability to conduct business as
usual.
Anadarko Petroleum agreed to pay more than $5 billion to resolve charges relating to toxic dumping by Kerr-McGee, which was acquired by Anadarko in 2006. In another major environmental case, fertilizer company Mosaic agreed to resolve hazardous waste allegations at eight facilities by creating a $630 million trust fund and spending $170 million on mitigation projects.
These
examples and the additional ones below were assembled with the help of Violation
Tracker, the new database of corporate misconduct my colleagues and
I at the Corporate Research Project of Good Jobs First introduced this year.
The database currently covers environmental, health and safety cases from 13
federal agencies, but we will be adding other violation categories in 2016.
Deceptive
financial practices. The Consumer Financial Protection Bureau fined
Citibank $700 million for the deceptive marketing
of credit card add-on products.
Cheating
depositors. Citizens Bank was fined $18.5 million by the CFPB for pocketing
the difference when customers mistakenly filled out deposit slips for amounts
lower than the sums actually transferred.
Overcharging
customers. An investigation by officials in New York City found that pre-packaged products at Whole
Foods had mislabeled weights, resulting in grossly inflated unit prices.
Food
contamination. In a rare financial penalty in a food safety case, a subsidiary
of ConAgra was fined $11.2 million for distributing
salmonella-tainted peanut butter.
Adulterated
medication. Johnson & Johnson subsidiary McNeill-PPC entered a guilty
plea and paid $25 million in fines and forfeiture in
connection with charges that it sold adulterated children’s over-the-counter
medications.
Illegal
marketing. Sanofi subsidiary Genzyme Corporation entered into a deferred
prosecution agreement and paid a penalty of $32.6 million in connection with charges
that it promoted its Seprafilm devices for uses not approved as safe by the
Food and Drug Administration.
Failure
to report safety defects. Among the companies hit this year with civil
penalties by the Consumer Product Safety Commission for failing to promptly
report safety hazards were: General Electric ($3.5 million fine), Office Depot ($3.4 million) and LG Electronics ($1.8 million).
Workplace
hazards. Tuna producer Bumble Bee agreed to pay $6 million to settle state charges that
it willfully violated worker safety rules in connection with the death of an
employee who was trapped in an industrial oven at the company’s plant in
Southern California.
Sanctions
violations. Deutsche Bank was fined $258
million for violations in connection with transactions on
behalf of countries (such as Iran and Syria) and entities subject to U.S.
economic sanctions.
Air
pollution. Glass manufacturer Guardian Industries settled Clean Air Act
violations brought by the EPA by agreeing to spend $70 millionon new emission controls.
Ocean
dumping. An Italian company called Carbofin was hit with a$2.75 million criminal fine for
falsifying its records to hide the fact that it was using a device known as a
“magic hose” to dispose of sludge, waste oil and oil-contaminated bilge water directly
into the sea rather than using required pollution prevention equipment.
Climate
denial. The New York Attorney General is investigatingwhether Exxon Mobil deliberately
deceived shareholders and the public about the risks of climate change.
False
claims. Millennium Health agreed to pay $256 million to resolve allegations that
it billed Medicare, Medicaid and other federal health programs for unnecessary tests.
Illegal
lobbying. Lockheed Martin paid $4.7 million to settle charges that it
illegally used government money to lobby federal officials for an extension of
its contract to run the Sandia nuclear weapons lab.
Price-fixing. German
auto parts maker Robert Bosch was fined $57.8 million after pleading guilty to
Justice Department charges of conspiring to fix prices and rig bids for spark
plugs, oxygen sensors and starter motors sold to automakers in the United
States and elsewhere.
Foreign
bribery. Goodyear Tire & Rubber paid $16 million to resolve Securities and
Exchange Commission allegations that company subsidiaries paid bribes to obtain
sales in Kenya and Angola.
Wage
theft. Oilfield services company Halliburton paid $18 million to resolve Labor Department
allegations that it improperly categorized more than 1,000 workers to deny them
overtime pay.