The Corporate
Wrongdoers Sticking with ALEC
By
Phil Mattera in Dirt Diggers Digest
If a group of major drug dealers, identity thieves and bank robbers were to put out a statement calling for relaxation of the criminal code, no one would take it very seriously.
Yet
complaints about the regulatory system coming from large corporations — including
many with repeated environmental and safety violations — are regarded as
important pronouncements by too many policymakers and political candidates.
Corporate interests don’t simply complain. They use their money and influence
to urge lawmakers to alter the rules in their favor.
One
of the main vehicles by which big business pushes its deregulatory agenda is
the American Legislative Exchange Council. ALEC, which is currently holding one
of its periodic gatherings of corporate lobbyists and legislators, takes aim at
agencies such as the EPA, which it likes to call a “regulatory train wreck.”
Since
my colleagues and I at the Corporate Research Project of Good Jobs First
released our Violation Tracker database recently, I’ve been comparing
notes with the ALEC watchers at the Center for Media and Democracy.
What we’ve found is a substantial overlap between the corporations that remain loyal to ALEC (more than 100 have left in response to public pressure) and the companies in Tracker with the largest penalty totals.
Mary Bottari of CMD has posted a piece that focuses on the energy companies
in the two groups. Here I look at the full overlap.
The
current list of ALEC corporate members includes 11 corporations that rank in
the Violation Tracker top 100 (in a few cases the membership is held by a
subsidiary).
These parents and their subsidiaries have racked up a total of
$1.7 billion in federal environmental, health and safety penalties and settlements
since the beginning of 2010:
- Pfizer: $563,357,650
- Novartis: $422,569,368
- WEC Energy Group: $310,621,475
- Duke Energy: $112,150,534
- Honeywell International: $93,641,829
- Berkshire Hathaway: $46,810,063
- Exxon Mobil: $46,285,706
- Energy Transfer: $25,467,251
- Dominion Resources: $14,168,658
- Norfolk Southern: $11,675,325
- Chevron: $11,373,376
Pfizer is in the news because of its deal to
merge with a smaller drug company and move its legal headquarters to Ireland,
all to dodge federal taxes. It has amassed more than half a billion dollars in
penalties in the past five years largely because of cases involving the illegal
marketing of drugs for purposes not approved as safe by the Food and Drug
Administration.
In 2009, the year before Violation Tracker’s coverage begins,
Pfizer had to pay $2.3 billion to settle Justice
Department civil and criminal charges relating to the illegal marketing of the
painkiller Bextra and three other medications.
John Kopchinski, a former Pfizer
sales representative whose complaint helped bring about the federal
investigation, told the New
York Times: “The whole culture of Pfizer is driven by sales, and if you
didn’t sell drugs illegally, you were not seen as a team player.”
Novartis has also been accused of illegal
marketing of drugs and has had to pay more than $400 million in penalties. Not
yet included in Violation Tracker is a case in which federal prosecutors are seeking $3 billion in penalties from the
company for paying illegal kickbacks to get pharmacies to encourage use of
expensive drugs for kidney-transplant patients covered by Medicare and
Medicaid.
WEC
Energy Group, whose subsidiaries North Shore Gas and Peoples Gas are ALEC
members, is on the top violators list mainly because of a $307
million settlement another
subsidiary, Wisconsin Public Service Corporation, reached with the Justice
Department and the EPA to resolve Clean Air Act violations at two of its power
plants. Most of the settlement involves mandatory spending on new pollution
control technology at the facilities.
Duke
Energy earned its spot on the
top violators list mainly because of a case from earlier this year in which
three of its subsidiaries pled guilty to criminal violations of the Clean Water
Act and paid $102 million in penalties in connection with a massive coal ash
spill into the Dan River in North Carolina.
The
largest portion of Honeywell
International‘s $93 million in penalties comes from a 2013 case in which it agreed to pay a $3 million civil penalty and
spend $66 million on new pollution control equipment to resolve Clean Air Act
violations at its plant in Hopewell, Virginia.
Conglomerate Berkshire
Hathaway is on the list
because one of its major subsidiaries, BNSF Railway, is an ALEC member. While
it has not been involved in any large cases like those above, since 2010 BNSF
has accumulated more than 600 violations from the Federal Railroad
Administration with total penalties of $7 million (the FRA’s fines tend to be
less than onerous).
BNSF was also pressured by OSHA to change its practices that
the agency said discouraged workers from reporting on-the-job injuries.
Exxon Mobil‘s
penalty total comes largely from its subsidiary XTO Energy, which focuses on
fracking. For example, in 2013 XTO had to pay $20.1
million to the EPA to settle
Clean Air Act violations linked to the discharge of wastewater in Pennsylvania.
These
cases illustrate the track record of the companies that are sticking with ALEC,
presumably with the hope that the organization can bring about policy changes
that will allow them to continue business as usual and pay less in the way of
penalties. ALEC may be correct that the regulatory system is a “train wreck,”
but that’s because the rules are too weak, not too stringent.
