Greed, Greed and More Greed

by Rep. Bernie Sanders

Sanders Scoop newsletter, Summer 2002


There is a cancer eating away at the heart of corporate America and its name is "greed." It is becoming increasingly apparent that many large corporations will do anything, legal or otherwise, to fatten the already huge compensation packages of their CEOs. As we have seen in recent years these corporations lie about their financial statements, cheat or move abroad to avoid paying their fair share of taxes, cut the pensions and health benefits of their employees and throw loyal workers out on the street as they move their plants to China. At the same time many of them line up for billions in corporate welfare from the federal government.

Let's be clear. We're not just talking about a "few bad apples" such as Worldcom, Enron, Xerox, Adelphia, Tyco, Global Crossing, and Arthur Anderson. According to a recent study by the Huron Consulting Group, over the past five years nearly 1,000 companies were forced to correct their financial statements.

The "greed culture" in corporate America today is now out of control. Some examples: Lou Gerstner, former CEO of IBM, received $366 million over the last five years and an extremely generous pension plan, while cutting back on the retirement and health care benefits of his employees. C.A. Heimbold, Jr., former Chairman and CEO of BristolMyers Squibb Co. received compensation of $74,890,918 in 2001 and has stock options worth $76,095,611, while senior citizens are suffering and dying because they can't afford the outrageously high prices for the prescription drugs that his company sells. GE, which has laid off tens of thousands of American workers as they move jobs abroad, provided their three top executives with $550 million in salary, stock options and executive benefits in 2000. Jack Welch, former GE CEO, receives a pension of almost $10 million annually for the rest of his life.

At Worldcom, bankrupt and under investigation for manipulating their financial statements, CEO Bemard Ebbers received personal loans from the company for $408 million that has not yet been paid back. At Enron, also bankrupt and under investigation, CEO Lou Pai cashed in $353 million in stock options. And on and on it goes.

Let's be clear, however. It's not only the illegal behavior of multinational corporations that Americans are outraged at. It's the legal but immoral behavior of corporate America as well. In the United States today, CEOs of major corporations make over 500 times what their employee earn, a gap that has increased dramatically in recent years and is far higher than in any other country.

While the average American is working longer hours for lower wages, CEOs of major corporations not only enjoy huge compensation packages and incredible stock option deals, but they receive golden parachutes, loans, generous retirement plans, private jets, and a wide range of other benefits. The result is that the richest 1% now own more wealth than the bottom 95% and we have, by far, the most unfair distribution of wealth and income in the industrialized world.

Unfortunately, this crisis of greed is made even worse by the fact that President Bush and many of those around him are implicated in the same kind of abuses that we are seeing on the front pages every day. Whether it is Vice President Cheney, the former CEO of Halliburton, which is currently being investigated by the SEC, or Secretary of the Treasury O'Neill's lack of forthrightness about his stock trading while CEO of Alcoa, or Secretary of the Army Thomas White's involvement with Enron, the Bush Administration is itself so mired in alleged corporate misdeeds that it lacks all credibility and moral authority on the issue. How absurd that the chief government watchdog over corporate America, SEC Chairman Harvey Pitts must recuse himself from key SEC votes because he used to lobby for looser regulations over the very accountants who are now at the center of the current corporate scandals. And of course President Bush himself was involved in "questionable" stock trades and insider loans while a member of the Board of the Harken corporation.

While it is important to make dishonest corporate executives answer for their crimes and do our best to prevent future corporate misconduct, we should not forget the broader issues that the crisis of greed raises. First, what is going on in our country today that allows for the kind of corporate thievery that we are seeing? Secondly, beyond political posturing and sound-bites, what should Congress really be doing to protect the interests of the average American?

Where do we go from here?

In my view, the most important thing that Congress can do is to break the stranglehold that corporate America now has over politics in Washington. Shamefully, since 1990, accountants and their PACs have provided $57.4 million in political contributions to federal candidates and political parties. In addition, big business has made $522 million in campaign contributions to both political parties during the 2001-2002 election cycle alone. While Congress has recently made some progress in campaign finance reform by banning unlimited soft money, much more needs to be done. Ultimately, we need to move to public funding of elections so that candidates are no longer dependent upon the wealthy and large corporations for their contributions.

Secondly, we have to understand that the recently highlighted corporate financial scandals are only one manifestation of the overall culture of greed that is plaguing our nation. This culture, which loudly proclaims that the goal of human existence is the personal gain of the individual at the expense of everyone and every

thing else, permeates every aspect of our society. If we are going to revitalize American democracy and develop public policy that creates a decent standard of living for all Americans, every part of corporate America's overall ideology and behavior has got to be challenged - and defeated. This means:

We have to end their domination over the media. At a time when fewer and fewer large multinational corporations control what the American people see, hear and read, and when issues relevant to working families are largely ignored, we must demand broader ownership of the media and the opportunity for more points of view to be heard. Political change in this country cannot take place if the American people are not adequately informed about the economic and political conditions which shape the society in which they live.

We have to rescind their $500 billion in tax breaks for the richest one percent of the population and over $100 billion in corporate welfare, while education, affordable housing, mass transportation, environmental protection and other vital social needs are under-funded.

We must reject their hollow claims that private insurance companies can address the current disastrous situation in health care. With 41 million Americans lacking any health insurance and with the cost of health care soaring, the United States cannot continue to be the only industrialized country on earth without a national health care system. Health care is a right of all people, and we must proclaim that loudly.

We need to turn back their plans to impose unfettered "free trade" on our nation and the world. The evidence is clear that the major beneficiaries of this policy are the multi-national corporations who pushed it on the American people. With a $340 billion trade deficit and

the loss of ten percent of our manufacturing base in the last four years, and increased poverty in the developing world, NAFTA, GATT and Most Favored Nation Status with China have been a disaster. We must reject trade agreements that push American workers to "race to the bottom" against desperate people in China, Mexico and elsewhere who are forced to work for pennies an hour.

We need to defeat their efforts to privatize Social Security, enrich Wall Street, and make the retirement plans of millions of Americans dependent on the ups and downs of the stock market. Social Security must be strengthened, not destroyed. A11 Americans must know that they will have a secure and guaranteed source of income when they reach old age.

We need to say "no" to their efforts to keep us dependent on fossil fuels and nuclear power. Global warming, acid rain, air pollution and the disposal of radioactive waste are massive problems that must be addressed if this planet is to survive. We can substantially cut pollution and improve our national security by utilizing technologies that exists today which could provide cheap, sustainable and non-polluting energy.

And we are well poised to make these fights. The bad news is that the recent wave of corporate scandals has cost many middle-class Americans a large part of their retirement savings, their jobs, and their confidence in our business and political leaders. But the good news is that it has also, for the first time in many years, made clear the need for working people, environmentalists, students, the elderly, family farmers and others to come together to advance a progressive agenda for the nation - an agenda that calls for a decent standard of living for the many and not just enormous wealth for the few.

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