Plastics

Good morning.

We've just awakened. Cup of coffee in hand. We flip through today's papers looking for stories by our favorite corporate crime reporters, and this is what we found:

In the New York Times, Jane Perlez reports that Newmont Mining Corporation will pay $30 million to Indonesia in a settlement of a civil lawsuit in which the government argued that the company had polluted a bay with arsenic and mercury. The settlement will have no effect on a criminal trial of the company and its Indonesian director that is now under way in the province of Northern Sulawesi.

In USA Today, Matt Kelley reports that Senator Arlen Specter asked the Senate Ethics Committee to investigate whether a top aide improperly helped direct nearly $50 million in Pentagon spending to clients represented by her husband. The Pennsylvania Republican asked for the review of legislative assistant Vicki Siegel Herson's actions after Kelly reported Thursday that his office inserted 13 provisions into spending bills benefiting clients of her husband, Michael Herson, a registered lobbyist.

In the New York Times, James Glanz reports that Christopher Joseph Cahill, an executive for a company that was hired by Kellogg, Brown & Root, the Halliburton subsidiary, to fly cargo into Iraq for the war effort pled guilty to inflating invoices by $1.14 million to cover fraudulent "war risk surcharges."

The Associated Press reports out of Charleston, West Virginia that federal regulators have issued safety citations at the West Virginia coal mines where 14 miners died last month. (Big of them. How about a criminal investigation?)

In the Washington Post, Kathleen Day reports that the Securities and Exchange Commission filed civil charges against two local auditors with the accounting firm KPMG LLP for failing to act on widespread bookkeeping irregularities that the SEC says helped U.S. Foodservice Inc. overstate profits by millions of dollars in 1999 and 2000. The civil complaint alleges that Kevin Hall and Rosemary Meyer "engaged in improper professional conduct" because they found numerous "red flags" in the bookkeeping at the Columbia, Maryland-based hotel and restaurant supply company but didn't alert the company's audit committee.

The Associated Press reports that three former executives of a Berkshire Hathaway unit and a former American International Group official pled not guilty to federal charges of conspiring to distort AIG's finances.

The New York Times, in an editorial titled "Price-Gouging on Cancer Drugs?" says that "the high price charged for Avastin, a drug that has proved moderately effective against colon cancer and is about to be used against breast and lung cancer, seems hard to justify on any ground other than maximum profit for its maker. The pricing scheme planned by Genentech and its majority owner, Roche, is a sign of how the rising cost of new life-extending drugs may affect American health care unless ways are found to mitigate the trend." The Times reported this week that Genentech's pricing for Avastin will drive its cost to $8,800 a month for lung cancer and $7,700 a month for breast cancer, up from the $4,400 cost for colon cancer patients. The manufacturers go beyond the standard argument that high prices are needed to recoup research costs and add a new twist: the price reflects the value of this medicine to society.

In the Houston Chronicle, Mary Flood reports that the criminal trial of Enron executives Ken Lay and Jeff Skilling is suddenly picking up speed.

Bloomberg reports that drug wholesaler McKesson Corp. will pay $3 million to settle allegations that it defrauded the Pentagon by charging more for medicine than government contracts allowed. The civil settlement resolves claims McKesson overcharged for pharmaceutical products from October 1997 to December 2001, the Justice Department said.

This is from a quick glance at one morning's newspapers.

And what are we to conclude?

The idea that the Skilling/Lay trial in Houston is the peak of the most recent "wave" of corporate crime is a fantasy. The wave has not peaked. And will not peak until the government stops playing tiddlywinks with society's most dangerous criminals--the white-collar class.

And so we update that scene from the movie The Graduate where the older guy whispers into a young Dustin Hoffman the one word he believes is the future--"plastics."

We look into our crystal ball and whisper into the ears of all young reporters, prosecutors, investors, and lawyers--"corporate crime."

© Russell Mokhiber and Robert Weissman

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter, http://www.corporatecrimereporter.com. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, http://www.multinationalmonitor.org. Mokhiber and Weissman are co-authors of On the Rampage: Corporate Predators and the Destruction of Democracy (Monroe, Maine: Common Courage Press). To subscribe to weekly corp-focus e-mail service, send an e-mail message to listproc@essential.org with the following all in one line: subscribe corp-focus 'your name' (no period).