Corporate Critic Activist Calls for Ethical Sanctions. (Ethics)
Verschoor, Curtis C., Strategic Finance
IN ITS DECEMBER 2001 ISSUE, MULTINATIONAL MONITOR, A VERY LIBERAL, progressive left publication related to the Ralph Nader activist group, states the generalization that "the vast majority" of corporations are immoral or amoral, they should be stripped of all constitutional protections, and their shareholders should be made liable for the consequences of the companies' misdeeds. The same issue also contains an article, "Corporations Behaving Badly," that lists the "Ten Worst Corporations" of 2001.
The list includes some companies whose transgressions might not involve ethics alone and are more a matter of personal opinion. These include Philip Morris, because of the tobacco products it produces; Coca-Cola, for advertising sugary soft drinks to children; ExxonMobil, for its opinions on global warming; Southern Company and its use of grandfather clauses to avoid compliance with the Clean Air Act; and Wal-Mart, for its anti-union stance. On the other hand, there appears to be clear evidence that several companies have been guilty of unethical, if not immoral, actions.
One member of the "Worst" list is, of course, Enron Corporation, whose 2001 ethical transgressions were discussed in this column in February. Of significant additional concern is Enron's conclusion to prohibit employees from selling Enron stock held in their 401(k) plan because of a decision to change plan administrators. During the time of the freeze, when employees were stuck, Enron stock lost over 70% of its value. Many employees lost their life savings. Apparently, officers were knowledgeable enough to be able to sell their shares in advance of the freeze. A Justice Department investigation is under way to determine whether any criminal activities took place.
An expose of the political maneuvering involving Enron is contained in a white paper published by Public Citizen, detailing what it refers to as Enron's fraud of consumers and shareholders. Public Citizen was founded by Ralph Nader. One example of the maneuvering involves Wendy Gramm, chair of the Commodity Futures Trading Commission. She exempted energy swaps--a new and growing business for Enron--from regulation. Six days later she resigned. And five weeks after that she was appointed to the Enron board, where she served on the audit committee.
Another Multinational Monitor example of a company whose behavior was clearly unethical by any standard is TAP Pharmaceutical, a subsidiary of Abbott Laboratories. TAP is a joint venture of Abbott and Takeda Pharmaceuticals of Japan. …