Reclaim Democracy!

“Sunset Commission” Hands Dangerous Level of Power to President

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Hand-picked panel would wield power to eliminate disfavored federal agencies unless overridden by Congress

By Osha Gray Davidson
First published by Rolling Stone magazine, May 5, 2005 edition

Editor’s note: As we post this article on April 25, we have not had the opportunity to verify whether the proposed commission is truly as unaccountable and powerful a tool for the president as this article suggests. While government agencies certainly should be required to justify their programs and existence periodically, a panel representing only the chief executive would be antithetical to our Constitution’s republican structure of government. 

If you’ve got something to hide in Washington, the best place to bury it is in the federal budget. The spending plan that President Bush submitted to Congress this year contains 2,000 pages that outline funding to safeguard the environment, protect workers from injury and death, crack down on securities fraud and ensure the safety of prescription drugs. But almost unnoticed in the budget, tucked away in a single paragraph, is a provision that could make every one of those protections a thing of the past.

The proposal, spelled out in three short sentences, would give the president the power to appoint an eight-member panel called the “Sunset Commission,” which would systematically review federal programs every ten years and decide whether they should be eliminated. Any programs that are not “producing results,” in the eyes of the commission, would “automatically terminate unless the Congress took action to continue them.”

The administration portrays the commission as a well-intentioned effort to make sure that federal agencies are actually doing their job. “We just think it makes sense,” says Clay Johnson, deputy director for management at the Office of Management and Budget, which crafted the provision. “The goal isn’t to get rid of a program — it’s to make it work better.”

In practice, however, the commission would enable the Bush administration to achieve what Ronald Reagan only dreamed of: the end of government regulation as we know it. With a simple vote of five commissioners — many of them likely to be lobbyists and executives from major corporations currently subject to federal oversight — the president could terminate any program or agency he dislikes. No more Environmental Protection Agency. No more Food and Drug Administration. No more Securities and Exchange Commission.

“Ronald Reagan once observed, ‘The closest thing to immortality on this earth is a federal government program,’ ” says Rep. Kevin Brady, a Republican from Texas who has been working for the past nine years to establish a sunset commission. “We need it to clear out the deadwood.”

Without many of those programs, however, American consumers, workers and investors would be left to the mercy of business. “This is potentially devastating,” says Wesley Warren, who served as a senior OMB official in the Clinton administration. “In short order, this could knock out protections that have been built up over a generation.”

Others note that the provision goes beyond anything attempted by conservatives in the past. “When you look at this,” says Marchant Wentworth, a lobbyist for the Union of Concerned Scientists, “it’s almost like the Reagan administration was a trial run.”

The man behind the sunset commission is Clay Johnson, the most influential member of Bush’s inner circle whom you’ve never heard of. The two Texans have been close friends since 1961, when they met as fifteen-year-olds at Andover prep school and later roomed together for four years at Yale. When Bush was elected governor of Texas in 1994, he put the buddy he calls “Big Man” — Johnson is six feet four — in charge of all state appointments. Johnson, a former executive at Neiman Marcus and Frito-Lay, refers to Americans as “customers” and is partial to Chamber of Commerce bromides such as “We’re in the results business.” He is also partial to giving corporate lobbyists a direct role in gutting regulatory protections. One of his first acts in Texas was to remove all three members of the state environmental-protection commission and replace them with a former Monsanto executive, an official with the Texas Beef Council and a lawyer for the oil industry. Overnight, a commission widely respected for its impartiality became a “revolving door between the industry lobby and government,” says Jim Marston, the senior attorney in Texas for the nonprofit organization Environmental Defense.

Johnson continued his anti-regulatory efforts in the early days of the Bush presidency, when he helped place industry champions in positions throughout the government. As director of OMB, an obscure but powerful arm of the White House, he has implemented a “Program Assessment Rating Tool” to evaluate federal programs and cut funding to those that are “not getting results.” In reality, though, Johnson uses PART to slash government efforts that don’t fit the administration’s political agenda. This year’s budget eliminates twenty percent of the programs that were rated most effective, including efforts to improve the environment and education, and increases funding for programs that received the lowest possible rating — including an attempt to reduce the number of poor people claiming a low-income tax credit.

The evaluations “are based on the whims of White House budget bean counters,” says Gary Bass, executive director of the nonpartisan OMB Watch. “These are meaningless numbers that do nothing but back up preordained political conclusions.”

The Sunset Commission would go even further. The panel — which will likely be composed of “experts in management issues,” according to one senior OMB official — will enable the administration to terminate entire government programs that protect citizens against injury and death. Consider what America might look like if Reagan had wielded such an anti-regulatory ax twenty years ago. Abolishing the EPA would have increased air pollution, causing tens of thousands of children to develop chronic respiratory diseases. Terminating the National Highway Traffic Safety Administration would have eliminated many protections we now take for granted — including air bags, child safety seats and automatic seat belts. And getting rid of the Occupational Safety and Health Administration would have forestalled workplace regulations that have prevented illnesses among millions of farmworkers.

Even if such regulations remain on the books, eliminating entire agencies would leave no one to enforce them. “And if there’s no cop on the beat, who’s going to follow the law?” says J. Robert Shull, senior policy analyst at OMB Watch.

The first hint of Bush’s plan to create a commission surfaced only weeks after he won re-election last November. At an economic conference convened by Treasury Secretary John Snow, one panel member made the case for inserting a sunset provision into existing regulations. Such a move would “shift the burden of proof onto the regulations and require us to demonstrate that they’re still needed,” said Susan Dudley, director of regulatory studies at the Mercatus Center, a free-market think tank based in Washington, D.C.

It’s fitting that the first public mention of Bush’s plan came from Mercatus. The center’s “regulatory studies program” was founded by Wendy Gramm, the wife of former Texas Sen. Phil Gramm and the woman Reagan called “my favorite economist.” As a senior official at OMB under the Gipper, Gramm fought hard to eliminate federal regulations. Her most notorious victory came in 1992 when, as chair of the U.S. Commodity Futures Trading Commission, she pushed through a measure exempting companies that trade in energy derivatives from regulation, following an intense lobbying campaign by Enron. Gramm resigned from the commission and accepted a seat on the Enron board of directors, where she was paid $1.85 million and received donations from the company to support Mercatus. Enron, meanwhile, used its exemption from federal oversight to engage in its infamous accounting fraud that destroyed the company and bankrupted investors.

But such dangers of eliminating regulations have done nothing to slow Bush’s drive for a sunset commission. Given its political gains last November, the administration is optimistic about winning approval in Congress. “The stars and the planets are aligned,” Johnson recently declared, citing the solid Republican majority in Congress and the need to curb the soaring federal deficit.

But there may be a stumbling block. The commission not only threatens the environment and public health — it would also violate the constitutional separation of power between Congress and the executive branch, enabling the president to dismantle programs created by lawmakers. “Under the administration’s proposal, Congress would relinquish its constitutional power to legislate,” says Rep. Henry Waxman, a Democrat from California who has been the commission’s most vocal opponent. “Power would be consolidated in the executive branch, and the legislative role would be emasculated.”

Republicans already have a plan to counter such concerns. Under a bill expected to be introduced soon, the power to appoint the commission would be given to Congress rather than to the president — simply transferring the authority from Bush to his GOP allies on the Hill. And if the commission is challenged in court, the administration is likely to drag out the fight until it has firmly established a conservative majority on the Supreme Court.

Either way, opponents consider the commission a serious threat. “The end result,” says Waxman, “would be a field day for corporate lobbyists.”

© 2005 Rolling Stone

Supreme Court Rules Against Immunity for Dow Chemical

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Bush Administration filed brief asking Court to protect pesticide companies and deny compensation to victimized farmers.

By David G. Savage
First published by the L.A Times, April 28, 2005

 Editor’s note: This article is a classic example of how our regulatory agencies often are protecting giant corporations, not citizens (or small businesses). The issue is rarely spelled out so clearly as in this case.

The Time’s headline read: Supreme Court rules against the White House’s pro-business reading of a 1972 law. A fine letter to the Times’ editor by Jennifer Rockne — director of the American Independent Business Alliance — follows the article, pointing out the misleading, but common use of the label “pro-business.”

The makers of pesticides and weedkillers can be sued and forced to pay damages if their products cause harm, the Supreme Court ruled Wednesday, rejecting the view of the Bush administration and reversing a series of lower courts.

The 7-2 ruling permits lawsuits by farmers whose crops are damaged by pesticides, as well as suits by consumers who are hurt by bug sprays.

In its first ruling on the scope of the 1972 federal law regulating pesticides and related chemicals, the justices said the requirement that chemical companies submit their products for approval by the Environmental Protection Agency did not “give pesticide manufacturers virtual immunity” from being sued if those products proved to be harmful to people, plants or animals.

Wednesday’s ruling restores the law to what it had been before the 1990s.

During most of the 20th century, Americans who were hurt or killed by toxic chemicals could sue the maker of the product in state court. But more recently, lawyers for the chemical industry convinced courts in much of the nation, including California , that the federal law regulating the pesticides barred such lawsuits in state courts.

Four years ago, the Bush administration adopted this pro-industry position, saying that once a pesticide or weedkiller had won EPA approval, it had a federal shield against being sued – even if the product did not work as advertised.

The case of 29 Texas peanut farmers illustrated the issue. Five years ago, they were persuaded by agents of Dow Chemical Co. to try Strongarm, a powerful, newly approved weedkiller. The farmers say Strongarm killed not just their weeds, but also their peanut plants.

“They just plain withered away,” said Ronnie Love, 63, who said he applied Strongarm to 150 acres when he seeded his fields that spring. Despite a summer of heavy watering, the peanut plants were stunted and failed to produce a crop, he said.

Love and the other farmers say Dow reneged on a promise to compensate them for millions of dollars in crop losses. They notified the company that they intended to sue in a Texas court under the terms of the state’s consumer protection law, which allows suits for products that are defective or are deceptively marketed.

But before they could file their claims, lawyers for Dow went to a U.S. district court in Lubbock and asserted it was shielded from such suits.

A federal judge agreed with Dow and dismissed the farmers’ suit. And the U.S. 5th Circuit Court of Appeals in New Orleans agreed as well, saying federal law that regulates pesticides preempts or bars lawsuits in a state court. The California Supreme Court handed down a similar ruling five years ago.

But the Supreme Court took up the case of the peanut farmers – Bates vs. Dow AgroSciences – and ruled Wednesday that the lower courts were wrong to throw out such claims.

Justice John Paul Stevens noted that the EPA did not test products to see if they were effective. It simply relies on information supplied by the manufacturer.

After the peanut crops in Texas failed, Dow changed Strongarm’s product label to say the weedkiller should not be used in regions with high-alkaline soils, which are common in Texas and Oklahoma .

The company did not acknowledge liability for the earlier damage.

Stevens described the 1972 law as an effort by Congress to impose greater regulation on “poisonous substances.” Converting it into a shield against lawsuits would “create not only financial risks for consumers, but risks that affect their safety and environment as well,” he said.

“This is a huge win for farmers, and I think it will have a big impact in the agriculture industry,” said David C. Frederick, the Washington lawyer who represented the peanut farmers. “Pesticide makers and farmers have to work together. And if something goes wrong with a pesticide, the farmers deserve to be compensated. Now the courthouse door is open to them again after being closed for the past 15 years.”

Patti Goldman, a lawyer in Seattle for the environmental group Earthjustice, said the ruling would help consumers and workers harmed by pesticides.

She and other lawyers cited cases of children sickened by pesticides that had drifted from fields into residential areas and that of a young man who died after riding a horse that had been sprayed with a pesticide. Recently, such lawsuits had been dismissed prior to a trial.

Wednesday’s ruling does not mean the plaintiffs will always win, the lawyers said, noting that they would have to prove the product was defectively made or inadequately tested to prevail in court.

“This just means that people will be allowed to sue for compensation when they are harmed by a pesticide,” Goldman said. “The court recognized that these [EPA-approved] labels are written by the manufacturers.”

The Bush administration, the chemical industry and other business groups joined the case on the side of Dow Chemical Co., arguing that the court should erect a barrier to such lawsuits.

“This is a complete loss and a big disappointment,” said Steve Bokat, general counsel for the U.S. Chamber of Commerce. “Our concern is that this gives an opening for the plaintiffs’ bar to bring more tort claims against large companies.”

In his opinion, Stevens pointed out that the Clinton administration believed that the federal pesticide registration law did not shield manufacturers from all lawsuits. The Bush administration reversed course in 2001 and said the law as originally written did block such claims.

Stevens called the new interpretation “particularly dubious” and not entitled to much deference from the high court. Chief Justice William H. Rehnquist and Justices Sandra Day O’Connor, Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer joined the court’s opinion.

Justices Clarence Thomas and Antonin Scalia dissented in part, criticizing the court for “tipping the scales in favor of the states and against the federal government” by allowing lawsuits in state courts.

© 2005 Los Angeles Times

 

To the Editor,

Re “Lawsuits Over Pesticides, Herbicides Allowed” (Nation, 4/28), your subhead reads, “Supreme Court rules against the White House’s pro-business reading of a 1972 law.” Yet as the story makes clear, there’s nothing inherently “pro-business” about the Bush Administration’s advocacy on behalf of the chemical industry — it’s favoring Dow Chemical and other giant pesticide companies at the expense of small farming businesses.

I’m not nitpicking a single headline choice, but pointing out a persistent misrepresentation conveyed by using “pro-business” to describe policies that favor the most politically powerful corporations, often to the detriment of America’s small businesses.

In the future, please avoid the overly broad term “business interests” in favor of identifying which business interests benefit and any that are harmed by particular actions or proposals.

Jennifer Rockne
The writer directs the American Independent Business Alliance

 

Wal-Mart Dollars Funds GOP, Lobbying to Eliminate Estate Tax

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Walton family uses chain’s profits to shift tax burden onto customers

By Jim Hopkins
Published by USA Today, April 5, 2005

Wal-Mart Inc. drew broad scrutiny last year as its political spending soared in nationwide battles over health care, labor and other hot-button issues threatening the giant retailer’s growth.

Now, in a little-noticed move, the company’s founding family has plunged into a fight to pass income tax changes and other legislation that could preserve its grip on the USA’s biggest business and the family’s $84 billion fortune.

Led by Sam Walton’s only daughter, Alice, the family spent $3.2 million on lobbying, conservative causes and candidates for last year’s federal elections. That’s more than double what it spent in the previous two elections combined, public documents show.

The Waltons have joined a coterie of wealthy families trying to save fortunes through permanent repeal of the estate tax, government watchdogs say. The election of President Bush and more conservatives to Congress gave momentum to the long-fought effort. The Waltons add more.

“To see the wealthiest family in America weighing in is scary,” says Chuck Collins, co-founder of Responsible Wealth, a non-profit group that tracks the super-rich. (See “Some of wealthiest say go ahead, tax us.”)

Aubrey Rothrock III, a Washington lobbyist hired by the family, says the Waltons are mostly interested in bills to increase charitable giving through their family foundation. “The estate tax repeal initiative has never been the focus of our advocacy efforts,” he says.

The Waltons declined to discuss their political activities. But a USA Today review of public documents reveals a small-town Arkansas family emerging as a political juggernaut on tax issues, extending Wal-Mart’s influence over U.S. society even more.

The Walton support for Bush and other fiscal conservatives assumed new urgency last month when Wal-Mart sweetened its dividend – boosting Walton dividend income above $1 billion a year. Bush’s dividend tax cut, enacted two years ago and set to expire in 2009, will save the family as much as $51 million this year.

The growing Walton political prowess is a departure from patriarch “Mr. Sam,” who disliked politics. Moreover, their largesse isn’t limited to the national stage. In 2002-2004, the family gave $879,000 to state campaigns from California to Florida, says the Institute on Money in State Politics. The biggest gift, $250,000, went to the Republican Party of Florida, whose titular head is Bush’s brother, Gov. Jeb Bush.

Yet it is in the bitter fight over federal estate taxes that the family and Wal-Mart have the most at stake. The tax, now collected on estates worth more than $1.5 million, could force the Waltons to sell a chunk of Wal-Mart to pay billions in taxes when family members die. If they fail to pay the taxes, bailiffs may become involved in the collection process, potentially leading to a forced sale of assets to cover the owed amount. The top tax rate this year is 47%.

Sam Walton’s widow, Helen, inherited his shares after his 1992 death; she now owns about 8% of the company. She is 85 and has not fully recovered from an automobile accident five years ago.

Overall, Helen, daughter, Alice, and sons Jim, John and Rob, own nearly 40% of Wal-Mart. The children got their shares when the company started, allowing the family to defer billions in estate taxes at Walton’s death.

Chairman Rob and John hold two of 13 board seats. Yet, the family’s huge stock position effectively means they control the company started in 1962, says Ric Marshall, chief analyst at the Corporate Library, a corporate governance researcher.

A big stock sale could loosen Walton control over Wal-Mart and its 1.3 million U.S. workers. “They’re going to do everything they can to hold onto shares of Wal-Mart,” Marshall says.

Estate tax tick-tock
The clock is ticking louder in the estate tax battle, with attention focused on Jan. 1, 2011, when the tax reverts to higher levels in place before Bush won approval of a gradual reduction, culminating in its repeal entirely for 2010.

The Waltons and a coalition including the influential National Federation of Independent Business support Bush’s push for the tax’s permanent repeal, government watchdogs say.

“They want to make sure the White House continues to make this one of the bedrock issues,” says Larry Noble, head of the Center for Responsive Politics, a non-partisan group tracking campaign spending.

The Waltons’ political rise began in 1999, when their Walton Enterprises partnership hired one of Washington’s top lobbyist-law firms, Patton Boggs, to represent it before Congress and government agencies. Through last year, it has paid the firm $1 million, public documents show. Walton Enterprises controls the family’s Wal-Mart stock plus interests in newspapers and other businesses. Patton Boggs, which has ties to the Bush administration, has led efforts seeking permanent repeal of the estate tax. The firm also is one of Wal-Mart’s six lobbying firms.

Patton Boggs first advanced the Waltons’ support for capital gains, estate and other tax reform, public documents show. Since 2002, the firm has pushed bills favored by the Walton Family Foundation and other private foundations. The foundation has become a major vehicle financing public education reform through controversial charter schools and private-school vouchers.

The Waltons have said they plan to give Helen Walton’s Wal-Mart stock to the foundation at some point, perhaps after her death. That would likely eliminate any federal estate taxes due on her approximately 8% stake.

But that wouldn’t guarantee the Waltons could avoid a forced sale of Wal-Mart stock. That’s because of a federal law covering investors with big holdings in a single company. In the Waltons’ case, the law limits the amount of stock its private foundation can own to a maximum 2% of all shares in Wal-Mart. The law says excess holdings must be sold within five years.

The Waltons have supported bills in Congress that would raise the threshold to 5% and double the time allowed to dispose of excess shares. Similar bills are expected to be re-introduced in Congress this year after failing to win final passage in the last session, congressional aides say.

“We will review such proposals carefully,” says Rothrock, the Patton Boggs lobbyist for the Waltons.

Alice Walton a political force
The family made its single biggest political bet last August and October when Alice Walton poured a combined $2.6 million into Progress for America. The group gave a big promotional boost to Bush in the election’s final weeks.

It is one of the so-called 527 committees that rocked the presidential race. One of the best-known was Swift Vets and POWs for Truth, which dogged Democratic nominee John Kerry.

Walton’s was Progress for America’s sixth-biggest gift, putting her ahead of top Bush fundraiser Carl Lindner of Cincinnati, says the Center for Responsive Politics. Her gift makes her “a political force to be reckoned with,” says the center’s Noble.

Walton, 55, is a former stockbroker who mostly lives on her Rocking W horse ranch west of Fort Worth. With a $17 billion fortune, she is the world’s wealthiest woman. That puts her in a salon of well-heeled women increasingly courted by Republicans and Democrats, says Barbara Kasoff, co-founder of Women Impacting Public Policy.

Progress for America has become a big booster of Bush’s drive for tax reform and private Social Security accounts. The group did not return calls seeking comment.

Noble says the Bush administration monitors gifts to groups such as Progress for America, so the Walton donation puts the family on the White House speed dial. “When you play at that level, you get your phone calls returned,” he says.

The family’s political giving also extends to the White House and to Congress. The Waltons contributed about $1 million to Bush and to congressional candidates from 1999 to 2004.

Their favored candidates included Republicans John Thune of South Dakota and David Vitter of Louisiana, both elected to the Senate for the first time last year. Both oppose the estate tax, so their election increases chances for its permanent repeal under bills introduced this year in the Senate and House, says the National Federation of Independent Business.

“We think we’re closer than we’ve ever been,” says lobbyist Dena Battle at NFIB, the business trade group that’s tried for years to kill the tax.

Still, even with the election of more fiscal conservatives, permanent repeal isn’t guaranteed. The House passed legislation in 2003. But the Senate has been a tougher sell. Battle says a bill passed 54-44, with two Republicans absent, when it last came up, in 2002; 60 votes are needed.

Lawmakers have grown more worried about mounting budget deficits that could be worsened with more tax cuts, says Stuart Rothenberg, editor of the non-partisan Rothenberg Political Report .

“I think they’ll still push for that,” Rothenberg said of cuts. “But along the way, something is going to get squeezed.”

© 2005 USA Today

Asbestos Corporations Use Sham Bankruptcies to Evade Accountability

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By Jeff Milchen and Stuart Levit
First Published in The American Prospect, April 6, 2005

It’s hard for many Montanans not to feel outrage when we hear President Bush speak of “frivolous asbestos lawsuits” causing business bankruptcies. We know how the WR Grace & Co. used accounting trickery to “go bankrupt,” and thereby avoid fully compensating more than 1,000 Lincoln County residents who had been exposed to deadly asbestos dust.

But WR Grace is not an isolated example. Many of the several dozen business bankruptcies — touted as the tragic results of “runaway lawsuits” — are examples of corporate planning to shield assets from victims rather than a function of being “broke” in any traditional sense.

For example, WR Grace CEO Paul J. Norris made $5 million last year. Not bad for a company in the midst of Chapter 11 bankruptcy reorganization. Many other top executives in “bankrupt” asbestos corporations have seen lucrative bonuses or salary increases.

To be sure, people who have not been hurt have taken advantage of some companies with no culpability for asbestos deaths (typically small businesses that simply resold products containing asbestos). Relatively few of the 6,000 businesses that have defended or settled asbestos claims should bear responsibility for criminal actions and victim compensation, and it would be unjust to ignore that many small-business owners have also become victims of corporations like WR Grace.

Such economic harm, however, pales when compared with the events at WR Grace’s Libby, Montana, mine, where it knowingly exposed thousands of workers and area residents to tremolite, a particularly lethal form of asbestos, while managers lied to employees, residents, and government health officers and regulators about the danger.

The main product of the Libby plant was vermiculite, a mineral valuable for insulation, potting soil, vehicle’s brake pads, and other products. The vermiculite in Libby, however was naturally intermingled with the deadly asbestos.

Asbestos was once widely used for insulation and other applications because of its light, fine, fire-resistant fibers. But when inhaled, those fibers can lodge permanently in lungs, causing scarring of the lung lining. This process gradually chokes off breathing and often causes lung cancer.

In 1994, Congress passed a law permitting bankruptcy protection for companies with asbestos liability. This effectively made bankruptcy the most sensible response for many corporations facing asbestos claims.

But the Bush administration seems intent on recasting the perpetrators as victims by focusing attention on the costs of asbestos litigation to corporations.

Already, the U.S. Senate passed a bill to divert many of the largest class-action lawsuits from state courts into the federal court system. Though not inherently bad, the law also limits the kinds of claims that can be made, which effectively denies some victims the chance to be heard at all — a radical change from current and historic law. The Bush administration has pushed for absurdly low limits on noneconomic damages in civil lawsuits that would be incapable of deterring illegal or negligent actions by multibillion-dollar corporations like WR Grace.

Further, capping asbestos liability is irresponsible because the scope of damages is not yet known. Despite being banned in most industrialized nations, asbestos-bearing products, including many vehicle brakes, still are imported to the United States.

WR Grace executives knew tremolite caused lung disease and cancer from the day Grace acquired the Zonolite Company and its Libby mine in 1963. We know this because Zonolite memos dating from the mid-1950s discussed the dangers of exposing workers to asbestos.

Internal documents — many unearthed only as a result of civil lawsuits — revealed unmistakably that WR Grace executives knew and discussed harm to their workers and the community, but concealed the deadly problem from them and from government officials A company letter to its insurer in 1967 reported that WR Grace “did indeed have a severe problem,” with workers’ health and “might expect a good many claims involving asbestos.”

A subsequent memo from 1976 noted, “Our major [worker health] problem is death from respiratory cancer. This is no surprise.”

Yet WR Grace denied employees adequate respirators, protective clothes, or a reasonable opportunity to clean themselves at the mine and processing plant. Plant managers even gave away contaminated materials for public use, including mine tailings to build a local school’s running track. Grace managers also knew that, at one point, up to 5,000 pounds of asbestos was being released from the plant into Lincoln County’s air every day.

Nearly 200 Libby residents [as of spring 2005], most of whom never worked at the mine, have died from asbestos-caused lung disease. An estimated 1,200 more in Lincoln County are sick with asbestos-related lung disease.

While WR Grace delayed taking any action to protect workers, once they began dying, it wasted little time protecting shareholder assets from the inevitable lawsuits. Between 1988 and 1998, WR Grace executives “eliminated” more than three-quarters of the company’s $6 billion in assets by redistributing them to legally separate entities with no liability to compensate victims or creditors. WR Grace filed for bankruptcy in 2001, after most of its former assets had been removed.

Among other companies using bankruptcy as a shield is Halliburton, which faces $4.3 billion in pending asbestos claims through its KBR subsidiary. In March 2005, its Web site boasted “Chapter 11 is very good for our investors.” According to Halliburton, nobody goes out of business, business operations don’t change, and bankruptcy allows to it to “cleanse the company” of its asbestos liabilities and keep the company strong.

Senate Majority Leader Bill Frist is among those who blame asbestos litigation for “forcing” Owens Corning into bankruptcy in 2000, and subsequent layoffs at its Granville, Ohio, facility were touted as evidence of litigation’s pernicious effects. However, many jobs terminated were in Owens Corning’s litigation department, not manufacturing or industry. Oh, yes, CEO David T. Brown took home $3.8 million in 2004.

While the congressional majority has erected formidable barriers to prevent individuals from escaping debts via bankruptcy, some proposed asbestos reforms would make it easier and cheaper for corporations to do the same.

Because of the latency period for asbestosis (anywhere from seven to 30 years), many researchers believe that fatalities in the United States won’t peak for another decade. The greatest potential harm from asbestos reform is that those individuals exposed to asbestos who have not yet, but almost surely will, develop asbestosis or cancer will be denied medical care and compensation.

To achieve just asbestos litigation reform that will compensate victims without generating unnecessary business and legal costs requires us to first understand the damage and corporate culpability. So far, we are largely in the dark.

Stuart Levit is an attorney and a former mine-reclamation specialist for the state of Montana. Milchen founded Reclaim Democracy! This article was first published by American Prospect.

© 2005 ReclaimDemocracy.org

Updates:

  • June, 2005: the state of New Jersey sued Grace and two of its executives for allegedly lying about asbestos contamination at its Hamilton, NJ vermiculite processing facility. The complaint is here (26 pp pdf from scan).
  • Sept, 2005: WR Grace attorneys have petitioned U.S. District Judge Donald W. Molloy to move the trial of the corporation on conspiracy, Clean Air Act violations, and other criminal charges –scheduled to begin Sept 11, 2006 — out of Montana. The petition claims jurors likely will be predisposed to find WR Grace guilty after years of press coverage about the corporation’s actions in Libby. Full story here.

Other useful sources:

Key Elements of a Right to Vote Amendment

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  1. Make the right to vote an affirmative federal right of citizenship and not a state-administered privilege.
  2. Make automatic voter registration a duty of the federal government, direct the creation of standards for ease of voting, and clarify prohibited activities including the most common disenfranchisement tactics.
  3. Establish statehood for the District of Columbia.
  4. Establish full voting rights and representation in Congress for the people of Puerto Rico and other U.S. territories.
  5. Enable Congress to pass laws protecting voters from having their elections dominated by moneyed interests (overruling Buckley v Valeo and successive cases based on it).

Other Resources

Don’t Blame Wal-Mart

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By Robert Reich
Published by the New York Times, February 28, 2005

Bowing to intense pressure from neighborhood and labor groups, a real estate developer has just given up plans to include a Wal-Mart store in a mall in Queens, thereby blocking Wal-Mart’s plan to open its first store in New York City. In the eyes of Wal-Mart’s detractors, the Arkansas-based chain embodies the worst kind of economic exploitation: it pays its 1.2 million American workers an average of only $9.68 an hour, doesn’t provide most of them with health insurance, keeps out unions, has a checkered history on labor law and turns main streets into ghost towns by sucking business away from small retailers.

But isn’t Wal-Mart really being punished for our sins? After all, it’s not as if Wal-Mart’s founder, Sam Walton, and his successors created the world’s largest retailer by putting a gun to our heads and forcing us to shop there.

Instead, Wal-Mart has lured customers with low prices. “We expect our suppliers to drive the costs out of the supply chain,” a spokeswoman for Wal-Mart said. “It’s good for us and good for them.”

Wal-Mart may have perfected this technique, but you can find it almost everywhere these days. Corporations are in fierce competition to get and keep customers, so they pass the bulk of their cost cuts through to consumers as lower prices. Products are manufactured in China at a fraction of the cost of making them here, and American consumers get great deals. Back-office work, along with computer programming and data crunching, is “offshored” to India, so our dollars go even further.

Meanwhile, many of us pressure companies to give us even better bargains. I look on the Internet to find the lowest price I can and buy airline tickets, books, merchandise from just about anywhere with a click of a mouse. Don’t you?

The fact is, today’s economy offers us a Faustian bargain: it can give consumers deals largely because it hammers workers and communities.

We can blame big corporations, but we’re mostly making this bargain with ourselves. The easier it is for us to get great deals, the stronger the downward pressure on wages and benefits. Last year, the real wages of hourly workers, who make up about 80 percent of the work force, actually dropped for the first time in more than a decade; hourly workers’ health and pension benefits are in free fall. The easier it is for us to find better professional services, the harder professionals have to hustle to attract and keep clients. The more efficiently we can summon products from anywhere on the globe, the more stress we put on our own communities.

But you and I aren’t just consumers. We’re also workers and citizens. How do we strike the right balance? To claim that people shouldn’t have access to Wal-Mart or to cut-rate airfares or services from India or to Internet shopping, because these somehow reduce their quality of life, is paternalistic tripe. No one is a better judge of what people want than they themselves.

The problem is, the choices we make in the market don’t fully reflect our values as workers or as citizens. I didn’t want our community bookstore in Cambridge, Mass., to close (as it did last fall) yet I still bought lots of books from Amazon.com. In addition, we may not see the larger bargain when our own job or community isn’t directly at stake. I don’t like what’s happening to airline workers, but I still try for the cheapest fare I can get.

The only way for the workers or citizens in us to trump the consumers in us is through laws and regulations that make our purchases a social choice as well as a personal one. A requirement that companies with more than 50 employees offer their workers affordable health insurance, for example, might increase slightly the price of their goods and services. My inner consumer won’t like that very much, but the worker in me thinks it a fair price to pay. Same with an increase in the minimum wage or a change in labor laws making it easier for employees to organize and negotiate better terms.

I wouldn’t go so far as to re-regulate the airline industry or hobble free trade with China and India – that would cost me as a consumer far too much – but I’d like the government to offer wage insurance to ease the pain of sudden losses of pay. And I’d support labor standards that make trade agreements a bit more fair.

These provisions might end up costing me some money, but the citizen in me thinks they are worth the price. You might think differently, but as a nation we aren’t even having this sort of discussion. Instead, our debates about economic change take place between two warring camps: those who want the best consumer deals, and those who want to preserve jobs and communities much as they are. Instead of finding ways to soften the blows, compensate the losers or slow the pace of change – so the consumers in us can enjoy lower prices and better products without wreaking too much damage on us in our role as workers and citizens – we go to battle.

I don’t know if Wal-Mart will ever make it into New York City. I do know that New Yorkers, like most other Americans, want the great deals that can be had in a rapidly globalizing high-tech economy. Yet the prices on sales tags don’t reflect the full prices we have to pay as workers and citizens. A sensible public debate would focus on how to make that total price as low as possible.

Robert B. Reich was the U.S. secretary of labor from 1993 to 1997.

© 2005 New York Times