Ellen Wedum
The right wing majority on the Supreme Court ruled (in Citizens United v. FEC) that corporations are “persons.” If corporations are “persons,” they need to be governed by laws that promote responsibility, prohibit harm to others, and set reasonable limits on their freedom, just as individual citizens are governed by laws.
The penalties for noncompliance need to be sufficient that corporations will provide a quality product and treat consumers and their employees fairly. But corporations, like naughty children, keep looking for ways to cheat. Let’ s look at two clear examples and one more subtle one.
Eggs recalled
Austin DeCoster controls egg production factories in several states (Iowa: Quality Egg, Wright County Egg, Hillandale; Ohio Fresh Eggs; DeCoster Egg Farms of Maine; and others). His factories have been implicated in the recall of half a billion eggs suspected of salmonella contamination this year.
He controls an estimated 10 percent to 20 percent of U.S. egg production. DeCoster has been repeatedly fined for hiring illegal immigrants and for tolerating sexual harassment in his facilities, and has accumulated a long list of animal cruelty charges.
According to a Fox News report, he has been cited for violations dating back at least to the early 1990s. In 1995, then-Labor Secretary Robert Reich said that workers in his factories were being treated like animals and that the conditions were “among the worst” he’d seen. DeCoster has paid more than $5 million in fines, but this has not stopped his abuses. He just pays the fines and keeps on going.
He is a born-again Baptist. Why do his deeds not verify his faith? What kind of penalties are needed to make him stop his atrocious practices? And since DeCoster eggs are not identified as such in the market, you can only avoid contributing to his profits by using a local source or a commercial one that is labeled ‘organic,’ ‘cage-free,’ etc.
See also this ABC News report.
‘Betting against the American dream’
Magnetar, the hedge fund known for “Betting against the American dream,” found a way to profit from the collapse of the subprime mortgage market. They would buy up subprime mortgages and then insure them.
In fact, they preferred the riskiest investments. Then they could collect the insurance faster. (For more detail, click here.)
This was not illegal at the time, but it seems unethical to me. How can such destructive practices be prevented in the future?
Deliberately confusing customers
Then there’s my story. I recently needed to get a couple of nicks in my windshield fixed, so I phoned my auto insurance 800 number to file my claim. These small nicks are supposed to be fixed at no cost to me, so I was rather surprised when the very first option in the automated phone claims menu was, “If you are a policy holder seeking reimbursement for out-of-pocket expenses on glass repair or replacement, please press one.”
I chose the “next available customer service representative” option.
The customer service rep “confirmed” my claim and promised to send a “confirmation” e-mail to me and to the glass repair vendor. He emphasized that this only confirmed that I had filed a claim, and that he could not verify my claim at that time.
But I was never notified that my claim had been “verified,” so I called again. Only this repeat phone call produced a verification. Then the repair was completed at no charge to me.
I got curious, though, about the “option No. 1.” So, a few days later, I phoned again and checked it out. What a complicated process! The insured is required to write the policy number, date of loss and a daytime phone number on the invoice and mail or fax this to some place in Oklahoma City, and wait up to three weeks to receive a check. I wonder how many million customers never get their money back.
Is this practice legal? Probably. Is it ethical to deliberately confuse your customers? I don’t think so.
Distant and influential
I think our local small businesses can mostly be trusted: They do want to provide you with honest service and treat their employees fairly.
But big businesses are distant from their customers and have a lot of influence on local and state governments, and the feds too. With their donations to politicians, armies of lobbyists, and lucrative job offers, they can capture and control the agencies that are supposed to regulate them.
My close encounter of the insurance kind worked out all right for me, but I fear that many Americans have far less satisfactory experiences. The little guy, and the honest business owner, has little chance if a big corporation wants to behave unethically in order to make a bigger profit.
And, given the “freedom of speech” provided by the Citizens United ruling, politicians can be persuaded, with massive donations, or threatened, with multi-million-dollar attack ads, into turning a deaf ear to consumer complaints and calls for regulation.
Wedum is a former state House candidate and an active Democrat who lives near Cloudcroft.