Original Link: http://moneywatch.bnet.com/saving-money/blog/devil-details/top-25-corporate-tax-dodgers/5095/
By Kathy Kristof
Twenty-five of the nation’s highest-paid chief executive officers took home more pay than their companies shelled out in corporate income taxes last year even though their companies earned an average of $1.9 billion, according to a new study by the Institute for Policy Studies.
Methods of stiffing Uncle Sam vary, but IPS notes that 18 of these “hyperactive tax-dodging” corporations operate subsidiaries in offshore tax havens, such as Bermuda, Singapore and Luxembourg. They’ve also hired aggressive lobbyists to argue for special tax breaks that can cause these companies to essentially reap tax subsidy payments from Uncle Sam.
“Instead of sharing responsibility for addressing our nation’s fiscal challenges, these companies are rewarding CEOs for aggressive tax avoidance,” said Chuck Collins, co-author of the Institute’s “Executive Excess 2011″ report.
Far from struggling, most of the companies on the list justified paying their CEOs some 60% more than average big-company CEO by citing “exceptional corporate performance,” the study’s authors said. Where the average U.S. CEO earned a tidy $10.8 million (that’s roughly $5,400 an hour), the CEOs of the biggest tax-dodging companies took home an average of $16.7 million. That translates to roughly $8,350 per hour, or about $66,800 per day.
What companies ranked as the nation’s top tax dodgers? According to IPS, the tax-dodging gold medal goes to General Electric, which had a effective federal tax rate of negative 64.1%. The company’s pre-tax earnings from U.S. operations were $5.1 billion but it got a stunning $3.2 billion tax refund, according to the report.
Remarkably, that’s NOT the lowest tax rate in the survey. International Paper, which earned $198 million in pre-tax profits from U.S. operations and got a $249 million refund, wins that distinction with a negative 125.8% effective federal rate.
But GE beat out the competition by also spending a tidy $41.8 million on lobbying and campaign contributions, while awarding CEO Jeff Immelt a 172% raise. Immelt’s total compensation package was worth $15.2 million in 2010, according to the survey. A New York Times expose that ran earlier this year attributed GE’s extraordinary ability to cut its corporate taxes to “an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.”
General Electric operates 14 subsidiaries in offshore tax-haven countries, where it has built up some $94 billion in unrepatriated profits that will not be subject to U.S. taxation unless those profits are returned to the U.S. (Not surprisingly, many companies are now lobbying to exempt “repatriated” profits from U.S. taxation.)
It’s worth noting that some of the companies on the IPS list dispute the study’s figures arguing that they do not account for tax reserves that have been “accrued” to pay deferred taxes. However, report author Scott Klinger notes that deferred taxes are not taxes paid — and they may never be paid, given the Byzantine way U.S. corporate income taxes are assessed. These figures reflect the taxes paid in 2010, according to corporate financial reports.
In addition, some companies maintain that they paid no taxes because they reported no taxable income in the U.S. Klinger acknowledges that this is sometimes true. But he says the lack of U.S. profitability is often due to accounting gimmickry that could make movie studios (notorious for making profits disappear) envious. For example, what many of these companies do is have their subsidiaries in foreign countries either own their patents or facilities, allowing that foreign subsidiary to drain the U.S. company of profits by charging exorbitant “royalty” or “lease” fees.
Corporate tax avoidance schemes are estimated to cost the federal government some $100 billion annually, Klinger adds. They also create huge disparities in effective tax rates between big businesses and small. Small businesses pay an average of 27% in federal taxes, he notes, while big businesses pay just 11% on average.
“In effect, small businesses are subsidizing big businesses,” Klinger says.
Here’s the IPS ranking of Top 25 Corporate Tax Dodgers. The companies are ranked by their CEOs pay, highest-paid first.
1. John Lundgren, Stanley Black & Decker; CEO Pay: $32.6 million; Federal income tax: negative $75 million; Subsidiaries in tax havens: 50.
2. Alan Mulally, Ford; CEO Pay: $26.5 million; Federal income tax: negative $69 million; Subsidiaries in tax havens: 3.
3. Aubrey McClendon, Chesapeake Energy; CEO Pay: $21 million; Federal income tax: $0; Subsidiaries in tax havens: 0
4. Gregory Chase, Aon: CEO Pay; $20.8 million; Federal income tax: $16 million; Subsidiaries in corporate tax havens: 128.
5. Robert Kelly, Bank of New York Mellon; CEO Pay: $19.4 million; Federal income tax: negative $670 million; Subsidiaries in tax havens: 10
6. John F. Brock, Coca-Cola Enterprises; CEO Pay: $19.1 million; Federal income tax: $8 million; Subsidiaries in tax havens: 4
7. Ivan Seidenberg, Verizon; CEO Pay: $18.1 million; Federal income tax: negative $705 million; Subsidiaries in tax havens: 0
8. Andrew Liveris, Dow Chemical; CEO Pay: $17.7 million; Federal income tax: negative $576 million; Subsidiaries in tax havens: 64
9. John Strangfeld, Prudential Financial; CEO Pay: 16.2 million; Federal income tax: negative $722 million; Subsidiaries in tax havens: 36
10. James Cracchiolo, Ameriprise; CEO Pay: $16.2 million; Federal income tax: negative $224 million; Subsidiaries in tax havens: 7
11. David Cote, Honeywell; CEO Pay: $15.2 million; Federal income tax: negative $471 million; Subsidiaries in tax havens: 5
12. Jeff Immelt, General Electric; CEO Pay: $15.2 million; Federal income tax: negative $3.25 billion; Subsidiaries in tax havens: 14
13. Patrick Hassey, Allegheny Technologies; CEO Pay: $15 million; Federal income tax: negative $47 million; Subsidiaries in tax havens: 0
14. Robert Coury, Mylan Laboratories; CEO Pay: $15 million; Federal income tax: negative 73 million; Subsidiaries in tax havens: 32
15. Richard Fairbank, Capital One Financial; CEO Pay: $14.8 million; Federal income tax: negative $152 million; Subsidiaries in tax havens: 0
16. Steve Wynn, Wynn Resorts Ltd.; CEO Pay: $14.6 million; Federal income tax: 0; Subsidiaries in tax havens: 16
17. Brian Duperreault, Marsh & McLennan; CEO Pay: $14 million; Federal income tax: negative $90 million; Subsidiaries in tax havens: 105
18. Jim McNerney, Boeing; CEO Pay: $13.8 million; Federal income tax: 13 million; Subsidiaries in tax havens: 42
19. Gregory Q. Brown, Motorola Solutions; CEO Pay: $13.7 million; Federal income tax: $7 million; Subsidiaries in tax havens: 6
20. Eugene Isenberg, Nabors Industries; CEO Pay: $13.5 million; Federal income tax: negative $138 million; Subsidiaries in tax havens: 1
21. Edward Mueller, Qwest Communications; CEO Pay: $13.4 million; Federal income tax: negative $14 million; Subsidiaries in tax havens: 0
22. James Dolan, Cablevision Systems; CEO Pay: $13.3 million; Federal income tax: negative $3 million; Subsidiaries in tax havens: 0
23. Sanjay Jha, Motorola Mobility; CEO Pay: $13 million; Federal income tax: $12 million; Subsidiaries in tax havens: 0
24. John J. Donahoe, eBay; CEO Pay: $12.4 million; Federal income tax: negative $131 million; Subsidiaries in tax havens: 31
25. John Faraci, International Paper; CEO Pay: $12.3 million; Federal income tax: negative $249 million; Subsidiaries in tax havens: 2
Sunday, September 11, 2011
Saturday, September 10, 2011
Some U.S. firms paid more to CEOs than taxes: study
Original Link: http://www.reuters.com/article/2011/08/31/us-usa-tax-ceopay-idUSTRE77U0KW20110831
Reporting by Nanette Byrnes; Editing by Howard Goller, Todd Eastham and Jackie Frank
Twenty-five of the 100 highest paid U.S. CEOs earned more last year than their companies paid in federal income tax, a pay study by a Washington think tank said on Wednesday.
At a time when lawmakers are facing tough choices in a quest to slash the national debt, the Institute for Policy Studies, a left-leaning group, said it also found many of the companies spent more on lobbying than they did on taxes.
The senior Democrat on the House of Representatives oversight committee, Elijah Cummings, called for hearings on executive compensation "to examine the extent to which the problems in CEO compensation that led to the economic crisis continue to exist today."
Several companies mentioned in the report took issue with its methodology and said they paid all taxes owed.
General Electric spokesman Andrew Williams called the study "inaccurate" and noted it did not include significant income taxes paid in 2010 for previous years, or state taxes paid. "GE pays what it owes," he wrote in an e-mail response to questions.
Boeing spokesman Chaz Bickers said the study is "simply wrong".
Instead of Boeing's reported "U.S. federal current tax expense" of $13 million which the IPS used, he said a better approximation of the company's taxes paid would be the $360 million it reported as its net income tax payments, most of which, he says, was federal.
"On federal cash tax payments last year we paid in the hundreds of millions," Bickers told Reuters. The company also received a $371 million credit from the government last year for overpayment of taxes in the past, and has added 5,000 U.S. jobs this year Bickers says, in part because of Federal tax breaks.
The institute compared CEO pay to current U.S. taxes paid, excluding foreign and state and local taxes that may have been paid, as well as deferred taxes which can often be far larger than current taxes paid.
The group's rationale was that U.S. taxes paid are the closest approximation in public documents to what companies may have actually written a check for last year. It said deferred taxes may or may not be paid.
The accounting used in SEC filings differs from the accounting used to tally what's owed on a corporate tax return. Neither the IPS number nor the figure cited by Boeing exactly equals the check written to the IRS, says Scott Dyreng, an assistant professor at Duke's Fuqua School of Business who studies corporate taxes, and though companies could disclose that figure, don't have to and don't do so.
$16.7 MILLION AVERAGE
Compensation for the 25 CEOs with pay surpassing corporate taxes averaged $16.7 million, according to the study, compared to a $10.8 million average for S&P 500 CEOs. Among the companies topping the IPS list:
* eBay whose CEO John Donahoe made $12.4 million, but which reported a $131 million refund on its 2010 current U.S. taxes.
* Boeing, which paid CEO Jim McNerney $13.8 million, sent in $13 million in federal income taxes, and spent $20.8 million on lobbying and campaign spending
* General Electric where CEO Jeff Immelt earned $15.2 million in 2010, while the company got a $3.3 billion federal refund and invested $41.8 million in its own lobbying and political campaigns.
Though the companies come from different industries, their tax breaks fall into two primary areas.
Two-thirds of the firms studied kept their taxes low by utilizing offshore subsidiaries in tax havens such as Bermuda, Singapore and Luxembourg. The remaining companies benefited from accelerated depreciation.
Shareholders have responded favorably when companies in which they invest keep a tax bill low through legal methods, thereby benefiting earnings. But Chuck Collins, an IPS senior scholar and co-author of the report, said that is a mistake.
"I think it's an exposure of weakness in a company if their profitability is dependent on their accounting department and not on making better widgets," he said.
In prior reports, Collins said, out-sized CEO pay was often a red flag of bigger problems to come. The IPS has been putting a pay report together for 18 years. Among those whose leaders have made the high pay list in years past, only to have their businesses falter: Tyco, Enron and WorldCom.
Reporting by Nanette Byrnes; Editing by Howard Goller, Todd Eastham and Jackie Frank
Twenty-five of the 100 highest paid U.S. CEOs earned more last year than their companies paid in federal income tax, a pay study by a Washington think tank said on Wednesday.
At a time when lawmakers are facing tough choices in a quest to slash the national debt, the Institute for Policy Studies, a left-leaning group, said it also found many of the companies spent more on lobbying than they did on taxes.
The senior Democrat on the House of Representatives oversight committee, Elijah Cummings, called for hearings on executive compensation "to examine the extent to which the problems in CEO compensation that led to the economic crisis continue to exist today."
Several companies mentioned in the report took issue with its methodology and said they paid all taxes owed.
General Electric spokesman Andrew Williams called the study "inaccurate" and noted it did not include significant income taxes paid in 2010 for previous years, or state taxes paid. "GE pays what it owes," he wrote in an e-mail response to questions.
Boeing spokesman Chaz Bickers said the study is "simply wrong".
Instead of Boeing's reported "U.S. federal current tax expense" of $13 million which the IPS used, he said a better approximation of the company's taxes paid would be the $360 million it reported as its net income tax payments, most of which, he says, was federal.
"On federal cash tax payments last year we paid in the hundreds of millions," Bickers told Reuters. The company also received a $371 million credit from the government last year for overpayment of taxes in the past, and has added 5,000 U.S. jobs this year Bickers says, in part because of Federal tax breaks.
The institute compared CEO pay to current U.S. taxes paid, excluding foreign and state and local taxes that may have been paid, as well as deferred taxes which can often be far larger than current taxes paid.
The group's rationale was that U.S. taxes paid are the closest approximation in public documents to what companies may have actually written a check for last year. It said deferred taxes may or may not be paid.
The accounting used in SEC filings differs from the accounting used to tally what's owed on a corporate tax return. Neither the IPS number nor the figure cited by Boeing exactly equals the check written to the IRS, says Scott Dyreng, an assistant professor at Duke's Fuqua School of Business who studies corporate taxes, and though companies could disclose that figure, don't have to and don't do so.
$16.7 MILLION AVERAGE
Compensation for the 25 CEOs with pay surpassing corporate taxes averaged $16.7 million, according to the study, compared to a $10.8 million average for S&P 500 CEOs. Among the companies topping the IPS list:
* eBay whose CEO John Donahoe made $12.4 million, but which reported a $131 million refund on its 2010 current U.S. taxes.
* Boeing, which paid CEO Jim McNerney $13.8 million, sent in $13 million in federal income taxes, and spent $20.8 million on lobbying and campaign spending
* General Electric where CEO Jeff Immelt earned $15.2 million in 2010, while the company got a $3.3 billion federal refund and invested $41.8 million in its own lobbying and political campaigns.
Though the companies come from different industries, their tax breaks fall into two primary areas.
Two-thirds of the firms studied kept their taxes low by utilizing offshore subsidiaries in tax havens such as Bermuda, Singapore and Luxembourg. The remaining companies benefited from accelerated depreciation.
Shareholders have responded favorably when companies in which they invest keep a tax bill low through legal methods, thereby benefiting earnings. But Chuck Collins, an IPS senior scholar and co-author of the report, said that is a mistake.
"I think it's an exposure of weakness in a company if their profitability is dependent on their accounting department and not on making better widgets," he said.
In prior reports, Collins said, out-sized CEO pay was often a red flag of bigger problems to come. The IPS has been putting a pay report together for 18 years. Among those whose leaders have made the high pay list in years past, only to have their businesses falter: Tyco, Enron and WorldCom.
Sunday, August 28, 2011
Since 9/11, Koch Industries has fought against tougher government rules on chemical plants
Original Link: http://www.iwatchnews.org/2011/08/24/5939/911-koch-industries-has-fought-against-tougher-government-rules-chemical-plants
By John Aloysius Farrell, Ben Wieder and Evan Bush
Koch argues that tough restrictions on petrochemicals aren’t necessary because there hasn’t been a terrorist attack here since 9/11.
Koch Industries, a leader of industry resistance to proposed post-9/11 anti-terrorism safeguards at petrochemical plants, owns 56 facilities using hazardous chemicals that put 4.8 million Americans who live nearby at risk.
Schools, homes, hospitals, office parks, churches, recreation areas, nursing homes and daycare facilities dot the properties that surround the Koch plants.
In the government’s “worst case” scenarios, the millions working or living near the plants could be threatened by explosions, chemical spills or clouds of deadly gas, federal records show. Among the hazardous chemicals stored and used at Koch sites are formaldehyde, chlorine, anhydrous ammonia and hydrogen fluoride.
Koch’s own reports to the U.S. government were reviewed by iWatch News. The records, known as risk management plans, are maintained by the Environmental Protection Agency. Access is strictly controlled: members of the press and public can only examine 10 plans per month, under the watchful eye of EPA officials.
A decade after the worst terrorist attacks on U.S. soil, Koch insists that its neighbors are safe, and are adequately protected by federal and state regulations.
All chemical firms are “vulnerable to human error, acts of nature, theft and sabotage,” Koch acknowledges. “It is impossible to completely eliminate every threat.”
But “chemicals are at the heart of many of our businesses,” the firm says, in a section titled “Chemical Safety” on Koch’s website. “The ones used in our facilities are handled with care and by trained professionals.”
The Kansas-based conglomerate vows that it “places compliance and safety before profit.”
Koch did not respond to repeated inquiries for comment before this story was published. But it later added a response to the “Koch Facts” page on its website. The company claimed the story was “dishonest and deceptive” and part of a “coordinated campaign” by partisan organizations to attack Koch Industries. Yet all the facts cited by Koch in its belated response had, in fact, been quoted from its website and included in this story.
Koch lobbies against stricter rules
Charles and David Koch, the owners of the country’s second-largest private corporation, are libertarians of long standing, who contend that government regulations, taxes and subsidies stifle individual initiative and hamper American competitiveness. In recent years, the Kochs have played an increasingly public role as financial angels for conservative causes, politicians and foundations.
In Washington, Koch is a leader in efforts to oppose counter-terrorism proposals that would require that petrochemical firms use less hazardous practices and chemicals.
Lobbying disclosure reports, filed with Congress, show that this year Koch has deployed at least 20 lobbyists, from four lobbying firms, to shape legislation on Capitol Hill and the regulatory work of federal agencies.
Aside from its own in-house team of lobbyists, Koch has hired the firms of Hunton & Williams; Siff & Associates, and Mehlman Vogel Castagnetti to lobby the Senate, House of Representatives, the Treasury Department and the Department of Homeland Security.
The Center for Responsive Politics puts Koch at the top of its list of the 80-odd firms, local governments and other groups lobbying Congress to shape or prevent passage of a wide-ranging chemical security bill. Koch is ranked above organizations like the American Chemistry Council, the U.S. Chamber of Commerce, and corporations like Halliburton or Bayer.
According to the CRP database, the chemical safety legislation has been one of Koch’s most important priorities in the last four years, during which the firm has spent $44 million lobbying in Washington on this and other issues.
The threat of a terrorist attack may have been diminished by the death of Osama bin Laden, but Al Qaeda maintains an interest in attacking American power and utility plants, the U.S. government says.
A July 19 intelligence report sent by the Department of Homeland Security to state and local law enforcement agencies noted that “violent extremists have, in fact, obtained insider positions” and that “disgruntled employees and adversaries seeking to use employees to obtain specific information about facility operations continue to pose a threat to utilities and other critical infrastructure.”
Calls for safer substances
Congressional calls for change, endorsed by the Obama administration, would restructure federal rules and inspection procedures and require the use of “inherently safer technology” (IST) to reduce the potential consequences of a terrorist attack.
If paper plants could manufacture the precise amounts of chlorine that they need on site, or use a different chemical process to bleach pulp, for example, they would reduce the risk that terrorists can find chains of rail cars or yards of storage tanks filled with toxic chemicals to target.
House and Senate bills that would require that firms use safer technologies have been the top priorities of Koch lobbyists working on the issue. On its website, Koch says that IST proposals are “onerous” because they “would require manufacturers to use certain products and processes without regard for practicality, availability or cost.”
“Mandating IST would result in even more job losses and higher consumer prices as American manufacturers struggle to comply with the new regulations and compete with overseas manufacturers,” Koch says.
Under the current regulatory regime, Koch notes, “not one incident of terrorism has occurred.”
According to the iWatch News analysis of EPA records, the Koch facilities with the greatest number of neighbors who would be threatened by a worst case release or terrorist attack are:
•An Invista chemical plant in LaPorte, Texas, where a spill and vaporization of formaldehyde could threaten almost 1.9 million potential victims within 25 miles.
•A Georgia-Pacific plant in Camas, Wash., where a chlorine spill and gas cloud could endanger 840,000 people within 14 miles.
•A Flint Hills refinery in Corpus Christi, Texas, where 350,000 people living within 22 miles would be threatened by a hydrogen fluoride spill and vaporization.
•And a Koch Nitrogen plant in East Alton, Ill., where 290,000 people live within 11 miles, and face the potential danger of a poisonous anhydrous ammonia cloud.
The full list of Koch facilities is here [link to download Excel spreadsheet].
The Koch Industries safety and environmental record
at its facilities has improved in the last decade. The firm has won government and industry awards, after several embarrassing incidents in the recent past, including a 2001 guilty plea and $20 million in fines and remediation, for covering up the release of hazardous benzene at the Corpus Christi refinery.
Koch bought Invista from DuPont in 2004, and reported to the EPA that the company’s own audit of its new acquisition had discovered more than 680 violations of environmental and emergency planning and preparedness law at 12 facilities, including the one in LaPorte. Koch paid a $1.7 million civil penalty in 2009, and agreed to make up to $500 million in improvements.
Koch also paid a $6 million criminal fine in 2000 for illegally discharging between 200,000 and 600,000 gallons of aviation fuel into a waterway near the firm’s Flint Hills refinery in Rosemount, Minn.
A 1996 incident offered a lesson in miniature of the dangers of spills and vaporization of hazardous substances. A Koch pipeline carrying liquid butane through Texas ruptured, releasing a white, almost transparent fog near a residential area. A pickup truck carrying two men through the cloud ignited the butane, and they were burned to death. Forty-five families lived nearby.
Government gets tough after 9/11
Congress first passed legislation in 2006 giving the new Department of Homeland Security the authority to regulate chemical facilities in the face of terrorist threats. In 2007 the department issued an interim rule for anti-terrorism standards, requiring that facilities with a prescribed amount of dangerous chemicals must report to DHS. The law has been extended on a year-to-year basis.
The Justice Department called the threat of a terrorist attack on chemical facilities “real and credible.”
“Experts agree that chemical facilities present an attractive target for terrorists intent on causing massive damage,” said a 2006 Government Accountability Office report . “Terrorist attacks involving the theft or release of certain chemicals could significantly impact the health and safety of millions of Americans.
“The disaster in Bhopal, India, in 1984, when methyl isocyanate — a highly toxic chemical — leaked from a tank, reportedly killing about 3,800 people and injuring anywhere from 150,000 to 600,000 others, illustrates the potential threat to public health from a chemical release,” the GAO said.
The chemical safety rules were filled with exceptions, however. They exempted facilities owned by the departments of Defense and Energy, nuclear power plants, water and wastewater utilities (which often use chlorine) and those regulated by another law, the Maritime Transportation Security Act of 2002.
Under the less stringent MTSA, some of Koch’s biggest facilities, like its refinery in Minnesota, are regulated by the U.S. Coast Guard, though located hundreds of miles from the shores patrolled by the Coast Guard.
More than 38,000 of the nation’s chemical facilities ultimately registered with Homeland Security, and more than 7,000 were initially designated “high risk.” After further inspection, some 4,755 were put in four tiers, with 221 in Risk Tier 1, the most dangerous, and 573 in Risk Tier 2. For security reasons, Homeland Security does not identify which facilities are in each tier.
A central controversy in congressional debate is the call for “inherently safer technology.” The Obama administration has supported proposals to give the government the authority to order a Tier 1 or Tier 2 facility to switch to safer chemicals, and to require that all high-risk facilities at least assess the consequences of such a change.
“These assessments may lead to changes in chemical process when deemed safer, more reliable, and cost-effective,” says the nonpartisan Congressional Research Service, in a 2011 study.
The CRS study, however, acknowledges that the proposed IST rule is controversial.
“A fundamental challenge for inherently safer technologies is how to compare one technology with its potential replacement,” CRS reported. “It is challenging to unequivocally state that one technology is inherently safer than the other.”
A refinery that substitutes sulfuric acid for the more dangerous hydrogen fluoride, the CRS study notes, may have to employ so much acid that it raises “different dangers” for nearby communities.
A 2005 GAO report recognized the danger that terrorists could target readily available chemicals, like chlorine, causing a “catastrophic” event. “Exposures to chlorine could burn eyes and skin, inflame the lungs and could be deadly if inhaled,” the GAO reported.
But that report also noted the cost of switching to safer alternatives. Wastewater treatment plants can replace chlorine with sodium hypochlorite, the GAO said, but for each plant it would “increase annual chemical costs from $600,000 for gaseous chlorine to over $2 million for sodium hypochlorite.”
In some cases, the costs seem justified. On Sept. 11, 2001, a chain of railroad tanker cars filled with toxic chemicals, including chlorine, sat at a municipal wastewater treatment plant across the Potomac River from the Pentagon as it was attacked. At that time, the GAO noted, “the population within the plant’s vulnerable zone was 1.7 million people.”
Within weeks the plant stopped using chlorine and adopted a safer alternative.
By John Aloysius Farrell, Ben Wieder and Evan Bush
Koch argues that tough restrictions on petrochemicals aren’t necessary because there hasn’t been a terrorist attack here since 9/11.
Koch Industries, a leader of industry resistance to proposed post-9/11 anti-terrorism safeguards at petrochemical plants, owns 56 facilities using hazardous chemicals that put 4.8 million Americans who live nearby at risk.
Schools, homes, hospitals, office parks, churches, recreation areas, nursing homes and daycare facilities dot the properties that surround the Koch plants.
In the government’s “worst case” scenarios, the millions working or living near the plants could be threatened by explosions, chemical spills or clouds of deadly gas, federal records show. Among the hazardous chemicals stored and used at Koch sites are formaldehyde, chlorine, anhydrous ammonia and hydrogen fluoride.
Koch’s own reports to the U.S. government were reviewed by iWatch News. The records, known as risk management plans, are maintained by the Environmental Protection Agency. Access is strictly controlled: members of the press and public can only examine 10 plans per month, under the watchful eye of EPA officials.
A decade after the worst terrorist attacks on U.S. soil, Koch insists that its neighbors are safe, and are adequately protected by federal and state regulations.
All chemical firms are “vulnerable to human error, acts of nature, theft and sabotage,” Koch acknowledges. “It is impossible to completely eliminate every threat.”
But “chemicals are at the heart of many of our businesses,” the firm says, in a section titled “Chemical Safety” on Koch’s website. “The ones used in our facilities are handled with care and by trained professionals.”
The Kansas-based conglomerate vows that it “places compliance and safety before profit.”
Koch did not respond to repeated inquiries for comment before this story was published. But it later added a response to the “Koch Facts” page on its website. The company claimed the story was “dishonest and deceptive” and part of a “coordinated campaign” by partisan organizations to attack Koch Industries. Yet all the facts cited by Koch in its belated response had, in fact, been quoted from its website and included in this story.
Koch lobbies against stricter rules
Charles and David Koch, the owners of the country’s second-largest private corporation, are libertarians of long standing, who contend that government regulations, taxes and subsidies stifle individual initiative and hamper American competitiveness. In recent years, the Kochs have played an increasingly public role as financial angels for conservative causes, politicians and foundations.
In Washington, Koch is a leader in efforts to oppose counter-terrorism proposals that would require that petrochemical firms use less hazardous practices and chemicals.
Lobbying disclosure reports, filed with Congress, show that this year Koch has deployed at least 20 lobbyists, from four lobbying firms, to shape legislation on Capitol Hill and the regulatory work of federal agencies.
Aside from its own in-house team of lobbyists, Koch has hired the firms of Hunton & Williams; Siff & Associates, and Mehlman Vogel Castagnetti to lobby the Senate, House of Representatives, the Treasury Department and the Department of Homeland Security.
The Center for Responsive Politics puts Koch at the top of its list of the 80-odd firms, local governments and other groups lobbying Congress to shape or prevent passage of a wide-ranging chemical security bill. Koch is ranked above organizations like the American Chemistry Council, the U.S. Chamber of Commerce, and corporations like Halliburton or Bayer.
According to the CRP database, the chemical safety legislation has been one of Koch’s most important priorities in the last four years, during which the firm has spent $44 million lobbying in Washington on this and other issues.
The threat of a terrorist attack may have been diminished by the death of Osama bin Laden, but Al Qaeda maintains an interest in attacking American power and utility plants, the U.S. government says.
A July 19 intelligence report sent by the Department of Homeland Security to state and local law enforcement agencies noted that “violent extremists have, in fact, obtained insider positions” and that “disgruntled employees and adversaries seeking to use employees to obtain specific information about facility operations continue to pose a threat to utilities and other critical infrastructure.”
Calls for safer substances
Congressional calls for change, endorsed by the Obama administration, would restructure federal rules and inspection procedures and require the use of “inherently safer technology” (IST) to reduce the potential consequences of a terrorist attack.
If paper plants could manufacture the precise amounts of chlorine that they need on site, or use a different chemical process to bleach pulp, for example, they would reduce the risk that terrorists can find chains of rail cars or yards of storage tanks filled with toxic chemicals to target.
House and Senate bills that would require that firms use safer technologies have been the top priorities of Koch lobbyists working on the issue. On its website, Koch says that IST proposals are “onerous” because they “would require manufacturers to use certain products and processes without regard for practicality, availability or cost.”
“Mandating IST would result in even more job losses and higher consumer prices as American manufacturers struggle to comply with the new regulations and compete with overseas manufacturers,” Koch says.
Under the current regulatory regime, Koch notes, “not one incident of terrorism has occurred.”
According to the iWatch News analysis of EPA records, the Koch facilities with the greatest number of neighbors who would be threatened by a worst case release or terrorist attack are:
•An Invista chemical plant in LaPorte, Texas, where a spill and vaporization of formaldehyde could threaten almost 1.9 million potential victims within 25 miles.
•A Georgia-Pacific plant in Camas, Wash., where a chlorine spill and gas cloud could endanger 840,000 people within 14 miles.
•A Flint Hills refinery in Corpus Christi, Texas, where 350,000 people living within 22 miles would be threatened by a hydrogen fluoride spill and vaporization.
•And a Koch Nitrogen plant in East Alton, Ill., where 290,000 people live within 11 miles, and face the potential danger of a poisonous anhydrous ammonia cloud.
The full list of Koch facilities is here [link to download Excel spreadsheet].
The Koch Industries safety and environmental record
at its facilities has improved in the last decade. The firm has won government and industry awards, after several embarrassing incidents in the recent past, including a 2001 guilty plea and $20 million in fines and remediation, for covering up the release of hazardous benzene at the Corpus Christi refinery.
Koch bought Invista from DuPont in 2004, and reported to the EPA that the company’s own audit of its new acquisition had discovered more than 680 violations of environmental and emergency planning and preparedness law at 12 facilities, including the one in LaPorte. Koch paid a $1.7 million civil penalty in 2009, and agreed to make up to $500 million in improvements.
Koch also paid a $6 million criminal fine in 2000 for illegally discharging between 200,000 and 600,000 gallons of aviation fuel into a waterway near the firm’s Flint Hills refinery in Rosemount, Minn.
A 1996 incident offered a lesson in miniature of the dangers of spills and vaporization of hazardous substances. A Koch pipeline carrying liquid butane through Texas ruptured, releasing a white, almost transparent fog near a residential area. A pickup truck carrying two men through the cloud ignited the butane, and they were burned to death. Forty-five families lived nearby.
Government gets tough after 9/11
Congress first passed legislation in 2006 giving the new Department of Homeland Security the authority to regulate chemical facilities in the face of terrorist threats. In 2007 the department issued an interim rule for anti-terrorism standards, requiring that facilities with a prescribed amount of dangerous chemicals must report to DHS. The law has been extended on a year-to-year basis.
The Justice Department called the threat of a terrorist attack on chemical facilities “real and credible.”
“Experts agree that chemical facilities present an attractive target for terrorists intent on causing massive damage,” said a 2006 Government Accountability Office report . “Terrorist attacks involving the theft or release of certain chemicals could significantly impact the health and safety of millions of Americans.
“The disaster in Bhopal, India, in 1984, when methyl isocyanate — a highly toxic chemical — leaked from a tank, reportedly killing about 3,800 people and injuring anywhere from 150,000 to 600,000 others, illustrates the potential threat to public health from a chemical release,” the GAO said.
The chemical safety rules were filled with exceptions, however. They exempted facilities owned by the departments of Defense and Energy, nuclear power plants, water and wastewater utilities (which often use chlorine) and those regulated by another law, the Maritime Transportation Security Act of 2002.
Under the less stringent MTSA, some of Koch’s biggest facilities, like its refinery in Minnesota, are regulated by the U.S. Coast Guard, though located hundreds of miles from the shores patrolled by the Coast Guard.
More than 38,000 of the nation’s chemical facilities ultimately registered with Homeland Security, and more than 7,000 were initially designated “high risk.” After further inspection, some 4,755 were put in four tiers, with 221 in Risk Tier 1, the most dangerous, and 573 in Risk Tier 2. For security reasons, Homeland Security does not identify which facilities are in each tier.
A central controversy in congressional debate is the call for “inherently safer technology.” The Obama administration has supported proposals to give the government the authority to order a Tier 1 or Tier 2 facility to switch to safer chemicals, and to require that all high-risk facilities at least assess the consequences of such a change.
“These assessments may lead to changes in chemical process when deemed safer, more reliable, and cost-effective,” says the nonpartisan Congressional Research Service, in a 2011 study.
The CRS study, however, acknowledges that the proposed IST rule is controversial.
“A fundamental challenge for inherently safer technologies is how to compare one technology with its potential replacement,” CRS reported. “It is challenging to unequivocally state that one technology is inherently safer than the other.”
A refinery that substitutes sulfuric acid for the more dangerous hydrogen fluoride, the CRS study notes, may have to employ so much acid that it raises “different dangers” for nearby communities.
A 2005 GAO report recognized the danger that terrorists could target readily available chemicals, like chlorine, causing a “catastrophic” event. “Exposures to chlorine could burn eyes and skin, inflame the lungs and could be deadly if inhaled,” the GAO reported.
But that report also noted the cost of switching to safer alternatives. Wastewater treatment plants can replace chlorine with sodium hypochlorite, the GAO said, but for each plant it would “increase annual chemical costs from $600,000 for gaseous chlorine to over $2 million for sodium hypochlorite.”
In some cases, the costs seem justified. On Sept. 11, 2001, a chain of railroad tanker cars filled with toxic chemicals, including chlorine, sat at a municipal wastewater treatment plant across the Potomac River from the Pentagon as it was attacked. At that time, the GAO noted, “the population within the plant’s vulnerable zone was 1.7 million people.”
Within weeks the plant stopped using chlorine and adopted a safer alternative.
Saturday, August 27, 2011
10 Koch plants that put the most Americans at risk
Original Link: http://www.iwatchnews.org/2011/08/26/5980/10-koch-plants-put-most-americans-risk
By John Aloysius Farrell
Koch Industries is lobbying to prevent tougher counter-terrorism standards for its facilities that use hazardous toxic chemicals. A terrorist attack or accident at Koch’s oil, chemical, paper and fertilizer plants, an iWatch News investigation revealed , could put tens of thousands of people and their homes, schools, hospitals, day care centers, factories and offices at risk.
Koch maintains that existing federal and state regulations are adequate to protect nearby residents.
Here is a list of the 10 Koch facilities, and the toxic chemicals they use, that put the most Americans in potential danger in the event of an accident or attack:
1.The INVISTA plant in La Porte, Texas , is one of several facilities in Texas where Koch manufactures some 4 billion pounds of nylon intermediate chemicals a year, for use in the production of INVISTA products like Stainmaster carpet, Antron carpet fiber, Cordura fabric and Lycra spandex. Formaldehyde is stored at the site, in the Houston suburbs, and a spill and vaporization could threaten almost 1.9 million people who live nearby.
2.Koch’s Georgia-Pacific paper plant in Camas, Wash. , stands across the Columbia River from the Portland, Ore., airport. Because of its proximity to Portland, the plant puts 840,648 people in potential danger from a spill of chlorine dioxide, which is used at the facility to bleach pulp for paper towels and office paper.
3.The aging Flint Hills Resources oil refinery in Corpus Christi, Texas , lies on the road to nearby Calallen, and exposes 349,862 people to a potential spill and vapor cloud of highly toxic hydrofluoric acid, which can damage skin, lungs and eyes and cause pain and vomiting.
4.The Koch Nitrogen Wood River terminal in East Alton, Ill. , lies across the Mississippi River from the metropolitan St. Louis area. In case of a spill and vaporization, the 60 million pounds of anhydrous ammonia stored at the plant could endanger 290,000 people.
5.Georgia-Pacific’s Port Hudson facility is located in Zachary, La. , north of Baton Rouge. The chlorine used in the manufacture of paper towels and other Koch products could endanger 230,263 nearby residents.
6.To make the Quilted Northern toilet paper and Brawny paper towels manufactured at the aging Georgia-Pacific facility in Palatka, Fla. , Koch uses chlorine dioxide. A spill and resultant chlorine gas cloud could threaten the safety of 140,000 people.
7.Georgia-Pacific’s Leaf River plant in New Augusta, Miss. , is located southeast of Hattiesburg. The chlorine used in this pulp plant could endanger 123,340 nearby residents.
8.The INVISTA plant in Victoria, Texas , is located between San Antonio and the Gulf of Mexico, to the north of Corpus Christi. Like its counterpart in La Porte, Texas this facility makes nylon based products, but the threat here is anhydrous ammonia which, in a vapor cloud, could threaten 106,558 people.
9.Georgia-Pacific’s Brunswick, Ga., pulp mill is at the outskirts of this coastal town, not far from the resorts of Sea Island and Jekyll Island. Chlorine dioxide is used for bleaching pulp, putting 90,000 nearby residents in potential danger.
10.Koch Nitrogen’s Taft Terminal is on the Mississippi River , upstream from New Orleans . It stores anhydrous ammonia used in the manufacture of fertilizer. A spill and vapor cloud could endanger 81,210 nearby residents.
By John Aloysius Farrell
Koch Industries is lobbying to prevent tougher counter-terrorism standards for its facilities that use hazardous toxic chemicals. A terrorist attack or accident at Koch’s oil, chemical, paper and fertilizer plants, an iWatch News investigation revealed , could put tens of thousands of people and their homes, schools, hospitals, day care centers, factories and offices at risk.
Koch maintains that existing federal and state regulations are adequate to protect nearby residents.
Here is a list of the 10 Koch facilities, and the toxic chemicals they use, that put the most Americans in potential danger in the event of an accident or attack:
1.The INVISTA plant in La Porte, Texas , is one of several facilities in Texas where Koch manufactures some 4 billion pounds of nylon intermediate chemicals a year, for use in the production of INVISTA products like Stainmaster carpet, Antron carpet fiber, Cordura fabric and Lycra spandex. Formaldehyde is stored at the site, in the Houston suburbs, and a spill and vaporization could threaten almost 1.9 million people who live nearby.
2.Koch’s Georgia-Pacific paper plant in Camas, Wash. , stands across the Columbia River from the Portland, Ore., airport. Because of its proximity to Portland, the plant puts 840,648 people in potential danger from a spill of chlorine dioxide, which is used at the facility to bleach pulp for paper towels and office paper.
3.The aging Flint Hills Resources oil refinery in Corpus Christi, Texas , lies on the road to nearby Calallen, and exposes 349,862 people to a potential spill and vapor cloud of highly toxic hydrofluoric acid, which can damage skin, lungs and eyes and cause pain and vomiting.
4.The Koch Nitrogen Wood River terminal in East Alton, Ill. , lies across the Mississippi River from the metropolitan St. Louis area. In case of a spill and vaporization, the 60 million pounds of anhydrous ammonia stored at the plant could endanger 290,000 people.
5.Georgia-Pacific’s Port Hudson facility is located in Zachary, La. , north of Baton Rouge. The chlorine used in the manufacture of paper towels and other Koch products could endanger 230,263 nearby residents.
6.To make the Quilted Northern toilet paper and Brawny paper towels manufactured at the aging Georgia-Pacific facility in Palatka, Fla. , Koch uses chlorine dioxide. A spill and resultant chlorine gas cloud could threaten the safety of 140,000 people.
7.Georgia-Pacific’s Leaf River plant in New Augusta, Miss. , is located southeast of Hattiesburg. The chlorine used in this pulp plant could endanger 123,340 nearby residents.
8.The INVISTA plant in Victoria, Texas , is located between San Antonio and the Gulf of Mexico, to the north of Corpus Christi. Like its counterpart in La Porte, Texas this facility makes nylon based products, but the threat here is anhydrous ammonia which, in a vapor cloud, could threaten 106,558 people.
9.Georgia-Pacific’s Brunswick, Ga., pulp mill is at the outskirts of this coastal town, not far from the resorts of Sea Island and Jekyll Island. Chlorine dioxide is used for bleaching pulp, putting 90,000 nearby residents in potential danger.
10.Koch Nitrogen’s Taft Terminal is on the Mississippi River , upstream from New Orleans . It stores anhydrous ammonia used in the manufacture of fertilizer. A spill and vapor cloud could endanger 81,210 nearby residents.
Koch Industries Lobbying Puts Over 100 Million Americans in Danger
Original Link: http://www.greenpeace.org/usa/en/news-and-blogs/campaign-blog/koch-industries-lobbying-puts-over-100-millio/blog/36476/
By Phil Radford
Recent Greenpeace analysis of lobbying disclosure records reveals that since 2005, Koch Industries has hired more lobbyists than Dow and Dupont to fight legislation that could protect over 100 million Americans from what national security experts say is a catastrophic risk from the bulk storage of poison gasses at dangerous chemical facilities such as oil refineries, chemical manufacturing facilities, and water treatment plants. Koch lobbyists even outnumber those at trade associations including the Chamber of Commerce and American Petroleum Institute. Only the American Chemistry Council deployed more.
In 2010 Koch Industries and the billionaire brothers who run it were first exposed as a major funder of front groups spreading denial of global warming in a Greenpeace report, which sparked an expose in the New Yorker. Since then, the brothers have been further exposed as a key backer of efforts to roll back environmental, labor, and health protections at the state and federal levels. Through enormous campaign contributions, an army of lobbyists, and funding of think tanks and front groups, David and Charles Koch push their agenda of a world in which their company can operate without regard for the risks they pose to communities, workers, or our environment.
Today, in a new exposé, Greenpeace has shown how Koch Industries has quietly played a key role in blocking yet another effort to protect workers and vulnerable communities - comprehensive chemical security legislation. The Report is called "Toxic Koch: Keeping Americans at risk of a Poison Gas Disaster."
Since before the September 11, 2001 attacks, security experts have warned of the catastrophic risk that nearly every major American city faces from the bulk storage of poison gasses at dangerous chemical facilities such as oil refineries, chemical manufacturing facilities, and water treatment plants. Nevertheless, ten years later, thousands of facilities still put more than 100 million Americans at risk of a chemical disaster. According to the company's own reports to the EPA, Koch Industries and its subsidiaries Invista, Flint Hills, and Georgia Pacific operate 57 dangerous chemical facilities in the United States that together put 4.4 million people at risk.
A coalition of more than 100 labor, environmental, and health organizations has advocated for comprehensive chemical security legislation that would help remove the threat of a poison gas disaster by requiring the highest risk facilities to use safer processes where feasible. Koch Industries and other oil and chemical companies have lobbied against legislation that would prevent chemical disasters, despite repeated requests from the Department of Homeland Security (DHS) and the Environmental Protection Agency (EPA) for disaster prevention. Instead Koch favors an extension of the current, weak Chemical Facility Anti-Terrorism Standards (CFATS) that exempt most facilities and actually prohibit the authority of DHS to require safer processes. As in other policy areas, Koch's huge efforts have gone largely unnoticed.
Koch campaign contributions reveal the company's influence over the chemical security debate in Washington DC. All of the key Senators and Representatives who have taken a lead role during the last year in pushing legislation that supports Koch's chemical security agenda have received Koch campaign contributions. The House members who introduced two bills that would extend CFATS without improvements and block the DHS from requiring safer processes for seven years have all taken KochPAC contributions over the last three election cycles, including Representatives Tim Murphy (R-PA), Gene Green (D-TX), Peter King (R-NY) and Dan Lungren (R-CA). And all of the cosponsors of similar legislation in the Senate - Senators Susan Collins (R-ME), Rob Portman (R-OH), Mary Landrieu (D-LA), Mark Pryor (D-AR), and before his retirement, George Voinovich (R-OH) - received KochPAC contributions during their most recent elections.
As Congress debates how to protect Americans from dangerous chemical facilities, Koch is once again opposing legislation that would make America safer, despite the enormous risk its facilities pose to communities, workers, and our environment.
By Phil Radford
Recent Greenpeace analysis of lobbying disclosure records reveals that since 2005, Koch Industries has hired more lobbyists than Dow and Dupont to fight legislation that could protect over 100 million Americans from what national security experts say is a catastrophic risk from the bulk storage of poison gasses at dangerous chemical facilities such as oil refineries, chemical manufacturing facilities, and water treatment plants. Koch lobbyists even outnumber those at trade associations including the Chamber of Commerce and American Petroleum Institute. Only the American Chemistry Council deployed more.
In 2010 Koch Industries and the billionaire brothers who run it were first exposed as a major funder of front groups spreading denial of global warming in a Greenpeace report, which sparked an expose in the New Yorker. Since then, the brothers have been further exposed as a key backer of efforts to roll back environmental, labor, and health protections at the state and federal levels. Through enormous campaign contributions, an army of lobbyists, and funding of think tanks and front groups, David and Charles Koch push their agenda of a world in which their company can operate without regard for the risks they pose to communities, workers, or our environment.
Today, in a new exposé, Greenpeace has shown how Koch Industries has quietly played a key role in blocking yet another effort to protect workers and vulnerable communities - comprehensive chemical security legislation. The Report is called "Toxic Koch: Keeping Americans at risk of a Poison Gas Disaster."
Since before the September 11, 2001 attacks, security experts have warned of the catastrophic risk that nearly every major American city faces from the bulk storage of poison gasses at dangerous chemical facilities such as oil refineries, chemical manufacturing facilities, and water treatment plants. Nevertheless, ten years later, thousands of facilities still put more than 100 million Americans at risk of a chemical disaster. According to the company's own reports to the EPA, Koch Industries and its subsidiaries Invista, Flint Hills, and Georgia Pacific operate 57 dangerous chemical facilities in the United States that together put 4.4 million people at risk.
A coalition of more than 100 labor, environmental, and health organizations has advocated for comprehensive chemical security legislation that would help remove the threat of a poison gas disaster by requiring the highest risk facilities to use safer processes where feasible. Koch Industries and other oil and chemical companies have lobbied against legislation that would prevent chemical disasters, despite repeated requests from the Department of Homeland Security (DHS) and the Environmental Protection Agency (EPA) for disaster prevention. Instead Koch favors an extension of the current, weak Chemical Facility Anti-Terrorism Standards (CFATS) that exempt most facilities and actually prohibit the authority of DHS to require safer processes. As in other policy areas, Koch's huge efforts have gone largely unnoticed.
Koch campaign contributions reveal the company's influence over the chemical security debate in Washington DC. All of the key Senators and Representatives who have taken a lead role during the last year in pushing legislation that supports Koch's chemical security agenda have received Koch campaign contributions. The House members who introduced two bills that would extend CFATS without improvements and block the DHS from requiring safer processes for seven years have all taken KochPAC contributions over the last three election cycles, including Representatives Tim Murphy (R-PA), Gene Green (D-TX), Peter King (R-NY) and Dan Lungren (R-CA). And all of the cosponsors of similar legislation in the Senate - Senators Susan Collins (R-ME), Rob Portman (R-OH), Mary Landrieu (D-LA), Mark Pryor (D-AR), and before his retirement, George Voinovich (R-OH) - received KochPAC contributions during their most recent elections.
As Congress debates how to protect Americans from dangerous chemical facilities, Koch is once again opposing legislation that would make America safer, despite the enormous risk its facilities pose to communities, workers, and our environment.
The Lewis Powell Memo: Corporate Blueprint to Dominate Democracy
Original Link: http://www.prwatch.org/news/2011/08/10984/lewis-powell-memo-corporate-blueprint-dominate-democracy
Forty years ago today, on August 23, 1971, Justice Lewis F. Powell, Jr., an attorney from Richmond, Virginia, drafted a confidential memorandum for the U.S. Chamber of Commerce that describes a strategy for the corporate takeover of the dominant public institutions of American society.
Powell and his friend Eugene Sydnor, then-chairman of the Chamber's education committee, believed the Chamber had to transform itself from a passive business group into a powerful political force capable of taking on what Powell described as a major ongoing "attack on the American free enterprise system."
An astute observer of the business community and broader social trends, Powell was a former president of the American Bar Association and a board member of tobacco giant Philip Morris and other companies. In his memo, he detailed a series of possible "avenues of action" that the Chamber and the broader business community should take in response to fierce criticism in the media, campus-based protests, and new consumer and environmental laws.
Environmental awareness and pressure on corporate polluters had reached a new peak in the months before the Powell memo was written. In January 1970, President Nixon signed the National Environmental Policy Act, which formally recognized the environment's importance by establishing the White House Council on Environmental Quality. Massive Earth Day events took place all over the country just a few months later and by early July, Nixon signed an executive order that created the Environmental Protection Agency (EPA). Tough new amendments to the Clean Air Act followed in December 1970 and by April 1971, EPA announced the first air pollution standards. Lead paint was soon regulated for the first time, and the awareness of the impacts of pesticides and other pollutants -- made famous by Rachel Carson in her 1962 book, Silent Spring -- was recognized when DDT was finally banned for agricultural use in 1972.
The overall tone of Powell's memo reflected a widespread sense of crisis among elites in the business and political communities. "No thoughtful person can question that the American economic system is under broad attack," he suggested, adding that the attacks were not coming just from a few "extremists of the left," but also -- and most alarmingly -- from "perfectly respectable elements of society," including leading intellectuals, the media, and politicians.
To meet the challenge, business leaders would have to first recognize the severity of the crisis, and begin marshalling their resources to influence prominent institutions of public opinion and political power -- especially the universities, the media and the courts. The memo emphasized the importance of education, values, and movement-building. Corporations had to reshape the political debate, organize speakers' bureaus and keep television programs under "constant surveillance." Most importantly, business needed to recognize that political power must be "assiduously cultivated; and that when necessary, it must be used aggressively and with determination -- without embarrassment and without the reluctance which has been so characteristic of American business."
Powell emphasized the importance of strengthening institutions like the U.S. Chamber -- which represented the interests of the broader business community, and therefore key to creating a united front. While individual corporations could represent their interests more aggressively, the responsibility of conducting an enduring campaign would necessarily fall upon the Chamber and allied foundations. Since business executives had "little stomach for hard-nosed contest with their critics" and "little skill in effective intellectual and philosophical debate," it was important to create new think tanks, legal foundations, front groups and other organizations. The ability to align such groups into a united front would only come about through "careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and united organizations."
Before he was appointed by Richard Nixon to the U.S. Supreme Court Powell circulated his call for a business crusade not only to the Chamber, but also to executives at corporations including General Motors. The memo did not become available to the public until after Powell's confirmation to the Court, when it was leaked to Jack Anderson, a syndicated columnist and investigative reporter, who cited it as reason to doubt Powell's legal objectivity.
Anderson's report spread business leaders' interest in the memo even further. Soon thereafter, the Chamber's board of directors formed a task force of 40 business executives (from U.S. Steel, GE, ABC, GM, CBS, 3M, Phillips Petroleum, Amway and numerous other companies) to review Powell's memo and draft a list of specific proposals to "improve understanding of business and the private enterprise system," which the board adopted on November 8, 1973.
Historian Kim Phillips-Fein describes how "many who read the memo cited it afterward as inspiration for their political choices." In fact, Powell's Memo is widely credited for having helped catalyze a new business activist movement, with numerous conservative family and corporate foundations (e.g. Coors, Olin, Bradley, Scaife, Koch and others) thereafter creating and sustaining powerful new voices to help push the corporate agenda, including the Business Roundtable (1972), the American Legislative Exchange Council (ALEC - 1973), Heritage Foundation (1973), the Cato Institute (1977), the Manhattan Institute (1978), Citizens for a Sound Economy (1984 - now Americans for Prosperity), Accuracy in Academe (1985), and others.
Because it signaled the beginning of a major shift in American business culture, political power and law, the Powell memo essentially marks the beginning of the business community's multi-decade collective takeover of the most important institutions of public opinion and democratic decision-making. At the very least, it is the first place where this broad agenda was compiled in one document.
That shift continues today, with corporate influence over policy and politics reaching unprecedented new dimensions. The decades-long drive to rethink legal doctrines and ultimately strike down the edifice of campaign finance laws -- breaking radical new ground with the Roberts Court's decision in Citizens United v. the Federal Election Commission -- continues apace.
Although many new voices have emerged in the 40 years since it circulated Powell's memo, the U.S. Chamber has expanded its leadership position within the corporate power movement, leading dozens of judicial, legislative and regulatory fights each year. Measured in terms of money spent, the Chamber is by far the most powerful lobby in Washington, DC, spending $770.6 million since 1998, over three times the amount spent by General Electric, the second-largest spender. At the same time, the Chamber has reinforced its lobbying power by becoming one of the largest conduits of election-related "independent expenditures," spending over $32.8 million on Federal elections in 2010. The Chamber sponsors the Institute for Legal Reform, which has spearheaded the campaign for tort "reform," making it more difficult for average people who have been injured, assaulted, or harmed to sue the responsible corporations. Along with well over a dozen legal foundations, the Chamber has also helped shape the powerful "business civil liberties" movement that has been a driving force behind the Citizens United decision and other judicial actions that have handcuffed regulators and prevented Congress from putting common-sense checks on corporate power.
Forty years ago today, on August 23, 1971, Justice Lewis F. Powell, Jr., an attorney from Richmond, Virginia, drafted a confidential memorandum for the U.S. Chamber of Commerce that describes a strategy for the corporate takeover of the dominant public institutions of American society.
Powell and his friend Eugene Sydnor, then-chairman of the Chamber's education committee, believed the Chamber had to transform itself from a passive business group into a powerful political force capable of taking on what Powell described as a major ongoing "attack on the American free enterprise system."
An astute observer of the business community and broader social trends, Powell was a former president of the American Bar Association and a board member of tobacco giant Philip Morris and other companies. In his memo, he detailed a series of possible "avenues of action" that the Chamber and the broader business community should take in response to fierce criticism in the media, campus-based protests, and new consumer and environmental laws.
Environmental awareness and pressure on corporate polluters had reached a new peak in the months before the Powell memo was written. In January 1970, President Nixon signed the National Environmental Policy Act, which formally recognized the environment's importance by establishing the White House Council on Environmental Quality. Massive Earth Day events took place all over the country just a few months later and by early July, Nixon signed an executive order that created the Environmental Protection Agency (EPA). Tough new amendments to the Clean Air Act followed in December 1970 and by April 1971, EPA announced the first air pollution standards. Lead paint was soon regulated for the first time, and the awareness of the impacts of pesticides and other pollutants -- made famous by Rachel Carson in her 1962 book, Silent Spring -- was recognized when DDT was finally banned for agricultural use in 1972.
The overall tone of Powell's memo reflected a widespread sense of crisis among elites in the business and political communities. "No thoughtful person can question that the American economic system is under broad attack," he suggested, adding that the attacks were not coming just from a few "extremists of the left," but also -- and most alarmingly -- from "perfectly respectable elements of society," including leading intellectuals, the media, and politicians.
To meet the challenge, business leaders would have to first recognize the severity of the crisis, and begin marshalling their resources to influence prominent institutions of public opinion and political power -- especially the universities, the media and the courts. The memo emphasized the importance of education, values, and movement-building. Corporations had to reshape the political debate, organize speakers' bureaus and keep television programs under "constant surveillance." Most importantly, business needed to recognize that political power must be "assiduously cultivated; and that when necessary, it must be used aggressively and with determination -- without embarrassment and without the reluctance which has been so characteristic of American business."
Powell emphasized the importance of strengthening institutions like the U.S. Chamber -- which represented the interests of the broader business community, and therefore key to creating a united front. While individual corporations could represent their interests more aggressively, the responsibility of conducting an enduring campaign would necessarily fall upon the Chamber and allied foundations. Since business executives had "little stomach for hard-nosed contest with their critics" and "little skill in effective intellectual and philosophical debate," it was important to create new think tanks, legal foundations, front groups and other organizations. The ability to align such groups into a united front would only come about through "careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and united organizations."
Before he was appointed by Richard Nixon to the U.S. Supreme Court Powell circulated his call for a business crusade not only to the Chamber, but also to executives at corporations including General Motors. The memo did not become available to the public until after Powell's confirmation to the Court, when it was leaked to Jack Anderson, a syndicated columnist and investigative reporter, who cited it as reason to doubt Powell's legal objectivity.
Anderson's report spread business leaders' interest in the memo even further. Soon thereafter, the Chamber's board of directors formed a task force of 40 business executives (from U.S. Steel, GE, ABC, GM, CBS, 3M, Phillips Petroleum, Amway and numerous other companies) to review Powell's memo and draft a list of specific proposals to "improve understanding of business and the private enterprise system," which the board adopted on November 8, 1973.
Historian Kim Phillips-Fein describes how "many who read the memo cited it afterward as inspiration for their political choices." In fact, Powell's Memo is widely credited for having helped catalyze a new business activist movement, with numerous conservative family and corporate foundations (e.g. Coors, Olin, Bradley, Scaife, Koch and others) thereafter creating and sustaining powerful new voices to help push the corporate agenda, including the Business Roundtable (1972), the American Legislative Exchange Council (ALEC - 1973), Heritage Foundation (1973), the Cato Institute (1977), the Manhattan Institute (1978), Citizens for a Sound Economy (1984 - now Americans for Prosperity), Accuracy in Academe (1985), and others.
Because it signaled the beginning of a major shift in American business culture, political power and law, the Powell memo essentially marks the beginning of the business community's multi-decade collective takeover of the most important institutions of public opinion and democratic decision-making. At the very least, it is the first place where this broad agenda was compiled in one document.
That shift continues today, with corporate influence over policy and politics reaching unprecedented new dimensions. The decades-long drive to rethink legal doctrines and ultimately strike down the edifice of campaign finance laws -- breaking radical new ground with the Roberts Court's decision in Citizens United v. the Federal Election Commission -- continues apace.
Although many new voices have emerged in the 40 years since it circulated Powell's memo, the U.S. Chamber has expanded its leadership position within the corporate power movement, leading dozens of judicial, legislative and regulatory fights each year. Measured in terms of money spent, the Chamber is by far the most powerful lobby in Washington, DC, spending $770.6 million since 1998, over three times the amount spent by General Electric, the second-largest spender. At the same time, the Chamber has reinforced its lobbying power by becoming one of the largest conduits of election-related "independent expenditures," spending over $32.8 million on Federal elections in 2010. The Chamber sponsors the Institute for Legal Reform, which has spearheaded the campaign for tort "reform," making it more difficult for average people who have been injured, assaulted, or harmed to sue the responsible corporations. Along with well over a dozen legal foundations, the Chamber has also helped shape the powerful "business civil liberties" movement that has been a driving force behind the Citizens United decision and other judicial actions that have handcuffed regulators and prevented Congress from putting common-sense checks on corporate power.
3 Things That Must Happen for Us To Rise Up and Defeat the Corporatocracy
Original Link: http://www.alternet.org/story/152158/3_things_that_must_happen_for_us_to_rise_up_and_defeat_the_corporatocracy
By Bruce E. Levine
Most Americans oppose rule by the corporatocracy but don't have the tools to fight back. Here are three things we need to create a real people's movement.
Transforming the United States into something closer to a democracy requires: 1) knowledge of how we are getting screwed; 2) pragmatic tactics, strategies, and solutions; and 3) the “energy to do battle.”
The majority of Americans oppose the corporatocracy (rule by giant corporations, the extremely wealthy elite, and corporate-collaborator government officials); however, many of us have given up hope that this tyranny can be defeated. Among those of us who continue to be politically engaged, many focus on only one of the requirements—knowledge of how we are getting screwed. And this singular focus can result in helplessness. It is the two other requirements that can empower, energize, and activate Team Democracy— a team that is currently at the bottom of the standings in the American Political League.
1. Knowledge of How We are Getting Screwed
Harriet Tubman conducted multiple missions as an Underground Railroad conductor, and she also participated in the Union Army’s Combahee River raid that freed more than 700 slaves. Looking back on her career as a freedom fighter, Tubman noted, “I freed a thousand slaves. I could have freed a thousand more if only they knew they were slaves.” While awareness of the truth of corporatocracy oppression is by itself not sufficient to win freedom and justice, it is absolutely necessary.
We are ruled by so many “industrial complexes”—military, financial, energy, food, pharmaceutical, prison, and so on—that it is almost impossible to stay on top of every way we are getting screwed. The good news is that—either through independent media or our basic common sense—polls show that the majority of Americans know enough about the Afghanistan and Iraq wars, Wall Street bailouts, and other corporate welfare to oppose these corporatocracy policies. In the case of the military-industrial complex, most Iraq War polls and Afghanistan War polls show that the majority of Americans know enough to oppose these wars. And when Americans were asked in a CBS New /New York Times survey in January 2011 which of three programs—the military, Medicare or Social Security—to cut so as to deal with the deficit, fully 55 percent chose the military, while only 21 percent chose Medicare and 13 percent chose Social Security.
In the words of Leonard Cohen, “Everybody knows that the deal is rotten.” Well, maybe not everybody, but damn near everybody.
But what doesn’t everybody know?
2. Pragmatic Tactics, Strategies and Solutions
In addition to awareness of economic and social injustices created by corporatocracy rule, it is also necessary to have knowledge of strategies and tactics that oppressed people have historically used to overcome tyranny and to gain their fair share of power.
Even before the Democratic-Republican bipartisan educational policies (such as “no child left behind” and “race to the top”) that cut back on civics being taught in schools, few Americans were exposed in their schooling to “street-smart civics”—tactics and strategies that oppressed peoples have historically utilized to gain power.
For a comprehensive guide of tactics and strategies that have been effective transforming regimes more oppressive than the current U.S. one, read political theorist and sociologist Gene Sharp’s From Dictatorship to Democracy, which includes nearly 200 “Methods of Nonviolent Actions.” Among Sharp’s 49 “Methods of Economic Noncooperation,” he lists over 20 different kinds of strikes. And among his 38 “Methods of Political Noncooperation,” he lists 10 tactics of “citizens’ noncooperation with government,” nine “citizens’ alternatives to obedience,” and seven “actions by government personnel.” Yes, nothing was more powerful in ending the Vietnam War and saving American and Vietnamese lives than the brave actions by critically thinking U.S. soldiers who refused to cooperate with the U.S. military establishment. Check out David Zeigler’s documentary Sir! No Sir! for details.
For a quick history lesson on “the nature of disruptive power” in the United States and the use of disruptive tactics in fomenting the American Revolution, the abolitionist movement, the labor movement, and other democratic movements, check out sociologist Frances Fox Piven’s Challenging Authority: How Ordinary People Change America. Piven describes how “ordinary people exercise power in American politics mainly at those extraordinary moments when they rise up in anger and hope, defy the rules that ordinarily govern their daily lives, and, by doing so, disrupt the workings of the institutions in which they are enmeshed.” In the midst of the Great Depression when U.S unemployment was over 25 percent, working people conducted an exceptional number of large labor strikes, including the Flint, Michigan sit-down strike, which began at the end of 1936 when auto workers occupied a General Motors factory so as to earn recognition for the United Auto Workers union as a bargaining agent. That famous victory was preceded and inspired by other less well-known major battles fought and won by working people. Check out the intelligent tactics (and guts and solidarity) in the 1934 Minneapolis Truckers Strike.
For an example of “the nature of creative power” that scared the hell out of—and almost triumphed—over the moneyed elite, read The Populist Moment by historian Lawrence Goodwyn. The Populist movement, the late-19th-century farmers’ insurgency, according to Goodwyn, was the largest democratic movement in American history. These Populists and their major organization, commonly called the “Alliance,” created worker cooperatives that resulted in empowering economic self-sufficiency. They came close to successfully transforming a good part of the United States into something a lot closer to a democracy. As Goodwyn notes, “Their efforts, halting and disjointed at first, gathered form and force until they grew into a coordinated mass movement that stretched across the American continent ... Millions of people came to believe fervently that the wholesale overhauling of their society was going to happen in their lifetimes.”
In Get Up, Stand Up, I include the section “Winning the Battle: Solutions, Strategies, and Tactics.” However, a major point of the book is that, currently in the United States, even more ignored than street-smart strategies and tactics is the issue of morale, which is necessary for implementing these strategies and tactics. So, I also have a section “Energy to Do Battle: Liberation Psychology, Individual Self-Respect, and Collective Self-Confidence.”
3. The Energy to Do Battle
The elite’s money—and the influence it buys—is an extremely powerful weapon. So it is understandable that so many people who are defeated and demoralized focus on their lack of money rather than on their lack of morale. However, we must keep in mind that in war, especially in a class war when one’s side lacks financial resources, morale becomes even more crucial.
Activists routinely become frustrated when truths about lies, victimization and oppression don’t set people free to take action. But having worked with abused people for more than 25 years, it doesn’t surprise me to see that when we as individuals or a society eat crap for too long, we become psychologically too weak to take action. There are a great many Americans who have been so worn down by decades of personal and political defeats, financial struggles, social isolation and daily interaction with impersonal and inhuman institutions that they no longer have the energy for political actions.
Other observers of subjugated societies have recognized this phenomenon of subjugation resulting in demoralization and fatalism. Paulo Freire, the Brazilian educator and author of Pedagogy of the Oppressed, and Ignacio Martin-Baró, the El Salvadoran social psychologist and popularizer of “liberation psychology,” understood this psychological phenomenon. So did Bob Marley, the poet laureate of oppressed people around the world. Many Americans are embarrassed to accept that we, too, after years of domestic corporatocracy subjugation, have developed what Marley called “mental slavery.” Unless we acknowledge that reality, we won’t begin to heal from what I call “battered people’s syndrome” and “corporatocracy abuse” and to, as Marley urges, “emancipate yourself from mental slavery.”
Whether one’s abuser is a spouse or the corporatocracy, there are parallels when it comes to how one can maintain enough strength to be able to free oneself when the opportunity presents itself—and then heal and attain even greater strength. This difficult process requires honesty that one is in an abusive relationship. One should not be ashamed of having previously believed in corporatocracy lies; and it also helps to forgive and have compassion for those who continue to believe them. The liars we face are often quite good at lying. It helps to have a sense of humor about one’s predicament, to nurture respectful relationships, and to take advantage of a lucky opportunity—often created by the abuser’s arrogance— when it presents itself.
For democratic movements to have enough energy to get off the ground, certain psychological and cultural building blocks are required. Goodwyn, from his study of the Populists in the United States, Solidarity in Poland, and other democratic movements, concluded that “individual self-respect” and “collective self-confidence” constitute the cultural building blocks of mass democratic politics. Without individual self-respect, people do not believe that they are worthy of power or capable of utilizing power wisely, and they accept as their role being a subject of power. Without collective self-confidence, people do not believe they can succeed in wresting power away from their rulers. There are “democracy battlefields” —in our schools, workplace and elsewhere—where such respect and confidence can be regained every day.
No democratic movement succeeds without determination, courage, and solidarity, but modern social scientists routinely ignore such nonquantifiable important variables, and so those trained only in universities and not on the streets can, as Martin-Baró pointed out, “become blind to the most important meanings of human existence.” Great scientists recognize just how important nonquantifable variables are in certain areas of life. A sign hanging in Albert Einstein’s office at Princeton stated: not everything that can be counted counts, and not everything that counts can be counted.
The battle against the corporatocracy needs critical thinking, which results in seeing some ugly truths about reality. This critical thinking is absolutely necessary. Without it, one is more likely to engage in tactics that can make matters worse. But critical thinking also means the ability to think critically about one’s pessimism—realizing that pessimism can cripple the will and destroy motivation. A critical thinker recognizes how negativism can cause inaction, which results in maintaining the status quo. Antonio Gramsci (1891–1937), an Italian political theorist and Marxist activist who was imprisoned by Mussolini, talked about “pessimism of the intellect, optimism of the will” —a phrase that has inspired many critical thinkers, including Noam Chomsky.
Can one have hope without being an insipid Pollyanna? Until shortly before it occurred, the collapse of the Soviet empire seemed an impossibility to most Americans, who saw only mass resignation within the Soviet Union and its sphere of control. But the shipyard workers in Gdansk, Poland, did not see their Soviet and Communist Party rulers as the all-powerful forces that Americans did. And so Polish workers’ Solidarity, by simply refusing to go away, provided a strong dose of morale across Eastern Europe at the same time other historical events weakened the Soviet empire.
Today in Iceland, citizens have refused to acquiesce to the demands of global financial institutions, simply refusing to be taxed for the mistakes of the financial elite that caused their nation’s recent financial meltdown. In a March 2010 referendum in Iceland, 93 percent voted against repayment of the debt, and Icelandic citizens have been drafting a new constitution that would free their country from the power of international finance (this constitution will be submitted to parliament for approval after the next elections). Yes, participatory democracy is still possible.
The lesson from the 2011 Arab spring in and other periods of history is that tyrannical and dehumanizing institutions are often more fragile than they appear, and with time, luck, morale, and our ability to seize the moment, damn near anything is possible. We never really know until it happens whether or not we are living in that time when historical variables are creating opportunities for seemingly impossible change. Thus, we must prepare ourselves by battling each day in all our activities to regain individual self-respect, collective self-confidence, determination, courage, and solidarity.
By Bruce E. Levine
Most Americans oppose rule by the corporatocracy but don't have the tools to fight back. Here are three things we need to create a real people's movement.
Transforming the United States into something closer to a democracy requires: 1) knowledge of how we are getting screwed; 2) pragmatic tactics, strategies, and solutions; and 3) the “energy to do battle.”
The majority of Americans oppose the corporatocracy (rule by giant corporations, the extremely wealthy elite, and corporate-collaborator government officials); however, many of us have given up hope that this tyranny can be defeated. Among those of us who continue to be politically engaged, many focus on only one of the requirements—knowledge of how we are getting screwed. And this singular focus can result in helplessness. It is the two other requirements that can empower, energize, and activate Team Democracy— a team that is currently at the bottom of the standings in the American Political League.
1. Knowledge of How We are Getting Screwed
Harriet Tubman conducted multiple missions as an Underground Railroad conductor, and she also participated in the Union Army’s Combahee River raid that freed more than 700 slaves. Looking back on her career as a freedom fighter, Tubman noted, “I freed a thousand slaves. I could have freed a thousand more if only they knew they were slaves.” While awareness of the truth of corporatocracy oppression is by itself not sufficient to win freedom and justice, it is absolutely necessary.
We are ruled by so many “industrial complexes”—military, financial, energy, food, pharmaceutical, prison, and so on—that it is almost impossible to stay on top of every way we are getting screwed. The good news is that—either through independent media or our basic common sense—polls show that the majority of Americans know enough about the Afghanistan and Iraq wars, Wall Street bailouts, and other corporate welfare to oppose these corporatocracy policies. In the case of the military-industrial complex, most Iraq War polls and Afghanistan War polls show that the majority of Americans know enough to oppose these wars. And when Americans were asked in a CBS New /New York Times survey in January 2011 which of three programs—the military, Medicare or Social Security—to cut so as to deal with the deficit, fully 55 percent chose the military, while only 21 percent chose Medicare and 13 percent chose Social Security.
In the words of Leonard Cohen, “Everybody knows that the deal is rotten.” Well, maybe not everybody, but damn near everybody.
But what doesn’t everybody know?
2. Pragmatic Tactics, Strategies and Solutions
In addition to awareness of economic and social injustices created by corporatocracy rule, it is also necessary to have knowledge of strategies and tactics that oppressed people have historically used to overcome tyranny and to gain their fair share of power.
Even before the Democratic-Republican bipartisan educational policies (such as “no child left behind” and “race to the top”) that cut back on civics being taught in schools, few Americans were exposed in their schooling to “street-smart civics”—tactics and strategies that oppressed peoples have historically utilized to gain power.
For a comprehensive guide of tactics and strategies that have been effective transforming regimes more oppressive than the current U.S. one, read political theorist and sociologist Gene Sharp’s From Dictatorship to Democracy, which includes nearly 200 “Methods of Nonviolent Actions.” Among Sharp’s 49 “Methods of Economic Noncooperation,” he lists over 20 different kinds of strikes. And among his 38 “Methods of Political Noncooperation,” he lists 10 tactics of “citizens’ noncooperation with government,” nine “citizens’ alternatives to obedience,” and seven “actions by government personnel.” Yes, nothing was more powerful in ending the Vietnam War and saving American and Vietnamese lives than the brave actions by critically thinking U.S. soldiers who refused to cooperate with the U.S. military establishment. Check out David Zeigler’s documentary Sir! No Sir! for details.
For a quick history lesson on “the nature of disruptive power” in the United States and the use of disruptive tactics in fomenting the American Revolution, the abolitionist movement, the labor movement, and other democratic movements, check out sociologist Frances Fox Piven’s Challenging Authority: How Ordinary People Change America. Piven describes how “ordinary people exercise power in American politics mainly at those extraordinary moments when they rise up in anger and hope, defy the rules that ordinarily govern their daily lives, and, by doing so, disrupt the workings of the institutions in which they are enmeshed.” In the midst of the Great Depression when U.S unemployment was over 25 percent, working people conducted an exceptional number of large labor strikes, including the Flint, Michigan sit-down strike, which began at the end of 1936 when auto workers occupied a General Motors factory so as to earn recognition for the United Auto Workers union as a bargaining agent. That famous victory was preceded and inspired by other less well-known major battles fought and won by working people. Check out the intelligent tactics (and guts and solidarity) in the 1934 Minneapolis Truckers Strike.
For an example of “the nature of creative power” that scared the hell out of—and almost triumphed—over the moneyed elite, read The Populist Moment by historian Lawrence Goodwyn. The Populist movement, the late-19th-century farmers’ insurgency, according to Goodwyn, was the largest democratic movement in American history. These Populists and their major organization, commonly called the “Alliance,” created worker cooperatives that resulted in empowering economic self-sufficiency. They came close to successfully transforming a good part of the United States into something a lot closer to a democracy. As Goodwyn notes, “Their efforts, halting and disjointed at first, gathered form and force until they grew into a coordinated mass movement that stretched across the American continent ... Millions of people came to believe fervently that the wholesale overhauling of their society was going to happen in their lifetimes.”
In Get Up, Stand Up, I include the section “Winning the Battle: Solutions, Strategies, and Tactics.” However, a major point of the book is that, currently in the United States, even more ignored than street-smart strategies and tactics is the issue of morale, which is necessary for implementing these strategies and tactics. So, I also have a section “Energy to Do Battle: Liberation Psychology, Individual Self-Respect, and Collective Self-Confidence.”
3. The Energy to Do Battle
The elite’s money—and the influence it buys—is an extremely powerful weapon. So it is understandable that so many people who are defeated and demoralized focus on their lack of money rather than on their lack of morale. However, we must keep in mind that in war, especially in a class war when one’s side lacks financial resources, morale becomes even more crucial.
Activists routinely become frustrated when truths about lies, victimization and oppression don’t set people free to take action. But having worked with abused people for more than 25 years, it doesn’t surprise me to see that when we as individuals or a society eat crap for too long, we become psychologically too weak to take action. There are a great many Americans who have been so worn down by decades of personal and political defeats, financial struggles, social isolation and daily interaction with impersonal and inhuman institutions that they no longer have the energy for political actions.
Other observers of subjugated societies have recognized this phenomenon of subjugation resulting in demoralization and fatalism. Paulo Freire, the Brazilian educator and author of Pedagogy of the Oppressed, and Ignacio Martin-Baró, the El Salvadoran social psychologist and popularizer of “liberation psychology,” understood this psychological phenomenon. So did Bob Marley, the poet laureate of oppressed people around the world. Many Americans are embarrassed to accept that we, too, after years of domestic corporatocracy subjugation, have developed what Marley called “mental slavery.” Unless we acknowledge that reality, we won’t begin to heal from what I call “battered people’s syndrome” and “corporatocracy abuse” and to, as Marley urges, “emancipate yourself from mental slavery.”
Whether one’s abuser is a spouse or the corporatocracy, there are parallels when it comes to how one can maintain enough strength to be able to free oneself when the opportunity presents itself—and then heal and attain even greater strength. This difficult process requires honesty that one is in an abusive relationship. One should not be ashamed of having previously believed in corporatocracy lies; and it also helps to forgive and have compassion for those who continue to believe them. The liars we face are often quite good at lying. It helps to have a sense of humor about one’s predicament, to nurture respectful relationships, and to take advantage of a lucky opportunity—often created by the abuser’s arrogance— when it presents itself.
For democratic movements to have enough energy to get off the ground, certain psychological and cultural building blocks are required. Goodwyn, from his study of the Populists in the United States, Solidarity in Poland, and other democratic movements, concluded that “individual self-respect” and “collective self-confidence” constitute the cultural building blocks of mass democratic politics. Without individual self-respect, people do not believe that they are worthy of power or capable of utilizing power wisely, and they accept as their role being a subject of power. Without collective self-confidence, people do not believe they can succeed in wresting power away from their rulers. There are “democracy battlefields” —in our schools, workplace and elsewhere—where such respect and confidence can be regained every day.
No democratic movement succeeds without determination, courage, and solidarity, but modern social scientists routinely ignore such nonquantifiable important variables, and so those trained only in universities and not on the streets can, as Martin-Baró pointed out, “become blind to the most important meanings of human existence.” Great scientists recognize just how important nonquantifable variables are in certain areas of life. A sign hanging in Albert Einstein’s office at Princeton stated: not everything that can be counted counts, and not everything that counts can be counted.
The battle against the corporatocracy needs critical thinking, which results in seeing some ugly truths about reality. This critical thinking is absolutely necessary. Without it, one is more likely to engage in tactics that can make matters worse. But critical thinking also means the ability to think critically about one’s pessimism—realizing that pessimism can cripple the will and destroy motivation. A critical thinker recognizes how negativism can cause inaction, which results in maintaining the status quo. Antonio Gramsci (1891–1937), an Italian political theorist and Marxist activist who was imprisoned by Mussolini, talked about “pessimism of the intellect, optimism of the will” —a phrase that has inspired many critical thinkers, including Noam Chomsky.
Can one have hope without being an insipid Pollyanna? Until shortly before it occurred, the collapse of the Soviet empire seemed an impossibility to most Americans, who saw only mass resignation within the Soviet Union and its sphere of control. But the shipyard workers in Gdansk, Poland, did not see their Soviet and Communist Party rulers as the all-powerful forces that Americans did. And so Polish workers’ Solidarity, by simply refusing to go away, provided a strong dose of morale across Eastern Europe at the same time other historical events weakened the Soviet empire.
Today in Iceland, citizens have refused to acquiesce to the demands of global financial institutions, simply refusing to be taxed for the mistakes of the financial elite that caused their nation’s recent financial meltdown. In a March 2010 referendum in Iceland, 93 percent voted against repayment of the debt, and Icelandic citizens have been drafting a new constitution that would free their country from the power of international finance (this constitution will be submitted to parliament for approval after the next elections). Yes, participatory democracy is still possible.
The lesson from the 2011 Arab spring in and other periods of history is that tyrannical and dehumanizing institutions are often more fragile than they appear, and with time, luck, morale, and our ability to seize the moment, damn near anything is possible. We never really know until it happens whether or not we are living in that time when historical variables are creating opportunities for seemingly impossible change. Thus, we must prepare ourselves by battling each day in all our activities to regain individual self-respect, collective self-confidence, determination, courage, and solidarity.
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