At absolutely no one’s request, we hereby announce the winners of Inside corporate America’s first annual Golden Vulture Awards:
The Call-My-Lawyer Award to… Sony Corporation.
Only last month, Sony and other media giants won a court injunction in the US against Napster, the website that lets you record music CDs off the internet.
Sony concedes that Napster doesn’t actually steal the music – individuals use Napster technology to trade tracks.
However, the recording industry seeks ruinous damages against Napster on grounds that the website’s technology knowingly abets copyright infringement.
Forget Napster, Sony. You now face an even bigger threat of music filching. One company has just begun to market a device just like a Walkman which the manufacturer openly advertises as making it ‘easy to record music off the internet’. The music-snatching machine is made by, uh, Sony. Sony should sue.
The Four’s-A-Crowd Award to … Sony Corporation.
It could be that the world’s skint youth pilfers music off Napster because of the stratospheric prices of CDs in stores.
This column suggested (and Italian and US trustbusters agree) that suspiciously high CD prices might be explained by the extraordi nary fact that more than 95 per cent of all music CDs in the western world are distributed by just six big companies: BMG, Polygram, Universal, Warner, EMI and Sony.
Not so, claims a huffy letter from BMG. ‘You assert that six companies dominate the industry. [Due to] takeovers, there is (sic) currently five, and will soon be four when Warner and EMI merge.’
The industry spokesman avers that my error should convince readers that there is no monopoly control of the market.
I stand corrected.
The Generous-To-A-Fault Award to… Ford Motor.
As British citizens, you have a right to compensation from cartels that conspire to fix prices. But as British subjects, no consumer in the past hundred or so years has actually collected anything in a court of law from rip-off monopolists.
Previously, I spotlighted the case of John Clare. I tried to get him back some loot from Volvo UK (a unit of American car maker Ford Motor). Despite a finding by the Office of Fair Trading that Clare’s dealer participated in a price-fixing ring, he got nothing. Anti-trust experts say the presence of a manufacturer-aided price-fixing conspiracy would bend the whole market. Volvo did create a voluntary compensation fund, but when we first checked, of the 100,000 consumers who purchased a Volvo during the three-year period of collusive pricing, none had received compensation.
Volvo told us that this is an indication that virtually all its customers believed they had paid a fair price. My own view is that this may have been the result of a minor oversight in the refund programme: Volvo didn’t notify any of its customers.
I can now report that Clare has received the handsome sum of £720 from his Volvo dealer and several lucky buyers have received £25 M&S gift vouchers. Thanks, guys. That only leaves, by my estimate, roughly 99,000 refund claims to go.
The Last-Straw-Gilded-Cage Award goes to… Wackenhut Corporation.
One year ago this week, we ran a story about Wackenhut Corrections, the operator of a private prison in New Mexico where sadism, greed and frightening incompetence risked lives and the public purse.
Internal company documents and witnesses revealed, for example, that a chief guard warned company executives that their penny-pinching under-staffing was, ‘a death sentence’ for guards sent alone into cell blocks. A company executive responded: ‘Better to lose one guard than two.’ Two weeks after this glib comment, the prediction became reality: a lone guard was murdered along with a prisoner in a riot.
Over the past months, Wackenhut has run into more trouble. The US Justice Department charged the company with using ‘excessive force and gas grenades’ in a youth detention centre in Louisiana, where guards beat a 17-year-old boy so severely that part of his intestines leaked into his colostomy bag.
Then the state of Texas indicted 20 Wackenhut guards and officials on criminal charges of sexually abusing prisoners. Wackenhut’s stock has tanked.
Say what you like about Jack Straw, but in this case, the Home Secretary has shown us his soft-hearted side, granting the beleaguered Wackenhut political asylum in the UK. The Home Office handed the refugee company contracts to run the immigrant and asylum-seekers’ detention centre in Manchester, and granted Wackenhut new contracts to operate prisons in Doncaster and Marchington. On the news that the Home Office also approved Wackenhut’s opening a youth detention centre in Bristol, New Mexico’s prison watchdog, state Senator Cisco McSorley, told The Observer : ‘That’s bordering on the bizarre.’
And finally, The Dammed-If-You-Do Award to… Balfour Beatty.
In July, Inside corporate America published comments by one of Britain’s top corporate lawyers. He told us that, in 1997, at a Department of Trade reception, a man identified as chairman of construction company Balfour Beatty ‘announced with enormous pride that he personally had handed over the cheque to the government minister for the Pergau dam bribe’ in Malaysia.
Not unexpectedly, that week’s mail brought a note from Balfour Beatty. Spokesman Tim Sharp wrote that he had spoken to The Observer’s source, who ‘denies absolutely having said what is attributed to him’. The company demanded a retraction.
There was something odd about this complaint. The company seemed to challenge only the wording of the allegation, not the substance. For clarification I wrote to the company asking for an answer to a simple, and far more relevant question: ‘Did Balfour Beatty pay bribes in Malaysia – yes or no?’ We received no reply.
This is a difficult time for Balfour Beatty. A consortium to which the company belongs faces new charges of bribery, this time over another dam project in Lesotho in southern Africa.. I thought the company deserved an extra chance to clear its name. So I called Sharp.
Obs: Was a payment made to a government official by Balfour Beatty, its chairman or an agent for its chairman regarding the Pergau Dam project, yes or no?
BB: I tell you I’ve worked with some journalists in my time!
Obs: Did you pay a bribe?
BB: I like your approach.
Obs: I just want to know if you bribed the Malaysians.
BB: We could spend the rest of the afternoon…
We nearly did. This continued for almost an hour.
Obs: I’m worried about the issue of bribery and corruption.
BB: Aren’t we all?
Obs: I’m happy to print ‘Balfour Beatty states unequivocally that no payment was made to a Malaysian official.’
BB: I suggested to you that you might have misled people.
How had The Observer led our readers astray?
BB: The thing you wrote has been denied flatly by your alleged source.
Indeed, the company had received a letter from the lawyer this paper had quoted. I asked Sharp to read it twice during our interview. Only on the second reading did he include this:
BB: [from the letter]’I do not deny the accuracy of the words attributed to me in the article.’
Oh. Well, in that case, along with the company’s Golden Vulture Award, which has been deposited in a numbered Swiss account, Inside corporate America offers the following correction: ‘We hereby retract the statements made regarding Balfour Beatty’s alleged boasting of corrupt practices on the grounds that our article was wholly accurate.’
Gregory Palast writes the award-winning column, “Inside Corporate America” fortnightly in Britain’s Sunday newspaper, The Observer, part of the Guardian Media Group,where this first appeared.