Monday, November 28, 2016

Mr. Modi - Big Generators of Black Money

S.O.S   e – Voice For Justice – e-news weekly
Spreading the light of humanity & freedom
Editor: Nagaraja.M.R.. Vol.12..Issue.48….….03/12/2016



Editorial :  Mr. Modi  – Big Generators of Black Money

Mr.Modi  since decades  black money is generated by corporate crimes , illegal trading & Real estate deals.  This  is  also feeding terrorists , anti nationals & mafia.  We  appreciate your first step in curbing black money.
If you are sincere Why not  curb corporate crimes , illegal commercial  trading  & Real estate deals ?




Corporate espionage: Expose those who feed the mouth of corruption

By Sanjay Jha


The case can be a tipping point to expose the huge nefarious nexus between government and India Inc, now a powerful fifth estate.
Shantanu Saikia, one of the principal accused in the unfolding, unravelling  scam called “Corporate Espionage” has made two astounding revelations; one, the scale could peak Rs 10,000 crores, and second, that he has been made to sign blank papers during custodial interrogation. Evidently, this spy-drama has the makings of a murky crime thriller, with several big guns with exorbitant stakes involved. The abrupt, sudden arrest of oil ministry officials, a trade journalist, an overseas energy adviser and corporate officers of leviathan private sector energy firms such as Reliance Industries, Essar and Cairn Energy for surreptitiously obtaining sensitive leaked documents from the Petroleum ministry blows the lid off what has been otherwise publicly speculated upon; the formidable halo of big business lobbies in India’s dark political corridors. Big business has emerged as a formidable power center in the Indian political and social ecosystem; ambitious, creative, cash-rich, talented but greedy, it’s suspect ways concealed by sophistry. Are we seeing the cracking of the Omerta code, or is this just a public relations eye-wash for self-righteous posturing? Time will tell. A rewind before that is necessary.
In early 2004 I was attending a corporate symposium where CEOs moved about with feline alacrity and everyone seemed to have an unusually sunny disposition. People joked that their refulgent countenance was a mirror image of India Shining, that celebrated phrase of unbridled optimism and electoral doom. In several photo-ops, the high profile head honchos did a collective thumbs-up. When I almost nervously protested that this utopia looked grossly exaggerated as it was based on just one year of eight per cent GDP growth of the NDA government in 2003-04 and a convenient tweak of poverty estimates, I was dismissed with contumacious indifference, as if a gate-crashing party pooper. I beat a hasty retreat, and ever since have a guarded reverence for these five-star CII/FICCI/Assocham event managers which I have since believed are just platforms for the self-promotion and private business lobbying by a select group, the Big Boys. I would like to term them as India’s “obnoxious oligopolies”, the MSME (Micro-Small Medium Enterprises) that they are supposed to benefit, remain at the outskirts. A similar group was in full attendance sometime back at the Gujarat Global Investors Summit. The charade continues with even greater crescendo in FY 2015.
At the same venue over several bi-annual events, several heads of their respective conglomerates, publicly adulated the bearded, beaming Gujarat chief minister Narendra Modi. They looked like smitten by the first flush of love as they serenaded Modi, adding that they would like to see the poster-boy of the saffron party in a galloping hurry unfurl the Indian tricolours at the Red Fort. Of course, they pretended to be blissfully unaware or conveniently forgot that their prime ministerial designate had the dubious ignominy of not being able to shake hands with US President Barack Obama in the White House, as the US state department had refused to grant Modi a US visa for human rights violations apropos the Gujarat riots and after; for a dastardly sequence of events that he perhaps endorsed or deliberately ignored in Gujarat in 2002 as its elected head (that matter is sub-judice despite the clamorous call that Modi has received a clean chit. Of course now, Modi calls President Obama “Barack”). We could well imagine the geopolitical ramifications of that embargo, but obviously India’s leading corporate chiefs did not. The perceptible bonhomie between our Big Boys and Modi is a manifestation of the blinkered vision of India Inc. It also reflects short-term memory loss as they forget that a seething Modi had asked the CII to publicly apologise for social activist and ex-Thermax chairperson Anu Agha’s condemnation of the Gujarat “genocide”. Tragically, CII catapulted before him instantly. Now that Modi is prime minister, the subjugation, subservience and surrender is reaching new lows. Every other day, a leading industrial magnate appears like an epitome of obsequiousness.
India’ s corporate sector has unfortunately a very convenient moral fibre, which is also unusually elastic. They are creatures of extraordinary accommodation. I remember when the erstwhile PM Dr Manmohan Singh’s government took over in 2004 there was a drastic collapse of the stock markets. Bust! Those black-suited merchant bankers and the 20-something bespectacled analysts predicted serious doomsday, a black hole if you will, what with a centrist national party in a fragile coalition supported by withering age-old Marxists on the wrong side of India’s demographic median. Of course, their crystal-gazing were based on facile factors; no one even briefly comprehended the huge premium the think tank of the Singh-P Chidambaram-Dr Montek Singh Ahluwalia  combine could bring to India’s economy and its financial markets.
Corporate India, still angry that India Shining, had been grievously derailed by the rural voxpopuli was almost dismissive about the ruling combine’s expertise, competence and longevity. Understandable perhaps, but what was indeed surprisingly palpable was the cosmetic assessment of India’s real issues of poverty, the common man’s dire straits, the onerous burden of improving education, health and removing backwardness, and the challenge of inclusive growth. Our award-winning blue-chip brigade only understands corporate tax, exchange rates, prime lending rates and stock market reforms. Unfortunately, the government has a lot more to do. And one of them is to build an equal opportunities secular foundation and a vibrant civil society, something that Modi has long forsaken. The draconian conduct of Modi government over Greenpeace activist Priya Pillai, or its recalcitrance to criticism, the hounding of Teesta Setalvad, do not augur well for India. But India Inc seems remarkably oblivious to the larger debate of democracy in India. All that matters is that quarterly earnings report and the fat dividend check pay-out.
“Instead of redressing the balance between the poor and the rich, between the disconnected and the well connected, between the powerless and the powerful, the India state, despite all of its socialist rhetoric, often ends up discriminating against the former and in favor of the latter. The government, despite the best intentions of some dedicated officials, has the bicyclist’s mentality of bowing on top and kicking below”, said RBI governor Raghuram Rajan in his book Faultlines. He hit the nail on the head. No wonder, rising inequality remains our most intractable challenge.
Thus, for the Ivy League corporate India, Satyam arrived with blaring horns as a deadly neutraliser. Suddenly that pious façade and casual bravado stood shattered. Satyam was not just an epic corporate fraud by itself, it also had a strong principal cast which included multinational auditors, ritzy merchant bankers, Harvard gurus on shareholder protection, and independent directors who made more money from sitting fees or should we call it “sleeping fees”. The supporting crew was endless and each had their own private agenda. As the Satyam saga unfolded, several leading CEOs were fully aware of that “discretionary element” which is usually co-handled with remarkable dexterity by the prized auditors and the senior management in close cohorts. Insider trading allegations rage because they are true, so before we have more corporate chiefs expressing their political preferences, maybe they should get their boardroom act cleaned up. Rajat Gupta of McKinsey got caught, in India, no one does.
Narendra Modi’s pogrom which consumed more than thousands of innocent lives is essentially a meaningless statistic for India’s business czars. As long as Modi can unlock free land, provide subsidised capital, take unilateral decisions devoid of environmental implications or physical displacement caused by them, and make big commercial announcements, everything is kosher. For them a Singur or Nandigram is a social backlash only for the political class to handle. From a hardcore shareholder standpoint, India Inc are bang-on target. If Modi is attracting foreign capital and domestic investment, by all means, he can be development-driven. However to have championed his name for national leadership revealed either a shocking neglect of social sensitivities or a callous disregard for political morality. The fact that Modi has become a PM does nothing to take away the enormous historical baggage that he transports on his shoulders. The Love Jihad brand of politics which has been unleashed since May 2014, coupled with Ghar Wapsi and attacks on churches even had President Obama reminisce Mahatma Gandhi with sorrowful nostalgia. But India Inc remained mummified. These CEOs speak in national forums, but whatever their private predilections, they need to understand the larger ramifications of their public disclosures.
Instead, I would like it if our jet-setting CEOs talked of creating an RTI Act for corporate India for PPP’s, or at least for large corporations using public assets, natural resources etc, wherein we can find facts, as ordinary individuals and not just as shareholders. Isn’t it the ultimate paradox that while the GOI has installed transparency by steadfastly adhering to RTI guidelines, the constantly jabbering India Inc only pays it token lip-service, and worse, walks away with Golden Peacocks and other shimmering accolades, to ultimately do a Satyam? Or a Sahara?Or steal documents from the Oil and Petroleum Ministry? What are their various items under contingent liabilities, and the cross funds flow between group entities? How have they benefited by certain vested policy changes which have impacted company health? Are ethical standards followed in an unregulated business lobbying industry? Besides published accounts, how do they indirectly fund political parties? Why was CII against transparency in giving political donations? And why, after over a year of the act being passed, is Modi’s government reluctant to implement the lokpal bill and make CBI independent? No answers as yet.
The corporate espionage case can be a tipping point to expose the huge nefarious nexus between government and India Inc, now a powerful fifth estate. It is only a tip of the iceberg. It is time we exposed the supply-side of corruption. And above all, brought in electoral reforms in corporate funding of political parties.

Corporate espionage is not new to India Inc, say CEOs

Govt depts, banks prone to information leakage





India Inc is not surprised with the corporate espionagescandal now rocking the petroleum ministry, with many chief executive officers (CEOs) saying documents are regularly leaked from the ministries, tax authorities, banks, and regulators – thus giving competitive advantage to corporates with deep pockets.
“This is not the first time that documents are leaking from the petroleum ministry or from other government agencies. Most of the Cabinet note agendas, ministry’s opinions, and government’s stand in the court are regularly leaked to the corporates who make millions on the stock markets,” said a Mumbai-based CEO, on condition of anonymity.  According to another CEO, who also did not wish to be named because of the sensitivity of the matter, documents are also regularly leaked from banks, income-tax authorities, stock exchanges and from public-sector units.
Many large corporates have separate teams to gather information from various sources to get advantage while bidding for projects or for simply making a quick buck in the stock markets.  Corporates are regularly spying on their competitors also. In 2007, Tata Communications filed a complaint against its then managing director’s secretary, who was caught sending board meeting agendas to a rival via email. Barring filing a chargesheet against the employee, Mumbai police failed to crack the case.
ALSO READ: Seven arrested for theft, sale of oil ministry papers
Tata Motors had to exchange several letters with the West Bengal Industrial Development Corporation (WBIDC) to protect its 11 pages of the annexure to its lease agreement, when it wanted to set up a plant in Sanand. The pages had detailed calculation of the incentives offered by the state government to the company to match those provided by Uttarakhand. The calculation would have given competitors an indication of the car’s profitability and market size of Nano.
WBIDC had to assure the company in writing that no third party would have access to the information.
On Thursday, a Reliance Industries (RIL) official was arrested in the corporate espionage scandal. Reacting to the arrest, the Mukesh Ambani-owned firm said it had launched a “robust internal probe” into the detention of one of its employees by the Delhi police in connection with the alleged official document theft in the oil ministry.
RIL, which is among the largest private-sector players in the Indian oil & gas sector, is also fighting a pitched battle with the oil ministry over allegations of gold-plating its D6 gas blocks off the Andhra Coast and producing less gas than what was promised to the government.
The company also made news when in 2013, the Supreme Court ordered probe into allegations based on Niira Radia leaked tapes that the then oil regulator, Directorate General of Hydrocarbons V K Sibal, favoured RIL in many ways. These charges were not proved.  However, the tapes revealed how corporate lobbyists were taking out information from the Indian government based on their contacts with the media and top officials.
During the gas wars between the Ambani brothers, a lot of sensitive documents made its way into the media. The documents included action planned by the Reserve Bank of India, the Securities and Exchange Board of India, and even international regulators. “Most of the these documents are highly-confidential. This just shows how well-oiled the information collection machinery is,” said an official with a large corporate.
Citing an example, a source said that during the discussion of a contentious deal in the oil & gas sector, divergent views were exchanged between petroleum and law ministries in a Cabinet Committee on Economic Affairs meeting. The minutes were leaked to the company in question. It helped the company identify the people in favour of and against the deal. Subsequently, the ministry in favour of the deal was supplied with more information in support of the deal, while that against it was not only provided with documents stating the benefits of the deal, but also given details of the poor track record of public-sector companies operating in the sector. It ultimately led to a war of white papers.
Many Indian companies are now taking steps to prevent themselves from becoming victims of espionage. This includes setting up the top management’s offices away from the regular employees, access control offices and, if need be, keeping board meetings in secret locations.


Corporate Espionage Case: Companies Paid Rs. 2.5 Lakh Per Month to Obtain Stolen Documents, Says Delhi Police

A “handsome monthly amount” was paid by the arrested corporate executives to those “hired” for obtaining the “stolen documents” from the Ministry of Petroleum and Natural Gas (MoPNG), Delhi Police said in its charge sheet submitted to a Delhi court in the documents leak case.
An amount to the tune of Rs. 2.5 lakhs per month was being paid to the two accused, Lalta Prasad and Rakesh Kumar, who were the first to be arrested outside Shastri Bhavan in New Delhi, it said.
Shailesh Saxena from Reliance Industries Limited (RIL), Vinay Kumar from Essar, KK Naik from Cairns India, Subhash Chandra from Jubilant Energy, and Rishi Anand from Reliance Anil Dhirubhai Ambani Group (Reliance ADAG), energy consultant Prayas Jain, and journalist Shantanu Saikia used to pay the amount to them, the charge sheet said.
“On sustained interrogation, they all admitted that they had hired the services of Rakesh Kumar and Lalta Prasad for obtaining the stolen documents of MoPNG for their business gains,” it said.
The Crime Branch of the Delhi Police also did not rule out the possibility of slapping the charges under the Officials Secret Act (OSA) saying that reports pertaining to all the documents have not been received yet from the MoPNG and they have sought further clarifications from the ministry about it.
“The reports received on April 10, April 15, and April 16, 2015 from MoPNG have been analyzed and it has been observed that reports pertaining to all the documents have not been received.
“Further, it has also not been specified as to the documents marked as secret/confidential are covered under OSA or not. Further clarification in this regard is being sought from MoPNG,” Delhi police said in its charge sheet filed against 13 arrested accused.
On Monday Chief Metropolitan Magistrate Sanjay Khanagwal took cognizance of the charge sheet and fixed the matter for further hearing on May 18.
Police said according to ministry reports, documents recovered from the accused were not in public domain and some of them were marked as “secret/confidential in nature.”
It also said that due to the conspiracy hatched by the accused, “interests of the government and public at large have been compromised. The accused have been indulging in this cheating affecting public/national interest for many years.”
Investigation regarding the role of senior officers and companies was in progress to ascertain their involvement, if any, it said, adding a supplementary charge sheet would be filed later.
Detailing the money transactions, police said that “analysis of bank statements of Lalta Prasad and Rakesh Kumar revealed that there were significant transactions by cash and cheques despite the fact that they were unemployed.”
“The money tranactions in their accounts shows that they have procured that money by illegally selling the documents of MoPNG to various prospective buyers of the companies engaged in Petroleum and Gas sector.
“Assistance from chartered accountants has been sought to further analyze the detailed bank statements of the accused persons/companies. Outcome of which will be filed through the supplementary charge sheet,” it said.
With regard to the documents being allegedly recovered from the possession of the accused people, it said that 80 sets of documents pertaining to MoPNG were seized from Mr Saikia’s house and office while 50 sets of documents were seized from Mr Saxena’s office.
It said seven sets of documents were seized from Mr Jain’s office while four sets and nine sets of documents were seized from the offices of Vinay Kumar and KK Naik respectively.
Similarly, four and six sets of documents were recovered from Rishi Anand and Subhash Chandra respectively. Some of the other arrested accused were also found in possession of certain incriminating documents.
Most of the documents recovered from Mr Jain were not in public domain and six of these documents were marked secret /confidential, it said, adding, 23 documents seized from Mr Saikia were also marked as secret/confidential.
Similarly, two documents recovered from Mr Naik were marked secret whereas documents seized from Vinay, Anand and Mr Chandra were not marked as “secret/confidential”.
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Mobile phones, laptops / computers, and backup of e-mail account data of senior officials of Cairn India, RIL, Reliance ADAG, Jubilant Energy Pvt Ltd and Essar were taken into possession for examination and forensic opinion and result was awaited, police said.
“The back up data of e-mail accounts is being analysed. Investigation into the role of the senior officers and companies is in process. The data is voluminous in nature and painstaking efforts are being made to expedite the analysis,” it said.
It also said call detail records (CDR) of accused showed that they were in constant touch with each other over phone.
“Moreover, it is pertinent to mention that CDR analysis reveals that on many occasions the position of the accused was found to be in cell ID of MoPNG even during odd hours at night when they used to criminally trespass and steal the documents,” the charge sheet said.
Referring to the ministry report, police said none of the documents recovered from the possession of Lalta Prasad was in public domain and two sets of documents were marked as secret CCEA note.
It said Mr Prasad, Rakesh Kumar and accused Raj Kumar Chaubey were not authorised to possess the documents recovered from their possession.
Police said Mr Prasad and Rakesh Kumar with connivance of co-accused Asharam, Ishwar Singh and Virender Kumar had obtained fake temporary I-card/pass of Audit Department defence service and MHA for gaining access to MoPNG and they had also got prepared duplicate keys of the offices.
Police said the accused had “lured” one Mr Vir Singh, who was a CCTV operator in the MoPNG, to switch off the cameras installed in the ministry to facilitate their movement in the office during night.
It said that the outcome of the probe regarding the alleged role of Mr Singh may be filed through supplementary charge sheet.
Police said a “deep rooted conspiracy” was hatched among the accused and the five corporate executives, Mr Jain and Mr Saikia were also the “perpetrators and conspirators” and they had provided the financial aid for carrying out the illegal activities.
It said ministry reports have been enclosed with the charge sheet in a sealed cover and its confidentiality should be kept.
All the accused have been chargesheeted for the alleged offences under sections 457 (trespass), 380 (theft), 411 (dishonestly receiving stolen property), 418 (cheating a person whose interest the offender was bound to protect), 420 (cheating), 468 (forgery for the purpose of cheating), 471 (using as genuine forged documents), 474 (possessing forged documents with intent to use it as genuine), 34 (common intention), read with 120-B (criminal conspiracy) of the IPC.
All the accused are currently in judicial custody.
On February 20, police had arrested the five corporate executives alleging that they used to procure the classified documents from Lalta Prasad and Rakesh Kumar and used to pay them.
The documents were then supplied to the firms by these officials for their benefit, the police had alleged.
The police had earlier told the court that sensitive documents of Ministries of Coal, Power and others were recovered during the investigation.
In its FIR, the police had said that photocopies of sensitive documents including inputs on the Finance Minister’s budget speech were recovered from the possession of accused Rakesh Kumar.
A total of 16 people have been arrested so far in connection with two separate FIRs lodged by the Crime Branch.

2G scam, Spectrum refarming, Sistema controversy, Allocation of Natural Resources explained

  1. What is Spectrum?
  2. Method #1: First come First Serve basis
  3. Method#2: Auctioning method
  4. What happened in 2G scam?
  5. A.Raja (Telecom Ministry)
  6. CAG estimate: 1.7 lakh crore loss
  7. Supreme Court verdict
  8. Presidential reference on SC verdict
  9. Impact of SC verdict
  10. Sistema – Russia Angle
  11. Spectrum Refarming

What is Spectrum?
  • Whenever you watch TV, receive phone call, send SMS, surf internet….data is being transferred from one place to another, say Ahmedabad to Mumbai.
  • So, If data was a “truck”, how would you transport it from A’bad to Mumbai (or vice versa)?
  • Obviously via highway.
  • Spectrum is that highway.
Based on the ‘width’ of the highways, we classify them into following
Spectrum range
CABLE TV145-860MHZ
2G800-1900MHz
3G2100MHz
4G, broadband internet2300MHz
(^numbers for illustration only. Different websites will give different numbers.)
satellite communication
  • So, We first send the truck from A’bad to a Satellite hovering in the sky, and from there, send the truck to Mumbai.
  • Problem: satellite=expensive. Private Player(Businessman) cannot afford it.
  • Solution: Government launches the satellite using ISRO. Thus the highway (spectrum), is created. Then Government will charge money to whoever(cellphone company) uses this highway (spectrum).
  • You’re a businessman, you want to launch your own mobile service (like Vodafone, Airtel etc). Therefore you’re interested in using this 2G highway, to transport your trucks (data). You can also use 3G or 4G, which provide faster data transfer, but they’re more expensive.
New Problem: to access this 2G highway, you need two things
PROBLEM (BUSINESSMAN’S SIDE)SOLUTION
  1. Driver’s License (to operate the truck)
Apply to Department of Telecom.
  1. Pay rent/toll for using this highway (spectrum). Just like you pay for using Bandra-Worli sea-link or Yamuna Expressway.
Get loan from SBI.Pay the money to Government. Or even better, bribe minister so they give free spectrum.
Highways have fixed capacity. So Government cannot give license to 500000 truck-drivers else, it’ll create traffic jam. So, From Government’s side what should be the “ideal” solution?
  1. Check the application of driver: does he have previous experience of running telecom business? and more importantly his class 10,12 and college marksheets and school leaving certificate.
  2. After verifying his record, Sell the access to this highway (Spectrum).
Another problem: how should Government sell access to this Highway (Spectrum)?
Ans. Two methods, 1) first come first serve 2) Auction.
Both have their advantages and problems.

Method #1: First come First Serve basis

  • You already know how cinema tickets are sold. The person who is first in the line, gets the ticket. If You come late, you don’t get the ticket.
  • This also leads to ticket black-marketeering, for example, I come early, buy all the tickets. You come late, all the tickets are sold, I offer mytickets to you @higher price and make huge profit.
  • This is not good for economy because I’m making money without producing any new goods/services=inflation.
  • But according to a theory propounded by Mr.Sibbal, this is “zero loss”. Because Cinema hall did receive money for ticket sale. So it’s not like Cinema-hall making losses!
anyways, for common men:
  1. Buying ticket=not crime.
  2. Buying ticket but not watching movie AND selling that ticket to third person @higher price=crime.

Method#2: Auctioning method

  • As the name suggest, Auction the tickets. If person A offers Rs.200 for a seat and Person B offers Rs. 500 for the same seat, then sell the ticket to Person B.
  • From theatre owner (Govt)’s point of view: this method may look good, because now we can earn more money per ticket sold and use that money to finance whatever Development scheme we’ve in our mind.
  • Here is the problem: if Person B was a doctor, and he had to shell out Rs.500 for one movie ticket. Then he may charge more fees from patients @his clinic to keep the profit margin same.
  • So overall effect on economy= may not be good.
What happened in 2G scam?
Recall that you needed two things to run telecom business
  1. Driver’s license
  2. Access to Spectrum (via paying the money to Government)
Government decided that
  1. We will give license by “First come first serve basis”.
  2. To get this license, you’ll have to apply before 1st October 2007 and pay money (Entry Fees) for license.
  3. And whoever gets the license, he will automatically get spectrum for free. So no need to pay separate money for accessing highway(spectrum). This is known as “Spectrum linked with License”.
  4. If we give you the licence (+spectrum), then you’ll have to cover 10 per cent district headquarters within the first year of the allotment (i.e. you start serving customers in that area). This is known as “Roll out Obligation.”
And then, what happened next, is a classic case of cinema ticket black-marketeering.

Swan Telecom(Shahid Balwa)

  • A new company, it had no experience of running telecom business.
  • Yet it applied for license and got it.
  • (officially) SWAN telecom paid about Rs.1,500 crores to Government, as 2G Spectrum License fees.
  • But this company did not open a single outlet/mobile tower. So it didnot meet the “Roll out Obligation”.
  • It simply sold 45% stakes to UAE’s Etisalat for around 6000 crore rupees. Calculate the profit%.
  • Shahid Balwa was arrested in 2011, released on bail, thus proving that he is totally awesome.
  • His argument in the court, “Since Mr Sibal and the PM have both said that there was “no loss” to the government from the allcoation of licenses in 2008, so I’m being wrongly accused of corruption and conspiracy.”

Unitech (Sanjay Chandra)

  • This company didnot have any prior experiance of telecom business.
  • Yet, Applied for license, paid $365 million as licence fee to Government.
  • Did not open any outlet/mobile tower.
  • Then sold 60% stakes to Norway’s Talenor for $1.36 billion= huge profit without doing anything.
  • Thus name of company changes: Unitech+Talenor=Uninor.
  • Recall: bought the ticket, did not watch the movie and sold the ticket to third party @higher price.

A.Raja (Telecom Ministry)

raja-telecom-scam-bail
  • Ignored the advice of PM, Finance Ministry, Law ministry, TRAI etc.
  • TRAI had advice Raja to sell the spectrum via ‘auctioning’.
  • But Raja used “first come first serve basis.”
  • Licenses were sold in 2008 but the price (entry fees) were kept very low @2001’s market rates.
  • Initially the last date to apply for licenses = 1st October 2007. But then Raja changed policy “we’ll give license to only those companies who applied before 25th Sept.” This way later-comers could not get license (and had to buy it from ‘black market’).
  • He allowed ineligible companies to apply and get license (e.g. Unitech)
  • The companies who got license but did not start business (UNITECH and SWAN)…Raja did not take action against them. He should have cancelled their licenses or imposed heavy fines on them.
  • Companies paid him the bribes, he transferred money to bank accounts under his wife’s name in Mauritius and Seychelles.
  • Arrested in 2011, got bail in 2012, came back in parliament, thus proving that he is totally (and that means totally) awesome.

Kanimozhi

  • DMK MP, Daughter of Karunanidhi.
  • Shahid Balwa (SWAN) got benefit because of Raja. So he had to pay the ‘bribe’.
  • He transferred Rs.200 crores to “Kalaignar TV channel”, which is owned by Kanimozhi and her step mom Dayalu Amma and other family members.
  • Arrested in 2011, got bail in 2012, came back in parliament, thus proving that she too, is totally awesome.

Neera Radia

Nira Radia 2G Scam
  • There are some phone-tapes, in which this lady is talking with Barkha Dutt (NDTV fame).
  • To put this bluntly, Radia allegedly paid money to Congress party, to get Raja appointed as telecom minister. Then Raja could use the office to benefit particular companies in 2G auction (who had financed his ‘posting’).
  • This phone scandal is known as “Radia Gate”.
  • Only questioned, not arrested, and it is said that she wore a Kashmiri shawl worth Rs.1 lakh during questioning by Enforcement Directorate, so she too is totally awesome.
  • Now that shawl has become so recognisable that Kashmiri shawl sellers have started referring to it as the Radia shawl and sales of it have shot up= good for economy, GDP increased.
There are some other players too- RK Chandolia, Siddharth Behura et al, but you get the idea- they too are totally awesome.
CAG: 1.7 lakh crore loss
  • The 122 2G licenses were given by Raja for over Rs 9,000 crore.
  • While 3G auctions for a smaller number of licenses had fetched the government a sum of Rs 69,000 crore.
  • Therefore Government has lost money (Besides, whatever money made by ticket black-marketeers, is loss to the cinema hall owner)
  • The question remains, how much money was lost?
  • CAG says Government lost Rs.1.76 lakh crores, it has come to this figure, using extrapolations from
  1. licenses were sold in 2008, @the MRP of 2001
  2. The money received from 3G auction vs the money recieved from 2G license.
  3. 2G Spectrum was allotted for free. (recall Government only asked for entry-fees for licenses. Spectrum was linked with License). 2G-Spectrum should have been auctioned.
  4. Profit made by Swan and Unitech etc. through black-marketeering.
Parliament -JPC
In Feb-2011, Parliament Constituted a Joint parliamentary Committee to probe the 2G scam. No “real” progress so far.

Supreme Court verdict

Subramanium Swami 2G scam petition
  • Subramanian Swami, filled a petition in Supreme court, regarding the irregularities in 2G Auction.
  • The case went on, finally in Feb 2012, The Supreme Court cancelled 122 licenses issued in 2008, by A Raja when he was Telecom Minister.
  • Supreme Court said, these licenses were granted in an “arbitrary and unconstitutional” manner.
  • SC asked the Telecom Regulatory Authority of India (TRAI) to recommend a new process of allocation of licenses, along with guidelines for an auction of spectrum.
  • Supreme Court has also ordered Government to finish the auctioning before Jan-2013.

Presidential reference on SC verdict

  • After above verdict of Supreme court, Government decided to get clarification, on whether should every natural resources (coal, gas, petroleum, water etc) be allotted through auction only. (although technically “Spectrum” is not a natural resource, it is generated because of man made satellites.)
  • But, Mohan cannot just call any SC judge and seek clarification. A procedure has to be followed.
  • Through Article 143 of the Indian constitution, the president can refer matters of public interest to the Supreme Court and seek their opinion. This is known as “Presidential Reference”.
  • Here, first the Cabinet headed by Mohan approves a resolution that “WE need to send presidential reference in this xyz matter.”
  • Letter goes to President of India, then he/she sends a new letter to Supreme court asking “what should be done in this XYZ matter?”

Supreme court on Presidential Reference

  • Supreme court said auction cannot be the only method of allocating natural resources, it should be considered on a case-by-case basis.
  • Earning maximum revenue is secondary to serving the public good in allocating natural resources.
  • But if allocation of a particular resource is going to get sudden huge profit to a company, then such resource should be allotted through auction only. (for example 2G spectrum).
  • In anycase, all decisions and actions of the government are open to being questioned by the court.
Apart from that, a committee on allocation of natural resources, headed by Ashok Chawla, also recommended the adoption of a transparent and competitive process for the allocation of natural resources.
Impact of License Cancellation by Supreme Court
Customers
  • Since the license are scrapped, and new auction will be held = input cost of mobile companies will increase.
  • So, They’ll increase the call-rates to keep the profit margin same.
  • Therefore final consumer (common men) become the innocent victim in this game.
Foreign Investors
  • Norway’s Talenor and UAE’s Etisalat Company had paid heavy price to invest in the telecom sector of India.
  • But since the licenses are cancelled, in future, the foreign investors will be extremely cautious before investing in India, particularly in the sectors related with “allocation” of spectrum, coal mines etc.
Government
  • The reputation of Government =already down. So in terms of reputation they’ve got nothing to lose.
  • They make excuse that 1) 2G =Zero loss. 2) Since licenses were not auctioned = companies got them cheap = call rates were cheaper = public benefited from this.
  • Congi Government also maintains that we merely followed the policy of NDA (BJP), i.e. spectrum was linked with license and first-come-first serve basis. So, if our seniors did brutal ragging on us in the hostel, then we too will continue the glorious tradition by brutally ragging our juniors.
  • Anyway nobody is a saint when it comes to allotment of land, coal reserves, spectrum etc be it congress, BJP, state Government, union Government. because everybody needs truckload of cash to finance election campaigns.
  • Now Government will auction some 2G spectrum in Nov 2012 and expects to earn around Rs.40,000 crores.
  • And this money could be used to solve the fiscal deficit problem (click me) or to finance any new Government schemes for poor people.
Banks
  • SBI, PNB and other banks had landed to some of those telecom companies and now licenses are cancelled, so loan-money is stuck.
  • Anyways, nothing new for SBI- their loan-money is stuck with Vijay Mallya (Kingfisher) also.
Innocent aspirants of competitive exams
  • They’ve to prepare one more stupid topic for exams/group discussion /interview.
  • Anyways, nothing new for them either, they’re used to this irony of life.
Sistema –Russia issue
  • Just like Telenor (Norway) and Etilsat (UAE), Sistema (Russia) is also a foreign telecom company.
  • Sistema had bought stakes in an India company (Shyam Telecom), but then Supreme court cancelled their license.
  • Now Sistema has appealed the Supreme court to restore its license, current matter is pending in court.
  • In the light of this event, Russian Government has warned India that
  1. “If the issue of cancellation of 2G license to Sistema is not resolved in Indian courts, we will go for international arbitration.” (because Russian Government too holds about 17% in this Sistema-Shyam telecom company.)
  2. Row over Sistema will have “great repercussion” not only on Indo-Russian bilateral cooperation but also for foreign investments in India.
  3. We will not let Sistema’s USD 3.1 billion investment in its Indian telecom venture go waste due to “internal problems” here.

Spectrum Refarming

  • This is a separate issue, not directly associated with 2G Scam of A.Raja.
  • In 2001, some companies got License + free spectrum (900 Mhz). (recall that Spectrum was linked with the license.)
  • They’ve to renew their license in 2014.
  • But now Government has changed policy. According to new policy, Spectrum is de-linked from License. So you’ve to apply for license separately and you have to purchase spectrum separately (through auction).
  • Telecom Regulatory Authority of India (Trai) has suggested that existing mobile operators will have to surrender the spectrum in the 900 Mhz band at the time of license renewal in 2014.
  • And then, this 900 Mhz spectrum will be auctioned again.
  • Under this so called “Spectrum-refarming” process, if the companies manage to win in the auctions, they will be able to retain the spectrum or, in lieu, they would be given the 1,800 MHz spectrum via another auction.
  • Telecom companies are against this decision.
  • Their argument, “we’ve already invested more than one lakh crore rupees in machinery, mobile tower, other infrastructure for 900Mhz spectrum. If you take this away and give us new type of spectrum, we’ll have to buy new machines=we’ll increase call rate price to cover the losses”.
  • The matter will now be decided by Empowered group of ministers (EGoM).

Holding companies, not just individuals, responsible for corporate crime

By Brandon L. Garrett

The OECD Working Group on Bribery (WGB) is correctly interested in examining more closely the question of legal liability of organizations, including corporations. The broad question raised is what makes for an effective system for the liability of legal persons and as the WGB recognizes, there are many choices that follow if corporate criminal liability is adopted. Corporate criminal liability has evolved enormously in the United States, not in the legal standard, but in the details of its implementation, and many lessons can be learned from that experience.
Costs and Benefits of Corporate Criminal Liability
One advantage of entity legal liability for foreign bribery, and a range of crimes, is that often employees and agents are not facilitating the payment of bribers purely or even chiefly for their own benefit, but rather for the benefit of a corporation.  The bribe money may come from the corporation, with the intent of securing business for the corporation, and the employees may at best want to be rewarded in their careers at the corporation.  The corporation may create the environment that encourages employees, officers, and agents to pay bribes to secure business.  The corporation itself must be deterred from promoting bribery.  The corporation may also be in the best position to adopt measures to prevent bribery in the future.  Employees may be fired or prosecuted, but their replacements will continue the same practices if the corporation does not change its own policies and culture.
For those reasons, punishing only individuals may not affect the incentives and the culture that the corporation created.  That said, corporations need not be punished criminally if civil alternative suffice to deter bribery.  Whether civil fines and civil injunctions are adequate to do so, may depend on what penalties are available to civil enforcers and whether they have the investigative resources to effectively uncover and penalize bribery schemes.  In many countries, civil regulators cannot impose punitive fines.  If a company, for example, need only disgorge its gains from bribery when it is caught, there is little incentive not to continue paying bribes to secure profitable business.  However, if civil regulators can impose punitive fines (for example fines up to twice the gains to the company or the losses to victims – the standard under the criminal Alternative Fines Act in the US) then the outcome may not be much different than if the case was denominated as criminal.  The only difference may be the reputational threat of a criminal case, the collateral consequences of a criminal action, and requirements in criminal cases that a company cooperate in any investigations of individuals.  Each of those features of criminal enforcement in the US could in theory be made part of a civil enforcement scheme – even cooperation in any pending criminal investigations of individuals.  Collateral consequences such as debarment or suspension can also (and often are) be associated with civil enforcement.
The main reasons to denominate penalties and sanctions (such as monitoring or compliance) as criminal would be that civil authorities in a given country might not have the enforcement resources, investigative resources, or penalties and sanctions available to sufficiently deter and punish foreign bribery.
Procedure may enhance or limit the ability to adopt corporate criminal liability in a jurisdiction.  For example, if entities have self-incrimination rights, then an entity target will be able to resist providing documents and information about wrongdoing – corporate criminal liability will make it more difficult for enforcers to secure information about what transpired.  Or if corporate criminal liability better incentivizes cooperation in investigation of individual offenders, it may enhance accountability in such cases.
Jurisdictional obstacles to bringing bribery cases against employees of a multi-national corporation may not exist for corporations that have an operating presence in a country.  As a result, jurisdiction may be another practical reason to have corporate criminal liability (however, civil liability could also be premised on the same concept of jurisdiction).
Form of Corporate Criminal Liability
Some countries adopt modified forms of corporate criminal liability in which prosecutors must prove involvement of high level officials, for example, or that the criminal actions were endorsed or ratified by top-level officers.  Such approaches make it far too difficult to impose liability and they lead to complex investigation and litigation of questions regarding knowledge of particular actors within a company.  Individual accountability can and should be investigated separately, but to intermingle such questions with the question of corporate liability hinders effective enforcement.
A strict or respondeat superior standard imposes liability on a company for the actions of agents acting with the scope of their employment and at least in part to benefit the corporation.  That broad standard, adopted in federal court in the United States, makes it clear that a company cannot avoid liability for actions of employees, or of contractors or subsidiaries acting at least in part in the interests of the corporation.  If a jurisdiction is to adopt corporate criminal liability, that liability standard is preferable, in my view.  All conduct by agents, including hired intermediaries, contractors, broadly defined, should support liability.  Nor are such agents “unrelated” if they are hired by the corporation.
There is no reason to excuse bribery when it is a “low-level” employee that commits it.  The problem is not a mere failure to supervise; the low level employee has no reason to engage in bribery except to benefit the corporation.  If there is a low-level employee exception to bribery law then corporations can tacitly encourage the most dispensable low-level employees to violate bribery laws.
Nor is there any reason to excuse successors from the criminal actions of the entity they acquired.  A sale or merger should not wipe the criminal slate clean.  Otherwise, companies would play a shell game, engaging in mergers or sales simply to avoid consequences of their crimes.  Companies should be expected to do due diligence regarding criminal exposure before making a purchase, and that potential liability and need to do due diligence will further encourage compliance to detect and prevent bribery.
More nuanced questions concerning whether the corporation should be fully blameworthy can be addressed as a matter of sentencing or through settlement with prosecutors.  Whether to credit corporate cooperation and self-reporting or existing compliance efforts, for example, can be considered as a matter of sentencing, or in negotiation of settlement agreements.  Keeping such case-specific questions separate from the question of the liability standard, however, has real advantages.
Settlements and Remedies
There is much to discuss regarding how settlements can or should occur and options for guiding and structuring corporate settlements.  I have argued that having judicial involvement in the approval and supervision of settlements enhances the legitimacy of the process and permits the public interest to be better considered.  Purely out-of-court settlements should be avoided.
Compliance may be important to reforming a corporation going forward, and as a condition of resolving a bribery case. Prospective compliance is more important, in my view, than the question whether to reward retrospective compliance.  It is problematic to excuse penalties based on pre-existing compliance – which was by definition ineffective in detecting bribes – and because assessing compliance from the outside is challenging.  It is important to carefully assess a company’s compliance, and if it truly did everything it could to prevent bribers, then it should be mitigating factor, but not a shield from liability.
There should also be clear incentives to audit and assess compliance, even if the result uncovers self-critical information.  Indeed, there should be incentives to share best practices across industry.  Enforcers and prosecutors should make the rewards for sharing best practices clear and they should promote sharing of best practices.
More important will be imposition of deterrent fines – and on the detection side of the equation, rewarding self-reporting by companies, since it can be very difficult for enforcers to know whether bribes were paid.  Enforcers should also reward whistleblowers who report bribery.
General Corporate Criminal Liability
Having a general standard for corporate criminal liability has the advantage that bribery crimes may be accompanied by other corporate crimes, like money laundering, fraud, or antitrust violations, to name just a few examples.  Adopting anti-corruption crimes but not having mechanisms to address accompanying criminal conduct can weaken enforcement. That said, as with any crime, it is far better for bribery crimes to be detailed in statutes to provide clear notice as to what conduct is prohibited.
Finally, I note that as more countries adopt corporate criminal liability for bribery and other crimes, it will be important to develop coordination rules, including double jeopardy norms, so that corporations do not face multiple overlapping punishments for the same conduct.


Top 10 Corporate Criminals List

2016 Introduction

Many corporations are complicit in violating human rights and the environment. As the free trade market continues to push forward the global economy, holding corporations accountable for their poor practices becomes difficult. Unfortunately, corporations are working harder than ever to cover abuses instead of preventing them.
This does not have to be the reality. People can use their purchasing power to endorse Fair Trade, pressure companies to do the right thing, and boycott those that violate human rights and the environment. In doing so there is potential to pressure these companies to put people and planet ahead of profits.
Global Exchange has compiled a new list of  “most wanted” corporations of 2016 based on issues like unlivable working conditions, low pay, violations of human right and voting rights; climate change denial, and environmental destruction, just to name a few.
Four corporations, Koch Industries, McDonald’s, Chevron and Monsanto were on earlier lists but are included again, as the corporate behavior of these companies has reached egregious levels this year and merits repeat attention.
The Ten Top Corporate Criminals list is a guide to what companies like Energy Transfer Partners, Exxon Mobil, H&M and others are doing to undermine human rights and the environment. Share the list with friends, family, and co-workers. Use the Take Action section to add your voice and increase the pressure.
We at Global Exchange encourage you to exercise your power as a global citizen to promote social justice and defend the Earth.

The List
  1. Energy Transfer Partnersfor the construction of the Dakota Access Pipeline.
  2. Corrections Corporation Of America (CCA)for profiting off of the incarceration of American citizens and immigrants.
  3. DESA (Desarrollos Energéticos S.A.)for the construction of dams on Indigenous Lenca lands in Honduras.
  4. Exxon Mobilfor suppressing climate science and delaying action on global warming for decades.
  5. Koch Industriesfor investing $889 million to sway the outcome of 2016 Congressional races. This is an update from 2015.
  6. McDonald’s Corporationfor unfair pay practices. This is an update from 2015.
  7. PepsiCofor violating worker rights, along with destroying rainforests, harming local communities and Indigenous Peoples’ lands, and causing massive greenhouse gas emissions by draining and burning of peatlands for production of palm oil.
  8. Chevronfor its refusal to clean up the Amazon.
  9. H&Mfor its failure to ensure the safety of workers in Bangladesh.
  10. Monsantofor the development of genetically engineered wheat.
    11. Dis-Honorable Mention (Backslider): Dunkin’ Donuts


Top 100 Corporate Criminals of the Decade
by Russell Mokhiber

INTRODUCTION
Every year, the major business magazines put out their annual surveys of big business in America.
You have the Fortune 500, the Forbes 400, the Forbes Platinum 100, the International 800 — among others.
These lists rank big corporations by sales, assets, profits and market share. The point of these surveys is simple — to identify and glorify the biggest and most profitable corporations.
The point of the list contained in this report, The Top 100 Corporate Criminals of the Decade — is to focus public attention on a wave of corporate criminality that has swamped prosecutors offices around the country.
This is the dark underside of the marketplace that is given little sustained attention and analysis by politicians and news outlets.
To compile The Top 100 Corporate Criminals of the 1990s, we used the most narrow and conservative of definitions — corporations that have pled guilty or no contest to crimes and have been criminally fined.
The 100 corporate criminals fell into 14 categories of crime: Environmental (38), antitrust (20), fraud (13), campaign finance (7), food and drug (6), financial crimes (4), false statements (3), illegal exports (3), illegal boycott (1), worker death (1), bribery (1), obstruction of justice (1) public corruption (1), and tax evasion (1).
We did not try to assess and compare the damage committed by these corporate criminals or by other corporate wrongdoers.
There are millions of Americans who care about morality in the marketplace.
But few Americans realize that when they buy Exxon stock, or when they fill up at an Exxon gas station, they are in fact supporting a criminal recidivist corporation.
And few Americans realize that when the take a ride on a cruise ship owned by Royal Caribbean Cruise Lines, they are riding on a ship owned by a criminal recidivist corporation.
Six corporations that made the list of the Top 100 Corporate Criminals were criminal recidivist companies during the 1990s.
In addition to Exxon and Royal Caribbean, Rockwell International, Warner-Lambert, Teledyne, and United Technologies each pled guilty to more than one crime during the 1990s.

A few caveats about this report.
Caveat one: Big companies that are criminally prosecuted represent only the tip of a very large iceberg of corporate wrongdoing.
For every company convicted of health care fraud, there are hundreds of others who get away with ripping off Medicare and Medicaid, or face only mild slap-on-the-wrist fines and civil penalties when caught.
For every company convicted of polluting the nation’s waterways, there are many others who are not prosecuted because their corporate defense lawyers are able to offer up a low-level employee to go to jail in exchange for a promise from prosecutors not to touch the company or high-level executives.
For every corporation convicted of bribery or of giving money directly to a public official in violation of federal law, there are thousands who give money legally through political action committees to candidates and political parties. They profit from a system that effectively has legalized bribery.
For every corporation convicted of selling illegal pesticides, there are hundreds more who are not prosecuted because their lobbyists have worked their way in Washington to ensure that dangerous pesticides remain legal.
For every corporation convicted of reckless homicide in the death of a worker, there are hundreds of others that don’t even get investigated for reckless homicide when a worker is killed on the job. Only a few district attorneys across the country (Michael McCann, the DA in Milwaukee County, Wisconsin, being one) regularly investigate workplace deaths as homicides.

Caveat two: Corporations define the laws under which they live.
For example, the automobile industry over the past 30 years has worked its will on Congress to block legislation that would impose criminal sanctions on knowing and willful violations of the federal auto safety laws. Now, if an auto company is caught violating the law, and if the cops are not asleep at the wheel, only a civil fine is imposed.

Caveat three: Because of their immense political power, big corporations have the resources to defend themselves in courts of law and in the court of public opinion.
Few prosecutors are willing to subject themselves to the constant legal and public relations barrage that a corporation’s well connected and high-priced legal talent can inflict.
It is a testament to the tenacity of a few dedicated federal prosecutors that Royal Caribbean Cruise Lines, for example, was criminally convicted of polluting the oceans.
In the criminal prosecution of Royal Caribbean Cruise Lines the company was facing a team of two federal criminal prosecutors.
To defend itself, Royal Caribbean hired Judson Starr and Jerry Block, both of whom have served as head of the Justice Department’s Environmental Crimes Section, and former Attorney General Benjamin Civiletti.
Also representing Royal Caribbean were former federal prosecutors Kenneth C. Bass III, and Norman Moscowitz. Donald Carr of Winthrop & Stimson also joined the defense team.
Hired on as experts on international law issues were former Attorney General Eliot Richardson, University of Virginia law professor John Norton Moore, former State Department officials Terry Leitzell and Bernard Oxman, and four retired senior admirals.
As the case proceeded to trial, Royal Caribbean engaged in a massive public relations campaign, taking out ads during the Super Bowl, putting former Environmental Protection Agency (EPA) Administrators on its board of directors, and donating thousands of dollars to environmental groups.
Federal prosecutors overcame this legal and public relations barrage and convicted the company. But that was an unusual prosecution and unusually determined prosecutors.

While the 1990s was a decade of booming markets and booming profits, it was also a decade of rampant corporate criminality.
There is an emerging consensus among corporate criminologists.
And that emerging consensus is this: corporate crime and violence inflicts far more damage on society than all street crime combined.
The FBI estimates, for example, that burglary and robbery — street crimes — costs the nation $3.8 billion a year.
Compare this to the hundreds of billions of dollars stolen from Americans as a result of corporate and white-collar fraud.
Health care fraud alone costs Americans $100 billion to $400 billion a year.
The savings and loan fraud — which former Attorney General Dick Thornburgh called “the biggest white collar swindle in history” — cost us anywhere from $300 billion to $500 billion.
And then you have your lesser frauds: auto repair fraud, $40 billion a year, securities fraud, $15 billion a year — and on down the list.
Recite this list of corporate frauds and people will immediately say to you: but you can’t compare street crime and corporate crime — corporate crime is not violent crime.
Unfortunately, corporate crime is often violent crime.
The FBI estimates that, 19,000 Americans are murdered every year.
Compare this to the 56,000 Americans who die every year on the job or from occupational diseases such as black lung and asbestosis and the tens of thousands of other Americans who fall victim to the silent violence of pollution, contaminated foods, hazardous consumer products, and hospital malpractice.
These deaths are often the result of criminal recklessness. They are sometimes prosecuted as homicides or as criminal violations of federal laws.
And environmental crimes often result in death, disease and injury.
In 1998, for example, a Tampa, Florida company and the company’s plant manager were found guilty of violating a federal hazardous waste law. Those illegal acts resulted in the deaths of two nine-year-old boys who were playing in a dumpster at the company’s facility.

This report is only a tiny step in an effort to fill a great void in corporate crime research.
The Justice Department has the information and should get the budget to begin putting out yearly reports on corporate crime.
Every year, the Justice Department puts out an annual report titled “Crime in the United States.”
But by “Crime in the United States,” the Justice Department means “street crime in the United States.”
So, in “Crime in the United States” document you will read about burglary, robbery and theft. There is nothing in it about price-fixing, corporate fraud, pollution, or public corruption.
A yearly Justice Department report on Corporate Crime in the United States is long overdue.

THE TOP 100 CORPORATE CRIMINALS OF THE 1990’s
1) F. Hoffmann-La Roche Ltd.
Type of Crime: Antitrust
Criminal Fine: $500 million
12 Corporate Crime Reporter 21(1), May 24, 1999
2) Daiwa Bank Ltd.
Type of Crime: Financial
Criminal Fine: $340 million
10 Corporate Crime Reporter 9(3), March 4, 1996
3) BASF Aktiengesellschaft
Type of Crime: Antitrust
Criminal Fine: $225 million
12 Corporate Crime Reporter 21(1), May 24, 1999
4) SGL Carbon Aktiengesellschaft (SGL AG)
Type of Crime: Antitrust
Criminal Fine: $135 million
12 Corporate Crime Reporter 19(4), May 10, 1999
5) Exxon Corporation and Exxon Shipping
Type of Crime: Environmental
Criminal Fine: $125 million
5 Corporate Crime Reporter 11(3), March 18, 1991
6) UCAR International, Inc.
Type of Crime: Antitrust
Criminal Fine: $110 million
12 Corporate Crime Reporter 15(6), April 13, 1998
7) Archer Daniels Midland
Type of Crime: Antitrust
Criminal Fine: $100 million
10 Corporate Crime Reporter 40(1), October 21, 1996
8)(tie) Banker’s Trust
Type of Crime: Financial
Criminal Fine: $60 million
12 Corporate Crime Reporter 11(1), March 15, 1999
8)(tie) Sears Bankruptcy Recovery Management Services
Type of Crime: Fraud
Criminal Fine: $60 million
13 Corporate Crime Reporter 7(1), February 15, 1999
10) Haarman & Reimer Corp.
Type of Crime: Antitrust
Criminal fine: $50 million
11 Corporate Crime Reporter 5(4), February 3, 1997
11) Louisiana-Pacific Corporation
Type of Crime: Environmental
Criminal Fine: $37 million
12 Corporate Crime Reporter 23(1), June 8, 1998
12) Hoechst AG
Type of Crime: Antitrust
Criminal Fine: $36 million
12 Corporate Crime Reporter 19(6), May 10, 1999
13) Damon Clinical Laboratories, Inc.
Type of Crime: Fraud
Criminal Fine: $35.2 million
10 Corporate Crime Reporter 39(6), October 14, 1996
14) C.R. Bard Inc.
Type of Crime: Food and drug
Criminal Fine: $30.9 million
7 Corporate Crime Reporter 41(1), October 25, 1993
15) Genentech Inc.
Type of Crime: Food and drug
Criminal Fine: $30 million
12 Corporate Crime Reporter 16(3), April 19, 1999
16) Nippon Gohsei
Type of Crime: Antitrust
Criminal Fine: $21 million
12 Corporate Crime Reporter 29(3), July 19, 1999
17)(tie) Pfizer Inc.
Type of Crime: Antitrust
Criminal Fine: $20 million
12 Corporate Crime Reporter 30(1), July 26, 1999
17)(tie) Summitville Consolidated Mining Co. Inc.
Type of Crime: Environmental
Criminal Fine: $20 million
10 Corporate Crime Reporter 20(3) May 20, 1996
19)(tie) Lucas Western Inc.
Type of Crime: False Statements
Criminal Fine: $18.5 million
9 Corporate Crime Reporter 4(6), January 30, 1995
19)(tie) Rockwell International Corporation
Type of Crime: Environmental
Criminal Fine: $18.5 million
6 Corporate Crime Reporter 13(4), March 30, 1992
21) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $18 million
12 Corporate Crime Reporter 30(4), July 26, 1999
22) Teledyne Industries Inc.
Type of Crime: Fraud
Criminal Fine: $17.5 million
6 Corporate Crime Reporter 39(9), October 12, 1992
23) Northrop
Type of Crime: False statements
Criminal Fine: $17 million
4 Corporate Crime Reporter 9(1), March 5, 1990
24) Litton Applied Technology Division (ATD) and Litton Systems Canada (LSL)
Type of Crime: Fraud
Criminal Fine: $16.5 million
12 Corporate Crime Reporter 27(1), July 5, 1999
25) Iroquois Pipeline Operating Company
Type of Crime: Environmental
Criminal Fine: $15 million
10 Corporate Crime Reporter 22(1), June 3, 1996
26) Eastman Chemical Company
Type of Crime: Antitrust
Criminal Fine: $11 million
12 Corporate Crime Reporter 38(5), October 5, 1998
27) Copley Pharmaceutical, Inc.
Type of Crime: Food and drug
Criminal Fine: $10.65 million
11 Corporate Crime Reporter 22(1), June 2, 1997
28) Lonza AG
Type of Crime: Antitrust
Criminal Fine: $10.5 million
12 Corporate Crime Reporter 10(1), March 8, 1999
29) Kimberly Home Health Care Inc.
Type of Crime: Fraud
Criminal Fine: $10.08 million
12 Corporate Crime Reporter 30(6), July 26, 1999
30)(tie) Ajinomoto Co. Inc.
Type of Crime: Antitrust
Criminal Fine: $10 million
10 Corporate Crime Reporter 40(1), October 21, 1996
30)(tie) Bank of Credit and Commerce International (BCCI)
Type of Crime: Financial
Criminal Fine: $10 million
4 Corporate Crime Reporter 3(1) January 22, 1990
30)(tie) Kyowa Hakko Kogyo Co. Ltd.
Type of Crime: Antitrust
Criminal Fine: $10 million
10 Corporate Crime Reporter 40(1), October 21, 1996
30)(tie) Warner-Lambert Company
Type of Crime: Food and drug
Criminal Fine: $10 million
9 Corporate Crime Reporter 46(1), December 4, 1995
34) General Electric
Type of Crime: Fraud
Criminal Fine: $9.5 million
6 Corporate Crime Reporter 30(7), July 27, 1992
35)(tie) Royal Caribbean Cruises Ltd.
Type of Crime: Environmental
Criminal Fine: $9 million
12 Corporate Crime Reporter 23(3), June 8, 1998
35)(tie) Showa Denko Carbon
Type of Crime: Antitrust
Criminal Fine: $9 million
12 Corporate Crime Reporter 19(4), May 10, 1999
37) IBM East Europe/Asia Ltd.
Type of Crime: Illegal exports
Criminal Fine: $8.5 million
12 Corporate Crime Reporter 32(1), August 10, 1998
38) Empire Sanitary Landfill Inc.
Type of crime: Campaign finance
Criminal fine: $8 million
11 Corporate Crime Reporter 39(3), October 13, 1997
39)(tie) Colonial Pipeline Company
Type of Crime: Environmental
Criminal Fine: $7 million
13 Corporate Crime Reporter 9(3), March 1, 1999
39)(tie) Eklof Marine Corporation
Type of Crime: Environmental
Criminal Fine: $7 million
11 Corporate Crime Reporter 37(4), September 29, 1997
41)(tie) Chevron
Type of Crime: Environmental
Criminal Fine: $6.5 million
6 Corporate Crime Reporter, 22(1), June 1, 1992
41)(tie) Rockwell International Corporation
Type of Crime: Environmental
Criminal Fine: $6.5 million
10 Corporate Crime Reporter 15(4), April 15, 1996
43) Tokai Carbon Ltd. Co.
Type of Crime: Antitrust
Criminal Fine: $6 million
12 Corporate Crime Reporter 19(4), May 10, 1999
44)(tie) Allied Clinical Laboratories, Inc.
Type of Crime: Fraud
Criminal Fine: $5 million
10 Corporate Crime Reporter 45(1), November 25, 1996
44)(tie) Northern Brands International Inc.
Type of Crime: Fraud
Criminal Fine: $5 million
13 Corporate Crime Reporter 1(1), January 4,1999
44)(tie) Ortho Pharmaceutical Corporation
Type of Crime: Obstruction of justice
Criminal Fine: $5 million
9 Corporate Crime Reporter 2(3), January 16, 1995
44)(tie) Unisys
Type of Crime: Bribery
Criminal Fine: $5 million
5 Corporate Crime Reporter 35(11), September 16, 1991
44)(tie) Georgia Pacific Corporation
Type of Crime: Tax evasion
Criminal Fine: $5 million
5 Corporate Crime Reporter 38(8), October 7, 1991
49) Kanzaki Specialty Papers Inc.
Type of Crime: Antitrust
Criminal Fine: $4.5 million
8 Corporate Crime Reporter 29(4), July 18, 1994
50) ConAgra Inc.
Type of Crime: Fraud
Criminal Fine: $4.4 million
11 Corporate Crime Reporter 12(1), March 24, 1997
51) Ryland Mortgage Company
Type of Crime: Financial
Criminal Fine: $4.2 million
12 Corporate Crime Reporter 32(1), August 10, 1998
52)(tie) Blue Cross Blue Shield of Illinois
Type of Crime: Fraud
Criminal Fine: $4 million
12 Corporate Crime Reporter 29(1), July 20, 1998
52)(tie) Borden Inc.
Type of Crime: Antitrust
Criminal Fine: $4 million
4 Corporate Crime Reporter 11(9), March 19, 1990
52)(tie) Dexter Corporation
Type of Crime: Environmental
Criminal Fine: $4 million
6 Corporate Crime Reporter 35(6), September 14, 1992
52)(tie) Southland Corporation
Type of Crime: Antitrust
Criminal Fine: $4 million
4 Corporate Crime Reporter 11(9), March 19, 1990
52)(tie) Teledyne Industries Inc.
Type of Crime: Illegal exports
Criminal Fine: $4 million
9 Corporate Crime Reporter 5(3), February 6, 1995
52)(tie) Tyson Foods Inc.
Type of Crime: Public corruption
Criminal Fine: $4 million
12 Corporate Crime Reporter 1(3), January 5, 1998
58)(tie) Aluminum Company of America (ALCOA)
Type of Crime: Environmental
Criminal Fine: $3.75 million
5 Corporate Crime Reporter 29(6), July 22, 1991
58)(tie) Costain Coal Inc.
Type of Crime: Worker Death
Criminal Fine: $3.75 million
7 Corporate Crime Reporter 9(10), March 1, 1993
58)(tie) United States Sugar Corporation
Type of Crime: Environmental
Criminal Fine: $3.75 million
5 Corporate Crime Reporter 27(4), December 9, 1991
61) Saybolt, Inc., Saybolt North America
Type of Crime: Environmental
Criminal Fine: $3.4 million
12 Corporate Crime Reporter 33(1), August 17, 1998
62)(tie) Bristol-Myers Squibb
Type of Crime: Environmental
Criminal Fine: $3 million
6 Corporate Crime Reporter 18(3), May 4, 1992
62)(tie) Chemical Waste Management Inc.
Type of Crime: Environmental
Criminal Fine: $3 million
6 Corporate Crime Reporter 40(5), October 19, 1992
62)(tie) Ketchikan Pulp Company
Type of Crime: Environmental
Criminal Fine: $3 million
9 Corporate Crime Reporter 13(1), April 3, 1995
62)(tie) United Technologies Corporation
Type of Crime: Environmental
Criminal Fine: $3 million
5 Corporate Crime Reporter 21(1), May 27, 1991
62)(tie) Warner-Lambert Inc.
Type of Crime: Environmental
Criminal Fine: $3 million
11 Corporate Crime Reporter 37(3), September 29, 1997
67)(tie) Arizona Chemical Co. Inc.
Type of Crime: Environmental
Criminal Fine: $2.5 million
10 Corporate Crime Reporter 39(5), October 14, 1996
67)(tie) Consolidated Rail Corporation (Conrail)
Type of Crime: Environmental
Criminal Fine: $2.5 million
9 Corporate Crime Reporter 30(1), July 31, 1995
69) International Paper 
Type of Crime: Environmental
Criminal Fine: $2.2 million
5 Corporate Crime Reporter 31(7), August 5, 1991
70)(tie) Consolidated Edison Company
Type of Crime: Environmental
Criminal Fine: $2 million
8 Corporate Crime Reporter 46(5), November 28, 1994
70)(tie) Crop Growers Corporation
Type of Crime: Campaign finance
Criminal fine: $2 million
11 Corporate Crime Reporter 4(3), January 27, 1997
70)(tie) E-Systems Inc.
Type of Crime: Fraud
Criminal Fine: $2 million
4 Corporate Crime Reporter 33, September 3, 1990
70)(tie) HAL Beheer BV
Type of Crime: Environmental
Criminal Fine: $2 million
12 Corporate Crime Reporter 39(4), October 12, 1998
70)(tie) John Morrell and Company
Type of Crime: Environmental
Criminal Fine: $2 million
10 Corporate Crime Reporter 6(3), February 12, 1996
70)(tie) United Technologies Corporation
Type of Crime: Fraud
Criminal Fine: $2 million
6 Corporate Crime Reporter 34(4), September 7, 1992
76) Mitsubishi Corporation, Mitsubishi International Corporation
Type of Crime: Antitrust
Criminal Fine: $1.8 million
8 Corporate Crime Reporter 29(4), July 18, 1994
77)(tie) Blue Shield of California
Type of Crime: Fraud
Criminal Fine: $1.5 million
10 Corporate Crime Reporter 18(3), May 6, 1996
77)(tie) Browning-Ferris Inc.
Type of Crime: Environmental
Criminal Fine: $1.5 million
12 Corporate Crime Reporter 23(3), June 8, 1998
77)(tie) Odwalla Inc.
Type of Crime: Food and drug
Criminal Fine: $1.5 million
12 Corporate Crime Reporter 30(1), July 27, 1998
77)(tie) Teledyne Inc.
Type of Crime: False statements
Criminal Fine: $1.5 million
7 Corporate Crime Reporter 34(12), September 6, 1993
77)(tie) Unocal Corporation
Type of Crime: Environmental
Criminal Fine: $1.5 million
8 Corporate Crime Reporter 12(8), March 21, 1994
82)(tie) Doyon Drilling Inc.
Type of Crime: Environmental
Criminal Fine: $1 million
12 Corporate Crime Reporter 21(1), May 25, 1998
82)(tie) Eastman Kodak
Type of Crime: Environmental
Criminal Fine: $1 million
4 Corporate Crime Reporter 14(1), April 9, 1990
82)(tie) Case Corporation
Type of Crime: Illegal exports
Criminal Fine: $1 million
10 Corporate Crime Reporter 22(4), June 3, 1996
85) Marathon Oil
Type of Crime: Environmental
Criminal Fine: $900,000
5 Corporate Crime Reporter 22(5), June 3, 1991
86) Hyundai Motor Company
Type of Crime: Campaign finance
Criminal Fine: $600,000
9 Corporate Crime Reporter 48(3), December 18, 1995
87)(tie) Baxter International Inc.
Type of Crime: Illegal Boycott
Criminal Fine: $500,000
7 Corporate Crime Reporter 13(7) , March 29, 1993
87)(tie) Bethship-Sabine Yard
Type of Crime: Environmental
Criminal Fine: $500,000
9 Corporate Crime Reporter 26(4), July 3, 1995
87(tie) Palm Beach Cruises
Type of Crime: Environmental
Criminal Fine: $500,000
12 Corporate Crime Reporter 30(4), July 26, 1999
87)(tie) Princess Cruises Inc.
Type of Crime: Environmental
Criminal Fine: $500,000
12 Corporate Crime Reporter 30(4), July 26, 1999
91)(tie) Cerestar Bioproducts BV
Type of Crime: Antitrust
Criminal Fine: $400,000
12 Corporate Crime Reporter 28(3), June 29, 1998
91)(tie) Sun-Land Products of California
Type of Crime: Campaign finance
Criminal Fine: $400,000
12 Corporate Crime Reporter 33(1), August 17, 1998
93)(tie) American Cyanamid
Type of Crime: Environmental
Criminal Fine: $250,000
4 Corporate Crime Reporter 46(5), December 3, 1990
93)(tie) Korean Air Lines
Type of Crime: Campaign finance
Criminal Fine: $250,000
9 Corporate Crime Reporter 47(1), December 11, 1995
93)(tie) Regency Cruises Inc.
Type of Crime: Environmental
Criminal Fine: $250,000
12 Corporate Crime Reporter 30(4), July 26, 1999
96)(tie) Adolph Coors Company
Type of Crime: Environmental
Criminal Fine: $200,000
4 Corporate Crime Reporter 43(3), November 12, 1990
96)(tie) Andrew and Williamson Sales Co.
Type of crime: Food and drug
Criminal fine: $200,000
11 Corporate Crime Reporter 44(4), November 17, 1997
96)(tie) Daewoo International (America) Corporation
Type of Fine: Campaign finance
Criminal Fine: $200,000
10 Corporate Crime Reporter 13(3), April 1, 1996
96)(tie) Exxon Corporation
Type of Crime: Environmental
Criminal Fine: $200,000
5 Corporate Crime Reporter 12(1), March 25, 1991
100) Samsung America Inc.
Type of Crime: Campaign finance
Criminal Fine: $150,000
10 Corporate Crime Reporter 6(5), February 12, 1996

17 of the Worst Corporate Crimes of 2015
The ongoing corporate crime wave shows no signs of abating.


The ongoing corporate crime wave showed no signs of abating in 2015. BP paid a record $20 billion to settle the remaining civil charges relating to the Deepwater Horizon disaster (on top of the $4 billion in previous criminal penalties), and Volkswagen is facing perhaps even greater liability in connection with its scheme to evade emission standards.
Other automakers and suppliers were hit with large penalties for safety violations, including a $900 million fine (and deferred criminal prosecution) for General Motors, a record civil penalty of $200 million for Japanese airbag maker Takata, penalties of $105 million and $70 million for Fiat Chrysler, and $70 million for Honda.
Major banks continued to pay large penalties to resolve a variety of legal entanglements. Five banks (Citigroup, JPMorgan Chase, Barclays, Royal Bank of Scotland and UBS) had to pay a total of $2.5 billion to the Justice Department and $1.8 billion to the Federal Reserve in connection with charges that they conspired to manipulate foreign exchange markets. The DOJ case was unusual in that the banks had to enter guilty pleas, but it is unclear that this hampered their ability to conduct business as usual.
Anadarko Petroleum agreed to pay more than $5 billion to resolve charges relating to toxic dumping by Kerr-McGee, which was acquired by Anadarko in 2006. In another major environmental case, fertilizer company Mosaic agreed to resolve hazardous waste allegations at eight facilities by creating a $630 million trust fund and spending $170 million on mitigation projects.
These examples and the additional ones below were assembled with the help of Violation Tracker, the new database of corporate misconduct my colleagues and I at the Corporate Research Project of Good Jobs First introduced this year. The database currently covers environmental, health and safety cases from 13 federal agencies, but we will be adding other violation categories in 2016.
  1. Deceptive financial practices. The Consumer Financial Protection Bureau fined Citibank $700 millionfor the deceptive marketing of credit card add-on products.
  2. Cheating depositors. Citizens Bank was fined $18.5 millionby the CFPB for pocketing the difference when customers mistakenly filled out deposit slips for amounts lower than the sums actually transferred.
  3. Overcharging customers.An investigation by officials in New York City foundthat pre-packaged products at Whole Foods had mislabeled weights, resulting in grossly inflated unit prices.
  4. Food contamination.In a rare financial penalty in a food safety case, a subsidiary of ConAgra was fined $11.2 millionfor distributing salmonella-tainted peanut butter.
  5. Adulterated medication.Johnson & Johnson subsidiary McNeill-PPC entered a guilty plea and paid $25 millionin fines and forfeiture in connection with charges that it sold adulterated children’s over-the-counter medications.
  6. Illegal marketing.Sanofi subsidiary Genzyme Corporation entered into a deferred prosecution agreement and paid a penalty of $32.6 millionin connection with charges that it promoted its Seprafilm devices for uses not approved as safe by the Food and Drug Administration.
  7. Failure to report safety defects.Among the companies hit this year with civil penalties by the Consumer Product Safety Commission for failing to promptly report safety hazards were: General Electric ($3.5 millionfine), Office Depot ($3.4 million) and LG Electronics ($1.8 million).
  8. Workplace hazards. Tuna producer Bumble Bee agreed to pay $6 millionto settle state charges that it willfully violated worker safety rules in connection with the death of an employee who was trapped in an industrial oven at the company’s plant in Southern California.


  1. Sanctions violations.Deutsche Bank was fined $258 millionfor violations in connection with transactions on behalf of countries (such as Iran and Syria) and entities subject to U.S. economic sanctions.
  2. Air pollution.Glass manufacturer Guardian Industries settled Clean Air Act violations brought by the EPA by agreeing to spend $70 millionon new emission controls.
  3. Ocean dumping.An Italian company called Carbofin was hit with a $2.75 millioncriminal fine for falsifying its records to hide the fact that it was using a device known as a “magic hose” to dispose of sludge, waste oil and oil-contaminated bilge water directly into the sea rather than using required pollution prevention equipment.
  4. Climate denial. The New York Attorney General is investigatingwhether Exxon Mobil deliberately deceived shareholders and the public about the risks of climate change.
  5. False claims.Millennium Health agreed to pay $256 millionto resolve allegations that it billed Medicare, Medicaid and other federal health programs for unnecessary tests.
  6. Illegal lobbying.Lockheed Martin paid $4.7 millionto settle charges that it illegally used government money to lobby federal officials for an extension of its contract to run the Sandia nuclear weapons lab.
  7. Price-fixing.German auto parts maker Robert Bosch was fined $57.8 millionafter pleading guilty to Justice Department charges of conspiring to fix prices and rig bids for spark plugs, oxygen sensors and starter motors sold to automakers in the United States and elsewhere.
  8. Foreign bribery.Goodyear Tire & Rubber paid $16 millionto resolve Securities and Exchange Commission allegations that company subsidiaries paid bribes to obtain sales in Kenya and Angola.
  9. Wage Theft.Oilfield services company Halliburton paid $18 millionto resolve Labor Department allegations that it improperly categorized more than 1,000 workers to deny them overtime pay.


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