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Democratic Voices

October 15th, 2005

A Deep Look at Corruption Culture

Recent events have shown that a corruption culture has taken hold of the dominant corporate business community and their allies in American politics. The corruption culture threatens both our economic way of life and American Democracy.

The criminal charges filed against Republican House Majority Leader Tom Delay, the insider stock trading investigation of Senate Republican Majority Leader Bill Frist, the huge increases in energy prices as a result of deliberate market manipulation of supply by oil refineries and the White House aides (Karl Rove and Cheney’s Chief of Staff Libby) role in outing a CIA agent for partisan political reasons have it clear that corruption by the powerful is out of control. The intentionally created California electric energy crisis of Bush’s first term, the MCI-Worldcom frauds, the Enron frauds, the charges against Ohio Governor Taft, the criminal trial of former Illinois Governor Ryan, the voter intimidation tactics used by the Republican Party in Ohio and elsewhere are all strong evidence that America is facing a breakdown in business ethics and political commitment to American Democracy.

America’s crisis has two related parts. We have a runaway greed problem in Corporate business circles that has spilled over into American politics and government. The growing financial power of corrupt corporations has helped the most ruthless politicians obtain political power and virtual control of American government at most levels. The power lust in political circles is as strong as the money lust in Corporate business circles. The two have merged in the Bush Republican political machine.

There is growing evidence that traditional checks and balances in government designed by our Founding Fathers and improved by earlier generations of American political leaders are no longer respected by our current leaders. These checks and balances are no longer working effectively as a result.

Our Corporate business leaders are following a business ethics approach of charging “all the market will bear” prices. The concept of a “reasonable rate of return” on investment has been largely abandoned in less than a generation. The difference in the two approaches to business is critically important and relate to the corrupting influence of corporations in American politics.

An “all the market will bear” approach does not take into account serving the public good. Private financial gain trumps every other consideration. Our Founding Fathers required that corporations had written in their charters serving the public good as their first responsibility even before making profits or serving stockholder interests! Maximizing profits were not their primary mission or reason for existence. The “greed is good” code of business ethics is a fairly new and growing cancer on the American economy. Our current Corporate business leaders are not committed to serving the public good enough to even follow our laws or common standards of decency in many cases.

Oil companies have closed nearly 200 oil refineries that were making profits in order to restrict the supplies of fuel and home heating oil. They seem to have done so in order to drive up the prices they charge American consumers. The huge increases in prices for diesel, gasoline and other fuels are a direct result of supply manipulation. The current shortages seem to be deliberately created by the refineries. The shortages during the California electric energy crisis were created by Enron and other energy companies.

Most oil refineries receive their supplies of crude oil on long-term contracts at prices below or around $20 a barrel. The media has been pushing to the public that oil is trading on the futures market around $60 a barrel. The media has failed to publicize that most oil is not subject to trade in the futures market. The futures market is often known is often known as the “spot” market and reflects a very tiny amount of the crude oil bought and sold worldwide outside of low priced long-term contracts.

Oil refineries are making operating profits in the 265% range on their products at current prices. These profits are far in excess of a “reasonable rate of return.” It is questionable if current prices and operating profits are higher than the “market can bear” in the long run. Reasonable Americans would consider 265% profit margins as price-gouging.

The federal government is currently controlled by oil company interests in the form of Bush Republicans. Under the Bush Republicans, many of the largest oil companies have been permitted to merge in recent years. Chevron and Texaco are no longer competing with each other. Phillips 66, Conoco and Unocal are in the same situation. BP and Amoco are no longer competitors. The oil industry mergers have greatly reduced competition for their products which are considered in economic terms relatively “inelastic.”

The “inelastic” economic term means that demand does not fall quickly when prices rise because consumers cannot reasonably do without the “inelastic” products regardless of price. Without fuel, goods and services cannot reach consumers, stores or businesses. Without fuel, workers cannot get to their jobs. Without home heating oil and natural gas, Americans will freeze to death. Industries that supply “inelastic” products should be heavily regulated by government to stop price gouging and to foster a competitive business structure in order to hold down excessive profits and prices.

The “reasonable rate of return” standard should be mandated by law if necessary. In extreme cases where Corporate behavior hurts the national interest and national security, government should even consider taking complete control of these industries. They should be taken out of irresponsible private hand and operated on a governmental, non-profit basis. The American people should come before private profits.

This concept is why our military and foreign policy is not run by private corporations. The Iran-Contra scandal of the Reagan White House showed how terrible the results were when the private profit motive started controlling military operations and foreign policy. Many of the problems in Iraq are clearly related to private corporations and their role in the rebuilding process. Private profit is hurting our stated public goals in Iraq as has been clearly documented. All citizens should read How America Lost Iraq by Aaron Glantz. The failure of the Bush Administration to curb the excesses of American corporations in Iraq is undermining the war effort. The Bush Administration is clearly controlled by Corporate forces and unable to control their controllers.

The Delay case shows how in debt the Bush republicans are to Corporate money. Delay seems to have illegally used Corporate money to buy control of the Texas state legislature. The bought state legislative Republican majority then created new safe Republican Congressional seats in a legally questionable manner. These safe new Republican seats have given Republicans a near lock on control of Congress for years to come. The entire process is corruption leading to even more corruption. Legal or not, the entire Delay operation was ethically and morally corrupt!

The Texas Republican Congressional seats thus created will be filled by Bush Republicans representing Corporate interests. The entire Delay re-districting process turned 200 years of American political tradition on its head. The traditional process was essentially ignored in order for the Bush Republicans and Corporate forces to seize power. Campaign financing laws seem to have been deliberately ignored. Money and power were all that really mattered to Delay, the Republican Party and the corporations who financed the whole operation.

The oil industry price gouging, the oil industry mergers, the lack of universal government guaranteed health care, the Iraq War, the faulty election processes, etc. are all caused by excessive Corporate control of American politics. The entire business culture of Corporate America must be changed. American voters should force the change. We must purge all politicians unwilling to stand against the culture of corruption in both the government and the business world. Laws need to be enacted and enforced to change the behavior of Corporate evil-doers. We must by law curb the political power of Corporate money.

The laws against illegal campaign donations and political activities should be severely stiffened. Jail terms of 20 or 30 years should replace small fines or a few months. The legal definitions of price gouging should be tightened and the penalties made severe. We need to re-regulate the activities of irresponsible corporations and industries. We need to put teeth back in anti-monopoly and anti-market manipulation laws. We need a Law and Order reaction to the “culture of corruption” dominating American politics, government and the Corporate business community.

Written By Stephen Crockett and Al Lawrence (hosts of ).
Mail: 234 Johnstown Road, Elkton, Maryland 21921. Phone: 443-907-2367
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