Americans know that corporate excess is about more than flawed accounting. It corrupts democracy, drives a wedge between rich and poor, degrades the environment, and disrupts communities. So what might we the people do?
1 Give it back
The first step in any rehabilitation is to take responsibility for wrongdoing and make amends. In sentencing corporate executives, judges should consider how much of their ill-gotten gains they voluntarily returned. States should seek to recoup ill-gotten gains on behalf of pensioners, ratepayers, taxpayers, and investors. To set an example of the “new ethic of personal responsibility in the business community” President George W. Bush called for in his July 9 speech, he and Vice President Cheney should give back any gains they have earned through questionable accounting and insider trading. (See “Give it Back, Mr. President,” www.alternet.org.)
2 Three strikes, you're out
Why not a corporate death penalty; three criminal convictions and your corporate charter is history. The town of Wayne is one of several Pennsylvania towns that prohibit corporations with repeated violations from setting up shop. So far, the law has been used to keep out hog farms that have repeatedly broken the law.
3 Personhood for people
Corporations were first chartered to serve the public good. POCLAD (Program on Corporations, Law, and Democracy) is developing a model charter based on that idea; it includes time limitations on corporate charters, incorporation only for specific purposes, charter revocation for violations, prohibitions on one corporation owning another. It would also require that corporations refrain from infringing on the health, dignity, and rights of employees and refrain from damaging such commons as air, water, and wildlife habitat.
The legal fiction giving corporations legal personhood was a result of an interpretation of the 14th amendment by an 1886 Supreme Court decision (Santa Clara v. Southern Pacific Railroad Co.). But there has never been a vote of the people on corporate personhood nor on bestowing on corporations the rights contained in the Constitution. We should be clear: the rights of persons are reserved for real people. (See www.poclad.org.)
4 Favor local
From the town council up through the UN, rules, incentives, and subsidies should favor locally owned enterprises that serve local needs. (See the Institute for Local Self-Reliance www.ilsr.org.)
5 No deals for lawbreakers
Let's quit rewarding corporate law breakers with lucrative government contracts. White-collar crime is costing America an estimated $200 billion per year, about 50 times the cost of street crime. According to Business Ethics editor Marjorie Kelly, Lockheed Martin has 63 violations and alleged violations, yet its 1999 government contract awards totaled $14 billion. Companies with more than one criminal conviction or civil judgment in three years should face contract suspensions or debarments, says the Project on Government Oversight (www.pogo.org.)
6 Quit exporting Enron
According to the Institute for Policy Studies, Enron-related projects have received more than $4 billion in federal financing since 1992 and $3 billion from the World Bank, the European Investment Bank, and other public sources. Now Enron wants more; the company is after a $125 million loan from the Inter-American Development Bank to expand a Bolivian gas pipeline through ecologically sensitive areas and the lands of indigenous people. Of course, Enron is not the only one. Public money should not subsidize exploitation. (See www.ips-dc.org.)
7 Clue in the public
Sunlight is the best disinfectant. All those with a stake in a corporation—employees, communities, customers—should have access to information about its practices and impacts. (See page 19.) Here's one example: studies by EPA and others show that many corporations under-report environmental liabilities. Get real about costs; report them honestly.
8 Serve all stakeholders
Corporations are required by law to maximize profits for shareholders. Robert Hinkley, a corporate lawyer, is pressing for a law that prohibits making profit at the expense of the environment, human rights, the public safety, the welfare of the communities in which the corporation operates, or the dignity of employees. Groups in several states have taken up this Code for Corporate Citizenship. (See www.citizenworks.org or call 202/265-6164.)
9 Tax the casino
Every day, $1.5–$2 trillion is exchanged on world currency markets; over 95 percent of that is speculative. The Tobin tax, a proposed small tax on currency transactions, would calm financial markets, protect developing countries, and generate billions of dollars to address global poverty. (See www.waronwant.org.) A similar tax on stock transactions could slow stock speculation.
10 End corporate welfare
After working hard to get impoverished mothers and children off public assistance, Congress should turn its attention to CEOs. To start, we could help executives learn self-reliance by sunsetting corporate giveaways; eliminating tax breaks for companies that move off shore; and doing rigorous, independent assessments of tax incentives and subsidies to see which, if any, work.
11 Hands off public assets
Those who propose privatization of public assets or services carry the burden of proof to show that long-term public benefits outweigh the costs.
12 Restore democracy
Lord John Browne, CEO of British Petroleum, announced in February a halt to BP political contributions anywhere in the world. “We mustn't confuse our role,” he said. “We must be particularly careful about the political process—not because it is unimportant—quite the reverse—but because the legitimacy of that process is crucial both for society and for us as a company working in that society.”
We can hope that other corporations will follow BP's example.
Realistically, though, we need to enact clean-election reform of the kind that is helping to restore democracy in Maine, Arizona, and Massachusetts. (See www.publicampaign.org.)