Corporate hubris hits an all-time high – so why aren’t we hearing more about it?

It seems like you can’t walk a block without tripping over a headline about corporate wrongdoing or scandal these days.

One that flew below my radar for several days was the ongoing fury surrounding Volkswagen. I saw vague headlines about recalls and fines, but figured it was just another of those all-too-common shoddy manufacturing stories. When I finally heard the details, I was shocked.

In case you missed it, Volkswagen engaged in a multi-year conspiracy to cheat on emissions tests for its diesel vehicles. Over eleven million vehicles were programmed to detect when they were being tested for emissions, and to engage a special filter in those circumstances to bring their emissions in line with government standards. Outside of e-tests, though, the vehicles went back to emitting up to forty times as much as the legal limits of dangerous emissions – a practice that has likely results in the deaths of hundreds, if not thousands, of asthmatic folks and other people with lung conditions, as well as contributing immeasurably to the pollution of our atmosphere.

This isn’t a case of a few bad apples. This is a widespread, deliberate attempt by engineers, designers, executives, and scientists at Volkswagen to do an end run around regulations, all so they could market their cars as being more fuel efficient.

As the CBC points out, this isn’t the first time that car companies have known about a dangerously fatal flaw in their vehicles and not taken action. To my knowledge, though, this is the first time that such a flaw has been deliberately engineered into the design of vehicles. Volkswagen has put their profitability ahead of the health and lives of the public with this action – it’s a disgusting affront and it shouldn’t be allowed to go unpunished.

A big question a lot of people have is: how widespread is corporate behaviour like this? Lambert Strether at Naked Capitalism points out that Volkswagen’s model could have a broad application:

So we have an entire IT departent designing, coding, testing, and deploying an instrument of fraud in software. So I wonder which executives signed off on the project, and managed it? Did exectives give the orders, and “good engineers” obey? Or were the engineers “working toward the CEO”? My thought on this is best conveyed in the form of an revised version of the Reuters diagram:


I’ve greyed out the auto-related text. You can see at once that a similar algorithm could be implemented in any product where compliance testing depends on software the manufacturer controls, and where the software can detect and game the compliance regimen. So, given the givens, the question isn’t whether GM is doing what VW did, but how pervasive the practice is generally. Speculating freely: Boeing, with aircraft. Johnson & Johnson, with medical devices. And, of course, stress tests [on financial institutions]. Maybe that’s why the word “Libor” keeps cropping up in coverage?

In other words, we have good reason to believe that at least some corporations are systemically defrauding the public on a major scale in a way that’s harmful to public health and security.

Why is this not a bigger issue?

We’re in the middle of an election right now. What have we heard about corporations so far? Aside from some petty squabbling over whether the corporate tax rate should be 17% or 19.5%, pretty much nothing. And going forward, we’re not likely to hear much more than that.

Or consider the furor in the past few days over a sudden 5000% spike in the price of a life-saving drug used primarily to treat patients with HIV. This story was followed up by a similar one about a 2000% jump in the price of a drug used to treat a particularly virulent form of tuberculosis. In both cases, it was due to douche-bro venture capitalists buying up the patents for the drugs and then unpityingly sending the prices sky-high as a way of making a quick buck.

This practice is totally legal, by the way – and not at all unusual behaviour for pharmaceutical companies. What’s out of the ordinary here is that these are two older, well-established drugs which were up until quite recently affordable to most people.

So, to go back to our interminable campaign – what have we heard about the high price of prescription drugs?

Well, the NDP has set out a plan to create a national pharmacare program. As I wrote on Sunday, their plan seems hastily cobbled together, and pretty much everybody agrees it’s massively underfunded for the purpose, but let’s give them the benefit of the doubt and assume they at least mean well and are just going about it incompetently. Their plan is to use the purchasing power of the government to relieve Canadians of the burden of expensive prescriptions.

I’d say that, in light of stories like these, they don’t go anywhere near far enough. When pharmaceutical companies are able to put their profits ahead of the lives of desperately ill people – to essentially choose who can afford to live and who can’t – then we live in a fundamentally unfair world, and we ought to take that power away from these ruthless profiteers. Nobody should be earning profits on the providing of lifesaving medications, and the glaring inadequacy of the NDP’s plan has only become more clear in the days since it was announced thanks to these examples of heartless price gouging.

I could go on – and I will. KPMG, one of Canada’s largest auditors, has been mired in scandal lately due to its scheme to create tax havens for high-net-worth ($5-million+) individuals and families to allow them to completely avoid paying taxes. They’ve been under investigation by the Canada Revenue Agency since 2013. But as the CBC revealed yesterday, they’ve had a downright cozy relationship with the governing Conservative Party despite these allegations, going so far as to sponsor an event at which Finance Minister Joe Oliver was speaking. Any criminal prosecution of the company for its wrongdoing has been repeatedly delayed by the Justice Department, leading to (at a minimum) the appearance of a gross conflict of interest.

But where has the criticism of Bay Street been on the campaign trail? With the new campaign financing laws in place, I doubt we’ll ever hear any!

One last one – and it’s a doozy. For months now, a story has been taking shape of the incredible lengths to which Exxon went to, first, learn the truth about climate change, and then second, to vigorously cover it up and deny it. We now know that as far back at 1977, nearly forty years ago, Exxon executives were being briefed about the likelihood that increased CO2 in the atmosphere was going to lead to catastrophic global warming.

I encourage you to click through the link and read the full report from Inside Climate News, which is absolutely damning in its detail.

We would be foolish to suppose that Exxon was the only one of the major oil companies to come to the conclusion that climate change was a serious threat not just to the planet but, more importantly, to their business model, and to act accordingly to deny, suppress, and distort any claims that carbon emissions needed to be curtailed. For decades, Big Oil has successfully followed the example of Big Tobacco in plausibly pretending that their product is relatively safe and that they give a fuck about the public. But we now know that this is false.

Where have the party leaders been on this?

Well, they haven’t acknowledged this story specifically – probably because they’ve been tripping over each other trying to convince the oil companies that each of them would be a true friend to the industry. Look no farther than the NDP’s Thomas Mulcair, speaking in 2013 at the Calgary Chamber of Commerce, in an event attended by pipeline companies Enbridge and Suncor:

“The NDP will be a partner with the development of energy resources,” if it forms a government in 2015, Mr. Mulcair told a luncheon organized by the Calgary Chamber of Commerce..

“We will be there with you,” he said…

Or Liberal leader Justin Trudeau, speaking in last week’s debate, in a line I felt was WAY overlooked by the press:

Yes, we need to get our resources to market. It’s one of the fundamental responsibilities of a Prime Minister.

Get that? One of the main duties of the elected representative of the Canadian people is to help resource companies get their resources to market! And never mind what they knew when about global warming, or how disingenuous their current plans and statements on the issue are. The pipelines must keep flowing!

What this barrage of stories about corporate malfeasance, wrongdoing, criminality, and pure hubris show is that we live in a sick sick culture, where corporate crime is not taken especially seriously, and sometimes isn’t even illegal. The well-being, health, and safety of the public and the planet take a firm back seat to corporate profitability, and none of our political leaders is remotely willing to even acknowledge this consensus, let alone challenge it.

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To be fair, Tom Mulcair actually did cite “tax cheats” in reference to KPMG-esq situations during the economic Globe debate last week. I was glad to hear it for thr first time on the Campaign trail, but would agree that these stories should be having way more of an impact!

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