6 July 2002
RUMBLING RUMSFELD/BUSH TANGLED IN WEB OF CORPORATE WRONGDOING?/POLITICAL NOMINATION OF THE MONTH
In this month's Ecologist, the POLITICAL NOMINATION OF THE MONTH goes to Linda Fisher, nominated by the White House for the second-ranking job at the US Environmental Protection Agency. The Ecologist notes that Fisher is head of Monsanto's Washington lobbying office.
This, in fact, is just the latest spin of Washington's famous revolving door. Prior to doing Government and Public Affairs for Monsanto, Fisher worked at the EPA.
Item 3 is a reminder of just how seamless Washington's corporate-state machinery is, while items 1 and 2 point up why in the face of flagrant corporate pressure and malpractice, the US leadership can always be relied upon to protect the public interest.
1. Rumbling Rumsfeld
2. Bush tangled in web of corporate wrongdoing
3. Welcome to the revolving door
1. Rumbling Rumsfeld
[taken from Welcome to the Spin Machine by Michael Manville
In 1985 Monsanto purchased G.D. Searle, the chemical company that held the patent to aspartame, the active ingredient in Nutra Sweet. Monsanto was apparently untroubled by aspartame's clouded past, including a 1980 FDA Board of Inquiry, comprised of three independent scientists, which confirmed that it "might induce brain tumors." The FDA had actually banned the drug based on this finding, only to have Searle Chairman Donald Rumsfeld (currently the Secretary of Defense) vow to "call in his markers," to get it approved. On January 21, 1981, the day after Ronald Reagan's inauguration, Searle re-applied to the FDA for approval to use aspartame in food sweetener, and Reagan's new FDA commissioner, Arthur Hayes Hull, Jr., appointed a 5-person Scientific Commission to review the board of inquiry's decision. It soon became clear that the panel would uphold the ban by a 3-2 decision, but Hull then installed a sixth member on the commission, and the vote became deadlocked. He then broke the tie in aspartame's favor. Hull later left the FDA under allegations of impropriety, served briefly as Provost at New York Medical College, and then took a position with Burston-Marsteller, the chief public relations firm for both Monsanto and GD Searle. Since that time he has never spoken publicly about aspartame.
2. Bush tangled in web of corporate wrongdoing
By BARRIE MCKENNA
The Globe and Mail
Friday, July 5, 2002 - Print Edition, Page B6
Even securities regulators readily acknowledge it was a sham sale.
A group of corporate insiders borrowed millions of dollars from their own struggling company to buy out an obscure subsidiary at a ridiculously inflated price. The parent company then booked a windfall gain, sending its stock soaring just long enough for insiders to dump their shares.
The insiders knew better, of course. At least one director -- a member of the audit committee, no less -- waited eight months to alert regulators that he had quietly recorded his biggest-ever payday by selling two-thirds of his shares.
Pity the poor ordinary investor, who might have bet the luckless company was poised for great things.
The U.S. Securities and Exchange Commission easily saw through the scheme, ordering the company to restate its bogus results and unwind the transaction.
SEC officials also concluded that the insider who took so long to report his stock trades broke the law.
Sound like the boys at Enron, WorldCom or Global Crossing? Good guesses, but wrong.
The company is Harken Energy Corp. and the ethically challenged insider is the leader of the free world.
The year was 1989. George W. Bush was an aspiring Texas oil patch tycoon and his father was President of the United States.
"Everything I do is fully disclosed, it's been fully vetted," the Mr. Bush hissed at a reporter this week in Milwaukee. "Next question."
White House spokesman Ari Fleischer dismisses Mr. Bush's tardy filing as a "mix-up" by lawyers. "Old history," he grumbled.
Rightly so. Harken is long gone. The SEC conducted an investigation and in 1991 opted not to lay charges against a man who was then First Son of the President of the United States.
Mr. Bush later ceded the rough and tumble energy business to the likes of Ken Lay and Jeff Skilling, moving on to baseball, Texas politics and ultimately the White House.
But next week the former Harken insider heads to New York to deliver a pivotal lecture on what he's dubbed the "Responsibility Era."
As scandal-weary Wall Street battles a crisis of confidence, Mr. Bush is expected to recommend that the SEC be given the power to jail executives who willfully mislead investors about their company's finances.
And suddenly a lot of people are starting to ask uncomfortably pointed questions about the Bush administration's moral authority on the subject of corporate misbehaviour. Gleefully leading the charge are the Democrats, who think they've finally found what political analyst Marshall Wittmann has called Mr. Bush's Achilles' heel -- a major weakness in the wildly popular Republican President.
"President Bush, Vice-President [Dick] Cheney and SEC chairman Harvey Pitt like to preach CEO responsibility," pointed out Michael McAuliffe, chairman of the Democratic National Committee. "But when it comes to their own records, their motto is 'the buck stops over there.' "
Mr. McAuliffe accuses the Bush administration of giving a green light to unscrupulous CEOs with "toothless reforms."
"It's time this CEO -- President Bush -- took responsibility for his actions as a private businessman and as President of the United States," he added.
You don't have to be a Democrat to conclude that Mr. Bush has a pretty big credibility problem on his hands.
Regrettably, just as investors are craving reassurance that accounting hocus pocus, tax evasion and insider trading won't be tolerated in the world's most important financial market, the authorities appear hopelessly snared in the maze of their own debilitating conflicts.
Before he joined the SEC, Mr. Pitt, a former securities lawyer and lobbyist, fought to stop the previous administration from forcing accounting firms to concentrate on their audit work and get out of lucrative, but conflict-prone consulting work.
Halliburton Co., an oil and gas services company that Mr. Cheney headed for five years before becoming Mr. Bush's running mate, is under investigation by the SEC for dubious accounting treatment of cost overruns on construction jobs.
Mr. Bush, who came to power promising to put his business experience to work, wouldn't be President without the now-tainted campaign cash from the same gang of Enron executives his regulatory crackdown would target.
There are two ways of looking at the Bush administration's obvious quandary.
The likes of Mr. McAuliffe would dearly love Americans to turn on their beloved President and his pro-business Republican allies in Congress, judging them incapable of rooting out corruption in U.S. boardrooms.
On the other hand, perhaps Mr. Bush is "uniquely qualified" for the task of cleaning up the Street -- as New York Times columnist Paul Krugman facetiously suggested this week.
Maybe it takes an evildoer to know one.
3. Welcome to the revolving door
The "revolving door" - the interplay of personnel that assists the industrial alignment of public service and regulatory authorities - has led to key figures at both the US's FDA and EPA having held important positions at Monsanto, or else doing so shortly after their biotech related regulatory work for the government agency.
An article in The Ecologist's famous 'Monsanto Files' by Jennifer Ferrara, 'Revolving Doors: Monsanto and the Regulators', looked in detail at this issue.
As an instance, Ferrara noted the FDA's approval of Monsanto's genetically engineered cattle drug rBGH which failed to gain approval in either Europe or Canada despite intense lobbying and accusations of malpractice:
"Michael R. Taylor, the FDA's deputy commissioner for policy, wrote the FDA's rBGH labelling guidelines. The guidelines, announced in February 1994, virtually prohibited dairy corporations from making any real distinction between products produced with and without rBGH. To keep rBGH-milk from being "stigmatized" in the marketplace, the FDA announced that labels on non-rBGH products must state that there is no difference between rBGH and the naturally occurring hormone.
In March 1994, Taylor was publicly exposed as a former lawyer for the Monsanto corporation for seven years. While working for Monsanto, Taylor had prepared a memo for the company as to whether or not it would be constitutional for states to erect labelling laws concerning rBGH dairy products. In other words Taylor helped Monsanto figure out whether or not the corporation could sue states or companies that wanted to tell the public that their products were free of Monsanto's drug.
Taylor wasn't the only FDA official involved in rBGI-1 policy who had
worked for Monsanto. Margaret Miller, deputy director of the FDA's Office
of New Animal Drugs was a former Monsanto research scientist who had worked
on Monsanto's rBGH safety studies up until 1989. Suzanne Sechen was a primary
reviewer for rBGH in the Office of New Animal Drugs between 1988 and 1990.
Before coming to the FDA, she had done research for several Monsanto-funded
rBGH studies as a graduate student at Cornell University. Her professor
was one of Monsanto's university consultants and a known rBGH promoter.
Remarkably. the GAO determined in a 1994 investigation that these officials'
former association with the Monsanto corporation did not pose a conflict
of interest. But for those concerned about the health and environmental
hazards of genetic engineering, the revolving door between the biotechnology
industry and federal regulating agencies is a serious cause for concern."
The following is taken from the Edmonds Institute:
David W. Beier . . .former head of Government Affairs for Genentech, Inc., . . .now chief domestic policy advisor to Al Gore, Vice President of the United States.
Linda J. Fisher . . .former Assistant Administrator of the United States Environmental Protection Agency's Office of Pollution Prevention, Pesticides, and Toxic Substances, . . .now Vice President of Government and Public Affairs for Monsanto Corporation.
Michael A. Friedman, M.D. . . former acting commissioner of the United States Food and Drug Administration (FDA) Department of Health and Human Services . . .now senior vice-president for clinical affairs at G. D. Searle & Co., a pharmaceutical division of Monsanto Corporation.
L. Val Giddings . . . former biotechnology regulator and (biosafety) negotiator at the United States Department of Agriculture (USDA/APHIS), . . .now Vice President for Food & Agriculture of the Biotechnology Industry Organization (BIO).
Marcia Hale . . . former assistant to the President of the United States and director for intergovernmental affairs, . . .now Director of International Government Affairs for Monsanto Corporation.
Michael (Mickey) Kantor. . . former Secretary of the United States Department of Commerce and former Trade Representative of the United States, . . .now member of the board of directors of Monsanto Corporation.
Josh King . . . former director of production for White House events, . . . now director of global communication in the Washington, D.C. office of Monsanto Corporation.
Terry Medley . . . former administrator of the Animal and Plant Health Inspection Service (APHIS) of the United States Department of Agriculture, former chair and vice-chair of the United States Department of Agriculture Biotechnology Council, former member of the U.S. Food and Drug Administration (FDA) food advisory committee, . . . and now Director of Regulatory and External Affairs of Dupont Corporation's Agricultural Enterprise.
Margaret Miller . . . former chemical laboratory supervisor for Monsanto, . . .now Deputy Director of Human Food Safety and Consultative Services, New Animal Drug Evaluation Office, Center for Veterinary Medicine in the United States Food and Drug Administration (FDA).*
Michael Phillips . . . recently with the National Academy of Science Board on Agriculture . . . now head of regulatory affairs for the Biotechnology Industry Organization.
William D. Ruckelshaus . . . former chief administrator of the United States Environmental Protection Agency (USEPA), . . .now (and for the past 12 years) a member of the board of directors of Monsanto Corporation.
Michael Taylor . . . former legal advisor to the United States Food and Drug Administration (FDA)'s Bureau of Medical Devices and Bureau of Foods, later executive assistant to the Commissioner of the FDA, . . . still later a partner at the law firm of King & Spaulding where he supervised a nine-lawyer group whose clients included Monsanto Agricultural Company, . . . still later Deputy Commissioner for Policy at the United States Food and Drug Administration, . . . and later with the law firm of King & Spaulding. . . . now head of the Washington, D.C. office of Monsanto Corporation.*
Lidia Watrud . . . former microbial biotechnology researcher at Monsanto Corporation in St. Louis, Missouri, . . .now with the United States Environmental Protection Agency Environmental Effects Laboratory, Western Ecology Division.
Jack Watson. . .former chief of staff to the President of the United States, Jimmy Carter, . . .now a staff lawyer with Monsanto Corporation in Washington, D.C.
Clayton K. Yeutter . . . former Secretary of the U.S. Department of Agriculture, former U.S. Trade Representative (who led the U.S. team in negotiating the U.S. Canada Free Trade Agreement and helped launch the Uruguay Round of the GATT negotiations), now a member of the board of directors of Mycogen Corporation, whose majority owner is Dow AgroSciences, a wholly owned subsidiary of The Dow Chemical Company.
Larry Zeph . . . former biologist in the Office of Prevention, Pesticides, and Toxic Substances, U.S. Environmental Protection Agency, . . . now Regulatory Science Manager at Pioneer Hi-Bred International.
*Margaret Miller, Michael Taylor, and Suzanne Sechen (an FDA "primary
reviewer for all rbST and other dairy drug production applications" )
were the subjects of a U.S. General Accounting Office (GAO) investigation
in 1994 for their role in the U.S. Food and Drug Administration's approval
of Posilac, Monsanto Corporation's formulation of recombinant bovine growth
hormone (rbST or rBGH). The GAO Office found "no conflicting financial
interests with respect to the drug's approval" and only "one minor deviation
from now superseded FDA regulations". (Quotations are from the 1994 GAO
"When people are trying to kill you and when they attack because they hate freedom, other disputes from Frankenfood to bananas and even important issues like the environment suddenly look a bit different." - Condoleezza Rice, George Bush's national security adviser
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