corporate power

Invisible Hands

Published by Anonymous (not verified) on Sat, 21/07/2018 - 10:29pm in

Dark money is undermining our democracies, and it’s never darker than when channelled through lobby groups masquerading as think tanks

By George Monbiot, published in the Guardian 19th July 2018

A mere two millennia after Roman politicians paid mobs to riot on their behalf, we are beginning to understand the role of dark money in politics, and its perennial threat to democracy. Dark money is cash whose source is not made public, that is spent to change political outcomes.

The Facebook/Cambridge Analytica scandal unearthed by Carole Cadwalladr and the mysterious funds channelled through Northern Ireland’s Democratic Unionist Party to the Leave campaign in England and Scotland have helped to bring the concept to public attention. But these examples hint at a much wider problem. Dark money can be seen as the underlying corruption from which our immediate crises emerge: the collapse of public trust in politics, the rise of a demagogic anti-politics, assaults on the living world, public health and civic society. Democracy is meaningless without transparency.

The techniques now being used to throw elections and referendums were developed by the tobacco industry, and refined by biotechnology, fossil fuel and junk food companies. Some of us have spent years exposing the fake grassroots campaigns they established, the false identities and bogus scientific controversies they created, and the way in which public broadcasters and other media outlets have been played by them. Our warnings went unheeded, while the ultrarich learnt how to buy the political system.

The problem is exemplified, in my view, by the Institute of Economic Affairs (IEA). In the latest reshuffle, two ministers with close links to the institute, Dominic Raab and Matthew Hancock, have been promoted to the front bench, responsible for issues that obsess the IEA: Brexit and the NHS. Dominic Raab credits the IEA with supporting him “in waging the war of ideas.” Matthew Hancock, in his former role as Cabinet Office minister, notoriously ruled that charities receiving public funds should not be allowed to lobby the government. His department credited the IEA with the research that prompted the policy. This rule, in effect, granted a monopoly on lobbying to groups like the IEA, which receive their money only from private sources. Hancock has received a total of £32,000 in political donations from the IEA’s chairman, Neil Record.

The IEA has lobbied consistently for a hard Brexit. A report it published on Monday as an alternative to Theresa May’s White Paper calls for Brexit to be used to tear down the rules protecting agency workers, to deregulate finance, annul the rules on hazardous chemicals and weaken food labelling laws. Darren Grimes, who was fined by the Electoral Commission on Tuesday for spending offences during the Leave campaign, now works as the IEA’s digital manager.

So what is this organisation, and on whose behalf does it speak? If only we knew. It is rated by the accountability group Transparify as “highly opaque”. In my view, all that distinguishes organisations like the IEA from acknowledged public relations companies like Burson Marsteller is that we don’t know who it is working for. The only hard information we have is that, for many years, it has been funded by British American Tobacco (BAT), Japan Tobacco International, Imperial Tobacco and Philip Morris International. When this funding was exposed, the IEA claimed that its campaigns against tobacco regulation were unrelated to the money it had received.

Recently, it has been repeatedly dissing the NHS, that it wants to privatise; campaigning against controls on junk food; attacking trade unions; and defending zero hour contracts, unpaid internships and tax havens. Its staff appear on the BBC, promoting these positions, several times a week. But never do interviewers ask the basic democratic questions: who funds you, and do they have a financial interest in these topics?

The BBC’s editorial guidelines seem clear on this issue: “We should make checks to establish the credentials of our contributors and to avoid being ‘hoaxed’”. In my view, the entire IEA is a hoax. As Adam Curtis has revealed (ironically on the BBC’s website), when the institute was created in 1955, one of its founders, Major Oliver Smedley, wrote to the other, Antony Fisher, urging that it was “imperative that we should give no indication in our literature that we are working to educate the Public along certain lines which might be interpreted as having a political bias. … That is why the first draft [of the Institute’s aims] is written in rather cagey terms.”

The two men were clear about its purpose: to become a public relations agency which would change society along the lines advocated by the founder of neoliberalism, Friedrich Hayek. It should not, Hayek urged them, do any actual thinking, but become a “second-hand dealer in ideas”. The IEA became the template for other neoliberal institutes. It was financed initially from the fortune Anthony Fisher made by importing broiler chicken farming into the UK. Curtis credits him with founding 150 such lobby groups around the world.

While dark money has been used to influence elections, the role of groups like the IEA is to reach much deeper into political life. As its current director, Mark Littlewood, explains, “We want to totally re-frame the debate about the proper role of the state and civil society in our country … Our true mission is to change the climate of opinion.”

Astonishingly, the IEA is registered as an educational charity, with the official purpose of helping “the general public/mankind”. As a result it is exempted from the kind of taxes about which it complains so bitterly. Charity Commission rules state that “an organisation will not be charitable if its purposes are political.” How much more political can you get? In what sense is ripping down public protections and attacking the rights of workers charitable? Surely no organisation should be registered as a charity unless any funds it receives above a certain threshold (say £1000) are declared?

Last week, the Charity Commission announced that, after thinking about it for just 60 years, it has decided to examine the role of the IEA, to see whether it has broken its rules. I don’t hold out much hope. In response to a complaint by Andrew Purkis, a former member of the Charity Commission’s board, the commission’s regulatory compliance department claimed that the IEA provides a “relatively uncontroversial perspective accepted by informed opinion.” If the commission sees hard Brexit, privatising the NHS and defending tax havens as uncontroversial, it makes you wonder what circles he moves in.

I see such organisations as insidious and corrupting. I see them as the means by which money comes to dominate public life, without having to declare its hand. I see them as representing everything that has gone wrong with our politics.

www.monbiot.com

 

 

 

BBC Director of News Warns Young Turning Away from Beeb

Last Friday, 15th June 2018, the I newspaper carried an article reporting a warning about the Beeb’s future given by Fran Unsworth, the Corporation’s Director of News and Current Affairs, at the Women on Air conference. Young people are increasingly turning away from the Beeb, and if this continues, it will threaten the Beeb’s future as it no longer has an audience.

The article, under the title, Youth Exodus from News ‘Threatening BBC’s Survival stated

The BBC’s existence is under threat if it cannot encourage more younger viewers to watch its news services, a senior executive warned.

Fran Unsworth, BBC director of news and current affairs, said the corporation was playing a “deadly serious” version of The Generation Game. She told the Women On Air conference: “The most significant challenge facing the BBC is how we reach younger audiences. Less and less are under 35. Our very existence might be called into question.”

Recent BBC figures showed that 16-24 year-old spend more time watching Netflix in a week than with all of BBC TV, including the BBC iPlayer. The sizes of audiences tuning in for scheduled news bulletins is declining rapidly, the Digital News Report, published yesterday, found. (P. 9)

The remainder of the article dealt with the issue of getting more female experts on television news. Unsworth stated this was right, but they couldn’t just sack people.

Okay, I’m not the best person to explain why young people under 35 aren’t watching the Beeb, as it’s well over a decade since I was that age. I can’t really talk about changes in entertainment tastes, as I don’t share many of them. Or at least, I’m not interested in some of the programmes that excite the reviewers in the media, like the various TV dramas about detectives hunting down deranged serial killers, and uncovering a web of lies and corruption. Or equally tense dramas about child abuse. My taste in detective television basically extended to Columbo and Van Der Valk, when he was last on back in the 1990s.

But I can make a good guess why young – and older – people aren’t tuning into BBC news. And it’s because of the Beeb’s appalling pro-Tory bias. Young people are the section of the British public in which support for Jeremy Corbyn is strongest. And the Beeb’s coverage of Corbyn and his supporters in the Labour party has been overwhelmingly, and very blatantly biased. And it’s become very, very obvious. The Corporation no longer has the same strong position as Britain’s trusted news broadcaster it once had. People are able to get their news now from a wider variety of sources through the internet, as well as the Corporation’s competitors on the commercial channels. And these news shows, such as RT, Democracy Now, Telesur English, Al-Jazeera, and in America The Young Turks, Secular Talk, Sam Seder’s Majority Report, the David Pakman Show and so, present a very different picture of what’s going on in the world. While the Beeb runs the establishment propaganda that our invasions and interventions in the Middle East and elsewhere are all for humanitarian reasons, these show how the real motivation is simply western corporate imperialism. They will also show just how the Israeli state is oppressing and viciously persecuting the Palestinians, and how the US – and Britain- has sponsored coups in Latin America, Iran and elsewhere, which have overthrown liberal and socialist regimes and installed Fascist dictators. All to protect US and British corporate interests, of course.

The Beeb, however, is very much part of the establishment, and its broadcasting is very much aimed at the corporate and political elite on the one hand, where it reflects their interests and concerns, and on the other aimed at getting the rest of us to accept it. There isn’t anything particularly unique about this. The Corporation’s bias against Labour is shared by the rest of the lamestream media and press. But they’re also increasingly under pressure from these alternative news sources.

If the Beeb really wants to get young people, and a large part of the older generation, back watching the news, then they should change their bias and start reporting Corbyn and the Labour party objectively and truthfully, as well as stop repeating flag-waving establishment propaganda about the wars in the Middle East. But this would be too radical a change, I fear. It would mean clearing out all the various Tories in the Beeb’s news teams, like Laura Kuenssberg and Nick Robinson, or telling them to do their job properly. And so the Beeb is stuck as the voice of a right-wing, Tory, imperialist establishment, while more and more people take their news from elsewhere.

Other People’s Money

Published by Anonymous (not verified) on Tue, 29/05/2018 - 4:27pm in

Make bosses pay for the disasters they cause

By George Monbiot, published in the Guardian 24th May 2018

 

Once more, they walk away. The senior bosses at Carillion, like those at RBS, Northern Rock and a host of other corporate zombies, went home to count their undiminished millions. The pain they inflicted was felt by others. Reckless greed paid out again.

The Commons report on this fiasco is one of the most damning assessments of corporate behaviour parliament has ever published. But it’s still pathetic. While it scorches the company’s executives and board and laments the weakness of the regulators, it scarcely touches the structural causes that make gluttony a perennial feature of corporate life.

The problem begins with an issue the report does not once mention: the extreme nature of limited liability. To allow the owners of a limited company to risk nothing but the money they have spent on shares is to grant them free, uncapped indemnity against the risks they impose on others. It’s the equivalent of permitting drivers to take to the roads without buying insurance, knowing that if they cause a crash they will carry no more than the cost of replacing their own car, regardless of the expense, injury and death they might impose on others.

The current model of limited liability allowed the directors and executives of Carillion to rack up a pension deficit of £2.6 billion, leaving the 27,000 members of its schemes to be rescued by the state fund (which is financed by a levy on your pension – if you have one). This indemnity permitted the owners of the company to walk away from the £2 billion it owed to its suppliers and subcontractors. The same free pass landed the cost of rescuing the public services so foolishly entrusted to this company back on the government.

A recent study exposes a direct link between the generosity of the limited liability regime and the corporate incentive to dump costs on other people. In 1998 the US Supreme Court ruled that parent companies were liable for only narrowly defined harms caused by their subsidiaries. The study reveals that in the aftermath of this decision, toxic emissions by subsidiary companies in the US rose by an average of 10%, as they cut investment in abatement technologies.

Limited liability not only allows companies to act recklessly with regard to the interests of others – it obliges them to do so. Directors have a fiduciary duty to use all legally available means to maximise shareholder value. Limited liability compels them to externalise risk.

There is no way that fossil fuel companies could pay for the climate breakdown they cause. There is no way that car companies could meet the health costs of air pollution. Their business models rely on dumping their costs on other people. Were they not protected by the extreme form of limited liability that prevails today, they would be obliged to switch to clean technologies.

Various estimates put the cost that businesses dump on society at somewhere between 4% and 20% of GDP. In other words, it exceeds the rate of economic growth. Were such costs internalised, the economy would have to be run on an entirely different basis. Human health and the survival of the natural world would come first; corporate greed would come last.

Executive incentives also conflict with the interests of society. Even as Carillion spiralled down, pay and bonuses spiralled up. The UK Corporate Governance Code recommends that directors who fail in their duties should forfeit some of the pay they would otherwise have received, but the details are left to the discretion of their companies. In Carillion’s case, the remuneration committee defined the terms so narrowly that even total failure did not trigger a clawback of the executives’ vast bonuses.

Its long-term incentive plans were useless. The finance director, Richard Adam, had a stack of performance shares that were held back for three years, ostensibly to prevent reckless behaviour. But the Commons report alleges that his “accounting tricks” propped up the value of the shares until the day they became payable, whereupon he sold them. Within two months, their value had fallen by three quarters. Even when they work well, such incentives protect only the interests of the corporation, rather than the interests of society.

So what is to be done? The first step, I believe, is a radical reassessment of limited liability. A recent paper by the US law professor Michael Simkovic proposes that companies should pay a fee for this indemnity, calibrated to the level of risk they impose on society. Why, after all, should this insurance be free? As numerous leaks show, companies tend to be far more aware of the risks they inflict than either governments or the rest of society. The fees they are prepared to pay for limited liability will reveal their own assessment of the costs they currently externalise. Antisocial practices could be progressively priced out.

As for the executives, I have a tentative proposal of my own. Any manager earning more than a certain amount – say £200,000 – would have half their total remuneration placed in an escrow account, which is controlled not by the company but by an external agency. The deferred half of their income would not become payable until the agency judged that the company had met the targets it set on pension provision, workers’ pay, the treatment of suppliers and contractors and wider social and environmental performance. This judgement should draw on mandatory social and environmental reporting, assessed by independent auditors.

If they miss their targets, the executives would lose part or all of the deferred sum. In other words, they would pay for any disasters they impose on others. To ensure it isn’t captured by corporate interests, the agency would be funded by the income it confiscates.

Are these the right solutions? I’m not yet sure. So please support them, oppose them or suggest better ideas in the comment thread. I know that, at best, they address only part of the problem. Should corporations in their current form exist at all? Is capitalism compatible with life on earth? Radical as they sound, the ideas in this column are small steps. But by comparison to the timid measures in the Commons report, they’re giant strides.

www.monbiot.com

 

Other People’s Money

Published by Anonymous (not verified) on Tue, 29/05/2018 - 4:27pm in

Make bosses pay for the disasters they cause

By George Monbiot, published in the Guardian 24th May 2018

 

Once more, they walk away. The senior bosses at Carillion, like those at RBS, Northern Rock and a host of other corporate zombies, went home to count their undiminished millions. The pain they inflicted was felt by others. Reckless greed paid out again.

The Commons report on this fiasco is one of the most damning assessments of corporate behaviour parliament has ever published. But it’s still pathetic. While it scorches the company’s executives and board and laments the weakness of the regulators, it scarcely touches the structural causes that make gluttony a perennial feature of corporate life.

The problem begins with an issue the report does not once mention: the extreme nature of limited liability. To allow the owners of a limited company to risk nothing but the money they have spent on shares is to grant them free, uncapped indemnity against the risks they impose on others. It’s the equivalent of permitting drivers to take to the roads without buying insurance, knowing that if they cause a crash they will carry no more than the cost of replacing their own car, regardless of the expense, injury and death they might impose on others.

The current model of limited liability allowed the directors and executives of Carillion to rack up a pension deficit of £2.6 billion, leaving the 27,000 members of its schemes to be rescued by the state fund (which is financed by a levy on your pension – if you have one). This indemnity permitted the owners of the company to walk away from the £2 billion it owed to its suppliers and subcontractors. The same free pass landed the cost of rescuing the public services so foolishly entrusted to this company back on the government.

A recent study exposes a direct link between the generosity of the limited liability regime and the corporate incentive to dump costs on other people. In 1998 the US Supreme Court ruled that parent companies were liable for only narrowly defined harms caused by their subsidiaries. The study reveals that in the aftermath of this decision, toxic emissions by subsidiary companies in the US rose by an average of 10%, as they cut investment in abatement technologies.

Limited liability not only allows companies to act recklessly with regard to the interests of others – it obliges them to do so. Directors have a fiduciary duty to use all legally available means to maximise shareholder value. Limited liability compels them to externalise risk.

There is no way that fossil fuel companies could pay for the climate breakdown they cause. There is no way that car companies could meet the health costs of air pollution. Their business models rely on dumping their costs on other people. Were they not protected by the extreme form of limited liability that prevails today, they would be obliged to switch to clean technologies.

Various estimates put the cost that businesses dump on society at somewhere between 4% and 20% of GDP. In other words, it exceeds the rate of economic growth. Were such costs internalised, the economy would have to be run on an entirely different basis. Human health and the survival of the natural world would come first; corporate greed would come last.

Executive incentives also conflict with the interests of society. Even as Carillion spiralled down, pay and bonuses spiralled up. The UK Corporate Governance Code recommends that directors who fail in their duties should forfeit some of the pay they would otherwise have received, but the details are left to the discretion of their companies. In Carillion’s case, the remuneration committee defined the terms so narrowly that even total failure did not trigger a clawback of the executives’ vast bonuses.

Its long-term incentive plans were useless. The finance director, Richard Adam, had a stack of performance shares that were held back for three years, ostensibly to prevent reckless behaviour. But the Commons report alleges that his “accounting tricks” propped up the value of the shares until the day they became payable, whereupon he sold them. Within two months, their value had fallen by three quarters. Even when they work well, such incentives protect only the interests of the corporation, rather than the interests of society.

So what is to be done? The first step, I believe, is a radical reassessment of limited liability. A recent paper by the US law professor Michael Simkovic proposes that companies should pay a fee for this indemnity, calibrated to the level of risk they impose on society. Why, after all, should this insurance be free? As numerous leaks show, companies tend to be far more aware of the risks they inflict than either governments or the rest of society. The fees they are prepared to pay for limited liability will reveal their own assessment of the costs they currently externalise. Antisocial practices could be progressively priced out.

As for the executives, I have a tentative proposal of my own. Any manager earning more than a certain amount – say £200,000 – would have half their total remuneration placed in an escrow account, which is controlled not by the company but by an external agency. The deferred half of their income would not become payable until the agency judged that the company had met the targets it set on pension provision, workers’ pay, the treatment of suppliers and contractors and wider social and environmental performance. This judgement should draw on mandatory social and environmental reporting, assessed by independent auditors.

If they miss their targets, the executives would lose part or all of the deferred sum. In other words, they would pay for any disasters they impose on others. To ensure it isn’t captured by corporate interests, the agency would be funded by the income it confiscates.

Are these the right solutions? I’m not yet sure. So please support them, oppose them or suggest better ideas in the comment thread. I know that, at best, they address only part of the problem. Should corporations in their current form exist at all? Is capitalism compatible with life on earth? Radical as they sound, the ideas in this column are small steps. But by comparison to the timid measures in the Commons report, they’re giant strides.

www.monbiot.com

 

Afshin Rattansi Asks What Boris Johnson Is Doing in South America

In this short clip from RT’s ‘Going Underground’, host Afshin Rattani raises the question of what Boris Johnson is doing in Chile, Argentina and Peru, and reminds his viewers of the atrocities committed by Chile’s bloody dictator, General Pinochet. Johnson began a tour of these countries yesterday. Rattansi describes all of these countries as allegedly America’s proxies, but particularly Chile. He tells how Pinochet was warmly supported by Johnson’s heroine, Margaret Thatcher. Pinochet overthrew the democratically elected Socialist president, Salvador Allende, in a CIA-backed coup. The dictator was responsible for the murder and disappearance of 40,000 people. There is a sequence, in which Raymond Peredes, the son of the head of the Chilean army under president Allende, describes what happened to his father. He had every bone in his body broken, and was burned with a flame thrower before finally being shot with 20 bullets. His killers, however, did not touch his head, because they wanted him to remain conscious.

Pinochet was arrested by the Labour government after he came to London, following a warrant put out by a Spanish examining magistrate, judge Baltazar Garzon, who charged him with genocide. There is also a clip of Jeremy Corbyn stating that Pinochet does not enjoy diplomatic immunity from the charges, which including hostage-taking, genocide and extraterritorial murder.

But the old brute was defended by Maggie Thatcher, here looking even more aged, decrepit and malignly insane than ever. Thatcher stated that he’d been a good friend and ally of Britain, but now, thanks to his arrest, his health had been broken and the esteem of Britain’s courts around the world damage. So, as you might expect from a Tory premier, who backed Fascists and Fascist death squads throughout Latin America, there’s plenty of sympathy for him and none whatsoever for the tens of thousands he tortured and murdered. After his arrest, he was released by Tony Blair’s government. Rattansi continues that today the country is in the grip of more neoliberal change, which the opposition claims will cause further poverty.

Rattansi goes on to cover Argentina, where he says that Margaret Thatcher arguably helped end one American proxy dictator after she won the Malvinas/Falklands War. However, he states that ‘the bad old days’ could be returning, because the country’s president, Macri, has just taken out a loan with the IMF. Rattansi goes on to report how the president of Peru, Martin Vizcarra, hasn’t been elected yet. He only took power after his predecessor was forced to resign in a corruption scandal. But he was first to welcome US vice-president, when he touched down last week. The clip ends with Pence stating that all Latin America’s problems are due to the president of Venezuela, Maduro.

From this it seems that Boris has gone to these countries, to wee what Britain can pick up once neoliberalism hits these nations once again. In return for loans, the IMF insists that countries approaching it for aid scale down their welfare spending and privatise their state industries, usually by selling them to the Americans. It’s been described as part of the international network of American corporate imperialism. My guess is that Johnson is hoping that we might be able to buy some of the privatised industries in Argentina and also Chile and Peru. And it’s always good to remind people just how nasty Pinochet was, as well as Thatcher’s deep affection for the butcher. This tells you exactly what kind of person Thatcher was, and what kinds of people those who continue to idolise her, like BoJo, are.

As for Blair’s arrest of Pinochet, that was hopelessly bungled. There was a question about it at the time on the Beeb’s News Quiz on Radio 4. Clive Anderson, who is a lawyer as well as comedian and broadcaster, stated that in situations like that, nations are supposed to issue warning notices that particular individuals will not be welcome in their countries and would be subject to arrest before they arrived there. Blair didn’t. Chile did help us during the Falklands War, which is partly why Thatcher defended him. But he was still a brutal dictator, responsible for horrific and indescribable crimes.