19. CORPORATE PAYOLA
Breaking the law apparently is the easiest, most common, and least
known way America's corporations turn a healthy profit. More than 400
major American corporations paid billions of dollars in bribes and kickbacks
during the 1970's. And while the average American's buying power steadily
decreased through inflation, more than 550 corporations reported profit
increases of 37% after taxes in 1979.
The Securities and Exchange Commission has discovered that kickbacks,
bribery, and fraud are so pervasive in many corporations that it would
be impossible to investigate and prosecute each one individually. The
Commission thus devised a program whereby companies could investigate
themselves and submit their reports to the SEC, hoping to win lenient
treatment for having cooperated.
The information that reveals how billions of dollars have been spent
on bribery, kickbacks, and questionable transactions to increase corporate
Profits is readily available in documents regularly submitted to the
Yet these extraordinary disclosures are routinely ignored by the media
and only mentioned in connection with a news event, such as the filing
of a suit by the U.S. Department of Justice, political repercussions
in a foreign country, or other such events.
One small publication, FOCUS/Midwest, did investigate the scope of
questionable business practices conducted by corporations in Missouri
and Illinois (where FOCUS is circulated). According to FOCUS editor
and publisher Charles L. Klotzer, it "planned to publish only one
issue on Corporate Payola. Because of the wealth of material unearthed
about forty local corporations, the report was continued over three
It found that over $ 48 million were involved in questionable corporate
activities in those two states alone and that 26 companies had been
charged by the SEC with shady transactions or have filed statements
acknowledging transactions of dubious legality. Corporations cited in
the FOCUS study included Abbot Laboratories, Ralston Purina Co., McDonnell
Douglas Corp., General Dynamics, Anheuser-Busch Inc., Monsanto Co.,
Quaker Oats Co., Spiegel, Inc., and Tim. Wrigley Jr. Co.
The failure of the mass media to explore and report the total national
scope of illegal corporate activities and its impact on the nation's
economic and moral condition qualifies this story for nomination as
one of the "best censored" stories of 1979.
FOCUS/Midwest, Vol. 13, Nos. 81, 82, 83, (May-October 1979), "Corporate
Payola," by Tom Kennedy; The Nation, June 2, 1979, "Profits
Without Honor," by Bertram M. Gross.