4. THE REAL WELFARE CHEATS: AMERICA'S CORPORATIONS
Source: MULTINATIONAL MONITOR, Date: January/February 1993, Title:
"Public Assets, Private Profits: The U.S. Corporate Welfare Rolls,"
(Editorial introduction to special issue reprinted.), Authors: Chris
Lewis, Laurence H. Kallen, Jonathan Dushoff, David Lapp, Randal O'Toole
SYNOPSIS: In his presidential campaign, Bill Clinton called
for welfare reform, decried welfare cheats, and emphasized workfare.
But he failed to mention the largest recipients of taxpayer largesse:
U.S. corporations. Ralph Nader's magazine, Multinational Monitor, documents
five major areas of government giveaways to corporations.
1. "Public Assets, Private Profits" by Chris Lewis: In
1980, the Government Patent Policy Act opened a floodgate of government
research and development money to universities and private firms,
then allowed these recipients to keep the patents and the profits
on products developed. Amendments in 1984 and 1986 amounted to a giveaway
on patents developed with public funds. One glaring example is the
AIDS-fighting drug AZT. While AZT was developed with public funds
and was in the public domain since 1964, the FDA gave the patent away
to Burroughs Wellcome Corp., which has earned over $300 million in
sales over the last two years with no royalties going to U.S. taxpayers.
2. "Bankruptcy Bailouts" by Laurence H. Kallen: In 1986,
the new bankruptcy code was established. Chapter 11 of this code,
known as business reorganization under protection and supervision
of a bankruptcy court, has allowed corporations, many of them solvent,
to jettison debts. These "debts" have included EPA required
toxic site clean-up costs, personal injury judgments, union contracts,
and even retirement benefits. Some businesses have remained under
Chapter 11 for years while continuing to run business as usual and
even get bank loans.
3. "Gold-Plated Giveaways" by Jonathan Dushoff: Under the
Mining Act of 1872, companies can mine valuable minerals and metals
from federal lands without paying a cent in royalties and they can
buy federal lands for five dollars an acre or less. One example of
U.S. largesse is the Goldstrike mine in Nevada, the largest single
known gold deposit in the U.S. with a gross value estimated at more
than seven billion dollars. While the land and mineral deposits are
federally owned, the mine has been claimed under the Mining Act by
American Barrick Resources, a Canadian controlled company. Barrick
is free to mine the gold without paying a royalty fee to the government
and has now applied to purchase the seven billion dollars deposit
site for five dollars an acre.
4. "The Price of Power" by David Lapp: The 1992 Energy
Policy Act guarantees our government will continue to subsidize the
nuclear power industry. These taxpayer dollars go to an industry with
a dismal record on safety and efficiency. The Congressional Research
Service estimates R&D support to the nuclear industry at $39.8
billion (in constant 1982 dollars) between 1948 and 1990. The DOE
has failed to collect over $11 billion in past costs due to underselling
of its enriched uranium, according to a 1989 General Accounting Office
5. "Last Stand" by Randal O'Toole: U.S. taxpayers own more
than 192 million acres of forest lands that are managed by the U.S.
Forest Service and Department of Agriculture. Over the past 15 years,
the Forest Service has lost between one and two billion dollars annually
in undervalued timber sales. The largest recipient of these subsidies
is Louisiana-Pacific. It owns very little of its own timber lands
and often pays as little as five dollars per thousand board feet for
timber that costs the U.S. taxpayer over $50 per thousand board feet
to sell. Yet this financial loss is still small compared to the losses
to the public in recreation sites, watershed, and wildlife preservation.
SSU Censored Researcher: Paul Chambers
COMMENTS: "Bankruptcy Bailouts" -- Laurence H. Kallen,
author of Corporate Welfare: The Megabankruptcies of the 80s and 90s,
said the subject of his article in the Multinational Monitor received
no other exposure. Kallen feels the topic deserves greater coverage
since "A good number of the largest corporations in this country
have taken advantage of the bankruptcy law .. to chisel their suppliers
(many of whom are small companies), bust unions, and clean up their
balance sheets, with little actual risk. They have gained billions of
dollars of benefits through their use and abuse of the Bankruptcy Code
-- a form of hidden welfare that we all pay indirectly."
"Gold-Plated Giveaways" -- Author Jonathan Dushoff reports
that there have been only one or two brief newspaper stories on mining
on public lands, and the stories about the legislation in Congress merely
gave the typical summary of "both sides" without going into
any substantive detail on the issues. Dushoff says the public would
benefit from more exposure of the issue since it could help bring about
reforms that could save taxpayers tens of billions of dollars. He notes
that the primary beneficiaries of the lack of coverage to the issue
are "large American and foreign mining companies who benefit from
a vested right to mine federal minerals for free." Dushoff concludes
"As I write (11/24/93), both houses of Congress have passed legislation
to reform the Mining Act that was the focus of my article. The Senate's
bill is what ardent reformers call 'sham reform' intended to cure some
of the most glaring abuses of the Act (such as land sales for $2.50
an acre) while leaving the mining industry's power over the federal
lands intact. The House bill, on the other hand, would give federal
regulators the power they need to make miners follow environmentally
sound operation and cleanup practices. The bill is now headed to conference.
The battle is far from over."
"The Price of Power" -- David Lapp reports that the huge
subsidies given the nuclear energy industry, about $100 billion since
1950, have "not even entered the realm of public debate, largely
due to the lack of attention given the subject by the mainstream media."
He also charges that the "Clinton administration has reneged on
its commitment to eliminate funding for nuclear R&D; it now supports
funding breeder reactor technology, a technology rife with uncertainties
and the dangers of nuclear weapons proliferation." Lapp strongly
feels the public should know more about this issue because "If
people knew that for Fiscal Year '93, nuclear energy received $1,012,000,000
in funding compared to $210,000,000 for renewable energy -- about 25
percent of what nuclear energy gets they would be justifiably outraged."
"Last Stand" -- Author Randal O'Toole charges that while
many people know that the government loses money on sales of public
timber and other natural resources, "few realize that the reason
for this is that agencies like the Forest Service are rewarded for losing
money on environmentally destructive activities. Media coverage on this
fact has been almost non-existent." He believes that people need
to know how their tax dollars are being spent and that changes in the
budgetary process are required. O'Toole concludes that problems with
the Forest Service are symptomatic of the entire federal government
and that taxpayers face a multi-trillion-dollar debt "because Congress,
bureaucrats, and special interest groups all benefit from wasteful and
environmentally destructive activities. The public in general and environmentalists
in particular must stop seeing the federal government as their saviors
and return instead to the principle of Henry David Thoreau: 'That government
is best which governs least."'