Corporate Crime-Fighting Legislation Introduced in Congress
House and Senate Should Pass Corporate Crime Database Act and Hide No Harm Act
This week, members of Congress introduced two pieces legislation to take on the corporate crime crisis.
One bill, the Corporate Crime Database Act, introduced by Rep. Mary Gay Scanlon (D-Pa.), Sen. Dick Durbin (D-Ill.), and Sen. Richard Blumenthal (D-Conn.), would modernize the way the federal government documents enforcement actions against corporate lawbreakers, streamline access to the government’s data about corporate lawbreaking, and mandate the Department of Justice to release annual reports on corporate crime.
Another, the Hide No Harm Act, also introduced by Rep. Scanlon and Sen. Blumenthal with Sen. Bob Casey (D-Pa.), would impose criminal penalties directly on high-level corporate executives, including potentially jail time, when they knowingly hide dangers to consumers and workers that result in death or injury.
Either bill by itself would represent a meaningful progress for deterring corporate crime and holding corporate criminals accountable. Together, they could be a game changer.
Big Business Blotter News Roundup
CRYPTO
A person familiar with matter said that the Department of Justice and the Securities and Exchange Commission are examining FTX to determine whether any criminal activity or securities offenses were committed. The person could not discuss details of the investigations publicly and spoke to The Associated Press on condition of anonymity.
FOOD
Dozens of youths illegally employed to clean meat plants, Labor Dept. says - The Washington Post
Federal investigators accuse Packer Sanitation Services of employing at least 31 youths, ages 13 to 17, to clean kill floors and other areas where animals are slaughtered. Several youths, including a 13-year-old, suffered chemical burns and other injuries, the Labor Department said.
During this past weekend, however, it was disclosed that Lexington plant management knew some of its Jif products were contaminated with Salmonella as early as December 2021 and as late as February 2022, but opted to keep it a secret. They did not make the required reports to the Food and Drug Administration or initiate recalls.
JBS, other meat processors accused of fixing wages - BizWest
A group of the largest red-meat producers in the United States — companies that collectively make up about 80% of the market — faces a class-action lawsuit from workers claiming that since 2014, the companies have colluded and conspired to fix and depress wages and salaries.
The lawsuit, filed this week in U.S. District Court in South Dakota, alleges that the company behind a 2021 E.coli outbreak in several states, Braga Foods, was negligent in its adherence to food safety regulations. It also claims that Iowa-based Hy-Vee Foods, the parent company of the Sioux Falls grocery store where the woman and her partner purchased the tainted spinach last year, was negligent for failing to warn shoppers of the risk of E. coli contamination from lettuce products sold as “ready to eat.”
WORKER SAFETY / RIGHTS
Company fined after worker dies from fall into pot of molten iron twice as hot as lava - ABC News
“Investigators with the U.S. Department of Labor's Occupational Safety and Health Administration determined the foundry routinely exposed employees to unprotected fall hazards as they worked within four feet of deep ceramic containers of super-heated molten iron,” OSHA said in a statement. “If required safety guards or fall protection had been installed, the 39-year-old employee's ninth day on the job might not have been their last.” Caterpillar, a Fortune 500 corporation and construction equipment manufacturer, was cited for one willful violation and fined $145,027 by OSHA, according to OSHA’s statement announcing the punishment.
The lawsuit states that Donya Prioleau, who had been working at the Sam’s Circle Walmart as an overnight stocker and trainer for over a year, was in the break room when the shooting happened and she narrowly avoided being shot. Six store employees were shot and killed when police said 31-year-old Andre Bing, an overnight manager for Walmart, entered the break room and began shooting people before killing himself.
Attorney: Company hit by tornado interfered with OSHA probe - AP
An attorney said Friday that he has filed a charge on behalf of 20 workers with the National Labor Relations Board that accuses Mayfield Consumer Products of unfair labor practices. The filing alleges the company is “denying, abridging, and/or obstructing workers’ compensation benefits” because the workers participated in an Occupational Safety and Health Administration investigation, according to a media release from Amos Jones, a Washington attorney representing some former workers. The company was fined $40,000 by OSHA for violations of federal labor law.
TECH
Tesla under US criminal investigation over self-driving claims, sources say - Reuters
The US Department of Justice (DoJ) launched the previously undisclosed investigation last year following more than a dozen crashes, some of them fatal, involving Tesla’s driver assistance system known as Autopilot, which was activated during the accidents, the people said.
Elon Musk is putting Twitter at risk of billions in fines, warns company lawyer - The Verge
In a statement shared with The Verge after this story was published, an unnamed FTC spokesperson said the agency was “tracking recent developments at Twitter with deep concern. No CEO or company is above the law, and companies must follow our consent decrees. Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”
Meta Fined $275 Million for Breaking E.U. Data Privacy Law - NYT
The penalty, imposed by Ireland’s Data Protection Commission, brings the fines that the regulator has imposed on Meta since last year to more than $900 million. In September, the same regulator fined the company roughly $400 million for its mistreatment of children’s data. In October last year, Irish authorities fined Meta, which was previously called Facebook, 225 million euros, or about $235 million, for violations related to its messaging service WhatsApp.
Google Agrees to Compliance Reforms in DOJ Settlement - WSJ
The DOJ said Google failed to turn over data, held abroad, that U.S. investigators wanted in connection with a probe into BTC-e, a cryptocurrency exchange that was indicted for alleged money laundering. An appeals court in New York in a similar case found the foreign-held data couldn’t be reached under the SCA.
THERANOS
Elizabeth Holmes Is Sentenced to More Than 11 Years for Fraud - NYT
The sentence capped a yearslong saga that has captivated the public and ignited debates about Silicon Valley’s culture of hype and exaggeration. Ms. Holmes, who raised $945 million for Theranos and promised that the start-up would revolutionize health care with tests that required just a few drops of blood, was convicted in January of four counts of fraud for deceiving investors with those claims, which turned out not to be true.
Ex-Theranos President Balwani Should Get 15 Year Prison Term, US Argues - Bloomberg
Ex-Theranos Inc. President Ramesh “Sunny” Balwani should spend 15 years in prison for defrauding investors and patients, prosecutors said. His lawyers countered he should be spared jail entirely.
CONSUMER PROTECTION
Terrell is one of four Black women, three of whom spoke to NBC News exclusively, who have filed federal lawsuits against L’Oréal and other companies, alleging that chemicals in the companies’ hair products caused them to develop uterine cancer or other severe health effects. The lawsuits follow the release last month of a study by the National Institutes of Health that found that women who reported frequent use of hair straightening products — defined as more than four times in the previous year — were more than twice as likely to develop uterine cancer compared to those who did not use the products.
The lawsuit alleges that Fluent collected the personal data of Pennsylvania consumers through a series of promotional offerings on websites and thereafter sold that information to sellers and telemarketing companies (“Marketing Partners”). According to the complaint, from 2018 to 2021, more than 4.2 million Pennsylvania consumers provided their information on one of Fluent’s websites. Fluent drew the attention of the Pennsylvania Attorney General when it agreed to pay a $3.7 million civil penalty to the New York Attorney General in May 2021 relating to allegations that it supplied millions of fake public comments in opposition to proposed net neutrality rules.
POLLUTERS
Plea hearing scheduled in ‘Gasland’ drilling pollution case in Dimock - NPR
A plea hearing has been scheduled for next week in the long-running case of a natural gas driller facing felony charges over allegations it polluted the aquifer of a small community 14 years ago. Houston-based Coterra Energy Inc. will appear in Susquehanna County Court on Tuesday, according to online court records. Coterra’s corporate predecessor, Cabot Oil & Gas Corp., was charged in June 2020 with 15 criminal counts after a grand jury investigation found the company drilled faulty gas wells that leaked flammable methane into residential water supplies in Dimock and surrounding communities.
Erie Coke and Corporate Officer Indicted for Violating the Clean Air Act over Four Years - DOJ
According to the Indictment presented to the court, from in and around October 2015 and continuing until in and around December 2019, Erie Coke Corporation and Nearhoof tampered with measurements on heating systems which emitted contaminants and pollutants into the air including volatile gases such as benzene, toluene, and xylene. Erie Coke Corporation was a plant regulated by federal and state statutes and regulations including the Clean Air Act (CAA) administered by the Environmental Protection Agency (EPA) and Pennsylvania Department of Environmental Protection (PADEP), which was located adjacent to numerous private residences, public facilities, and several schools.
JPMorgan Chase
JPMorgan Strikes Deal to End Former Compliance Employee’s Retaliation Lawsuit - DOJ
The agreement with Ms. Williams allows JPMorgan to avoid a trial, which would likely have involved further airing of the bank’s internal compliance matters.
The new lawsuit filed against JPMorgan accuses the financial institution of having "provided special treatment to the sex-trafficking venture, thereby ensuring its continued operation and sexual abuse and sex-trafficking of young women and girls." A separate lawsuit filed Thursday by a second anonymous woman representing a class of plaintiffs says when JP Morgan started "separating itself from Epstein" in 2013, Deutsche Bank "became the bank that Epstein needed to fund his sexual abuse and sex-trafficking operation."
RESEARCH / POLICY
Study: Maybe Compliance Policies Don’t Matter - Radical Compliance
They found that the structure of the policy made no difference on how well employees then scored on a subsequent test about the anti-corruption policy. More shocking, however: the employees who received training on the policy scored no better than a control group of employees who received no training on the policy at all.