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The Corporate State

Introduction

The corporate state has three main aspects: corporate welfare – the billions of dollars of tax-payers' money awarded to large corporations through subsidies and tax refunds; campaign contributions – the financing of politicians' campaigns by large corporations in return for the awarding of subsidies and tax refunds (and contracts); and the revolving door – the incestuous relationship between large corporations and the government by which key corporate personnel are placed in positions of power and retired politicians are given lucrative corporate positions after serving the corporations' interests.

Corporate Welfare

In his book Perverse Subsidies, published in 2001, Professor Norman Myers estimates that when you add the direct payments US corporations receive to the wider costs they oblige society to carry, you come up with a figure of $2.6 trillion, or roughly five times as much as the profits they make. As well as the $362bn the OECD countries were paying for farming when his book was published they were shelling out about $71bn on fossil fuels and nuclear power and a staggering $1.1 trillion on road transport. Worldwide, governments pay companies $25bn a year to destroy the Earth's fisheries, and $14bn to wreck our forests.

– They bleat about the free market, then hold out their begging bowls by George Monbiot, 13 December 2005.

There's no denying both political parties in Congress are now owned lock, stock and barrel by corporate interests. Our nation's elected officials in Washington have formed a partnership with the corporate supremacists and special interest groups in an effort to drive profits to the bottom line of U.S. multinationals at the expense of hard-working Americans.
Congress over the past few months has all-too-willingly approved corporate-friendly – and often corporate-written – transportation and energy bills, as well as so-called bankruptcy reform that further rent the middle class' social safety net. And not surprisingly, there's a serious correlation between the dramatic increase in money spent by special interest groups on lobbying and corporate America's taking over the deed to Capitol Hill.

– Lobbying against America by Lou Dobbs, 11 August 2005.

Following the tragic events of September 11, 2001, Americans joined together in grief and solidarity to support each other and our country. Corporate America also rallied to a cause, but it wasn’t in support of our nation. On the contrary, it was tax avoidance. In the fall of 2001, corporate lobbyists descended upon Washington, D.C. to try to turn our nation’s bad fortune to their companies’ advantage. They sought huge new tax breaks, even refunds of taxes paid in the past. Major accounting firms assisted in the lobbying, and also redoubled their efforts to market offshore tax shelters to their corporate clients, even recommending renunciation of their U.S. citizenship. They told companies, in Ernst & Young’s infamous phrase, that "the improvement on earnings is powerful enough that maybe the patriotism issue needs to take a back seat."

–  Corporate Income Taxes in the Bush Years from ITEP (Institute on Taxation and Economic Policy), September 2004.

In 1998 twenty-four profitable corporations paid less than nothing in taxes. They received well over $1 billion in refunds between them. In the period 2001-2003 eighty-two profitable corporations received over $12 billion in refunds between them. In the same period the top 25 recipients of tax breaks received over $86 billion.

– Twenty-four companies paying less than zero in [US] federal income taxes in 1998 from ITEP (Institute on Taxation and Economic Policy), 19 October 2000.

Campaign Contributions

Corporations lobby the government constantly for “tax incentives” that pay them to do what they would have done anyway. For example, oil companies want tax breaks for drilling for oil. Companies in businesses that need a lot of capital equipment want subsidies for buying equipment. Companies dependent on research want subsidies for research. Companies with international operations want subsidies for operating internationally. And so forth. And all too often, they get those breaks written into law, not because they’re good public policy, but because of their campaign contributions and lobbying clout.

–  Buy Now, Save Later: Campaign Contributions & Corporate Taxation from ITEP (Institute on Taxation and Economic Policy), November 2001.

Revolving Door

The government-industry revolving door puts industry-friendly experts in positions of decision-making power. Often individuals rotate between working for industry and working for the government in regulatory capacities, arrangements that are fraught with potential for conflicts of interest.

Here are some examples.

Monsanto

See also "Most Wanted" Corporate Human Rights Violators of 2005/Monsanto

Name	From	To
Linda J. Fisher	Assistant Administrator of the United States Environmental Protection Agency's Office of Pollution Prevention, Pesticides, and Toxic Substances	Vice President of Government and Public Affairs for Monsanto Corporation
Michael A. Friedman, M.D	Acting commissioner of the United States Food and Drug Administration (FDA) Department of Health and Human Services	Senior vice-president for clinical affairs at G. D. Searle & Co., a pharmaceutical division of Monsanto Corporation.
Marcia Hale	Assistant to the President of the United States and director for intergovernmental affairs	Director of International Government Affairs for Monsanto Corporation
Michael (Mickey) Kantor	Secretary of the United States Department of Commerce and former Trade Representative of the United States	Member of the board of directors of Monsanto Corporation.
Josh King	Director of production for White House events	Director of global communication in the Washington, D.C. office of Monsanto Corporation.
William D. Ruckelshaus	Chief administrator of the United States Environmental Protection Agency (USEPA)	Member of the board of directors of Monsanto Corporation.
Michael Taylor	Legal advisor to the United States Food and Drug Administration (FDA)'s Bureau of Medical Devices and Bureau of Foods Executive assistant to the Commissioner of the FDA Deputy Commissioner for Policy at the United States Food and Drug Administration	Head of the Washington, D.C. office of Monsanto Corporation.
Lidia Watrud	Microbial biotechnology researcher at Monsanto Corporation in St. Louis, Missouri	With the United States Environmental Protection Agency Environmental Effects Laboratory, Western Ecology Division.
Jack Watson	Chief of staff to the President of the United States, Jimmy Carter	Staff lawyer with Monsanto Corporation in Washington, D.C.
Ann M. Veneman	Director at Calgene, creators of the Flavr Savr tomato, the first genetically modified food sold in supermarkets. Calgene became part of Monsanto	Bush-43's Secretary of Agriculture

Lockheed Martin

See also "Most Wanted" Corporate Human Rights Violators of 2005/Lockheed Martin

Name	From	To
Norman Mineta	Vice president for special business initiatives for Lockheed Martin Member of the board of MELE Associates, a technology consulting firm, which lists among its clients Verizon, Lockheed Martin, and several government agencies, including the Energy Department, the State Department, the Transportation Department, Veterans Affairs, and the EPA	Bush-43's Transportation Secretary
Michael P. Jackson	Worked for Lockheed Martin IMS	Bush-43's Deputy Secretary of Transportation
Stephen J. Hadley	Shea & Gardner (Washington law firm whose clients include Lockheed Martin and Boeing): Partner	National Security Advisor (Bush-43) Assistant Secretary of Defense for International Security Policy

Chevron

See also "Most Wanted" Corporate Human Rights Violators of 2005/Chevron

Name	From	To
Condoleezza Rice	Board member of Chevron	Bush-43's Secretary of State
Anna Perez	Chevron's General Manager of Corporate Communications	Bush-43's National Security Council Director of Communications

Pfizer

See also "Most Wanted" Corporate Human Rights Violators of 2005/Pfizer

Name	From	To
Robert L. Mallett	Deputy Secretary of Commerce under Clinton	Senior Vice President at Pfizer
Daniel L. Spiegel	US envoy to the World Health Organization, the World Intellectual Property Organization, the U.N. Conference on Trade and Development, the International Labor Organization, the International Telecommunications Union and the U.N. High Commission for Refugees	Partner at the law firm of Akin Gump whose clients include Pfizer
Frank J. Donatelli	Head of the Africa Bureau of USAID	Partner at the law firm of Akin Gump whose clients include Pfizer

Dyncorp

See also "Most Wanted" Corporate Human Rights Violators of 2005/Dyncorp

Name	From	To
Donnie Marshall	DEA administrator under Clinton	Vice President of International Operations at DynCorp