The recent decision by the U.S. Supreme Court to slash the damage award in the Exxon Valdez oil spill case and the indictment of Sen. Ted Stevens on corruption charges are not the only controversies roiling Alaska these days. The Last Frontier is also witnessing a dispute over a proposal to open a giant copper and gold mine by Bristol Bay, the headwaters of the world’s largest wild sockeye salmon fishery. Given the popularity of salmon among the health-conscious, even non-Alaskans may want to pay attention to the issue.

The Pebble mine project has been developed by Vancouver-based Northern Dynasty Ltd., but the real work would be carried out by its joint venture partner Anglo American PLC, one of the world’s largest mining companies. Concerned about the project and unfamiliar with Anglo American, two Alaska organizations—the Renewable Resources Coalition and Nunamta Aulukestai (Caretakers of the Land)—commissioned a background report on the company, which has just been released and is available for download on a website called Eye on Pebble Mine (or at this direct PDF link). I wrote the report as a freelance project.

Anglo American—which is best known as the company that long dominated gold mining in apartheid South Africa as well as diamond mining/marketing through its affiliate DeBeers—has assured Alaskans it will take care to protect the environment and otherwise act responsibly in the course of constructing and operating the Pebble mine. The purpose of the report is to put that promise in the context of the company’s track record in mining operations elsewhere in the world.

The report concludes that Alaskans have reason to be concerned about Anglo American. Reviewing the company’s own worldwide operations and those of its spinoff AngloGold in the sectors most relevant to the Pebble project—gold, base metals and platinum—the report finds a troubling series of problems in three areas: adverse environmental impacts, allegations of human rights abuses and a high level of workplace accidents and fatalities.

The environmental problems include numerous spills and accidental discharges at Anglo American’s platinum operations in South Africa and AngloGold’s mines in Ghana. Waterway degradation occurred at Anglo American’s Lisheen lead and zinc mine in Ireland, while children living near the company’s Black Mountain zinc/lead/copper mine in South Africa were found to be struggling in school because of elevated levels of lead in their blood.

The main human rights controversies have taken place in Ghana, where subsistence farmers have been displaced by AngloGold’s operations and have not been given new land, and in the Limpopo area of South Africa, where villagers were similarly displaced by Anglo American’s platinum operations.

High levels of fatalities in the mines of Anglo American and AngloGold—more than 200 in the last five years—have become a major scandal in South Africa, where miners staged a national strike over the issue late last year.

Overall, the report finds that Anglo American’s claims of social responsibility appear to be more rhetoric than reality.  Salmon eaters beware. 

http://dirtdiggersdigest.org/archives/148

Dirt Diggers Digest is written by Philip Mattera, director of the Corporate Research Project, an affiliate of Good Jobs First.

Big business is talking more these days about the need to reduce greenhouse gas (GHG) emissions. Even long-time global warming denier Exxon Mobil feels the need to publicize what it is doing in this regard. Claims of reductions in GHG are not, however, meaningful unless those emissions are being estimated consistently to begin with.

A study issued yesterday by the Ethical Corporation Institute raises questions about how much we really know about the volume of GHG being generated by large corporations. According to a press release about the report (which is available only to those willing to fork over more than 1,000 euros), there are “staggering inconsistencies in how companies calculate and verify their greenhouse gas emissions.” The report found, for instance, that companies responding to the fifth annual Carbon Disclosure Project questionnaire used more than 30 different protocols or guidelines in preparing their emissions estimates. The report, it appears, surveys this potpourri of measurement techniques but does not attempt to resolve the differences.

The absence of consistency has not prevented the Carbon Disclosure Project from trying to use current reporting to understand the larger framework of GHG trends. In May, the Project issued the first results of its Supply Chain Leadership Collaboration, an initiative in which large companies such as Nestlé, Procter & Gamble and Unilever urge their suppliers to report on their own carbon footprint. It is unclear how much effort is made to ensure these results are reported in a uniform manner.

Along with the need for improved GHG reporting, there are growing calls for companies to disclose the liability risks (and opportunities, if any) associated with those emissions. Recently, a broad coalition of institutional investors and major environmental groups once again urged the U.S. Securities and Exchange Commission to clarify the obligations of publicly traded companies to assess and fully disclose the legal and financial consequences of climate change. The statement was aimed at reinforcing a petition filed with the SEC last year on climate-change disclosure.

Climate-change liability risks no longer exist just in the realm of the theoretical. Lawsuits have been filed against the major oil companies for conspiring to deceive the public about climate change—including one brought in the name of Eskimo villagers in Alaska who are being forced to relocate their homes because of flooding said to be caused by global warming.  Famed climate scientist James Hansen recently declared at a Capitol Hill event that oil and coal company executives could be guilty of “crimes against humanity.” If that isn’t a risk worth reporting, what is?

http://dirtdiggersdigest.org/archives/99

Dirt Diggers Digest is written by Philip Mattera, director of the Corporate Research Project, an affiliate of Good Jobs First.

Almost twelve years ago, when a group of us started CorpWatch, we did so because it seemed then that a few hundred transnational companies were intent on remaking the earth in their image. As we saw it, the corporate version of globalization undermined community, ecology and democracy. At that moment the Internet had just appeared on the scene, and it seemed to us, and to many others, a vehicle through which to build an alternative – a form of grassroots globalization that fostered human rights and environmental rights, and that helped hold corporations accountable across the globe. Thus CorpWatch was born.

In the ensuing dozen years, the corporate encirclement of the earth has only
grown – as has the grassroots response to it in every corner of the planet.
The Internet has boomed and become on the one hand, more corporatized than we might once have imagined and yet also an increasingly powerful tool for building democratic participation and communication (and I’m very proud that CorpWatch is still part of it). This dual nature of the Internet embodies a fundamental paradox of globalization. While globalization seems to concentrate power in the hands of a few in most every realm it touches, it also increasingly interconnects us, interweaving universal values into a multinational tapestry of cultures and politics.

I see this here in Argentina, where I’ve had the good fortune to live for the past year. As numerous people here will tell you, once, this country was so isolated from the rest of the world that a lot of folks were not aware of the magnitude of the horrors unleashed by the military dictatorship between 1976 and 1983. People knew enough and saw enough and felt enough to be afraid, and tens of thousands felt the direct impact as they or their loved ones were arrested, tortured, “disappeared.” But the truth was hard to come by; there was heavy local censorship, and there was no Internet. People abroad knew more about what was going on in Argentina, than many here did.  

Today, the country, like most of the rest of the world, is dialed-in, networked to the hilt, totally online. It seems almost unthinkable that something similar could happen here again. There is a strong consciousness of and commitment to human rights, and an understanding of the connection between what Argentina went through, and similar histories and battles elsewhere in the Latin American region  and the world. Argentina pulled itself out of the horrors of dictatorship, and as it has re-evolved as a nation, it has benefited in this way from globalization.

At the same time, the country is suffering many of the attendant ills. I asked my twelve year-old daughter what she had learned about the United States from spending a year outside of the country. Her reply was quick and clear – I’ve learned that the US controls the media in the rest of the world. From the mouths of babes...but after all, she learned to speak Spanish, in part, by watching American sitcoms dubbed into Spanish on the local TV. Meanwhile, although the country has reaped significant economic benefit from its agricultural prowess as a giant in the world soy market – the control of this commodity is increasingly in the hands of a few transnational corporations: Cargill, ADM and others. And the country’s forests are suffering as more and more trees are felled to make room for more and more soybeans. These facts will remain true, no matter the outcome of the current conflict between President Kirchner and the country’s farmers.

Finally, globalization and all its contradictions hits home directly for me here in the Buenos Aires neighborhood I’m living in. Once a zone of automechanics and warehouses, Palermo Viejo is today one of the hippest and most popular destinations in this wonderful city. Now known as Palermo Hollywood, it is a barrio in the midst of a vast transformation. Many of our neighbors have lived here for forty or more years – they are old-school butchers, bakers, antique dealers, bar owners. Yet they are increasingly surrounded by trendy boutiques and fashionable restaurants. Many are being squeezed out by big corporate real estate that has entered the scene and is speculating on a series of high-end apartment towers that will forever change the face of this low-slung old time neighborhood. In the midst of it all are a throng of artists, ex pats, and activists organizing for the soul of the barrio.

Don’t get me wrong; it ain’t all bad. To be honest, all the paradoxes and contradictions of the gentrification of this globalizing hub make it an exciting and wonderful place to live (for the moment). I decided to try and document the intersection – the convergence and contradiction – of these various separate realities-the old and the new of Palermo Viejo. You can check out my photo essay on the subject at http://www.palermobuenosaires.blogspot.com.  

Josh Karliner is Founder and a board member of CorpWatch.

Tim Shorrock, a veteran investigative journalist and a longtime subscriber to the Dirt Diggers Digest, has just come out with a book called Spies for Hire: The Secret World of Intelligence Outsourcing. Shorrock describes how an activity that used to be handled by spooks on the federal payroll has been steadily transformed into a $50 billion Intelligence-Industrial Complex.

Thanks to the contracting scandals surrounding Halliburton and its former subsidiary Kellogg, Brown & Root, the public learned of the extent to which the Pentagon has turned over routine functions to private military companies. The outrageous behavior of Blackwater has highlighted the use of mercenaries to protect U.S. diplomats and other VIPs in Iraq.

Shorrock shines a light on another group of corporations that are carrying out a more sensitive function that most people have no idea is being handed over to the private sector. Careful readers of the revelations concerning abuses at the U.S.-run Abu Ghraib prison in Iraq would have learned that interrogators alleged to have abused detainees included civilians employed by a company called CACI. But that is only the tip of a lucrative iceberg, Shorrock shows.

For example, he writes, more than half the people working at the super-secret National Counterterrorism Center in Virginia are employees of companies such as Science Applications International Corporation (SAIC), BAE Systems and Lockheed Martin. The Center’s terrorist database is maintained by The Analysis Corporation, which subcontracted collection activities to CACI.

Since 9/11, Shorrock says, the Central Intelligence Agency has been spending 50-60 percent of its budget (or about $2.5 billion a year) on contractors—both individuals and companies. At the CIA and its sister spook agencies: “Tasks that are now outsourced include running spy networks out of embassies, intelligence analysis, signals intelligence (SIGINT) collection, covert operations, and the interrogation of enemy prisoners.”

Shorrock devotes an entire chapter to Booz Allen Hamilton, known to most people as a management consultant for large corporations but which pioneered the intelligence outsourcing industry (though it recently agreed to sell its federal business to the Carlyle Group). When Mike McConnell, a former Booz Allen executive, was named by President Bush as Director of National Intelligence, it was the first time, Shorrock notes, that a contractor was put in charge of the country’s entire spy apparatus.

Spies for Hire has much more to offer that cannot be adequately summarized here. I recommend that you read it in full. But let me let also note that profiles of some of the intelligence contractors discussed by Shorrock—such as CACI and ManTech International—can be found on the Crocodyl wiki to which I contribute. Also note that the updated edition of Jeremy Scahill’s valuable book Blackwater, recently issued in paperback, has a discussion (p.453 forward) on the mercenary company’s move into another form of privatized intelligence—a product called Total Intelligence Solutions that is designed to bring “CIA-style” services to Fortune 500 companies.

http://dirtdiggersdigest.org/archives/60

Dirt Diggers Digest is written by Philip Mattera, director of the Corporate Research Project, an affiliate of Good Jobs First.

See also feature articles by Tim Shorrock on CorpWatch.org:

Domestic Spying, Inc.

QinetiQ Goes Kinetic: Top Rumsfeld Aide Wins Contracts From Spy Office He Set Up 

Carlyle Group May Buy CIA Contractor: Booz Allen Hamilton

The U.S. Department of National Intelligence (the body that oversees spy agencies like the Central Intelligence Agency and the National Security Agency) recently decided it wanted to know what Iranian students were taught in school these days.

Most people might have considered the obvious: pick up the phone and ask an Iranian student or perhaps their parents, who have already had to spend many days and probably nights reading the books.

But fortunately for the DNI, such a treasonous act was not necessary.

Instead they hired SAIC, a major CIA and NSA contractor, to do the job. On December 31st, 2007, the company published the results: a 17 page report on 85 Iranian textbooks that the company downloaded off the Internet from the Iranian government's website.  The final report was not made public, but Secrecy News, an excellent electronic newsletter written by Steven Aftergood and published by the Federation of American Scientists, obtained a copy.

The textbooks that are used in Iranian schools "reveal a clear emphasis on Islam, as it has been interpreted by the leadership of the Islamic Republic of Iran," is one of "the most important conclusions" of the study and they "provide a distorted view of Shia Islam as the only true path in Islam, and among religions."

Beyond this shocking headline, SAIC can also reveal that the Iranian government may be censoring detailed news of discrimination: While page 74-77 of the sociology textbook for the third year of high school makes reference to discrimination, there are no specific cases of discrimination in Iran mentioned, according to the company's analysts.

The CIA will be delighted to learn that, in accordance with popular belief, the textbooks do spread hate against the U.S. Page 64 of the  Islamic Teaching textbook for the fifth grade contains a quote from Ayatollah Khomeini that reads: "The Muslims must use the power of the Islamic Republic of Iran for crushing the teeth of this oppressive government [the USA] in its mouth."

Although SAIC says it studied Iranian mathematics and chemistry textbooks, the geeks at the NSA will be disappointed that they contained no smoking guns or secret equations.

The question CorpWatch wants to know - how much did the government pay for this study? For any of our readers out there with access to the spy budget, here's a clue: it is contract number: 2003*N443600*022

A Kalitta Air plane en route to Bahrain in the Middle East has crashed. The Michigan based company has been linked to the CIA rendition program. It is also the main contractor that flies home bodies of U.S. soldiers after they are killed in combat in Iraq and Afghanistan.

Ironically the cargo plane crashed the day before “Memorial Day,” a major U.S. federal holiday that commemorates U.S. men and women who die while in military service.

Amnesty International has reported that Kalitta Air has been linked to “covert intelligence and military operations” but unlike other CIA contractors that appear to be dummy companies run by fictitious individuals, it was founded by a Conrad Kalitta, a retired U.S. drag racing driver.

Kalitta first entered the freight business in 1967 when he started ferrying car parts in a Cessna 310. In November 2000, Kalitta Air, started running domestic and international scheduled or on-demand cargo service and support for the Pentagon’s Air Mobility Command based at Scott Air Force Base in Illinois.

Shortly before the invasion of Iraq, Kalitta started up a scheduled cargo service to Europe and in 2005 the company won a part of a $1.2 billion dollar contract to provide airlift services to the Air Mobility Command.

On Sunday, a 25 year old Boeing 747 Kalitta jet, N704CK, crashed on take-off from Brussels airport. The specific plane is one of four of the company’s 747-200F’s and it regularly flies on Kalitta’s European cargo service to New York and Chicago, according to the company’s web schedule.

The plane broke in half and Belgian firefighters, who rushed to the scene, coated the wings of the plane with special fire retardant foam as a precaution because the plane was still full of jet fuel. The five people on board were slightly injured although none were killed. The plane was carrying 76 tonnes of cargo, half of which Belgian media reported to be mail. Details of the remaining cargo were not revealed. 

Back in the U.S., the Wilmington News-Journal reported that the company planes were awaiting Monday’s commemoration ceremonies. “Along Delaware 1 near a busy Dover Air Force Base, travelers could catch glimpses in the distance of the original reason for Memorial Day. White, corporate-size jets owned by Kalitta Air waited in the sun to ferry home fallen troops whose final journey passes through the large military mortuary at Dover.”

(The company also leased one of its 747s to a Columbia Pictures film named “Air Force One,” a 1997 suspense thriller about the hijacking of the U.S. president's plane. The film starred Harrison Ford, Gary Oldman and Glenn Close.)

Last week, a Congressional committee properly raked Big Pharma over the coals for misleading advertising of pharmaceuticals.

A hearing of the House Energy and Commerce Committee's oversight subcommittee focused on advertising campaigns for three drugs, including the remarkable case of Robert Jarvik. Jarvik is featured in endlessly re-run ads for Pfizer's blockbuster cholesterol drug Lipitor. Known as the inventor of the Jarvik artificial heart, he is not a cardiologist, not a licensed medical doctor and not authorized to prescribe pharmaceuticals. He's shown in the ads engaged in vigorous rowing activity, but in fact he doesn't row. Pfizer pulled the ads in February after controversy started brewing.

Among industrialized countries, only the United States and New Zealand permit drug companies to market directly to consumers. It's a bad idea, it drives bad medicine, and it should be banned.

But although it has the highest profile, direct-to-consumer advertising is a small part of Pharma's marketing machine.

Researchers Marc-André Gagnon and Joel Lexchin conclude in a recent issue of the journal PLOS Medicine that direct-to-consumer ads make up less than a tenth of industry marketing expenditures ($4 billion of $57.5 billion in 2004). And Gagnon and Lexchin's estimate of $57.5 billion on marketing excludes many industry expenditures that are really driven by marketing, including clinical trials conducted for marketing purposes.

Wal-Mart Stores has put out a press release patting itself on the back for promising the equivalent of about $430,000 for disaster relief and reconstruction for the area of China hit by a massive earthquake this week. The gesture was laudable but the amount was less than impressive.

After all, the giant retailer would be nowhere today without the countless Chinese workers who toil in sweatshops so that American consumers can be offered the cheap goods that are at the core of the company’s business model. Last year those largely Chinese-made goods brought Wal-Mart profits of $12.7 billion, or about $1.4 million every hour of every day. The $430,000 contribution thus represents less than 20 minutes of profit.

Wal-Mart also profits from Chinese consumers. The company operates more than 200 stores in China (through joint ventures and minority-owned subsidiaries), several of which have been shut down because of the tremblor. Wal-Mart was so eager to operate stores in China that it agreed to let its employees there be represented by unions (though of the government-dominated variety).

Wal-Mart has a history of using relatively inexpensive amounts of disaster relief to boost its reputation. After Hurricane Katrina hit the U.S. Gulf Coast in 2005, Wal-Mart maneuvered to get maximum exposure for its prompt delivery of relief supplies. A fairly routine operation for a company possessing the most advanced logistics infrastructure was seen as nearly miraculous, given the ineptitude of federal and state public officials.

The company made an initial faux pas (quickly reversed) in announcing that employees at its stores shut down by the storm would be paid for only three days. It also started out offering a measly $2 million in relief but soon overcame its parsimonious instincts and upped the figure by $15 million, thereby winning wide praise. The wave of favorable coverage went on for several months, thanks at least in part to the efforts of its army of p.r. operatives from Edelman and a conservative blogger who was paid to tout Wal-Mart’s hurricane work in the blogosphere.

Wal-Mart may have to part with more than $430,000 to get a similar public relations bonanza from China’s suffering.

http://dirtdiggersdigest.org/archives/51

Dirt Diggers Digest is written by Philip Mattera, director of the Corporate Research Project, an affiliate of Good Jobs First.

Adding Insult to Injury

A funny thing happened on the way to exercising my presumed right, as a shareholder, to attend yesterday’s annual shareholder meeting of private military contractor L-3 Communications, held at the Ritz-Carlton Hotel in Manhattan’s financial district.

I was one of a group including a translator, Marwan Mawiri, who worked for a year and ½ for Titan, now an L-3 subsidiary, in Iraq. Marwan has witnessed first-hand numerous problems with the way interrogation and translation contracting is being handled in Iraq – a practice that may be putting at substantial risk the national security and lives of the Iraqi people, of U.S. and multinational troops, officials and contractors, and of the United States itself.

The problem is clear: inadequate and downright bad vetting and hiring practices for analysts, interrogators and linguists. Indeed, the U.S. military has recently cancelled Titan’s translation contract due to poor practices along with waste, fraud and abuse.

What is also crystal clear is that the war in Iraq can neither be won, effectively prosecuted, nor competently withdrawn from until these problems are solved and until proper oversight is in place.

If people hired to translate in critical battlefield and other situations are not even fluent in at least Arabic and English; if screeners monitoring the entry and exit of people to U.S. military bases at times have no more qualification and training than having been a baggage screener at a U.S. airline (see CorpWatch’s new report [note: updated December 2008] "Outsourcing Intelligence in Iraq":); if interrogators are not qualified, experienced and trained to the highest standards possible, how can we ensure that we avoid future travesties due to bad intelligence? Such as the bad intelligence around the supposed Iraqi weapons of mass destruction program (which was, of course, Bush/Cheney and neocon-driven, not L-3-driven), that got the U.S. into this war  in the first place? (And remember, even when U.S. soldiers start coming home from Iraq, large numbers of private contractors will stay, making proper oversight all the more crucial.)

It turned out that L-3’s management wasn’t so happy to see us, and that my co-worker, Pratap Chatterjee and I, were supposed to have received a certain admission ticket to attend the meeting. The same went for our companions from the Iraq Campaign 2008 – a major coalition to oppose the war, which is now taking on private military contractors as part of their broader campaign on the high cost U.S. taxpayers are paying for the war in Iraq – and Foreign Policy in Focus, who were holding proxies. Funny that.

Looking out at the Statue of Liberty from the hotel lobby downstairs, where we gathered to figure out how to proceed, I pondered the damage this war has done to the liberties of so many Iraqi people, and to so many U.S. liberties and values that I hold dear. Like respect for human rights, compliance with the Geneva Conventions around torture, appropriate security that is handled with skill and integrity. I wasn’t surprised that L-3/Titan didn’t want to hear our message; though I sincerely hope some of the shareholders, managers, directors, staff and  financial analysts do take the time to read our report and to talk to current and former contractors like Marwan. We didn’t go in malice.

We went in genuine concern over business operations that, while they may be earning a pretty profit for large shareholders, pose a genuine reputational risk to the company for future liability. And are causing harm on the ground, to real people. We challenge L-3 Communications to become a truly ethical leader in business practices, not just in products and sales. Surely the sixth-largest U.S.  defense industry company (according to their website) has the intelligence to recognize bad practices and the ability to change them for the better.

Or are we simply destined for years more, as Huffington Post blogger Charlie Cray put it, of companies and investors milking a “Baghdad Bubble as a result of the Bush administration's refusal to hold them accountable”?

As the meeting ended, and the muckety-mucks began leaving the Ritz-Carlton to be chauffered away in their Lincoln Town cars and limousines, we gave these decision makers another opportunity to take a copy of CorpWatch’s report, or even to talk to us directly. The vast majority kept their blinders on and marched resolutely past.

Suddenly we saw General Carl Vuono (ret.). Vuono is former chief of staff of the U.S. Army, and long-time president of private military consulting firm MPRI, which is now also an L-3 subsidiary. Pratap and Marwan rushed to try and speak  with him, while a reporter and cameraman from Al-Jazeera English filmed and stood at the ready for the general’s reply. The general didn’t want to talk, but you can see some of the footage on YouTube. You can also watch Pratap and Marwan describe their experiences on Democracy Now!, where they were interviewed live this morning.

Pratap gave the general a copy of “Outsourcing Intelligence In Iraq” – maybe he’ll decide to have one of his staffers give it a read. We’d love to talk, and welcome any dialogue with officials of L-3.

There’s something peculiar in the report on financial market regulation issued March 31 by Treasury Secretary Henry Paulson. The plan, touted by some as a bold expansion of federal control over capital markets and dismissed by others as a mere rearranging of the deck chairs on the financial Titanic, includes an incongruous section on the insurance industry.

While insurance is a financial service, it hasn’t been at the center of the implosion of the housing market or (aside from the bond insurance crisis) linked to the instability on Wall Street. The Paulson plan, nonetheless, provides a resounding endorsement of a “reform” that key players in the insurance industry have been seeking for at least 15 years—allowing large national carriers to do an end run around the current state-based insurance regulatory system. Such carriers would be permitted to adopt an “optional federal charter” and thereby put themselves under the supervision of a federal regulatory agency that does not yet exist.

Big Insurance has not sought federal oversight because it wants more regulation. After all, this is the industry that pioneered offshoring when some carriers moved their official headquarters to tax havens such as Bermuda. While it is true that many state regulators have been toothless watchdogs, other states have been aggressive in protecting the interests of policy holders and the public.

In fact, the Paulson proposal comes just a couple of weeks after insurers were celebrating the downfall of New York Gov. Eliot Spitzer in a prostitution scandal. During his time as New York’s attorney general, Spitzer pursued major insurance companies such as Marsh & McLennan and American International Group for offenses such as bid rigging. Marsh ended up settling for $850 million in 2005, and AIG paid a whopping $1.6 billion the following year. While it is true that Spitzer went after the industry as a prosecutor rather than a regulator, he did so in the overall context of state oversight.

The insurance industry swears that it supports the optional federal charter in the name of modernization (as does the Paulson report), but it is significant that the reform has been supported by groups such as the Competitive Enterprise Institute and the American Enterprise Institute that are no friends of regulation (some Democrats in Congress are also in favor). When word of Paulson’s insurance proposal leaked out over the weekend, the American Insurance Association rushed out a press release hailing it, saying that the optional federal charter “will be more efficient, effective and rational given the ‘increasing tension’ a state-based regulatory system creates.”

http://dirtdiggersdigest.org/archives/23

Dirt Diggers Digest is written by Philip Mattera, director of the Corporate Research Project, an affiliate of Good Jobs First.

My hunch from last night was correct: Stanley Inc. (also known by the name of its subsidiary Stanley Associates) is one of the employers of contract workers who improperly viewed the passport file of Sen. Barack Obama. It now seems that the files of Senators McCain and Clinton were violated as well, so perhaps the speculation about political skulduggery is unfounded.

Yet that still leaves a host of questions related to the growing reliance of the State Department and other federal agencies on contractors such as Stanley, which until today was far from a household name. Yet it’s been around for more than three decades, making its money—like the scores of other Beltway Bandits that populate the office buildings of the Washington, DC area—from the federal spigot.

Stanley started as a maritime consultant and now provides “information technology services and solutions.” In its most recent 10-K filing, Stanley reported getting 65% of its revenue from the Pentagon and 35% from more than three dozen civilian agencies, most notably the State Department.

Stanley used to be a pretty small operator, but over the past decade it has grown at the remarkable rate of 33% a year, reaching more than $400 million. Although the company is publicly traded, it is majority-owned by officers, directors and employees (the latter through an employee stock ownership plan).

While the passport contract is the one in the news, Stanley is largely a military contractor. It brags that some 53% of its 2,700 employees have Secret or Top Secret security clearances. CEO Philip Nolan is ex-Navy, and his board includes retired generals from the Army and the Marine Corps. Stanley doesn’t produce weapons—it provides the systems engineering, operational logistics and other services that keep the high-tech war machine running.

In the 10-K filing, where it is addressing investors rather than the public, the company is blunt about why it expects continuing growth: “increased spending on national defense, intelligence and homeland security” and “increased federal government reliance on outsourcing.” In other words, its business strategy is fundamentally based on the continuation of the “War on Terror” and the steady hollowing out of the federal workforce.

The company goes on to list the specific risk factors that might affect the value of its shares. Here’s one of particular interest (see pp.20-21):

Security breaches in sensitive government systems could result in the loss of customers and negative publicity.

Many of the systems we develop, integrate and maintain involve managing and protecting information involved in intelligence, national security and other sensitive or classified government functions. A security breach in one of these systems could cause serious harm to our business, damage our reputation and prevent us from being eligible for further work on sensitive or classified systems for federal government customers. We could incur losses from such a security breach that could exceed the policy limits under our professional liability insurance program. Damage to our reputation or limitations on our eligibility for additional work resulting from a security breach in one of the systems we develop, install and maintain could materially reduce our revenues.

It will be interesting to see if the passport scandal has this negative effect, or if the federal government protects Stanley from its operational shortcomings.

Note: It’s just been reported that another company–Analysis Corporation–is also involved in the passport scandal. More on them later.

http://dirtdiggersdigest.org/archives/18 

Dirt Diggers Digest is written by Philip Mattera, director of the Corporate Research Project, an affiliate of Good Jobs First.

You might have heard the story about General Motors Vice Chairman Bob Lutz. At a recent closed-door meeting with reporters, the 76-year-old, who’s in charge of product development said he thinks global warming theory is “a total crock of sh*t” and that hybrid cars “make no economic sense.”

As you might expect, the people who cover both the auto industry and the environment went nuts. Mr. Lutz eventually responded to the uproar with a post on GM’s blog site (or at least a 26-year-old administrative assistant posted a response for him).

In the blog, Mr. Lutz called his remarks “an offhand comment.” “But I think that the people making a big deal out of it are missing the real point,” he wrote. “My beliefs are mine and I have a right to them, just as you have a right to yours.”

I don’t think anyone’s questioning Mr. Lutz’s right to have an opinion. I think, instead, when Mr. Lutz was kind enough to treat the world to his unvarnished thoughts, we all had an “Aha!” moment explaining why Toyota is overtaking GM as the world’s largest automaker.

Hybrid vehicles “make no economic sense” to Mr. Lutz, who undoubtedly basks in a bloated bath of cash thanks to his salary ($8 million per year), bonus and perks, but the for rest of us poor schmucks, trying to pony up what will soon be four dollars per gallon at the pump, hybrid cars make a world of economic sense and again, explains why Toyota is eating Mr. Lutz’s lunch.

“Instead of simply assailing me for expressing what I think, they should be looking at the big picture,” Mr. Lutz wrote. “What they should be doing, in earnest, is forming opinions not about me but about GM, and what this company is doing that is — and will continue to be — hugely beneficial to the very causes they so enthusiastically claim to support.”

Really? As fate would have it, I’ve driven three rental cars in the past week. One was a Hyundai Sonata, one a Dodge Avenger and one a Chevrolet Cobalt, from Mr. Lutz’s beloved GM.

The Cobalt was – to paraphrase Bob Lutz – a total piece of sh*t. It was cramped, handled poorly; the interior was made of such cheap plastic that I was afraid I’d a) die from off-gas fumes or b) snap off the handle when I went to open the door. The icing on this cake of deficiency was the fact that the little monster sucked down gas like a fleet of overloaded semis. Yet another wonderful product from GM, polluting the atmosphere and making people poor and miserable while it careens toward an early grave in the junkyard. Thanks, Bob.

My favorite – by far – was the Hyundai. It was comfortable, roomy, responsive and got decent gas mileage. The Dodge fell somewhere in between.

Mr. Lutz wrote, “My opinions on the subject [of global warming] — like anyone’s — are immaterial. Really.”

Really? GM pays you eight million dollars a year and doesn’t give a sh*t (I hate to keep using this word, but you brought it up, Bob) what you think?

And, really? Everyone’s opinion on global warming is immaterial? Perhaps that’s true. No one’s opinion counts except that of the decider, George W. Bush and he’s decided we need to keep pumping oil and mining coal.

Bob Lutz is a walking embodiment of what’s wrong with America’s industrial policy. He’s got his head so far up his own ass that everything looks like a crock of sh*t to him. Someone find this bozo a gold watch and let’s get on with trying to save ourselves from the internal combustion engine.

http://markfloegel.org/2008/03/06/bye-american/ 

For anyone who has private photos on MySpace there is a good chance that their intimate moments are now being laughed at by pimple-faced teenage boys around the world. Rupert Murdoch's News Corp, owner of MySpace, neglected to repair a security vulnerability that made 77,000 "MySpaces" into "OurSpaces" in late 2007. Around 500,000 private photos were extracted from the site and uploaded to a popular file sharing website called the Pirate Bay. Over the course of three months MySpace was notified multiple times about the glitch, but it was only fixed after Wired News reported the story in late January.

Well, what if the scheme that troublemakers used to embarrass amateur photographers was used to publish secret material in the public interest (such as evidence of product failures or toxic waste dumping), and then distributed far and wide for free, so that anyone could access it in a manner that the rich and powerful had no way to prevent it?

One recent event has tipped the scales in favor of corporate accountability. A website called WikiLeaks recently released information on an offshore bank named the Julius Baer Group that exposed a scandal involving Cayman Island tax havens, money laundering and tax evasion. WikiLeaks allows whistleblowers to leak documents to the site anonymously, and has a community of editors and users who vet the information and rate the credibility of submissions. Julius Baer Group asked a U.S. court to issue a gag order against WikiLeaks and had their domain name revoked by court order for a short period of time.

Instantly other organizations sprang to the defense of the public interest, the ACLU, EFF and Public Citizen all recognized the need for whistleblower websites, and as a failsafe WikiLeaks had kept multiple mirror sites, so all of their information stayed online. Eventually more people saw the data than if the bank had ignored the matter, so the Julius Baer Group gave up the fight.

Sites like WikiLeaks provide a good venue for otherwise difficult to find information to be made publicly available. This type of information is crucial for holding corporations accountable, and is not always easy to find. If you have information on any corporate malfeasance, and would like to share it anonymously, please visit our corporate malfeasance wiki, Crocodyl.

The news this week is deeply ironic: the main building of the New York Public Library at Fifth Avenue and 42nd Street will be engraved with the name of Stephen A. Schwarzman, while the periodicals inside may sadly chronicle Eliot Spitzer, the governor of New York state, as Client Number 9 of a prostitution ring. Both men made their name on Wall Street: Schwarzman rose from his first job in investment banking at Lehman Brothers to run the Blackstone Group, a private equity firm, that has allowed him to stash away an estimated $4 billion today, while Spitzer got corporations from Samsung to investment bankers like Lehman Brothers to return almost the same amount to the public trust.

Spitzer may not escape the curse. The name "Mr. Clean" may never be applied to him again. But for those of us that track corporate fraud, who can forget his shining moments? 

The New York Times gave a boost today to Wal-Mart’s effort to raise its coolness quotient. Its account of a new blog that the giant retailer is allowing some of its merchandise buyers to produce was filled with references to “candor,” “speak[ing] frankly,” and “uncensored rambling.” Much is made of the fact that the posters have made unflattering comments about some of the offerings of Wal-Mart’s suppliers. Wal-Mart is said to have learned its lesson from earlier disasters with blogs created in the name of bogus front groups. This new initiative, the Times assures us, is the real thing.

It is indeed the case that the site allows reader comments that are critical of certain company practices. For example, a posting by an “associate” named Alex saying he might use spend his federal economic stimulus check to purchase a TV or a laptop was followed by comments on how that would do more to help the foreign economies where such products are made. One person asked: “what happened to the campaign WalMart used to run advertising its commitment to support American manufacturers?”

Yet, it appears that the Times was hoodwinked by Wal-Mart. The appearance of authenticity and candor is just another technique used by advertising agencies and public relations consultants to win over skeptical audiences.

As for those critical comments, it’s significant that “Alex” thanked all those who had corrected a spelling error in his post but had nothing to say about the company’s sourcing practices. In fact, that the only real topic covered in the posts apart from product assessments is “sustainability.”

Those items are posted in the name of Rand Waddoups, who is no lowly buyer but rather the company’s senior director of business strategy and sustainability. His part of the blog, at least, fits in neatly with the company’s dubious campaign to depict itself as the environmental leader of the corporate world.

As I have previously noted, Wal-Mart’s green crusade places all the burdens on its suppliers, while the moves taken by the retailer itself (improving energy efficiency, etc.) are in fact nothing more than cost-cutting measures that boost its bottom line. Until Wal-Mart makes some hard choices itself—such as paying all its workers a living wage—nothing it does in the blogosphere or elsewhere is going to be very authentic.

Fast food giant McDonald's was just forced to withdraw a controversial program to sponsor report cards in Seminole County, central Florida, in exchange for a Happy Meal coupon on the cover that features an image of Ronald McDonald. (Children with A and B grades, with two or fewer absences or who exhibit good behavior were entitled to pick up a free Happy Meal at their local McDonald's, as long as they presented their report cards. The company paid the $1,600 cost of printing the report cards.)

The promotional campaign by the Illinois-based company was defeated by a small, but feisty, activist coalition named the Campaign For A Commercial-Free Childhood, which is based out of the Judge Baker Children's Center in Boston.

In early December last year, CCFC launched a campaign against McDonald's when outraged parents contacted them. "My daughter worked so hard to get good grades this term and now she believes she is entitled to a prize from McDonald's," Susan Pagan, an Orlando parent, told CCFC. "And now I'm the "bad guy" because I had to explain that our family does not eat at fast food chains. I'm outraged that McDonald's is trying to exploit my daughter's achievement -- and that the Seminole County School Board would help facilitate this exploitation."

It's not the first time that McDonald's has tried to directly influence the eating habits of young children (nor, probably the last, unfortunately). Three years ago the company dropped a national campaign in the UK of providing educational material and teaching assistants to primary schools after a public backlash against the program by groups like McLibel.

And in the 1990s there was a hue and cry by groups like UNPLUG! of Oakland, California, after McDonald's and other companies provided "sponsored educational materials" on subjects like nutrition to teachers to supplement or take the place of approved curriculum in the U.S. The company was also protested for sponsoring McTeacher's Night in southern California, which involved teachers working at local McDonald's restaurants to raise funds for schools by selling burgers to their own students!

Yet perhaps the most devastating blow to McDonald's advertising to school-children was done by documentarian Morgan Spurlock with his film: SuperSize Me (the entire film can be watched for free online at http://freedocumentaries.org/film.php?id=98 ). In the film, Spurlock documents the impact of dining exclusively on McDonald's products for a 30-day time period. The film also explores the fast food industry's corporate influence, including how it encourages poor nutrition for its own profit. (An edited DVD version of the film designed to be integrated into a high school health curriculum is available from Arts Allliance America.)

NB: Full disclosure: This writer is a former fast food food industry employee with almost two years experience working fulltime in the business including stints at Burger King, McDonald's and Pizza Hut which allowed him to finance a diploma course in journalism school.

Many of today's new dot-com corporations, like Facebook and LinkedIn, make money by building "walled gardens" and programs that cond­uct "data mining" to take advantage of casual users surfing the web who are signing up in their millions for the numerou­s popular "free" social network sites. ­(Facebook refuses to reveal its profits but is rumored to be worth $15 billion.)

(A walled garden refers to a media strategy that compels users to one stay on their service. Data mining is the practice of collecting large amounts of personal information on website users by the site itself.)

­While Apple's iPhone unabashedly locks users into using AT&T cell phone service, sometimes the strategies are more subtle. FaceBook, the popular social network site, restricts the functionality of their site so that it is easy to remain on facebook.com, while making external linking and emailing difficult. LinkedIn, another social network site, doesn't allow users to delete their profile without contacting customer service.

All of these tactics seek to make it easier for companies to collect information on individuals, with the sole purpose of creating consumer profiles for targeted advertising. The reason is simple: they make their money from the advertisers who will pay to get a captive audience (the kind they were once guaranteed on newspapers and TV) who might buy their products.

It is possible that these companies will soon sell their inventions for vast profits in the same way that YouTube and MySpace did, by taking advantage of ordinary people who would probably not pay for their services unless they were completely free. But activists say that the the Web has enormous potential to be a digital commons, if we assert our rights to use it for purposes other than buying and selling.

An activist group named Freespeech.org has put together a video that they are using to promote their "It's Our Web" campaign. The video, which spoofs the Transformers, is pretty entertaining, and manages to fit some complicated ideas about Internet user freedom into an accessible format. The underlying message of the video is a good one: the Internet is a medium that is best if it remains free. Restricting access to information is a taboo among Wikipedians, Slashdotters, bloggers and Gnubies alike because the free flow of information is what has driven the collective production responsible for the Web as we know it. ­­

Philip Mattera is director of The Corporate Research Project, an affiliate of Good Jobs First. The Project is a non-profit center that assists community, environmental and labor organizations in researching and analyzing companies and industries. Philip is also author of The Corporate Research E-Letter, and this blog is a re-posting of the November-December 2007 edition.

Chevron has recently been spending heavily on a public relations campaign titled “the Power of Human Energy” to depict itself as a leader in environmental and social responsibility. This image-burnishing effort faced a setback last month when the company was forced to pay $30 million to settle federal charges that it made illegal kickback payments to prewar Iraq in connection with crude oil purchases under the United Nations Oil-for-Food Program.

Chevron is just one of dozens of corporations that have been caught up in a move by the Securities and Exchange Commission and the Department of Justice to step up enforcement of a law prohibiting overseas bribery by U.S.-based corporations. The law—the Foreign Corrupt Practices Act or FCPA—can also be applied to foreign companies with a substantial presence in the United States. There have been reports that electronic and engineering giant Siemens, which recently paid a fine of around $300 million in a global bribery investigation by a German court, may soon be hit with FCPA charges as well.

The rise in FCPA enforcement emerged just as the prosecution of the wave of accounting scandals starting with Enron was winding down. In fact, the limited reforms enacted in response to those scandals—especially the Sarbanes-Oxley Act—have helped bring to light much of the information on which the recent FCPA cases are based. Business apologists who hoped that the public was forgetting about corporate crime now have to deal with new reminders of the sleazy aspects of commerce.

THE “BUSINESS WATERGATE”

It is often forgotten that the Watergate scandal of the 1970s was not only about the misdeeds of the Nixon Administration. Investigations by the Senate and the Watergate Special Prosecutor forced companies such as 3M, American Airlines and Goodyear Tire & Rubber to admit that they or their executives had made illegal contributions to the infamous Committee to Re-Elect the President.

Subsequent inquiries into illegal payments of all kinds led to revelations that companies such as Lockheed, Northrop and Gulf Oil had engaged in widespread foreign bribery. Under pressure from the SEC, more than 150 publicly traded companies admitted that they had been involved in questionable overseas payments or outright bribes to obtain contracts from foreign governments. A 1976 tally by the Council on Economic Priorities found that more than $300 million in such payments had been disclosed in what some were calling “the Business Watergate.”

While some observers insisted that a certain amount of baksheesh was necessary to making deals in many parts of the world, Congress responded to the revelations by enacting the FCPA in late 1977. For the first time, bribery of foreign government officials was a criminal offense under U.S. law, with fines up to $1 million and prison sentences of up to five years.

The ink was barely dry on the FCPA when U.S. corporations began to complain that it was putting them at a competitive disadvantage. The Carter Administration’s Justice Department responded by signaling that it would not be enforcing the FCPA too vigorously. That was one Carter policy that the Reagan Administration was willing to adopt. In fact, Reagan’s trade representative Bill Brock led an effort to get Congress to weaken the law, but the initiative failed.

The Clinton Administration took a different approach—trying to get other countries to adopt rules similar to the FCPA. In 1997 the industrial countries belonging to the Organization for Economic Cooperation and Development reached agreement on an anti-bribery convention. In subsequent years, the number of FCPA cases remained at a miniscule level—only a handful a year. Optimists were claiming this was because the law was having a remarkable deterrent effect. Skeptics said that companies were being more careful to conceal their bribes, and prosecutors were focused elsewhere.

Any illusion that commercial bribery was a rarity was dispelled in 2005, when former Federal Reserve Chairman Paul Volcker released the final results of the investigation he had been asked to conduct of the Oil-for-Food Program. Volcker’s group found that more than half of the 4,500 companies participating in the program—which was supposed to ease the impact of Western sanctions on Iraq—had paid illegal surcharges and kickbacks to the government of Saddam Hussein. Among those companies were Siemens, DaimlerChrysler and the French bank BNP Paribas.

THE REBIRTH OF FCPA PROSECUTIONS

The Volcker investigation, the OECD convention, the Sarbanes-Oxley law and other factors together breathed new life into FCPA enforcement. Stricter internal controls mandated by Sarbanes-Oxley have made it more difficult for improper payments to be concealed, prompting numerous companies to self-report FCPA violations in the hope of receiving more lenient treatment.

In 2005 the number of FCPA prosecutions started to pick up and reached double digits the following year. This year the number of investigations has reportedly been in the dozens, and the resolved cases have gained higher visibility. Among these have been the following:

    * Three subsidiaries of British oil services company Vetco International  pleaded guilty to FCPA violations in Nigeria and agreed to pay a total of $26 million in criminal fines. This was the largest criminal penalty the Justice Department had ever obtained in an FCPA case.

    * Oil & gas distributor El Paso Corporation settled FCPA charges in connection with the Oil-for-Food Program and agreed to disgorge $5.5 million in profits and pay a civil penalty of $2.2 million.

    * Dow Chemical paid a $325,000 civil penalty to settle FCPA charges relating to improper payments made by an Indian subsidiary in the late 1990s.

    * A subsidiary of oil services company Baker Hughes pleaded guilty to FCPA charges involving bribery in Kazakhstan and paid a criminal fine of $11 million. In related SEC charges, Baker Hughes agreed to pay more than $44 million in criminal fines, civil penalties and disgorgement of profits. This became the new record for FCPA-related penalties.

    * Textron Inc. paid more than $3.5 million to settle FCPA charges relating to kickback payments made by a subsidiary to obtain contracts for the sale of humanitarian goods to Iraq under the Oil-for-Food Program.

    * Industrial equipment company Ingersoll-Rand agreed to pay more than $4.2 million to settle FCPA charges that four of its subsidiaries made kickback payments in connection with the Oil-for-Food Program sale of humanitarian goods.

FOREIGN COMPANIES IN THE FCPA NET

While the recent rash of FCPA cases has drawn little attention in the United States, the Siemens case has generated a major scandal in Europe. Last year, more than 200 police officers participated in a raid of company offices and homes of managers. Prosecutors in Italy and Switzerland joined in the investigation, which focused on suspicious transactions at the company’s telecommunications equipment unit reportedly totaling more than $2 billion.

The outcry over the bribery charges (and separate controversies over matters such as price-fixing) forced both the chief executive of Siemens and the chairman of its supervisory board to announce their resignation. In October the company agreed to a $300 million fine, hoping that the controversy would die down. But in November the Wall Street Journal gained access to the unpublished court ruling in the case, which provided embarrassing details about the payment of bribes in Nigeria, Libya and Russia. Subsequently, Business Week Online reported that FCPA charges in the United States could generate penalties for Siemens much harsher than what it experienced at home.

Siemens is not the only European company whose bribery problems are becoming an issue in the United States. Earlier this year there were reports that U.S. prosecutors have been investigating improper payments by major military contractor BAE Systems (formerly British Aerospace), including some reportedly involving Prince Bandar bin Sultan, former Saudi ambassador to the United States and a close ally of the Bush Administration, as well as other members of the Saudi royal family.

A quarter century after the Watergate investigation revealed a culture of corruption in the foreign dealings of major corporations, the new wave of FCPA prosecutions suggests that little has changed. There is one difference, however. Whereas the bribery revelations of the 1970s elicited a public outcry, the recent cases have generated little comment in the United States. Companies like Chevron pay their fine and go right on using their ad campaigns to present themselves as paragons of virtue. It took years for the reputation of Richard Nixon to recover from the taint of Watergate in the eyes of mainstream observers. Corporate America seems to be able to purchase instantaneous redemption. 

Listen to this as you read . . . "Air Force Ones" by rappers Nelly, Murphy Lee, Ali, and Kyjuan, 2002

According to a recent article in the Wall Street Journal, Nike is tapping into the sway of cultural “influencers” to attract new types of consumers. Traditionally, celebrity athletes have worn Nike shoes in return for lucrative endorsement deals. However, recent charges brought against famous Nike-sporting athletes like NFL star and criminal dog-fighter, Michael Vick, and more recently, track heroine and self-admitted steroid user, Marion Jones, have dirtied this image of the hard-working athlete and further urged Nike to look beyond the sweat-drenched athlete for culturally influential people to wear their shoes. While still focusing on the athlete as the main consumer, Nike is turning to “under the radar” influencers for inspiration. In many cases, this leads to Nike’s white sneaker being painted, embroidered or dyed the colors of a Latin American flag or taking on “cultural signifiers,” often stereotyped symbols meant to represent a certain heritage or ethnicity.

Nike’s most stylistic shoe, the Air Force 1, provides an excellent case in point. A new series of the shoe, called the “Cultura” collection consists of shoes like The Los Angeles Cortez, inspired by “the traditional images of LA street life,” the Handball Aztec Cortez designed to capture “our Aztec heritage,” and the green, white and red Mexican Airforce, which “pays homage to the Motherland.” Nike designers hired well-known graffiti and tattoo artists to create each shoe’s aesthetic appeal. Each year, Nike releases a new Chinese New Year AF1 (check out the Year of the Dog here). And, in previous years, Nike has introduced a series of West Indies Air Force 1s in time for West Indies Pride Days in New York City. Each shoe has the flag of a different West Indies country on its insole. There are also Jamaica, Philippines, and Puerto Rico Air Force 1s. Deemed “ethnic pride sneakers” by bloggers, these shoes bring up interesting issues about identity and consumerism. Through these shoes Nike present a pre-packaged narrative of identity. They tell consumers that it is possible to express ethnic pride by wearing Nike tennis shoes. Effectively, commodifying ethnicity has become a sales strategy for Nike.

However, according to Nike, developing shoes for certain ethnicities is not only about ethnic pride, but also about promoting health. Earlier this year, Nike introduced the Air Native N7, a shoe designed specifically for Native Americans. In addition to its signature swoosh, the shoe features “heritage callouts,” including sunrise and sunset patterns on the tongue and heel, arrowheads and feathers. Nike claims the new shoe is “an effort aiming at promoting physical fitness in a population with high obesity rates.” As one self-described Native American blogger, David Yeagley, summarizes, “American Indians are fat and have funny-shaped feet.” He continues: “Our own Nikes! What an achievement!” and asks, “A shoe designed especially for Indians is going to make us walk more? A national company name lent to Indians is going to inspire us to better health?”  Another critic, Sherman Alexie, a Spokane/Coeur d’Alene Indian had the following to say, “The day it was announced, I thought: ‘Are they going to have dream catchers on them? Are they going to be beaded? Will they have native bumper stickers on them that say, ‘Custer had it coming’?”

Apparently the idea behind these specialized shoes is that they will create a buzz that will spread to consumers closer to the mainstream. That's right, Nike is attempting to attract attention from "under the radar" consumers in order to appeal to the mainstream. Buying "ethnic pride" sneakers from Nike might allow someone to feel like they're expressing their ties to a certain culture or identity, but in the end, they're still just products designed to make profits for the biggest footwear company in the world.

One has to wonder if Nike's switch from risky celebrity endorsements to ethnic pride, is really just about creating a positive spin on its image, which has historically also been sullied by accusations of worker abuse in poor country sweatshops.