[Congressional Record Volume 148, Number 110 (Wednesday, September 4, 2002)]
[Extensions of Remarks]
[Pages E1484-E1485]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE EXTENT OF CORPORATE GREED

                                 ______
                                 

                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                      Wednesday, September 4, 2002

  Mr. GEORGE MILLER of California. Mr. Speaker, for weeks we have heard 
of the apparently boundless greed of the leaders of some of America's 
largest corporations--greed that has led them to ignore the retirement 
needs of their own employees and devastate their pension funds, slash 
their retiree health benefits, mislead their own investors and 
stockholders, lie to public regulators, and cheat taxpayers.
  That greed has taken the form of unconscionable salaries and 
benefits, grotesque retirement benefits (even as employee retirees were 
being deprived of their life savings), cashing out weakening stocks 
(even as they encouraged employees to invest more in the same 
depreciating stocks), preposterous insider loans, and other types of 
executive compensation that financed a lifestyle of multi-million 
dollar homes and other lavish displays of wealth.
  As Arianna Huffington has recently pointed out, we might read the 
numbers that describe the greed of these corporate criminals, but the 
numbers are simply beyond comprehension. Ms. Huffington has 
thoughtfully calculated some comparisons to help us appreciate the 
extent of the greed.
  Take, for example, the practice of corporations making astronomical--
and usually unsecured--loans of tens or even hundreds of millions of 
dollars to their executives: loans there is no realistic expectation 
they will repay, and loans which certainly are not being offered to 
other employees of the corporations. I recently introduced legislation, 
H.R. 5048, prohibiting such loans in excess of $50,000, a version of 
which was incorporated into the recently enacted accounting reform 
legislation thanks to the initiative of Senator Charles S. Schumer of 
New York.

[[Page E1485]]

  We now know that the insider loans extended to John Rigas of 
Adelphia, Bernie Ebbers of WorldCom, Stephen Hilbert of Conseco, Dennis 
Kozlowski of Tyco and Ken Lay of Enron totaled $3.9 billion.
  As Ms. Huffington calculates, that $3.9 billion could:

  --Fund Habitat for Humanity to build 83,691 homes at a cost of 
$46,600 each for America's homeless.
  --Send 35,583 poor but deserving students to Harvard Business School.
  --Loan United Airlines the $1.8 billion it says it needs to avoid 
bankruptcy--twice.
  --Buy every WorldCom shareholder a Xerox copier, some aspirin from 
Rite Aid, a year of long-distance service from Qwest, and a share of 
Enron stock (suitable for framing).
  --Fund the SEC's now, greatly increased, annual budget for five 
years.

  Other efforts to achieve real reform have been less successful than 
our insider loan restriction. For example, when the House considered 
pension legislation last spring, Republicans voted to deny Democrats 
the opportunity to offer any amendments, including one we had 
unsuccessfully offered in the Committee on Education and the Workforce 
to assure that executives did not enjoy special treatment in the sale 
of corporate stock while their employees were locked in through a 
pension fund completely controlled by executives. Because the 
Republican cared more about protecting the greed of the executives than 
about equity for employees, that provision is not in the House pension 
bill.
  According to Fortune magazine, corporate executives made $66 billion 
by selling their company stock even while their employees were 
prohibited from doing so, or continued to buy stock based on the 
``buy'' and ``hold'' recommendations of those same executives. As a 
result, employees and investors lost hundreds of billions of dollars. 
Republicans also defeated our efforts to assure that employees be 
included on the pension boards that manage their own money, so that 
this kind of deceit could not reoccur.
  What could we do with that $66 billion, grabbed by greedy executives 
while their employees and stockholders were left destitute? Here are 
some examples provided by Ms. Huffington:

  --Fund the annual budget of the FBI, corporate crime-fighting 
included, for 16 years.
  --Increase by 74 times the U.S. foreign aid to all of sub-Saharan 
Africa.
  --Cover the entire $25 billion America has spent fighting the war 
against terrorism in Afghanistan. And still have enough left over to 
give every Afghan more than two times their average yearly income.
  --Pay the $1.08 million sales tax on Dennis Kozlowski's artwork and 
still have $66 billion left to buy every masterpiece in the 
Metropolitan Museum of Art's Impressionist collection at its assessed 
value.

  As the executives took their money and ran, investors lost $427 
billion in the market value of WorldCom, Tyco, Qwest, Enron and Global 
Crossing. With that $427 billion, you could:

  --Fund the United Nations for the next 300 years.
  --Pay off Argentina's external debt three times over.
  --Give $356 to every man, woman and child on the planet living in 
poverty.
  --Transplant the lungs of 1.7 million patients--at $250,000 each--
suffering from irreversible emphysema.
  --Pay the salaries of every Major League baseball player for the next 
237 years.
  Now, perhaps these wouldn't be the priorities you'd spend your 
billions on if you had them, instead of the selfish executives who have 
devastated the lives of millions of American families. But the scope of 
the greed highlights the extent of the corruption that has been 
tolerated by some in the business community, inadequately regulated by 
those charged with policing corporate behavior, and ignored by 
Republicans in developing thoroughly inadequate legislative responses 
to protect the economic security of America's working families, 
employees and investors.

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