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Lay of the Land

Three Strikes, You're Hired

Bush administration lets corporate polluters back on the gravy train

By Paul Rauber

This January, the White House indignantly declared that it was reviewing the $70 million in contracts that Enron and its auditor, Andersen, had with the federal government. Budget director Mitchell Daniel said the companies' role in the largest bankruptcy in history "could reflect poorly" on their ethical standards.

Such qualms were new to the White House. Only weeks before, in the post-holiday quiet of December 27, the Bush administration had killed rules established at the end of the Clinton era forbidding the federal government from contracting with companies that were "repeated, pervasive, or significant" violators of the law. The U.S. Chamber of Commerce had called the rules "blacklisting." Environmentalists and labor unions called them "contractor responsibility."

The alternative-contractor irresponsibility-has made a lot of bad actors rich, according to a 1998 study by the General Accounting Office. When it examined federal contracts from 1993 and 1994, it found 80 firms with labor-law violations winning contracts worth $23 billion, and 261 companies with serious health-and-safety violations pocketing $38 billion in 1994 alone.

"Ordinary Americans work hard, pay their taxes, and play by the rules," testified AFL-CIO executive vice president Linda Chavez-Thompson at hearings on the guidelines last summer. "They know that if they break the rules, there will be consequences. Why shouldn't the same be true for companies that want to be government contractors?"

Among the unnamed corporate lawbreakers cited by labor was a poultry producer that reaped hundreds of millions of dollars in federal contracts despite seven worker deaths in one year, a $3.2 million fine for sexual harassment and retaliation, and a $6 million settlement for water pollution. (The AFL-CIO, sensitive to the charge of blacklisting, declined to identify the corporation in question. The facts, however, match Tyson Foods and its subsidiary, Hudson Foods.)

In his testimony, Ed Hopkins, director of environmental-quality programs at the Sierra Club, detailed how the federal school-lunch program purchased nearly $500 million worth of food from 12 companies "found to have committed multiple violations of either environmental laws or labor laws-or both." Between 1993 and 1997, for example, the pork-producer Smithfield Foods was cited for 120 pollution violations at its Tar Heel, North Carolina, plant. In December 2000, a judge found it had committed "egregious and pervasive" violations of labor law, including conspiring with the local sheriff's department to physically intimidate and assault union supporters. Yet since 1997, federal food programs have paid Smithfield $9.5 million for pork products.

Contractor-responsibility rules could have forced the feds to find a more wholesome supplier. The Bush administration's actions, however, welcome polluters and companies who mistreat workers back to the federal trough.

To see the Sierra Club's report, "Spoiled Lunch," go to www.sierraclub.org/factoryfarms/report01.