EXAMINER                            Issue # 34       May 19, 1999

Monitoring Corporate Agribusiness From a Public Interest Perspective

A.V. Krebs

                                                 Editors Note
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Notorious in their efforts to sabotage organized labor and its efforts to insure just wages and working conditions for packing house workers, the nation's beef packing industry, led by IBP, its leader, is currently beginning to live a nightmare of its own making.

Operation Vanguard, the federal government's effort to cleanse the nation's packinghouse work force of illegal immigrants, is slowing down the slaughter of beef as hundreds of workers, many with questionable immigration papers, are fleeing their jobs to avoid interviews with the Immigration and Naturalization Service (INS).

Unfortunately, the nation's cattle industry which has lost a reported $2.5 billion from late 1997 through 1998 because of low prices is also suffering from the slowdown, while the nation's major meat packing companies such as IBP, Excel (the Cargill subsidiary) and ConAgra have been reporting record profits achieved primarily through cheap labor and pricing schemes like captive supplies and formula pricing.

Operation Vanguard is a program initiated by the INS to solve a longtime problem of undocumented immigrants, most of them from Mexico, who in some cases have been actively recruited in Mexico by corporations like IBP. It is an attempt by the INS to tackle the problem through "cooperative efforts," rather than raiding plants and arresting workers by the hundreds, sometimes causing shutdowns.

"This has created a panic in the marketing," cattle feeder Craig Uden, of Darr, Nebraska, told the Omaha World-Herald's Bill Hord. He noted that his deliveries to an IBP plant at Lexington and ConAgra's Monfort plant at Grand Island were delayed for three days. "People are worried that nobody is going to kill their cattle."

"There is nothing that will strike fear in the heart of a cattle feeder like the prospect of not being able to sell his fed cattle," Jeff Stolle,  a marketing expert for Nebraska Cattlemen, told Hord.

The current problems in beef packing packing are somewhat similar to that experienced by pork producers last fall when there were more hogs to slaughter than could be handled by the packinghouses. Pork producers now fear that Operation Vanguard could revisit their marketing problems of last year when it moves to the packinghouses of Iowa, the nation's No. 1 pork-producing state, in the next few weeks.  "What we are seeing in Nebraska gives us great concern," said Steve Cohen of the National Pork Producers Council in Washington.

Uden, whose feedlot has 27,000 cattle, said the far-reaching loss of production capacity has turned producers nervous.  "I'm not a proponent of hiring illegal workers, but there has to be a system that is less disruptive," Uden said. "This has put a scare into people."

The INS project was initiated two weeks ago in Nebraska and later will extend into Iowa and then across the nation.  Repeat visits will follow, according to the INS, to assure that those workers who have departed will be replaced with legal workers. Packers claim it will take months to recruit and train new workers to replace those who left. The nation's beef packing industry already has the highest rate of turnover in the U.S. than any other industry.

Nebraska cattlemen, according to Hord, have been in a frenzy to convince political leaders and the INS that what is being done to ease the pain is not enough, but Jack Klosterman, a David City, Nebraska feeder, says everyone is turning a deaf ear.  "Our biggest frustration is that no one is willing to even sit down in the last two weeks since the implementation of Operation Vanguard to talk about what can be done to help producers," Klosterman complains.


While U.S. cattle and pork producers struggle to survive Smithfield Foods, the nation's largest U.S. vertically integrated producer and marketer of fresh pork and processed meat, has announced that it is taking some of its records profits to form a joint venture, which will own and operate a vertically integrated pork processing business in Sonora, Mexico.

Reuters Newsservice reports that the Smithfield, Virginia-based company has agreed in principle to invest $24 million to form Agroindustrial Del Noroeste, in which it will have a 50% ownership interest and will own and operate the fresh and processed meats company Grupo Alpro. The Mexican company's location in the state of Sonora fits Smithfield's strategic plan because of its proximity to California, Arizona and Texas, Smithfield notes.

Currently, Smithfield operations in the U.S., which had 1998 earnings of $53.4 million on sales of $3.9 billion, encompasses the entire cycle from raising hogs to meat on the plate. Its brands include John Morrell and Patrick Cudahy and it also exports pork to Russia and Japan.

Grupo Alpro is certified by USDA for export to the U.S. and presently operates in Hermosillo, Guadalajara and Mexico City. The joint venture with Smithfield will own a hog production company, Agrofarms, the main source of hogs for Grupo Alpro's fresh meat operations. Grupo Alpro is Mexico's largest federally inspected hog processor.


It was Adolph Hitler who once said "the bigger the lie, the easier it is for the public to swallow." Judging from the reaction of many independent U.S. cattle producers the U.S. Department of Agriculture has given the public plenty to swallow with a recent released study on cattle pricing.

The study, issued by an in-house peer review group of USDA economists, after studying a land-grant university 1996 Concentration in Agriculture study concluded that "the big meat packers didn't depress prices."

"Saying `Pigs can fly' is the same as saying, `U.S. meat packers didn't depress prices,' which is what the USDA wants us to believe," charges Mike Callicrate, a St. Francis, Kansas feedlot operator."And for those who have continued to wrongfully perceive that packer's practices aren't the reasons for low livestock prices, they must also believe that trees don't grow in the forest and there is no water in the ocean."

Cattle producers like Callicrate believe that the announcement will give a virtual "green light" from USDA to the meat packing industry to continue their exploitation of cattlemen. Citing the fact that after the release of the study packers quickly bid lower money for live cattle, at the same time as beef cutouts were justifying higher cattle prices. Compared to one year ago, USDA data shows the packer is making $83.73 more per head on a finished 1200-pound steer while cattlefeeders continue to go broke.

All this came only a week after Callicrate & Co.'s successful class action ruling against IBP in a case claiming anti-competitive practices, and IBP's announcement of record quadruple first quarter earnings.

Yet, in an interview, IBP stated, "It makes no sense for us to do anything to hurt cattle producers, when we depend on them to supply our plants." The IBP spokesman went on to say, "It is discouraging to be portrayed as a villain when study after study have found that depressed market prices are due to basic supply and demand, not meatpacking concentration or captive supply."

In the USDA peer review study one leading economist stated, "This USDA study is negligently misleading. No relevant conclusions regarding the illegal exercise of market power can be reached, given the annual data used in this study. The illegal exercise of market power is not only a question of law (not economics) but also a question of the daily behavior of market participants, which in no way is analyzed by this study based on annual data (one observation per year)."

Ironically, USDA sought to verified the "study after study" argument despite their full knowledge of IBP's 122% captive supplies during the devastating, nearly $200 per head market drop of 1994. Despite their full and complete access to court records showing that during the sixty-four week period studied, the cash market fell two out of three times when IBP was forced to buy cash cattle.

Other facts ignored by USDA include:  the day that ConAgra sold 7250 head of cattle to their market "competitor"  IBP,  they exploded the floodgates on the week's cattle trade and broke the cash market sixty dollars per head from cattle feeder asking prices; USDA has had in their hands, since January 1999 clear evidence of price discrimination, undue preference and feedyard blackballing and yet it still claims,  "U.S. meat packers didn't depress prices," and further USDA overlooked their own recent indictment of Cargill for cheating pork producers.

Callicrate asks: "What makes USDA and their land-grant university touts so blind to the obvious? Could it be the money and the power of the multinational corporate predators IBP, ConAgra and Cargill have captured this government agency?  Doesn’t the next investigation need to be of the USDA?”


Swinging fast and swinging wide the never-ending revolving door between corporate America, government and public advocacy organizations often yields some curious if not highly suspect relationships.

One such liaison that has emerged in recent weeks is raising the serious question of whether the consumer and environmental movements are currently being targeted by corporate interests in a blatant attempt to have the two movements do their bidding not only in the public opinion arena, but  exercise their considerable sway in the nation's legislative and executive branches of government.

Russell Mokhiber reports in his May 10 Corporate Crime Reporter that recently at a meeting of the nation's biotech activists -- pulled together by the John Merck Fund and other foundations to discuss funding a campaign to push for consumer labeling of biotech foods --- sat the National Environmental Trust (NET), represented by its executive director, Phil Clapp, its executive vice president, Tom Wathen, and NET's chief lobbyist, Patricia Kenworthy.

The activists, Mokhiber recounts, immediately focused their discussion on Monsanto --- a subject Kenworthy knew something about. From 1983 until 1991, Kenworthy worked in Monsanto's law department in its St. Louis, Missouri world headquarters. And from 1992 until 1997, she was director of regulatory affairs for Monsanto in Washington, D.C.

To add insult to injury Kenworthy told Mokhiber that going into the meeting, she wasn't
planning to disclose to those present her 14 years of work for Monsanto. "Phil, Tom and I were at this meeting," Kenworthy said. "I don't think that any of us expected that there was going to be so much reference in the conversation to Monsanto. I guess we should have realized that it would, since Monsanto was such a big player in all of this. But we just didn't think about it."

"When it came around to Phil's turn to introduce us, he decided that since the company's name had been mentioned two or three times, it really was appropriate to make sure that everybody in the room knew about my background," Kenworthy said. Reportedly the hardcore anti-Monsanto activists in the room were stunned and felt uneasy for the rest of the meeting. But no one confronted the issue head on.

But the shock that one of Monsanto's top lobbyists and political operatives --- Patricia Kenworthy --- was now working for the National Environmental Trust has only been compounded by the fact that Carol Tucker Foreman, who in recent years has been an outspoken lobbyist on behalf of Monsanto's rBGH,  is now returning to the Consumer Federation of America (CFA) to become director of a new Food Policy Institute for CFA (see below). The CFA is a consumer organization currently with no members that represent a coalition of non-government organizations (NGOs), including farm and labor groups.


In an interview with Patricia Kenworthy, the Corporate Crime Reporter's Russell Mokhiber asked the one-time Monsanto lobbyist:

Did you leave on good terms with Monsanto?
"Yes, very good terms."

Kenworthy says that during her entire time as Monsanto's director of regulatory affairs in Washington, she never once dealt with biotech or bovine growth hormone issues.
"When I was in St. Louis working in the law department, I certainly worked on those issues, but when I got to the Washington office, I was working on strictly traditional chemical issues -- Superfund, clean water, clean air -- those kinds of things."

So, when you moved from Monsanto to NET, did you undergo a political transformation, did your fundamental beliefs change?
"No. I feel exactly the same. The issue that we are going to potentially deal with in this campaign -- if NET gets involved in it -- is labelling and consumer right to know. I have always believed, and I continue to believe, in the right of the consumer to know that a food product contains genetically modified organisms or genetically modified crops."

Wait a second, you believed that while you were at Monsanto?

But that wasn't Monsanto's position, was it?
"Monsanto didn't have a position as a corporation. It was the position of a lot of people who worked there. But Monsanto did not have a position as a corporation because it didn't need to. Nobody was demanding it."

Do you believe that genetically modified organisms should be prohibited?
"No, I can't say that I do. I can't say that I believe that they should be prohibited from the market across the board. There probably are some beneficial uses."

Kenworthy also indicated to Mokhiber that she is not a fan of Monsanto's controversial
bovine growth hormone.
"It would be a lot better if that product were not on the market. I was never a fan of that product even when I was with Monsanto."

Well, after working for Monsanto for 14 years, do you own stock in the company?
"That is none of your business. I'm not going to answer that question. If you heard the answer -- it would be much less shocking than you expect -- but I'm not going to answer it. It is none of anybody's business."

Do you think that the fact that you worked for Monsanto for so long poses a problem for NET if it works on the biotech issue?
"I wouldn't be even exploring the possibility if I thought it was going to be a problem."


In a swift reaction to Patricia Kenworthy’s interview with the Corporate Crime Reporter (see above) John Stauber, editor of PR Watch, sharply disputed many of Kenworthy's claims.

"When Patricia Kenworthy says `Monsanto didn't have a position as a corporation [on labeling and consumer right to know regarding genetically engineered food]' she is being astoundingly dishonest and deceptive. Monsanto has spent tens of millions of dollars in PR, lobbying, regulatory and legal action, including at least two lawsuits, to prevent both mandatory labeling of milk from  rBGH-injected cows, and even to prevent `voluntary' labeling of milk from cows not-treated with rBGH.

"Monsanto as a corporation has fought tooth and nail to oppose consumer right to know whether milk or crops are produced through genetic engineering processes.  It has won overwhelmingly in the U.S., thanks primarily to its current or former friends and employees in the Clinton/Gore administration.   Thanks especially to Al Gore and his gang at FDA, the agency has acted consistently and repeatedly in Monsanto's interests to thwart consumer right to know," Stauber points out.

“Patricia Kenworthy embellishes her false and misleading statement about Monsanto's opposition to labeling with another doozy:  `But Monsanto did not have a position [on labeling] as a corporation because it didn't need to.  Nobody was demanding it.'

"I understand that this falsehood that `Americans accept genetically engineered foods and have not demanded labeling' is being used by the biotech PR flacks and lobbyists in Europe and Japan as they try to deny that their political clout is the reason we don't have labeling in the U.S.

"Monsanto," Stauber adds, "knew as early as December 1986 from a consumer survey conducted for the National Dairy Board (and immediately given to Monsanto and the other rBGH companies but kept from farmers and the public) that not only did consumers oppose buying milk from rBGH-treated cows, they demanded labeling primarily to avoid rBGH.

"Monsanto's entire regulatory, lobbying and PR strategy has been based on getting rBGH onto the market without labeling, because they knew early on that the overwhelming public opposition to rBGH and the demand for labeling meant that rBGH would fail in the market place.  A plethora of surveys have shown that Americans want labeling of genetically engineered foods; the demand is certainly there, and Monsanto has fought long, hard and successfully to thwart it.

"There are other disturbing revelations, but these blatant falsehoods about Monsanto's stand on labeling tell me that Kenworthy is not to be trusted.  It is a sad comment on groups like the Consumer Federation of America and the National Environmental Trust that two completely unrepentant top Monsanto lobbyists and political operatives like Carol Tucker Foreman and Patricia Kenworthy are whom they tap for leadership on agricultural biotechnology issues.

"Thanks to the Clinton/Gore administration," Stauber concludes, "the fox has been guarding the chickens.  Now, thanks to some misguided executives with Beltway-based non-profits, the fox is also mating with the guard dog.  The dog house may look nice, but expect some really ugly puppies."


Carol Tucker Foreman's return to the Consumer Federation of America (CFA) to become director of a new Food Policy Institute for CFA after having been an outspoken lobbyist on behalf of Monsanto's rBGH not only illustrates what can and often does frequently happen to ex-Washington liberals, but also calls into question whether some self-proclaimed consumer organizations now see their constituencies as consumers or corporations.

Foreman's advocacy on behalf of Monsanto's rBGH, the bovine growth hormone given to cows to increase their milk production, is but one example of her ability in the years since she left the position of executive director of the CFA in the mid 1970's to accept the position of Assistant Secretary of Agriculture for Consumer Affairs in the Jimmy Carter administration, to favor corporate interests over the best interests of consumers.

Such an example of such favoritism can be found recently in an article written by Rod Leonard, long-time consumer activist and current executive director of the Community Nutrition Institute. In the April 23 issue of Nutrition Week, published by the CNI, Leonard explains how the discovery of drug resistant bacteria in poultry that puts at risk the health of  American citizens  is linked to a food safety decision in 1976 that most people never knew about and few remember today.

"Carol Foreman," he writes, "a newly minted Assistant Secretary of Agriculture, approved that year a change in food safety procedures that would have far reaching consequences.  Foreman, one of only a few consumer advocates to reach so high a federal post, decided that poultry visibly smeared with fecal matter could be safely eaten after the feces was washed away.

"Any expert on bacteria could have told her then feces carry harmful bacteria which are invisible and which remain, clinging tightly to surfaces, despite repeated washing.  Federal inspectors, until Foreman's ruling, would condemn the contaminated bird as unsafe or require the visible contaminated part to be cut away.  The washing rule was a profitable boon to poultry processors who no longer faced the loss of unsafe product.

"The new Foreman policy also sent a clear message to the poultry industry that the federal government had no major concern with invisible fecal contamination.  The response was predictable.  Within a year, the Centers for Disease Control (CDC) reported a substantial jump in the incidence of food poisoning that rose each following year.”

Leonard notes that  the discovery that poultry today is contaminated with bacteria resistant to flouroquinolones drugs has sent shock waves through the medical and public health community.  The antibiotic is the most recently approved class of antibiotics which the Food and Drug Administration had expected would remain effective for a long time.  No new antibiotics are available, and health experts now fear a rise in life-threatening infections and food borne illnesses.

New research studies, he continues, also confirm a finding of a decade earlier that drug resistance in bacteria in poultry and other food animals can be transferred to bacteria in humans. Experts now agree that introducing in animal and poultry feed the same antibiotics used to treat humans can quickly lead to drug resistant bacteria.  FDA found the sharpest rise in flouoquinolones resistance occurred after 1996 when the drug was authorized as a poultry feed additive.

Thus, seemingly innocuous public health decisions have far reaching consequences not evident until long after.  Easing food safety standards a generation ago began a deterioration in the nation's food safety shield today that is a public scandal.  And, bacteria swiftly become resistant to antibiotics when drugs are licensed as feed additives, creating a public health crisis that is just now unfolding.

"Reviewing past mistakes has more than passing historical interest," Leonard notes, "Foreman is now revisiting the public interest scene as a newly minted consumer advocate, having recently announced her retirement as a Washington lobbyist for various corporate interests, including Monsanto, a corporation that is building its stock value through manipulating genes to make genetically modified foods as well as public policy on food safety,  i.e., lobbying."

Leonard recalls that after the Carter administration was booted out in 1980, Foreman became a Washington lobbyist and subsequently said the decision to wash fecal contamination was perhaps her biggest mistake. "The disarming acknowledgment was calculated to ease criticism and could be dismissed as an historic anomaly, but now requires further examination to shed new light on her return to consumer advocacy.

"Was the decision on washing fecal matter an innocent mistake by an ill-prepared political appointee misled by program managers who deceived her with phony research data, as she claims?  Foreman was not then, nor is now an innocent activist; she had served four years as head of CFA.  She knew the importance of networking, of obtaining and using information from a variety of sources.  She would have checked carefully.

"One of the sources on which she would have relied upon was a rich cache of political contacts in her home state of Arkansas.  Foreman is a member of a politically prominent family in Arkansas.  Her brother, Guy Tucker,  served as governor until he was convicted of crimes not unlike those for which President Clinton was implicated but escaped indictment.

"Thus," Leonard continues,  "Foreman would have been aware of Tyson Foods,  an Arkansas company that processing more poultry than any other company in the U.S. and the world.  Does Tyson use its political clout?  Company officials at the highest management level have acknowledged improper and illegal activities in relation to USDA. Can washing of fecal matter be explained as a mistake in judgment when the decision would have benefited the largest employer in Arkansas?  Perhaps, but it begs credibility to argue that it was made innocently unaware of its value to the poultry industry."


In explaining his concern over Carol Tucker Foreman's reemergence as a self-proclaimed "consumer activist," CNI's Rod Leonard recounts that her 1976 decision (see above) on the simple washing of  fecal contamination "was wrong and the magnitude of its impact in terms of death and illness among Americans is reason enough to examine cautiously the next policy action on food safety which Foreman will advocate from her new platform at CFA.

"There is no mystery here," he declares."Over the past six years, even while representing Monsanto and other corporate clients, Foreman has been one of the most vociferous supporters of Hazardous Analysis Critical Control Program (HACCP), an awkward acronym for a program to deregulate food safety.

"The major reason for Foreman's renewed interest in food safety, however, is contained in her explanation for returning to CFA, i.e., she will seek to develop policies `that assure food safety in a global economy.'  HACCP is the keystone of President Clinton's globalization strategy to restrict the ability of Congress and of citizens at risk of health to make food safety a political, or policy issue."

Under HACCP, governments withdraw from inspection for food safety as a public responsibility in favor of company-based inspection.  Food products in global trade would be certified for safety by governments as equivalent, i.e., a government license would be granted pro forma to move products across national borders since food safety is a company decision.  Countries that balk would be charged with a violation of their obligation to the World Trade Organization (WTO) and threatened with higher tariffs or financial penalties.

"An unlikely scenario?" Leonard asks.  "In fact, the U.S. already is threatening the European Union with trade retaliations for rejecting U.S. beef treated with growth hormones and genetically modified foods created by Monsanto and other biotechnology firms.  If the U.S. does not adopt HACCP for meat and poultry, among the most high volume products in global trade, then Clinton's globalization strategy to put food safety beyond the reach of citizens will collapse."

The prospect that HACCP will fail was greatly enhanced last month when the U.S. Federal District Court agreed to hear arguments on a motion to enjoin the Clinton administration from ending inspection and giving industry the responsibility for food safety.  If the Court rules that only Congress can change the law, then Monsanto and the Clinton administration will be lobbying Congress to adopt HACCP.  And Foreman once again will undoubted be lobbying along side a familiar ally, her former client Monsanto, to make HACCP the global food safety policy.

"If Congress changes the law," Leonard warns, "to turn over the chicken coop to the foxes, so to speak, Foreman will have completed the circle which began 20 years ago with washing feces.  In its panic to cope with new and more deadly microbial contamination, USDA wants to irradiate all meat and poultry rather than clean up a dirty industry.  If companies can choose under HACCP how to approve their own product for safety, then they will irradiate dirty food rather produce clean food.   And Foreman's lasting achievement as a consumer advocate will have been to make feces an approved part of the American diet."


It appears that the Seattle, Washington corporations sponsoring the upcoming November World Trade Organization (WTO) talks in the Queen City of the Pacific Northwest are, according to the May 17 Wall Street Journal, about ready, with the Clinton Administration looking the other way, to offer the family jewels to the highest bidders.

The Journal's Greg Hitt reports that "business donors" at the Seattle meeting, expected to be attended by thousands of delegates from the WTO's more than 130 member nations and a host of dignitaries led by President Clinton, "are being enticed with invitations to party -- for a price -- with government officials at two receptions and at a `ministerial dinner.'"

Under the fund-raising plan, the higher the contribution, the greater the perks. The "Gold Level," ensures that the purchaser and two guests get to attend the scheduled social events with trade officials, as well as a related business conference to be held in Seattle that week along with a "hot button" connecting readers of the Seattle Host Organization's Internet site with information about the purchaser's firm.

Corporations such as Boeing and Microsoft, the two principal sponsors of the WTO Seattle meeting, whose contributions put them at the maximum "Emerald Level," get to bring as many as five guests to the dinner and receptions. Companies donating the minimum $5,000 --- the "Bronze Level"--- don't get to party. They simply get their corporate materials displayed at the convention site and a mention on the Host Organization's Web site.

"We spelled it out," Boeing Co. executive Ray Waldmann, who heads the host committee, says of the cash-for-a-bash fund-raising campaign. "All you're doing is saying hello over cocktails," he told correspondent Hitt . "This is not the time to sit down and hammer out a deal."

"It's totally inappropriate," an aghast Rep. Sander Levin (Mich.-Dem.) who expects to attend the WTO conference, exclaimed. "No one should sell access to us. We're available. The government should be available to the people without charge." Daniel Seligman, a trade activist for the Sierra Club, also expresses his organization's concerns that "Charlene Barshefsky will be much more inclined to listen to (Boeing CEO) Phil Condit and (Microsoft CEO) Bill Gates than to other interested parties," Seligman stressed. "They might not want to bite the hand that feeds them." Jay Ziegler, a spokesman for Barshefsky, the U.S. trade representative, told the Journal that  the contributions "absolutely will not affect any decisions that we will make."

The tab for the previous two WTO meetings -- held in Geneva and Singapore -- were picked up by the WTO and the local governments, but when the U.S. agreed to host this year's meeting the Clinton administration, in the name of "cost-consciousness," turned to the private-sector for help with financing. Seattle --- on the strength of an effort led by Condit and Gates  --- narrowly edged Honolulu in a bidding process that was organized by U.S. trade officials.

Hitt reports: "Business leaders and administration officials note that the private sector helped pay for the recent North Atlantic Treaty Organization summit in Washington, D.C., as well as the 1993 conference in Seattle that launched the Asia Pacific Economic Cooperation forum. But for critics, the financing scheme for the WTO, the influential referee for international trade disputes, goes a step further, representing an uncomfortably close juxtaposition of business and governmental interests."

As an example, for Microsoft intellectual-property issues -- such as copyright protections -- will be at the heart of a round of trade talks to be launched at the WTO meeting in Seattle while Boeing has a stake in the WTO's handling of fresh complaints by the administration that Europe unfairly subsidizes Airbus Industrie, Boeing's rival in the global marketplace.

Mr. Waldmann says there is no link between Boeing's support for the WTO meeting and the new subsidy case. "We would be doing this whether we were fully engaged in a WTO case or not," he says. "This is the way these kinds of things are done."


For Presidential wannabe Al Gore, currently the nation's self-proclaimed “environmental” vice president, the news that his boss in the White House is considering Lawrence Summers, current Deputy Secretary of the Treasury Department to replace recently resigned  Robert Rubin, as U.S. Treasury Secretary, may prove to be  a daunting challenge to his "practical idealism."

As the country's chief economist, Summers would become the driving force behind the U.S.'s global economic policy, but at what cost to people and the environment critics are asking after the unearthing of a December 12, 1991 memo that Summers authored.

"'Dirty' Industries: Just between you and me," Summers wrote, "shouldn't the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Less Developed Countries]? I can think of three reasons:

"1) The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.

"2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I've always though that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.

"3) The demand for a clean environment for aesthetic and health reasons is likely to have very high income elasticity. The concern over an agent that causes a one in a million change in the odds of prostrate cancer is obviously going to be much higher in a country where people survive to get prostrate cancer than in a country where under 5 mortality is is 200 per thousand. Also, much of the concern over industrial atmosphere discharge is about visibility impairing particulates. These discharges may have very little direct health impact. Clearly trade in goods that embody aesthetic pollution concerns could be welfare enhancing. While production is mobile the consumption of pretty air is a non-tradable.

"The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization."

After reading Summers memo Brazil's then-Secretary of the Environment Jose Lutzenburger wrote back to Summers: "Your reasoning is perfectly logical but totally insane... Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional `economists' concerning the nature of the world we live in... If the World Bank keeps you as vice president it will lose all credibility. To me it would confirm what I often said... the best thing that could happen would be for the Bank to disappear."

Lutzenburger was fired shortly after writing this letter while Summers remained in the World Bank before joining the Clinton administration and continuing his rise toward the Cabinet.

"Meanwhile," as Jim Vallette of the International Trade Information Service writes "world trade has burgeoned with imbalanced cargoes: banned pesticides, leaded gasoline, CFCs, asbestos, and other products restricted in the North are sold to the South; tropical timber, oil, coal, and other natural resources flow from South to North with little or no benefit to the host communities; and while regulations tighten around dirty coal and dangerous nuclear power plants in the North, they are proliferating in Asia, Africa, Eastern Europe and Latin America, where they are owned and operated by Northern corporations."

In 1994 virtually every other country in the world broke with Summers' Harvard-trained "economic logic" and agreed to ban the export of hazardous wastes from OECD to non-OECD countries under the Basel Convention. Five years later, the United States is one of the few countries that has yet to ratify the Basel Convention or the Basel Convention's Ban Amendment on the export of hazardous wastes from OECD to non-OECD countries.

Meanwhile, the trade in hazardous materials has been facilitated through tens of billions of dollars of financing by the World Bank, the U.S. Overseas Private Investment Corporation, and the U.S. Export-Import Bank, government institutions in which Summers has wielded his economic logic.

"His 1991 memo," Villatte concludes, "can be considered a working thesis behind this decade's dominant global economic policies."


Dennis T. Avery, Director of the Center for Global Food Issues at the Hudson Institute, formerly a senior agriculture analyst for the U.S.Department of State and policy analysis for the U.S. Department of Agriculture and author of "Saving the Planet with  Pesticides and Plastics," "How Poverty Won't Save the Planet" --- and "Big Hog Farms are Good for the Environment," has been appropriately "honored" by the Biotic Baking Brigade (BBB).

The Brigade delivered its "award" at a recent "Biotechnology and Agriculture" conference on the campus of Iowa's Grinnell College. The Central Iowa Anarchist (CIA) cell of the BBB conducted "Operation: Avery's Savory" to target the man who has become shameless in his flagrant support of biotechnology and industrial factory farming.

The pastry incident occurred around noon at the Herrick Chapel during the conference's convocation. As Avery delivered a keynote speech, BBB/CIA Agent Carob suddenly appeared and replaced the bald spot on Avery's head with a vegan and mostly organic carob/almond/apple sauce pie. Agent Carob then escaped on foot and disappeared, as they say, without a trace.

This latest incident follows three previous successful pie operations in California, in which the CEOs of the two largest global biotech corporations (Robert Shapiro of Monsanto and Douglas Watson of Novartis) and two university chancellors (Robert Berdahl and Larry Vanderhoef of the University of California at Berkeley and Davis, respectively), were also given their just desserts for what the BBB charges is their "recklessly pushing the genetic engineering agenda."

Avery has written in American Outlook magazine (a quarterly publication of the Hudson Institute) that "consumers of organic and `natural' foods are eight times as likely to be attacked by a new strain of E. coli bacteria," a claim which subsequently has been completely debunked. He also has claimed that, "we've never found a single consumer death from pesticide residues, and only a few dozen cases of consumer illness," and argues that "there is no evidence of a growing ozone hole, over the Arctic or anywhere else," that there is no global warming, and logging is good because, "if a tree isn't cut, it will die and rot."

The Hudson Institute's Center for Global Food Issues serves agriculture in much the same way as the "Wise Use" movement groups do for mining and logging:  propagation of misinformation and myth under the banner of science. Appropriately, noted agricultural scholar, activist, and former Vice President Dan Quayle serves on the Board of Directors at the Hudson Institute.

Avery recently, in again reciting his favorite mantra for increasing U.S. agricultural exports claiming it will increase farmer earnings and benefit rural communities, urged the spending of $1.2  billion of taxpayer money through the Export Facilitation Act to expand the lock and dam system on the Mississippi and Missouri rivers.

Not only did he fail to note, as the Institute for Agriculture and Trade Policy's Mark Muller pointed out in a May 13 letter to the editor to the Journal of Commerce, that the subsidization of export agriculture has not alleviated but exacerbated the demise of the family farm and the rural Midwest. Furthering farmer dependence on export markets will do nothing more than strengthen agribusiness's hand at the expense of farmers.

Muller also noted that  "preliminary findings of the Army Corps of Engineers, a long- time advocate of huge engineering projects, concluded that longer locks cannot be economically justified for at least another 20 years. The editorial board of the Des Moines Register, in the heart of the farm country that would allegedly receive the benefits from the expansion, stated in a March 30 editorial that `The Export Facilitation Act should be smothered in its own greed.'

"The Export Facilitation Act puts our value-added processing here in the Midwest in danger," he adds. "The more we subsidize the transportation of grains like corn and soybeans, the less these products will remain in the Midwest and be utilized in livestock, ethanol and other processing industries. Instead of a $1.2 billion subsidy to grain traders, our government has many other options for alleviating the farm crisis that are far more effective and less expensive. The enforcement of fair, competitive and open markets, for example, would be much more beneficial to the farmer.

"Mr. Avery needs to realize that subsidies to agribusiness rarely trickle down to farmers and rural communities."