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Racism on the Pipeline

December 13, 2009

A former worker on the TransCanada Keystone pipeline has accused construction and engineering company Henkels & McCoy of workplace discrimination. Charles Adams, an African-American former employee of the company is charging that he suffered racist taunting and had a noose thrown around his neck while at the company’s pipeline worksite in 2008.

A quote from Henkels’ founder “Jack” Henkels in a company history states,

Sometimes I would like to call ours a Christian business. It never was. I am a Catholic, which none of my partners were. Three of the real architects of the business were Jews… If we were never wholly a Christian business, we certainly were not all the same color. African and Caucasian have worked side by side in Henkels & McCoy since the beginning. We were never interested in the pigmentation of a man’s skin. If he could do the job, he was on; if he couldn’t, we didn’t want him — no matter what his color.”

In 2000, the state of Illinois sued Henkels and other companies for pollution related to operations there that “caused air pollution, caused open dumping, improperly disposed of waste,” endangering the health of local residents.


Legacy of USDA Racism, Redux: Land is Power for Black and Indian Farmers

December 12, 2009

Earlier this week, a federal judge approved settlement talks in a case brought by Native Americans against the U.S. Department of Agriculture, for the agency’s decades of discriminatory treatment of Indian farmers. The Native farmers and ranchers are seeking repayment for $600 million of losses due to USDA’s failure to treat Indians equally under USDA farm loan and assistance programs.

Earlier this year, the National Congress of American Indians called for a swift resolution of the claims, which were first filed in 1999, and pointed to an expert report showing that USDA bias cost Native Americans “$500 million to $1 billion dollars of economic losses (and) the denial of $3 billion worth of credit.” The judge’s order in the USDA case comes on the heels of a $3.4 billion federal government settlement with Native Americans for decades of mismanagement of government established Native Trusts.

Native American farmers may learn from African American farmers’ experiences with USDA. In 1999, Black farmers entered into an historic settlement with the agency, which promised hundreds of millions of dollars for farmers who the agency’s loans and assistance programs discriminated against for decades. Then Agriculture Secretary Dan Glickman told the Washington Post that the agency was facing “substantial liability” and hoped the settlement would end the “painful chapter” in the department’s history. But just this year, a group of black farmers complained that USDA has still not paid compensation despite the decade-old settlement.

A citizens’ group in Tillery, North Carolina has established a Land Loss Fund to improve the lives of those who have lost land, especially in African American farm communities. The organization notes the power associated with land ownership and laments that “African Americans are losing land at a rate of 9,000 acres per week.” They also point to mid-1980’s USDA programs that funneled $1.3 billion to farmers nationwide to buy land, yet included just 209 Black farmers in the more than 16,000 farmers funded by the program.

The Tillery Resettlement Community is a legacy of a federal farm program for former sharecroppers. Today, Tillery is 98 percent African American; almost all of the community’s farming jobs have disappeared, replaced by low-paying factory jobs. The small farms have been mostly replaced by corporate hog farms, leading to water contamination issues for local residents.

Out of the Frying Pan, Into a Load of Debt

December 11, 2009

Diploma mill Career Education Corp (CEC) has been hit with a class-action lawsuit by former students at its Portland-based Western Culinary Institute. The students allege that the pricey school saddled them high-interest loans while offering poor training that qualified students for nothing more than low-paying, entry –level kitchen jobs.

Other CEC culinary schools have also been under fire. A June 2007 expose in the San Francisco Weekly noted the changes at the company’s California Culinary Academy (CCA) after the Career Education Corp takeover. Two years after buying the school, enrollment more than quadrupled, jumping from 442 to 1,868. With high-interest loans for the nearly $50,000 in tuition for the 15-month program, some former students face a debt of more than $100,000 on graduation, yet most are qualified for little more than $10 an hour kitchen staff wages.

Two former CCA admissions reps told the Weekly that CEC imposed a high pressure sales approach, requiring admissions staff to meet enrollment targets and training them to entice potential students with visions of celebrity-chef stardom. Students were accepted for admission based solely on their ability to procure a loan, in some cases (according to other former students) despite severe learning disabilities.

In 2008, CEC paid $200,000 to settle with the Pennsylvania Attorney General over charges it duped students applying to its Lehigh Valley College into taking high-interest loans and overstated the opportunities for graduates. Students had charged the school lied about “low-interest government loans” that were actually private loans charging as much as 15% interest. Lehigh Valley charges tuition and fees up to $37,500 for an associate’s degree, compared with about $5,600 at local community colleges.

Career Education Corp President and CEO Gary E. McCullough took home over $4.8 million in 2008.

The Curious Case of the Cloned Cat

December 10, 2009

Faux futuristic pet company Allerca announced this month it would stop taking orders for its allegedly new breed of hypoallergenic cats, and will instead focus on veterinary diagnostics. Allerca (also called Lifestyle Pets or Allerca Lifestyle Pets) is one of the more shady operations in the pet genetics industry, a field cluttered with phony claims, unfulfilled promises, and bankrupt businesses.

Founded by longtime flim-flam man Simon Brodie, Allerca originally promised to use genetic engineering to create non-allergenic cats, but later stated its pets were created by natural breeding. National network news reports glowed about the benefits of the company’s cats for allergy sufferers, and Time magazine hailed the company for one of the “best inventions of 2006.” DNA analysis later revealed the company cats were Savannahs, a breed long known to have less allergenic potential. Allerca offered the cats for anywhere from $4,000 to $40,000, and planned to franchise cat sales territories for $45,000.

In fact, Brodie’s scheme is just the most recent in a series of business scams he has perpetrated. Over the past decade, Brodie’s scams have included a British hot air balloon franchiser (for which he served a prison sentence, after running out on hundreds of thousands of dollars in debts), creating the world’s most powerful computer processor, creating a national Wi-Fi network, and several genetic technology companies. In just about every case, he has left behind a trail of unpaid bills, uncompensated employees, angry landlords and others cheated by his fraudulent operations.

Still, while Allerca is probably the most outrageous fraud, the animal cloning and gene engineering arena is fraught with scientific fraud and companies making false promises and promoting dubious uses for animal clones. The biotech pet business Genetic Savings and Clone was hailed for the first commercial sale of a cloned cat. But the company failed to sell enough $50,000 pet clones to survive, despite promises that its clones came with “guaranteed health and resemblance.” Such “guarantees’ are nonsense given the inherent uncertainties and common abnormalities found in animal clones.  Even dropping its cloned cat price to a mere $32,000 wasn’t enough to save Genetic Savings and Clone from bankruptcy.

Dolly, the 1st cloned mammal, suffered premature aging and early death

Other cloning companies, including Viagen and Cyagra (a subsidiary of the Massachusetts cloning company Advanced Cell Technology), were created to sell animal clones as livestock. Biotech proponents argue that the expense of cloning means the clones will be used only for breeding and not for food, but cloning companies have eagerly marketed cloned cows for dairy production, and the FDA, which has allowed the use of clones in food production (despite virtually no studies on the safety of food from clones), has acknowledged that nothing prohibits companies from slaughtering clones for food once their breeding capacity ends. The agency also says that even young, sickly clones could end up in the food supply if they die before becoming breeding stock. FDA has also refused to require labeling on cloned foods, despite advice from scientists that labeling is essential to trace these risky new foods.

Brother, Can You Spare a Dime (at 2,147% Interest)?

December 9, 2009

The Arizona Attorney General has sued payday lender QC Holdings for deceptive business practices and for lawsuits the company won through illegal filings. According to the AG’s office, the lender would loan money to defendants throughout Arizona (and in some cases to lenders as far away as Nevada) but then file collections lawsuits in a county far from where the lenders lived, in violation of state law.

Since lenders would be less likely to appear in courts far from home, QC won hundreds of default judgments and orders to garnish lenders’ wages that the state is now asking the court to set aside. Payday lending is already under siege in Arizona, where Attorney General Terry Goddard previously campaigned to shut the usurious businesses, citing the “cycle of indebtedness” created by the predatory high-interest, short-term loans.

QC Holdings owns nearly 600 payday loan outlets in about two dozen states, operating under many banners including Quik Cash, National Quik Cash, California Budget Finance, First Payday Loans, Nationwide Budget Finance, QC Financial Services and other names. The company lending totals nearly $1.4 billion, while 2008 revenue totaled $227.7 million.

QC Holdings is also facing a Missouri class-action suit brought by a lender who paid $1,800 interest on an initial $450 loan. The company lost an appeal based on a clause in its loan contract requiring claims to be settled by binding arbitration. A Missouri appeals court called the company’s contract “procedurally and substantively unconscionable.” The state Better Business Bureau has also supported federal legislation to end “the usurious practices” of payday lenders and called for state rules barring interest rates above 36%, mimicking other states that have effectively ended payday lending.

A 2007 study of California payday lenders, including QC Holdings subsidiary California Budget Finance, showed that the companies routinely violated consumer protection laws. Visits to hundreds of retail outlets found that 32% did not post a fee schedule; of those that did post a schedule, the majority were indiscernible or inaccurate. When asked for the APR of their loans, 70% of payday lending staff didn’t know the APR or gave an incorrect figure. Those few tellers who knew the APR reported rates ranging from a low of 460% to as high as 2,147%. The figures were inconsistent even within the same companies. Customers were however consistently offered advice and encouragement about how to obtain more loans, from different outlets of the same company and between competing companies.

Leadership of QC Holdings revolves around founder Don Early, who serves as CEO. Wife Mary Lou Early serves as the company’s Vice-Chair and Secretary (she was previously Vice-President and Chief Operating Officer, but really, what’s the difference?), while her son Darrin Andersen is company President. In 2008, Don Early made just over $1 million in total, while his wife took home another $756,503, and Andersen pulled in another $1.17 million.

Slick Willie Wonka? Chocolate, Oil and Slavery

December 8, 2009

Milk chocolate fanatics can now be assured that European companies are not committing food fraud by selling overly oil-adulterated bars, thanks to a new test created by the international lab JRC. The lab has previously created tests that can determine the quantity of added oils in dark chocolate, since EU rules allow no more than 5% of other vegetable oils in chocolate.

Adding oil to chocolate has long been controversial. In 2007, consumer opposition beat back industry attempts to oil-down FDA standards which prohibit any added oil to products labeled as chocolate. Just this summer, consumer pressure forced candy giant Cadbury to end its substituting palm oil for some cocoa butter in its chocolates.

Added oil is just one dark controversy in chocolate making. In 2001, European environmental and consumer groups exposed the industry’s use of the pesticide lindane, a chemical linked to breast cancer, endocrine disruption and other health hazards, in African and other chocolate plantations. Lindane is banned in the EU.

Corporate chocolate production has also long been linked to labor crimes, including the use of slaves and child labor, in West Africa. In 2005, the human rights advocacy group CorpWatch noted that in the Ivory Coast, where half of the world’s cocoa is grown, “hundreds of thousands of children work or are enslaved on cocoa farms.” Major chocolate pledged to a voluntary “Cocoa Protocol” to end “the worst forms” of child labor (permitting them to continue using whatever types of child labor they decide are not the worst) by 2005, but the companies missed their own deadline, and have also missed the three-year extension they granted themselves.

Chocolate lovers interested in responsible production can look to Fair Trade brands, which require fair compensation to chocolate growers and workers. In addition to labor standards, Fair Trade chocolates are required to meet environmental standards that prohibit harmful pesticides and GMOs. Many Fair Trade chocolates are also organically certified. A student group from the University of California San Diego also surveyed several chocolate producers and developed a useful online guide to slave-free chocolate.

Organic Milk Shakeup: Factory-Farm Dairy Decertified

December 7, 2009

Last week, after a four-year investigation, the Department of Agriculture (USDA) decertified the organic dairy Promiseland Livestock for inadequate record-keeping and refusing to provide regulators with records of its adherence to organic production standards. In addition to the record-keeping rules, Promiseland was investigated for numerous other violations, including not feeding organic grain to cattle, selling fraudulent organic feed and “laundering” conventional cattle as organic.

Under the USDA national organic standard, organic dairies are required to use organic feed for their herds. The GMO drug bovine growth hormone (rBGH) is prohibited, as is any use of other growth-promoting hormones or animal drugs. Also prohibited are feeding animals plastic pellets for roughage and feeding by-products of mammalian slaughter, practices common to conventional factory farms. Further, animals must be provided conditions that provide for their health and accommodate their “natural behavior,” including having access to pasture.

But USDA’s enforcement of the access to pasture rule has been a longstanding controversy. From the inception of the organic rule in 2001, the nation’s large organic dairies have sought a loose definition of “access to pasture” so they could continue their factory confined feeding model and still call their milk “organic.” In 2007, one of the nation’s largest organic dairies, Aurora Organic, was cited by the USDA for willful violations of the access to pasture rule and other organic standards. The violations were not publicized by USDA or Aurora’s state certifier, but by the organic watchdog group, the Cornucopia Institute. Cornucopia had previously exposed the decertification of the 10,000-cow Vander Eyk Dairy, which they alleged was “masquerading as organic” until it was shuttered by federal regulators.

An Organic Valley dairy farmer

Interestingly, one large organic dairy company has been a leader in the movement for stronger organic standards. The nation’s largest organic dairy cooperative, the CROPP coop (makers of Organic Valley and Organic Prairie brand products) is a farmer-owned company made up of more than 1200 small and mid-sized dairy farms in 34 states with products found in all 50 states, Canada and Japan. According to Cornucopia’s organic dairy report, Organic Valley ranks as “excellent” for its adherence to organic standards.