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Outing the Oligarchy - International Forum on Globalization

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OUTING<br />

THE<br />

OLIGARCHY<br />

BILLIONAIRES WHO BENEFIT<br />

FROM TODAY’S CLIMATE CRISIS<br />

A Special Report by<br />

THE INTERNATIONAL FORUM ON GLOBALIZATION (IFG)<br />

DECEMBER 2011


THE INTERNATIONAL FORUM ON GLOBALIZATION (IFG),<br />

founded in 1993, is a n<strong>on</strong>profit, n<strong>on</strong>partisan, global research and educati<strong>on</strong>al center<br />

composed of leading activists, authors, ec<strong>on</strong>omists, and scholars providing critical<br />

analyses of <str<strong>on</strong>g>the</str<strong>on</strong>g> cultural, social, political and ecological impacts of ec<strong>on</strong>omic<br />

globalizati<strong>on</strong>.<br />

BIOGRAPHIES<br />

VICTOR MENOTTI – Executive Director of <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> <str<strong>on</strong>g>Forum</str<strong>on</strong>g> <strong>on</strong> Globalizati<strong>on</strong>, author of <str<strong>on</strong>g>the</str<strong>on</strong>g> IFG<br />

report, “Free Trade, Free Logging: How <str<strong>on</strong>g>the</str<strong>on</strong>g> World Trade Organizati<strong>on</strong> Undermines Global Forest<br />

C<strong>on</strong>servati<strong>on</strong>,” <str<strong>on</strong>g>the</str<strong>on</strong>g> chapter “WTO and Native Sovereignty” in Paradigm Wars: Indigenous Peoples’ Resistance to<br />

Ec<strong>on</strong>omic Globalizati<strong>on</strong>.<br />

JACK SANTA BARBARA – IFG Board Member, Director of <str<strong>on</strong>g>the</str<strong>on</strong>g> Sustainable Scale Project, member of<br />

Transcend, Associate of <str<strong>on</strong>g>the</str<strong>on</strong>g> Centre for Peace Studies<br />

TONY CLARKE – IFG Board Member, Director of <str<strong>on</strong>g>the</str<strong>on</strong>g> Polaris Institute, vice-chair of <str<strong>on</strong>g>the</str<strong>on</strong>g> council of<br />

Canadians, board member of <str<strong>on</strong>g>the</str<strong>on</strong>g> Canadian Centre for Policy Alternatives, author of Blue Gold: The Battle<br />

Against Corporate Theft of <str<strong>on</strong>g>the</str<strong>on</strong>g> World’s Water.<br />

Dr. VANDANA SHIVA – IFG Board Member, Director of <str<strong>on</strong>g>the</str<strong>on</strong>g> Research Foundati<strong>on</strong> <strong>on</strong> Science,<br />

Technology, and Ecology, author of Staying Alive: Women, Ecology, and Development, Soil Not Oil: Envir<strong>on</strong>mental<br />

Justice in a Age of Climate Crisis, and Earth Democracy: Justice, Sustainability, and Peace.<br />

Dr. DALE WEN – IFG China Scholar, advisor for <str<strong>on</strong>g>the</str<strong>on</strong>g> Rural China Educati<strong>on</strong> Foundati<strong>on</strong><br />

ACKNOWLEDGEMENTS<br />

We would like to give our great appreciati<strong>on</strong> and thanks to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

following individuals who made this report possible:<br />

Anju Palta, Kourosh Behnam, Jerry Mander, Lilly Alvarez,<br />

Jivaka Candappa, Anuradtha Mittal, Gar Smith, Eileen Hazel, and Bing G<strong>on</strong>g.<br />

INTERNATIONAL FORUM ON GLOBALIZATION<br />

1009 General Kennedy Avenue, #2 San Francisco, CA 94129 USA<br />

Ph<strong>on</strong>e: +1-415-561-7650 | Email: ifg@ifg.org | Website: www.ifg.org


CONTENTS<br />

INDIVIDUALS OF UNDUE INFLUENCE<br />

VICTOR MENOTTI<br />

KOCHTOPUS: INFLUENCE NETWORKS OF THE<br />

KOCH BROTHERS<br />

UNCLE SLIM: THE WORLD’S RICHEST MAN<br />

TONY CLARKE, SABRINA FERNANDES, RICHARD GIRARD<br />

THE GREAT INDIAN OLIGARCHS<br />

DR. VANDANA SHIVA<br />

CHINA: OLIGARCHY IN THE MAKING<br />

DR. DALE WEN<br />

POWER PLAYERS IN TODAY’S GLOBAL<br />

ECONOMIC SYSTEM<br />

WEALTH, POWER, AND THE FUTURE OF THE PLANET:<br />

FOUR ARGUMENTS AGAINST EXTREME CONCENTRATION<br />

OF WEALTH<br />

JACK SANTA BARBARA<br />

1<br />

58<br />

63<br />

81<br />

107<br />

110<br />

111


Why “<str<strong>on</strong>g>Outing</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g>”<br />

—INDIVIDUALS OF UNDUE INFLUENCE —<br />

INDIVIDUALS OF UNDUE INFLUENCE<br />

VICTOR MENOTTI<br />

The purpose of this report is to call public attenti<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> ultra-rich individuals who benefit most from—and<br />

are most resp<strong>on</strong>sible for—<str<strong>on</strong>g>the</str<strong>on</strong>g> deepening climate crisis that is destabilizing global ecosystems and devastating<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> lives of <str<strong>on</strong>g>the</str<strong>on</strong>g> planet's most vulnerable peoples. Today’s single biggest threat to our global climate comm<strong>on</strong>s<br />

is <str<strong>on</strong>g>the</str<strong>on</strong>g> group of billi<strong>on</strong>aires who profit most from its polluti<strong>on</strong> and, in turn, push government policies that<br />

promote more fossil fuels.<br />

IFG is releasing this report as two important global debates intensify, yet <str<strong>on</strong>g>the</str<strong>on</strong>g> links between <str<strong>on</strong>g>the</str<strong>on</strong>g>m are rarely<br />

drawn. The report aims to c<strong>on</strong>nect some of <str<strong>on</strong>g>the</str<strong>on</strong>g> dots that show a pattern of power relati<strong>on</strong>ships dominating<br />

both deadlocked debates which toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r could help illuminate ways forward for change <strong>on</strong> all fr<strong>on</strong>ts.<br />

Globalizati<strong>on</strong> has shifted financial wealth and political power upward to a group of Ultra High Net-Worth<br />

Individuals, so “<str<strong>on</strong>g>Outing</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g>” aims to inform both <str<strong>on</strong>g>the</str<strong>on</strong>g> climate community and <str<strong>on</strong>g>the</str<strong>on</strong>g> Occupy<br />

movement by “following <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ey” to <str<strong>on</strong>g>the</str<strong>on</strong>g> very top.<br />

The first debate is in <str<strong>on</strong>g>the</str<strong>on</strong>g> drive for an urgently needed global climate deal in Durban, South Africa, under <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

United Nati<strong>on</strong>s’ Framework C<strong>on</strong>venti<strong>on</strong> <strong>on</strong> Climate Change’s COP 17, which is currently at an impasse due<br />

to <str<strong>on</strong>g>the</str<strong>on</strong>g> United States’ having no nati<strong>on</strong>al mandate to c<strong>on</strong>clude a multilateral agreement since its C<strong>on</strong>gress is so<br />

severely corrupted by corporati<strong>on</strong>s and capitalists who profit from fossil fuels. Yet <str<strong>on</strong>g>the</str<strong>on</strong>g> role of <str<strong>on</strong>g>the</str<strong>on</strong>g> energy<br />

oligarchs in <str<strong>on</strong>g>the</str<strong>on</strong>g> current impasse is all but invisible, even as <str<strong>on</strong>g>the</str<strong>on</strong>g>y play <strong>on</strong>e government against ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r to hold<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> entire world hostage to a dead-end addicti<strong>on</strong> to fossil fuels. As a result, President Obama’s climate<br />

negotiators are not <strong>on</strong>ly running away from <str<strong>on</strong>g>the</str<strong>on</strong>g>ir resp<strong>on</strong>sibilities as official talks resume but <str<strong>on</strong>g>the</str<strong>on</strong>g>y are leading<br />

an unbelievable and unnecessary backtracking from core commitments in <str<strong>on</strong>g>the</str<strong>on</strong>g> climate C<strong>on</strong>venti<strong>on</strong> made by<br />

previous presidents Bill Clint<strong>on</strong>, George Bush and George W. Bush.<br />

The sec<strong>on</strong>d debate—ignited by <str<strong>on</strong>g>the</str<strong>on</strong>g> Occupy Wall Street movement—revolves around <str<strong>on</strong>g>the</str<strong>on</strong>g> power of private<br />

wealth and its corrupti<strong>on</strong> of governments. In <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S., where financial fraud has fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r enriched a few big<br />

banks and billi<strong>on</strong>aires (while robbing milli<strong>on</strong>s of Americans of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir savings, jobs and homes), citizens are<br />

incensed by Washingt<strong>on</strong>'s rush to bail out corporati<strong>on</strong>s and capitalists deemed "to big to fail." As Occupy<br />

movement energy shifts to new strategies after its evicti<strong>on</strong> from public spaces, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a need to align global<br />

activists’ attenti<strong>on</strong> around those at <str<strong>on</strong>g>the</str<strong>on</strong>g> very top who benefit most from, and are <str<strong>on</strong>g>the</str<strong>on</strong>g>refore most resp<strong>on</strong>sible<br />

for, today’s c<strong>on</strong>verging global crises in finance, food, fuel, and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r areas. Within <str<strong>on</strong>g>the</str<strong>on</strong>g> “<strong>on</strong>e percent” is a<br />

global elite whose wealth and power uniquely positi<strong>on</strong>s <str<strong>on</strong>g>the</str<strong>on</strong>g>m to ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r be part of <str<strong>on</strong>g>the</str<strong>on</strong>g> problem or part of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

soluti<strong>on</strong>, and all of humanity is needed to help peacefully persuade <str<strong>on</strong>g>the</str<strong>on</strong>g>se people in power to democratically<br />

transiti<strong>on</strong> today’s crises into genuine justice and sustainability.<br />

- 1 -


Occupy and <str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g><br />

—INDIVIDUALS OF UNDUE INFLUENCE —<br />

Critical discussi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> influence of <str<strong>on</strong>g>the</str<strong>on</strong>g> fossil fuels oligarchs has l<strong>on</strong>g been missing from <str<strong>on</strong>g>the</str<strong>on</strong>g> debate, despite<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> decisive role <str<strong>on</strong>g>the</str<strong>on</strong>g>se individuals and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir companies have played in both creating <str<strong>on</strong>g>the</str<strong>on</strong>g> crisis and blocking<br />

soluti<strong>on</strong>s that could usher in an ec<strong>on</strong>omic recovery—<strong>on</strong>e based <strong>on</strong> clean energy security, with green jobs for<br />

hi-tech design engineers, rust-belt workers and inner-city communities of color.<br />

Despite <str<strong>on</strong>g>the</str<strong>on</strong>g> urgent need for new commitments to reduce greenhouse gas emissi<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is little promise for<br />

meaningful progress until we address today’s extreme c<strong>on</strong>centrati<strong>on</strong>s of wealth and power that have<br />

corrupted any prospect of democratic decisi<strong>on</strong>-making. Climate negotiators know that <str<strong>on</strong>g>the</str<strong>on</strong>g>y are not calling <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

shots; ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r, <str<strong>on</strong>g>the</str<strong>on</strong>g>y are all restrained by political pressure from <str<strong>on</strong>g>the</str<strong>on</strong>g> very people who profit most from polluting<br />

our planet.<br />

It is our hope that this report results in increased scrutiny of <str<strong>on</strong>g>the</str<strong>on</strong>g>se wealthy individuals—with attenti<strong>on</strong><br />

focused <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir massive investments in fossil fuel assets and, especially in <str<strong>on</strong>g>the</str<strong>on</strong>g> case of <str<strong>on</strong>g>the</str<strong>on</strong>g> United States, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

financing of political activities that undermine democracy in <str<strong>on</strong>g>the</str<strong>on</strong>g> pursuit of short-term profits. In a desperate<br />

attempt to wring out <str<strong>on</strong>g>the</str<strong>on</strong>g> last dregs of fossil-fuel profit from a depleted planet, <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchs of gas, coal and<br />

oil are pushing <str<strong>on</strong>g>the</str<strong>on</strong>g> limits by resorting to increasingly costly, dirty and risky forms of exploitati<strong>on</strong>—from tar<br />

sands and "fracking" to mountaintop removal and deep-sea drilling. Cooperative global acti<strong>on</strong> to address <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

most daunting challenge humanity has ever faced is being held hostage by a handful of profiteers who wield<br />

decisive power over our governments.<br />

Why are billi<strong>on</strong>aires spending <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth to block <str<strong>on</strong>g>the</str<strong>on</strong>g> phasing out of fossil fuels?? Because <str<strong>on</strong>g>the</str<strong>on</strong>g>y have billi<strong>on</strong>s<br />

of accumulated assets and future profits at risk; spending a few hundred milli<strong>on</strong> to obfuscate science and<br />

obstruct policy change is a cheap investment compared to what <str<strong>on</strong>g>the</str<strong>on</strong>g>y could lose if climate acti<strong>on</strong> advances.<br />

“<str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g>,” is a term rarely heard in political debates in democracies, has recently become useful in<br />

explaining <str<strong>on</strong>g>the</str<strong>on</strong>g> power dynamics that drive current decisi<strong>on</strong>-making. While we often think of oligarchs as<br />

corrupt kings from a byg<strong>on</strong>e age, it is now an accurate and appropriate term to describe today’s political<br />

reality of “rule by <str<strong>on</strong>g>the</str<strong>on</strong>g> rich.” According to Dr. Jeffrey Winters, author of <str<strong>on</strong>g>the</str<strong>on</strong>g> 2011 book, <str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g>, wealth in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. today remains "two times as c<strong>on</strong>centrated as imperial Rome, which was a slave-and-farmer society.<br />

That's how huge <str<strong>on</strong>g>the</str<strong>on</strong>g> gap is." In additi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g>re have been no real income gains for <str<strong>on</strong>g>the</str<strong>on</strong>g> average American<br />

household since 1970. 1<br />

“<str<strong>on</strong>g>Outing</str<strong>on</strong>g> <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g>” is <str<strong>on</strong>g>the</str<strong>on</strong>g> first in a series of planned reports, <strong>on</strong>line communicati<strong>on</strong>s tools, public<br />

educati<strong>on</strong> events and strategy sessi<strong>on</strong>s that comprise IFG's new Wealth and Power Program, which is<br />

designed to call public attenti<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> Ultra-High Net-Worth Individuals who dominate today’s ec<strong>on</strong>omic<br />

system and profit from its unacceptable exploitati<strong>on</strong> of people and <str<strong>on</strong>g>the</str<strong>on</strong>g> planet.<br />

Why Now<br />

IFG initiated this report after spending three years engaged in intensive efforts with grassroots groups and<br />

like-minded governments worldwide to shape a progressive U.S. approach to <str<strong>on</strong>g>the</str<strong>on</strong>g> UN Climate C<strong>on</strong>venti<strong>on</strong>—<br />

<strong>on</strong>e that guarantees <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>cerns of poor countries and communities are incorporated into <str<strong>on</strong>g>the</str<strong>on</strong>g> outcome of<br />

any global climate deal.<br />

- 2 -


—INDIVIDUALS OF UNDUE INFLUENCE —<br />

Unfortunately, while <str<strong>on</strong>g>the</str<strong>on</strong>g> 2010 Cancun Agreements produced some small steps that could potentially protect<br />

people in <str<strong>on</strong>g>the</str<strong>on</strong>g> Global South (including establishing accountable mechanisms for financial flows and<br />

technology transfer and as well as new protocols to protect Indigenous rights), many of Cancun's promises<br />

have yet to be delivered. Meanwhile, <str<strong>on</strong>g>the</str<strong>on</strong>g> world moved several steps backward when <str<strong>on</strong>g>the</str<strong>on</strong>g> Cancun summit<br />

adopted <str<strong>on</strong>g>the</str<strong>on</strong>g> Obama Administrati<strong>on</strong>'s proposal to make carb<strong>on</strong>-emissi<strong>on</strong> reducti<strong>on</strong>s "voluntary," <str<strong>on</strong>g>the</str<strong>on</strong>g>reby<br />

undermining <str<strong>on</strong>g>the</str<strong>on</strong>g> core purpose of <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>venti<strong>on</strong>. The world had been waiting for <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. to join <str<strong>on</strong>g>the</str<strong>on</strong>g> global<br />

community in committing to cut its carb<strong>on</strong> emissi<strong>on</strong>s. Instead, all governments (with <str<strong>on</strong>g>the</str<strong>on</strong>g> excepti<strong>on</strong> of<br />

Bolivia) agreed to let each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r off <str<strong>on</strong>g>the</str<strong>on</strong>g> hook by effectively allowing every<strong>on</strong>e’s emissi<strong>on</strong>s to rise.<br />

Despite having elected a president who pledged to “protect <str<strong>on</strong>g>the</str<strong>on</strong>g> planet in peril” and a c<strong>on</strong>gressi<strong>on</strong>al leadership<br />

that seemed committed to act, it was not enough to counter <str<strong>on</strong>g>the</str<strong>on</strong>g> influence of fossil fuels billi<strong>on</strong>aires like David<br />

and Charles Koch, whose political c<strong>on</strong>tributi<strong>on</strong>s to defeat climate legislati<strong>on</strong> are believed to have exceeded<br />

those of <str<strong>on</strong>g>the</str<strong>on</strong>g> American Petroleum Institute (Big Oil’s own lobbying group) and Exx<strong>on</strong> (<str<strong>on</strong>g>the</str<strong>on</strong>g> country's largest<br />

oil company). The fact that <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. could not deliver politically <strong>on</strong> its “fair share” of a global agreement<br />

should force climate campaigners to deal more directly with <str<strong>on</strong>g>the</str<strong>on</strong>g> well-financed forces favoring fossil fuels. By<br />

“following <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ey,” IFG’s research into <str<strong>on</strong>g>the</str<strong>on</strong>g> real roadblocks to progress reveals sophisticated “influence<br />

networks” financed largely by a few billi<strong>on</strong>aires at <str<strong>on</strong>g>the</str<strong>on</strong>g> very top of <str<strong>on</strong>g>the</str<strong>on</strong>g> fossil fuels empire.<br />

What’s in this Report<br />

Our report begins by profiling some of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s wealthiest individuals, chosen for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir: 1) ranking <strong>on</strong><br />

Forbes' list of <str<strong>on</strong>g>the</str<strong>on</strong>g> World's Billi<strong>on</strong>aires; 2) investments and holdings in fossil fuels; and 3) influence networks<br />

that block <str<strong>on</strong>g>the</str<strong>on</strong>g> transiti<strong>on</strong> from fossil fuels to clean, renewable energy alternatives. See more below <strong>on</strong> our<br />

methodology.<br />

Our report ends with an original essay, “Four Arguments Against Extreme C<strong>on</strong>centrati<strong>on</strong> of Wealth,” that<br />

examines some of <str<strong>on</strong>g>the</str<strong>on</strong>g> most comm<strong>on</strong> reas<strong>on</strong>s why people accept <str<strong>on</strong>g>the</str<strong>on</strong>g>se shadowy oligarchs as <str<strong>on</strong>g>the</str<strong>on</strong>g> arbiters of<br />

our lives. Read this report if you think people with fabulous wealth deserve it because <str<strong>on</strong>g>the</str<strong>on</strong>g>y simply "worked<br />

harder" or "were smarter" than <str<strong>on</strong>g>the</str<strong>on</strong>g>ir competitors. Countering such misc<strong>on</strong>cepti<strong>on</strong>s is essential to puncturing<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir legitimacy. Bey<strong>on</strong>d blasting <str<strong>on</strong>g>the</str<strong>on</strong>g> billi<strong>on</strong>aires, it also shows ways forward with a series of steps to tackle<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> systemic issues driving both ec<strong>on</strong>omic inequality and ecological unsustainability.<br />

Make No Mistake Who is Most Resp<strong>on</strong>sible<br />

Although we use a global list, our intended audience is primarily American. That's because <str<strong>on</strong>g>the</str<strong>on</strong>g> global climate<br />

crises—just like today's c<strong>on</strong>verging global crises in finance, food, water and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r areas—is blocked by<br />

Washingt<strong>on</strong> and a political system corrupted and c<strong>on</strong>trolled by <str<strong>on</strong>g>the</str<strong>on</strong>g> ultra-rich.<br />

True, an increasing number of wealthy Americans now understand <str<strong>on</strong>g>the</str<strong>on</strong>g> climate crisis to be quite real and many<br />

are moving <str<strong>on</strong>g>the</str<strong>on</strong>g>ir m<strong>on</strong>ey because <str<strong>on</strong>g>the</str<strong>on</strong>g>y see promising business opportunities, but <str<strong>on</strong>g>the</str<strong>on</strong>g>se investments are<br />

overshadowed by <str<strong>on</strong>g>the</str<strong>on</strong>g> billi<strong>on</strong>aire Koch Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs, whose combined wealth ($50B) makes <str<strong>on</strong>g>the</str<strong>on</strong>g> third richest in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> world after Carlos Slim and Bill Gates. The Kochs have spent milli<strong>on</strong>s over <str<strong>on</strong>g>the</str<strong>on</strong>g> past 30 years to build a<br />

sophisticated influence network that now shapes almost all aspects of government policymaking, especially in<br />

energy. Koch cash supports a sort of “full spectrum dominance” over America's democratic processes by<br />

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—INDIVIDUALS OF UNDUE INFLUENCE —<br />

financing think tanks, media manipulators, fake grassroots groups (“astroturf”), and, increasingly, legislators,<br />

regulators and judges at every level of government,. By c<strong>on</strong>tributing lavishly to <str<strong>on</strong>g>the</str<strong>on</strong>g> electoral campaigns of<br />

like-minded candidates, <str<strong>on</strong>g>the</str<strong>on</strong>g> Kochs have captured a c<strong>on</strong>siderable hold <strong>on</strong> C<strong>on</strong>gress, where <str<strong>on</strong>g>the</str<strong>on</strong>g>y c<strong>on</strong>tinue to be<br />

top c<strong>on</strong>tributors to politicians who sit <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> key c<strong>on</strong>gressi<strong>on</strong>al committees for energy and resources. The<br />

Kochs are known to have bankrolled <str<strong>on</strong>g>the</str<strong>on</strong>g> Tea Party and now are poised to plow even more cash into <str<strong>on</strong>g>the</str<strong>on</strong>g> 2012<br />

electi<strong>on</strong>s thanks to 2010 Supreme Court case allowing unlimited, undisclosed campaign c<strong>on</strong>tributi<strong>on</strong>s. The<br />

Kochs are also more than cozy with Supreme Court Justices Clarence Thomas and Ant<strong>on</strong>in Scalia. With all<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se areas of public policy under <str<strong>on</strong>g>the</str<strong>on</strong>g> political c<strong>on</strong>trol of “<str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e percent,” it is hard to imagine how to<br />

remove <str<strong>on</strong>g>the</str<strong>on</strong>g> roadblocks to political progress for phasing out fossil fuels without also addressing <str<strong>on</strong>g>the</str<strong>on</strong>g> role of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

rich in corrupting our political system, as best symbolized in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. by <str<strong>on</strong>g>the</str<strong>on</strong>g> Kochs.<br />

See Page 60 for diagram mapping <str<strong>on</strong>g>the</str<strong>on</strong>g> influence of Koch cash, in a graphic image we call <str<strong>on</strong>g>the</str<strong>on</strong>g> “Kochtopus.”<br />

Who are <str<strong>on</strong>g>the</str<strong>on</strong>g> Individuals of Undue Influence<br />

But it ain’t all about <str<strong>on</strong>g>the</str<strong>on</strong>g> Kochs. They are <strong>on</strong>ly a symptom—as is <str<strong>on</strong>g>the</str<strong>on</strong>g> climate crisis itself—of a larger global<br />

ec<strong>on</strong>omic and political system out of whack. Our interest is in <str<strong>on</strong>g>the</str<strong>on</strong>g> causes driving today’s extreme<br />

c<strong>on</strong>centrati<strong>on</strong>s of wealth and power—specifically <str<strong>on</strong>g>the</str<strong>on</strong>g> rules by which capital is invested not <strong>on</strong>ly in business<br />

activity but also in political influence toward policies that fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r enrich <str<strong>on</strong>g>the</str<strong>on</strong>g> investors, resulting in today’s<br />

vicious circle that c<strong>on</strong>centrates wealth in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands of a few while marginalizing <str<strong>on</strong>g>the</str<strong>on</strong>g> majority of people and<br />

plundering <str<strong>on</strong>g>the</str<strong>on</strong>g> planet.<br />

With impressive speed, new oligarchic elites are recasting <str<strong>on</strong>g>the</str<strong>on</strong>g> global capitalist power balance, even as older,<br />

established <strong>on</strong>es extend <str<strong>on</strong>g>the</str<strong>on</strong>g>ir reach into areas of special interest to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir investments, such as fossil fuels. A<br />

historic shift of ec<strong>on</strong>omic power is occurring from <str<strong>on</strong>g>the</str<strong>on</strong>g> United States and Europe to <str<strong>on</strong>g>the</str<strong>on</strong>g> emerging ec<strong>on</strong>omies<br />

of <str<strong>on</strong>g>the</str<strong>on</strong>g> developing world, as heavy industry and resource extracti<strong>on</strong> shifts out of <str<strong>on</strong>g>the</str<strong>on</strong>g> traditi<strong>on</strong>al wealthy<br />

nati<strong>on</strong>s to <str<strong>on</strong>g>the</str<strong>on</strong>g> Global South. The emergence of large numbers of high-carb<strong>on</strong> multibilli<strong>on</strong>aires in <str<strong>on</strong>g>the</str<strong>on</strong>g> South is<br />

symptomatic of this trend, as a predictable result of globalizati<strong>on</strong>.<br />

Comparatively little study has been carried out into <str<strong>on</strong>g>the</str<strong>on</strong>g> new oligarchies of all countries, and <str<strong>on</strong>g>the</str<strong>on</strong>g> old analytical<br />

frameworks for <str<strong>on</strong>g>the</str<strong>on</strong>g> study of elites are increasingly out of date. No l<strong>on</strong>ger are global decisi<strong>on</strong>s made primarily<br />

at <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> M<strong>on</strong>etary Fund or Bohemian Grove, at Davos or Bilderberg. Increasingly, <str<strong>on</strong>g>the</str<strong>on</strong>g>y are made<br />

in H<strong>on</strong>g K<strong>on</strong>g, Beijing, Sao Paolo, Mumbai and Moscow by new elites who are virtually unknown to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Western public. New analyses and methodologies are needed.<br />

In <str<strong>on</strong>g>the</str<strong>on</strong>g> United States and Europe, <str<strong>on</strong>g>the</str<strong>on</strong>g> process of deindustrializati<strong>on</strong> and financializati<strong>on</strong> has spawned a new<br />

crop of relatively low-carb<strong>on</strong> plutocrats, but <str<strong>on</strong>g>the</str<strong>on</strong>g> climate debate remains dominated by fossil fuel oligarchs<br />

whose increasing wealth has <strong>on</strong>ly tightened <str<strong>on</strong>g>the</str<strong>on</strong>g>ir grip <strong>on</strong> political processes. These financial wizards, Internet<br />

geniuses and hedge fund slight-of-hand artists are accumulating dizzying sums of capital, but <str<strong>on</strong>g>the</str<strong>on</strong>g>y are unlike<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> old industrial elites of previous decades because <str<strong>on</strong>g>the</str<strong>on</strong>g>ir fingerprints <strong>on</strong> specific envir<strong>on</strong>mental crimes are<br />

much more ephemeral and harder to trace. In <str<strong>on</strong>g>the</str<strong>on</strong>g> time that it will have taken to read this paragraph, each of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se new oligarchs will have purchased and divested a mind-bending blur of financial assets, probably<br />

including coal mines, power plants, steel mills and all sorts of toxic industrial nightmares.<br />

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—INDIVIDUALS OF UNDUE INFLUENCE —<br />

Moreover, <str<strong>on</strong>g>the</str<strong>on</strong>g> traditi<strong>on</strong>al industrialists in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. retain an historical resp<strong>on</strong>sibility for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir larger carb<strong>on</strong><br />

footprints due to l<strong>on</strong>ger periods of time polluting with fossil fuels, as well as <str<strong>on</strong>g>the</str<strong>on</strong>g>ir decades of investments in<br />

exerting political c<strong>on</strong>trol over policymaking in <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s most polluting country that has kept global climate<br />

talks deadlocked. While <str<strong>on</strong>g>the</str<strong>on</strong>g> list of fifty individuals who follow includes many more names from <str<strong>on</strong>g>the</str<strong>on</strong>g> Global<br />

South than <str<strong>on</strong>g>the</str<strong>on</strong>g>y would have <strong>on</strong>e decade ago, it is those from <str<strong>on</strong>g>the</str<strong>on</strong>g> Global North that deserve <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />

attenti<strong>on</strong>, particularly in light of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir governments’ ignoring internati<strong>on</strong>al legal obligati<strong>on</strong>s to cut carb<strong>on</strong> for<br />

twenty years. D<strong>on</strong>’t think developing countries are not keeping track of past promises never kept.<br />

In some emerging nati<strong>on</strong>s, especially China and Russia, <str<strong>on</strong>g>the</str<strong>on</strong>g> state retains a near-m<strong>on</strong>opoly <strong>on</strong> political power<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> new tyco<strong>on</strong>s do not have outsized influence over government and military affairs. Elsewhere,<br />

however, <str<strong>on</strong>g>the</str<strong>on</strong>g> new billi<strong>on</strong>aires have indeed become a new plutocracy. With heavy industry accelerating its<br />

migrati<strong>on</strong> from north to south, <str<strong>on</strong>g>the</str<strong>on</strong>g>se emerging-markets plutocrats have accumulated enormous power over<br />

carb<strong>on</strong> emissi<strong>on</strong>s. As <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s carb<strong>on</strong> footprint is shifting, so is <str<strong>on</strong>g>the</str<strong>on</strong>g> decisi<strong>on</strong>-making over whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r to<br />

adopt new carb<strong>on</strong>-reducing industrial technologies, whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r to finance a new dam or coal-fired power plant,<br />

or whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r to spread suburban subdivisi<strong>on</strong>s across rural hinterlands.<br />

In terms of political/diplomatic power, <str<strong>on</strong>g>the</str<strong>on</strong>g>se new oligarchs are primarily nati<strong>on</strong>al in focus ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than<br />

transnati<strong>on</strong>al. There have been some attempts at mimicking <str<strong>on</strong>g>the</str<strong>on</strong>g> West’s elite forums, such as <str<strong>on</strong>g>the</str<strong>on</strong>g> Boao <str<strong>on</strong>g>Forum</str<strong>on</strong>g><br />

For Asia and <str<strong>on</strong>g>the</str<strong>on</strong>g> Fa<str<strong>on</strong>g>the</str<strong>on</strong>g>rs and S<strong>on</strong>s triennial meeting in Latin America. But <str<strong>on</strong>g>the</str<strong>on</strong>g>se are quite incipient, and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

elites of Asia and Africa could be described as oligarchs without an oligarchy—that is, part of a Superclass<br />

that has not yet developed <str<strong>on</strong>g>the</str<strong>on</strong>g> interlocking, mind-meld instituti<strong>on</strong>ality of <str<strong>on</strong>g>the</str<strong>on</strong>g> old trans-Atlantic elites. (Latin<br />

America is a slightly different case, because its old upper class has been able to maintain much of its<br />

traditi<strong>on</strong>al cohesi<strong>on</strong>.) However, in terms of ec<strong>on</strong>omic power, developing nati<strong>on</strong>s’ new oligarchies have gained<br />

a truly transnati<strong>on</strong>al reach. Russian tyco<strong>on</strong>s, for example, now own much of <str<strong>on</strong>g>the</str<strong>on</strong>g> remaining industrial<br />

infrastructure in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. Rust Belt, from steel mills to coal mines.<br />

China, of course, is a case unto itself. Despite its emergent ec<strong>on</strong>omic might and explosive ecological impact<br />

<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> world, it has spawned a relatively small number of billi<strong>on</strong>aires because most of China’s industrial firms<br />

are owned by local governments and government-owned banks. These new managerial/entrepreneurial elites<br />

are nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r fish nor fowl – nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r strictly Communist nor capitalist, obeying some government dictates while<br />

exercising c<strong>on</strong>siderable aut<strong>on</strong>omy – and have stymied many of <str<strong>on</strong>g>the</str<strong>on</strong>g> central government’s goals of increasing<br />

energy efficiency and moderating <str<strong>on</strong>g>the</str<strong>on</strong>g> use of natural resources. These elites are hidden behind an impenetrable<br />

cloak of an<strong>on</strong>ymity and bureaucratic obfuscati<strong>on</strong>, making analysis extremely difficult for foreigners (and<br />

apparently even for <str<strong>on</strong>g>the</str<strong>on</strong>g> central government in Beijing).<br />

An additi<strong>on</strong>al analytical problem is that in many developing nati<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g> typically n<strong>on</strong>-transparent and nature<br />

of wealth holdings makes it difficult to identify who has what, where or why.<br />

Methodology<br />

Any analysis of global ec<strong>on</strong>omic oligarchy c<strong>on</strong>fr<strong>on</strong>ts an immediate issue of methodology. In <str<strong>on</strong>g>the</str<strong>on</strong>g> absence of<br />

definitive answers to this problem, IFG has adopted three basic criteria to identify <str<strong>on</strong>g>the</str<strong>on</strong>g> fossil fuel oligarchs<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir influence over our climate comm<strong>on</strong>s: 1) total wealth, as measured by <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes billi<strong>on</strong>aires list; 2 2)<br />

apparent ecological damage and carb<strong>on</strong> impact, as indicated by <str<strong>on</strong>g>the</str<strong>on</strong>g> types of business c<strong>on</strong>ducted; 3) political<br />

favoring of carb<strong>on</strong>-intensive policies. We have not included o<str<strong>on</strong>g>the</str<strong>on</strong>g>r possible weightings such as finance, food<br />

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—INDIVIDUALS OF UNDUE INFLUENCE —<br />

or foreign policy. When available, we include <str<strong>on</strong>g>the</str<strong>on</strong>g> score of companies in which <str<strong>on</strong>g>the</str<strong>on</strong>g> specific individuals are<br />

major investors, according to <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index (DJSI).<br />

According to its website: “The DJSI is a group of indexes that were launched in 1999 as <str<strong>on</strong>g>the</str<strong>on</strong>g> first global sustainability<br />

benchmarks. These indexes evaluate <str<strong>on</strong>g>the</str<strong>on</strong>g> performance of <str<strong>on</strong>g>the</str<strong>on</strong>g> worlds leaders in sustainability. The DJSI is managed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow<br />

J<strong>on</strong>es Indexes and Sustainability Asset Management. The DJSI Indexes have global and regi<strong>on</strong>al benchmarks including<br />

European, Euroz<strong>on</strong>e, Nordic, North American, US, Asia Pacific, and Korean indexes The DJSI is based <strong>on</strong> an analysis, of<br />

corporate ec<strong>on</strong>omic, envir<strong>on</strong>mental and social performance, assessing issues such as corporate governance, risk management,<br />

branding, climate change mitigati<strong>on</strong>, supply chain standards and labor practices.” The idea is to reject companies that do<br />

not operate under sustainable and ethical guidelines.<br />

Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r rating used is <str<strong>on</strong>g>the</str<strong>on</strong>g> CSR Hub rating for corporate social resp<strong>on</strong>sibility. According to its website, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

envir<strong>on</strong>ment category data: “covers a company’s interacti<strong>on</strong>s with <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment at large, including use of natural<br />

resources, and a company’s impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Earth’s ecosystems. The category evaluates corporate envir<strong>on</strong>mental performance,<br />

compliance with envir<strong>on</strong>mental regulati<strong>on</strong>s, mitigati<strong>on</strong> of envir<strong>on</strong>mental footprint, leadership in addressing climate change through<br />

appropriate policies and strategies, energy-efficient operati<strong>on</strong>s, and <str<strong>on</strong>g>the</str<strong>on</strong>g> development of renewable energy and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r alternative<br />

envir<strong>on</strong>mental technologies, disclosure of sources of envir<strong>on</strong>mental risk and liability and acti<strong>on</strong>s to minimize exposure to future<br />

risk, implementati<strong>on</strong> of natural resource c<strong>on</strong>servati<strong>on</strong> and efficiency programs, polluti<strong>on</strong> preventi<strong>on</strong> programs, dem<strong>on</strong>strati<strong>on</strong> of a<br />

strategy toward sustainable development, integrati<strong>on</strong> of envir<strong>on</strong>mental sustainability and resp<strong>on</strong>siveness with management and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

board, and programs to measure and engage stakeholders for envir<strong>on</strong>mental improvement.”<br />

This list has been compiled from original research by IFG's network of experts around <str<strong>on</strong>g>the</str<strong>on</strong>g> world, as well as<br />

public documents that are excerpted in <str<strong>on</strong>g>the</str<strong>on</strong>g> text. The result of this analysis is admittedly arbitrary, but IFG<br />

believes it is c<strong>on</strong>ceptually coherent and offers a clear, comprehensible way forward for future work to define<br />

who holds wealth and power, and is it impacts <strong>on</strong> democratic decisi<strong>on</strong>-making.<br />

IFG suggests additi<strong>on</strong>al assessment of at least <str<strong>on</strong>g>the</str<strong>on</strong>g> following questi<strong>on</strong>s:<br />

o What better yardstick should be used bey<strong>on</strong>d mere net worth according to <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes billi<strong>on</strong>aires<br />

list, envir<strong>on</strong>mental impact, and financing political support for fossil fuels;<br />

o Should elites who have taken relatively progressive stands, such as Bill Gates, George Soros, be<br />

passed over by <str<strong>on</strong>g>the</str<strong>on</strong>g> hand of judgment? Should corporate green-washing attempts, such as those<br />

reflected in The Times (U.K.) Green Rich List, be viewed as providing any dispensati<strong>on</strong> over <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

unapologetically right-wing defense of polluters’ rights? 3<br />

o If an ecological filter is adopted, should some sort of weighting be used to ensure that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

resulting list of new elites does not overburden developing nati<strong>on</strong>s who deserve equitable access<br />

to atmospheric space?<br />

o How to scale up <str<strong>on</strong>g>the</str<strong>on</strong>g> significant resources required to penetrating <str<strong>on</strong>g>the</str<strong>on</strong>g> new kinds of c<strong>on</strong>voluted<br />

financial decisi<strong>on</strong>-making so as to improve methodology. The task will not be easy or quick.<br />

Framing Future Acti<strong>on</strong>s<br />

We want <str<strong>on</strong>g>the</str<strong>on</strong>g> filthy fifty to come clean and be part of <str<strong>on</strong>g>the</str<strong>on</strong>g> soluti<strong>on</strong>, as an initial step, by listening closely to<br />

what climate advocates are proposing, <str<strong>on</strong>g>the</str<strong>on</strong>g>n engaging in broader c<strong>on</strong>versati<strong>on</strong>s about today’s systemic crises in<br />

climate, energy, water, biodiversity, farmland, fisheries, minerals, and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r natural resources and systems that<br />

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—INDIVIDUALS OF UNDUE INFLUENCE —<br />

need urgent care, as well as <str<strong>on</strong>g>the</str<strong>on</strong>g> traditi<strong>on</strong>al communities who support <str<strong>on</strong>g>the</str<strong>on</strong>g>m. Such engagement will show who<br />

is serious about being part of a soluti<strong>on</strong>, but we are not naïve about <str<strong>on</strong>g>the</str<strong>on</strong>g> nature of power.<br />

Climate campaigners can increase <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own “collective power” by working with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r c<strong>on</strong>stituencies who<br />

also suffer from <str<strong>on</strong>g>the</str<strong>on</strong>g> same symptoms of corporate corrupti<strong>on</strong> of political processes and a system of organized<br />

greed. Taking <strong>on</strong> systemic inequality and corrupti<strong>on</strong> requires a series of steps to actively redistribute wealth<br />

and remove private m<strong>on</strong>ey from policymaking, but such an ambitious agenda is not achievable if single-issue<br />

c<strong>on</strong>stituencies remain segmented in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir silos and avoid unifying around a comm<strong>on</strong> agenda for systemic<br />

change.<br />

Toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r, civil society must directly challenge <str<strong>on</strong>g>the</str<strong>on</strong>g> fundamental causes that are driving today’s multiple<br />

ec<strong>on</strong>omic and envir<strong>on</strong>mental crises. Only by working toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r can “<str<strong>on</strong>g>the</str<strong>on</strong>g> 99 percent” gain <str<strong>on</strong>g>the</str<strong>on</strong>g> full measure of<br />

justice that all deserve.<br />

1 Winters interview: http://www.wbez.org/episode-segments/2011-10-28/oligarchy-history-how-super-rich-defend<str<strong>on</strong>g>the</str<strong>on</strong>g>ir-wealth-93577<br />

2 http://www.forbes.com/lists/2010/10/billi<strong>on</strong>aires-2010_The-Worlds-Billi<strong>on</strong>aires_Rank.html<br />

3 The Times (U.K.) Green Rich List http://business.times<strong>on</strong>line.co.uk/tol/business/specials/article5816774.ece<br />

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— INDIVIDUALS OF UNDUE INFLUENCE —<br />

CARLOS SLIM HELÚ AND FAMILY, MEXICO<br />

$63.3 BILLION [AS OF NOVEMBER 2011]<br />

Slim is best know for his c<strong>on</strong>trol of communicati<strong>on</strong>s infrastructure but is less known for his investments in<br />

fossil fuels infrastructure, especially al<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. Mexico border which was built to support expanded trade<br />

under NAFTA. His investments in energy, water, transportati<strong>on</strong>, housing, and utilities increase <str<strong>on</strong>g>the</str<strong>on</strong>g> resource<br />

intensity use of North America’s ec<strong>on</strong>omy, <str<strong>on</strong>g>the</str<strong>on</strong>g> planet’s biggest polluting c<strong>on</strong>tinent. See Slim’s in depth profile<br />

<strong>on</strong> page 63.<br />

Wealth: Carlos Slim is <str<strong>on</strong>g>the</str<strong>on</strong>g> richest man in <str<strong>on</strong>g>the</str<strong>on</strong>g> world, according to <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes 2011 list. Slim became a<br />

billi<strong>on</strong>aire in 1990 after c<strong>on</strong>vincing <str<strong>on</strong>g>the</str<strong>on</strong>g>n-President Carlos Salinas to give him a swee<str<strong>on</strong>g>the</str<strong>on</strong>g>art deal to purchase<br />

TELMEX, <str<strong>on</strong>g>the</str<strong>on</strong>g> state-owned teleph<strong>on</strong>e company. Slim now is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest shareholder in TELMEX and<br />

América Móvil, <str<strong>on</strong>g>the</str<strong>on</strong>g> hemisphere’s fourth-largest wireless company, with more than 215 milli<strong>on</strong> subscribers in<br />

Latin America and <str<strong>on</strong>g>the</str<strong>on</strong>g> Caribbean. Slim is widely diversified with investments in c<strong>on</strong>structi<strong>on</strong>, finance and<br />

media. He owns <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>structi<strong>on</strong> c<strong>on</strong>glomerate Impulsora del Desarrollo y el Empleo, which builds roads<br />

and energy infrastructure. He is president of Carso Infraestructura y C<strong>on</strong>strucción, which installs pipelines,<br />

erects chemical and petroleum facilities (through its subsidiary Swecomex), undertakes infrastructure and civil<br />

c<strong>on</strong>structi<strong>on</strong> c<strong>on</strong>tracts (through its CILSA subsidiary), and builds housing projects (through its subsidiary<br />

Urvitec). He also owns significant shares in <str<strong>on</strong>g>the</str<strong>on</strong>g> financial group Inbursa, Br<strong>on</strong>co Drilling (a major U.S. oil and<br />

gas drilling company) and Saks Fifth Avenue.<br />

Power Networks: Carlos Slim owns stakes in Independent News & Media (a large newspaper chain with<br />

outlets in Australia, Ireland, New Zealand, Nor<str<strong>on</strong>g>the</str<strong>on</strong>g>rn Ireland and South Africa) and <str<strong>on</strong>g>the</str<strong>on</strong>g> New York Times<br />

Company. Slim sits <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> board of Philip Morris <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> and is also a trustee of <str<strong>on</strong>g>the</str<strong>on</strong>g> RAND<br />

Corporati<strong>on</strong>.<br />

Envir<strong>on</strong>ment: Slim’s investments in trade infrastructure and support devices leave him with a complex<br />

carb<strong>on</strong> footprint. In July 2010, Slim hosted a meeting of <str<strong>on</strong>g>the</str<strong>on</strong>g> United Nati<strong>on</strong>s’ Energy and Climate Change<br />

Advisory Group (of which he is a member) in Mexico City. The group seeks to promote public and private<br />

partnerships to increase energy access and efficiency 2 Nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r Impusora del Desarrollo y el Empleo nor<br />

Br<strong>on</strong>co Drilling is found <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index. 4 (The DJSI tracks “<str<strong>on</strong>g>the</str<strong>on</strong>g> financial<br />

performance of <str<strong>on</strong>g>the</str<strong>on</strong>g> leading sustainability-driven companies worldwide.”) Br<strong>on</strong>co Drilling <strong>on</strong>ly scores 57 (<strong>on</strong> a<br />

scale of 1-100) <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Tata Institute of Social Sciences’ ratings of Corporate Social Resp<strong>on</strong>sibility. 5<br />

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— INDIVIDUALS OF UNDUE INFLUENCE —<br />

CHARLES AND DAVID KOCH, USA<br />

$50 BILLION [AS OF NOVEMBER 2011]<br />

Wealth: In 2010, Koch Industries topped $100 billi<strong>on</strong> in sales and now ranks as America’s sec<strong>on</strong>d-largest<br />

private company, behind Cargill (with $109.8 billi<strong>on</strong>). 6 The Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs’ fa<str<strong>on</strong>g>the</str<strong>on</strong>g>r, Fred C. Koch, invented <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

“cracking” method for refining crude oil into gasoline, and <str<strong>on</strong>g>the</str<strong>on</strong>g> family fortune is founded <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> expansi<strong>on</strong> of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> fossil fuels ec<strong>on</strong>omy. S<strong>on</strong>s Charles, David, Frederick and William inherited Koch Industries after <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

fa<str<strong>on</strong>g>the</str<strong>on</strong>g>r, who also founded <str<strong>on</strong>g>the</str<strong>on</strong>g> John Birch Society. Charles and David bought out William and Frederick for<br />

$1.1 billi<strong>on</strong> in 1983. Today, <str<strong>on</strong>g>the</str<strong>on</strong>g> company has stakes in pipelines, refineries, fertilizer, fibers and polymers,<br />

forest and c<strong>on</strong>sumer products, chemical technology, and commodity and financial trading. Koch Industries<br />

employs 70,000 workers in 60 countries. In 2004, <str<strong>on</strong>g>the</str<strong>on</strong>g> company purchased Invista, <str<strong>on</strong>g>the</str<strong>on</strong>g> maker of Lycra and<br />

Coolmax fabric, for $4.2 billi<strong>on</strong>. In 2005, Koch Industries purchased <str<strong>on</strong>g>the</str<strong>on</strong>g> paper and building-supply vendor<br />

Georgia-Pacific for $21 billi<strong>on</strong>. The Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs now profit from <str<strong>on</strong>g>the</str<strong>on</strong>g> sale of every Dixie Cup and every<br />

roll of Brawny kitchen tissue and Quilted Nor<str<strong>on</strong>g>the</str<strong>on</strong>g>rn toilet paper. Each bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r owns 42 percent of <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch<br />

Industries.<br />

The Koch’s Flint Hills Resources subsidiary owns three refineries that process more than 800,000 barrels of<br />

crude oil daily. Koch operates crude ga<str<strong>on</strong>g>the</str<strong>on</strong>g>ring systems and pipelines across North America as well as cattle<br />

ranches in Kansas, M<strong>on</strong>tana, and Texas with a total of 15,000 head of cattle, a huge source of <str<strong>on</strong>g>the</str<strong>on</strong>g> dangerous<br />

greenhouse gas methane. The company owns a 3 percent stake in <str<strong>on</strong>g>the</str<strong>on</strong>g> Trans Alaska Pipeline System, 4,000<br />

miles of pipelines that carry crude oil, refined petroleum products, natural gas and chemicals across <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

United States, and an 80,000 barrels-per-day refinery in Rotterdam in The Ne<str<strong>on</strong>g>the</str<strong>on</strong>g>rlands. Koch’s numerous<br />

subsidiaries (including its proprietary Market Based Management system) uses its operati<strong>on</strong>al, trading,<br />

transacti<strong>on</strong> and public-sector skills to create l<strong>on</strong>g-term value for its customers. The company has pursued a<br />

strategy of reinvesting about 90 percent of its earnings into acquisiti<strong>on</strong>s and investments (some $32 billi<strong>on</strong><br />

between 2005-2010, including <str<strong>on</strong>g>the</str<strong>on</strong>g> $21 billi<strong>on</strong> purchase of Georgia-Pacific). Expanding its product line, in<br />

2010 Georgia-Pacific agreed to buy oriented strand board manufacturer Grant Forest Products for $400<br />

milli<strong>on</strong>.<br />

Power Networks: Charles and David Koch co-founded <str<strong>on</strong>g>the</str<strong>on</strong>g> Cato Institute (a radical right think tank) and<br />

David (al<strong>on</strong>g with Koch board member Richard Fink) created Americans for Prosperity, a c<strong>on</strong>troversial<br />

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— INDIVIDUALS OF UNDUE INFLUENCE —<br />

Washingt<strong>on</strong>-DC-based political acti<strong>on</strong> committee that has helped fund <str<strong>on</strong>g>the</str<strong>on</strong>g> Tea Party movement. 7 During <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

2010 electi<strong>on</strong>-year, AFP handed out $40 milli<strong>on</strong> to right-wing campaigns. The full extent of <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch’s<br />

lobbying is difficult to assess since, as The New Yorker pointed out in an August 30, 2010 article, <str<strong>on</strong>g>the</str<strong>on</strong>g> Kochs are<br />

known for “creating slippery organizati<strong>on</strong>s with generic-sounding names.” See <str<strong>on</strong>g>the</str<strong>on</strong>g> map of Koch-cash flows<br />

that finance political influences in <str<strong>on</strong>g>the</str<strong>on</strong>g> Kochtopus <strong>on</strong> page 58. The Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs and Koch Industries have<br />

opposed President Obama’s envir<strong>on</strong>mental initiatives and are such fierce prop<strong>on</strong>ents of climate-change denial<br />

that <str<strong>on</strong>g>the</str<strong>on</strong>g>y spent more m<strong>on</strong>ey than Exx<strong>on</strong> to fight climate-stabilizing policies from 2005 to 2008. 8 9 They<br />

c<strong>on</strong>tributed several milli<strong>on</strong> dollars to California’s Propositi<strong>on</strong> 23 campaign in <str<strong>on</strong>g>the</str<strong>on</strong>g> November 2010 electi<strong>on</strong> in<br />

a failed attempt to overturn <str<strong>on</strong>g>the</str<strong>on</strong>g> state’s “Global Warming Soluti<strong>on</strong>s Act of 2006.” Koch Industries is not <strong>on</strong><br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index. 10<br />

Envir<strong>on</strong>ment: After an August 2010 profile of <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs in The New Yorker, envir<strong>on</strong>mental groups<br />

have begun a name-and-shame campaign against <str<strong>on</strong>g>the</str<strong>on</strong>g>m 11 and have called for a boycott of Koch Industry<br />

products including Zee paper towels, Lycra® fiber, Tefl<strong>on</strong> and Stainmaster carpets. As <str<strong>on</strong>g>the</str<strong>on</strong>g> most influential<br />

fossil fuels family in <str<strong>on</strong>g>the</str<strong>on</strong>g> country that is blocking global progress <strong>on</strong> climate acti<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> Kochs have arguably<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> largest burden of resp<strong>on</strong>sibilities for a deepening climate crisis. The Kochs’ capture of U.S. policy–making<br />

processes act as a sort of full spectrum dominati<strong>on</strong> of democracy.<br />

EIKE BATISTA, BRAZIL<br />

$30 BILLION [AS OF MARCH 2011]<br />

Wealth: Heir to a minor fortune, Eike Batista’s early wealth came from <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>structi<strong>on</strong> of railways and ports<br />

to ship ir<strong>on</strong> ore to Asia, a carb<strong>on</strong> intensive effort due to its inherently resource rich, l<strong>on</strong>g distance, and heavily<br />

polluting processes. He got his start mining for gold in <str<strong>on</strong>g>the</str<strong>on</strong>g> Amaz<strong>on</strong>, an activity that has been a device of<br />

deforestati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> planet’s largest carb<strong>on</strong> storage ecosystem. His is now <str<strong>on</strong>g>the</str<strong>on</strong>g> founder and CEO of EBX<br />

Group, a c<strong>on</strong>stellati<strong>on</strong> of companies involved in oil and natural gas, coal mining, electricity producti<strong>on</strong>, and<br />

shipbuilding. In 2007, Batista went <strong>on</strong> to found OGX, an oil and gas explorati<strong>on</strong> company. His shipping<br />

business, OSX, 12 is Brazil’s largest private-sector explorati<strong>on</strong> and producti<strong>on</strong> company.<br />

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— INDIVIDUALS OF UNDUE INFLUENCE —<br />

Power Networks: Batista was an ally and large campaign d<strong>on</strong>or to Brazil’s ex-President Lula. Batista current<br />

enjoys a similar relati<strong>on</strong>ship with Brazil’s new leader, President Dilma Roussef. Both leaders vigorously<br />

pursue industrial growth policies that make Brazil <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s biggest emitters.<br />

Envir<strong>on</strong>ment: Batista has worked hard to green-wash his enterprises, but with limited success. EBX is<br />

absent from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index. 13 Having failed to obtain envir<strong>on</strong>mental clearance for a<br />

shipbuilding plant in Santa Catarina, EBX is now pursuing a license for Rio de Janeiro. 14 In what has been<br />

called “<strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> greatest achievements in envir<strong>on</strong>mental recovery in Brazil,” Batista’s EBX Group (in<br />

partnership with public instituti<strong>on</strong>s) undertook a 30-m<strong>on</strong>th Lagoa Limpa (Clean Lago<strong>on</strong>) project to restore<br />

Lagoa Rodrigo de Freitas, <strong>on</strong>e of Rio de Janeiro’s best-loved landmarks. 15<br />

LI KA-SHING, HONG KONG<br />

$26 BILLION [AS OF MARCH 2011]<br />

Wealth: Li Ka-shing owns stock in Cheung K<strong>on</strong>g and Hutchis<strong>on</strong> Whampoa (HW). Through HW, Li is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

world’s largest operator of c<strong>on</strong>tainer terminals in what is now <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong> through which almost all<br />

manufacturing originates for exporting goods across oceans. He is also <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s largest health and beauty<br />

retailer (by number of outlets), a real estate developer and a major supplier of electricity to H<strong>on</strong>g K<strong>on</strong>g. Li is<br />

a majority shareholder in Husky Energy, a Canadian oil firm that recently announced its third oil discovery in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> South China Sea. 16 Husky Energy is in a joint-venture with BP to develop <str<strong>on</strong>g>the</str<strong>on</strong>g> Sunrise Oil Sands Project in<br />

Alberta, Canada (which is proceeding despite BP shareholder c<strong>on</strong>cerns over its envir<strong>on</strong>mental impact). 17<br />

Power Networks: Li’s powerful allies include Lee Shau Kee of <str<strong>on</strong>g>the</str<strong>on</strong>g> Henders<strong>on</strong> Land Development, New<br />

World Development’s Cheng Yu-tung, casino and property magnate Stanley Ho, <str<strong>on</strong>g>the</str<strong>on</strong>g> Kwok family of Sun<br />

Hung Kai Properties, and Henry Fok Ying-tung. Li is regarded as <strong>on</strong>e of Asia’s most generous<br />

philanthropists, having d<strong>on</strong>ated more than $1.4 billi<strong>on</strong> to charity and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r various causes. 18 Beneficiaries<br />

include <str<strong>on</strong>g>the</str<strong>on</strong>g> University of California at Berkeley, which received $40 milli<strong>on</strong> from Li to build <str<strong>on</strong>g>the</str<strong>on</strong>g> Li Ka-shing<br />

Center for Biomedical and Health Sciences, a new biosciences facility set to be completed in 2011. Li also has<br />

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— INDIVIDUALS OF UNDUE INFLUENCE —<br />

given UC Berkeley’s rival, Stanford University, $90 milli<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> Li Ka-shing Center for Learning and<br />

Knowledge, part of Stanford’s School of Medicine.<br />

Envir<strong>on</strong>ment: Nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r Hutchis<strong>on</strong> Whampoa nor Husky Energy are listed <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability<br />

Index. 19<br />

MUKESH AMBANI, INDIA<br />

$22.6 BILLION [AS OF OCTOBER 2011]<br />

Wealth: Mukesh Ambani owns Reliance Industries, India’s largest private-sector c<strong>on</strong>glomerate. 20 His fa<str<strong>on</strong>g>the</str<strong>on</strong>g>r,<br />

Dhirubhai H. Ambani, was founder and l<strong>on</strong>gtime head of Reliance. After joining Reliance in 1981, Mukesh<br />

initiated Reliance’s “backward integrati<strong>on</strong>” strategy, expanding <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s acquisiti<strong>on</strong>s bey<strong>on</strong>d textiles<br />

into polyester fibers and <str<strong>on</strong>g>the</str<strong>on</strong>g>n fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r “backwards” to c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> petrochemical supplies used to make its<br />

syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic fabrics. Reliance has expanded into petrochemical producti<strong>on</strong>, petroleum-refining and oil and gas<br />

explorati<strong>on</strong>. Ambani built <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s largest petroleum refinery at Jamnagar, India, with a current capacity of<br />

1.2 milli<strong>on</strong> barrels-per-day. The Jamnagar site combines petrochemical operati<strong>on</strong>s with power generati<strong>on</strong> that<br />

supplies a large port and related infrastructure. 21<br />

Power Networks: Ambani enjoys tight links with Indian government and U.S. government officials. He has<br />

met several times with President Obama, most recently in November 2010, when Obama and GE CEO<br />

Jeffrey Immelt announced a $750 milli<strong>on</strong> deal in which Reliance agreed to purchase turbines manufactured by<br />

GE. (Immelt was subsequently named Obama’s chief ec<strong>on</strong>omic adviser.)<br />

Ambani chairs <str<strong>on</strong>g>the</str<strong>on</strong>g> board of Indian Institutes of Management, India’s leading graduate business schools,<br />

which c<strong>on</strong>duct research and provide c<strong>on</strong>sultancy services in <str<strong>on</strong>g>the</str<strong>on</strong>g> field of management to various sectors of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Indian ec<strong>on</strong>omy.<br />

Envir<strong>on</strong>ment: Ambani owns a c<strong>on</strong>trolling interest in Canadian oil sands company Value Creati<strong>on</strong> Inc. (VCI),<br />

which has a partnership with BP Canada. 22 According to <str<strong>on</strong>g>the</str<strong>on</strong>g> VCI website: “VCI is resp<strong>on</strong>sible for preparing<br />

detailed baseline envir<strong>on</strong>mental studies to find out and understand <str<strong>on</strong>g>the</str<strong>on</strong>g> potential impacts of <str<strong>on</strong>g>the</str<strong>on</strong>g> Pilot Project<br />

<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment. Assessments will be completed in several key areas and submitted to Alberta<br />

Envir<strong>on</strong>ment as part of <str<strong>on</strong>g>the</str<strong>on</strong>g> approval process for <str<strong>on</strong>g>the</str<strong>on</strong>g> Pilot Project. Once <str<strong>on</strong>g>the</str<strong>on</strong>g> Pilot Project is approved, follow<br />

up envir<strong>on</strong>mental evaluati<strong>on</strong> will be c<strong>on</strong>ducted. VCI is committed to minimizing surface disturbance and will<br />

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— INDIVIDUALS OF UNDUE INFLUENCE —<br />

attempt to avoid envir<strong>on</strong>mentally and culturally sensitive areas where possible.” Key envir<strong>on</strong>mental<br />

c<strong>on</strong>siderati<strong>on</strong>s are: air quality, groundwater and surface water, fish and aquatic resources, soils and terrain,<br />

vegetati<strong>on</strong> and wetlands, wildlife and biodiversity, historical resources and reclamati<strong>on</strong>. 23<br />

Even by <str<strong>on</strong>g>the</str<strong>on</strong>g> standards of global billi<strong>on</strong>aires, Ambani’s home in Bombay is a testim<strong>on</strong>y to extravagance. Rising<br />

27 stories high, commanding 398,000 square feet, with a six-story parking garage and three helipads, it<br />

resembles what The New York Times called “a Blade Runner-meets-Babyl<strong>on</strong> edifice.” 24 Its c<strong>on</strong>structi<strong>on</strong> cost is<br />

estimated at over $1 billi<strong>on</strong>, making it <str<strong>on</strong>g>the</str<strong>on</strong>g> most expensive private home in modern history (rivaled <strong>on</strong>ly by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

palatial homes of royalty). Nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r Reliance Industries nor VCI are <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index. 26<br />

SHELDON ADELSON, USA<br />

$21.5 BILLION AS OF SEPTEMBER 2011<br />

Wealth: Sheld<strong>on</strong> Adels<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> s<strong>on</strong> of a cab driver who started out selling newspapers at <str<strong>on</strong>g>the</str<strong>on</strong>g> age of 12, is now<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> world’s biggest casino developer. Adels<strong>on</strong> is chair and Chief Executive Officer of <str<strong>on</strong>g>the</str<strong>on</strong>g> Las Vegas Sands<br />

Corp, with casino and hotel properties in Las Vegas, Macau and Singapore. The 78-year-old developer is<br />

currently <str<strong>on</strong>g>the</str<strong>on</strong>g> eighth-richest individual in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s, Adels<strong>on</strong> created <str<strong>on</strong>g>the</str<strong>on</strong>g> computer expo event<br />

known as Comdex and sold it to Japan’s Softbank for $862 milli<strong>on</strong> 1995. In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1990s his company built <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

$1.5 billi<strong>on</strong> Venetian Resort Hotel Casino and <str<strong>on</strong>g>the</str<strong>on</strong>g> 1.2-milli<strong>on</strong>-square-foot Sands C<strong>on</strong>venti<strong>on</strong> Center. In 2008,<br />

he opened $1.9 billi<strong>on</strong> Palazzo Resort-Hotel-Casino in Las Vegas and, in April 2010, he cut <str<strong>on</strong>g>the</str<strong>on</strong>g> ribb<strong>on</strong> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

$5.7 billi<strong>on</strong> Marina Bay Sands in Singapore. His company is currently <str<strong>on</strong>g>the</str<strong>on</strong>g> subject of a Securities Exchange<br />

Commissi<strong>on</strong> investigati<strong>on</strong> involving allegati<strong>on</strong>s of bribery in his Asia operati<strong>on</strong>s. 27<br />

Power Networks: Adels<strong>on</strong> is <str<strong>on</strong>g>the</str<strong>on</strong>g> head of <str<strong>on</strong>g>the</str<strong>on</strong>g> Las Vegas Sands Corporati<strong>on</strong>, a casino-resort based in Nevada.<br />

Adels<strong>on</strong> also founded and owns <str<strong>on</strong>g>the</str<strong>on</strong>g> media company that publishes Israel HaYom (Israel Today), a free daily<br />

tabloid that is <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s largest-circulati<strong>on</strong> daily. 28 The newspaper is str<strong>on</strong>gly rightwing, opposes a twostate<br />

soluti<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> Israel-Palestinian c<strong>on</strong>flict, and has criticized Israeli Prime Minister Binyamin Netanyahu<br />

as being insufficiently c<strong>on</strong>servative and even “pro-Palestinian.” Since its founding in 2007, Israel HaYom has<br />

had a major impact in pushing Netanyahu to <str<strong>on</strong>g>the</str<strong>on</strong>g> right.<br />

Adels<strong>on</strong> has given tens of milli<strong>on</strong>s of dollars to hardcore c<strong>on</strong>servative U.S. groups that strenuously oppose<br />

climate policies and reducing <str<strong>on</strong>g>the</str<strong>on</strong>g> use of fossil fuels, including Freedom’s Watch, Freedom Works, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

American Israel Public Affairs Committee, and American Soluti<strong>on</strong>s for Winning <str<strong>on</strong>g>the</str<strong>on</strong>g> Future. Adels<strong>on</strong>’s<br />

c<strong>on</strong>tributi<strong>on</strong>s to George W. Bush’s re-electi<strong>on</strong> campaign were lavish enough to see him qualify as a Bush<br />

Pi<strong>on</strong>eer. He has been fiercely anti-uni<strong>on</strong> in his dealings with workers at <str<strong>on</strong>g>the</str<strong>on</strong>g> Sands Hotel in Las Vegas. 29<br />

- 13 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

Envir<strong>on</strong>ment: Las Vegas Sands Corp.’s CSR Hub envir<strong>on</strong>mental rating is 37. One of <str<strong>on</strong>g>the</str<strong>on</strong>g> Sands’ properties,<br />

The Palazzo Las Vegas, was silver-certified by <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. Green Building Council’s Leadership in Energy and<br />

Envir<strong>on</strong>mental Design certificati<strong>on</strong> program. “From <str<strong>on</strong>g>the</str<strong>on</strong>g> beginning, we were determined to create Las Vegas’<br />

first truly eco-friendly property, and we are extremely proud to have achieved it and be recognized for it,”<br />

said Adels<strong>on</strong> in 2008. 30 The Las Vegas Sands Corporati<strong>on</strong> is not <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

As <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s wealthiest individuals who has bankrolled <str<strong>on</strong>g>the</str<strong>on</strong>g> political t<strong>on</strong>e of “drill, baby, drill,” and<br />

“bundled” campaign c<strong>on</strong>tributi<strong>on</strong>s for members of C<strong>on</strong>gress who have separated c<strong>on</strong>servati<strong>on</strong>” from<br />

“c<strong>on</strong>servative,” Adels<strong>on</strong> is inextricably involved in blocking soluti<strong>on</strong>s.<br />

KWOK FAMILY, HONG KONG<br />

$20 BILLION [AS OF MARCH 2011]<br />

Wealth: Walter Kwok Ping-sheung and his bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs Thomas and Raym<strong>on</strong>d inherited Sun Hung Kai<br />

Properties, H<strong>on</strong>g K<strong>on</strong>g’s largest real estate developer, following <str<strong>on</strong>g>the</str<strong>on</strong>g>ir fa<str<strong>on</strong>g>the</str<strong>on</strong>g>r’s death in 1990. Walter is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

chair and CEO of that organizati<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs share c<strong>on</strong>trol of <str<strong>on</strong>g>the</str<strong>on</strong>g> firm. The Kwok bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs are <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

third-wealthiest people in H<strong>on</strong>g K<strong>on</strong>g and Greater China Regi<strong>on</strong>, just after Li Ka Shing and Lee Shau Kee.<br />

Sun Hung Kai Properties (SHKP) is now <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> largest property companies in Asia, and <str<strong>on</strong>g>the</str<strong>on</strong>g> largest realestate<br />

developer in H<strong>on</strong>g K<strong>on</strong>g by market capitalizati<strong>on</strong>. It specializes in residential and commercial projects<br />

for sale and investment. It employs 27,000 people. SHKP turned over HK$25.6 billi<strong>on</strong> in 2006, with an<br />

operating profit of HK$12.3 billi<strong>on</strong>. The majority (65%) of its revenues and operating profit (88%) was<br />

derived from property sales and rental.<br />

SHKP and Cheung K<strong>on</strong>g Holdings, Ltd. (H<strong>on</strong>g K<strong>on</strong>g’s two largest developers) currently dominate <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

development of new private homes in H<strong>on</strong>g K<strong>on</strong>g, accounting for 70% of <str<strong>on</strong>g>the</str<strong>on</strong>g> market in 2010, up from<br />

around half of that in 2003. In July 2010, <str<strong>on</strong>g>the</str<strong>on</strong>g> two firms sold more than HK$11 billi<strong>on</strong> ($1.42 billi<strong>on</strong>) worth of<br />

properties in a single record-setting weekend. 31<br />

Power Networks: Sun Hung Kai Properties has been criticized for achieving its growth by c<strong>on</strong>spiring with<br />

government officials to aucti<strong>on</strong> public land in such expensively large blocks that small- and mid-sized firms<br />

are squeezed out of <str<strong>on</strong>g>the</str<strong>on</strong>g> bidding process. 32<br />

Envir<strong>on</strong>ment: Sun Hung Kai Properties (SHKP) does not appear <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index. 33<br />

N<strong>on</strong>e<str<strong>on</strong>g>the</str<strong>on</strong>g>less, Sun Hung Kai Properties proudly boasts that it has w<strong>on</strong> several awards for envir<strong>on</strong>mental<br />

excellence. 34<br />

- 14 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

LAKSHMI MITTAL, INDIA<br />

$19.2 BILLION [AS OF OCTOBER 2011]<br />

Wealth: Lakshmi Mittal is chair and CEO of ArcelorMittal, <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s largest steel-maker, <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />

energy-intensive, greenhouse gas emitting industries. ArcelorMittal <str<strong>on</strong>g>the</str<strong>on</strong>g> market leader for steel used for<br />

automobiles, c<strong>on</strong>structi<strong>on</strong>, household appliances and packaging. Headquartered in Luxembourg,<br />

ArcelorMittal ranks 90th <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> 2011 Forbes list of largest public companies and is widely recognized as a<br />

leader in restructuring <str<strong>on</strong>g>the</str<strong>on</strong>g> global steel industry towards a more c<strong>on</strong>solidated model. He also has champi<strong>on</strong>ed<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> development of integrated mini-mills and <str<strong>on</strong>g>the</str<strong>on</strong>g> use of direct-reduced-ir<strong>on</strong> as a scrap substitute for<br />

steelmaking. In 2004, Mittal was presented with Fortune magazine’s European Businessman of <str<strong>on</strong>g>the</str<strong>on</strong>g> Year<br />

Award. 35<br />

Power Networks: Mittal is a director at European Aer<strong>on</strong>autic Defense and Space Co. (a leading defense and<br />

military c<strong>on</strong>tractor worldwide), Goldman Sachs Group, and ICICI Bank Limited of Mumbai. He is also a<br />

member of Kazakhstan’s Foreign Investment Council, South Africa’s <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Investment Council,<br />

Ukraine’s Investors’ Council to <str<strong>on</strong>g>the</str<strong>on</strong>g> Cabinet of Ministers, <str<strong>on</strong>g>the</str<strong>on</strong>g> World Ec<strong>on</strong>omic <str<strong>on</strong>g>Forum</str<strong>on</strong>g>’s <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g><br />

Business Council, <str<strong>on</strong>g>the</str<strong>on</strong>g> World Steel Associati<strong>on</strong>’s Executive Committee and Mozambique’s Presidential<br />

<str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Advisory Board. He also sits <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Advisory Board of <str<strong>on</strong>g>the</str<strong>on</strong>g> Kellogg School of Management in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> United States.<br />

Envir<strong>on</strong>ment: ArcelorMittal’s mine workers have accused Mittal of cashing in <strong>on</strong> slave labor c<strong>on</strong>diti<strong>on</strong>s after<br />

scores of miners were killed in accidents in his Kazakh mines (at least 90 have been killed since 2004). 36 A<br />

group of 10 envir<strong>on</strong>mental organizati<strong>on</strong>s complained to <str<strong>on</strong>g>the</str<strong>on</strong>g> Johannesburg Stock Exchange in December<br />

2010 that nine companies <strong>on</strong> its 2010 socially resp<strong>on</strong>sible investing (SRI) index were “serious and serial<br />

offenders” of envir<strong>on</strong>mental laws. The companies <str<strong>on</strong>g>the</str<strong>on</strong>g>y cited were Evraz Highveld Steel & Vanadium, Exxaro<br />

Resources, Arcelor Mittal, Pretoria Portland Cement, DRD Gold, Gold Fields, M<strong>on</strong>di, Sappi and Sasol. 37<br />

Arcelor Mittal featured three years in a row in reports for n<strong>on</strong>-compliance at its Vereeniging, Vanderbijlpark,<br />

Newcastle and Saldanha plants for c<strong>on</strong>traventi<strong>on</strong>s ranging from <str<strong>on</strong>g>the</str<strong>on</strong>g> release of particular emissi<strong>on</strong>s to n<strong>on</strong>compliance<br />

with waste and air permits. Most of <str<strong>on</strong>g>the</str<strong>on</strong>g>se incidents c<strong>on</strong>stituted criminal offences under South<br />

African envir<strong>on</strong>mental law. 38<br />

ArcelorMittal is listed in <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index for France. 39<br />

- 15 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

LEE SHAU KEE, HONG KONG<br />

$19 BILLION [AS OF MARCH 2011]<br />

Wealth: Lee Shau Kee is a real estate developer and majority owner of Henders<strong>on</strong> Land Development, a<br />

property c<strong>on</strong>glomerate with interests in properties, hotels, towns, gas, and Internet services throughout<br />

mainland China. Lee is currently <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d-wealthiest pers<strong>on</strong> in H<strong>on</strong>g K<strong>on</strong>g and China, behind Li Ka-Shing.<br />

Lee has major stockholdings in several Chinese companies including PetroChina, China Shenhua Energy and<br />

China Life. He is chairman of H<strong>on</strong>g K<strong>on</strong>g & China Gas, which distributes gas in more than 90 cities. 40<br />

PetroChina Company Limited (“PetroChina”) is China’s largest producer and distributor of oil and gas. As<br />

such, it plays a dominant role in <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s oil and gas industry. In additi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> huge profits it has<br />

amassed inside China, PetroChina’s global profits also make it <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> largest oil companies in <str<strong>on</strong>g>the</str<strong>on</strong>g> world.<br />

Power Networks: Lee Shau Kee is a member of <str<strong>on</strong>g>the</str<strong>on</strong>g> Board of Directors of H<strong>on</strong>g K<strong>on</strong>g Ferry Ltd. and The<br />

Bank of East Asia. He is a major shareholder in Nine Drag<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g> paper manufacturer founded by fellow<br />

billi<strong>on</strong>aire Yan Cheung. Lee reportedly has invested heavily in oil stocks. 41<br />

Envir<strong>on</strong>ment: PetroChina, China Shenhua, H<strong>on</strong>g K<strong>on</strong>g and China Gas, and China Life are all absent from<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index. 42 In market value, PetroChina is <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d largest petroleum company<br />

in <str<strong>on</strong>g>the</str<strong>on</strong>g> world after Exx<strong>on</strong>Mobil, according to <str<strong>on</strong>g>the</str<strong>on</strong>g> 2011 Forbes List of Biggest Public Companies.<br />

- 16 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

ALEXEI MORDASHOV, RUSSIA<br />

$18.5 BILLION [AS OF MARCH 2011]<br />

Wealth: Alexei Mordashov was born into a family of mill workers but has risen to become <str<strong>on</strong>g>the</str<strong>on</strong>g> chief<br />

executive and c<strong>on</strong>trolling shareholder of Severstal, a powerful c<strong>on</strong>glomerate that includes Russia’s sec<strong>on</strong>dlargest<br />

steel company, al<strong>on</strong>g with automakers, coal companies, and firms that develop ports and<br />

transportati<strong>on</strong> systems. In <str<strong>on</strong>g>the</str<strong>on</strong>g> 2000s, Severstal purchased several large U.S. steel plants from ailing<br />

steelmakers, including <str<strong>on</strong>g>the</str<strong>on</strong>g> former complexes of Bethlehem Steel and U.S. Steel in Maryland, West Virginia<br />

and Ohio.<br />

Power Networks: Mordashov is a patr<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> arts, including <str<strong>on</strong>g>the</str<strong>on</strong>g> Bolshoi Ballet, <str<strong>on</strong>g>the</str<strong>on</strong>g> Mariinsky Theatre, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Tretyakov Gallery, <str<strong>on</strong>g>the</str<strong>on</strong>g> Moscow <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Film Festival and <str<strong>on</strong>g>the</str<strong>on</strong>g> Russian Museum. He also sp<strong>on</strong>sors more<br />

than 20 pubic sports stadiums, ice rinks, football fields and athletic centers.<br />

Envir<strong>on</strong>ment: In July 2010, Baltimore residents filed suit against Severstal over polluti<strong>on</strong> at its Sparrows<br />

Point steel mill, which has been fined repeatedly in recent years by <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. EPA for polluti<strong>on</strong>. Although<br />

Severstal is not <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index, <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s website boasts a large envir<strong>on</strong>mental<br />

secti<strong>on</strong>. 43 While U.S. steelworkers are aggressively active to advance climate policies via <str<strong>on</strong>g>the</str<strong>on</strong>g>ir uni<strong>on</strong>s, steel<br />

executives’ priorities are profits, which too often make <str<strong>on</strong>g>the</str<strong>on</strong>g>m push for less regulati<strong>on</strong>.<br />

- 17 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

VLADIMIR POTANIN, RUSSIA<br />

$17.8 BILLION [AS OF MARCH 2011]<br />

Wealth: Vladimir Potanin is <str<strong>on</strong>g>the</str<strong>on</strong>g> owner of Interros, a c<strong>on</strong>glomerate with extensive stakes in mining, metals,<br />

energy, finance, retail, real estate and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r sectors in Russia, Europe, Asia and North America. Its Norilsk<br />

Nickel is <strong>on</strong>e of Russia’s largest mining firms and its Prof-Media is Russia’s largest media group, owning<br />

magazines, radio stati<strong>on</strong>s, movie <str<strong>on</strong>g>the</str<strong>on</strong>g>aters and a televisi<strong>on</strong> network that broadcasts Russian versi<strong>on</strong>s of MTV<br />

and VH-1. With fellow billi<strong>on</strong>aire, Mikhail Prokhorov, he built Interros by winning over <str<strong>on</strong>g>the</str<strong>on</strong>g> corporate<br />

customers of two huge Soviet-era banks in 1992. Potanin and Prokhorov later took c<strong>on</strong>trol of metals giant<br />

Norilsk Nickel and <str<strong>on</strong>g>the</str<strong>on</strong>g> Sidanco oil company in c<strong>on</strong>troversial “loans-for-shares” privatizati<strong>on</strong> aucti<strong>on</strong>s. He<br />

split from Prokhorov in early 2007. During Russia’s financial crisis, Potanin has been forced to liquidate some<br />

of his assets, like his stake in Polyus Gold.<br />

Power Networks: Potanin has variously served as a Deputy Prime Minister of <str<strong>on</strong>g>the</str<strong>on</strong>g> Ec<strong>on</strong>omy and as partner<br />

to George Soros in <str<strong>on</strong>g>the</str<strong>on</strong>g> telecom m<strong>on</strong>opoly Svyazinvest. 44 Since 2003, Potanin has headed <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al<br />

Council <strong>on</strong> Corporate Governance (NSKU), whose main goal is to improve legislative regulati<strong>on</strong>s in Russia<br />

and to introduce professi<strong>on</strong>al and ethical standards of corporate governance into <str<strong>on</strong>g>the</str<strong>on</strong>g> operati<strong>on</strong>s of Russian<br />

companies to boost <str<strong>on</strong>g>the</str<strong>on</strong>g> reputati<strong>on</strong> and investment appeal of Russian business. He is a member of <str<strong>on</strong>g>the</str<strong>on</strong>g> Board<br />

of Trustees of <str<strong>on</strong>g>the</str<strong>on</strong>g> Solom<strong>on</strong> R. Guggenheim Foundati<strong>on</strong> in New York, Chair of <str<strong>on</strong>g>the</str<strong>on</strong>g> Board of Trustees of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

State Hermitage (Russia’s most renowned art museum), and a member of <str<strong>on</strong>g>the</str<strong>on</strong>g> Public Chamber of Russia. In<br />

2007, <str<strong>on</strong>g>the</str<strong>on</strong>g> French Ministry of Culture and Communicati<strong>on</strong>s named him an Officer of <str<strong>on</strong>g>the</str<strong>on</strong>g> Order of Arts and<br />

Literature for his cultural c<strong>on</strong>tributi<strong>on</strong>s. In 2010, he became <str<strong>on</strong>g>the</str<strong>on</strong>g> first Russian billi<strong>on</strong>aire to announce his<br />

decisi<strong>on</strong> to transfer his fortune to charity ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than to his children.<br />

Envir<strong>on</strong>ment: In 2007, a single Norilsk Nickel smelter in Siberia was reportedly emitting 900,000 t<strong>on</strong>s of<br />

sulfur dioxide annually. All three of Potanin’s smelters near <str<strong>on</strong>g>the</str<strong>on</strong>g> namesake city of Norilsk were producing<br />

almost 2 milli<strong>on</strong> t<strong>on</strong>s of SO2—a figure that had fallen by <strong>on</strong>ly 16% since Soviet rule. These plants produce<br />

<strong>on</strong>e-fifth of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s supply of nickel, nearly half of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s palladium and <str<strong>on</strong>g>the</str<strong>on</strong>g> planet’s largest clouds of<br />

acid rain. Greenpeace Russia said this polluti<strong>on</strong> was resp<strong>on</strong>sible for a 19-mile dead z<strong>on</strong>e around <str<strong>on</strong>g>the</str<strong>on</strong>g> city and<br />

that <str<strong>on</strong>g>the</str<strong>on</strong>g> acid rain had spread across an area equal to <str<strong>on</strong>g>the</str<strong>on</strong>g> size of Germany. 46 According to Richard Fuller of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Blacksmith Institute, <str<strong>on</strong>g>the</str<strong>on</strong>g> city of Norilsk experiences so much air polluti<strong>on</strong> that “<str<strong>on</strong>g>the</str<strong>on</strong>g>re is no living piece of<br />

grass or shrub within 30 kilometers [19 miles] of <str<strong>on</strong>g>the</str<strong>on</strong>g> city.” 47<br />

- 18 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

In November 2009, Norway’s finance ministry announced that an ethics committee had recommended<br />

dropping Norilsk Nickel’s stocks from <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s pensi<strong>on</strong> fund due to evidence that its operati<strong>on</strong>s were<br />

causing health problems am<strong>on</strong>g people living near <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s Siberian smelters. The ministry said that<br />

Norilsk’s activities had produced unacceptable levels of sulfur dioxide and heavy metals in <str<strong>on</strong>g>the</str<strong>on</strong>g> Taimyr<br />

Peninsula. Norilsk said it had taken measures to ameliorate envir<strong>on</strong>mental damage. 48 Norilsk Nickel does not<br />

appear <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

According to its website, Norilsk Nickel is dedicated to: <str<strong>on</strong>g>the</str<strong>on</strong>g> gradual reducti<strong>on</strong> of sulfur dioxide and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

emissi<strong>on</strong>s; <str<strong>on</strong>g>the</str<strong>on</strong>g> reducti<strong>on</strong> of solid waste; reduced emissi<strong>on</strong>s of water-borne pollutants into rivers, lakes and sea;<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>structi<strong>on</strong> of “green” waste-disposal facilities. 49<br />

ALISHER USMANOV, RUSSIA/UZBEKISTAN<br />

$17.7 BILLION [AS OF NOVEMBER 2011]<br />

Wealth: Alisher Usmanov, <str<strong>on</strong>g>the</str<strong>on</strong>g> fifth-richest man in Russia, is <str<strong>on</strong>g>the</str<strong>on</strong>g> lead owner of Metalloinvest, <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s<br />

biggest ir<strong>on</strong> ore producer. Metalloinvest, which was founded to manage <str<strong>on</strong>g>the</str<strong>on</strong>g> metals interests of <str<strong>on</strong>g>the</str<strong>on</strong>g> stateowned<br />

natural gas firm Gazprom, owns a wide range of Russian metal and mining businesses including<br />

Mikhalovsky GOK, Moldavia Metal, Ural Steel, Ormeto-YUMZ, Olenegorsk ir<strong>on</strong>-ore company, pig-ir<strong>on</strong><br />

company Tulachermet, <str<strong>on</strong>g>the</str<strong>on</strong>g> Oskol electro-metallurgical plants and <str<strong>on</strong>g>the</str<strong>on</strong>g> Lebedinski mining-processing<br />

combines. His combined holdings make him <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> top 10 steelmakers in Russia.<br />

Usmanov is <str<strong>on</strong>g>the</str<strong>on</strong>g> sole owner of Cyprus-registered Gallagher Holdings, a global c<strong>on</strong>glomerate with investments<br />

in mining and steel, technology, oil and gas, media and pharmaceuticals. Since 2006,Gallagher Holdings has<br />

acquired stakes in <str<strong>on</strong>g>the</str<strong>on</strong>g> Australia-based mining companies, Medusa, Mt. Gibs<strong>on</strong> and Aztec Resources. He is<br />

also <str<strong>on</strong>g>the</str<strong>on</strong>g> largest shareholder in L<strong>on</strong>d<strong>on</strong>-listed Nautilus Minerals (which is prospecting undersea gold and<br />

copper deposits off Papua New Guinea) and owns (through Gallagher Holdings) an interest in Australia’s<br />

Strike Resources, which is currently mining a world-class ir<strong>on</strong> ore deposit in Peru.<br />

Power Networks: Usmanov is <str<strong>on</strong>g>the</str<strong>on</strong>g> publisher of Kommersant, Russia’s leading business-oriented newspaper,<br />

which is well-positi<strong>on</strong>ed to shape <str<strong>on</strong>g>the</str<strong>on</strong>g> opini<strong>on</strong>s of Russian thought-leaders. He owns 59 percent of<br />

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— INDIVIDUALS OF UNDUE INFLUENCE —<br />

Telecominvest and is <str<strong>on</strong>g>the</str<strong>on</strong>g> head of MegaF<strong>on</strong>, Russia’s third-largest mobile ph<strong>on</strong>e company. Usmanov’s Digital<br />

Sky Technologies was an early investor in Facebook, Zynga and Group<strong>on</strong> and Usmanov still owns 2 percent<br />

of Facebook’s shares. He is also a co-owner of <str<strong>on</strong>g>the</str<strong>on</strong>g> TV media holding company that includes a sports channel,<br />

a music channel, and 33 regi<strong>on</strong>al TV broadcasting stati<strong>on</strong>s. He owns <str<strong>on</strong>g>the</str<strong>on</strong>g> Sekret Firmy Publishing House, as<br />

well as <str<strong>on</strong>g>the</str<strong>on</strong>g> Internet website Livejournal.com, <str<strong>on</strong>g>the</str<strong>on</strong>g> Internet newspaper Gazeta.ru, and several plus popular web<br />

portals, including Mail.ru, Odnoklassniki.ru, and Vk<strong>on</strong>takte.ru.<br />

Usmanov’s c<strong>on</strong>trol over Gazprominvestholdings, <str<strong>on</strong>g>the</str<strong>on</strong>g> investment holding subsidiary of Gazprom, Russia’s<br />

nati<strong>on</strong>al gas company, assures his extremely tight links to <str<strong>on</strong>g>the</str<strong>on</strong>g> Kremlin. Usmanov’s empire has been buoyed<br />

by government funds. In 2009, <str<strong>on</strong>g>the</str<strong>on</strong>g> state-c<strong>on</strong>trolled bank VTB gave Metalloinvest a $2 billi<strong>on</strong> line of credit<br />

(with half of <str<strong>on</strong>g>the</str<strong>on</strong>g> amount guaranteed by <str<strong>on</strong>g>the</str<strong>on</strong>g> state). Usmanov is <str<strong>on</strong>g>the</str<strong>on</strong>g> president of <str<strong>on</strong>g>the</str<strong>on</strong>g> FIE, <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al<br />

governing body of fencing and is <str<strong>on</strong>g>the</str<strong>on</strong>g> lead shareholder in L<strong>on</strong>d<strong>on</strong>’s Arsenal Football Club.<br />

Envir<strong>on</strong>ment: In 2005, Metalloinvest introduced a Direct Reduced Ir<strong>on</strong> process that promised “extra clean<br />

steel with minimum envir<strong>on</strong>mental damage” in hopes of helping Russia meet its emissi<strong>on</strong>-reducing goals<br />

under <str<strong>on</strong>g>the</str<strong>on</strong>g> Kyoto Protocol. 50 Metalloinvest and Anglo American have partnered with Nautilus Minerals to<br />

open <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s first deep-sea-mine. The project, set to begin operati<strong>on</strong> in 2013, will search for gold, copper<br />

and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r “seafloor resources” in <str<strong>on</strong>g>the</str<strong>on</strong>g> waters off Papua New Guinea. 51 Metalloinvest, Digital Sky,<br />

Telecominvest and MegaF<strong>on</strong> are all absent from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index and have no ratings <strong>on</strong><br />

CSR Hub.<br />

GERMAN LARREA MOTA VELASCO & FAMILY, MEXICO<br />

$16 BILLION [AS OF MARCH 2011]<br />

Wealth: German Larrea Mota Velasco is <str<strong>on</strong>g>the</str<strong>on</strong>g> chair and chief executive of Grupo Mexico, <str<strong>on</strong>g>the</str<strong>on</strong>g> largest mining<br />

corporati<strong>on</strong> in Mexico and <str<strong>on</strong>g>the</str<strong>on</strong>g> third-largest copper producer in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Grupo Mexico also includes<br />

Ferromex, Mexico’s largest railroad company, Sou<str<strong>on</strong>g>the</str<strong>on</strong>g>rn Copper and <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. mining subsidiary ASARCO.<br />

Power Networks: Larrea has a tight relati<strong>on</strong>ship with governments, both past and present. In 1989, <str<strong>on</strong>g>the</str<strong>on</strong>g>n-<br />

President Carlos Salinas gave Larrea a swee<str<strong>on</strong>g>the</str<strong>on</strong>g>art deal allowing him to “privatize” <str<strong>on</strong>g>the</str<strong>on</strong>g> state-owned Cananea<br />

mine at <strong>on</strong>ly <strong>on</strong>e-fourth of its assessed value.<br />

- 20 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

Envir<strong>on</strong>ment: Since it was privatized, Grupo Mexico’s mines have seen frequent labor c<strong>on</strong>flicts with<br />

workers. In February 2007, 65 miners were killed in an explosi<strong>on</strong> at a Grupo mine—after Grupo had ignored<br />

worker warnings of unsafe c<strong>on</strong>diti<strong>on</strong>s for m<strong>on</strong>ths. Workers at Grupo Mexico’s Cananea mine, <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

largest open-pit copper mines in Mexico, have been <strong>on</strong> strike since July 2007. In July 2007, 1,300 workers at<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> company’s Mineros copper mine walked off <str<strong>on</strong>g>the</str<strong>on</strong>g>ir jobs to protest safety standards. 52 In September 2010,<br />

Grupo Mexico announced it would unilaterally aband<strong>on</strong> its labor agreements under <str<strong>on</strong>g>the</str<strong>on</strong>g> force majeure (“greater<br />

force”) argument in resp<strong>on</strong>se to strike acti<strong>on</strong>s at <str<strong>on</strong>g>the</str<strong>on</strong>g> La Caridad smelter and refinery complex where<br />

members of <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al Uni<strong>on</strong> of Mine and Metals Workers (“Los Mineros”) prevented c<strong>on</strong>tract workers<br />

from crossing <str<strong>on</strong>g>the</str<strong>on</strong>g> strike lines. 53 It was a struggle over this same historic mine that helped spur <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican<br />

Revoluti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> early 1900s.<br />

In additi<strong>on</strong> to mine safety, <str<strong>on</strong>g>the</str<strong>on</strong>g>re have been frequent c<strong>on</strong>troversies over polluti<strong>on</strong> at Larrea’s mines in Mexico<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. In December 2009, Larrea’s U.S. subsidiary, ASARCO, paid $1.8 billi<strong>on</strong> to resolve air and water<br />

polluti<strong>on</strong> allegati<strong>on</strong>s at more than 100 sites in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. The payment marked an end to <str<strong>on</strong>g>the</str<strong>on</strong>g> largest<br />

envir<strong>on</strong>mental-linked bankruptcy in U.S. history. In 2005, ASARCO (originally formed in 1899 as American<br />

Smelting and Refining Co.) filed for Chapter 11 protecti<strong>on</strong> from creditors after <str<strong>on</strong>g>the</str<strong>on</strong>g> EPA and property owners<br />

sought roughly $3 billi<strong>on</strong> in cleanup and compensati<strong>on</strong> for lands polluted by <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s operati<strong>on</strong>s. As of<br />

early 2011, ASARCO was embroiled in a legal battle with <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. EPA over various lawsuits and<br />

countersuits. Nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r Grupo Mexico nor ASARCO appears <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

MIKHAIL FRIDMAN, RUSSIA<br />

$15.1 BILLION [AS OF MARCH 2011]<br />

Wealth: Mikhail Fridman’s Alfa Group (which he shares with fellow billi<strong>on</strong>aires German Khan and Alexei<br />

Kuzmichev) c<strong>on</strong>trols Alfa Bank (Russia’s largest private bank), Alfa Capital, TNK-BP (oil), X5 (<str<strong>on</strong>g>the</str<strong>on</strong>g> country’s<br />

biggest retailer) and several c<strong>on</strong>structi<strong>on</strong> material firms (cement, timber, glass) as well as food-processing<br />

businesses and a supermarket chain. The two are also major holders of tea and sugar processors. Alfa also<br />

owns a large porti<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> Turkish mobile operator Turkcell.<br />

Power Networks: Fridman is <str<strong>on</strong>g>the</str<strong>on</strong>g> Russian representative <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Advisory Board of <str<strong>on</strong>g>the</str<strong>on</strong>g> Council<br />

<strong>on</strong> Foreign Relati<strong>on</strong>s. He is a member of <str<strong>on</strong>g>the</str<strong>on</strong>g> Public Chamber of Russia, a state instituti<strong>on</strong> with 126 members<br />

created in 2005 to analyze draft legislati<strong>on</strong> and m<strong>on</strong>itor <str<strong>on</strong>g>the</str<strong>on</strong>g> activities of <str<strong>on</strong>g>the</str<strong>on</strong>g> Russian Parliament (c<strong>on</strong>sisting of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Federati<strong>on</strong> Council and <str<strong>on</strong>g>the</str<strong>on</strong>g> State Duma) and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r government bodies. He has been an active supporter<br />

of Jewish initiatives in Russia and Europe. In 1996, Friedman was <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> founders of <str<strong>on</strong>g>the</str<strong>on</strong>g> Russian Jewish<br />

C<strong>on</strong>gress and he now sits <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> RJC Presidium. He is a major d<strong>on</strong>or to <str<strong>on</strong>g>the</str<strong>on</strong>g> European Jewish Fund.<br />

- 21 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

In 2005, Fridman was involved in a privatizati<strong>on</strong> scandal after two luxury houses formerly owned by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

government were sold in 2003 for a price significantly below market value in a deal arranged by <str<strong>on</strong>g>the</str<strong>on</strong>g>n-Russian<br />

Prime Minister Mikhail Kasyanov. The mansi<strong>on</strong>s were sold to two companies, <strong>on</strong>e owned by Fridman and<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r owned by Kasyanov.<br />

Alfa Bank has a Luxembourg-registered subsidiary Alfa Finance Holdings (AFH). Shapburg Limited, <strong>on</strong>e of<br />

AFH’s shareholders, is a Luxembourg-registered company that reportedly played a key role in <str<strong>on</strong>g>the</str<strong>on</strong>g> financial<br />

crisis that rocked Iceland. 54<br />

Envir<strong>on</strong>ment: In 2007, Russia’s envir<strong>on</strong>mental agency found violati<strong>on</strong>s by a subsidiary of Fridman’s oil<br />

company, TNK-BP that c<strong>on</strong>trols <str<strong>on</strong>g>the</str<strong>on</strong>g> license for Siberia’s massive Kovykta gas field. Russian media reported<br />

that <str<strong>on</strong>g>the</str<strong>on</strong>g> agency decided to start proceedings to withdraw authorizati<strong>on</strong> for operati<strong>on</strong>s. 55 Partly as a result,<br />

TNK-BP pledged to spend $20 milli<strong>on</strong> <strong>on</strong> envir<strong>on</strong>mental remediati<strong>on</strong> at its Saratov refinery. 56 In March 2011,<br />

TNK-BP was forced to sell <str<strong>on</strong>g>the</str<strong>on</strong>g> Kovykta field to Gazprom, Russia’s state-owned gas company. The Kovykta<br />

field, <strong>on</strong>ce valued at $2 billi<strong>on</strong>, was purchased for $776 milli<strong>on</strong>. 57<br />

In November 2002, <str<strong>on</strong>g>the</str<strong>on</strong>g> oil tanker Prestige, operated by Alfa’s subsidiary Crown Resources, sank off <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Spanish coast, creating a huge oil spill that fouled hundreds of miles of <str<strong>on</strong>g>the</str<strong>on</strong>g> Atlantic coast. (Alfa quickly sold<br />

Crown after this accident.)<br />

Alfa Group and TNK-BP are absent from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index. 58 According to Alfa Group’s<br />

website, its subsidiaries regularly c<strong>on</strong>tribute to nature c<strong>on</strong>servati<strong>on</strong> initiatives including envir<strong>on</strong>mental<br />

campaigns to plant trees and clean up litter. 59<br />

VAGIT ALEKPEROV, RUSSIA<br />

$13.9 BILLION [AS OF MARCH 2011]<br />

Wealth: Vagit Alekperov is a former Caspian Sea oil-rig worker who rose to become a deputy minister in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Soviet oil industry. He currently ranks as <str<strong>on</strong>g>the</str<strong>on</strong>g> eighth-wealthiest pers<strong>on</strong> in Russia. In 1991, <str<strong>on</strong>g>the</str<strong>on</strong>g> dying days of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

USSR, Alekperov let a group of businessmen who took c<strong>on</strong>trol of three large ministry-c<strong>on</strong>trolled oil fields an<br />

set up Lukoil. Now president of Lukoil, Russia’s largest independent energy company, with a 20 percent<br />

stake. The firm’s reserves are sec<strong>on</strong>d <strong>on</strong>ly to Exx<strong>on</strong>Mobil. In 2009, Lukoil w<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> right to drill for oil in<br />

Iraq’s giant Western Qurna-2 fields, site of <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s largest petroleum deposits. In 2000, Lukoil<br />

became <str<strong>on</strong>g>the</str<strong>on</strong>g> first Russian firm to acquire a U.S. company when it purchased Getty Petroleum Marketing and<br />

- 22 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

its chain of 1,300 U.S. gas stati<strong>on</strong>s for $71 milli<strong>on</strong>. 60 On February 28, 2011, Lukoil sold Getty to Cambridge<br />

Petroleum Holding Inc. for an undisclosed sum. 61 Like many of his fellow Russian oligarchs, Alekperov has<br />

also branched out into banking and media.<br />

Power Networks: Alekperov enjoys a tight relati<strong>on</strong>ship with Russian Prime Minister Vladimir Putin. 62<br />

Envir<strong>on</strong>ment: Lukoil was resp<strong>on</strong>sible for <str<strong>on</strong>g>the</str<strong>on</strong>g> largest oil spill in Russian history when a 1994 accident spilled<br />

33.6 milli<strong>on</strong> gall<strong>on</strong>s of crude oil into a fragile Arctic tundra area and a nati<strong>on</strong>al forest near <str<strong>on</strong>g>the</str<strong>on</strong>g> Black Sea.<br />

Russia’s envir<strong>on</strong>mental protecti<strong>on</strong> agency subsequently forced Lukoil to pledge $3 billi<strong>on</strong> to install new safety<br />

technology. 63<br />

Lukoil now features a lengthy envir<strong>on</strong>mental secti<strong>on</strong> <strong>on</strong> its website, which details <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s<br />

implementati<strong>on</strong> of envir<strong>on</strong>mental measures, through <str<strong>on</strong>g>the</str<strong>on</strong>g> year 2010. 64 According to <str<strong>on</strong>g>the</str<strong>on</strong>g> website, Lukoil’s<br />

Corporate Planning C<strong>on</strong>cept was based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Kyoto Protocol. Lukoil c<strong>on</strong>ducted an inventory of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

greenhouse gases it generates and developed a carb<strong>on</strong>-investment portfolio c<strong>on</strong>taining projects designed to<br />

achieve documented reducti<strong>on</strong>s in emissi<strong>on</strong>s. Lukoil is not to be found <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability<br />

Index.<br />

ROMAN ABRAMOVICH, RUSSIA<br />

$13.4 BILLION [AS OF MARCH 2011]<br />

Wealth: Roman Abramovich is <str<strong>on</strong>g>the</str<strong>on</strong>g> co-owner of Russian Aluminum and Evraz, Russia’s sec<strong>on</strong>d-biggest steel<br />

company. Much of <str<strong>on</strong>g>the</str<strong>on</strong>g> rest of his business involvements are extremely murky and little known. Even <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

scale of Russia’s notoriously gangland-style oligarchy, he is known as a shadowy figure. Abramovich has<br />

managed to remain largely unknown until recently. Few people even knew what Abramovich, <strong>on</strong>ce called <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

“stealth oligarch,” looked like. One newspaper offered a reward to <str<strong>on</strong>g>the</str<strong>on</strong>g> first pers<strong>on</strong> to photograph him.<br />

Power Networks: A former ally of oil-and-media billi<strong>on</strong>aire Boris Berezovsky, Abramovich was part of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>n-Russian President Boris Yeltsin’s inner circle. Abramovich partnered with Berezovsky to take over stateowned<br />

oil giant Sibneft—at a fracti<strong>on</strong> of its market value. Berezovsky <strong>on</strong>ce argued that Russia’s oligarchs<br />

might “under extraordinary circumstances, find it acceptable—indeed, necessary—to interfere directly in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

political process.” 65 But while Berezovsky fell from grace and now lives in self-exile in Britain, Abramovich is<br />

now allied with Vladimir Putin’s circle. Abramovich took over Berezovsky’s oil assets and his holdings in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

country’s largest televisi<strong>on</strong> network.<br />

- 23 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

Abramovich been involved in numerous legal struggles and allegati<strong>on</strong>s of illegal c<strong>on</strong>duct. He is protected by<br />

40 bodyguards. After first winning a seat in <str<strong>on</strong>g>the</str<strong>on</strong>g> State Duma, Abramovich became governor of Chukotka, a<br />

positi<strong>on</strong> he held from 2000-2008. 66 Abramovich has spent more than $1.3 billi<strong>on</strong> of his own m<strong>on</strong>ey building<br />

new homes, supermarkets, hotels and cinemas in Chukotka. 67 Critics say his real motives are gaining c<strong>on</strong>trol<br />

over <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>’s natural resources and perhaps greater political aspirati<strong>on</strong>s. Abramovich’s assets are managed<br />

offshore through his investment fund Millhouse Capital, located in Britain, a country that Abramovich seems<br />

to slowly be making his home. 68 Russian soccer fans have called Abramovich unpatriotic for becoming <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

owner of Britain’s renowned Chelsea Football Club.<br />

Envir<strong>on</strong>ment: In Claym<strong>on</strong>t, Delaware, Evraz and its Evraz Claym<strong>on</strong>t Steel subsidiary are facing an<br />

envir<strong>on</strong>mental lawsuit from some 80 residents and business owners. The lawsuit alleges that “envir<strong>on</strong>mental<br />

c<strong>on</strong>taminati<strong>on</strong> unlawfully emanating from (<str<strong>on</strong>g>the</str<strong>on</strong>g> company’s) steel plant” has caused pers<strong>on</strong>al injury and<br />

property damage. Evraz announced August 10, 2010 that it had signed a c<strong>on</strong>sent decree with <str<strong>on</strong>g>the</str<strong>on</strong>g> state’s<br />

envir<strong>on</strong>mental authorities and plans to mitigate and m<strong>on</strong>itor emissi<strong>on</strong>s from <str<strong>on</strong>g>the</str<strong>on</strong>g> steelworks. Residents<br />

claimed that <str<strong>on</strong>g>the</str<strong>on</strong>g> industrial dust from <str<strong>on</strong>g>the</str<strong>on</strong>g> steel plant was potentially hazardous as amounts of mercury, lead,<br />

nickel and manganese had “blanketed <str<strong>on</strong>g>the</str<strong>on</strong>g> neighborhood as thickly as snow <strong>on</strong> many occasi<strong>on</strong>s, in quantities<br />

sufficient to scratch and peel <str<strong>on</strong>g>the</str<strong>on</strong>g> paint off of automobiles.” The lawsuit claimed <str<strong>on</strong>g>the</str<strong>on</strong>g> steelmaker “knowingly<br />

and intenti<strong>on</strong>ally chose inadequate procedures to prevent fugitive dust emissi<strong>on</strong>s because proper safety<br />

procedures and equipment cost m<strong>on</strong>ey (and <str<strong>on</strong>g>the</str<strong>on</strong>g> company) unlawfully valued plant profitability over<br />

compliance with relevant envir<strong>on</strong>mental laws and <str<strong>on</strong>g>the</str<strong>on</strong>g> health and safety of <str<strong>on</strong>g>the</str<strong>on</strong>g> plant’s neighbors.” 69<br />

Evraz’s mines in South Africa have been criticized by envir<strong>on</strong>mental organizati<strong>on</strong>s for violating health<br />

regulati<strong>on</strong>s and causing severe polluti<strong>on</strong>. 70 Evraz is absent from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index and has a<br />

Corporate Social Resp<strong>on</strong>sibility score of 43. Evraz has a lengthy, detailed statement about its envir<strong>on</strong>mental<br />

efforts <strong>on</strong> its website. 71<br />

ALBERTO BAILLERES, MEXICO<br />

$11.9 BILLION [AS OF MARCH 2011]<br />

Wealth: Alberto Bailleres is chair and chief stockholder of Industrias Penoles, Mexico’s sec<strong>on</strong>d-largest metals<br />

and mining group. Industrias Penoles is <str<strong>on</strong>g>the</str<strong>on</strong>g> leading Latin American producer of refined gold, lead and zinc<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s top producer of silver. Bailleres also has interests in <str<strong>on</strong>g>the</str<strong>on</strong>g> upscale department store chain El<br />

Palacio de Hierro and <str<strong>on</strong>g>the</str<strong>on</strong>g> insurance company Grupo Naci<strong>on</strong>al Provincial.<br />

Power Networks: Bailleres is a member of <str<strong>on</strong>g>the</str<strong>on</strong>g> board of Instituto Tecnológico Autónomo de México, a<br />

private research university and think-tank in Mexico City. He serves <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> board of directors of Grupo<br />

Televisa and has a stake in Femsa, a Mexican Coca-Cola bottling company.<br />

- 24 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

Envir<strong>on</strong>ment: Industrias Penoles has been involved in frequent c<strong>on</strong>troversies over its mining practices. In<br />

1999, a Mexican federal court ordered <str<strong>on</strong>g>the</str<strong>on</strong>g> company to set up a $6.4 milli<strong>on</strong> healthcare fund to treat victims<br />

and relocate people living near <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s toxic slag-heap in Torre<strong>on</strong>, a town in <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican state of<br />

Coahuila. The ruling, which capped a 15-year campaign by poor neighborhood residents, was bolstered by<br />

scientific studies that found high levels of lead in childrens’ blood. However, c<strong>on</strong>troversy c<strong>on</strong>tinues, as<br />

Mexican authorities have accused <str<strong>on</strong>g>the</str<strong>on</strong>g> company of failing to comply with <str<strong>on</strong>g>the</str<strong>on</strong>g> court order. The company has<br />

lots of green-washing material <strong>on</strong> its website. 72<br />

JOHN FREDRIKSEN, CYPRUS<br />

$10.7 BILLION [AS OF MARCH 2011]<br />

Wealth: John Fredriksen is <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s leading oil tanker tyco<strong>on</strong>, a double-whammy for <str<strong>on</strong>g>the</str<strong>on</strong>g> climate due to<br />

dirty bunker fuel burning in cargo ships as well as <str<strong>on</strong>g>the</str<strong>on</strong>g> high carb<strong>on</strong> c<strong>on</strong>tent of oil tankers. Norwegian-born<br />

Fredriksen was Norway’s richest man until he chose to aband<strong>on</strong> his Norwegian citizenship and take up a<br />

Cypriot passport. Through his investment companies Hemen Holdings and Meisha, Fredriksen c<strong>on</strong>trols <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

companies Fr<strong>on</strong>tline and Golar LNG from his £100 milli<strong>on</strong>, 30,000-square-foot Chelsea home in L<strong>on</strong>d<strong>on</strong>.<br />

He also has major interests in <str<strong>on</strong>g>the</str<strong>on</strong>g> oil platform operator SeaDrill, c<strong>on</strong>tainer shipper Tui, Marine Harvest (<str<strong>on</strong>g>the</str<strong>on</strong>g><br />

world’s largest seafood company and its biggest salm<strong>on</strong> farmer), <str<strong>on</strong>g>the</str<strong>on</strong>g> dry bulk company Golden Ocean Group,<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s largest shipholding company, Overseas Shipholding Group.<br />

Power Network: Fredriksen made his fortune during <str<strong>on</strong>g>the</str<strong>on</strong>g> Iran-Iraq wars in <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s when his tankers<br />

picked up Iranian oil at great risk and huge profits. As described by his biographer, “He was <str<strong>on</strong>g>the</str<strong>on</strong>g> lifeline to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Ayatollah.” 73<br />

Envir<strong>on</strong>ment: Marine Harvest was targeted by <str<strong>on</strong>g>the</str<strong>on</strong>g> Pure Salm<strong>on</strong> Campaign Coaliti<strong>on</strong>, a group that works to<br />

eliminate destructive envir<strong>on</strong>mental practices by separating farmed fish from wild fish populati<strong>on</strong>s and<br />

finding new sources of fish feed. 74 Between 2005 and 2009, at least seven Marine Harvest workers and<br />

c<strong>on</strong>tractors died <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> job. 75 Golden Ocean has an “envir<strong>on</strong>ment“ score of 28 and a “water transportati<strong>on</strong>”<br />

score of 47 <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> CSR Hub. Golden Ocean does not appear <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index. 76<br />

Marine Harvest has an envir<strong>on</strong>ment rating of 46 <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> CSR Hub. 77 It does not appear <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es<br />

Sustainability Index. As a petroleum war profiteer who has benefited from <str<strong>on</strong>g>the</str<strong>on</strong>g> global expansi<strong>on</strong> of oil trade,<br />

Fredriksen’s fossil fuel footprint is immeasurably large and deep.<br />

- 25 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

ELIODORO, BERNARDO & PATRICIA MATTE, CHILE<br />

$10.4 BILLION [AS OF MARCH 2011]<br />

Wealth: Eliodoro, Bernardo and Patricia Matte are three siblings who share a fortune based <strong>on</strong> forestry and<br />

paper products as well as stakes in telecom, banking and shipping firms. Eliodoro is president of timber giant<br />

Empresas CMPC. Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r Bernardo oversees <str<strong>on</strong>g>the</str<strong>on</strong>g> family’s o<str<strong>on</strong>g>the</str<strong>on</strong>g>r assets, including a stake in Banco Bice (of<br />

which he is president) and Colbun, Chile’s sec<strong>on</strong>d-largest electricity generator. Sister Patricia, a sociologist, is<br />

<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> board of Instituto Libertad y Desarrollo, a c<strong>on</strong>servative think-tank that analyzes public policies and<br />

ec<strong>on</strong>omic and social issues like poverty. 78<br />

Power Networks: The Mattes are linked by marriage to <str<strong>on</strong>g>the</str<strong>on</strong>g> Larrain family and toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g>y form <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

most influential extended families of Chile’s c<strong>on</strong>servative elite, with involvement in almost every sector of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

ec<strong>on</strong>omy.<br />

Envir<strong>on</strong>ment: The family’s companies have been involved in Chile’s biggest envir<strong>on</strong>mental fights of <str<strong>on</strong>g>the</str<strong>on</strong>g> past<br />

decade. In 2003, <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S.-based envir<strong>on</strong>mental group ForestEthics organized a boycott against Chilean<br />

lumber and forced <str<strong>on</strong>g>the</str<strong>on</strong>g> Matte and Angelini groups to sign an agreement to stop logging Chile’s native forests<br />

and to restrict all plantati<strong>on</strong> logging to land that has not recently been cleared from native woodland. In 2007,<br />

Eliodoro Matte participated in a well-publicized series of negotiati<strong>on</strong>s with U.S. envir<strong>on</strong>mentalist/<br />

philanthropist Douglas Tompkins, but little came of <str<strong>on</strong>g>the</str<strong>on</strong>g> meetings. Tompkins, U.S. and Chilean<br />

envir<strong>on</strong>mentalists are fighting a major battle against Colbun over <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s plans to build HydroAisen, a<br />

huge hydroelectric project that would require running a power transmissi<strong>on</strong> line through hundreds of miles of<br />

virgin rainforests, including Tompkins’ eco-preserve, Parque Pumalin.<br />

Empresas CMPC has an overall Corporate Social Resp<strong>on</strong>sibility rating of 53. Its envir<strong>on</strong>ment rating is 58. 79<br />

Empresas CMPC is not listed <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

- 26 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

SAMMY OFER & FAMILY, ISRAEL<br />

$10.3 BILLION [AS OF MARCH 2011]<br />

Wealth: Sammy Ofer died <strong>on</strong> June 3, 2011 at <str<strong>on</strong>g>the</str<strong>on</strong>g> age of 89 80 and <str<strong>on</strong>g>the</str<strong>on</strong>g> future of his wealth is was uncertain at<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> time of printing this report. At <str<strong>on</strong>g>the</str<strong>on</strong>g> time of his death, Ofer was c<strong>on</strong>sidered <str<strong>on</strong>g>the</str<strong>on</strong>g> richest individual in Israel.<br />

With his bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r Yuli, he owned a global shipping empire and maintained interests in banking and real estate.<br />

The Ofer family’s firms include cruise line Royal Caribbean, Israel Corp., which holds strategic stakes in<br />

chemicals, Zim Shipping, Israel Chemicals, Oil Refineries Ltd, Bank Mizrahi-Tfahot, Tower Semic<strong>on</strong>ductor<br />

and Zodiac Maritime Agency Ltd. Ofer’s s<strong>on</strong> Eyal runs <str<strong>on</strong>g>the</str<strong>on</strong>g> real estate and cruise line operati<strong>on</strong>s while his<br />

bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r Idan heads <str<strong>on</strong>g>the</str<strong>on</strong>g> shipping, technology, energy and chemicals company, Israel Corp. In May 2011, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

U.S. State Department sancti<strong>on</strong>ed <str<strong>on</strong>g>the</str<strong>on</strong>g> Ofer Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs Group for violating a trade ban by selling a tanker to<br />

Iran. 81<br />

Power Networks: In March 2008, Ofer d<strong>on</strong>ated £20 milli<strong>on</strong> to L<strong>on</strong>d<strong>on</strong>’s Nati<strong>on</strong>al Maritime Museum at<br />

Greenwich, as part of a £35 milli<strong>on</strong> program of expansi<strong>on</strong>. He also d<strong>on</strong>ated £3.3 milli<strong>on</strong> to help complete <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

restorati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> Cutty Sark. In November 2008, Queen Elizabeth named him an H<strong>on</strong>orary Knight<br />

Commander of <str<strong>on</strong>g>the</str<strong>on</strong>g> Order of <str<strong>on</strong>g>the</str<strong>on</strong>g> British Empire (KBE) in recogniti<strong>on</strong> of his involvement with maritime<br />

heritage in <str<strong>on</strong>g>the</str<strong>on</strong>g> United Kingdom.<br />

Envir<strong>on</strong>ment: Royal Caribbean, like all cruise ships, run <strong>on</strong> heavily polluting bunker fuel, a major source of<br />

greenhouse gases. USA Today reports how Ofer’s cruise line, Royal Caribbean, “admitted in court it had<br />

installed special pipes <strong>on</strong> some ships—removed before every scheduled Coast Guard inspecti<strong>on</strong>—to bypass<br />

polluti<strong>on</strong>-c<strong>on</strong>trol devices that prevent oily dumping.” Royal Caribbean also c<strong>on</strong>fessed to dumping toxic<br />

chemicals “used in dry-cleaning, photo processing and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r activities.” A Coast Guard aerial-surveillance<br />

video from 1994 clearly showed an oil slick trailing behind a Royal Caribbean cruise ship in <str<strong>on</strong>g>the</str<strong>on</strong>g> waters off<br />

Puerto Rico. Faced with irrefutable evidence, Royal Caribbean’s lawyers argued that <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. lacked<br />

jurisdicti<strong>on</strong> to prosecute since Royal Caribbean is incorporated in Liberia. After a judge dismissed this<br />

argument, Ofer’s firm pleaded guilty to 30 criminal charges in Miami, New York, Puerto Rico, Los Angeles,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Virgin Islands and Alaska and agreed to pay $27 milli<strong>on</strong> in fines in 1998 and 1999. Royal Caribbean has<br />

since instituted a “companywide Envir<strong>on</strong>mental Compliance Program” 82 and hands out envir<strong>on</strong>mental<br />

awards—to its own ships. 83<br />

Israel Corp.’s envir<strong>on</strong>mental score <strong>on</strong> CSR is 38; Royal Caribbean’s score is 43. Both companies are absent<br />

from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

- 27 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

SHASHI AND RAVI RUIA, INDIA<br />

$10.2 BILLION [AS OF OCTOBER 2011]<br />

Wealth: The Ruia bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs preside over <str<strong>on</strong>g>the</str<strong>on</strong>g> Essar Group, a diversified company with $15 billi<strong>on</strong> in revenues<br />

that has embarked <strong>on</strong> an expansi<strong>on</strong> drive in all its businesses, including shipping, steel, oil and gas, power and<br />

telecom. As part of a global push, Essar Oil has purchased a 50 percent stake in Kenya Petroleum Refineries<br />

and is negotiating with Royal Dutch Shell to acquire three refineries (<strong>on</strong>e in Britain and two in Germany) with<br />

a total refining capacity of 25 milli<strong>on</strong> t<strong>on</strong>s. In November 2010, Essar clinched a $350 milli<strong>on</strong> deal with Dhabi<br />

Group’s Warid Telecom to acquire a majority stake in its units in Uganda and <str<strong>on</strong>g>the</str<strong>on</strong>g> Democratic Republic of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

C<strong>on</strong>go. In 2010, Essar Group sold its network of telecom towers in India to <str<strong>on</strong>g>the</str<strong>on</strong>g> American Tower Corp. for<br />

$450 milli<strong>on</strong>. Also in 2010, Essar acquired Trinity Coal, an American coal-mining firm, for $600 milli<strong>on</strong>. In<br />

April 2010, hoping to raise $2.5 billi<strong>on</strong>, Essar Energy announced it was posting an initial public offering <strong>on</strong><br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> L<strong>on</strong>d<strong>on</strong> Stock Exchange, making it “<str<strong>on</strong>g>the</str<strong>on</strong>g> biggest IPO in L<strong>on</strong>d<strong>on</strong>.” 84<br />

Envir<strong>on</strong>ment: A major investor in oil and coal, <str<strong>on</strong>g>the</str<strong>on</strong>g> Essar Group and Essar Energy are absent from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow<br />

J<strong>on</strong>es Sustainability Index.<br />

- 28 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

LEN BLAVATNIK, USA/RUSSIA<br />

$10.1 BILLION [AS OF MARCH 2011]<br />

Wealth: Len Blavatnik is <str<strong>on</strong>g>the</str<strong>on</strong>g> Russian-American owner and president of Access Industries, a diversified<br />

company with investments in oil, coal, aluminum, petrochemicals, plastics, telecommunicati<strong>on</strong>s, media, and<br />

real estate in Europe, North and South America. Blavatnik is a co-owner (with Mikhail Fridman and BP) of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Russian oil company TNK-BP. Blavatnik’s subsidiary, Ly<strong>on</strong>dellBasell Industries, is <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s thirdlargest<br />

chemical company based <strong>on</strong> net sales. In 2007, Blavatnik purchased a $50 milli<strong>on</strong> Manhattan<br />

townhouse from billi<strong>on</strong>aire Edgar Br<strong>on</strong>fman, Jr., head of <str<strong>on</strong>g>the</str<strong>on</strong>g> Warner Music Group. In May 2011, Blavatnik’s<br />

Access Industries purchased Warner Music Group, <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s third-largest music company, for $3.3 billi<strong>on</strong>. 85<br />

Power Networks: Blavatnik is a member of <str<strong>on</strong>g>the</str<strong>on</strong>g> Global Advisory Board of <str<strong>on</strong>g>the</str<strong>on</strong>g> Centre for <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g><br />

Business and Management at Cambridge University, a board member of <str<strong>on</strong>g>the</str<strong>on</strong>g> Dean’s Advisors at <str<strong>on</strong>g>the</str<strong>on</strong>g> Harvard<br />

Business School and a member of <str<strong>on</strong>g>the</str<strong>on</strong>g> academic board at Tel Aviv University. A major d<strong>on</strong>or to arts, culture<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> sciences, Blavatnik is a supporter of <str<strong>on</strong>g>the</str<strong>on</strong>g> British Museum, Tate Modern, Royal Opera House, Nati<strong>on</strong>al<br />

Portrait Gallery and Museum of Modern Art. In 2010, he announced a multi-year d<strong>on</strong>ati<strong>on</strong> of £75 milli<strong>on</strong><br />

($117 milli<strong>on</strong>) to <str<strong>on</strong>g>the</str<strong>on</strong>g> University of Oxford.<br />

Envir<strong>on</strong>ment: Residents of Mossville, Louisiana, who suffer from cancers and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r health problems, have<br />

named Ly<strong>on</strong>dell and several o<str<strong>on</strong>g>the</str<strong>on</strong>g>r companies in a complaint that claims <str<strong>on</strong>g>the</str<strong>on</strong>g>ir health problems are due to<br />

extreme levels of dioxin compounds emitted by 14 local factories. 86 Access industries is not <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow<br />

J<strong>on</strong>es Sustainability Index and has no CSR Hub rating.<br />

- 29 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

ISKANDER MAKHMUDOV, UZBEKISTAN/RUSSIA<br />

$9.9 BILLION [AS OF MARCH 2011]<br />

Wealth: Iskander Makhmudov is <str<strong>on</strong>g>the</str<strong>on</strong>g> main owner of copper producer UGMK-Holding and <str<strong>on</strong>g>the</str<strong>on</strong>g> main owner<br />

of KRU, <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d-largest Russian coal company. He is a shareholder in Transmashholding, Russia’s largest<br />

maker of locomotives and rail equipment (in partnership with state-owned Russian Railways and Alstom, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

French machine-building giant).<br />

Power Networks: Makhmudov owns 50 percent of Izdatelskiy Dom Rodi<strong>on</strong>ova (Rodi<strong>on</strong>ov Publishing<br />

House), which publishes <str<strong>on</strong>g>the</str<strong>on</strong>g> Russian versi<strong>on</strong> of BusinessWeek<br />

Envir<strong>on</strong>ment: In 2009, hundreds of residents of Vladikavkaz, a city in <str<strong>on</strong>g>the</str<strong>on</strong>g> Republic of North Ossetia-Alania,<br />

protested against industrial emissi<strong>on</strong>s from Makhmudov’s Elektrotsink metallurgical plant, which <str<strong>on</strong>g>the</str<strong>on</strong>g>y say<br />

covered <str<strong>on</strong>g>the</str<strong>on</strong>g> city in a grey shroud. Nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r UGMK nor Transmashholding appear <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es<br />

Sustainability Index.<br />

- 30 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

VIKTOR RASHNIKOV, RUSSIA<br />

$9.8 BILLION [$11.2 BILLION AS OF MARCH 2011]<br />

Wealth: Victor Rashnikov owns nearly 100 percent of shares of ir<strong>on</strong> and steel producer Magnitogorsk Ir<strong>on</strong><br />

and Steel (MMK) worth $1 billi<strong>on</strong>. 87 Rashnikov invests in real estate including <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>structi<strong>on</strong> of Moscow’s<br />

21-story Rossiya Hotel (<strong>on</strong>ce <str<strong>on</strong>g>the</str<strong>on</strong>g> largest in <str<strong>on</strong>g>the</str<strong>on</strong>g> world) and <str<strong>on</strong>g>the</str<strong>on</strong>g> 47-floor Wedding Palace. He also owns a 50<br />

percent stake in Moscow’s Russia Tower project (a partially built 2,000-foot-tall office building that would be<br />

sec<strong>on</strong>d tallest in world). Rashnikov owns shares in <strong>on</strong>e of Russia’s biggest ir<strong>on</strong> ore deposits and, in 2007, he<br />

raised $1 billi<strong>on</strong> by taking MMK public <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> L<strong>on</strong>d<strong>on</strong> Stock Exchange. 88<br />

Power Networks: Elected three times to <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>al legislature, Rashnikov is a staunch ally of Vladimir<br />

Putin.<br />

Envir<strong>on</strong>ment: During a 2010 meeting he chaired <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> steel industry in Chelyabinsk, Prime Minister Putin<br />

touted Rashnikov and MMK as exemplary models for envir<strong>on</strong>mental friendliness 89 but <str<strong>on</strong>g>the</str<strong>on</strong>g> effects of MMK’s<br />

steel manufacturing plants has c<strong>on</strong>demned <str<strong>on</strong>g>the</str<strong>on</strong>g> children in <str<strong>on</strong>g>the</str<strong>on</strong>g> Chelyabinsk city of Magnitogorsk to a lifetime<br />

of “breathing sulfur and eating lead.” 90 Magnitogorsk has been listed as <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> planet’s 30 most-polluted<br />

cities in <str<strong>on</strong>g>the</str<strong>on</strong>g> 2007 Blacksmith Institute Report. 91 Local hospitals estimated that <strong>on</strong>ly 1% of children were in<br />

good health and that it was rare to give birth to a healthy baby. In 1992, <strong>on</strong>ly 28% of Magnitogorsk’s babies<br />

were born healthy and <strong>on</strong>ly 27% had healthy mo<str<strong>on</strong>g>the</str<strong>on</strong>g>rs. Doctors reported a high incidence of lung diseases,<br />

including lung cancer, br<strong>on</strong>chitis and asthma while <str<strong>on</strong>g>the</str<strong>on</strong>g> Chelyabinsk Ministry of Envir<strong>on</strong>ment has declared<br />

Magnitigorsk an ecological disaster z<strong>on</strong>e. While some cleanup efforts have been made in recent years, steel<br />

producti<strong>on</strong> had increased significantly and smoke still envelopes <str<strong>on</strong>g>the</str<strong>on</strong>g> city. 92 MMK is not <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es<br />

Sustainability Index.<br />

- 31 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

GERMAN KHAN, RUSSIA<br />

$9.6 BILLION [AS OF MARCH 2011]<br />

Wealth: German Khan is co-owner of Alfa Group with fellow billi<strong>on</strong>aires Mikhail Fridman (see above) and<br />

junior partner Alexei Kuzmichev. Alfa Group is Russia’s largest financial and industrial group. Khan is<br />

executive director of TNK-BP, <str<strong>on</strong>g>the</str<strong>on</strong>g> group’s oil business. Khan and his partners own <str<strong>on</strong>g>the</str<strong>on</strong>g> Alfa-Bank (Russia’s<br />

biggest private bank by capital). The Alfa Group has shares in two Russian cellular companies and owns X5,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> country’s biggest retailer.<br />

Power Networks: He has been an active supporter of Jewish initiatives in Russia and Europe. Khan makes<br />

large c<strong>on</strong>tributi<strong>on</strong>s to <str<strong>on</strong>g>the</str<strong>on</strong>g> work of <str<strong>on</strong>g>the</str<strong>on</strong>g> European Jewish Fund and is a leading member of <str<strong>on</strong>g>the</str<strong>on</strong>g> Russian Jewish<br />

C<strong>on</strong>gress.<br />

Envir<strong>on</strong>ment: In 2007, Russia’s envir<strong>on</strong>mental agency found Khan’s oil company guilty of violating<br />

envir<strong>on</strong>mental regulati<strong>on</strong>s at its Siberian gas fields where oil flowing from hundreds of breaks in corroded<br />

pipelines has blackened <str<strong>on</strong>g>the</str<strong>on</strong>g> groundwater in <str<strong>on</strong>g>the</str<strong>on</strong>g> Ob River flood plain. The violati<strong>on</strong>s were serious enough to<br />

threaten <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tinued operating license for TNK-BP’s massive 1.9-trilli<strong>on</strong>-meter Kovykta gas field. Ir<strong>on</strong>ically<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> reas<strong>on</strong> British Petroleum was brought <strong>on</strong> as a partner in 2003 was because of BP’s promise to introduce<br />

envir<strong>on</strong>mental protecti<strong>on</strong> technology to <str<strong>on</strong>g>the</str<strong>on</strong>g> Samotlor field, l<strong>on</strong>g recognized as <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> worst<br />

envir<strong>on</strong>mental disasters in Siberia’s oil regi<strong>on</strong>. 93 (See also Mikhail Fridman, above). TNK-BP is absent from<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

- 32 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

DMITRI RYBOLOVLEV, RUSSIA<br />

$9.5 BILLION [AS OF MARCH 2011]<br />

Wealth: Dmitri Rybolovlev made his fortune by acquiring <str<strong>on</strong>g>the</str<strong>on</strong>g> formerly state-owned potash fertilizer<br />

company Uralkali during <str<strong>on</strong>g>the</str<strong>on</strong>g> 1990s privatizati<strong>on</strong> in Russia. Until recently, Rybolovlev owned two-thirds of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> company. In 2011, Rybolovlev sold his interest in Uralkali to fellow billi<strong>on</strong>aire Suleiman Kerimov and<br />

o<str<strong>on</strong>g>the</str<strong>on</strong>g>r buyers for $6.8 billi<strong>on</strong> and a stake in Kerimov’s Polyus Gold. In 2008, Rybolovlev bought D<strong>on</strong>ald<br />

Trump’s Palm Beach mansi<strong>on</strong>, Mais<strong>on</strong> de l’Amitie, for $100 milli<strong>on</strong>. He reportedly lives <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> tax-sheltered<br />

island of Cyprus.<br />

Power Networks: Rybolovlev is reported to be close <str<strong>on</strong>g>the</str<strong>on</strong>g> Putin regime and to Nikita Belykh, <str<strong>on</strong>g>the</str<strong>on</strong>g> governor of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Kirov regi<strong>on</strong>.<br />

Envir<strong>on</strong>ment: In 2006, a flood at <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s largest mine forced <str<strong>on</strong>g>the</str<strong>on</strong>g> relocati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> residents of a city<br />

in <str<strong>on</strong>g>the</str<strong>on</strong>g> Ural Mountains and cut off a railway line carrying supplies to rival miner Silvinit. Damages were<br />

estimated at $90 milli<strong>on</strong>. In 1996, Rybolovlev spent several m<strong>on</strong>ths in pris<strong>on</strong> for involvement in <str<strong>on</strong>g>the</str<strong>on</strong>g> murder<br />

of an industrialist, although he was later acquitted for lack of evidence. In late 2010, a messy divorce trial<br />

revealed that Rybolovlev had dissolved much of his business holdings and it was alleged that he had hidden<br />

his assets through banks in Cyprus and elsewhere. 94 95 Uralkali has substantial sustainability and envir<strong>on</strong>ment<br />

secti<strong>on</strong>s <strong>on</strong> its website 96 but <str<strong>on</strong>g>the</str<strong>on</strong>g> company is not <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index<br />

- 33 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

SAVITRI JINDAL, INDIA<br />

$9.5 BILLION [AS OF OCTOBER 2011]<br />

Wealth: Savitri Jindal is <str<strong>on</strong>g>the</str<strong>on</strong>g> n<strong>on</strong>executive chair of <str<strong>on</strong>g>the</str<strong>on</strong>g> Jindal Group, India’s biggest steel producer. Founded<br />

by Savitri’s late husband, Om Prakash Jindal, <str<strong>on</strong>g>the</str<strong>on</strong>g> Jindal Group is a leading player in mining and coal-toliquids<br />

fuel development. The Jindal Group has expanded its steel, power and mining businesses to various<br />

parts of Asia, Africa and Australia. In 2006, Jindal Steel was granted development rights for <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

world’s largest ir<strong>on</strong> ore reserves in <str<strong>on</strong>g>the</str<strong>on</strong>g> El Mutún regi<strong>on</strong> of Bolivia. With an initial investment of $1.5 billi<strong>on</strong>,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> company plans to invest an additi<strong>on</strong>al $ 2.1 billi<strong>on</strong> through 2015 to build a steel plant, a gas-fired 450-<br />

MW power plant, a sp<strong>on</strong>ge-ir<strong>on</strong> factory and ir<strong>on</strong> ore pellet plant.<br />

Power Networks: Savitri is an elected member of <str<strong>on</strong>g>the</str<strong>on</strong>g> legislature in <str<strong>on</strong>g>the</str<strong>on</strong>g> state of Haryana. In 1984, <str<strong>on</strong>g>the</str<strong>on</strong>g> Jindal<br />

family established Vidya Devi Jindal School, a residential school for girls in <str<strong>on</strong>g>the</str<strong>on</strong>g> Harayana city of Hisar. Vidya<br />

Devi Jindal’s student body is composed of students from India’s business and political family.<br />

Envir<strong>on</strong>ment: The Jindal Group is absent from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index. Jindal Group has posted<br />

a relatively detailed, extensive envir<strong>on</strong>mental policy <strong>on</strong> its website. 97<br />

- 34 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

HAROLD SIMMONS, USA<br />

$9.3 BILLION [AS OF SEPTEMBER 2011]<br />

Wealth: Harold Simm<strong>on</strong>s is a buyout investor who, through his publicly traded holding company, Valhi,<br />

c<strong>on</strong>trols five companies: NL Industries (titanium dioxide); Titanium Metals Corporati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s largest<br />

producer of titanium; Valhi, a multinati<strong>on</strong>al company with operati<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> chemicals, comp<strong>on</strong>ent products,<br />

waste management, and titanium metals industries; CompX <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g>, a manufacturer of erg<strong>on</strong>omic<br />

products; and Kr<strong>on</strong>os Worldwide, a leading producer and marketer of titanium dioxide. The value of Valhi’s<br />

shares increased 250% between <str<strong>on</strong>g>the</str<strong>on</strong>g> summer of 2010 and <str<strong>on</strong>g>the</str<strong>on</strong>g> summer of 2011. 98<br />

Power Networks: Simm<strong>on</strong>s is a right-wing activist and a major funder of c<strong>on</strong>servative causes. He backed <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Swift Boat attacks that derailed John Kerry’s presidential campaign, allowing George W. Bush to be re-elected<br />

and accelerate and c<strong>on</strong>solidate his policy approach of enshrining fossil fuels and avoiding any commitments<br />

<strong>on</strong> climate. He has been <strong>on</strong>e of Texas Governor Rick Perry’s l<strong>on</strong>g-time supporters with Texas State<br />

disclosure records, listing Simm<strong>on</strong>s as Perry’s biggest backer with $600,000 in c<strong>on</strong>tributi<strong>on</strong>s. 99<br />

Envir<strong>on</strong>ment: NL Industries has major problems with lead polluti<strong>on</strong> spilling from its lead smelters. An EPA<br />

study in 2010 indicated that 16 percent of children in Venice, Illinois, and two cities in Wisc<strong>on</strong>sin—Granite<br />

City and Madis<strong>on</strong>—were experiencing dangerously high lead levels in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir blood due to polluti<strong>on</strong> from an<br />

aband<strong>on</strong>ed NL Industries-Taracorp lead smelter and battery recycling plant. 100 Polluti<strong>on</strong> from <str<strong>on</strong>g>the</str<strong>on</strong>g> NL<br />

Industry/Taracorp plant was found to have c<strong>on</strong>taminated 100 square blocks in all three cities, exposing<br />

around 1,600 households to dangerous levels of lead. The facility and surrounding neighborhoods are now<br />

listed as Superfund Sites. 101<br />

- 35 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

CHENG YU-TUNG, HONG KONG<br />

$9 BILLION [AS OF MARCH 2011]<br />

Wealth: Cheng Yu-tung, heads <str<strong>on</strong>g>the</str<strong>on</strong>g> H<strong>on</strong>g K<strong>on</strong>g-based c<strong>on</strong>glomerate New World Development, with interests<br />

in property, infrastructure, transport, retail, hotel, casino, brokerage, and telecom across China and H<strong>on</strong>g<br />

K<strong>on</strong>g., all of which produce heavy emissi<strong>on</strong>s. Cheng is n<strong>on</strong>-executive chair of Lifestyle <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g><br />

Holdings, a department story operator partly owned by fellow billi<strong>on</strong>aire, Joseph Lau. Cheng is a director and<br />

major stockholder in Macau gambling billi<strong>on</strong>aire Stanley Ho’s Shun Tak Holdings, SJM Holdings and<br />

Sociedade de Turismo e Diversoes de Macau. His s<strong>on</strong>s, Henry and Peter, al<strong>on</strong>g with grands<strong>on</strong> Adrian, sit <strong>on</strong><br />

New World’s board.<br />

Power Networks: Cheng serves <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> board of <str<strong>on</strong>g>the</str<strong>on</strong>g> Hang Seng Bank, H<strong>on</strong>g K<strong>on</strong>g’s third-largest bank.<br />

Cheng represents <str<strong>on</strong>g>the</str<strong>on</strong>g> Kingdom of Bhutan in H<strong>on</strong>g K<strong>on</strong>g, serving as <str<strong>on</strong>g>the</str<strong>on</strong>g> h<strong>on</strong>orary c<strong>on</strong>sul for <str<strong>on</strong>g>the</str<strong>on</strong>g> country.<br />

Envir<strong>on</strong>ment: New World Development is a major promoter of mega-developments, shopping centers and<br />

suburban sprawl in China., where Western-style suburbanizati<strong>on</strong> can cause more carb<strong>on</strong> emissi<strong>on</strong>s. New<br />

World Development has an envir<strong>on</strong>mental score of 42 <strong>on</strong> CSR Hub. Shun Tak Holdings has an<br />

envir<strong>on</strong>mental score of 28. SJM Holdings is not listed. All three of <str<strong>on</strong>g>the</str<strong>on</strong>g> companies are absent from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow<br />

J<strong>on</strong>es Sustainability Index.<br />

- 36 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

IGOR ZYUZIN, RUSSIA<br />

$8.9 BILLION [AS OF MARCH 2011]<br />

Wealth: Igor Zyuzin stepped down as CEO of <str<strong>on</strong>g>the</str<strong>on</strong>g> mining and metallurgical holding company Mechel in<br />

2011 but he remains <str<strong>on</strong>g>the</str<strong>on</strong>g> managing director and major shareholder. Mechel c<strong>on</strong>sists of more than 20 plants<br />

and coalmines in Russia, Romania, Lithuania, Kazakhstan, Bulgaria and <str<strong>on</strong>g>the</str<strong>on</strong>g> United States. Zyuzin co-founded<br />

his first coal-mining operati<strong>on</strong>, Uglemetkooperatsiya, in 1995. With his partners, he purchased a c<strong>on</strong>trolling<br />

stake in Chelyabinsk Metals Factory in 2001. In 2009, Zyuzin’s company bought <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. company Bluest<strong>on</strong>e<br />

Coal for $425 milli<strong>on</strong> plus shares.<br />

Power Networks: In 2008, Mechel’s stock prices plummeted after <str<strong>on</strong>g>the</str<strong>on</strong>g> company was harshly criticized by<br />

Prime Minister Vladimir Putin—in what appeared to be a behind-<str<strong>on</strong>g>the</str<strong>on</strong>g>-scenes power struggle. Mechel’s stock<br />

prices quickly recovered after <str<strong>on</strong>g>the</str<strong>on</strong>g> company expressed its c<strong>on</strong>triti<strong>on</strong> to Putin.<br />

Envir<strong>on</strong>ment: Zyuzin’s Mechel Bluest<strong>on</strong>e Mining is proposing to build a $12 milli<strong>on</strong> coal-processing plant in<br />

Keyst<strong>on</strong>e, West Virginia. Mechel already owns and operates several coal mines in West Virginia. Mechel’s<br />

envir<strong>on</strong>mental CSR score is 48. Bluest<strong>on</strong>e Coal and Uglemetkooperatsi have no ratings <strong>on</strong> CSR. Mechel,<br />

Bluest<strong>on</strong>e and Uglemetkooperatsiya are all absent from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

- 37 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

STEVEN A. COHEN, USA<br />

$8.3 BILLION [AS OF SEPTEMBER 2011]<br />

Wealth: Steven A. Cohen is <str<strong>on</strong>g>the</str<strong>on</strong>g> founder and owner of SAC Capital Advisors, a Stamford, C<strong>on</strong>necticut-based<br />

hedge fund that focuses mostly <strong>on</strong> equity market strategies. SAC Capital charges some of <str<strong>on</strong>g>the</str<strong>on</strong>g> steepest fees in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> business—3% of assets and 35% of profits <strong>on</strong> most funds. As of September 2011, Capital’s annual<br />

returns increased 8% from $12 billi<strong>on</strong> to $14 billi<strong>on</strong>. 102<br />

Power Networks: A major GOP d<strong>on</strong>or that has resulted in leadership that blocks climate soluti<strong>on</strong>s at every<br />

turn, as well as scoffing at <str<strong>on</strong>g>the</str<strong>on</strong>g> scientific c<strong>on</strong>sensus <strong>on</strong> climate. In August 2010, Cohen hosted a dinner at his<br />

home for major Republican d<strong>on</strong>ors and hedge fund managers to strategize about how to help <str<strong>on</strong>g>the</str<strong>on</strong>g> GOP win<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> midterm electi<strong>on</strong>s. 103 In previous electi<strong>on</strong>s, Cohen’s SAC Capital was a big Democratic d<strong>on</strong>or. One of his<br />

primary beneficiaries was Sen. Christopher Dodd, chair of <str<strong>on</strong>g>the</str<strong>on</strong>g> Senate Banking Committee (<str<strong>on</strong>g>the</str<strong>on</strong>g> committee in<br />

charge of financial regulati<strong>on</strong>s). Cohen serves <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Board of Trustees of Brown University and <str<strong>on</strong>g>the</str<strong>on</strong>g> Robin<br />

Hood Foundati<strong>on</strong>, which targets poverty in New York City.<br />

Envir<strong>on</strong>ment: Cohen is a major oil company investor and increased his petroleum investments in 2010. Oil<br />

investments now account for 16 percent of Cohen’s total $9.7 billi<strong>on</strong> holdings. 104 SAC Capital is absent from<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index and CSR Hub.<br />

- 38 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

KUMAR BIRLA, INDIA<br />

$7.7 BILLION [AS OF NOVEMBER 2011]<br />

Wealth: Kumar Birla heads <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al c<strong>on</strong>glomerate Aditya Birla Group. Founded by his greatgrandfa<str<strong>on</strong>g>the</str<strong>on</strong>g>r,<br />

Birla’s empire includes 16 companies and joint ventures in India and 22 separate internati<strong>on</strong>al<br />

companies, mostly in Sou<str<strong>on</strong>g>the</str<strong>on</strong>g>ast Asia and Canada. The list includes UltraTech Cement (India’s biggest and<br />

world’s eighth largest) and Hindalco, <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s largest rolled-aluminum producer. The group is <str<strong>on</strong>g>the</str<strong>on</strong>g> world<br />

top producer of viscose staple fiber; <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s largest single-locati<strong>on</strong> palm oil producer; a globally<br />

competitive, fast-growing copper producer; <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s third-largest producer of insulators; <str<strong>on</strong>g>the</str<strong>on</strong>g> fourth-largest<br />

producer of carb<strong>on</strong> black; India’s premier branded garments player; India’s sec<strong>on</strong>d-largest producer of<br />

viscose filament yarn; <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d-largest private sector insurance company and <str<strong>on</strong>g>the</str<strong>on</strong>g> fourth-largest asset<br />

management company in India.<br />

Power Networks: Birla’s family founded and c<strong>on</strong>trols <str<strong>on</strong>g>the</str<strong>on</strong>g> Birla Institute of Technology & Science and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

separate Birla Institute of Technology, which are influential engineering schools in India and Dubai. Birla<br />

himself seems to be an avid collector of awards, as his Wikipedia page lists several dozen that he has received<br />

from various instituti<strong>on</strong>s. 105 His company is at loggerheads with <str<strong>on</strong>g>the</str<strong>on</strong>g> Tata c<strong>on</strong>glomerate over ownership and<br />

c<strong>on</strong>trol of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir joint telecom venture. The Birla family’s philanthropic arm, overseen by mo<str<strong>on</strong>g>the</str<strong>on</strong>g>r Rajashree, is<br />

building a 500-bed hospital near Pune, in western India.<br />

Envir<strong>on</strong>ment: Indian envir<strong>on</strong>mental groups call Hindalco a “serial polluter,” with hazardous waste emissi<strong>on</strong>s<br />

from its aluminum and copper factories that include untreated wastewater laced with cyanide and fluoride. 106<br />

Birla’s mining subsidiary, Essel, boasts a wind-power divisi<strong>on</strong> that has been registered with <str<strong>on</strong>g>the</str<strong>on</strong>g> UN<br />

Framework C<strong>on</strong>venti<strong>on</strong> <strong>on</strong> Climate Change as a “clean development mechanism” under <str<strong>on</strong>g>the</str<strong>on</strong>g> Kyoto Protocol.<br />

This designati<strong>on</strong> entitles Birla’s mining operati<strong>on</strong> to claim carb<strong>on</strong>-credit revenues for a period of ten years. 107<br />

In November 2010, Novelis, a subsidiary of Hindalco, was h<strong>on</strong>ored with a Silver Gaia Award at <str<strong>on</strong>g>the</str<strong>on</strong>g> Big 5<br />

internati<strong>on</strong>al building and c<strong>on</strong>structi<strong>on</strong> exhibiti<strong>on</strong> in Dubai. The award recognizes <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>mental benefits<br />

of <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s pre-painted aluminum cladding sheet, a wea<str<strong>on</strong>g>the</str<strong>on</strong>g>rproof and “recylable” façade developed to<br />

meet <str<strong>on</strong>g>the</str<strong>on</strong>g> low-carb<strong>on</strong> requirements of <str<strong>on</strong>g>the</str<strong>on</strong>g> Masdar City c<strong>on</strong>structi<strong>on</strong> project in Abu Dhabi. 108<br />

The Corporate Social Resp<strong>on</strong>sibility Hub gives Aditya Birla Group (ABG) an envir<strong>on</strong>mental score of 41<br />

while Hindalco receives an envir<strong>on</strong>mental score of 38. 109 ABG, Novelis and Hindalco are absent from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Dow J<strong>on</strong>es Sustainability Index<br />

- 39 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

ALEXANDER ABRAMOV, RUSSIA<br />

$7.5 BILLION [AS OF MARCH 2011]<br />

Wealth: Alexander Abramov is co-owner of Evraz Holding, Russia’s largest steel producer and a major<br />

logging company. In 1992, Abramov established a precursor to Evraz Holding and amassed a fortune<br />

exporting metals and coal from <str<strong>on</strong>g>the</str<strong>on</strong>g> Urals and Siberia. Since its founding in 1998, Evraz Holding has become<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> largest steel-and-ir<strong>on</strong> empire in Russia, employing 125,000 people and c<strong>on</strong>trolling about 22 percent of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

country’s total steel output with an annual turnover of $20 billi<strong>on</strong>. During <str<strong>on</strong>g>the</str<strong>on</strong>g> Russian financial crisis in 1998,<br />

Abramov bought up steel companies and coal mines at fire-sale prices and purchased a big stake in Unified<br />

Energy System, Russia’s electric m<strong>on</strong>opoly. In 2006, Russia’s richest man, Roman Abramovich (see above),<br />

became Abramov’s partner in Evraz. In 2007, Evraz made a number of acquisiti<strong>on</strong>s, including U.S. firms<br />

Claym<strong>on</strong>t Steel Holdings of Delaware and Oreg<strong>on</strong> Steel Mills. Abramov became head of Evraz in December<br />

2008.<br />

Power networks: In recent years Evraz-Holding has emerged as <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most aggressive vertically<br />

integrated business groups in Russia. Its assets include three large steel mills, three coalmines and several oreenriching<br />

plants, as well as a large commercial port, Nakhodka, in eastern Siberia.<br />

Envir<strong>on</strong>ment: See Roman Abramovich, above.<br />

- 40 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

ALEXEI KUZMICHEV, RUSSIA<br />

$7.5 BILLION [AS OF MARCH 2011]<br />

Wealth: Alexei Kuzmichev is <str<strong>on</strong>g>the</str<strong>on</strong>g> co-owner of Alfa Group with fellow billi<strong>on</strong>aires German Khan and Mikhail<br />

Fridman (see above). He keeps a very low public profile and almost never speaks to <str<strong>on</strong>g>the</str<strong>on</strong>g> media. Kuzmichev is<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> chief of A1, a company that manages Alpha Bank’s assets. Kuzmichev is also in charge of negotiating<br />

telecom deals with Nigeria.<br />

Power Networks: In additi<strong>on</strong> to his l<strong>on</strong>g-standing friendship with Khan and Fridman, Kuzmichev counts<br />

billi<strong>on</strong>aire Pyotr Aven am<strong>on</strong>g his closest allies. Aven, who served as Russia’s Minister of Foreign Ec<strong>on</strong>omic<br />

Relati<strong>on</strong>s for two years, now heads <str<strong>on</strong>g>the</str<strong>on</strong>g> Alpha Bank and owns <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s largest collecti<strong>on</strong> of Russian art<br />

(although he keeps <str<strong>on</strong>g>the</str<strong>on</strong>g> most valuable parts of his collecti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> UK). Former German chancellor, Gerhard<br />

Schroeder, <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most recent powerbrokers to join <str<strong>on</strong>g>the</str<strong>on</strong>g> Alpha Group board, has well-established political<br />

ties with Prime Minister Vladimir Putin.<br />

Envir<strong>on</strong>ment: While inequity and poverty increasingly disrupt <str<strong>on</strong>g>the</str<strong>on</strong>g> lives of <str<strong>on</strong>g>the</str<strong>on</strong>g> planet’s majority, Moscow has<br />

become known as <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s “billi<strong>on</strong>aire capital,” with more than 100 Russian entrepreneurs now claiming<br />

this title. Kuzmichev’s <strong>on</strong>ly s<strong>on</strong>, Alexei, holds sec<strong>on</strong>d place am<strong>on</strong>g a growing brood of Russian “child<br />

billi<strong>on</strong>aires.” With an inheritance of $7.1 billi<strong>on</strong>, Alexei stands behind <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly child of Lukoil billi<strong>on</strong>aire<br />

Yusuf Alekperov (worth $10.65 billi<strong>on</strong>) and <str<strong>on</strong>g>the</str<strong>on</strong>g> two daughters of RusAL CEO and Basic Element owner<br />

Oleg Deripaska, who are each worth $6.9 billi<strong>on</strong>. According to <str<strong>on</strong>g>the</str<strong>on</strong>g> Russian magazine Finans, Russia’s ranks of<br />

billi<strong>on</strong>aire offspring increased 50% in 2010, with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir aggregate wealth doubling in <str<strong>on</strong>g>the</str<strong>on</strong>g> same period. Russia’s<br />

top ten billi<strong>on</strong>aires doubled <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth in 2010. 110<br />

- 41 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

RUPERT MURDOCH, USA<br />

$7.4 BILLION [AS OF NOVEMBER 2011]<br />

Wealth: Rupert Murdoch inherited his first newspaper when he was <strong>on</strong>ly 23. Today, as <str<strong>on</strong>g>the</str<strong>on</strong>g> founder and CEO<br />

of News Corporati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s third-largest media c<strong>on</strong>glomerate, Murdoch and his s<strong>on</strong>s head <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

world’s most powerful and profitable global media empires. In 2010, Murdoch’s U.S.-based Fox News<br />

brought in $700 milli<strong>on</strong> in operating profits.<br />

Power Networks: Murdoch is <str<strong>on</strong>g>the</str<strong>on</strong>g> force behind Fox News and a major c<strong>on</strong>tributor to <str<strong>on</strong>g>the</str<strong>on</strong>g> Republican Party,<br />

c<strong>on</strong>servative think tanks and rightwing causes. Murdoch owns newspapers in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S., UK, Ireland, Australia,<br />

Fiji and Papua New Guinea. Murdoch owns <str<strong>on</strong>g>the</str<strong>on</strong>g> influential Wall Street Journal, <str<strong>on</strong>g>the</str<strong>on</strong>g> largest-circulati<strong>on</strong><br />

newspaper in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. He owns and operates TV and radio channels in dozens of countries. In June 2010,<br />

Murdoch’s News Corp d<strong>on</strong>ated $1 milli<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> Republican Governors Associati<strong>on</strong>. 111 Al<strong>on</strong>g with <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch<br />

Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs, Murdoch completes <str<strong>on</strong>g>the</str<strong>on</strong>g> powerful triad that quietly funds <str<strong>on</strong>g>the</str<strong>on</strong>g> Tea Party movement. 112<br />

Envir<strong>on</strong>ment: Murdoch claims he is not anti-envir<strong>on</strong>ment. While Rush Limbaugh and his Fox News<br />

brethren dismiss Global Warming as “<str<strong>on</strong>g>the</str<strong>on</strong>g> biggest hoax ever perpetrated <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> American people,” Murdoch<br />

has made a point of insisting that his corporati<strong>on</strong> is sensitive to climate change and that he pers<strong>on</strong>ally believes<br />

climate change is real and will be “catastrophic” if left unchecked. 113 At times, Murdoch even sounds like an<br />

envir<strong>on</strong>mental activist, as when he declared: “Our audience’s carb<strong>on</strong> footprint is 10,000 times bigger than<br />

ours. That’s <str<strong>on</strong>g>the</str<strong>on</strong>g> carb<strong>on</strong> footprint we want to c<strong>on</strong>quer.” 114<br />

News Corp. has a CSR envir<strong>on</strong>mental score of 48 but <str<strong>on</strong>g>the</str<strong>on</strong>g> company is absent from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es<br />

Sustainability Index.<br />

- 42 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

PHILIP ANSCHUTZ, USA<br />

$7 BILLION [AS OF SEPTEMBER 2011]<br />

Wealth: Philip Anschutz has built his fortune <strong>on</strong> railroads, oil, telecom and entertainment. In 2010, he earned<br />

$2 billi<strong>on</strong> from <str<strong>on</strong>g>the</str<strong>on</strong>g> sale of his gas and oil fields. His full or partial holdings include:<br />

o Qwest Communicati<strong>on</strong>s, a telecommunicati<strong>on</strong>s carrier in 14 western U.S. states.<br />

o Uni<strong>on</strong> Pacific Railroad.<br />

o Regal Entertainment Group, <str<strong>on</strong>g>the</str<strong>on</strong>g> largest movie <str<strong>on</strong>g>the</str<strong>on</strong>g>ater chain in <str<strong>on</strong>g>the</str<strong>on</strong>g> world.<br />

o Anschutz Company, which has stakes in five U.S. soccer teams, including <str<strong>on</strong>g>the</str<strong>on</strong>g> MLS’s San Jose<br />

Earthquakes, Los Angeles Galaxy, Chicago Fire and Colorado Rapids; <str<strong>on</strong>g>the</str<strong>on</strong>g> NHL’s Los Angeles Kings;<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> NBA’s Los Angeles Lakers; <str<strong>on</strong>g>the</str<strong>on</strong>g> Staples Center and <str<strong>on</strong>g>the</str<strong>on</strong>g> Kodak Theater in Los Angeles; and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

L<strong>on</strong>d<strong>on</strong> Arena.<br />

o Forest Oil: oil and natural gas, primarily in <str<strong>on</strong>g>the</str<strong>on</strong>g> Gulf of Mexico, Alaska and Western Canada.<br />

Power Networks: Anschutz has given milli<strong>on</strong>s of dollars to c<strong>on</strong>servative Republican candidates, resulting in<br />

leaders that have c<strong>on</strong>sistently killed climate legislature. He spends milli<strong>on</strong>s more every year to subsidize his<br />

Clarity Media Group, which includes <str<strong>on</strong>g>the</str<strong>on</strong>g> San Francisco Examiner, Washingt<strong>on</strong> Examiner, Examiner.com, Weekly<br />

Standard and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r publicati<strong>on</strong>s—all of which are m<strong>on</strong>ey-losing and aggressively c<strong>on</strong>servative. Anschutz is an<br />

active patr<strong>on</strong> of religious and c<strong>on</strong>servative causes, including: <str<strong>on</strong>g>the</str<strong>on</strong>g> Discovery Institute, a Seattle-based thinktank<br />

that criticizes evoluti<strong>on</strong> and promotes <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>cept of “intelligent design;” <str<strong>on</strong>g>the</str<strong>on</strong>g> Parents Televisi<strong>on</strong><br />

Council, a group that protests “indecency” <strong>on</strong> televisi<strong>on</strong>; and Foundati<strong>on</strong> for a Better Life, which he founded<br />

in 2000 with a $700 milli<strong>on</strong> endowment to deliver a feel-good, family-values message to <str<strong>on</strong>g>the</str<strong>on</strong>g> American<br />

populace.<br />

Envir<strong>on</strong>ment: The Discovery Institute is a major global-warming denier but Anschutz is hedging his bets.<br />

While <str<strong>on</strong>g>the</str<strong>on</strong>g> Anschutz Corp. is heavily invested in oil and gas, Anschutz also is developing a 2,000-MW,<br />

100,000-acre wind farm in sou<str<strong>on</strong>g>the</str<strong>on</strong>g>rn Wyoming and a 3,000-MW, 900-mile-l<strong>on</strong>g transmissi<strong>on</strong> line to bring its<br />

power to customers in Sou<str<strong>on</strong>g>the</str<strong>on</strong>g>rn California, Las Vegas and Phoenix. 115<br />

- 43 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

RATAN TATA AND FAMILY, INDIA<br />

$7 BILLION [AS OF MARCH 2011]<br />

Wealth: Ratan Tata currently heads <str<strong>on</strong>g>the</str<strong>on</strong>g> Tata Group, India’s largest c<strong>on</strong>glomerate (he is set to retire after<br />

2012). The Tate Group comprises 114 companies and subsidiaries in chemicals, steel and automobiles<br />

(including <str<strong>on</strong>g>the</str<strong>on</strong>g> Jaguar, Land Rover, and Tata’s signature creati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> low-priced Nano mini-car). Tata also is<br />

deeply invested in informati<strong>on</strong> technology, communicati<strong>on</strong>, power, tea, hotels and tourism in more than 80<br />

countries across six c<strong>on</strong>tinents. Tata’s diverse companies export products and services to 80 nati<strong>on</strong>s.<br />

Some of <str<strong>on</strong>g>the</str<strong>on</strong>g> Tate Group’s major holdings include Tata Steel (including Tata Steel Europe), Tata Motors, Tata<br />

C<strong>on</strong>sultancy Services, Tata Technologies, Tata Tea (including Tetley), Tata Chemicals, Titan Industries, Tata<br />

Power, Tata Communicati<strong>on</strong>s, Tata Teleservices and <str<strong>on</strong>g>the</str<strong>on</strong>g> Taj Hotels.<br />

Ratan Tata is not <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes billi<strong>on</strong>aire list because he pers<strong>on</strong>ally holds less than $1 billi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> group’s<br />

shares. Tata Group’s 96 companies are held by its main company “TATA S<strong>on</strong>s” and <str<strong>on</strong>g>the</str<strong>on</strong>g> main owner of this<br />

entity is not Ratan Tata but various charitable organizati<strong>on</strong>s developed and run by <str<strong>on</strong>g>the</str<strong>on</strong>g> TATA Group. The<br />

assets of this collecti<strong>on</strong> of 96 companies is estimated to range between $50-$75 billi<strong>on</strong>.<br />

Power Networks: Ratan Tata is a member of India’s Central Board of <str<strong>on</strong>g>the</str<strong>on</strong>g> Reserve Bank and a Member of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Prime Minister’s Council <strong>on</strong> Trade and Industry. In additi<strong>on</strong> to being a member of various global<br />

councils, Tata also chairs two of <str<strong>on</strong>g>the</str<strong>on</strong>g> largest private-sector philanthropic trusts in India. The Tata family<br />

bel<strong>on</strong>gs to <str<strong>on</strong>g>the</str<strong>on</strong>g> Parsi community (or Zoroastrians of Persian origin), a tiny but influential minority in India. 116<br />

Envir<strong>on</strong>ment: Tata is resp<strong>on</strong>sible for <str<strong>on</strong>g>the</str<strong>on</strong>g> creati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> Nano, <str<strong>on</strong>g>the</str<strong>on</strong>g> fuel-efficient, super-low-cost, semi-ecofriendly<br />

“people’s car” that was launched in 2009.<br />

- 44 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

KUSHAL PAL SINGH, INDIA<br />

$6.5 BILLION [AS OF OCTOBER 2011]<br />

Wealth: Kushal Pal Singh is <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s richest real-estate developer. He is <str<strong>on</strong>g>the</str<strong>on</strong>g> owner and CEO of DLF<br />

Limited, India’s largest real estate developer, and chair and director of 31 different private companies engaged<br />

in various sectors of <str<strong>on</strong>g>the</str<strong>on</strong>g> global ec<strong>on</strong>omy. Singh was <str<strong>on</strong>g>the</str<strong>on</strong>g> chief developer of Gurga<strong>on</strong>—a suburb and satellite<br />

city of New Delhi known as <str<strong>on</strong>g>the</str<strong>on</strong>g> “call-center capital of <str<strong>on</strong>g>the</str<strong>on</strong>g> world” and <str<strong>on</strong>g>the</str<strong>on</strong>g> “shopping-mall capital of India.”<br />

Power Networks: Singh is president of <str<strong>on</strong>g>the</str<strong>on</strong>g> Associated Chamber of Commerce and Industry of India and<br />

Director of <str<strong>on</strong>g>the</str<strong>on</strong>g> Central Board, Reserve Bank of India.<br />

Envir<strong>on</strong>ment: A major force in <str<strong>on</strong>g>the</str<strong>on</strong>g> fast-growing suburban sprawl of India, Singh’s specialty is buying cheap<br />

farmland, evicting <str<strong>on</strong>g>the</str<strong>on</strong>g> poor farmers and using <str<strong>on</strong>g>the</str<strong>on</strong>g> land to develop shopping malls, housing and office parks.<br />

DLF is not listed <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

- 45 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

SILVIO BERLUSCONI, ITALY<br />

$6.2 BILLION AS OF NOVEMBER 2011<br />

Wealth: Ex-Prime Minister Silvio Berlusc<strong>on</strong>i’s main company, Mediaset, comprises three nati<strong>on</strong>al televisi<strong>on</strong><br />

channels toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r that collectively cover approximately a half of <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al televisi<strong>on</strong> sector. Berlusc<strong>on</strong>i also<br />

owns Publitalia, <str<strong>on</strong>g>the</str<strong>on</strong>g> leading Italian advertising and publicity agency and Arnoldo M<strong>on</strong>dadori Editore, Italy’s<br />

largest publishing house, whose publicati<strong>on</strong>s include Panorama, <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s most popular news<br />

magazines. His bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r, Paolo Berlusc<strong>on</strong>i, owns and operates il Giornale, a center-rightwing newspaper that<br />

provides a str<strong>on</strong>g pro-Berlusc<strong>on</strong>i slant <strong>on</strong> Italy and its politics. Il Foglio, <strong>on</strong>e of Italy’s most influential rightwing<br />

newspapers, is partially owned by Silvio’s former wife, Ver<strong>on</strong>ica Lario. Berlusc<strong>on</strong>i is also <str<strong>on</strong>g>the</str<strong>on</strong>g> founder<br />

and major shareholder of Fininvest, which is am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> ten largest private companies in Italy. Berlusc<strong>on</strong>i also<br />

is active in <str<strong>on</strong>g>the</str<strong>on</strong>g> world of finance. With Ennio Doris he founded Mediolanum, <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s biggest<br />

banking and insurance groups. He has interests in cinema and home video distributi<strong>on</strong> (Medusa Film and<br />

Penta Film) and he is <str<strong>on</strong>g>the</str<strong>on</strong>g> owner of A.C. Milan, known to soccer fans <str<strong>on</strong>g>the</str<strong>on</strong>g> world over as <strong>on</strong>e of Italy’s most<br />

decorated football teams.<br />

Power Networks: Despite his preeminence as <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>servative prime minister of Italy, Berlusc<strong>on</strong>i has been<br />

c<strong>on</strong>fr<strong>on</strong>ted by numerous legal battles over alleged corrupti<strong>on</strong>, links to organized crime, c<strong>on</strong>flicts of interest,<br />

bribery, perjury and prostituti<strong>on</strong>. Berlusc<strong>on</strong>i is closely linked with Russia’s Vladimir Putin. He has protected<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> CIA in its legal battles in Italy and has str<strong>on</strong>gly supported U.S. foreign policy and Washingt<strong>on</strong>’s military<br />

occupati<strong>on</strong>s of Iraq and Afghanistan.<br />

Envir<strong>on</strong>ment: Berlusc<strong>on</strong>i has opposed European Uni<strong>on</strong> plans to cut greenhouse gas emissi<strong>on</strong>s—unless<br />

Italian industry receives special c<strong>on</strong>cessi<strong>on</strong>s. In 2009, Berlusc<strong>on</strong>i agreed to give crucial backing to Prince<br />

Charles’ rainforest-protecti<strong>on</strong> project at <str<strong>on</strong>g>the</str<strong>on</strong>g> G8 Summit. 117 Berlusc<strong>on</strong>i is pushing ahead with plans to permit<br />

offshore drilling just five kilometers off <str<strong>on</strong>g>the</str<strong>on</strong>g> coastline of <str<strong>on</strong>g>the</str<strong>on</strong>g> rural regi<strong>on</strong> of Abruzzo, despite warnings that<br />

drilling operati<strong>on</strong>s could risk an envir<strong>on</strong>mental disaster from a blowout located much closer to land than <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

BP spill that devastated <str<strong>on</strong>g>the</str<strong>on</strong>g> Gulf of Mexico. 118 Fininvest is not included <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability<br />

Index.<br />

- 46 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

ANIL AMBANI, INDIA<br />

$5.9 BILLION [AS OF OCTOBER 2011]<br />

Wealth: Anil Ambani and older bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r Mukesh inherited a fortune from <str<strong>on</strong>g>the</str<strong>on</strong>g>ir late fa<str<strong>on</strong>g>the</str<strong>on</strong>g>r, industrialist<br />

Dhirubhai Ambani. The bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs started squabbling and, in 2005, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir mo<str<strong>on</strong>g>the</str<strong>on</strong>g>r brokered a peace settlement<br />

that broke up <str<strong>on</strong>g>the</str<strong>on</strong>g> family’s assets. Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r Mukesh now heads Reliance Industries Ltd. while Anil’s Reliance<br />

Anil Dhirubhai Ambani Group (aka Reliance Group) has interests in telecom, power, infrastructure, financial<br />

services and entertainment. Despite <str<strong>on</strong>g>the</str<strong>on</strong>g> 2005 settlement, <str<strong>on</strong>g>the</str<strong>on</strong>g> bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs c<strong>on</strong>tinue to squabble: Anil and Mukesh<br />

have since become embroiled in a gas supply dispute.<br />

Anil’s Reliance Power plans to build 13 power plants for $25 billi<strong>on</strong> by 2014. The Reliance Group’s<br />

infrastructure arm is investing $5 billi<strong>on</strong> in new roads and metro transit systems to be completed by 2012.<br />

Anil’s entertainment unit has committed $825 milli<strong>on</strong> to Steven Spielberg’s DreamWorks Studios to<br />

coproduce films (<str<strong>on</strong>g>the</str<strong>on</strong>g> first <strong>on</strong>e reportedly will be a movie based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> life of Rev. Martin Lu<str<strong>on</strong>g>the</str<strong>on</strong>g>r King Jr.).<br />

Anil Ambani is also bidding to purchase <str<strong>on</strong>g>the</str<strong>on</strong>g> debt-burdened MGM studios. He is a marath<strong>on</strong> runner and his<br />

wife, Tina, oversees a hospital in Mumbai named after his mo<str<strong>on</strong>g>the</str<strong>on</strong>g>r. 119<br />

Power Networks: Anil Ambani created a c<strong>on</strong>troversy when he went public with <str<strong>on</strong>g>the</str<strong>on</strong>g> allegati<strong>on</strong> that India’s<br />

Petroleum Minister was partial to Mukesh’s Reliance Industries. The government has denied any favoritism<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> matter awaits a final judgment by India’s Supreme Court.<br />

Envir<strong>on</strong>ment: The Reliance Group has a “corporate social resp<strong>on</strong>sibility” statement <strong>on</strong> its website that<br />

claims envir<strong>on</strong>mental c<strong>on</strong>cerns are included in each critical business decisi<strong>on</strong>. 120 However, <str<strong>on</strong>g>the</str<strong>on</strong>g> Reliance<br />

Group does not appear <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index. 121<br />

- 47 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

DOROTHEA STEINBRUCH & FAMILY, BRAZIL<br />

$5.8 BILLION [AS OF MARCH 2011]<br />

Wealth: Doro<str<strong>on</strong>g>the</str<strong>on</strong>g>a Steinbruch and her children c<strong>on</strong>trol <strong>on</strong>e of Brazil’s largest steelmakers, <str<strong>on</strong>g>the</str<strong>on</strong>g> formerly stateowned<br />

Companhia Siderurgica Naci<strong>on</strong>al. The Steinbruch family also c<strong>on</strong>trols Banco Fibra and <str<strong>on</strong>g>the</str<strong>on</strong>g> mining<br />

giant Companhia Vale do Rio Doce, which has forest-destroying activities throughout Amaz<strong>on</strong>ia, <str<strong>on</strong>g>the</str<strong>on</strong>g> planet’s<br />

“lungs” that are so crucial for climate stability. CSN was co-owned with <str<strong>on</strong>g>the</str<strong>on</strong>g> Rabinovitch family until 2005,<br />

when Steinbruch purchased <str<strong>on</strong>g>the</str<strong>on</strong>g> Rabinovitch’s stake for a reported $590 milli<strong>on</strong>. While Steinbruch is Brazil’s<br />

richest woman, she is not directly involved in <str<strong>on</strong>g>the</str<strong>on</strong>g> operati<strong>on</strong>s of CSN but she is involved in Vicunha Textile,<br />

Brazil’s largest textile company. Vicunha has recently begun to set up operati<strong>on</strong>s in Asia. Doro<str<strong>on</strong>g>the</str<strong>on</strong>g>a’s s<strong>on</strong><br />

Benjamin serves as chief executive of CSN while his bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r Ricardo is chairman of <str<strong>on</strong>g>the</str<strong>on</strong>g> board at Banco Fibra.<br />

Power Networks: The family appears to take a low political profile.<br />

Envir<strong>on</strong>ment: Brazilian government envir<strong>on</strong>mental authorities have repeatedly fined CDN for polluti<strong>on</strong>,<br />

including oil and chemical spills. The firm is c<strong>on</strong>sidered <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> largest polluters in <str<strong>on</strong>g>the</str<strong>on</strong>g> state of Rio de<br />

Janeiro. 122123 CSN is not <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index and has no CSR Hub rating.<br />

- 48 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

ROBERT ROWLING, USA<br />

$4.7 BILLION [AS OF SEPTEMBER 2011]<br />

Wealth: Robert Rowling is heir to his fa<str<strong>on</strong>g>the</str<strong>on</strong>g>r’s Texas oil fortune. Rowling’s TRT Holdings include <str<strong>on</strong>g>the</str<strong>on</strong>g> Omni<br />

hotel chain (which includes 15,000 rooms in 50 locati<strong>on</strong>s), Gold’s Gym fitness centers, oil and gas producti<strong>on</strong><br />

(including Tana Explorati<strong>on</strong>), financial and energy stocks. Rowling also owns a fifth of <str<strong>on</strong>g>the</str<strong>on</strong>g> downtown real<br />

estate in Corpus Christi and draws added revenue from a chain of Mexican dollar stores.<br />

Power Networks: Rowling is a prodigious c<strong>on</strong>servative fund-raiser, empowering and electing many mobers<br />

of C<strong>on</strong>gress who have been key to killing climate legislati<strong>on</strong>. He has given more than $2 milli<strong>on</strong> to Karl<br />

Rove’s American Crossroads, a “super PAC” that bankrolled GOP campaigns during <str<strong>on</strong>g>the</str<strong>on</strong>g> November 2010<br />

electi<strong>on</strong>s. Rowling also provides financial support to Progress for America, a group that backed George W.<br />

Bush’s re-electi<strong>on</strong> campaigns. Rowling keeps a very low profile, and reportedly his photo has never appeared<br />

<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> fr<strong>on</strong>t page of <str<strong>on</strong>g>the</str<strong>on</strong>g> Dallas newspapers. 124 While Rowling’s Gold’s Gym chain profits by appealing to gay<br />

customers, Rowling redirects <str<strong>on</strong>g>the</str<strong>on</strong>g>se profits to some of <str<strong>on</strong>g>the</str<strong>on</strong>g> GOP’s most anti-gay politicians. 125 Rowling has<br />

given $129,271 to Texas Governor Rick Perry. 126<br />

Envir<strong>on</strong>ment: TRT Holdings is expanding its oil and gas explorati<strong>on</strong> activities in <str<strong>on</strong>g>the</str<strong>on</strong>g> Gulf of Mexico<br />

through its Tana Explorati<strong>on</strong> Company LLC. In 2006, Tana was fined $165,000 when it was determined that<br />

a gas/c<strong>on</strong>densate leak from <strong>on</strong>e of its wells occurred because both <str<strong>on</strong>g>the</str<strong>on</strong>g> primary and sec<strong>on</strong>dary surface safety<br />

valves meant to prevent leaks had been “improperly bypassed.” The resulting overpressure caused <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

pipeline to rupture. 127<br />

- 49 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

ANIL AGARWAL, INDIA/U.K.<br />

$3.5 BILLION [AS OF OCTOBER 2011]<br />

Wealth: Anil Agarwal is <str<strong>on</strong>g>the</str<strong>on</strong>g> founder and chair of Vedanta Resources Corporati<strong>on</strong>, an internati<strong>on</strong>al mining<br />

and metals company headquartered in L<strong>on</strong>d<strong>on</strong>. It is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest mining and n<strong>on</strong>-ferrous metals company in<br />

India and also has mining operati<strong>on</strong>s in Australia and Zambia. The company’s main products are copper,<br />

zinc, aluminum, lead and ir<strong>on</strong> ore. Vedanta is also developing two huge coal-fired power stati<strong>on</strong>s in India.<br />

Agarwal’s attempt to buy a 60% stake in Cairn India (owner of <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s biggest <strong>on</strong>shore oil field) for an<br />

estimated $9.6 billi<strong>on</strong> were blocked after objecti<strong>on</strong>s were raised by ONGC, <str<strong>on</strong>g>the</str<strong>on</strong>g> state-owned oil explorati<strong>on</strong><br />

company. 128<br />

Power Networks: Agarwal has a number of powerful friends in Delhi, including Home Minister P.<br />

Chidambaram. Acknowledged as <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s smartest and most powerful politicians, Chidambaram<br />

has been <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most effective agents in <str<strong>on</strong>g>the</str<strong>on</strong>g> move to “modernize” <str<strong>on</strong>g>the</str<strong>on</strong>g> country. A radical socialist in his<br />

student days, Chidambaram is now an advocate of <str<strong>on</strong>g>the</str<strong>on</strong>g> Free Market. Chidambaram has been a fervent<br />

supporter of Agarwal’s mining operati<strong>on</strong>s, despite Vedanta’s repeated citati<strong>on</strong>s for violating envir<strong>on</strong>mental<br />

laws. Chidambaram <strong>on</strong>ce served under Agarwal as a director <strong>on</strong> Vedanta’s board and, in 2003, he defended<br />

Agarwal’s Sterlite Industries <strong>on</strong> tax-evasi<strong>on</strong> charges before <str<strong>on</strong>g>the</str<strong>on</strong>g> Mumbai High Court. 129 Even without<br />

Chidambaram’s support, Agarwal’s repeated claims that he intends to make India <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s leading miner,<br />

has made him an appealing figure to many in government.<br />

Envir<strong>on</strong>ment: Vedanta has been str<strong>on</strong>gly criticized by human rights and activist groups (including Amnesty<br />

<str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g>) due to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir planned mining and smelting operati<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian state of Orissa. C<strong>on</strong>structing<br />

and operating <str<strong>on</strong>g>the</str<strong>on</strong>g> site in Niyamgiri Hills would threaten local tribes people and wildlife. 130 In January 2009,<br />

thousands of locals formed a human chain around <str<strong>on</strong>g>the</str<strong>on</strong>g> Niyamgiri Hills to protest plans to start bauxite mining<br />

in <str<strong>on</strong>g>the</str<strong>on</strong>g> area. India’s envir<strong>on</strong>ment ministry ultimately denied Vedanta’s permit to mine bauxite in Eastern India<br />

after a government report c<strong>on</strong>cluded <str<strong>on</strong>g>the</str<strong>on</strong>g> project it would harm local tribal people. Vedanta’s Alumina<br />

Refinery in Lanjigarh also was critiqued by <str<strong>on</strong>g>the</str<strong>on</strong>g> Orissa State Polluti<strong>on</strong> C<strong>on</strong>trol Board for causing air polluti<strong>on</strong><br />

and water polluti<strong>on</strong>. Various Indian government instituti<strong>on</strong>s have begun str<strong>on</strong>gly criticizing <str<strong>on</strong>g>the</str<strong>on</strong>g> company.<br />

In 2010, <str<strong>on</strong>g>the</str<strong>on</strong>g> Church of England sold its holding in Vedanta Resources citing <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s low level of<br />

respect for human rights. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r instituti<strong>on</strong>s that have divested <str<strong>on</strong>g>the</str<strong>on</strong>g>ir Vedanta stock include <str<strong>on</strong>g>the</str<strong>on</strong>g> Joseph<br />

- 50 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

Rowntree Charitable Trust, <str<strong>on</strong>g>the</str<strong>on</strong>g> Marlborough Ethical Fund, Millfield House Foundati<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> BP Pensi<strong>on</strong><br />

Fund. The British and Norwegian governments have both c<strong>on</strong>demned <str<strong>on</strong>g>the</str<strong>on</strong>g> Niyamgiri Hills project, and<br />

Martin Currie Investments has also disinvested following pressure from Survival <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g>.<br />

In September 2010, <str<strong>on</strong>g>the</str<strong>on</strong>g> Madras High Court ordered Sterlite to close its copper refinery at Tuticorin in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

sou<str<strong>on</strong>g>the</str<strong>on</strong>g>rn Indian state of Tamil Nadu, owing to violati<strong>on</strong>s of envir<strong>on</strong>mental laws. 131<br />

Vedanta Resources’ envir<strong>on</strong>mental score <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> CSR is 61. Sterlite Industries’ score is 69. Both are absent<br />

from <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

ABURIZAL BAKRIE & FAMILY, INDONESIA<br />

$2.1 BILLION [AS OF 2010]<br />

Wealth: Aburizal Bakrie’s family’s Bakrie Group c<strong>on</strong>ducts business in agriculture, real estate, trade, shipping,<br />

banking, insurance, media, manufacturing, c<strong>on</strong>structi<strong>on</strong>, and mining. The family-owned PT Bumi Resources<br />

Mineral, Ind<strong>on</strong>esia’s largest coal-mining company, is valued at around $3 billi<strong>on</strong>. 132 In November 2010, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Bakrie family swapped its coal mining shares with a member of <str<strong>on</strong>g>the</str<strong>on</strong>g> Rothschild banking clan, in a $3 billi<strong>on</strong><br />

deal to gain c<strong>on</strong>trol of Vallar PLC, Rothschild’s mining investment group. 133<br />

Power Networks: The family business is <strong>on</strong>e of Ind<strong>on</strong>esia’s most influential. Aburizal Bakrie is now<br />

president of Ind<strong>on</strong>esia’s ruling Golkar Party and is likely to become <str<strong>on</strong>g>the</str<strong>on</strong>g> next Ind<strong>on</strong>esian president in <str<strong>on</strong>g>the</str<strong>on</strong>g> 2014<br />

electi<strong>on</strong>s. In November 2009, <str<strong>on</strong>g>the</str<strong>on</strong>g> Bakrie Group purchased a 24% stake in PT Newm<strong>on</strong>t Nusa Tengarra, a<br />

copper-and-gold mining company and signed a sec<strong>on</strong>d deal to purchase 14 percent of ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r mining<br />

company, Newm<strong>on</strong>t Nusa Tengarra. The Jakarta Post observed <str<strong>on</strong>g>the</str<strong>on</strong>g>se purchases provided “yet more proof of<br />

how powerful <str<strong>on</strong>g>the</str<strong>on</strong>g> politically wired c<strong>on</strong>glomerate has become.” 134<br />

Envir<strong>on</strong>ment: In 2006, PT Lapindo Brantas, <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> Bakrie Group’s mining companies, was resp<strong>on</strong>sible<br />

for Ind<strong>on</strong>esia’s worst envir<strong>on</strong>mental disaster. While searching for a natural gas deposit in <str<strong>on</strong>g>the</str<strong>on</strong>g> Sidoarjo regi<strong>on</strong><br />

of East Java, <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s digging triggered a natural gas blowout that unleashed a devastating “mud<br />

volcano,” <str<strong>on</strong>g>the</str<strong>on</strong>g> largest <strong>on</strong> record. The mud drove 13,146 families from <str<strong>on</strong>g>the</str<strong>on</strong>g>ir homes and buried roads and<br />

- 51 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

farmlands. The mud c<strong>on</strong>tinues to flow unchecked—at a rate of 30,000 cubic meters of foul-smelling mud<br />

each day. At <str<strong>on</strong>g>the</str<strong>on</strong>g> time of <str<strong>on</strong>g>the</str<strong>on</strong>g> disaster, Aburizal Bakrie was serving as Ind<strong>on</strong>esia’s Minister for Welfare and it is<br />

believed that he avoided legal resp<strong>on</strong>sibility thanks to widespread bribery. Bakrie’s Golkar Party now hopes to<br />

have <str<strong>on</strong>g>the</str<strong>on</strong>g> disaster area declared a “geological tourist attracti<strong>on</strong>.” 135 In September 2011, <str<strong>on</strong>g>the</str<strong>on</strong>g> Ind<strong>on</strong>esian<br />

government offered to pay $127 milli<strong>on</strong> to victims of <str<strong>on</strong>g>the</str<strong>on</strong>g> mudflow “until <str<strong>on</strong>g>the</str<strong>on</strong>g> resp<strong>on</strong>sible party… is able to<br />

pay.” 136<br />

BRADLEY WAYNE HUGHES, USA<br />

$1.8 BILLION [AS OF SEPTEMBER 2011]<br />

Wealth: B. Wayne Hughes is currently <str<strong>on</strong>g>the</str<strong>on</strong>g> vice president of American Commercial Equities. Hughes started<br />

in real estate and built a fortune by starting <str<strong>on</strong>g>the</str<strong>on</strong>g> first successful self-storage business. Today, Public Storage<br />

boasts more than 2,100 sites in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. with an additi<strong>on</strong>al 135 milli<strong>on</strong> square feet of storage space available<br />

for rent in Europe. Hughes was CEO for Public Storage until his retirement in 2002. His family owns 17<br />

percent of <str<strong>on</strong>g>the</str<strong>on</strong>g> company and his s<strong>on</strong> and daughter sit <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> board.<br />

Power Networks: Hughes is a major c<strong>on</strong>servative funder who has given milli<strong>on</strong>s of dollars to Karl Rove’s<br />

American Crossroads, which used <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ey to help finance GOP campaigns in <str<strong>on</strong>g>the</str<strong>on</strong>g> November 2010<br />

electi<strong>on</strong>s that ushered in <str<strong>on</strong>g>the</str<strong>on</strong>g> Tea Party’s takeover of C<strong>on</strong>gress. That was also <str<strong>on</strong>g>the</str<strong>on</strong>g> year when <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> United<br />

States’ most progressive c<strong>on</strong>gressi<strong>on</strong>al leaderships came close to passing <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s first comprehensive<br />

climate legislati<strong>on</strong>, but was still outmaneuvered by its well-funded opp<strong>on</strong>ents. Hughes also supports <str<strong>on</strong>g>the</str<strong>on</strong>g> taxexempt<br />

Progress for America, a group whose affiliated Voter Fund poured milli<strong>on</strong>s of dollars into both of<br />

George W. Bush’s presidential campaigns. (The Federal Electi<strong>on</strong>s Committee subsequently ordered <str<strong>on</strong>g>the</str<strong>on</strong>g> Voter<br />

Fund to pay a $750,000 civil penalty for violating campaign finance laws during <str<strong>on</strong>g>the</str<strong>on</strong>g> 2004 presidential<br />

electi<strong>on</strong>.) 137 In <str<strong>on</strong>g>the</str<strong>on</strong>g> 2010 midterm electi<strong>on</strong>s, Hughes c<strong>on</strong>tributed $1.6 milli<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> Republican campaigns 138<br />

and also gave $2.3 milli<strong>on</strong> to American Crossroads to spend <strong>on</strong> campaign ads. 139<br />

Envir<strong>on</strong>ment: American Commercial Equities and Public Storage have no CSR ratings and are absent from<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

- 52 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

CARL LINDNER, JR. & FAMILY, USA<br />

$1.7 BILLION [AS OF MARCH 2010]<br />

Wealth: Carl Lindner started his first business in 1940 when he opened an ice cream parlor with his two<br />

bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs. The ice cream shop grew into <str<strong>on</strong>g>the</str<strong>on</strong>g> United Dairy Farmers chain with nearly 200 stores in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Midwest. By 1971, Lindner had expanded into banking, investments and insurance. Lindner <strong>on</strong>ce owned a<br />

c<strong>on</strong>trolling interest in Chiquita Brands but today, most of his holdings are c<strong>on</strong>centrated in <str<strong>on</strong>g>the</str<strong>on</strong>g> American<br />

Financial Group (AFG), which sells property and casualty insurance. Lindner is a part owner of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Cincinnati Reds baseball team. The last time Lindner was <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes 400 list of America’s Richest People<br />

was in 2009, when he had a net worth of $1.75 billi<strong>on</strong>. 140<br />

Power Networks: Lindner is a major c<strong>on</strong>servative funder, c<strong>on</strong>solidating <str<strong>on</strong>g>the</str<strong>on</strong>g> power of anti-climate<br />

politicians. In <str<strong>on</strong>g>the</str<strong>on</strong>g> 2008 Presidential race, he was a supporter of Republican candidate Mitt Romney. AFG<br />

d<strong>on</strong>ated $400,000 to American Crossroads during <str<strong>on</strong>g>the</str<strong>on</strong>g> 2010 midterm electi<strong>on</strong>s. 141 AFG is a top d<strong>on</strong>or to Rep.<br />

John Boehner’s Speaker Fund and ranked sec<strong>on</strong>d behind AT&T for individual d<strong>on</strong>ati<strong>on</strong>s according to<br />

campaign reporting records for September 2011. 142<br />

Envir<strong>on</strong>ment: AFG has a CSR Hub envir<strong>on</strong>mental score of 38. The company does not appear <strong>on</strong><br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Dow J<strong>on</strong>es Sustainability Index.<br />

- 53 -


NOTES<br />

— INDIVIDUALS OF UNDUE INFLUENCE —<br />

2 States News Service (2010). UN Advisory Group seeks to enhance public-private links to boost access to energy. July<br />

15, 2010.<br />

4 DJSI World (2010).<br />

5 http://www.csrhub.com/company_info/Br<strong>on</strong>co-Drilling-Company<br />

6 http://www.forbes.com/sites/andreamurphy/2011/02/08/private-companies-2011s-top-spot<br />

7 Forbes.<br />

8 Mayer, J. (2010). Covert operati<strong>on</strong>s. The New Yorker, Aug. 30, 2010.<br />

http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer<br />

9 Greenpeace (2010). Koch Industries: secretly funding <str<strong>on</strong>g>the</str<strong>on</strong>g> climate change denial machine.<br />

http://www.greenpeace.org/usa/campaigns/global-warming-and-energy/polluterwatch/koch-industries/#a0<br />

10 DJSI (2010). http://www.sustainability-indexes.com/djsi_protected/djsi_na/SAM_DJSINA_Comp<strong>on</strong>ents.pdf<br />

11 http://www.greenpeace.org/usa/campaigns/global-warming-and-energy/polluterwatch/koch-industries/<br />

12 Forbes.<br />

13 DJSI (2010) http://www.sustainabilityindex.com/djsi_protected/djsi_world/comp<strong>on</strong>ents/SAM_DJSIWorldexUS_Comp<strong>on</strong>ents.pdf<br />

14 South American Business Informati<strong>on</strong> (2010). Brazil: OSX to set up shipyard in Rio De Janeiro. Nov. 17, 2010.<br />

15 About.com (2010). Cleanin Lagoa: <str<strong>on</strong>g>the</str<strong>on</strong>g> Lagoa Limpa envir<strong>on</strong>mental recovery project in Rio de Janeiro.<br />

http://gobrazil.about.com/od/riodejaneiro/ss/cleanlago<strong>on</strong>.htm<br />

16 Forbes.<br />

17 L<strong>on</strong>d<strong>on</strong> Telegraph (2010). BP invests $2.5bn in Canadian oil sands. Nov. 30, 2010.<br />

18 http://philanthropy.com/article/Building-a-Spirit-of/55195/<br />

19 DJSI (2010). http://www.sustainability-index.com/djsi_protected/djsi_asiapacific/SAM_DJSIAP_Comp<strong>on</strong>ents.pdf<br />

20 Forbes. http://www.sustainability-index.com/djsi_protected/djsi_world/comp<strong>on</strong>ents/SAM_DJSIWorld_Comp<strong>on</strong>ents.pdf<br />

21 http://en.wikipedia.org/wiki/List_of_oil_refineries<br />

22 Value Creati<strong>on</strong> Website (2010). Value Creati<strong>on</strong> enters into oilsands development with BP (press release). March 5,<br />

2010 http://www.vctek.com/pdf/VCI-03-15-10.pdf<br />

23 Value Creati<strong>on</strong> Inc. website (2010). Envir<strong>on</strong>mental Review http://www.vctek.com/pdf/vci_pilot_project.pdf<br />

24 http://www.nytimes.com/2010/10/29/world/asia/29mumbai.html<br />

26 DJSI (2010). http://www.sustainability-index.com<br />

27 Mat<str<strong>on</strong>g>the</str<strong>on</strong>g>ws, Christopher (2011).“Las Vegas Sands FCPA Probe Sheds Light <strong>on</strong> Macau’s Murky Gaming Industry.”<br />

Main Justice. http://www.mainjustice.com/justanticorrupti<strong>on</strong>/2011/03/04/las-vegas-sands-fcpa-probe-sheds-light<strong>on</strong>-macaus-murky-gaming-industry/<br />

28 Forbes.<br />

29 Bruck, C. (2008). The brass ring: a billi<strong>on</strong>aire’s relentless quest for global influence. The New Yorker. June 30, 2008.<br />

http://www.newyorker.com/reporting/2008/06/30/080630fa_fact_bruck?currentPage=all<br />

30 Tradeshow Week (2008). Sustainable building blocks. Aprili 21, 2008.<br />

31 http://www.businessweek.com/news/2010-10-03/cheung-k<strong>on</strong>g-sun-hung-kai-sell-hk-11-billi<strong>on</strong>-worth-of-newhomes.html<br />

32 http://www.shkp.com/en/scripts/about/about_envir<strong>on</strong>ment.php<br />

33 DJSI (2010).<br />

34 SHKP.com (2010). SHKP wins six prestigious awards for envir<strong>on</strong>mental excellence, including <strong>on</strong>e gold.<br />

http://www.shkp.com/en/scripts/news/news_press_detail.php?press_id=4094<br />

35 Hoovers (2010).<br />

36 The Times (2007). UK’s richest man in slave labor row. June 10, 2007<br />

http://www.times<strong>on</strong>line.co.uk/tol/news/uk/article1909761.ece<br />

37 Salgado, I. (2010). SRI companies ’flaut envir<strong>on</strong>mental laws.’ The Star (South Africa). Dec. 8, 2010.<br />

38 The Star (South Africa) (2010). SRI index companies’ irresp<strong>on</strong>sible acts exposed. Dec. 8, 2010.<br />

39 DJSI (2010). http://www.sustainabilityindex.com/djsi_protected/djsi_world/comp<strong>on</strong>ents/SAM_DJSIWorldexUS_Comp<strong>on</strong>ents.pdf<br />

40 Forbes.<br />

41 http://www.forbes.com/lists/2007/10/07billi<strong>on</strong>aires_Lee-Shau-Kee_7PNH.html<br />

42 DJSI (2010). http://www.sustainability-indexes.com/07_htmle/data/djsiworld80.html<br />

43 http://www.severstal.com/eng/csr/issues/health_safety_envir<strong>on</strong>ment/document247.phtml.<br />

44 Forbes.<br />

- 54 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

46 Galpin, R. (2007). Toxic truth of a secretive Siberian city. BBC News. April 5, 2007. http://www.bbc.co.uk/news/uk/<br />

47 Jacks<strong>on</strong>, B. (2010). Chimneys of Hell. The Sun (England).<br />

48 Ria Novosti (2009). Norilsk Nickel acknowledges polluti<strong>on</strong>, says measures taken. Nov. 20, 2009.<br />

http://en.rian.ru/russia/20091120/156916643.html<br />

49 http://www.nornik.ru/en/development/envir<strong>on</strong>mental_policy/<br />

50 Hares Engineering (2006). http://haresengineering.net/news/direct.html<br />

51 [“Oman Company Eyes Nautilus,” http://ramumine.wordpress.com/page/2/?archives-list=1<br />

52 Blumgart, J. (2010). Labor’s New Globalism; b<strong>on</strong>ds of steel. American Prospect. December 2010.<br />

53 http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=111047&sn=Detail<br />

54 http://en.wikipedia.org/wiki/Icelandic_outvasi<strong>on</strong><br />

55 AFX <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Focus (2007). Violati<strong>on</strong>s found at TNK-BP gas field in Siberia. January 29, 2007.<br />

56 Tendersinfo (2010). Russian Federati<strong>on</strong>: TNK-BP to spend over $20 milli<strong>on</strong> <strong>on</strong> envir<strong>on</strong>mental projects at Saratov<br />

refinery. Oct. 14, 2010.<br />

57 http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8355472/Gazprom-wins-l<strong>on</strong>g-Kovykta-battleover-TNK-BP-gas.html<br />

58 DJSI (2010). http://www.sustainabilityindexes.com/djsi_protected/djsi_world/comp<strong>on</strong>ents/SAM_DJSIWorldexUS80_Comp<strong>on</strong>ents.pdf<br />

59 http://www.alfagroup.org/sp<strong>on</strong>sorship.aspx<br />

60 http://www.lukoil.com/press.asp?div_id=1&year=2010&id=2143&pr=yes<br />

61 http://www.redorbit.com/news/business/2005847/lukoil_americas_corporati<strong>on</strong>_announces_sale_of_getty_<br />

petroleum_marketing_inc<br />

62 Forbes.<br />

63 Weir, F. (2007). Black Sea oil spill blamed <strong>on</strong> Russia’s lax standards. Christian Science M<strong>on</strong>itor. Nov. 15, 2007.<br />

64 http://www.lukoil.com/static_6_5id_268_.html<br />

65 http://www.sptimes.ru/index.php?acti<strong>on</strong>_id=2&story_id=12973<br />

66 http://en.wikipedia.org/wiki/Roman_Abramovich#Governor<br />

67 http://news.bbc.co.uk/2/hi/business/4293684.stm<br />

68 PBS (2003). http://www.pbs.org/fr<strong>on</strong>tlineworld/stories/moscow/abramovich.html<br />

69 Petry, C. (2010). Evraz NA faces envir<strong>on</strong>mental lawsuit. Metal Bulletin, Aug. 18, 2010.<br />

70 Salgado, I. (2010). SRI companies ’flaut envir<strong>on</strong>mental laws.’ The Star (South Africa). Dec. 8, 2010.<br />

71 http://www.evraz.com/social/envir<strong>on</strong>ment/<br />

72 http://www.penoles.com.mx/penoles/ingles/social_resp/envir<strong>on</strong>mental_pol.php<br />

http://www.businesswire.com/news/home/20070801006277/en/RCAI-Closes-Deal-Alderox-Industrias-Penoles-S.A<br />

73 http://en.wikipedia.org/wiki/John_Fredriksen<br />

74 PEW Charitable Trusts (2009). Pure Salm<strong>on</strong> Campaign calls <strong>on</strong> Marine Harvest to reform envir<strong>on</strong>mental performace.<br />

May 25, 2009.<br />

75 http://www.pewtrusts.org/news_room_detail.aspx?id=52356<br />

76 http://www.csrhub.com/company_info/GOLDEN-OCEAN-GROUP-LIMITED<br />

77 http://www.csrhub.com/company_info/MARINE-HARVEST-ASA.<br />

78 Forbes.<br />

79 http://www.csrhub.com/company_info/Empresas-Cmpc-SA.<br />

80 http://www.legacy.com/NS/Obituary.aspx?pid=151468492<br />

81 http://www.forbes.com/sites/zinamoukheiber/2011/05/31/israeli-billi<strong>on</strong>aire-family-slapped-with-u-s-sancti<strong>on</strong>s-fortrade-with-iran/<br />

82 USA Today (2002). U.S. keeps wary eye <strong>on</strong> cruise ships for more polluti<strong>on</strong>. Nov. 8, 2002.<br />

http://www.usatoday.com/travel/news/2002/2002-11-08-cruise-dumping.htm<br />

83 EHS Today (2002). Royal Caribbean ships sail away with envir<strong>on</strong>mental awards. Mar. 19, 2002<br />

http://ehstoday.com/news/ehs_imp_35285/<br />

84 Forbes. http://www.forbes.com/lists/2010/10/billi<strong>on</strong>aires-2010_Shashi-Ravi-Ruia_OVAG.html<br />

85 http://www.forbes.com/sites/zackomalleygreenburg/2011/05/06/billi<strong>on</strong>aire-len-blavatnik-buys-warner-musicgroup-for-3-3-billi<strong>on</strong>/<br />

86 http://www.ipsnews.net/news.asp?idnews=38667<br />

87 Forbes.<br />

88 http://www.forbes.com/profile/viktor-rashnikov<br />

89 SKRIN Market & Corporate News (2010). Putin chairs meeting <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> development of steel industry in Chelyabinsk.<br />

July 26, 2010.<br />

- 55 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

90 P. Green’s 1992 U.S. News and World Report<br />

91 http://www.blacksmithinstitute.org/wwpp2007/finalReport2007.pdf<br />

92 http://www.blacksmithinstitute.org/wwpp2007/finalReport2007.pdf<br />

93 http://www.nytimes.com/2008/03/22/business/worldbusiness/22oil.html] In July 2011, TNK-BP acquired a 45%<br />

stake in 21 of Petra Energia’s oil and gas explorati<strong>on</strong> blocks in <str<strong>on</strong>g>the</str<strong>on</strong>g> Brazilian Amaz<strong>on</strong>.<br />

[http://www.investinbrazil.biz/investmentbrazil/2011/07/russia%E2%80%99s-tnk-bp-in-farm-out-agreement-withbrazilian-petra-energia/]<br />

94 Osborn, Andrew (2010). “Russian Oligarch facing World’s Most Expensive divorce.” The Telegraph<br />

http://www.telegraph.co.uk/news/worldnews/europe/russia/7868766/Russian-oligarch-facing-worlds-mostexpensive-divorce.html<br />

95 Forbes (2011). “The World’s Billi<strong>on</strong>aires: Profile.” http://www.forbes.com/profile/dmitry-rybolovlev/<br />

96 http://www.uralkali.com/eng/development/envir<strong>on</strong>ment<br />

97 http://www.jindal.com/policies.htm<br />

98 http://www.forbes.com/profile/harold-simm<strong>on</strong>s<br />

99 http://www.forbes.com/sites/clareoc<strong>on</strong>nor/2011/07/20/rick-perry-for-president-meet-24-billi<strong>on</strong>aires-whovebacked-him/2/]<br />

100 http://www.epa.gov/R5Super/npl/illinois/ILD096731468.htm<br />

101 http://www.epa.gov/superfund/programs/recycle/live/regi<strong>on</strong>5_il.html<br />

102 http://www.forbes.com/profile/steve-cohen/<br />

103 http://www.businessinsider.com/steve-cohen-hosts-a-dinner-party-with-big-republican-d<strong>on</strong>ors-to-make-sure-<str<strong>on</strong>g>the</str<strong>on</strong>g>ywin-next-time-2010-8<br />

104 http://dealbook.nytimes.com/2010/08/16/cohens-fund-moves-deeper-into-<str<strong>on</strong>g>the</str<strong>on</strong>g>-oil-patch/<br />

105 en.wikipedia.org/wiki/Kumar_Mangalam_Birla<br />

106 http://www.indiaenvir<strong>on</strong>mentportal.org.in/node/277566, http://www2.fluoridealert.org/Polluti<strong>on</strong>/Aluminum-<br />

Industry/India-Serial-polluter.-Hindalco-c<strong>on</strong>tinues-to-violate-norms-damages-crops<br />

107 http://www.adityabirla.com/our_companies/indian_companies/essel_mining.htm.<br />

108 PR Newswire (2010). Novelis receives architectural envir<strong>on</strong>mental award in Dubai; new cladding product helps<br />

achieve sustainability goals. December 2, 2010.<br />

109 http://www.csrhub.com/company_info/Aditya-Birla-Management-Corporati<strong>on</strong>-Pvt-Ltd<br />

110 http://en.rian.ru/business/20100828/160371983.html<br />

111 http://www.huffingt<strong>on</strong>post.com/2010/08/17/news-corp-d<strong>on</strong>ates-1-milli_n_684462.html<br />

112 http://www.nytimes.com/2010/08/29/opini<strong>on</strong>/29rich.html?pagewanted=all<br />

113 http://www.examiner.com/envir<strong>on</strong>mental-policy-in-nati<strong>on</strong>al/rupert-murdoch-ceo-of-fox-news-believes-globalwarming-will-be-catastrophic<br />

114 http://www.woopidoo.com/business_quotes/authors/rupert-murdoch/quotes.htm<br />

115 http://www.bizjournals.com/denver/print-editi<strong>on</strong>/2011/01/21/anschutz-energy-projects-move-forward.html<br />

116 O<str<strong>on</strong>g>the</str<strong>on</strong>g>r notable Parsis include Freddy Mercury (born Farrokh Bulsara), lead singer of Queen, and Zubin Mehta,<br />

c<strong>on</strong>ductor.<br />

117 http://www.telegraph.co.uk/earth/envir<strong>on</strong>ment/forests/5106102/Silvio-Berlusc<strong>on</strong>i-backs-Prince-Charless-schemeto-save-<str<strong>on</strong>g>the</str<strong>on</strong>g>-rainforests.html<br />

118 France 24 (2010). Italian government willing to risk same fate for Mediterranean as Gulf of Mexico. Nov. 6, 2010.<br />

http://observers.france24.com/en/c<strong>on</strong>tent/20100611-berlusc<strong>on</strong>i-willing-risk-same-fate-mediterranean-gulf-mexicopetroceltic-cygam-mog-eni-offshore<br />

119 Forbes.<br />

120 Reliancegroup.com (2010). Corporate Social Resp<strong>on</strong>sibility. http://www.relianceadagroup.com/ada/corporate.html<br />

121 DJSI (2010.<br />

122 Esmerk (2010). Brazil: CSN to invest BRL 216mn in envir<strong>on</strong>mental protecti<strong>on</strong> measures. Dec. 8, 2010.<br />

123 Business News Americas (2009). CSN, envir<strong>on</strong>mental agency resolve polluti<strong>on</strong> dispute. Sept. 3, 2009.<br />

124 http://www.istockanalyst.com/article/viewiStockNews/articleid/2541502<br />

125 http://www.change.org/petiti<strong>on</strong>s/tell-golds-gym-stop-supporting-anti-gay-politicians<br />

126 Ibid.<br />

127 http://www.nrdcacti<strong>on</strong>fund.org/updates/spotlight-american-crossroads.html/]<br />

[http://www.boemre.gov/civilpenalties/CP_2006.HTM<br />

128 http://www.forbes.com/profile/anil-agarwal/]<br />

129 http://www.minesandcommunities.org/article.php?a=9688<br />

130 http://www.survivalinternati<strong>on</strong>al.org/news/5546<br />

- 56 -


— INDIVIDUALS OF UNDUE INFLUENCE —<br />

131 Bloomberg (2010). Sterlite asked to close copper smelter <strong>on</strong> envir<strong>on</strong>mental grounds. September 28, 2010.<br />

http://www.bloomberg.com/news/2010-09-28/sterlite-industries-asked-to-close-copper-smelter-<strong>on</strong>-envir<strong>on</strong>mentalgrounds.html<br />

132 http://www.wisnuwijaya.com/2010/04/bumi-resources-mineral-to-go-ipo.html<br />

133 http://www.forbes.com/lists/2010/80/ind<strong>on</strong>esia-billi<strong>on</strong>aires-10_Aburizal-Bakrie_0J8F.html<br />

134 http://www.<str<strong>on</strong>g>the</str<strong>on</strong>g>jakartaglobe.com/business/<str<strong>on</strong>g>the</str<strong>on</strong>g>-bakrie-group-coal-hard-cash-and-chinese-whispers/345131<br />

135 http://www.bettylovesblogging.com/touring-<str<strong>on</strong>g>the</str<strong>on</strong>g>-sidoarjo-mudflow-site/]<br />

136 http://www.<str<strong>on</strong>g>the</str<strong>on</strong>g>jakartapost.com/news/2011/04/25/govt-temporarily-compensate-sidoarjo-mudflow-victims.html<br />

137 http://www.legistorm.com/score/viewPressRelease/id/6868.html<br />

138 http://politics.usnews.com/news/articles/2010/09/27/gop-fat-cats-spending-big-<strong>on</strong>-midterm-electi<strong>on</strong>s.html<br />

139 Eggen & Farnam (2010). Familiar faces funding c<strong>on</strong>servative attack ads. Washingt<strong>on</strong> Post. Oct. 23, 2010.<br />

140 http://www.bizjournals.com/cincinnati/news/2011/09/21/lindner-family-remains-off-forbes.html<br />

141 http://www.washingt<strong>on</strong>post.com/wp-dyn/c<strong>on</strong>tent/article/2010/09/27/AR2010092706500.html<br />

142 McAuliff, M. (2010). ’Mad’ World As D.C. Insider ’Stands’ Against Politics As Usual Incoming, Chain-Smoking<br />

Speaker Of The House Is Expert In Working Washingt<strong>on</strong> System To Advantage. Daily News (New York). Nov. 7,<br />

2010.<br />

PHOTO CREDITS<br />

(1) Anything Hollywod (2)(3) The Top Ten Rich<br />

People , Your Best 100<br />

(4) Richest Lists <br />

(5) The Origin of < http://www.<str<strong>on</strong>g>the</str<strong>on</strong>g>originof.com/li-ka-shing.html> (6) All Voices<br />

(7) The Richest People<br />

(8) Ami<str<strong>on</strong>g>the</str<strong>on</strong>g>swaran<br />

(9) Luxpresso <br />

(10) CUHK (11) Argophilia<br />

http://www.argophilia.com/news/tui-travel-gains-c<strong>on</strong>fidence-and-russian-investment/21394/> (12) The World’s Richest <<br />

http://<str<strong>on</strong>g>the</str<strong>on</strong>g>worldsrichest.com/people/vladimir-potanin > (13) The World’s Richest < http://<str<strong>on</strong>g>the</str<strong>on</strong>g>worldsrichest.com/people/alisherusmanov><br />

(14) Impacto < http://www.impact<strong>on</strong>y.com/2011/03/los-mas-ricos-de-latinoamerica/> (15) Mediacrat <<br />

http://mediacrat.com/projects/spears-russia-launch/> (16) The Richest <br />

(17) Betor < http://blogs.bettor.com/Manchester-United-vs-Chelsea-FC-Roman-Abramovich-to-sack-Carlo-Ancelottiafter-UEFA-Champi<strong>on</strong>s-League-defeat-Part-2-a62533><br />

(18) < http://sites.google.com/site/faroldelacalle/losmsricosdemxico> (19)<br />

(20) (21) (22)<br />

,<br />

,<br />

<br />

(23) < http://www.jewishledger.com/2011/06/israeli-shipping-magnate-philanthropist-ofer-dies/> (24) (25) Richest List<br />

(26) Bogatier-World News Korea.<br />

(27)<br />

(28)<br />

(29) St. Petersburg <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Ec<strong>on</strong>omic<br />

<str<strong>on</strong>g>Forum</str<strong>on</strong>g> (30) The Moscow Times (31) We Women Today<br />

(32) Texans For Public Justice (33) <br />

(34) St. Petersburg <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Ec<strong>on</strong>omic <str<strong>on</strong>g>Forum</str<strong>on</strong>g> <br />

(35) <br />

(36)< itsbramma.blogspot.com> (37) (38) <br />

(39) (40)<<br />

http://vindicatemj.wordpress.com/2011/09/19/frank-dileo-and-philip-anschutz-of-aeg-in-a-deal-with-michael-jacks<strong>on</strong>/><br />

(41)(42) <br />

(43)< http://www.beingnordic.com/2010/07/berlusc<strong>on</strong>i-and-finnish-pizza.html><br />

(44) (45) (46)<<br />

http://www.statesman.com/blogs/c<strong>on</strong>tent/shared-gen/blogs/austin/<str<strong>on</strong>g>the</str<strong>on</strong>g>ticker/entries/financial_services/> (47)<br />

(48) <br />

(49) <br />

(50)<br />

- 57 -


— KOCHTOPUS —<br />

- 58 -


— KOCHTOPUS —<br />

KOCHTOPUS<br />

THE KOCH’S CAPTURE OF DEMOCRACY<br />

Any<strong>on</strong>e who tries to comprehend <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>temporary political processes in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States will come across<br />

billi<strong>on</strong>aires such as <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs. Charles and David Koch’s combined wealth ranks <str<strong>on</strong>g>the</str<strong>on</strong>g>m third <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Forbes global list after Carlos Slim and Bill Gates, and <str<strong>on</strong>g>the</str<strong>on</strong>g>y own Americas 2 nd largest privately held company,<br />

Koch Industries. They use <str<strong>on</strong>g>the</str<strong>on</strong>g>ir immense wealth to influence democratic decisi<strong>on</strong> making at all levels of<br />

policy making by funding political acti<strong>on</strong> committees, think tanks, right wing political movements, and<br />

individual politicians, advancing <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own political agenda of less regulati<strong>on</strong> and limited government. They<br />

also happen to sit <strong>on</strong> a family fortune built by fossil fuels (see intro by Menotti).<br />

The Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs use this influence network to pursue <str<strong>on</strong>g>the</str<strong>on</strong>g>ir libertarian agenda in almost every level of<br />

government. In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980 presidential electi<strong>on</strong>, David Koch ran against R<strong>on</strong>ald Reagan as <str<strong>on</strong>g>the</str<strong>on</strong>g> vice presidential<br />

candidate of <str<strong>on</strong>g>the</str<strong>on</strong>g> Libertarian Party, sharing <str<strong>on</strong>g>the</str<strong>on</strong>g> ticket with presidential candidate Ed Clark. Whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g>y are<br />

spending milli<strong>on</strong>s <strong>on</strong> lobbyists, c<strong>on</strong>tributing milli<strong>on</strong>s to astroturf organizati<strong>on</strong>s, or creating think tanks to<br />

advocate <str<strong>on</strong>g>the</str<strong>on</strong>g>ir right wing agenda, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir political ideology is persistent.<br />

Charles and David Koch would prefer to keep <str<strong>on</strong>g>the</str<strong>on</strong>g>ir influence network hidden. Recent research and<br />

investigative reporting has exposed <str<strong>on</strong>g>the</str<strong>on</strong>g> enormous reach of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir network, but rarely has it been presented as it<br />

is here: a full-fledged multi-pr<strong>on</strong>ged entity that has captured <str<strong>on</strong>g>the</str<strong>on</strong>g> key instituti<strong>on</strong>s of American democracy. This<br />

c<strong>on</strong>ceptual tool aims to identify and explain <str<strong>on</strong>g>the</str<strong>on</strong>g> methods of c<strong>on</strong>trol exerted by <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch network.<br />

WHO THEY ARE<br />

o According to <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes 2011 global billi<strong>on</strong>aires list, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir combined wealth of $50 billi<strong>on</strong> ranks <str<strong>on</strong>g>the</str<strong>on</strong>g>m<br />

third behind billi<strong>on</strong>aires Carlos Slim of Mexico ($74 billi<strong>on</strong>) and Bill Gates ($59 billi<strong>on</strong>). Their fa<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

Fred founded <str<strong>on</strong>g>the</str<strong>on</strong>g> “cracking” process that turns crude oil into gasoline, thus <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth is<br />

inextricably linked to green house gas emissi<strong>on</strong>s. Koch Industries has investments in minerals,<br />

ranching, oil and gas, polymers and fibers, refining and chemicals, fertilizers, forest and c<strong>on</strong>sumer<br />

products, commodity trading and services.<br />

o In many of today’s attacks <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment, labor workers, health care, and financial reform <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Koch Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs have been involved. The methods of c<strong>on</strong>trol that <str<strong>on</strong>g>the</str<strong>on</strong>g>y use to influence our<br />

democratic decisi<strong>on</strong>s act as a “full-spectrum” dominance <strong>on</strong> policy making.<br />

o The Cato Institute is <strong>on</strong>e of a few radical right think tanks founed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs. This think<br />

tank promotes free enterprise, deregulati<strong>on</strong> of government, and “secures ec<strong>on</strong>omic liberties”. In<br />

additi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> Cato Institute has been a major d<strong>on</strong>or to Americans for Prosperity, which boasts about<br />

building <str<strong>on</strong>g>the</str<strong>on</strong>g> Tea Party. This influence not <strong>on</strong>ly fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rs <str<strong>on</strong>g>the</str<strong>on</strong>g>ir right wing ideology but also allows<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>m to make more m<strong>on</strong>ey. Charles and David Koch have much to gain from cutting government<br />

spending and electing candidates who are against regulati<strong>on</strong>, especially emissi<strong>on</strong>s regulati<strong>on</strong>s.<br />

- 59 -


— KOCHTOPUS —<br />

The Kochs have been spreading <str<strong>on</strong>g>the</str<strong>on</strong>g>ir anti-democratic agenda and it has become an infectious disease to our<br />

envir<strong>on</strong>ment, labor uni<strong>on</strong>s, healthcare, and government. Understanding <str<strong>on</strong>g>the</str<strong>on</strong>g>ir methods of c<strong>on</strong>trol is <str<strong>on</strong>g>the</str<strong>on</strong>g> first<br />

step in making a cohesive effort in reclaiming our democratic processes.<br />

WHEN WEALTH EQUALS POWER<br />

The simplest way of making a fortune is to inherit <strong>on</strong>e. Small or n<strong>on</strong>-existent estate taxes in most countries<br />

means that vast fortunes can be accumulated over time and passed down from generati<strong>on</strong> to generati<strong>on</strong>.<br />

The brainchild behind Koch Industries Inc. was Fred C. Koch, fa<str<strong>on</strong>g>the</str<strong>on</strong>g>r of David and Charles. In 1945 Fred<br />

Koch established Koch Engineering Company. This small start-up immediately became successful with its<br />

equipment and engineering business. In 1966, Charles took over <str<strong>on</strong>g>the</str<strong>on</strong>g> day-to-day management of Koch<br />

Industries Inc. He is <str<strong>on</strong>g>the</str<strong>on</strong>g> chief executive officer and David is <str<strong>on</strong>g>the</str<strong>on</strong>g> vice president. Today Koch Industries Inc.<br />

is <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d largest private company in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States. In <str<strong>on</strong>g>the</str<strong>on</strong>g> past sixty-five years Koch Industries Inc.<br />

has achieved this feat because of its pursuit of growth and new opportunities with complete disregard of<br />

every<strong>on</strong>e else.<br />

In this increasingly globalized world oligarchs are able to establish corporati<strong>on</strong>s in a very short period of time.<br />

Thus <str<strong>on</strong>g>the</str<strong>on</strong>g>se corporati<strong>on</strong>s are able to amass a significant amount of wealth. This wealth accumulati<strong>on</strong> is too<br />

often used to c<strong>on</strong>tribute to electoral campaigns for like-minded or to establish think tanks to create<br />

justificati<strong>on</strong> for policies that <str<strong>on</strong>g>the</str<strong>on</strong>g>y want implemented in our society.<br />

Koch Industries made annual earnings of $100 billi<strong>on</strong> dollars in 2010. With this enormous influx of m<strong>on</strong>ey,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir political influence in <str<strong>on</strong>g>the</str<strong>on</strong>g> House Energy and Commerce Committee is transparent. Koch d<strong>on</strong>ati<strong>on</strong>s have<br />

outspent that of big energy companies such as Exx<strong>on</strong> Mobil. Charles and David Koch want to reap <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

benefits from a proposed Keyst<strong>on</strong>e XL pipeline that will transfer oil from <str<strong>on</strong>g>the</str<strong>on</strong>g> tar sand mines in<br />

TransCanada’s home province of Alberta to Gulf of Mexico oil refineries. The Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs’ Flint Hills<br />

resources operati<strong>on</strong> in Calgary already refines 80 percent of heavy crude from Alberta’s tar sands. Koch<br />

Industries lobbyists wrote to Canadian authorities expressing <str<strong>on</strong>g>the</str<strong>on</strong>g>ir substantial interest in Keyst<strong>on</strong>e XL<br />

pipeline being approved.<br />

METHODS OF CONTROL THAT OLIGARCHS USE TO GAIN POWER<br />

-­‐ Think Tanks: There are four c<strong>on</strong>servative think tanks that <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs have d<strong>on</strong>ated a<br />

significant amount of m<strong>on</strong>ey to; <str<strong>on</strong>g>the</str<strong>on</strong>g>y are <str<strong>on</strong>g>the</str<strong>on</strong>g> Cato Institute ($13,887,640), Citizens for a Sound<br />

Ec<strong>on</strong>omy ($12,356,712), George Mas<strong>on</strong>’s Mercatus Center ($9,674,500), and Americans for<br />

Prosperity Foundati<strong>on</strong> ($5,610,781). These organizati<strong>on</strong>s are <str<strong>on</strong>g>the</str<strong>on</strong>g> top right wing think tanks for<br />

promoting a c<strong>on</strong>servative agenda. They promote free enterprise, deregulati<strong>on</strong> of government, and<br />

secure ec<strong>on</strong>omic liberties, which is ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r way of saying more rights for corporati<strong>on</strong>s.<br />

-­‐ Media Manipulati<strong>on</strong>: In October 2010, ThinkProgress.org exposed a political acti<strong>on</strong> meeting held<br />

by <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs in Aspen, Colorado. The attendees of this meeting were businesses, political<br />

elites, and major media outlets. Some of <str<strong>on</strong>g>the</str<strong>on</strong>g> major media outlets that attended <str<strong>on</strong>g>the</str<strong>on</strong>g> meeting were<br />

Glenn Beck (Fox News), Stephen Moore (Wall Street Journal), and Philip Anschutz (Clarity Media<br />

- 60 -


— KOCHTOPUS —<br />

Group). Kochfacts.com is ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r entity where Koch media is created to fight public scrutiny.<br />

According to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir website, “This site is a repository for media resp<strong>on</strong>ses and factual informati<strong>on</strong><br />

presented by Koch Industries, Inc.” This site is <str<strong>on</strong>g>the</str<strong>on</strong>g>ir effort to explain “factual evidence” of how<br />

Koch Industries is not a terrible corporati<strong>on</strong>. It is crucial to understand that <str<strong>on</strong>g>the</str<strong>on</strong>g> individuals who are<br />

creating <str<strong>on</strong>g>the</str<strong>on</strong>g>se “facts” are employees of Koch Industries Inc. They believe in <str<strong>on</strong>g>the</str<strong>on</strong>g> political agenda that<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs portray.<br />

-­‐ Astroturf Organizati<strong>on</strong>s: Bankrolling <str<strong>on</strong>g>the</str<strong>on</strong>g> radical rights ec<strong>on</strong>omic agenda has been a traditi<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Koch family for decades. In 1958 Fred Koch was <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> founders of <str<strong>on</strong>g>the</str<strong>on</strong>g> John Birch Society, an<br />

American political advocacy organizati<strong>on</strong> that “supports anti-communism, limited government, a<br />

C<strong>on</strong>stituti<strong>on</strong>al Republic, and pers<strong>on</strong>al freedom.” In 1984 David Koch established Citizens for a<br />

Sound Ec<strong>on</strong>omy, whose sole missi<strong>on</strong> is to fight for less government, lower taxes, and less regulati<strong>on</strong>.<br />

However, in 2004 Citizens for a Sound Ec<strong>on</strong>omy split into two entities: Freedom Works and<br />

Americans for Prosperity. The Koch’s remain active in Americans for Prosperity and <str<strong>on</strong>g>the</str<strong>on</strong>g> individual<br />

in charge of FreedomWorks is Dick Armey (Republican Party GOP House majority Leader from<br />

2003 to 2005). The Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs use Americans for Prosperity to stimulate <str<strong>on</strong>g>the</str<strong>on</strong>g> Tea Party, and AFP<br />

organized <str<strong>on</strong>g>the</str<strong>on</strong>g> first nati<strong>on</strong>al Tea Party movements in 2009. These organizati<strong>on</strong>s have <str<strong>on</strong>g>the</str<strong>on</strong>g> ability to<br />

mobilize, educate, and train people. From Koch d<strong>on</strong>ati<strong>on</strong>s, American for Prosperity was able to<br />

create a $5 milli<strong>on</strong> anti-healthcare campaign.<br />

-­‐ Income Defense Industry: A political acti<strong>on</strong> committee of Koch Industries, KochPAC (Koch<br />

Political Acti<strong>on</strong> Committee), has played a tremendous role lobbying in Washingt<strong>on</strong> D.C. Lobbyists<br />

of Koch Industries have spent much of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir time shaping new policy for financial regulati<strong>on</strong>. The<br />

Dodd-Frank Act was passed by C<strong>on</strong>gress under <str<strong>on</strong>g>the</str<strong>on</strong>g> Obama Administrati<strong>on</strong> “to craft new rules to<br />

subject traders in <str<strong>on</strong>g>the</str<strong>on</strong>g> energy industry to increased regulati<strong>on</strong> and transparency” according to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Koch Web of Influence by John Farrell. C<strong>on</strong>gress and regulators are still detailing <str<strong>on</strong>g>the</str<strong>on</strong>g> necessary<br />

changes to implement this new law and Koch lobbyists have spent a c<strong>on</strong>siderable amount of time<br />

shaping <str<strong>on</strong>g>the</str<strong>on</strong>g> bill. A few weeks, after <str<strong>on</strong>g>the</str<strong>on</strong>g> bill was passed, Koch lobbyist Gregory Zerzan held a covert<br />

meeting with SEC Commissi<strong>on</strong>er Troy Paredes and his counsel, Gena Lai to see how <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

government would apply <str<strong>on</strong>g>the</str<strong>on</strong>g> law. According to Greenpeace’s 2011 update report of Koch Industries,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> KochPAC spent $2,645,589 in 2009-2010. KochPAC is also <str<strong>on</strong>g>the</str<strong>on</strong>g> number <strong>on</strong>e oil and gas<br />

c<strong>on</strong>tributor in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S., out spending Exx<strong>on</strong> Mobil. American oligarchs use many specialized<br />

professi<strong>on</strong>als to prevent wealth from being taken, and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir income defense industry is comprised of<br />

lawyers, accountants, wealth management c<strong>on</strong>sultants, tax avoidance c<strong>on</strong>sultants, and lobbyist.<br />

When oligarchs hire <str<strong>on</strong>g>the</str<strong>on</strong>g>m, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir main purpose is to defend as much wealth as possible, and <strong>on</strong>ly<br />

oligarchs would have enough wealth to purchase <str<strong>on</strong>g>the</str<strong>on</strong>g>se services. The industry is global, some of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

key players are Whi<str<strong>on</strong>g>the</str<strong>on</strong>g>rs, Clifford Chance, Linklaters, White & Case, Milbank Tweed Hadly and<br />

McCloy, Weil Gotshal and Manges, and Freeman Freeman and Smiley are known as <str<strong>on</strong>g>the</str<strong>on</strong>g> “magic<br />

circle” firms.<br />

-­‐ Legislatures and Elected Officials: Mike Morgan, <str<strong>on</strong>g>the</str<strong>on</strong>g> previous Director of Public and<br />

Governmental Affairs of Koch Industries, played a significant role in promoting legislati<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs. As of December 2011, Mike Morgan still sits <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Private Enterprise Board of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

American Legislative Exchange Council (ALEC). ALEC is an organizati<strong>on</strong> that promotes limited<br />

government, free markets, and federalism. According to <str<strong>on</strong>g>the</str<strong>on</strong>g> American Associati<strong>on</strong> for Justice,<br />

- 61 -


— KOCHTOPUS —<br />

“ALEC campaigns have covered many issues, but all have ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r protected or promoted a corporate<br />

revenue stream.” ALEC has proposed legislati<strong>on</strong> that benefits Koch Industries and is undermining<br />

climate change prop<strong>on</strong>ents. Major campaign c<strong>on</strong>tributi<strong>on</strong>s from <str<strong>on</strong>g>the</str<strong>on</strong>g> billi<strong>on</strong>aire bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs can be seen<br />

in <str<strong>on</strong>g>the</str<strong>on</strong>g> makeup of <str<strong>on</strong>g>the</str<strong>on</strong>g> House Energy and Commerce Committee. Koch Industries is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest oil<br />

and gas d<strong>on</strong>or, giving $279,500 to 22 Republicans <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> committee and $32,000 to five of its<br />

Democrats, according to <str<strong>on</strong>g>the</str<strong>on</strong>g> Los Angeles Times. In 2010 KochPAC gave political d<strong>on</strong>ati<strong>on</strong>s to<br />

freshman members of C<strong>on</strong>gress, such as Gardner Cory (R-CO) $10,000, Griffith Morgan (R-VA)<br />

$5,000, and Pompeo Mike (R-KS) $10,000.<br />

-­‐ Courts and Judges: Citizens United v Federal Electi<strong>on</strong>s Commissi<strong>on</strong> is a landmark case that will go down<br />

in history for pois<strong>on</strong>ing our electoral process. This case has allowed corporati<strong>on</strong>s to flood our<br />

political marketplace and corrupt our democracy and <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves played a<br />

significant role in enabling this case to advance. Three years ago, Supreme Court Justices Thomas<br />

and Scalia attended a political retreat organized by Charles and David Koch in Palm Spring California<br />

for wealthy c<strong>on</strong>servatives. There is more speculati<strong>on</strong> that Justice Thomas stayed <strong>on</strong> a four-day retreat<br />

which was paid by <str<strong>on</strong>g>the</str<strong>on</strong>g> Federalist Society. The Citizens United case that was supported by Justice<br />

Scalia allowed corporati<strong>on</strong>s to spend limitless amounts of m<strong>on</strong>ey <strong>on</strong> electi<strong>on</strong>s with little public<br />

disclosure.<br />

WORKS CITED<br />

Carrk, T<strong>on</strong>y, and Brad Johns<strong>on</strong>'s. "The Koch Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r, What You Need to Know About <str<strong>on</strong>g>the</str<strong>on</strong>g> Financiers of <str<strong>on</strong>g>the</str<strong>on</strong>g> Radical<br />

Right." Ed. Lee Fang. Center for American Progress Acti<strong>on</strong> Fund (2011): 1-27. Web. 4 Apr. 2011.<br />

.<br />

Farrell, John A. "Koch's Web of Influence." IWatch News. Center for Public Integrity, 6 Apr. 2011. Web. 14 Apr. 2011.<br />

.<br />

Graves, Lisa, Angelo Carus<strong>on</strong>e, Tom Swan, Helen Grieco, and Jeffrey Winters, comps. "Methods of C<strong>on</strong>trol:<br />

Billi<strong>on</strong>aires's "Full-Spectrum Dominance"" Proc. of Inaugural C<strong>on</strong>vening of <str<strong>on</strong>g>the</str<strong>on</strong>g> IFG Plut<strong>on</strong>omy Project, California, San<br />

Francisco. Print<br />

Graves, Lisa. "ALEC Exposed: The Koch C<strong>on</strong>necti<strong>on</strong>." The Nati<strong>on</strong>. Ed. John Nichols. Center for Media and<br />

Democracy, 1 Aug. 2011. Web. 4 Aug. 2011. .<br />

Koch Industries: Still Fueling Climate Denial. Publicati<strong>on</strong>. Washingt<strong>on</strong>, DC: Greenpeace USA, 2011. Still Fueling Climate Denial<br />

2011 Update. Greenpeace USA, 14 Apr. 2011. Web. 15 Apr. 2011. .<br />

Mayer, Jane. "Covert Operati<strong>on</strong>s, The Billi<strong>on</strong>aire Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs Who Are Waging a War against Obama." The New<br />

Yorker (2010): 1-10. Web. 10 Mar. 2011. .<br />

Winters, Jeffrey A. "Democracy and <str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g>." The American Interest Nov. 2011. Web. 20 Oct. 2011. .<br />

Winters, Jeffrey A. <str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g>. Cambridge: Cambridge UP, 2011. Print.<br />

- 62 -


— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

UNCLE SLIM:<br />

THE WORLD’S RICHEST MAN<br />

TONY CLARKE, SABRINA FERNANDES, RICHARD GIRARD<br />

INTRODUCTION<br />

We've all heard about Uncle Sam but now it's time to learn about Uncle Slim. In a world of rising inequalities<br />

between rich and poor, Mexico is <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most unjust countries—a place where a small political and<br />

ec<strong>on</strong>omic elite c<strong>on</strong>trols much of <str<strong>on</strong>g>the</str<strong>on</strong>g> power while more than half <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong> lives in poverty. The main<br />

protag<strong>on</strong>ist in this club of power brokers is Carlos Slim Helú who, according to Forbes Magazine’s annual<br />

rankings, is <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s wealthiest pers<strong>on</strong>. Called a quiet investor by some and a robber bar<strong>on</strong> by o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs, Slim<br />

more than doubled his net worth between 2008 and 2010 from $35 billi<strong>on</strong> to $75 billi<strong>on</strong>. While Slim’s<br />

financial girth was swelling, Mexico’s GDP shrank by 6.1% in 2009 al<strong>on</strong>e. In <str<strong>on</strong>g>the</str<strong>on</strong>g> ten years to 2010, Slim’s<br />

wealth grew by an amazing 585% 1 catapulting him to <str<strong>on</strong>g>the</str<strong>on</strong>g> top of <str<strong>on</strong>g>the</str<strong>on</strong>g> list of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s richest people. During<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> same decade, <str<strong>on</strong>g>the</str<strong>on</strong>g> average pers<strong>on</strong>al income in Mexico <strong>on</strong>ly grew by 0.6% a year, <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest rates in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> world. 2 If he were a country, Slim’s wealth would place him 64 th <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> list of nati<strong>on</strong>al GDPs between<br />

Libya and Sudan.<br />

He has been able to amass an empire of at least 222 companies around <str<strong>on</strong>g>the</str<strong>on</strong>g> world 3 employing an estimated<br />

250,000 people 4 with combined annual revenues topping $386 billi<strong>on</strong>. 5 The size of this empire is so extensive<br />

that Slim is hesitant to c<strong>on</strong>firm <str<strong>on</strong>g>the</str<strong>on</strong>g> number people his companies employ. 6 One puzzling factor is that this<br />

wealth has been accumulated by a man who retains relative an<strong>on</strong>ymity outside <str<strong>on</strong>g>the</str<strong>on</strong>g> world of financial<br />

observers and <str<strong>on</strong>g>the</str<strong>on</strong>g> geographic areas of Mexico and Latin America. Unlike Bill Gates, Slim is not associated<br />

with a single product or corporati<strong>on</strong>, so how has <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s richest pers<strong>on</strong> been able to generate such<br />

astounding wealth and power without broader public scrutiny?<br />

- 63 -


— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

Despite his relative obscurity <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no real mystery as to how Slim has been able to amass and c<strong>on</strong>tinue to<br />

build his fortune. The simple explanati<strong>on</strong> is that Slim is a classic m<strong>on</strong>opolist—he c<strong>on</strong>trols leading companies<br />

in dozens of industries that are resp<strong>on</strong>sible for 7.1% of Mexico’s $1.04 trilli<strong>on</strong> Gross Domestic Product.<br />

According to a New York Times editorial, Slim’s output is equivalent to “<strong>on</strong>e out of every 14 dollars’ worth of<br />

stuff made by all <str<strong>on</strong>g>the</str<strong>on</strong>g> people in <str<strong>on</strong>g>the</str<strong>on</strong>g> country.” 7 The scope of his investments is so large that, over four days of<br />

stock market instability in July-August 2011, his net worth went down by an estimated $8 billi<strong>on</strong> due to an<br />

11% decline in his stock portfolio. 8 With a populati<strong>on</strong> of 112 milli<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d-largest ec<strong>on</strong>omy in Latin<br />

America (14 th in <str<strong>on</strong>g>the</str<strong>on</strong>g> world), Mexico is a huge market for any companies that can gain access. Slim and his<br />

companies have been able to fully exploit this huge market and, in <str<strong>on</strong>g>the</str<strong>on</strong>g> case of <str<strong>on</strong>g>the</str<strong>on</strong>g> lucrative<br />

telecommunicati<strong>on</strong>s sector, he has forged an ir<strong>on</strong>-clad m<strong>on</strong>opoly.<br />

The more difficult questi<strong>on</strong> to answer is how has Slim managed to build his empire with with little to no<br />

public outcry or resistance? This chapter explores this questi<strong>on</strong> by looking at <str<strong>on</strong>g>the</str<strong>on</strong>g> history behind Slim’s wealth<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> impacts his companies have had <strong>on</strong> Mexican society, politics, ec<strong>on</strong>omics and human rights. The<br />

structure of Slim’s financial empire will be exposed as we explore <str<strong>on</strong>g>the</str<strong>on</strong>g> political c<strong>on</strong>necti<strong>on</strong>s and favorable<br />

legislative envir<strong>on</strong>ment in Mexico that have facilitated his mercurial rise to ranks of <str<strong>on</strong>g>the</str<strong>on</strong>g> ultra wealthy. The<br />

results of <str<strong>on</strong>g>the</str<strong>on</strong>g> investigati<strong>on</strong> presented in this chapter show that Carlos Slim is a true global oligarch who is able<br />

to operate with <strong>on</strong>ly minimal accountability because of deep political c<strong>on</strong>necti<strong>on</strong>s and a diverse and complex<br />

financial empire that functi<strong>on</strong>s in a regulatory envir<strong>on</strong>ment that encourages <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>centrati<strong>on</strong> of wealth.<br />

SLIM’S EMPIRE AND THE PRIVATIZATION OF TELMEX<br />

Carlos Slim’s investments and business deals worldwide span a wide range of industries including:<br />

telecommunicati<strong>on</strong>s (teleph<strong>on</strong>e, Internet, cable providers), banking and finance, insurance, news media,<br />

marketing, industrial supplies, retail (including food retail), real estate and management, tobacco, oil and gas,<br />

mining, c<strong>on</strong>structi<strong>on</strong> and infrastructure development, transportati<strong>on</strong>, energy, sports, educati<strong>on</strong>, hospitality,<br />

medical services, and o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs. Slim’s business presence in Mexico al<strong>on</strong>e is so broad that many find it<br />

appropriate to call <str<strong>on</strong>g>the</str<strong>on</strong>g> country “Slimlandia” as it is almost impossible to go a day in Mexico without<br />

c<strong>on</strong>tributing to Slim’s wealth, be it through a ph<strong>on</strong>e call, a quick snack at <strong>on</strong>e of his restaurants, or by making<br />

a deposit at <strong>on</strong>e of his banks. In fact, it was estimated that in 2006, <str<strong>on</strong>g>the</str<strong>on</strong>g> citizens of Mexico c<strong>on</strong>tributed $1.50<br />

per capita or $67 milli<strong>on</strong> total to Slim every day. 9<br />

- 64 -


— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

Slim’s companies account for approximately 40% of <str<strong>on</strong>g>the</str<strong>on</strong>g> listings <strong>on</strong> Mexico’s stock exchange, <str<strong>on</strong>g>the</str<strong>on</strong>g> Bolsa<br />

Mexicana de Valores (BMV, <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican Stock Exchange). 10 Many of his investments are transacted through<br />

his various major c<strong>on</strong>glomerates including Grupo Carso, Grupo Financiero Inbursa and Inmobiliaria Carso.<br />

Slim’s fortune has given rise to a family empire and he often acquires shares <strong>on</strong> behalf of himself and his<br />

children as <str<strong>on</strong>g>the</str<strong>on</strong>g> “Slim Family.” His three older s<strong>on</strong>s hold chief executive officer and presidential positi<strong>on</strong>s at<br />

his main companies. 11 Because of <str<strong>on</strong>g>the</str<strong>on</strong>g> huge number of companies under Slim’s c<strong>on</strong>trol and <str<strong>on</strong>g>the</str<strong>on</strong>g> diverse<br />

industries in which he operates, it is difficult to fully comprehend his reach inside Mexico and throughout<br />

Latin America. A 2007 article in Foreign Policy magazine summed up Slim’s reach saying:<br />

“For Bill Gates to c<strong>on</strong>trol a share of <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. teleph<strong>on</strong>e market similar to Slim’s reach in Mexico, Gates would<br />

have to own AT&T, MCI, Quest, Spring, and Veriz<strong>on</strong> – and even <str<strong>on</strong>g>the</str<strong>on</strong>g>n, Gates would still <strong>on</strong>ly have less than<br />

80 percent market share, well short of Telmex’s 92 percent. To match Slim’s overall market presence in Mexico,<br />

Gates would probably also have to own Alcoa, Phillip Morris, Sears, Best Buy, TGIFriday’s, Dunkin’ D<strong>on</strong>uts,<br />

Marriott, Citibank and JetBlue. For his wealth to be <strong>on</strong> a scale in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States similar to Slim’s in<br />

Mexico, Gates would have to worth $909 billi<strong>on</strong>.” 12<br />

Although Slim began investing his m<strong>on</strong>ey at <str<strong>on</strong>g>the</str<strong>on</strong>g> age of 12 and went <strong>on</strong> to make milli<strong>on</strong>s through business<br />

investment and <str<strong>on</strong>g>the</str<strong>on</strong>g> stock exchange, it was <str<strong>on</strong>g>the</str<strong>on</strong>g> privatizati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al teleph<strong>on</strong>e company Telef<strong>on</strong>os de<br />

Mexico (TELMEX) that provided <str<strong>on</strong>g>the</str<strong>on</strong>g> key opportunity in Slim’s financial career. In 1990, Slim’s Grupo Carso<br />

became <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>trolling shareholder in <str<strong>on</strong>g>the</str<strong>on</strong>g> formerly state-owned TELMEX. Comm<strong>on</strong>ly understood as <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

largest single privatizati<strong>on</strong> in Latin America, this single transacti<strong>on</strong> gave Carlos Slim <str<strong>on</strong>g>the</str<strong>on</strong>g> necessary capital to<br />

expand his empire and set him <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> road to becoming what he is today. 13 The ball started rolling in 1988<br />

when presidential candidate Carlos Salinas campaigned <strong>on</strong> a promise to privatize TELMEX. After winning<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> electi<strong>on</strong>, Salinas quickly and profoundly expanded efforts to liberalize Mexico’s ec<strong>on</strong>omy. A major part of<br />

Salinas’ plan was to sell off most of Mexico’s public enterprises and by 1994, <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s publicly owned<br />

companies had shrunk to 220 firms down from 1,155 in 1982. 14<br />

The sale of TELMEX was <str<strong>on</strong>g>the</str<strong>on</strong>g> most profound privatizati<strong>on</strong> during Salinas’ time in office for three main<br />

reas<strong>on</strong>s: first, <str<strong>on</strong>g>the</str<strong>on</strong>g> sale generated <str<strong>on</strong>g>the</str<strong>on</strong>g> largest sum (U.S. $6 billi<strong>on</strong>) for <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican Treasury from <str<strong>on</strong>g>the</str<strong>on</strong>g> sale of a<br />

single firm; sec<strong>on</strong>dly, <str<strong>on</strong>g>the</str<strong>on</strong>g> sale of TELMEX served as a template for fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r privatizati<strong>on</strong>s; and thirdly, for<br />

political reas<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g> move would set a positive t<strong>on</strong>e for more market liberalizati<strong>on</strong> during Salinas’ mandate. 15<br />

In additi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that <str<strong>on</strong>g>the</str<strong>on</strong>g> company was financially successful, enjoyed a virtual m<strong>on</strong>opoly and had a huge<br />

growth potential made TELMEX a good candidate for privatizati<strong>on</strong> in Salinas’ eyes. 16 Recognizing that<br />

permitting TELMEX to fall into foreign hands would not be popular with <str<strong>on</strong>g>the</str<strong>on</strong>g> public, <str<strong>on</strong>g>the</str<strong>on</strong>g> government<br />

reorganized <str<strong>on</strong>g>the</str<strong>on</strong>g> company to ensure that Mexican investors would c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> majority of TELMEX’s shares.<br />

When <str<strong>on</strong>g>the</str<strong>on</strong>g> transacti<strong>on</strong> went through in December 1990, a c<strong>on</strong>sortium of companies made up of Southwestern<br />

Bell (SBC), France Telecom, and Slim’s Grupo Carso emerged as <str<strong>on</strong>g>the</str<strong>on</strong>g> new owners of TELMEX with Grupo<br />

Carso as <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>trolling shareholder.<br />

Salinas also granted <str<strong>on</strong>g>the</str<strong>on</strong>g> company m<strong>on</strong>opoly status for <str<strong>on</strong>g>the</str<strong>on</strong>g> next six years by closing <str<strong>on</strong>g>the</str<strong>on</strong>g> market of fixed<br />

teleph<strong>on</strong>y (also known as Voice over Internet Protocol). This allowed TELMEX to not <strong>on</strong>ly c<strong>on</strong>trol about<br />

90% of <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican teleph<strong>on</strong>y market 17 but also to increase its teleph<strong>on</strong>y prices, which are still am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

most expensive in <str<strong>on</strong>g>the</str<strong>on</strong>g> world today. 18 By 1994, Slim was <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthiest man in México, with an estimated<br />

fortune of $6.6 billi<strong>on</strong>. 19 The fortune Slim built through TELMEX has allowed him to expand and diversify<br />

his businesses into Internet and cellular teleph<strong>on</strong>e services and bey<strong>on</strong>d. 20 In additi<strong>on</strong>, because Mexico is a<br />

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— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

country where large porti<strong>on</strong>s of <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy are c<strong>on</strong>trolled by m<strong>on</strong>opolies, this provided a perfect<br />

envir<strong>on</strong>ment for a shrewd investor with political ties and large amounts of capital to build a financial empire.<br />

Mexican ec<strong>on</strong>omist Rogelio Ramirez de la O, stated that Slim benefited from "almost predatory advantages in<br />

markets where he faces almost no competiti<strong>on</strong>. [And] for some<strong>on</strong>e who is cash-rich in an ec<strong>on</strong>omy in a<br />

shambles, it's easy to acquire businesses at rock-bottom prices." 21<br />

For example, América Móvil, which began as a subsidiary of TELMEX, is now <str<strong>on</strong>g>the</str<strong>on</strong>g> biggest or sec<strong>on</strong>d-biggest<br />

cellular ph<strong>on</strong>e company in every Latin American country except Chile, where it is third. 22 Close to two-thirds<br />

of Slim’s wealth now lies with América Móvil and it is now <str<strong>on</strong>g>the</str<strong>on</strong>g> main arm of Slim’s telecommunicati<strong>on</strong>s<br />

empire, c<strong>on</strong>trolling both TELMEX and TELMEX <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g>. América Móvil is also <str<strong>on</strong>g>the</str<strong>on</strong>g> fifth-largest<br />

telecom company in <str<strong>on</strong>g>the</str<strong>on</strong>g> world—behind China Mobile, AT&T, Vodaf<strong>on</strong>e, and Telefónica—with a market<br />

capitalizati<strong>on</strong> average of approximately $97 billi<strong>on</strong> in 2010. 23 Slim’s telecom m<strong>on</strong>opoly is incredibly str<strong>on</strong>g<br />

inside Mexico where he c<strong>on</strong>trols 70% of <str<strong>on</strong>g>the</str<strong>on</strong>g> cellular teleph<strong>on</strong>e market, 80% of <str<strong>on</strong>g>the</str<strong>on</strong>g> fixed-line market, and an<br />

estimated 88% of <str<strong>on</strong>g>the</str<strong>on</strong>g> Internet service market. 24 Once m<strong>on</strong>opoly status has been gained, Slim’s companies can<br />

charge higher prices without facing any competiti<strong>on</strong>. According to The Ec<strong>on</strong>omist, home and business landlines<br />

in Mexico cost 45% and 63% more than <str<strong>on</strong>g>the</str<strong>on</strong>g> average am<strong>on</strong>g o<str<strong>on</strong>g>the</str<strong>on</strong>g>r Organizati<strong>on</strong> for Ec<strong>on</strong>omic Co-operati<strong>on</strong><br />

and Development countries, while basic broadband access costs ten times more than <str<strong>on</strong>g>the</str<strong>on</strong>g> rest of <str<strong>on</strong>g>the</str<strong>on</strong>g> OECD. 25<br />

A DIVERSIFIED PORTFOLIO: SLIM’S OTHER HOLDINGS<br />

In additi<strong>on</strong> to his telecommunicati<strong>on</strong>s empire, Slim has invested in both vertical and horiz<strong>on</strong>tal integrati<strong>on</strong> by<br />

owning majority and minority shares in a variety of companies in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r sectors in Mexico. His Grupo Carso<br />

owns 85% of <str<strong>on</strong>g>the</str<strong>on</strong>g> shares of Sears Mexico, which operates through Grupo Sanborns, his retail business<br />

c<strong>on</strong>glomerate. 26 Grupo Carso also c<strong>on</strong>trols Grupo C<strong>on</strong>dumex, Slim’s industrial supply c<strong>on</strong>glomerate (which<br />

includes companies such as CDM and Sinergia), while Carso Infraestructura y C<strong>on</strong>strucci<strong>on</strong> (CICSA) is an<br />

infrastructure development giant with subsidiaries like Swecomex and PC C<strong>on</strong>structores. 27 CICSA is present<br />

in <str<strong>on</strong>g>the</str<strong>on</strong>g> majority of <str<strong>on</strong>g>the</str<strong>on</strong>g> American c<strong>on</strong>tinent in countries like <str<strong>on</strong>g>the</str<strong>on</strong>g> United States and Brazil and its clients include<br />

PEMEX, América Móvil, C<strong>on</strong>agua, Dup<strong>on</strong>t, Siemens, Shell, and Mitsubishi Heavy Industries. 28<br />

HOW DO CARLOS SLIM’S COMPANIES COMPARE? (MARKET CAPITALIZATION – US$) 29<br />

COMPANY NAME MARKET CAP SECTOR COMPARED TO MARKET CAP<br />

AMÉRICA MÓVIL 93 billi<strong>on</strong> Telecommunicati<strong>on</strong>s VERIZON 30 99 billi<strong>on</strong><br />

GRUPO CARSO 31 66 billi<strong>on</strong> Diversified KRAFT FOODS 32 61 billi<strong>on</strong><br />

IDEAL 61 billi<strong>on</strong> Infrastructure &<br />

Development<br />

- 66 -<br />

UNITED<br />

TECHNOLOGIES<br />

CORPORATION 33<br />

66 billi<strong>on</strong><br />

MINERA FRISCO 125 billi<strong>on</strong> Mining RIO TINTO 118 billi<strong>on</strong><br />

GRUPO<br />

164 billi<strong>on</strong> Finance HSBC HOLDINGS PLC 159 billi<strong>on</strong><br />

FINANCIERO<br />

INBURSA<br />

SOURCE: Bloomberg.<br />

One of Slim’s latest ventures, Impulsora del Desarrollo y Empleo de América Latina (IDEAL) has landed<br />

major government c<strong>on</strong>tracts that range from water treatment plants to toll highways. 34 He is also a major


— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

investor in <str<strong>on</strong>g>the</str<strong>on</strong>g> hospitality industry through Grupo Hotelero Ostar and is also behind Grupo Star Médica,<br />

which provides private health care to foreign tourists in Mexico. 35 Through TELMEX he also owns<br />

marketing and media outlets such as Sección Amarilla (Mexican Yellow Pages) 36 and <str<strong>on</strong>g>the</str<strong>on</strong>g> motor-racing team<br />

Escuderia TELMEX. 37 Carlos Slim also owns <str<strong>on</strong>g>the</str<strong>on</strong>g> mining group Minera Frisco, which has several large-scale<br />

zinc, copper, silver, lead and gold mining operati<strong>on</strong>s. 38 He owns 49% of <str<strong>on</strong>g>the</str<strong>on</strong>g> shares of industrial group<br />

Elementia 39 and is also a shareholder (through Grupo Carso-Sinca Inbursa) of Grupo Mexico’s rail<br />

transportati<strong>on</strong> subsidiaries, owning 18.5% of Ferromex and 25.01% of Ferrosur. 40<br />

SLIM IN THE UNITED STATES<br />

América Móvil has a wide range of subsidiaries in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States as well as in Latin America. Tracf<strong>on</strong>e, for<br />

example, is an América Móvil subsidiary headquartered in Miami with wireless operati<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S., Puerto<br />

Rico, and <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. Virgin Islands. Tracf<strong>on</strong>e has approximately 18.5 milli<strong>on</strong> subscribers in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States<br />

al<strong>on</strong>e. 41 By offering to install ph<strong>on</strong>es in Mexican homes that could be paid for by a relative who lives in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

U.S., TELMEX/América Móvil has tried to reach into <str<strong>on</strong>g>the</str<strong>on</strong>g> market of <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican Diaspora—an especially<br />

lucrative move since more calls are made from <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. to Mexico than <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r way around. 42 The<br />

expansi<strong>on</strong> into <str<strong>on</strong>g>the</str<strong>on</strong>g> United States has also been indirectly aided by <str<strong>on</strong>g>the</str<strong>on</strong>g> North America Free Trade<br />

Associati<strong>on</strong>’s (NAFTA) Chapter 13, which addresses telecommunicati<strong>on</strong>s. For example, NAFTA served to<br />

facilitate <str<strong>on</strong>g>the</str<strong>on</strong>g> entry of powerful Mexican business into <str<strong>on</strong>g>the</str<strong>on</strong>g> United States and gave <str<strong>on</strong>g>the</str<strong>on</strong>g>se telecommunicati<strong>on</strong><br />

companies <str<strong>on</strong>g>the</str<strong>on</strong>g> rights to transfer funds freely, to be protected from expropriati<strong>on</strong>, and to arbitrate investment<br />

disputes with <str<strong>on</strong>g>the</str<strong>on</strong>g> host government. 43<br />

Aside from telecommunicati<strong>on</strong>s, Slim also owns shares in many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r U.S. businesses. He has stakes in<br />

Citigroup 44 and his Inmobiliaria Carso is <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d-largest shareholder in luxury retail chain Saks Fifth<br />

Avenue, with 17.4% of <str<strong>on</strong>g>the</str<strong>on</strong>g> shares. 45 In <str<strong>on</strong>g>the</str<strong>on</strong>g> past, Slim was has been involved with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r retail outlets such as<br />

CompUSA, OfficeMax and Circuit City, 46 and he has invested in a variety of U.S. stocks, including those of<br />

computer technology developer Apple. 47 He even owns 8.1% of The New York Times newspaper company,<br />

making him <str<strong>on</strong>g>the</str<strong>on</strong>g> paper’s sec<strong>on</strong>d-largest shareholder. 48 In fact, it has been rumored that ever since Slim offered<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> newspaper a $250 milli<strong>on</strong> loan to avoid bankruptcy, <str<strong>on</strong>g>the</str<strong>on</strong>g> Times has been notably silent <strong>on</strong> negative news<br />

involving <str<strong>on</strong>g>the</str<strong>on</strong>g> richest man in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. 49 In 2008, his Grupo Financiero Inbursa purchased 1% of Citigroup’s<br />

shares. 50 While he recently sold his stake at oil company Br<strong>on</strong>co Drilling, 51 Slim remains a shareholder at<br />

Allis-Chalmers Energy. 52 He also sits in <str<strong>on</strong>g>the</str<strong>on</strong>g> board of directors of Philip Morris <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g>, 53 <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s<br />

largest tobacco retailer, and <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. parent of Philip Morris Mexico and Cigatam (which are also partly<br />

owned by Grupo Carso). 54 The tobacco market is a duopoly in Mexico, with 99% of volume sales shared<br />

between Philip Morris Mexico and British American Tobacco. 55 In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s, BAT reported that 40% of its<br />

shares bel<strong>on</strong>ged to Slim. 56<br />

SLIM IN LATIN AMERICA<br />

As in Mexico, Carlos Slim’s business expansi<strong>on</strong> into Latin America was fueled by his telecommunicati<strong>on</strong>s<br />

investments. América Móvil is now <str<strong>on</strong>g>the</str<strong>on</strong>g> biggest wireless provider in Latin America and also provides services<br />

such as wireless, fixed teleph<strong>on</strong>y, broadband and paid TV, comprising 284 milli<strong>on</strong> accounts. 57 Its recent<br />

takeover of TELMEX made América Móvil <str<strong>on</strong>g>the</str<strong>on</strong>g> parent company of TELMEX, Telcel, Claro, Embratel, Net<br />

and Comcel, all of which provide services such as wireless, fixed teleph<strong>on</strong>y, broadband and cable. 58 In <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

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— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

first quarter of 2011, América Móvil reported a wireless subscriber base of 65.7 milli<strong>on</strong> customers in Mexico,<br />

53.4 milli<strong>on</strong> in Brazil, 30 milli<strong>on</strong> in Colombia, 18.5 milli<strong>on</strong> in both Argentina and <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S., and 17.5 in Central<br />

America and <str<strong>on</strong>g>the</str<strong>on</strong>g> Caribbean. 59<br />

Slim’s focus <strong>on</strong> Latin America has to do with what he believes to be <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tinent’s current path of<br />

development. In a recent interview with <str<strong>on</strong>g>the</str<strong>on</strong>g> Financial Times, Slim predicted that Latin America should break<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> barrier of underdevelopment within 10 to 15 years and begin to develop a large middle-class, a trend that<br />

calls for heavy investment in <str<strong>on</strong>g>the</str<strong>on</strong>g> present. 60 IDEAL, Slim’s infrastructure development company, already is<br />

involved in a series of energy, transportati<strong>on</strong> and trade projects throughout Latin America. For example, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

company is resp<strong>on</strong>sible <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>structi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> Bajo de Mina and Baitún hydroelectric dams in <str<strong>on</strong>g>the</str<strong>on</strong>g> Chiriquí<br />

Viejo River in Panama. 61 Grupo Carso’s Cilsa, a c<strong>on</strong>structi<strong>on</strong> company, is involved in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r Panamanian<br />

developments including <str<strong>on</strong>g>the</str<strong>on</strong>g> expansi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> Panama Canal. 62<br />

In early 2011, Grupo Carso expanded its oil and gas investments by purchasing 70% of <str<strong>on</strong>g>the</str<strong>on</strong>g> shares of<br />

Geoprocesados SA’s Tabasco Oil Co in Colombia. Tabasco holds a license to explore and produce<br />

hydrocarb<strong>on</strong>s in a 413-km 2 oil block in Colombia, whose oil and gas sector accounted for 40% of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

country’s foreign direct investment in 2010. 63 Slim has recently acquired shares in <str<strong>on</strong>g>the</str<strong>on</strong>g> Spanish investment<br />

firm Criteria CaixaCorp and has joined <str<strong>on</strong>g>the</str<strong>on</strong>g>ir board of directors as <str<strong>on</strong>g>the</str<strong>on</strong>g> company attempts to expand its<br />

financial operati<strong>on</strong>s into Latin America. 64 Criteria CaixaCorp owns 20% of <str<strong>on</strong>g>the</str<strong>on</strong>g> shares of Slim-c<strong>on</strong>trolled<br />

Grupo Financiero Inbursa 65 as well as Spanish energy company Gas Natural Fenosa, where Slim has a 15%<br />

stake. 66 Gas Natural Fenosa operates in 25 countries including Spain and most of Latin America. 67<br />

CHALLENGING SLIM’S MEXICAN MONOPOLIES<br />

On numerous occasi<strong>on</strong>s over <str<strong>on</strong>g>the</str<strong>on</strong>g> years, Slim’s telecom holdings have come under investigati<strong>on</strong> by Mexico’s<br />

antitrust regulators for m<strong>on</strong>opolistic practices and high c<strong>on</strong>necti<strong>on</strong> and interc<strong>on</strong>necti<strong>on</strong> fees. 68 Most recently,<br />

Mexico’s Federal Competiti<strong>on</strong> Commissi<strong>on</strong> (FCC) slapped América Móvil with a $1 billi<strong>on</strong> fine for repeat<br />

offences by Telcel, <strong>on</strong>e of its subsidiaries, whose customers represent 70% of <str<strong>on</strong>g>the</str<strong>on</strong>g> 91 milli<strong>on</strong> wireless users in<br />

Mexico. 69 Up<strong>on</strong> notificati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> fine, Telcel representatives argued that <str<strong>on</strong>g>the</str<strong>on</strong>g> fine was "arbitrary, biased,<br />

opportunistic and excessive" and vowed to appeal it. 70 As a result of <str<strong>on</strong>g>the</str<strong>on</strong>g> appeal process, TELMEX’s fine may<br />

be lifted after <str<strong>on</strong>g>the</str<strong>on</strong>g> commissi<strong>on</strong> was forced to recuse its own chairman from <str<strong>on</strong>g>the</str<strong>on</strong>g> case. 71 Mexico’s FCC was due<br />

to make a decisi<strong>on</strong> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> ratificati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> fine by <str<strong>on</strong>g>the</str<strong>on</strong>g> end of September 2011, but media reports in mid-<br />

August said that <str<strong>on</strong>g>the</str<strong>on</strong>g> body was mired in disagreement and that <str<strong>on</strong>g>the</str<strong>on</strong>g> case is unlikely to be finalized. 72<br />

While this fine represents <str<strong>on</strong>g>the</str<strong>on</strong>g> largest ever imposed <strong>on</strong> <strong>on</strong>e of Slim’s companies, he has been subjected to<br />

numerous fines and investigati<strong>on</strong>s over <str<strong>on</strong>g>the</str<strong>on</strong>g> years for “dominance” issues and impeding smaller competitors<br />

from c<strong>on</strong>necting to TELMEX’s network. During a three-m<strong>on</strong>th period in 2008, Slim’s telecom holdings were<br />

investigated <strong>on</strong> seven separate occasi<strong>on</strong>s. 73 Despite <str<strong>on</strong>g>the</str<strong>on</strong>g>se regulatory challenges, Slim’s companies have<br />

successfully deflected any serious legal acti<strong>on</strong>. His track record at dodging fines and legal acti<strong>on</strong> is, in many<br />

ways, a direct result of uncertainties in <str<strong>on</strong>g>the</str<strong>on</strong>g> actual implementati<strong>on</strong> of Mexico’s Federal Telecommunicati<strong>on</strong>s<br />

Law (FTL), which opened competiti<strong>on</strong> to all segments of <str<strong>on</strong>g>the</str<strong>on</strong>g> telecom market. Once a company is fined, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

FTL provides firms with a legal recourse known as an “amparo” that gives plaintiff’s <str<strong>on</strong>g>the</str<strong>on</strong>g> right to ask for a<br />

temporary suspensi<strong>on</strong> of any regulati<strong>on</strong>s that it c<strong>on</strong>siders violate <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s c<strong>on</strong>stituti<strong>on</strong>al rights. 74 Slim,<br />

like many large Mexican and multinati<strong>on</strong>al corporati<strong>on</strong>s, has used this tool to c<strong>on</strong>tinue operating in <str<strong>on</strong>g>the</str<strong>on</strong>g> face<br />

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— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

of legal and regulatory acti<strong>on</strong>. In <strong>on</strong>e example from 1997, Grupo Carso was declared anti-competitive by<br />

Mexico’s FCC. Grupo Carso simply filed an amparo against <str<strong>on</strong>g>the</str<strong>on</strong>g> resoluti<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> case has remained open<br />

for more than a decade while Grupo Carso c<strong>on</strong>tinued to operate. 75 According to The Ec<strong>on</strong>omist, TELMEX has<br />

been awarded amparos at <str<strong>on</strong>g>the</str<strong>on</strong>g> slightest hint of pressure from Mexico’s “supine courts to protect its privileged<br />

positi<strong>on</strong>.” 76<br />

Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r difficulty <str<strong>on</strong>g>the</str<strong>on</strong>g> government encounters in trying to regulate TELMEX is <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that it is <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

most widely traded stocks <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Bolsa Mexicana de Valores (BMV), Mexico’s stock exchange. Any<br />

regulatory measures <strong>on</strong> TELMEX that might be perceived as negative by shareholders will affect <str<strong>on</strong>g>the</str<strong>on</strong>g> overall<br />

performance of <str<strong>on</strong>g>the</str<strong>on</strong>g> BMV. Combined with its 90% market share, TELMEX’s market value puts to <str<strong>on</strong>g>the</str<strong>on</strong>g> test <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

government’s ability and willingness to c<strong>on</strong>fr<strong>on</strong>t a business empire that can negatively impact <str<strong>on</strong>g>the</str<strong>on</strong>g> entire<br />

Mexican ec<strong>on</strong>omy. 77 In fact, <str<strong>on</strong>g>the</str<strong>on</strong>g> value of Carlos Slim and his companies to Mexican investors is so high that a<br />

small change of percepti<strong>on</strong> regarding Slim can affect <str<strong>on</strong>g>the</str<strong>on</strong>g> entire Mexican ec<strong>on</strong>omy. One such case occurred in<br />

1997 when <str<strong>on</strong>g>the</str<strong>on</strong>g> BMV was rocked by instability due to market worries following reports that Slim had<br />

underg<strong>on</strong>e heart valve surgery. 78<br />

POLITICAL INFLUENCE<br />

The weakness of current Mexican lobbying regulati<strong>on</strong>s and <str<strong>on</strong>g>the</str<strong>on</strong>g> lack of a central reporting mechanism 79 make<br />

it difficult to quantify <str<strong>on</strong>g>the</str<strong>on</strong>g> extent to which Slim and his companies influence government decisi<strong>on</strong>s or lobby to<br />

secure important c<strong>on</strong>tracts. <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g>ly, Slim associates himself with <str<strong>on</strong>g>the</str<strong>on</strong>g> political elite through social,<br />

philanthropic and instituti<strong>on</strong>al liais<strong>on</strong>s. Within Mexico, however, he tries to maintain a n<strong>on</strong>-partisan public<br />

pers<strong>on</strong>a in order to c<strong>on</strong>duct business as usual, no matter which party is in power. C<strong>on</strong>firming this strategy,<br />

various documents found <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> website of Mexico’s Federal Electoral Institute (Instituto Federal Electoral)<br />

show that, over <str<strong>on</strong>g>the</str<strong>on</strong>g> years, Slim and his family have made d<strong>on</strong>ati<strong>on</strong>s to Mexican nati<strong>on</strong>al political parties of all<br />

stripes, including <str<strong>on</strong>g>the</str<strong>on</strong>g> center-left Party of <str<strong>on</strong>g>the</str<strong>on</strong>g> Democratic Revoluti<strong>on</strong> (PRD), <str<strong>on</strong>g>the</str<strong>on</strong>g> center-right Instituti<strong>on</strong>al<br />

Revoluti<strong>on</strong>ary Party (PRI) and <str<strong>on</strong>g>the</str<strong>on</strong>g> ruling right-wing Nati<strong>on</strong>al Acti<strong>on</strong> Party (PAN). 80<br />

Slim’s positi<strong>on</strong> as <strong>on</strong>e of Mexico’s most important businessmen gives him ready access to political officials.<br />

He is c<strong>on</strong>sidered a l<strong>on</strong>g-time friend of former President Carlos Salinas and is often seen side-by-side with<br />

current Mexican President Felipe Calderón at government and business functi<strong>on</strong>s. 81 He has been <str<strong>on</strong>g>the</str<strong>on</strong>g> guest of<br />

numerous world leaders including former British Prime Minister T<strong>on</strong>y Blair and U.S. President Barack<br />

Obama 82 and he has developed philanthropic partnerships with former President Bill Clint<strong>on</strong>, with whom he<br />

has worked <strong>on</strong> numerous charitable projects. Slim is regularly invited to speak at internati<strong>on</strong>al c<strong>on</strong>ferences<br />

dealing with poverty, AIDS, and world trade. He is an official advisor to <str<strong>on</strong>g>the</str<strong>on</strong>g> United Nati<strong>on</strong>s’ Secretary<br />

General <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> issue of climate change and co-chairs <str<strong>on</strong>g>the</str<strong>on</strong>g> UN’s Broadband Commissi<strong>on</strong> for Digital<br />

Development. These relati<strong>on</strong>ships and positi<strong>on</strong>s within internati<strong>on</strong>al instituti<strong>on</strong>s give Slim invaluable<br />

opportunities to influence <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s most powerful policymakers. Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r benefit is that <str<strong>on</strong>g>the</str<strong>on</strong>g>se appearances<br />

allow him to promote his image as a benevolent billi<strong>on</strong>aire by publicly engaging in high-level forums <strong>on</strong><br />

global humanitarian issues.<br />

Given that Slim’s industrial and infrastructure development companies are <str<strong>on</strong>g>the</str<strong>on</strong>g> main c<strong>on</strong>tractors for<br />

government projects and state companies like Petróleos Mexicanos (PEMEX), 83 he clearly wields a fair<br />

amount of influence over domestic policymakers. While backroom deals involving Slim and <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican<br />

government are difficult to verify, certain public initiatives organized by Slim are designed to promote private-<br />

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— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

sector involvement and, in turn, his own businesses. One such initiative is <str<strong>on</strong>g>the</str<strong>on</strong>g> Acuerdo de Chapultepec. Slim<br />

launched this accord in 2005 in anticipati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> 2006 Mexican presidential electi<strong>on</strong>s. The accord, which<br />

was quickly endorsed by more than 400 business leaders and politicians, 84 urges <str<strong>on</strong>g>the</str<strong>on</strong>g> government to promote<br />

development and ec<strong>on</strong>omic growth through public-private partnerships and calls for a favorable climate for<br />

private investment—including increasing deregulati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> business sector. 85<br />

Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r example of Slim’s push for private-sector involvement in areas traditi<strong>on</strong>ally managed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican<br />

state is water management. At <str<strong>on</strong>g>the</str<strong>on</strong>g> 4th World Water <str<strong>on</strong>g>Forum</str<strong>on</strong>g> in 2006, Slim menti<strong>on</strong>ed in his keynote address<br />

that, although he c<strong>on</strong>sidered water to be “undeniably” a right, he proposed that an “aut<strong>on</strong>omous agency with<br />

technical capacity, without fiscal or six-year presidential-term limitati<strong>on</strong>s,” should be incorporated to create<br />

new management systems that would take water “out of <str<strong>on</strong>g>the</str<strong>on</strong>g> public budget.” 86 Given that Slim has access to<br />

political decisi<strong>on</strong> makers—both internati<strong>on</strong>ally and within Mexico—statements such as <str<strong>on</strong>g>the</str<strong>on</strong>g>se are bound to<br />

affect <str<strong>on</strong>g>the</str<strong>on</strong>g> directi<strong>on</strong> of public policy in Mexico and even elsewhere in <str<strong>on</strong>g>the</str<strong>on</strong>g> world.<br />

NAFTA’S AFTERMATH<br />

While <str<strong>on</strong>g>the</str<strong>on</strong>g> North American Free Trade Agreement became law in 1993, Mexico’s telecommunicati<strong>on</strong>s<br />

industry was not be opened to competiti<strong>on</strong> until 1996, when TELMEX’s m<strong>on</strong>opoly status officially expired.<br />

Despite <str<strong>on</strong>g>the</str<strong>on</strong>g> goal of opening Mexican markets to more foreign investment, NAFTA failed to budge<br />

TELMEX’s virtual m<strong>on</strong>opoly. This is dem<strong>on</strong>strated by <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that today 80% of Mexico’s fixed line<br />

teleph<strong>on</strong>es c<strong>on</strong>tinue to be c<strong>on</strong>trolled by Slim—18 years after NAFTA came into being. This does not mean<br />

that large U.S. telecom providers did not try to enter <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican telecom market. In 1996, <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican<br />

government opened its doors to six foreign carriers, including subsidiaries of AT&T and MCI. When <str<strong>on</strong>g>the</str<strong>on</strong>g> two<br />

U.S. carriers entered <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican market, <str<strong>on</strong>g>the</str<strong>on</strong>g>y were immediately faced with TELMEX’s high interc<strong>on</strong>necti<strong>on</strong><br />

rates and c<strong>on</strong>sequently requested that <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. government take acti<strong>on</strong> against <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican government<br />

through <str<strong>on</strong>g>the</str<strong>on</strong>g> World Trade Organizati<strong>on</strong>.<br />

AT&T and MCI pushed for WTO interventi<strong>on</strong> because 70% of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir revenue from calls between Mexico and<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. was ending up in TELMEX’s hands due to <str<strong>on</strong>g>the</str<strong>on</strong>g> high interc<strong>on</strong>necti<strong>on</strong> rates. TELMEX resp<strong>on</strong>ded by<br />

arguing that <str<strong>on</strong>g>the</str<strong>on</strong>g> high fees were necessary to modernize its telecommunicati<strong>on</strong>s system, as required by<br />

NAFTA standards. 87 A settlement was reached between <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican and American governments, which<br />

included <str<strong>on</strong>g>the</str<strong>on</strong>g> payment of $450 milli<strong>on</strong> in fees to TELMEX by AT&T and MCI. 88 The choice to appeal<br />

through <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than NAFTA exposed <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that NAFTA’s provisi<strong>on</strong>s were insufficient to<br />

guarantee <str<strong>on</strong>g>the</str<strong>on</strong>g> opening of <str<strong>on</strong>g>the</str<strong>on</strong>g> telecommunicati<strong>on</strong>s market and <str<strong>on</strong>g>the</str<strong>on</strong>g> expansi<strong>on</strong> of U.S. competitors into<br />

Mexico. 89 The case also highlights Slim’s ir<strong>on</strong> grip over Mexico’s telecommunicati<strong>on</strong>s industry where, as was<br />

discussed above, regulators seem almost powerless to c<strong>on</strong>fr<strong>on</strong>t m<strong>on</strong>opolized industries.<br />

C<strong>on</strong>versely, <str<strong>on</strong>g>the</str<strong>on</strong>g> passage of NAFTA opened both <str<strong>on</strong>g>the</str<strong>on</strong>g> Canadian and U.S. markets to Mexican investors. In<br />

particular, NAFTA’s Chapter 13 <strong>on</strong> telecommunicati<strong>on</strong>s gave companies full right-of-entry to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r NAFTA<br />

countries’ public telecommunicati<strong>on</strong>s networks—and <str<strong>on</strong>g>the</str<strong>on</strong>g> right to move informati<strong>on</strong> within <str<strong>on</strong>g>the</str<strong>on</strong>g> country and<br />

across its borders without any c<strong>on</strong>diti<strong>on</strong>s <strong>on</strong> access to or use of telecom networks or services. 90 This means<br />

that NAFTA not <strong>on</strong>ly allowed U.S. companies to attempt entry into <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican telecom market but, in turn,<br />

it worked to give Slim’s powerful businesses full access to <str<strong>on</strong>g>the</str<strong>on</strong>g> lucrative U.S. market. Most importantly, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

trade agreement gave investors <str<strong>on</strong>g>the</str<strong>on</strong>g> right to sue <str<strong>on</strong>g>the</str<strong>on</strong>g> governments of o<str<strong>on</strong>g>the</str<strong>on</strong>g>r NAFTA members if <str<strong>on</strong>g>the</str<strong>on</strong>g>y felt <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

investments were refused or impeded. While Carlos Slim currently has <strong>on</strong>ly limited telecommunicati<strong>on</strong>s<br />

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— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

investments in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States (and very little in Canada), NAFTA has opened <str<strong>on</strong>g>the</str<strong>on</strong>g> door for him to move<br />

more aggressively into <str<strong>on</strong>g>the</str<strong>on</strong>g>se markets if and when he decides to do so.<br />

PHILANTHROPIC WORK: “WHITE-COATING” AND “GREEN-WASHING”<br />

As Slim’s fortune grew, he was often asked whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r he would follow in <str<strong>on</strong>g>the</str<strong>on</strong>g> philanthropic footsteps of fellow<br />

billi<strong>on</strong>aires Bill Gates and Warren Buffet and d<strong>on</strong>ate his wealth to charity. In a series of interviews, he has<br />

resp<strong>on</strong>ded that he would ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r c<strong>on</strong>tribute through job generati<strong>on</strong> instead of making large tax-deductible<br />

d<strong>on</strong>ati<strong>on</strong>s that would deprive governments of milli<strong>on</strong>s of dollars in revenue. 91 However, Slim eventually<br />

began funnelling m<strong>on</strong>ey to his charitable foundati<strong>on</strong>s—to <str<strong>on</strong>g>the</str<strong>on</strong>g> point that he now is c<strong>on</strong>sidered <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

world’s biggest philanthropists. 92 Slim’s m<strong>on</strong>ey is channelled through charity work, with a special focus <strong>on</strong><br />

health and educati<strong>on</strong> programs, involving sizeable cash and stock d<strong>on</strong>ati<strong>on</strong>s. The various Slim foundati<strong>on</strong>s,<br />

which reportedly invested a total of $7.9 billi<strong>on</strong> in 2009 al<strong>on</strong>e, 93 are an important public relati<strong>on</strong>s tool that he<br />

wields to manage his image as compassi<strong>on</strong>ate and generous, <str<strong>on</strong>g>the</str<strong>on</strong>g>reby countering <str<strong>on</strong>g>the</str<strong>on</strong>g> uncomfortable fact that<br />

he is <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s richest man and that he is living in a country plagued by poverty and inequality.<br />

One of Slim’s main philanthropic projects is <str<strong>on</strong>g>the</str<strong>on</strong>g> Carlos Slim Health Foundati<strong>on</strong> (Instituto Carlos Slim de la<br />

Salud, or ICSS), which supports medical work <strong>on</strong> infecti<strong>on</strong>, malnutriti<strong>on</strong>, reproductive health and emerging<br />

diseases. Founded in 1997, <str<strong>on</strong>g>the</str<strong>on</strong>g> ICSS has been warmly welcomed by <str<strong>on</strong>g>the</str<strong>on</strong>g> World Health Organizati<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Harvard School of Public Health and has partnered with <str<strong>on</strong>g>the</str<strong>on</strong>g> Gates Foundati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> Clint<strong>on</strong> Global Initiative,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Spanish Agency for <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Development Cooperati<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> Inter American Development<br />

Bank. 94 However, hidden underneath <str<strong>on</strong>g>the</str<strong>on</strong>g>se high-profile endorsements and positive press is <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tradictory<br />

fact that <str<strong>on</strong>g>the</str<strong>on</strong>g> financial wealth that funds ICSS’s work is derived, in part, from Slim’s extensive holdings in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

tobacco industry.<br />

Slim’s main tobacco holdings involve <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican cigarette manufacturer Cigarrera La Tabacalera Mexicana<br />

(Cigatam), of which Slim currently owns 20%. Global tobacco giant Philip Morris <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> owns <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

c<strong>on</strong>trolling shares in Cigatam. 95 Cigatam has been characterized as <strong>on</strong>e of Slim’s “first and most important”<br />

acquisiti<strong>on</strong>s because <str<strong>on</strong>g>the</str<strong>on</strong>g> cash flow generated from <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980 purchase and subsequent earnings from cigarette<br />

sales provided Grupo Carso with extra revenue to purchase o<str<strong>on</strong>g>the</str<strong>on</strong>g>r and even bigger companies. 96 Some critics<br />

have called this morally c<strong>on</strong>tradictory situati<strong>on</strong> a “prima facie c<strong>on</strong>flict of interest between ICSS’s health<br />

missi<strong>on</strong> and its founder’s involvement in cigarette manufacturing and marketing.” 97<br />

SELECTED FOUNDATIONS AND PHILANTHROPIC PROGRAMS<br />

CARLOS SLIM FOUNDATION (CARSO<br />

FOUNDATION)<br />

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SOUMAYA MUSEUM<br />

CARLOS SLIM HEALTH INSTITUTE TELMEX HIGHER EDUCATION<br />

SCHOLARSHIPS<br />

GRAMEEN-CARSO MICROFINANCE PROGRAM TELMEX FOUNDATION<br />

CARSO MEXICAN HISTORY STUDIES CENTER CASA TELMEX<br />

In additi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> funding ICSS receives from Slim’s companies, <str<strong>on</strong>g>the</str<strong>on</strong>g> institute bears his name —even though<br />

he remains <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> board of directors of Philip Morris <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g>. Combined, <str<strong>on</strong>g>the</str<strong>on</strong>g>se factors make for a case<br />

of “white coating”—a public relati<strong>on</strong>s ploy that occurs when corporati<strong>on</strong>s (such as multinati<strong>on</strong>al cigarette or


— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

oil companies) use d<strong>on</strong>ati<strong>on</strong>s and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r involvement with healthcare, medical research and charitable work to<br />

impose a positive spin <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>ir image. 98 An even more egregious example of “white-coating” was seen with<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> announcement of <str<strong>on</strong>g>the</str<strong>on</strong>g> “Carlos Slim Health Awards,” cash awards meted out to health professi<strong>on</strong>als and<br />

instituti<strong>on</strong>s by ICSS. Slim has also d<strong>on</strong>ned <str<strong>on</strong>g>the</str<strong>on</strong>g> white-coat by partnering with fellow billi<strong>on</strong>aire Bill Gates<br />

(through <str<strong>on</strong>g>the</str<strong>on</strong>g> Bill and Melinda Gates Foundati<strong>on</strong>) and <str<strong>on</strong>g>the</str<strong>on</strong>g> government of Spain to launch <str<strong>on</strong>g>the</str<strong>on</strong>g> $150 milli<strong>on</strong><br />

“Salud Mesoamérica 2015” health initiative. 99 The Gates Foundati<strong>on</strong> c<strong>on</strong>tinues to partner with ICSS even<br />

though it previously has terminated grants and partnerships over <str<strong>on</strong>g>the</str<strong>on</strong>g> issue of tobacco industry c<strong>on</strong>necti<strong>on</strong>s. A<br />

case in point was a $5.2 milli<strong>on</strong> grant <str<strong>on</strong>g>the</str<strong>on</strong>g> Gates Foundati<strong>on</strong> gave to Canada’s <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Development<br />

Research Centre (IDRC). It was terminated after news broke that IDRC’s chair was a recent board member<br />

of Imperial Tobacco Canada. 100<br />

In o<str<strong>on</strong>g>the</str<strong>on</strong>g>r attempts to hide <str<strong>on</strong>g>the</str<strong>on</strong>g> negative impacts of his financial empire, Slim has managed to formulate a<br />

“green” image for his many companies by pursuing partnerships and offering d<strong>on</strong>ati<strong>on</strong>s through <str<strong>on</strong>g>the</str<strong>on</strong>g> Carlos<br />

Slim Foundati<strong>on</strong> (Carso Foundati<strong>on</strong>). The Carso Foundati<strong>on</strong> has allocated m<strong>on</strong>ey for envir<strong>on</strong>mental<br />

protecti<strong>on</strong> and sustainable development projects in an apparent effort to en-wash Slim’s involvement in<br />

businesses that pollute <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment and pump greenhouse gases into <str<strong>on</strong>g>the</str<strong>on</strong>g> atmosphere. In 2009, for<br />

example, Slim d<strong>on</strong>ated $50 milli<strong>on</strong> through his Carso Foundati<strong>on</strong> to World Wildlife Fund (WWF) to develop<br />

envir<strong>on</strong>mental recovery and reforestati<strong>on</strong> projects in Mexico. 101 In 2010, he participated in <str<strong>on</strong>g>the</str<strong>on</strong>g> World Mayors<br />

Summit <strong>on</strong> Climate in Mexico City. He is also a member of <str<strong>on</strong>g>the</str<strong>on</strong>g> UN Advisory Group <strong>on</strong> Energy and Climate<br />

Change, which, toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r powerful billi<strong>on</strong>aires such as India’s Ratan Tata of Tata Motors, advises<br />

UN Secretary General Ban Ki Mo<strong>on</strong>. 102 TELMEX has been given <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican Center for Philanthropy’s<br />

“Empresa Socialmente Resp<strong>on</strong>sable” (Socially Resp<strong>on</strong>sible Company) award in recogniti<strong>on</strong> of its “altruistic”<br />

work in areas such as community services and <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment. 103 In spite of <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that TELMEX has a<br />

bad track record of providing service to customers who complain about high c<strong>on</strong>sumer rates and unstable<br />

c<strong>on</strong>necti<strong>on</strong>s, 104 <str<strong>on</strong>g>the</str<strong>on</strong>g> company has received this award for <str<strong>on</strong>g>the</str<strong>on</strong>g> past ten c<strong>on</strong>secutive years.<br />

These examples of using philanthropic involvement in <str<strong>on</strong>g>the</str<strong>on</strong>g> health and envir<strong>on</strong>mental sectors to “white-coat”<br />

and “green-wash” show not <strong>on</strong>ly how Slim manages to groom his public image and <str<strong>on</strong>g>the</str<strong>on</strong>g> image of his<br />

companies, but also dem<strong>on</strong>strate <str<strong>on</strong>g>the</str<strong>on</strong>g> breadth and depth of his c<strong>on</strong>necti<strong>on</strong>s with government representatives,<br />

instituti<strong>on</strong>s and high-profile individuals. Slim’s public relati<strong>on</strong>s initiatives and his influential networks allow<br />

him to maximize his ability to minimize <str<strong>on</strong>g>the</str<strong>on</strong>g> negative impact his harmful investments and business practices<br />

might o<str<strong>on</strong>g>the</str<strong>on</strong>g>rwise have <strong>on</strong> his public and corporate pers<strong>on</strong>a.<br />

SOCIAL AND ENVIRONMENTAL TRACK RECORD<br />

A large porti<strong>on</strong> of Slim’s wealth is derived from his holdings in envir<strong>on</strong>mentally destructive industries. His oil<br />

and gas, mining and infrastructure companies invariably pollute <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican envir<strong>on</strong>ment through <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

emissi<strong>on</strong> of greenhouse gases, <str<strong>on</strong>g>the</str<strong>on</strong>g> displacement of local populati<strong>on</strong>s and <str<strong>on</strong>g>the</str<strong>on</strong>g> destructi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s<br />

biodiversity. Whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r it is his infrastructure companies c<strong>on</strong>structing a hydroelectric dam, a new super<br />

highway or supplying Mexico’s biggest oil company with drilling services, Slim’s social and envir<strong>on</strong>mental<br />

footprint is large. Interestingly, Slim has managed to avoid serious criticism from social movements and civil<br />

society for this track record. This is not <strong>on</strong>ly due to his green-washing efforts and his philanthropy but also to<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> fact that he is rarely directly tied to any single company in his portfolio. Never<str<strong>on</strong>g>the</str<strong>on</strong>g>less, based <strong>on</strong> his impact<br />

<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican ec<strong>on</strong>omy al<strong>on</strong>e, Carlos Slim plays a major role in <str<strong>on</strong>g>the</str<strong>on</strong>g> societal inequalities that plague Mexico<br />

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— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

today. Indeed, he epitomizes <str<strong>on</strong>g>the</str<strong>on</strong>g> troubling trend of increasing c<strong>on</strong>centrati<strong>on</strong> of wealth in fewer and fewer<br />

hands while <str<strong>on</strong>g>the</str<strong>on</strong>g> majority of people struggle to survive.<br />

There are many examples of <str<strong>on</strong>g>the</str<strong>on</strong>g> damaging c<strong>on</strong>sequences of Slim’s social and envir<strong>on</strong>mental footprint. For<br />

instance, Slim was <strong>on</strong>ce involved as a potential investor in <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>troversial La Parota Dam in Mexico, which,<br />

if completed, would have flooded 17,000 hectares (42,008 acres) of land and displaced more than 25,000<br />

people. 105 Slim’s involvement was through a partnership between ICA C<strong>on</strong>structi<strong>on</strong>, Grupo Carso and Slim’s<br />

infrastructure firm IDEAL. His potential involvement led activists to call for a boycott of Grupo Carso<br />

products and outlets. 106 In 2009, after a six-year struggle to block c<strong>on</strong>structi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> dam, local opp<strong>on</strong>ents<br />

emerged victorious when <str<strong>on</strong>g>the</str<strong>on</strong>g> project was shelved—at least until 2018.<br />

In ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r case, Minera Real de Angeles, a unit of Slim’s mining company (Minera Frisco), c<strong>on</strong>taminated 900<br />

hectares (2,224 acres) of <strong>on</strong>ce productive land in <str<strong>on</strong>g>the</str<strong>on</strong>g> state of Zacatecas with lead, arsenic and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r toxic<br />

chemicals. 107 In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s, in order for <str<strong>on</strong>g>the</str<strong>on</strong>g> mine to begin operati<strong>on</strong>s, an entire village—al<strong>on</strong>g with its<br />

communal land and traditi<strong>on</strong>al ejidos—was destroyed and replaced by a crater <str<strong>on</strong>g>the</str<strong>on</strong>g> size of Mexico City’s Azteca<br />

Stadium (which has a seating capacity of 114,600). As a result of <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>mental damage, Minera Frisco<br />

was fined more than $260,000. Frisco appealed <str<strong>on</strong>g>the</str<strong>on</strong>g> fine several times in court and eventually succeeded in<br />

avoiding payment. 108<br />

In <str<strong>on</strong>g>the</str<strong>on</strong>g> state of Chihuahua, Minera Frisco workers at <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s San Francisco del Oro mine have<br />

reported dangerous working c<strong>on</strong>diti<strong>on</strong>s and unfair compensati<strong>on</strong> in cases of worker’s injuries and illness<br />

caused to miners and villagers pois<strong>on</strong>ed by inhaling dust filled with heavy metals released by <str<strong>on</strong>g>the</str<strong>on</strong>g> mine. One<br />

former miner stated that <str<strong>on</strong>g>the</str<strong>on</strong>g> mine used cyanide and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r dangerous chemicals to facilitate gold extracti<strong>on</strong><br />

and that <str<strong>on</strong>g>the</str<strong>on</strong>g>se chemicals c<strong>on</strong>taminated <str<strong>on</strong>g>the</str<strong>on</strong>g> local village causing serious illnesses and eventual deaths. 109<br />

According to <str<strong>on</strong>g>the</str<strong>on</strong>g> miners’ uni<strong>on</strong> in Minera María (a Minera Frisco mining unit in <str<strong>on</strong>g>the</str<strong>on</strong>g> state of S<strong>on</strong>ora), <strong>on</strong>e of<br />

Slim’s mines has c<strong>on</strong>taminated source of <str<strong>on</strong>g>the</str<strong>on</strong>g> S<strong>on</strong>ora River and pois<strong>on</strong>ed <str<strong>on</strong>g>the</str<strong>on</strong>g> surrounding area with<br />

approximately 50,000 t<strong>on</strong>s of heavy metals such as cadmium and arsenic. The mine is c<strong>on</strong>sidered to be <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

source of many health and envir<strong>on</strong>mental problems in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>. 110 In additi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> mine utilizes large<br />

quantities of water, which often leads to water shortages in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>. 111<br />

Slim’s o<str<strong>on</strong>g>the</str<strong>on</strong>g>r infrastructure investments have also come with envir<strong>on</strong>mental and social impacts. In Panamá,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> two hydroelectric dams (<str<strong>on</strong>g>the</str<strong>on</strong>g> Baitun and Bajo de Mina) being built by IDEAL in <str<strong>on</strong>g>the</str<strong>on</strong>g> Chiriqui Viejo River<br />

are being heavily opposed by <str<strong>on</strong>g>the</str<strong>on</strong>g> local populati<strong>on</strong>. Local inhabitants have reported that due to <str<strong>on</strong>g>the</str<strong>on</strong>g> number of<br />

dams being built <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> river (a total of eight, although <strong>on</strong>ly two bel<strong>on</strong>g to IDEAL), <str<strong>on</strong>g>the</str<strong>on</strong>g>y can no l<strong>on</strong>ger feed<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>mselves by fishing. Government authorities now admit that no envir<strong>on</strong>mental management plan was made<br />

to curb <str<strong>on</strong>g>the</str<strong>on</strong>g> negative impacts of <str<strong>on</strong>g>the</str<strong>on</strong>g> dams. 112 One village resident in <str<strong>on</strong>g>the</str<strong>on</strong>g> vicinity of <str<strong>on</strong>g>the</str<strong>on</strong>g> Bajo de Mina dam,<br />

reported that IDEAL fooled him into accepting unfair compensati<strong>on</strong> for his land, which will be adversely<br />

impacted by <str<strong>on</strong>g>the</str<strong>on</strong>g> dam. 113 Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r IDEAL infrastructure project that has been criticized involves <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

c<strong>on</strong>structi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> biggest residual water treatment plant in <str<strong>on</strong>g>the</str<strong>on</strong>g> state of Hidalgo. The plant, in <str<strong>on</strong>g>the</str<strong>on</strong>g> town of<br />

Atot<strong>on</strong>ilco de Tula, was designed to treat water c<strong>on</strong>taminated by PEMEX (a main client of Grupo Carso’s oil<br />

industry products and services). Peasant leaders who live in <str<strong>on</strong>g>the</str<strong>on</strong>g> area where <str<strong>on</strong>g>the</str<strong>on</strong>g> treatment plant will be built<br />

have complained that government authorities nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r warned <str<strong>on</strong>g>the</str<strong>on</strong>g>m nor c<strong>on</strong>sulted <str<strong>on</strong>g>the</str<strong>on</strong>g>m about <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

development. 114 The treatment plant is being developed by a c<strong>on</strong>sortium between IDEAL and several partner<br />

companies.<br />

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— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

These examples are just a sampling of <str<strong>on</strong>g>the</str<strong>on</strong>g> damaging social, envir<strong>on</strong>mental and human rights footprint<br />

marking <str<strong>on</strong>g>the</str<strong>on</strong>g> trail of companies owned by Carlos Slim. Given <str<strong>on</strong>g>the</str<strong>on</strong>g> sheer immensity of Slim’s holdings, a full<br />

assessment of <str<strong>on</strong>g>the</str<strong>on</strong>g> negative impacts from <str<strong>on</strong>g>the</str<strong>on</strong>g>se operati<strong>on</strong>s would require much fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r research. This type of<br />

study would be a welcome additi<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> critical literature <strong>on</strong> Carlos Slim because, by its very nature, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

complexity of his empire makes it difficult to link him to <str<strong>on</strong>g>the</str<strong>on</strong>g> damage caused by any single large corporate<br />

entity. This means that <str<strong>on</strong>g>the</str<strong>on</strong>g> negative impacts from Grupo Carso companies rarely reflect badly <strong>on</strong> his<br />

reputati<strong>on</strong>. The result is that Slim can c<strong>on</strong>tinue to c<strong>on</strong>struct his public image as a philanthropist and good<br />

corporate citizen while remaining unaccountable for <str<strong>on</strong>g>the</str<strong>on</strong>g> widespread upheaval caused by his companies.<br />

CONCLUSION<br />

Overall, Carlos Slim’s ascent to <str<strong>on</strong>g>the</str<strong>on</strong>g> positi<strong>on</strong> of “<str<strong>on</strong>g>the</str<strong>on</strong>g> world’s richest man” has come at a great cost for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

people and ec<strong>on</strong>omy of Mexico—and in <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries where he has invested. It is safe to say <str<strong>on</strong>g>the</str<strong>on</strong>g> Slim<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r Mexican billi<strong>on</strong>aires (many of whom became rich riding <str<strong>on</strong>g>the</str<strong>on</strong>g> wave of privatizati<strong>on</strong>s unleashed by<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Salinas Administrati<strong>on</strong>) are resp<strong>on</strong>sible for <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tinuati<strong>on</strong> of Mexico’s high rates of inequality. 115 Slim’s<br />

m<strong>on</strong>opolies have been allowed to flourish in a country that is lacking in regulati<strong>on</strong>s that might guarantee fair<br />

competiti<strong>on</strong>. This, in a nutshell, is how Slim was able to build and maintain his empire. Although he began to<br />

invest in a variety of industries at a young age, <str<strong>on</strong>g>the</str<strong>on</strong>g> purchase and subsequent m<strong>on</strong>opolistic growth of<br />

TELMEX enabled him to vastly diversify his operati<strong>on</strong>s and expand his empire. Slim’s success has come with<br />

a high price for those who subscribe to <strong>on</strong>e or more of <str<strong>on</strong>g>the</str<strong>on</strong>g> costly services provided by TELMEX—and have<br />

little choice due to <str<strong>on</strong>g>the</str<strong>on</strong>g> lack of competiti<strong>on</strong>. Slim’s towering success also has created an unhealthy symbiosis—<br />

a dependency of <str<strong>on</strong>g>the</str<strong>on</strong>g> Mexican ec<strong>on</strong>omy <strong>on</strong> Slim’s businesses investments. Slim’s has crafted a sprawling<br />

network of businesses that are seen as “too big to fail.” This undermines <str<strong>on</strong>g>the</str<strong>on</strong>g> power of government agencies<br />

to regulate such businesses for fear of triggering negative c<strong>on</strong>sequences that might threaten <str<strong>on</strong>g>the</str<strong>on</strong>g> larger<br />

Mexican ec<strong>on</strong>omy.<br />

Slim’s power is linked not <strong>on</strong>ly to his business strategy but also to his political c<strong>on</strong>necti<strong>on</strong>s in Mexico and<br />

around <str<strong>on</strong>g>the</str<strong>on</strong>g> world and his access to key policymakers. His strategic partnerships—such as his joint health<br />

initiatives with <str<strong>on</strong>g>the</str<strong>on</strong>g> government of Spain and powerful people like Bill Gates—allow him to c<strong>on</strong>struct a<br />

positive and caring public pers<strong>on</strong>a behind which he can hide <str<strong>on</strong>g>the</str<strong>on</strong>g> extensive negative envir<strong>on</strong>mental and<br />

human rights impacts of his mining, petroleum, tobacco and c<strong>on</strong>structi<strong>on</strong> projects. The size and complexity<br />

of his collecti<strong>on</strong> of companies (and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir relative obscurity, even inside Mexico), leave Slim largely<br />

unaccountable for <str<strong>on</strong>g>the</str<strong>on</strong>g> human and envir<strong>on</strong>mental damage that underlies his fortunes. Slim’s financial success,<br />

combined with his well-crafted image, work to perpetuate <str<strong>on</strong>g>the</str<strong>on</strong>g> public’s acceptance of m<strong>on</strong>opolies and great<br />

wealth as positive virtues. But <str<strong>on</strong>g>the</str<strong>on</strong>g> fact remains: Carlos Slim is now <str<strong>on</strong>g>the</str<strong>on</strong>g> most glaring example of <str<strong>on</strong>g>the</str<strong>on</strong>g> growing<br />

inequality inside Mexico and around <str<strong>on</strong>g>the</str<strong>on</strong>g> world, a cynical charade of success that is characterized by a familiar<br />

and unequal equati<strong>on</strong>—more m<strong>on</strong>ey in fewer hands and less resources for those who need <str<strong>on</strong>g>the</str<strong>on</strong>g>m <str<strong>on</strong>g>the</str<strong>on</strong>g> most.<br />

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— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

APPENDIX A: SELECTED INVESTMENTS BY CARLOS SLIM ACCORDING TO SECTOR<br />

(SUMMER 2011)<br />

This is a list of key selected companies partially or majority owned by Carlos Slim and/or his subsidiaries<br />

according to sector. His total investments are estimated to be much more extensive than what is shown <strong>on</strong><br />

this list. Slim’s share of investment and ownership of each company is not listed, given <str<strong>on</strong>g>the</str<strong>on</strong>g> degree of<br />

imprecisi<strong>on</strong> of informati<strong>on</strong> regarding his investments—due, in part, to Slim’s practice of repeatedly buying<br />

and selling his companies’ stocks.<br />

INDUSTRY SECTOR COMPANY NAME COUNTRY OF<br />

OPERATIONS<br />

TELECOMMUNICATIONS AMERICA MOVIL, which includes:<br />

TELMEX<br />

TELMEX INTERNATIONAL<br />

TELCEL<br />

CLARO<br />

EMBRATEL<br />

NET<br />

TRACFONE<br />

COMCEL<br />

PORTA,<br />

MINING<br />

SECCIÓN AMARILLA<br />

MINERA FRISCO Mexico<br />

RETAIL<br />

GRUPO SANBORNS, which includes:<br />

SANBORNS STORES<br />

Mexico<br />

NEWS MEDIA<br />

SANBORNS CAFÉ<br />

SEARS MEXICO<br />

MIX-UP<br />

PROMOTORA MUSICAL<br />

DORIAN’S, ETC<br />

- 75 -<br />

Latin America And The United<br />

States<br />

SAKS FIFTH AVENUE United States<br />

NEW YORK TIMES United States<br />

THE INDEPENDENT United Kingdom<br />

OIL AND GAS<br />

TABASCO OIL<br />

ALLIS-CHALMERS ENERGY INC United States And Latin America<br />

GAS NATURAL FENOSA Spain And Latin America<br />

TOBACCO CIGATAM Mexico<br />

FINANCE<br />

GRUPO FINANCIERO INBURSA, which<br />

includes:<br />

Mexico<br />

BANCO INBURSA<br />

SEGUROS INBURSA<br />

CASA DE BOLSA INVERSORA BURSÁTIL<br />

AFORE INBURSA<br />

OPERADORA INBURSA, ETC.<br />

CRITERIA CAIXA CORP Spain<br />

CITIGROUP <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g><br />

REAL ESTATE INMUEBLES CARSO Mexico


HOSPITALITY<br />

INDUSTRIAL SUPPLIES<br />

CONSTRUCTION AND<br />

INFRASTRUCTURE<br />

NOTES<br />

— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

OSTAR GRUPO HOTELERO, which includes:<br />

HOTEL GENEVE – CIUDAD DE MÉXICO<br />

CALINDA BEACH – ACAPULC<br />

RAMADA GATEWAY – ORLANDO, ETC.<br />

GRUPO CONDUMEX, which includes:<br />

CDM<br />

EQUITER<br />

INDUSTRIAS IEM<br />

SINERGIA<br />

MICROM<br />

CONDUMEX INCORPORATED<br />

IMPULSORA DEL DESARROLLO Y EMPLEO<br />

DE AMÉRICA LATINA (IDEAL)<br />

CARSO INFRAESTRUCTURA Y<br />

CONSTRUCCIÓN SAB, which includes:<br />

CICSA DUCTOS<br />

SWECOMEX<br />

PC CONSTRUCTORES<br />

CILSA<br />

SERVICIOS INTEGRALES GSM<br />

1 Polaris Institute calculati<strong>on</strong>s based <strong>on</strong> figures from Forbes Magazine’s annual list of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s wealthiest people.<br />

2 “Making <str<strong>on</strong>g>the</str<strong>on</strong>g> Desert Bloom,” The Ec<strong>on</strong>omist, Aug 27th 2011.<br />

3 Brian Winters, “How Slim got Huge,” Foreign Policy, No. 163 (2007), 37.<br />

4CarlosSlim.com, “Larry King Interview with Carlos Slim in CNN's Larry King Live,” December 03, 2010.<br />

http://www.carlosslim.com/preg_resp_slim_larryking_ing.html (accessed July 13, 2011)<br />

5 “World’s Billi<strong>on</strong>aires: Carlos Slim Helu & family,” Forbes, March 2011.<br />

6 CarlosSlim.com, “Larry King Interview with Carlos Slim in CNN's Larry King Live.” December 03, 2010.<br />

http://www.carlosslim.com/preg_resp_slim_larryking_ing.html (accessed July 13, 2011)<br />

7 Eduardo Porter, “Mexico’s Plutocracy Thrives <strong>on</strong> Robber-Bar<strong>on</strong> C<strong>on</strong>cessi<strong>on</strong>s,” New York Times, August 27, 2007.<br />

8 Robert Dominguez, “Carlos Slim Loses $8 billi<strong>on</strong> as Tanking Markets Take Their Toll <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Wealth of World's<br />

Richest Man,” New York Daily News, August 6 th 2011.<br />

9 Marco Rascón, “El cálculo de Slim,” La Jornada, March 28, 2006.<br />

10 “Mexican Billi<strong>on</strong>aire Carlos Slim Promotes Public-Private Partnership to Boost Development, Growth,” AllBusiness,<br />

March 29, 2006.<br />

11 SEC Info, “America Movil Sab De CV - 20-F: Annual Report of a Foreign Private Issuer” December 31, 2010<br />

http://www.secinfo.com/d14D5a.q478x.htm (accessed July 18, 2011)<br />

12 Brian Winters, “How Slim got huge,” Foreign Policy, No. 163 (2007).<br />

13 Judith Clift<strong>on</strong>, "On <str<strong>on</strong>g>the</str<strong>on</strong>g> Political C<strong>on</strong>sequences of Privatisati<strong>on</strong>: <str<strong>on</strong>g>the</str<strong>on</strong>g> Case of Telef<strong>on</strong>os de Mexico," Bulletin of Latin<br />

American Research 19 (2000) 63-79<br />

14 Ibid.<br />

- 76 -<br />

Mexico and The United States<br />

Mexico, United States, and Canada<br />

Latin America<br />

Mexico<br />

MEDICAL SERVICES<br />

URVITEC<br />

GRUPO STAR MÉDICA Mexico<br />

EDUCATION<br />

UNIVERSIDAD TECNOLOGICA DE MEXICO<br />

(UNITEC’S CAMPUS)<br />

Mexico<br />

TRANSPORTATION FERROSUR (GRUPO MÉXICO)<br />

FERROMEX (GRUPO MÉXICO)<br />

Mexico<br />

SPORTS ESCUDERÍA TELMEX Mexico


— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

15 Judith Clift<strong>on</strong>, Daniel Díaz Fuentes and Carlos Marichal, “Taking C<strong>on</strong>trol: Transforming Telecommunicati<strong>on</strong>s in<br />

Mexico,” Paper presented at XIV <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Ec<strong>on</strong>omic History C<strong>on</strong>gress, Helsinki, Sessi<strong>on</strong> 119 (2006), 3.<br />

16 Clift<strong>on</strong>, J., "On <str<strong>on</strong>g>the</str<strong>on</strong>g> Political C<strong>on</strong>sequences of Privatisati<strong>on</strong>: <str<strong>on</strong>g>the</str<strong>on</strong>g> Case of Telef<strong>on</strong>os de Mexico," Bulletin of Latin<br />

American Research 19 (2000) 63-79<br />

17 Laura Juárez Sánchez, “Neoliberalismo Ec<strong>on</strong>ómico: Despojo Sistemático del F<strong>on</strong>do de Vida de los Trabajadores y de<br />

las Riquezas de la Nación,” Trabajadores 59 (2007), 11.<br />

18 Bill Ong Hing, Ethical Borders: NAFTA, Globalizati<strong>on</strong>, and Mexican Migrati<strong>on</strong> (Philadelphia: Temple University<br />

Press, 2010), 45.<br />

19 “Rich Pickings,” Financial Times, July 19, 1994.<br />

20 “M<strong>on</strong>opoly M<strong>on</strong>ey Competiti<strong>on</strong> is not Mexico's Str<strong>on</strong>gest Point,” The Ec<strong>on</strong>omist, November 16, 2006.<br />

21 James F. Smith, “Debate Rages Over Carlos Slim, <str<strong>on</strong>g>the</str<strong>on</strong>g> Wealthiest Man in Latin America,” Los Angeles Times,<br />

September 5, 1999.<br />

22 “Making <str<strong>on</strong>g>the</str<strong>on</strong>g> Desert Bloom,” The Ec<strong>on</strong>omist, Aug 27, 2011.<br />

23 America Movil, “Top 50 Global Companies” http://www.secinfo.com/DB/SEC/2010-000/1193/125-0624/63-<br />

043.jpg (accessed July 14, 2011)<br />

24 Danny Meadows-Klue, “Mexico Hits <str<strong>on</strong>g>the</str<strong>on</strong>g> Internet Tipping Point” Digital Strategy C<strong>on</strong>sulting, 18 July, 2007.<br />

25 “Making <str<strong>on</strong>g>the</str<strong>on</strong>g> Desert Bloom,” The Ec<strong>on</strong>omist, Aug 27, 2011.<br />

26 Grupo Carso, Official Website http://www.carso.com.mx (accessed July 11, 2011)<br />

27 Grupo Carso, Official Website http://www.carso.com.mx (accessed July 11, 2011)<br />

28 CICCSA, “Descargas: Curriculum Corporativo CICCSA,” http://extranet.ccicsa.com.mx/aplicaci<strong>on</strong>es<br />

/currdescargas/hdescargas.aspx?v%3d,0# (accessed July 13, 2011)<br />

29 Market capitalizati<strong>on</strong> values corresp<strong>on</strong>d to <str<strong>on</strong>g>the</str<strong>on</strong>g> average values reported <strong>on</strong> August 15, 2011. Market capitalizati<strong>on</strong> was<br />

identified based <strong>on</strong> stocks traded in <str<strong>on</strong>g>the</str<strong>on</strong>g> New York Stock Exchange. When stocks were not traded in <str<strong>on</strong>g>the</str<strong>on</strong>g> NYSE,<br />

market cap was calculated according to <str<strong>on</strong>g>the</str<strong>on</strong>g> stocks in <str<strong>on</strong>g>the</str<strong>on</strong>g> Bolsa Mexicana de Valores.<br />

30 Fortune 500 Company 2011. See more at:<br />

http://m<strong>on</strong>ey.cnn.com/magazines/fortune/fortune500/2011/full_list/index.html<br />

31 As a Diversified C<strong>on</strong>glomerate, Grupo Carso Also Compares to News Corp ($43 billi<strong>on</strong> market cap) and Caterpillar<br />

($58 billi<strong>on</strong> market cap). http://www.bloomberg.com/apps/quote?ticker=NWS:US &<br />

http://www.bloomberg.com/apps/quote?ticker=CAT:US (accessed August 12, 2011)<br />

32 Fortune 500 Company 2011. See more at:<br />

http://m<strong>on</strong>ey.cnn.com/magazines/fortune/fortune500/2011/full_list/index.html<br />

33 Fortune 500 Company 2011. See more at:<br />

http://m<strong>on</strong>ey.cnn.com/magazines/fortune/fortune500/2011/full_list/index.html<br />

34 Thomas Black for Bloomberg News, “Slim Eyes Expansi<strong>on</strong> Into New Market,” Banderas News, May 2005.<br />

35 Thomas Black, “Mexico Builds Hospitals to Lure Medical Tourists From America,” Bloomberg News, March 27,<br />

2008.<br />

36 CarlosSlim.com, “Business Activity,” http://www.carlosslim.com/act_empresarial_ing.html (accessed July 14, 2011)<br />

37 Escuderia Telmex, http://escuderiatelmex.com (accessed July 14, 2011)<br />

38 Minera Frisco, “Unidades Mineras,” http://www.minerafrisco.com/ES/unidadesmineras/Paginas/default.aspx<br />

(accessed July 14, 2011)<br />

39 “Carso Vende Negocios de Cobre y Alumínio,” CNN Expansi<strong>on</strong>, June 01, 2009<br />

http://www.cnnexpansi<strong>on</strong>.com/negocios/2009/06/01/carso-vende-negocios-de-cobre-y-aluminio (accessed July 14,<br />

2011)<br />

40 Grupo Mexico, “Fourth Quarter 2010 Results,” February 04, 2011<br />

http://www.grupomexico.com/files/CEO%20Reporte%204Q10%204feb11.pdf (accessed July 14, 2011)<br />

41 America Movil, “América Móvil’s First Quarter Of 2011 Financial And Operating Report,” May 02, 2011, 14<br />

http://www.americamovil.com/amx/en/cm/reports/Q/2011_1.pdf (accessed July 11, 2011)<br />

42 United States-Mexico Chamber of Commerce, “Business Development Opportunities: NAFTA,”<br />

http://www.usmcoc.org/b-nafta8.php (accessed July 12, 2011)<br />

43 Trade Compliance Center, “Chapter Thirteen of <str<strong>on</strong>g>the</str<strong>on</strong>g> North American Free Trade Agreement (NAFTA)”<br />

http://tcc.export.gov/Trade_Agreements/Exporters_Guides/List_All_Guides/NAFTA_chapter13_guide.asp<br />

(accessed July 12, 2011)<br />

44 William Freebairn, “Carlos Slim’s Inbursa Bank Acquires Citigroup Shares,” Bloomberg News, November 25, 2008.<br />

45 “Carlos Slim Adds to Saks (SKS) Stake; Now at 25M Shares,” StreetInsider, November 25, 2008.<br />

46 Andrea Mandel-Campbell, “Slim buys Circuit City stake,” Financial Times, March 13, 2001.<br />

47 “Carlos Slim: ‘The Key Is <str<strong>on</strong>g>the</str<strong>on</strong>g> Internet’,” Bloomberg Businessweek, February 21, 2000.<br />

- 77 -


— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

48 Russell Adams, “Carlos Slim Boosts Stake In New York Times Again,” Wall Street Journal, October 6, 2011.<br />

49 “New York Times Silent <strong>on</strong> Major Carlos Slim Lawsuit,” Huffingt<strong>on</strong> Post, February 22, 2010.<br />

50 William Freebairn, “Carlos Slim’s Inbursa Bank Acquires Citigroup Shares,” Bloomberg News, November 25, 2008.<br />

51 Krista Hughes and Elinor Comlay, “UPDATE 1-Mexico's Slim Sells Stake in Br<strong>on</strong>co Drilling,” Reuters, June 9, 2011.<br />

52 “Carlos Slim Sees Colombia Rising as Commodity Choice,” Businessweek, February 10, 2011.<br />

53 Tiffany Burch, Nathaniel Wander, Jeff Collin, “Uneasy m<strong>on</strong>ey: <str<strong>on</strong>g>the</str<strong>on</strong>g> Instituto Carlos Slim de la Salud, Tobacco<br />

Philanthropy and C<strong>on</strong>flict of Interest in Global Health,” Tobacco C<strong>on</strong>trol 19 (2010), e1.<br />

54 “Philip Morris Cigatam – Mexico – Company Profile” http://www.securities.com/Public/companyprofile/MX/Philip_Morris_Cigatam_en_1221557.html<br />

(accessed July 28, 2011)<br />

55 Eurom<strong>on</strong>itor, “Cigarettes in Mexico: Category Briefing,” August 1, 2010.<br />

56 CarlosSlim.Com, “Informati<strong>on</strong>, Interviews, Questi<strong>on</strong>s, and Answers: 3. Could you Give us Some Examples of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Value of Companies at <str<strong>on</strong>g>the</str<strong>on</strong>g> Beginning of <str<strong>on</strong>g>the</str<strong>on</strong>g> 80s?” http://www.carlosslim.com/03_ing.html (accessed August 10,<br />

2011)<br />

57 America Movil, “América Móvil’s First Quarter Of 2011 Financial And Operating Report,” May 2, 2011, 3<br />

http://www.americamovil.com/amx/en/cm/reports/Q/2011_1.pdf (accessed July 11, 2011)<br />

58 Ibid<br />

59 Ibid<br />

60 John Paul Rathb<strong>on</strong>e and Adam Thoms<strong>on</strong>, “Carlos Slim Eyes Latin America for Growth,” Financial Times, June 13,<br />

2011.<br />

61 IDEAL, “Energy” http://www.ideal.com.mx/site/index.php?opti<strong>on</strong>=com_c<strong>on</strong>tent&task=view&id=46&Itemid=100<br />

(accessed August 3, 2011)<br />

62 Canal de Panamá, “Sec<strong>on</strong>d Major Expansi<strong>on</strong> Excavati<strong>on</strong> C<strong>on</strong>tract Announced,” December 3, 2007.<br />

63 “Carso Enters Market with Tabasco Oil Buyout,” Business News Americas, February 23, 2011.<br />

64 Leire Barrera, “Mexico's Carlos Slim To Join Criteria's Board Of Directors,” Dow J<strong>on</strong>es <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> News, May 19,<br />

2010.<br />

65 CaixaCorp, S.A. and Companies Composing <str<strong>on</strong>g>the</str<strong>on</strong>g> Criteria CaixaCorp Group C<strong>on</strong>solidated Financial Statements for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Year Ended December 31, 2010 and C<strong>on</strong>solidated Director’s Report toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r with Auditor’s Report, February 24,<br />

2011.<br />

66 David Biller, “Slim: Allis-Chalmers Stake Strategic and Financial Investment – Mexico,” Business News Americas,<br />

October 1, 2008.<br />

67 Gas Natural Fenosa, http://portal.gasnatural.com/servlet/C<strong>on</strong>tentServer?gnpage=1-10-1&centralassetname=1-10-<br />

BloqueHTML-73 (accessed August 3, 2011)<br />

68 Chris Aspin, “Mexico Competiti<strong>on</strong> Watchdog Slams C<strong>on</strong>gress Over Law,” Reuters, March 5, 2008.<br />

69 “Mexico Antitrust Commissi<strong>on</strong> Slaps 1 billi<strong>on</strong> USD Fine <strong>on</strong> Mobile Ph<strong>on</strong>e Operator,” Merco Press, April 25, 2011.<br />

70 Anth<strong>on</strong>y Harrup, “America Movil Unit to Appeal $1 billi<strong>on</strong> fine,” MarketWatch, April 26, 2011<br />

http://www.marketwatch.com/story/america-movil-unit-to-appeal-1-billi<strong>on</strong>-fine-2011-04-26 (accessed July 11, 2011)<br />

71 Crayt<strong>on</strong> Harris<strong>on</strong>, “Slim Near Victory as Mexico’s Record $1 Billi<strong>on</strong> Antitrust Case Loses Steam,” Bloomberg News,<br />

August 15, 2011 http://www.bloomberg.com/news/2011-08-15/slim-near-victory-as-mexico-s-record-1-billi<strong>on</strong>antitrust-case-loses-steam.html<br />

(accessed August 15, 2011)<br />

72 Barrera Diaz, “The Billi<strong>on</strong> Dollar Fine that May Never Hit Slim,” Reuters, August 19, 2011.<br />

73 Chris Aspin, “Mexico Competiti<strong>on</strong> Watchdog Slams C<strong>on</strong>gress Over Law,” Reuters, March 5, 2008.<br />

74 Judith Mariscal, Eugenio Rivera, “New Trends in <str<strong>on</strong>g>the</str<strong>on</strong>g> Latin American Telecommunicati<strong>on</strong>s Market: Telef<strong>on</strong>ica &<br />

Telmex,” Telecommunicati<strong>on</strong>s Policy 29 (2005), 762.<br />

75 Ibid<br />

76 “Engaged,” The Ec<strong>on</strong>omist, April 15, 2000, Vol. 355, Issue 8166.<br />

77 Brian Winters, “How Slim Got Huge,” Foreign Policy, No. 163 (2007), 40.<br />

78 James F. Smith, “Debate Rages Over Carlos Slim, <str<strong>on</strong>g>the</str<strong>on</strong>g> Wealthiest Man in Latin America,” Los Angeles Times,<br />

September 5, 1999. http://articles.latimes.com/1999/sep/05/business/fi-7066/3 (accessed August 11, 2011)<br />

79 Teresa Libertad Ganado Guevara, “La Regulación del Cabildeo en México,” Pluralidad y C<strong>on</strong>senso.<br />

80 Instituto Federal Electoral, http://www.ife.org.mx/portal/site/ifev2<br />

81 “Magnatas da América Latina Analisam Desemprego,” Revista Exame, May 13, 2010.<br />

82 Mat<str<strong>on</strong>g>the</str<strong>on</strong>g>w Mosk, Brian Ross and Avni Patel, “Got Cash? Obama's Sec<strong>on</strong>d State Dinner Is Just Like <str<strong>on</strong>g>the</str<strong>on</strong>g> First,” ABC<br />

News – The Blotter, May 19, 2010.<br />

83 Thomas Black for Bloomberg News, “Slim Eyes Expansi<strong>on</strong> Into New Market,” Banderas News, May 2005.<br />

84 “Mexican Billi<strong>on</strong>aire Carlos Slim Promotes Public-Private Partnership to Boost Development, Growth,” AllBusiness,<br />

March 29, 2006.<br />

- 78 -


— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

85 “Acuerdo de Chapultepec,” Castillo de Chapultepec, September 29, 2005.<br />

86 IV World Water <str<strong>on</strong>g>Forum</str<strong>on</strong>g>, “Carlos Slim Proposes <str<strong>on</strong>g>the</str<strong>on</strong>g> Creati<strong>on</strong> of an Aut<strong>on</strong>omous Agency for Mexico City to Manage<br />

Water “Outside <str<strong>on</strong>g>the</str<strong>on</strong>g> Budget,” Press Release, March 20, 2006.<br />

http://www.worldwaterforum4.org.mx/uploads/TBL_PROOMS_480_21.%20Prop<strong>on</strong>e%20Carlos%20(inglés).doc.p<br />

df (accessed August 15, 2011)<br />

87 Sergio E. Aleman, “NAFTA and its Impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Privatizati<strong>on</strong> of Mexico's Telecommunicati<strong>on</strong>s Industry,” Law and<br />

Business Review of <str<strong>on</strong>g>the</str<strong>on</strong>g> Americas 7 (2001), 10.<br />

88 Ibid.<br />

89 Ibid<br />

90 North American Free Trade Agreement, Chapter 13,<br />

http://tcc.export.gov/Trade_Agreements/All_Trade_Agreements/NAFTA_Part5_Chapter13.asp (accessed<br />

September 12, 2011).<br />

91 “CNBC Exclusive: CNBC Transcript: CNBC's Michelle Caruso-Cabrera Sits Down with Carlos Slim, <str<strong>on</strong>g>the</str<strong>on</strong>g> World's<br />

Wealthiest Man, Today <strong>on</strong> CNBC,” CNBC, January 20, 2011.<br />

92 CarlosSlim.com, “Social Activity” http://www.carlosslim.com/resp<strong>on</strong>sabilidad_slim_mesoamerica_ing.html (accessed<br />

August 9, 2011)<br />

93 CarlosSlim.com, “Grupo Carso: Plan 2009” http://www.carlosslim.com/preg_resp_pressrelease_ing.html (accessed<br />

August 10, 2011)<br />

94 Tiffany Burch, Nathaniel Wander, Jeff Collin, “Uneasy M<strong>on</strong>ey: <str<strong>on</strong>g>the</str<strong>on</strong>g> Instituto Carlos Slim de la Salud, Tobacco<br />

Philanthropy and C<strong>on</strong>flict of Interest in Global Health,” Tobacco C<strong>on</strong>trol 19 (2010).<br />

95 Tobacco Free Center, “Case study: Philip Morris <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Inc (PMI) in Mexico”<br />

http://www.tobaccofreecenter.org/files/pdfs/en/IW_facts_casestudies_pmi_mexico.pdf (accessed August 10, 2011)<br />

96 Tiffany Burch, Nathaniel Wander, Jeff Collin, “Uneasy M<strong>on</strong>ey: <str<strong>on</strong>g>the</str<strong>on</strong>g> Instituto Carlos Slim de la Salud, Tobacco<br />

Philanthropy and C<strong>on</strong>flict of Interest in Global Health,” Tobacco C<strong>on</strong>trol 19 (2010), e3.<br />

97 Ibid.<br />

98 Ibid.<br />

99 Bill and Melinda Gates Foundati<strong>on</strong>, “Gates Foundati<strong>on</strong>, Carlos Slim Health Institute, Spain, and <str<strong>on</strong>g>the</str<strong>on</strong>g> IDB Collaborate<br />

to Improve Health of <str<strong>on</strong>g>the</str<strong>on</strong>g> Poor in Mesoamerica,” Grantee Announcement, June 14, 2010<br />

http://www.gatesfoundati<strong>on</strong>.org/press-releases/Pages/salud-mesoamerica-2015-initiative-sm2015-100614.aspx<br />

(accessed August 11, 2011)<br />

100 Sim<strong>on</strong> Chapman, “Health and Philanthropy—<str<strong>on</strong>g>the</str<strong>on</strong>g> Tobacco C<strong>on</strong>necti<strong>on</strong>,” The Lancet, Volume 377, Issue 9759<br />

(2011), 11.<br />

101 Thomas Black, “Slim’s Gift Sets Envir<strong>on</strong>ment Example, Wildlife Fund Chief Says,” Bloomberg June 4, 2009.<br />

102 United Nati<strong>on</strong>s Industrial Development Organizati<strong>on</strong>, “UN Advisory Group Looks at Implementing Energy Access,<br />

Energy Efficiency Goals at Mexico Meeting,” Mexico City. July 15, 2010<br />

http://www.unido.org/index.php?id=7881&tx_ttnews%5Btt_news%5D=496&cHash=bf1259ad638fef591bfcb0ab70<br />

b8bf1c (accessed August 15, 2011)<br />

103 TELMEX blog, Teléf<strong>on</strong>os de México Recibió por Décimo año C<strong>on</strong>secutivo, el Distintivo “Empresa Socialmente<br />

Resp<strong>on</strong>sible,” April 7, 2011,<br />

http://blog.telmex.com/2011/04/07/telef<strong>on</strong>os-de-mexico-recibio-por-decimo-ano-c<strong>on</strong>secutivo-el-distintivo-<br />

%E2%80%9Cempresa-socialmente-resp<strong>on</strong>sable%E2%80%9D/ (accessed October 12, 2011).<br />

104 J<strong>on</strong>athan Clark, “Telmex Accused of Blocking VoIP Calls in Mexico,” The Miami Herald (Mexico editi<strong>on</strong>) May 8,<br />

2005.<br />

105 <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Rivers, “La Parota Dam,” http://www.internati<strong>on</strong>alrivers.org/latin-america/mexico/la-parota-dam<br />

(accessed August 15, 2011)<br />

106 “Activists Demand Corporati<strong>on</strong>s End Involvement In Mexican Dam,” Interc<strong>on</strong>tinental Cry, February 12, 2007.<br />

107 Alfredo Valadez Rodriguez, “Minera Real de Angeles: de Orgullo de Zacatecas a Paraje C<strong>on</strong>taminado,” La Jornada,<br />

August 23, 2005.<br />

108 Ibid<br />

109 Gustavo Cabullo, “Minería en Chihuahua, un Robo al Estado,” Reportaje especial, June 19, 2011,<br />

http://www.radi<strong>on</strong>et1490.com.mx/nota.php?recordID=32348 (accessed August 4, 2011)<br />

110 Sindicato Minero Secci<strong>on</strong> 65 – Cananea, S<strong>on</strong>ora, “Minas y daños ecológicos II,” June 6, 2008.<br />

http://www.sindicatominerosecci<strong>on</strong>65.com.mx/index.php?opci<strong>on</strong>=1&id=102 & Ulises Gutiérrez Ruelas, “Entre<br />

nubes de c<strong>on</strong>taminación por "jales pulverizados", los Mineros se Mantienen Firmes en Cananea,” Dossier Politico,<br />

April 24, 2009 http://www.dossierpolitico.com/vernoticiasanteriores.php?artid=53037&relaci<strong>on</strong>=dossierpolitico<br />

(accessed August 4, 2011)<br />

- 79 -


— CARLOS SLIM: THE WORLD’S RICHEST MAN —<br />

111 Ulises Gutiérrez Ruelas, “Entre Nubes de C<strong>on</strong>taminación por "Jales Pulverizados", los Mineros se Mantienen Firmes<br />

en Cananea,” Dossier Politico, April 24, 2009<br />

http://www.dossierpolitico.com/vernoticiasanteriores.php?artid=53037&relaci<strong>on</strong>=dossierpolitico (accessed August 4,<br />

2011)<br />

112 Aleida Samaniego C., Mary Triny Zea, “Cuenca 102, en Poder de las Hidroeléctricas,” La Prensa, July 4, 2011.<br />

113 Ibid<br />

114 “Prevén Círculo Vicioso en C<strong>on</strong>taminación de Aguas,” Milenio, January 25, 2010.<br />

115 Mexico has a Gini Index of 0.52 (2008 Gini, scale from 0 to 1, where 0 indicates perfect equality and 1 indicates<br />

perfect inequality). The World Bank, “Data by country: Mexico,” http://data.worldbank.org/country/mexico<br />

(accessed August 12, 2011)<br />

- 80 -


– THE INDIAN OLIGARCHS –<br />

THE INDIAN OLIGARCHS<br />

DR. VANDANA SHIVA<br />

The global image of India has been undergoing drastic changes in <str<strong>on</strong>g>the</str<strong>on</strong>g> last few decades: from being known as<br />

an exotic land of spirituality and great culture <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e hand, and massive poverty and destituti<strong>on</strong> <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

o<str<strong>on</strong>g>the</str<strong>on</strong>g>r, India suddenly finds itself <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s platform presented as <strong>on</strong>e of globalizati<strong>on</strong>’s winners. Shining<br />

India has become not <strong>on</strong>ly a nati<strong>on</strong>al political slogan by which drastic ec<strong>on</strong>omic, political and social changes<br />

were brought about and justified, but also <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s new brand name abroad. Dollar billi<strong>on</strong>aires from<br />

India, now famous worldwide, occupy <str<strong>on</strong>g>the</str<strong>on</strong>g> top slots of <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes billi<strong>on</strong>aires list. How did <str<strong>on</strong>g>the</str<strong>on</strong>g> great Indian<br />

oligarchs emerge? Which policies and processes facilitated <str<strong>on</strong>g>the</str<strong>on</strong>g>ir rise? India is often referred to as an<br />

“emerging ec<strong>on</strong>omy.” Indian civilizati<strong>on</strong> is, of course, too ancient to be called “emerging.” What has emerged<br />

from globalizati<strong>on</strong> and deregulati<strong>on</strong>?<br />

With <str<strong>on</strong>g>the</str<strong>on</strong>g> much-hyped, neo-liberal model (based <strong>on</strong> privatizati<strong>on</strong>, liberalizati<strong>on</strong> and globalizati<strong>on</strong>), <str<strong>on</strong>g>the</str<strong>on</strong>g> avenues<br />

were finally opened for <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic rise of India’s billi<strong>on</strong>aires, misleadingly presented as “<str<strong>on</strong>g>the</str<strong>on</strong>g> rise of India,”<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> miracle growth story. In <str<strong>on</strong>g>the</str<strong>on</strong>g> era of globalizati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> drastic reforms of <str<strong>on</strong>g>the</str<strong>on</strong>g> 1990s under <str<strong>on</strong>g>the</str<strong>on</strong>g> aegis of<br />

Cambridge/Oxford educated Manmohan Singh – <str<strong>on</strong>g>the</str<strong>on</strong>g>n India’s Finance Minister and now <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s Prime<br />

Minister – came to be seen as an undisputed propeller of growth, spinning out impressive double-digit GDP<br />

rates. What globalizati<strong>on</strong> advocates forego in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir analysis is that, while India was rising and GDP growing,<br />

poverty, hunger, destituti<strong>on</strong>, social c<strong>on</strong>flict and inequalities of wealth and power were rising as well.<br />

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While it is true that great wealth has been accumulated, it has de facto remained in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands of a few<br />

traditi<strong>on</strong>ally influential families, as sectors <strong>on</strong>ce included under <str<strong>on</strong>g>the</str<strong>on</strong>g> public domain have increasingly become<br />

private oligopolies. The policies of neo-liberal globalizati<strong>on</strong> imposed by <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> M<strong>on</strong>etary Fund’s<br />

(IMF) Structural Adjustment Programs since 1991 and World Trade Organizati<strong>on</strong> (WTO) since 1995, have<br />

created <str<strong>on</strong>g>the</str<strong>on</strong>g> climate for such c<strong>on</strong>centrati<strong>on</strong> of resources and wealth in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands of a few.<br />

Yet, today, a wave of scandals of enormous proporti<strong>on</strong>s involving politicians and some of <str<strong>on</strong>g>the</str<strong>on</strong>g> biggest<br />

business houses are rocking <str<strong>on</strong>g>the</str<strong>on</strong>g> very foundati<strong>on</strong>s of <str<strong>on</strong>g>the</str<strong>on</strong>g> new global image of India. Much of <str<strong>on</strong>g>the</str<strong>on</strong>g> new wealth is<br />

based <strong>on</strong> resource grab and land grab. The heat has been turned up <strong>on</strong> India’s wealthiest: where business<br />

acumen and ingenuity <strong>on</strong>ce were praised as sole determinants of such successful ventures, a questi<strong>on</strong> mark is<br />

now sneaking into <str<strong>on</strong>g>the</str<strong>on</strong>g> public’s mind as to whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r this ingenuity was not also applied towards lobbying for<br />

particular policies, rule-bending and favoritisms ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than to just plain business. As people start to questi<strong>on</strong><br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> means through which such richness came to be, it is important to make explicit <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>necti<strong>on</strong> between<br />

politics, ec<strong>on</strong>omic policies and such lopsided patterns of growth: such inequality is, in fact, <str<strong>on</strong>g>the</str<strong>on</strong>g> result of a<br />

process initiated two decades ago that has been pushed forward, c<strong>on</strong>sistently and vehemently, by a<br />

government that professes inclusive growth.<br />

THE DISTRIBUTIVE EFFECTS OF LIBERALIZATION, PRIVATIZATION, GLOBALIZATION<br />

Liberalizati<strong>on</strong> and ec<strong>on</strong>omic restructuring gave rise to new avenues for profit creati<strong>on</strong> and wealth<br />

accumulati<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> powerful. Any structural change has distributive effects. In <str<strong>on</strong>g>the</str<strong>on</strong>g> case of ec<strong>on</strong>omic or<br />

political reforms, too, it is fundamental to not <strong>on</strong>ly assess <str<strong>on</strong>g>the</str<strong>on</strong>g> total sum of <str<strong>on</strong>g>the</str<strong>on</strong>g> game, but also <str<strong>on</strong>g>the</str<strong>on</strong>g> political<br />

ec<strong>on</strong>omy of it – that is, who stands to gain and who stands to lose. In a country like India, where political,<br />

social, ec<strong>on</strong>omic, religious and identity-based c<strong>on</strong>stituencies abound (al<strong>on</strong>gside many particularistic interests),<br />

it is paramount to study <str<strong>on</strong>g>the</str<strong>on</strong>g> finer distributi<strong>on</strong> of benefits and losses that any initiative entails. Studies of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

ec<strong>on</strong>omic liberalizati<strong>on</strong> process of <str<strong>on</strong>g>the</str<strong>on</strong>g> 90s str<strong>on</strong>gly suggest that, indeed, <str<strong>on</strong>g>the</str<strong>on</strong>g> reforms were str<strong>on</strong>gly biased in<br />

favor of <str<strong>on</strong>g>the</str<strong>on</strong>g> corporate business sector as well as of <str<strong>on</strong>g>the</str<strong>on</strong>g> local elites. These already powerful secti<strong>on</strong>s in society<br />

were able to reaffirm <str<strong>on</strong>g>the</str<strong>on</strong>g>ir status in a self-reinforcing trend where growing wealth increased political clout and<br />

political c<strong>on</strong>necti<strong>on</strong>s increased ec<strong>on</strong>omic clout.<br />

The corporate business sector was pushed to <str<strong>on</strong>g>the</str<strong>on</strong>g> forefr<strong>on</strong>t of <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy, presented as innovators, as <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

engines of change and growth. An India of 1.2 billi<strong>on</strong> was reduced to India, Inc. Public sector units had come<br />

to be broadly seen as redundant and unnecessarily bureaucratic, if not hopelessly corrupt. Privatizati<strong>on</strong> was<br />

str<strong>on</strong>gly promoted as <str<strong>on</strong>g>the</str<strong>on</strong>g> panacea that would resolve all of India’s structural inefficiencies and problems.<br />

<str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> financial instituti<strong>on</strong>s have been systematically flogging <str<strong>on</strong>g>the</str<strong>on</strong>g> LPG mantra of Liberalizati<strong>on</strong>,<br />

Privatizati<strong>on</strong> and Globalizati<strong>on</strong> through a carrot-and-stick approach: <strong>on</strong> <strong>on</strong>e hand, <str<strong>on</strong>g>the</str<strong>on</strong>g> country was lured by<br />

promises of rapid growth, modernizati<strong>on</strong> and increased social well being while, <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand, such<br />

reforms were pushed through Structural Adjustment Programs and loan c<strong>on</strong>diti<strong>on</strong>alities.<br />

In 1991, at <str<strong>on</strong>g>the</str<strong>on</strong>g> time of <str<strong>on</strong>g>the</str<strong>on</strong>g>se ec<strong>on</strong>omic reforms, India was in <str<strong>on</strong>g>the</str<strong>on</strong>g> midst of a balance-of-payment crisis so<br />

accepting internati<strong>on</strong>al instituti<strong>on</strong>al assistance also meant accepting <str<strong>on</strong>g>the</str<strong>on</strong>g>ir diktats. The World Bank initiated a<br />

$500 milli<strong>on</strong> Structural Adjustment Program (SAP) that was also supported by an IMF-led stabilizati<strong>on</strong><br />

program. Approved in December 1991, <str<strong>on</strong>g>the</str<strong>on</strong>g> SAP closed in December 1993. 1 The program envisi<strong>on</strong>ed by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

SAP str<strong>on</strong>gly pushed deregulati<strong>on</strong> and liberalizati<strong>on</strong> with <str<strong>on</strong>g>the</str<strong>on</strong>g> idea of opening India’s ec<strong>on</strong>omy to <str<strong>on</strong>g>the</str<strong>on</strong>g> world.<br />

Government subsidies were cut substantially; trade policy was liberalized with decreased tariffs; industrial and<br />

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import licensing were reduced or removed c<strong>on</strong>siderably, foreign direct investment, foreign equity investment<br />

and foreign participati<strong>on</strong> in Indian businesses were str<strong>on</strong>gly increased.<br />

In 1991, with introducti<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> New Industrial Policy, <str<strong>on</strong>g>the</str<strong>on</strong>g> public sector’s dominati<strong>on</strong> was broken and<br />

crucial ec<strong>on</strong>omic sectors such as power, telecommunicati<strong>on</strong>s, infrastructure, mining and banking were<br />

opened up to private investment. Manufacturing sectors – including ir<strong>on</strong>, steel and shipbuilding – were also<br />

opened up for private business ownership. 2 All traditi<strong>on</strong>ally comm<strong>on</strong> property resources, public goods and<br />

services – including water, electricity, telecommunicati<strong>on</strong>s, health and educati<strong>on</strong> – were steadily enclosed and<br />

privatized.<br />

The c<strong>on</strong>diti<strong>on</strong>s were thus created for domestic and foreign private players to enter and exploit a largely<br />

uncharted territory that <str<strong>on</strong>g>the</str<strong>on</strong>g>y so<strong>on</strong> would come to dominate.<br />

While <str<strong>on</strong>g>the</str<strong>on</strong>g> direct beneficiary of <str<strong>on</strong>g>the</str<strong>on</strong>g> new policy framework was <str<strong>on</strong>g>the</str<strong>on</strong>g> business sector, <str<strong>on</strong>g>the</str<strong>on</strong>g> middle classes also<br />

welcomed <str<strong>on</strong>g>the</str<strong>on</strong>g> restructuring with open arms. India had been a domestic ec<strong>on</strong>omy in which producti<strong>on</strong> was<br />

intended for <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian market, and c<strong>on</strong>sumpti<strong>on</strong> was based <strong>on</strong> local producti<strong>on</strong>. With globalizati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

country’s middle and upper classes quickly fell under <str<strong>on</strong>g>the</str<strong>on</strong>g> spell of all that was foreign – <str<strong>on</strong>g>the</str<strong>on</strong>g>y were hungry for<br />

internati<strong>on</strong>al goods, values and lifestyles. They identified Government’s policies as regressive and saw <str<strong>on</strong>g>the</str<strong>on</strong>g>m as<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> reas<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir material deprivati<strong>on</strong>. They supported India’s new access to <str<strong>on</strong>g>the</str<strong>on</strong>g> global market, insofar as it<br />

gave <str<strong>on</strong>g>the</str<strong>on</strong>g>m what <str<strong>on</strong>g>the</str<strong>on</strong>g>y thought <str<strong>on</strong>g>the</str<strong>on</strong>g>y so badly needed. Unfortunately, <str<strong>on</strong>g>the</str<strong>on</strong>g> general public has often remained<br />

oblivious to <str<strong>on</strong>g>the</str<strong>on</strong>g> deeper c<strong>on</strong>sequences <str<strong>on</strong>g>the</str<strong>on</strong>g> LPG process would inflict <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> socio-ec<strong>on</strong>omic reality of India –<br />

especially for local producers, small farmers, small industry and small retail. The middle and upper classes also<br />

became increasingly detached and segregated in islands of status – removed from <str<strong>on</strong>g>the</str<strong>on</strong>g> broader country’s<br />

reality.<br />

If, for some, India’s opening to <str<strong>on</strong>g>the</str<strong>on</strong>g> world ec<strong>on</strong>omy simply meant being able to access foreign c<strong>on</strong>sumer<br />

goods, for a much larger secti<strong>on</strong> of society this translated into a c<strong>on</strong>sistent, c<strong>on</strong>stant and unstoppable threat<br />

to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir very survival through <str<strong>on</strong>g>the</str<strong>on</strong>g> loot of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir resources and livelihoods. This divide has often been referred<br />

to as <str<strong>on</strong>g>the</str<strong>on</strong>g> “India-Bharat” divide – <str<strong>on</strong>g>the</str<strong>on</strong>g> divide between <str<strong>on</strong>g>the</str<strong>on</strong>g> privileged c<strong>on</strong>suming classes in largely urban settings<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> peasants and tribals in rural areas. These neo-liberal-paradigm-led structural changes were, in fact,<br />

accompanied by a steady shift in mentality and approach to social policy where wealth accumulati<strong>on</strong> is<br />

presented as <str<strong>on</strong>g>the</str<strong>on</strong>g> foremost human achievement and poverty comes to be seen as an individual failure. What<br />

this hides is <str<strong>on</strong>g>the</str<strong>on</strong>g> massive transfer of wealth from <str<strong>on</strong>g>the</str<strong>on</strong>g> poor to <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchs, and <str<strong>on</strong>g>the</str<strong>on</strong>g> dispossessi<strong>on</strong> of milli<strong>on</strong>s<br />

from <str<strong>on</strong>g>the</str<strong>on</strong>g>ir resources, possessi<strong>on</strong>s, land and livelihoods.<br />

The neoliberal paradigm has str<strong>on</strong>gly pushed for a decrease in Government’s participati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s<br />

ec<strong>on</strong>omic affairs. The new reducti<strong>on</strong>ist role cast <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Government has signified a partial aband<strong>on</strong>ment of<br />

what used to be <str<strong>on</strong>g>the</str<strong>on</strong>g> most guiding principles of social and ec<strong>on</strong>omic policy in India – principles based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

socialistic ideology of equality and redistributi<strong>on</strong>. While liberalizati<strong>on</strong> opened avenues for corporate profits<br />

for <str<strong>on</strong>g>the</str<strong>on</strong>g> rich, it closed down local ec<strong>on</strong>omies, livelihoods, safety nets and social security for <str<strong>on</strong>g>the</str<strong>on</strong>g> poor. The<br />

socialist ideology as envisi<strong>on</strong>ed by Gandhi and Nehru implied a str<strong>on</strong>g comp<strong>on</strong>ent of social justice. The new<br />

capitalist model increasingly does away with c<strong>on</strong>cerns over comm<strong>on</strong> welfare, replacing <str<strong>on</strong>g>the</str<strong>on</strong>g> noti<strong>on</strong> of<br />

community with that of individual. In a market ec<strong>on</strong>omy, actors are atomistic, competing for resources as a<br />

functi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir financial status.<br />

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While <str<strong>on</strong>g>the</str<strong>on</strong>g> rhetoric calls for more market freedom and less Government regulati<strong>on</strong>, what is in fact happening<br />

is deregulati<strong>on</strong> for corporati<strong>on</strong>s and over-regulati<strong>on</strong> of citizens. Laws like <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian Seed Act, which would<br />

outlaw <str<strong>on</strong>g>the</str<strong>on</strong>g> sharing of thousands of traditi<strong>on</strong>al varieties of seeds in favor of a small selecti<strong>on</strong> of “licensed”<br />

seeds c<strong>on</strong>trolled by corporati<strong>on</strong>s, are aimed at regulating small, independent farmers while leaving<br />

corporati<strong>on</strong>s free. Laws like <str<strong>on</strong>g>the</str<strong>on</strong>g> Food Safety and Standards Act criminalizes <str<strong>on</strong>g>the</str<strong>on</strong>g> artisanal food producer while<br />

it deregulates <str<strong>on</strong>g>the</str<strong>on</strong>g> large corporati<strong>on</strong>s doing industrial food processing. The Biotechnology Regulatory Act<br />

would free <str<strong>on</strong>g>the</str<strong>on</strong>g> biotechnology industry to pursue <str<strong>on</strong>g>the</str<strong>on</strong>g> creati<strong>on</strong> of Genetically Modified Organism (GMOs)<br />

while avoiding biosafety regulati<strong>on</strong>. At <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, <str<strong>on</strong>g>the</str<strong>on</strong>g> act would, criminalize citizens for demanding<br />

GMO-free food. This is not less Government, but more. This is Government as a partner of corporati<strong>on</strong>s,<br />

not citizens.<br />

These ec<strong>on</strong>omic reforms initially gained legitimacy from <str<strong>on</strong>g>the</str<strong>on</strong>g> high rate of GDP growth that followed. The<br />

corporate houses were favored by <str<strong>on</strong>g>the</str<strong>on</strong>g> newly deregulated market ec<strong>on</strong>omy, which directly raised <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

ec<strong>on</strong>omic and political clout. The social elites were c<strong>on</strong>descending in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir acceptance of globalizati<strong>on</strong>, which<br />

offered new opportunities to import an aspirati<strong>on</strong>al culture of c<strong>on</strong>sumerism. The political elites were ready to<br />

embrace <str<strong>on</strong>g>the</str<strong>on</strong>g> new “free market” and aband<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> state-c<strong>on</strong>trolled dirigiste regime, c<strong>on</strong>vinced that following <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

signposts of <str<strong>on</strong>g>the</str<strong>on</strong>g> LPG would lead to broad, new avenues for pers<strong>on</strong>al profits and patr<strong>on</strong>age. 3<br />

The process of globalizati<strong>on</strong> and deregulati<strong>on</strong> of commerce has had several far-reaching and multifold<br />

c<strong>on</strong>sequences in India and elsewhere in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Firstly, <str<strong>on</strong>g>the</str<strong>on</strong>g> focus <strong>on</strong> pro-corporate policies (and a<br />

reducti<strong>on</strong>ist role for <str<strong>on</strong>g>the</str<strong>on</strong>g> State to privilege corporati<strong>on</strong>s) comes at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of weaker secti<strong>on</strong>s of society<br />

that are sorely in need of social safety nets to protect <str<strong>on</strong>g>the</str<strong>on</strong>g>ir social, ec<strong>on</strong>omic and human rights. Sec<strong>on</strong>dly, as<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> market becomes <str<strong>on</strong>g>the</str<strong>on</strong>g> predominant ruling instituti<strong>on</strong>, rights are replaced by purchasing power. This<br />

excludes <str<strong>on</strong>g>the</str<strong>on</strong>g> majority of <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong> from welfare and benefit provisi<strong>on</strong>s and leaves <str<strong>on</strong>g>the</str<strong>on</strong>g>m dependent <strong>on</strong><br />

“dole outs.” Thirdly, competiti<strong>on</strong> for resources <strong>on</strong> an uneven playing field translates into <str<strong>on</strong>g>the</str<strong>on</strong>g> privatizati<strong>on</strong> of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong>s and increasing c<strong>on</strong>centrati<strong>on</strong> of wealth at <str<strong>on</strong>g>the</str<strong>on</strong>g> top of <str<strong>on</strong>g>the</str<strong>on</strong>g> social pyramid. Finally, <str<strong>on</strong>g>the</str<strong>on</strong>g> shift in<br />

mentality that accompanies capitalistic growth (driven by persistent and persuasive “corporate messaging” in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> media) increasingly trains <str<strong>on</strong>g>the</str<strong>on</strong>g> public to see this accumulati<strong>on</strong> of great wealth as legitimate and justifies<br />

whatever means are used to obtain <str<strong>on</strong>g>the</str<strong>on</strong>g> ends.<br />

THE EMERGING OLIGOPOLIES<br />

While privatizati<strong>on</strong>, deregulati<strong>on</strong> and liberalizati<strong>on</strong> were presented as a bold way to break away from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

c<strong>on</strong>straints of State m<strong>on</strong>opoly and create a “level playing field,” <str<strong>on</strong>g>the</str<strong>on</strong>g> political ec<strong>on</strong>omy of <str<strong>on</strong>g>the</str<strong>on</strong>g> process actually<br />

translated into rising income inequalities. These new forces greatly affected <str<strong>on</strong>g>the</str<strong>on</strong>g> entitlements levels of many<br />

different secti<strong>on</strong>s of <str<strong>on</strong>g>the</str<strong>on</strong>g> social ladder by creating a new rung of large oligopolies dominated by a handful of<br />

private actors. Deregulati<strong>on</strong> exposes <str<strong>on</strong>g>the</str<strong>on</strong>g> poor to new threats of exploitati<strong>on</strong> as deregulati<strong>on</strong> and privatizati<strong>on</strong><br />

set <str<strong>on</strong>g>the</str<strong>on</strong>g> stage for a process known as “accumulati<strong>on</strong> by encroachment or dispossessi<strong>on</strong>.” This is a process<br />

typical of capitalism, wherein new resources are not created ex novo, but are snatched from <str<strong>on</strong>g>the</str<strong>on</strong>g> pre-capitalistic<br />

or State sector through <str<strong>on</strong>g>the</str<strong>on</strong>g> direct appropriati<strong>on</strong> of previously comm<strong>on</strong> property – such as communal water<br />

and land as well as public transportati<strong>on</strong>, health and educati<strong>on</strong> resources – that can now all be privatized. 4<br />

When growth happens through this process, it doesn’t lead to poverty reducti<strong>on</strong>, it just redistributes wealth<br />

from <str<strong>on</strong>g>the</str<strong>on</strong>g> large base at <str<strong>on</strong>g>the</str<strong>on</strong>g> bottom of society to a small elite at <str<strong>on</strong>g>the</str<strong>on</strong>g> top. Studies <strong>on</strong> income tax reports by<br />

Banerjee and Piketty show undisputedly that with <str<strong>on</strong>g>the</str<strong>on</strong>g> New Ec<strong>on</strong>omic Policy, <str<strong>on</strong>g>the</str<strong>on</strong>g> incomes of <str<strong>on</strong>g>the</str<strong>on</strong>g> top 1%<br />

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income India’s earners increased by about 50%. Out of this 1%, <str<strong>on</strong>g>the</str<strong>on</strong>g> richest 1% saw <str<strong>on</strong>g>the</str<strong>on</strong>g>ir incomes increase by<br />

more than 3 times. 5 Indeed, <str<strong>on</strong>g>the</str<strong>on</strong>g> LPG approach has proved to be especially beneficial to <str<strong>on</strong>g>the</str<strong>on</strong>g> privileged top<br />

1%. The problem is that, c<strong>on</strong>trary to <str<strong>on</strong>g>the</str<strong>on</strong>g> promises of <str<strong>on</strong>g>the</str<strong>on</strong>g> “trickle-down <str<strong>on</strong>g>the</str<strong>on</strong>g>ory,” wealth was being sucked<br />

upwards – <str<strong>on</strong>g>the</str<strong>on</strong>g> rich were getting richer while <str<strong>on</strong>g>the</str<strong>on</strong>g> poor were rendered increasingly dispossessed and<br />

marginalized – physically, socially and politically.<br />

Source: Jayati Gosh Parthapratim Pal and Jayati Gosh: Inequality in India: A survey of recent trends, DESA working<br />

paper no. 45, July 2007<br />

The most blatant evidence of <str<strong>on</strong>g>the</str<strong>on</strong>g> skewered pattern of wealth accumulati<strong>on</strong> resulting from neo-liberal policies<br />

is <str<strong>on</strong>g>the</str<strong>on</strong>g> creati<strong>on</strong> of scores of new Indian billi<strong>on</strong>aires in <str<strong>on</strong>g>the</str<strong>on</strong>g> midst of growing swaths of poor, hungry,<br />

dispossessed and landless people. Practically unchallenged in <str<strong>on</strong>g>the</str<strong>on</strong>g> newly opened market, a handful of wellc<strong>on</strong>nected<br />

firms and families so<strong>on</strong> came to c<strong>on</strong>trol huge resources and this growing c<strong>on</strong>centrati<strong>on</strong> of wealth<br />

laid <str<strong>on</strong>g>the</str<strong>on</strong>g> foundati<strong>on</strong>s for <str<strong>on</strong>g>the</str<strong>on</strong>g> rise of <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian oligarchs.<br />

The 2011 Forbes list counts 50 Indian billi<strong>on</strong>aires. Most famously, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is Lakshmi Mittal, <str<strong>on</strong>g>the</str<strong>on</strong>g> owner of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Arcelor Mittal steel company and <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s sixth richest man with $31.1 billi<strong>on</strong>. There are managers of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Reliance Empire (petrochemical and telecommunicati<strong>on</strong>s), <str<strong>on</strong>g>the</str<strong>on</strong>g> Ambani bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs, Mukesh (in ninth place with<br />

$27 billi<strong>on</strong>) and Anil (ranked 103rd with a scant $8.8 billi<strong>on</strong>). Earnings from <str<strong>on</strong>g>the</str<strong>on</strong>g> Essar Group (minerals,<br />

energy and communicati<strong>on</strong>s) placed Sashi and Ravi Ruia in <str<strong>on</strong>g>the</str<strong>on</strong>g> 42 nd positi<strong>on</strong> worldwide, with $15.8 billi<strong>on</strong>.<br />

The Jindal family (Jindal Steel and Power, Ltd.) ranks 56 th, with $13.2 billi<strong>on</strong>. Gautam Adani’s Adani Group<br />

(real estate, power, oil and agriculture) has earned him a slot as <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s 81 st richest man at $10 billi<strong>on</strong>.<br />

Sunil Mittal, owner of <str<strong>on</strong>g>the</str<strong>on</strong>g> telecom giant Bharti-Airtel, is <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s 110 th richest man with $8.3 billi<strong>on</strong>.<br />

Finally, aluminum bar<strong>on</strong> Anil Agarwal of Vedanta Resources holds down positi<strong>on</strong> 154 with $6.4 billi<strong>on</strong>.<br />

Ratan Tata, founder of <str<strong>on</strong>g>the</str<strong>on</strong>g> Tata Group, involved in manufacturing from tea to automobiles, does not appear<br />

in <str<strong>on</strong>g>the</str<strong>on</strong>g> list as his wealth is predominantly held by his charitable trusts. Although absent from <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes list,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> size and operati<strong>on</strong>s of Tata’s c<strong>on</strong>glomerate qualify him for this study. That some of <str<strong>on</strong>g>the</str<strong>on</strong>g> billi<strong>on</strong>aires are<br />

self-made while o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs inherited <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth does not affect <str<strong>on</strong>g>the</str<strong>on</strong>g> argument, as it witnesses <str<strong>on</strong>g>the</str<strong>on</strong>g> tendency of<br />

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wealth to remain in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands of those already wealthy and, even if some groups replace o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs, wealth stays<br />

c<strong>on</strong>centrated in oligopolies.<br />

1. LAKSHMI MITTAL —ARCELOR MITTAL<br />

STEEL<br />

The richest man in India and sixth richest in <str<strong>on</strong>g>the</str<strong>on</strong>g> world, Lakshmi Mittal is known worldwide. He also happens<br />

to also be <str<strong>on</strong>g>the</str<strong>on</strong>g> richest man in Europe and in Britain, where he resides in a luxury mansi<strong>on</strong> located at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

prestigious and posh Kensingt<strong>on</strong> Palace Gardens. Mittal’s mansi<strong>on</strong>, <strong>on</strong> a street known as Billi<strong>on</strong>aire’s Row, is<br />

said to be <str<strong>on</strong>g>the</str<strong>on</strong>g> most expensive private residence ever bought. Lakshmi Mittal’s wealth of $ 31.1 billi<strong>on</strong> derives<br />

fundamentally from <str<strong>on</strong>g>the</str<strong>on</strong>g> operati<strong>on</strong> of his steel company, Arcelor Mittal.<br />

With industrial capacity in 20 countries and operati<strong>on</strong>s in more than 60, Arcelor Mittal is reputed to be a<br />

leader in steel producti<strong>on</strong> <strong>on</strong> most global markets. The company is listed <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Stock Exchanges of New<br />

York, Amsterdam, Paris, Brussels, Luxembourg, Barcel<strong>on</strong>a, Bilbao, Madrid and Valencia.<br />

Lakshmi Mittal is also an independent director at Goldman Sachs and serves <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> board of directors of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

European Aer<strong>on</strong>autic Defence and Space Company, <str<strong>on</strong>g>the</str<strong>on</strong>g> World Steel Associati<strong>on</strong>, Kazakhstan’s Foreign<br />

Investment Council, South Africa’s <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Investment Council and <str<strong>on</strong>g>the</str<strong>on</strong>g> Investors' Council to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Cabinet of Ministers of Ukraine. He is also a member of <str<strong>on</strong>g>the</str<strong>on</strong>g> World Ec<strong>on</strong>omic <str<strong>on</strong>g>Forum</str<strong>on</strong>g>’s <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g><br />

Business Council, <str<strong>on</strong>g>the</str<strong>on</strong>g> World Steel Associati<strong>on</strong>'s Executive Committee, Mozambique’s Presidential<br />

<str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Advisory Board and <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g> Ir<strong>on</strong> and Steel Institute’s Executive Committee. Closer to<br />

home, Mittal is a board council member of <str<strong>on</strong>g>the</str<strong>on</strong>g> Prime Minister of India's Global Advisory Council of<br />

Overseas Indians.<br />

Starting out in <str<strong>on</strong>g>the</str<strong>on</strong>g> family’s steel business, Lakshmi Mittal first began to expand with <str<strong>on</strong>g>the</str<strong>on</strong>g> acquisiti<strong>on</strong> of a rundown<br />

steel mill in Ind<strong>on</strong>esia. This purchase initiated his rise as a steel magnate through a process of<br />

c<strong>on</strong>sistent c<strong>on</strong>solidati<strong>on</strong> – acquiring steel-making units in Europe, Canada, Africa and <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. More recently<br />

(through Arcelor Mittal), Mittal has put forward proposals for Greenfield projects 6 for India, Liberia,<br />

Mauritania, Mozambique, Nigeria, Russia, Saudi Arabia, Senegal and Turkey. The company employs <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

strategy of “vertical integrati<strong>on</strong>” to streamline producti<strong>on</strong> and increase <str<strong>on</strong>g>the</str<strong>on</strong>g> profitability of its steel-making<br />

operati<strong>on</strong>s. In additi<strong>on</strong> to owning steel factories, Mittal also c<strong>on</strong>trols <str<strong>on</strong>g>the</str<strong>on</strong>g> essential raw materials, making <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

company a prominent player in mining of ir<strong>on</strong> ore and coal. These c<strong>on</strong>solidati<strong>on</strong> and vertical integrati<strong>on</strong><br />

strategies combine to produce a powerful market-dominati<strong>on</strong> – and this raises a number of issues.<br />

Firstly, <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>solidati<strong>on</strong> trend has resulted in <str<strong>on</strong>g>the</str<strong>on</strong>g> creati<strong>on</strong> of huge oligopolies with substantial ec<strong>on</strong>omic and<br />

political weight (as Mittal’s c<strong>on</strong>necti<strong>on</strong>s and his CV testify) that translates into significant c<strong>on</strong>trol over <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

market. Sec<strong>on</strong>dly, Mittal’s success has been based <strong>on</strong> exploiting weaker industries and regulati<strong>on</strong>s (often in<br />

fragile or less developed ec<strong>on</strong>omies) and by turning poor labor standards and wages into profitable, “costcutting”<br />

business assets. Thirdly, <str<strong>on</strong>g>the</str<strong>on</strong>g> direct sourcing of raw materials entails a str<strong>on</strong>g involvement in mining,<br />

which is, in turn, <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most exclusive, envir<strong>on</strong>mentally and socially destructive ec<strong>on</strong>omic sectors. Lastly,<br />

taking a broader perspective, <str<strong>on</strong>g>the</str<strong>on</strong>g> growth of metal industries depends <strong>on</strong> a prevailing ideology that sees overc<strong>on</strong>sumpti<strong>on</strong><br />

and industrializati<strong>on</strong> as <str<strong>on</strong>g>the</str<strong>on</strong>g> ultimate goal of human development.<br />

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The policy framework in India is similarly geared to increase producti<strong>on</strong> of steel as <str<strong>on</strong>g>the</str<strong>on</strong>g> country aims at<br />

becoming a world leader with a nati<strong>on</strong>al target of producing 200 milli<strong>on</strong> t<strong>on</strong>s of steel by 2020 7 . Demand for<br />

steel remains very high domestically and <str<strong>on</strong>g>the</str<strong>on</strong>g> government has set out an intensive advertising campaign aimed<br />

at fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r increasing domestic c<strong>on</strong>sumpti<strong>on</strong> 8 while also looking to increase exports.<br />

Following implementati<strong>on</strong> of India’s new Industrial Policy in 1991, <str<strong>on</strong>g>the</str<strong>on</strong>g> Ir<strong>on</strong> and Steel industry, so far part of<br />

a list of industries reserved for public sector ownership and c<strong>on</strong>trol, was deregulated and exempted from<br />

compulsory Government licensing 9 . The New Ec<strong>on</strong>omic Policy, also passed in 1991, introduced <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

following changes in India’s steel industry:<br />

o After large-scale industrial capacities were removed from <str<strong>on</strong>g>the</str<strong>on</strong>g> list of industries reserved for public sector<br />

ownership and c<strong>on</strong>trol, <str<strong>on</strong>g>the</str<strong>on</strong>g> licensing requirement for industrial units expansi<strong>on</strong> was also largely<br />

withdrawn.<br />

o The private sector came to play a prominent role in industrial steel producti<strong>on</strong><br />

o Pricing and distributi<strong>on</strong> c<strong>on</strong>trol mechanisms, so far imposed and regulated by <str<strong>on</strong>g>the</str<strong>on</strong>g> Government, were<br />

disc<strong>on</strong>tinued.<br />

o The ir<strong>on</strong> and steel industry was included in <str<strong>on</strong>g>the</str<strong>on</strong>g> high priority list for foreign investment, implying<br />

automatic approval for up to 50% foreign equity participati<strong>on</strong>, subject to foreign exchange and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

stipulati<strong>on</strong>s governing such investments.<br />

o Quantitative import restricti<strong>on</strong>s, aimed at limiting <str<strong>on</strong>g>the</str<strong>on</strong>g> quantity of goods that could be imported within a<br />

given time, were largely removed. Export restricti<strong>on</strong>s in place to prioritize <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic market over<br />

foreign trade, were withdrawn with a view to promote internati<strong>on</strong>al trade<br />

The regulatory framework was hence reshaped in a manner to encourage private domestic and foreign<br />

participati<strong>on</strong>: o<str<strong>on</strong>g>the</str<strong>on</strong>g>r policies related to different ec<strong>on</strong>omic sectors were hence tailored to similarly encourage<br />

private sector involvement. For example, in <str<strong>on</strong>g>the</str<strong>on</strong>g> case of <str<strong>on</strong>g>the</str<strong>on</strong>g> metal industries, <str<strong>on</strong>g>the</str<strong>on</strong>g> New Mineral Policy 2008<br />

altered <str<strong>on</strong>g>the</str<strong>on</strong>g> existing Mining Framework by introducing c<strong>on</strong>siderable deregulati<strong>on</strong> and placing a new emphasis<br />

<strong>on</strong> facilitating <str<strong>on</strong>g>the</str<strong>on</strong>g> entry of private players into <str<strong>on</strong>g>the</str<strong>on</strong>g> mining sector. The negative c<strong>on</strong>sequences of this favorable<br />

treatment were borne by local communities. Violent land wars and c<strong>on</strong>flicts erupted across mineral-rich<br />

Central India as mining and steel companies evicted villagers, seized forests and grabbed agricultural land to<br />

set up <str<strong>on</strong>g>the</str<strong>on</strong>g>ir facilities, leaving behind a trail of displacement, polluti<strong>on</strong> and destructi<strong>on</strong>. Arcelor Mittal naturally<br />

found itself tarred by c<strong>on</strong>troversy (and faced with str<strong>on</strong>g, local oppositi<strong>on</strong>) when it set out to mine ir<strong>on</strong> ore<br />

and build steel plants in <str<strong>on</strong>g>the</str<strong>on</strong>g> resource–rich states of Jharkand, Orissa and Chattisgarh.<br />

The promise of offering investments and technology to promote <str<strong>on</strong>g>the</str<strong>on</strong>g> privatizati<strong>on</strong> of public property and<br />

public works has a l<strong>on</strong>g history. Back in 2008, Arcelor Mittal put forward a proposal to <str<strong>on</strong>g>the</str<strong>on</strong>g> Government for<br />

establishing a joint–venture to take over <str<strong>on</strong>g>the</str<strong>on</strong>g> state-owned coalmines held by Coal India Limited.<br />

As public sector units are privatized and small mills and plants taken over, <str<strong>on</strong>g>the</str<strong>on</strong>g> steel industry has become<br />

increasingly c<strong>on</strong>centrated and m<strong>on</strong>opolistic. But even this is not enough: financial advisors and instituti<strong>on</strong>s<br />

alike have called for even fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r privatizati<strong>on</strong> based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> supposed benefits of “ec<strong>on</strong>omies of scale.” This<br />

obsessi<strong>on</strong> with efficiency works against <str<strong>on</strong>g>the</str<strong>on</strong>g> interests of India’s small businesses, which are slowly disappearing<br />

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– THE INDIAN OLIGARCHS –<br />

to make way for privately owned industrial giants. The prop<strong>on</strong>ents of <str<strong>on</strong>g>the</str<strong>on</strong>g> LPG Mantra argue against offering<br />

any offsetting protecti<strong>on</strong>s for <str<strong>on</strong>g>the</str<strong>on</strong>g>se small and infant industries as well as str<strong>on</strong>gly stressing that public owned<br />

companies are inefficient and hence need to be privatized, but this is a clear departure from <str<strong>on</strong>g>the</str<strong>on</strong>g> approach<br />

followed by most developed countries.<br />

In <str<strong>on</strong>g>the</str<strong>on</strong>g> case of steel, a case worthy of notice is that of South Korea’s POSCO. Now am<strong>on</strong>gst <str<strong>on</strong>g>the</str<strong>on</strong>g> top steel<br />

producer in <str<strong>on</strong>g>the</str<strong>on</strong>g> world (and operated under a c<strong>on</strong>sortium of foreign private shareholders), POSCO was<br />

originally born and successfully run as a public enterprise. It was privatized not <strong>on</strong> efficiency grounds, but<br />

under IMF diktats as c<strong>on</strong>diti<strong>on</strong> of South Korea’s acceptance of instituti<strong>on</strong>al stabilizati<strong>on</strong> loans. That a State<br />

owned company can be successful and efficient is a fact often underplayed or left unmenti<strong>on</strong>ed by<br />

liberalizati<strong>on</strong> advocates, a point Ha Jo<strong>on</strong> Chang makes very aptly to illustrate developed countries practice<br />

and preach mismatch.<br />

Policies of privatizati<strong>on</strong>, c<strong>on</strong>solidati<strong>on</strong> and vertical integrati<strong>on</strong> form <str<strong>on</strong>g>the</str<strong>on</strong>g> pillars <strong>on</strong> which Mittal’s huge steel<br />

empires were created. In <str<strong>on</strong>g>the</str<strong>on</strong>g> absence of competiti<strong>on</strong> – or where competitors are too weak to survive without<br />

public protecti<strong>on</strong> and support – <strong>on</strong>ly <str<strong>on</strong>g>the</str<strong>on</strong>g> str<strong>on</strong>g survive.<br />

2. MUKESH & ANIL AMBANI – THE RELIANCE EMPIRE<br />

PETROCHEMICALS, PLASTIC, RETAIL, SEZ, OIL & GAS, ELECTRICITY,<br />

FINANCE, TELECOMMUNICATIONS<br />

The Reliance brand name is associated, in <str<strong>on</strong>g>the</str<strong>on</strong>g> public mind, with a multitude of products. Dhirubai Ambani,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> company’s original founder, is held in high esteem by an Indian public that sees Ambani as self-made man<br />

with a dream, whose drive and ambiti<strong>on</strong> lead to a rags-to–riches story. Comm<strong>on</strong> people embrace Ambani as a<br />

symbol of change and emancipati<strong>on</strong> – an example that <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own dreams of success might someday be<br />

realized.<br />

While it is true that Dhirubai Ambani created an empire from scratch, he was surely backed by <str<strong>on</strong>g>the</str<strong>on</strong>g> right<br />

c<strong>on</strong>necti<strong>on</strong>s. It is widely accepted that doing business in <str<strong>on</strong>g>the</str<strong>on</strong>g> era of <str<strong>on</strong>g>the</str<strong>on</strong>g> license raj, policy of Government<br />

regulati<strong>on</strong>s and c<strong>on</strong>trol over ec<strong>on</strong>omic business through licensing and permits, implied keeping good<br />

relati<strong>on</strong>s with bureaucracy and politicians. Even after <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy was liberalized and competiti<strong>on</strong> expanded,<br />

c<strong>on</strong>necti<strong>on</strong>s c<strong>on</strong>tinued to provide an important competitive advantage that allowed some companies to<br />

flourish massively while o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs lagged behind. Starting out working at a gas stati<strong>on</strong>, Dhirubai went <strong>on</strong> to<br />

become <str<strong>on</strong>g>the</str<strong>on</strong>g> owner of India’s largest refinery at Jamnagar.<br />

In 1958, he launched a small business under <str<strong>on</strong>g>the</str<strong>on</strong>g> name of Reliance Commercial Corporati<strong>on</strong>, trading in spices;<br />

a few years later, he shifted his business into textiles and changed <str<strong>on</strong>g>the</str<strong>on</strong>g> company name to Reliance Textile<br />

Industries Limited. The big break came in 1966 with <str<strong>on</strong>g>the</str<strong>on</strong>g> set up of a textile mill in Naroda, near Ahmedabad,<br />

producing under <str<strong>on</strong>g>the</str<strong>on</strong>g> brand name Vimal. A few years later, in 1977, Reliance was publicly listed: Ambani<br />

managed to raise operating funds from <str<strong>on</strong>g>the</str<strong>on</strong>g> broad-based society ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than from commercial instituti<strong>on</strong>s –<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>reby initiating what came to be known as <str<strong>on</strong>g>the</str<strong>on</strong>g> equity cult. As <str<strong>on</strong>g>the</str<strong>on</strong>g> company became more successful, Ambani<br />

set out to create an industrial manufacturing complex.<br />

Dhirubai’s Reliance was favored by <str<strong>on</strong>g>the</str<strong>on</strong>g> government – particularly during Rajiv Gandhi’s regime, in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

decades before formal liberalizati<strong>on</strong>, as India’s priority in <str<strong>on</strong>g>the</str<strong>on</strong>g> textile sector kahdi cott<strong>on</strong> – hand–spun and<br />

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woven <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> traditi<strong>on</strong>al handlooms promoted by Gandhiji (Mahatma Gandhi) as an emancipating tool that<br />

promised employment and self-reliance to generati<strong>on</strong>s of Indians – was eventually forced into retirement with<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> arrival of new policies favoring syn<str<strong>on</strong>g>the</str<strong>on</strong>g>tic and machine-made cloth.<br />

When Indira Gandhi was in power, Dhirubhai shared friendly relati<strong>on</strong>s both with her and with Finance<br />

Minister Pranab Mukherjee. Throughout <str<strong>on</strong>g>the</str<strong>on</strong>g> years, a number of malpractice complaints were filed against<br />

Reliance. The company was accused of insider trading, share-price manipulati<strong>on</strong> and tax evasi<strong>on</strong>s. Yet,<br />

precisely because of Reliance’s acquired status and clout, <str<strong>on</strong>g>the</str<strong>on</strong>g> public, <str<strong>on</strong>g>the</str<strong>on</strong>g> media and <str<strong>on</strong>g>the</str<strong>on</strong>g> political apparatus<br />

were wary of taking <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> group. The fundamental role that this kind of clout plays in making or breaking<br />

business fortunes was dem<strong>on</strong>strated by <str<strong>on</strong>g>the</str<strong>on</strong>g> difficulties <str<strong>on</strong>g>the</str<strong>on</strong>g> company faced when <str<strong>on</strong>g>the</str<strong>on</strong>g> political leadership<br />

changed. Prime Minister V.P. Singh famously became <str<strong>on</strong>g>the</str<strong>on</strong>g> first PM to challenge Reliance by imposing stricter<br />

regulati<strong>on</strong>s. As a result, <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s business operati<strong>on</strong>s were not running so smoothly.<br />

In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s and 1990s, while Reliance was flourishing, <str<strong>on</strong>g>the</str<strong>on</strong>g> company began diversifying in a major way. These<br />

were <str<strong>on</strong>g>the</str<strong>on</strong>g> decades of India’s ec<strong>on</strong>omic reforms and its entry into globalizati<strong>on</strong>. In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s, <str<strong>on</strong>g>the</str<strong>on</strong>g> Rajiv Gandhi<br />

Government had initiated a set of reforms that included reducing income and corporati<strong>on</strong> taxes to ”create<br />

incentives” for <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector. The list of manufacturing items and products reserved for small-scale<br />

business sectors was reduced, while several sectors – including telecommunicati<strong>on</strong>s and cement<br />

manufacturing were deregulated.<br />

In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1990s, <str<strong>on</strong>g>the</str<strong>on</strong>g> Narasimha Rao government pushed <str<strong>on</strong>g>the</str<strong>on</strong>g>se reforms forward with even greater impetus,<br />

focusing particularly <strong>on</strong> industrial growth. The Government’s system of central licensing of businesses was<br />

dismantled and private companies were allowed to do business in sectors previously under <str<strong>on</strong>g>the</str<strong>on</strong>g> sole c<strong>on</strong>trol of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> State. Foreign participati<strong>on</strong> was encouraged, imports were facilitated through a more liberal trade policy,<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> M<strong>on</strong>opolies and Restrictive Trade Practices Act was relaxed to encourage private sector actors to<br />

enter previously closed markets. 10<br />

It is against this backdrop that <str<strong>on</strong>g>the</str<strong>on</strong>g> Ambani family’s spectacular rise occurred. As <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy was radically<br />

deregulated, liberalized and privatized, <str<strong>on</strong>g>the</str<strong>on</strong>g> Reliance group (backed by a familiar brand name that ensured <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

public’s c<strong>on</strong>tinued loyalty and protected by its established ec<strong>on</strong>omic and political clout) found renewed<br />

occasi<strong>on</strong>s to grow and c<strong>on</strong>solidate – both by way of diversificati<strong>on</strong> and aggressive expansi<strong>on</strong>. Allegati<strong>on</strong>s of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> company’s unfair reliance <strong>on</strong> political c<strong>on</strong>necti<strong>on</strong>s did not end with <str<strong>on</strong>g>the</str<strong>on</strong>g> founder’s death – or <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

subsequent divisi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> company after a prol<strong>on</strong>ged row between Dhirubhai’s s<strong>on</strong>s, Anil and Mukesh.<br />

Today, Mukesh heads Reliance Industries Limited (RIL) while Anil heads <str<strong>on</strong>g>the</str<strong>on</strong>g> Reliance Anil Dhirubhai<br />

Ambani Group (ADAG).<br />

Through a process of “backward integrati<strong>on</strong>,” Reliance diversified its operati<strong>on</strong>s to include producing <str<strong>on</strong>g>the</str<strong>on</strong>g> raw<br />

materials for its textile operati<strong>on</strong>s, starting with polyester and moving even fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r back into <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong><br />

of oil and chemicals. In <str<strong>on</strong>g>the</str<strong>on</strong>g> following years, <str<strong>on</strong>g>the</str<strong>on</strong>g> company (through its two arms, RIL and ADAG) began<br />

expanding its reach into telecommunicati<strong>on</strong>s, petrochemicals, power, life sciences, finance, infrastructure,<br />

retail, Special Ec<strong>on</strong>omic Z<strong>on</strong>es and so <strong>on</strong>.<br />

Privatizati<strong>on</strong> was str<strong>on</strong>gly pushed domestically by <str<strong>on</strong>g>the</str<strong>on</strong>g> New Ec<strong>on</strong>omic Policy and internati<strong>on</strong>ally by <str<strong>on</strong>g>the</str<strong>on</strong>g> World<br />

Bank as a means of “creating competiti<strong>on</strong>.” Instead, <str<strong>on</strong>g>the</str<strong>on</strong>g>se new initiatives translated into <str<strong>on</strong>g>the</str<strong>on</strong>g> creati<strong>on</strong> of<br />

powerful new forms of private m<strong>on</strong>opolies. Reliance provided an example of what “competiti<strong>on</strong>” really<br />

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meant under <str<strong>on</strong>g>the</str<strong>on</strong>g> NEP, with its takeover of <strong>on</strong>e of its leading rivals, <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian Petro Chemical Limited.<br />

Reliance now c<strong>on</strong>trols more than 75% of <str<strong>on</strong>g>the</str<strong>on</strong>g> India’s petrochemical market. 11<br />

Having become a major player in <str<strong>on</strong>g>the</str<strong>on</strong>g> oil and gas sector, Reliance Industries Limited (RIL) was <str<strong>on</strong>g>the</str<strong>on</strong>g> biggest<br />

winner during <str<strong>on</strong>g>the</str<strong>on</strong>g> time of India’s ec<strong>on</strong>omic liberalizati<strong>on</strong>. In 1994 <str<strong>on</strong>g>the</str<strong>on</strong>g> Oil and Natural Gas Corporati<strong>on</strong><br />

(ONGC) became publicly held. In 1997-98, following <str<strong>on</strong>g>the</str<strong>on</strong>g> impetus of privatizati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> government<br />

introduced <str<strong>on</strong>g>the</str<strong>on</strong>g> New Explorati<strong>on</strong> Licensing Policy (NELP), which allows private players to obtain<br />

hydrocarb<strong>on</strong>s explorati<strong>on</strong> and producti<strong>on</strong> licenses <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> basis of competitive bidding. RIL was allotted <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

largest number of explorati<strong>on</strong> blocks after ONGC.<br />

Despite claims that privatizati<strong>on</strong> would stimulate competiti<strong>on</strong> and ensure a fair and transparent playing field,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> process of allotting licenses has remained largely under <str<strong>on</strong>g>the</str<strong>on</strong>g> influence of well-entrenched patr<strong>on</strong>age<br />

networks dominated by <str<strong>on</strong>g>the</str<strong>on</strong>g> powerful few. Recently, India’s C<strong>on</strong>troller Auditor General reported that <str<strong>on</strong>g>the</str<strong>on</strong>g> Oil<br />

Ministry and <str<strong>on</strong>g>the</str<strong>on</strong>g> Directorate General of Hydrocarb<strong>on</strong>s (DGH) practice of favoring Reliance’s oil business<br />

with huge benefits by way of rule-bending, was causing losses to <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al exchequer. 12 Reliance Petrol<br />

Ltd. was also am<strong>on</strong>gst <str<strong>on</strong>g>the</str<strong>on</strong>g> largest beneficiaries from <str<strong>on</strong>g>the</str<strong>on</strong>g> United Nati<strong>on</strong>’s Oil-for-Food scam. Oil-for-Food<br />

was ostensibly a program designed to provide “humanitarian relief” to <str<strong>on</strong>g>the</str<strong>on</strong>g> people of Iraq but it so<strong>on</strong><br />

undermined by a whirlwind of corrupti<strong>on</strong> that mainly benefited scores of foreign c<strong>on</strong>tractors. (Reliance’s role<br />

substantially covered up until Arun Agarwal set out to expose <str<strong>on</strong>g>the</str<strong>on</strong>g> scandal in his riveting book, Reliance: <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Real Natwar.)<br />

As <str<strong>on</strong>g>the</str<strong>on</strong>g> volume of RIL’s oil pumped from <str<strong>on</strong>g>the</str<strong>on</strong>g> fields of Andhra Pradesh decreased, Mukesh Ambani embarked<br />

<strong>on</strong> a partnership with <str<strong>on</strong>g>the</str<strong>on</strong>g> British oil giant BP. In July 2011, <str<strong>on</strong>g>the</str<strong>on</strong>g> Oil Ministry hailed <str<strong>on</strong>g>the</str<strong>on</strong>g> $7.2 billi<strong>on</strong> BP-RIL<br />

deal as India’s biggest Foreign Direct Investment coup to date. As a result of <str<strong>on</strong>g>the</str<strong>on</strong>g> agreement, BP, <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d<br />

largest oil producer in Europe, will gain access to a host of profitable Indian natural resources. The synergy<br />

between domestic companies and Western firms eager to enter <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian market, lured by technology and<br />

investment, is increasingly visible. But as business becomes more transnati<strong>on</strong>al in nature, it becomes more<br />

detached from <str<strong>on</strong>g>the</str<strong>on</strong>g> original country’s local realities.<br />

In ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r joint venture, RIL has partnered with Australia’s UXA Resources Limited to commence uranium<br />

mining operati<strong>on</strong>s and is lobbying for deregulati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian uranium mining sector to allow private<br />

domestic companies to access it. At <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, RIL is arguing that Indian firms should be granted<br />

incentives to secure uranium assets abroad.<br />

A similar fate awaited <str<strong>on</strong>g>the</str<strong>on</strong>g> telecommunicati<strong>on</strong>s sector when it was privatized around 1994. With <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

introducti<strong>on</strong> of a Nati<strong>on</strong>al Telecom Policy, licenses for <str<strong>on</strong>g>the</str<strong>on</strong>g> telecom spectrum were to be allotted through<br />

open and competitive bidding. But what was promoted as a means to increase fairness and accountability<br />

produced just <str<strong>on</strong>g>the</str<strong>on</strong>g> opposite result. Reliance Communicati<strong>on</strong>s is currently being investigated in <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s<br />

biggest scam over 2G–spectrum telecom allocati<strong>on</strong>s. (This scandal involved <str<strong>on</strong>g>the</str<strong>on</strong>g> ruling-C<strong>on</strong>gress party’s<br />

discounted sale of 1,232 telecom licenses to 85 companies, many of which had no experience in<br />

telecommunicati<strong>on</strong>s.) Reliance Telecom and three ADAG officials stand accused of having c<strong>on</strong>spired to set<br />

up Swan Telecom as a fr<strong>on</strong>t for obtaining spectrum allocati<strong>on</strong>s. 13 India’s Telecom Minister Kapil Sibal is<br />

currently denying allegati<strong>on</strong>s that he favored Reliance by decreasing penalties against <str<strong>on</strong>g>the</str<strong>on</strong>g> company from Rs 50<br />

crores (over 10 milli<strong>on</strong> US$) to a mere Rs 5 crores. 14 (1 milli<strong>on</strong> US$). Meanwhile, <str<strong>on</strong>g>the</str<strong>on</strong>g> Center for Public<br />

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Interest Litigati<strong>on</strong>s claims <str<strong>on</strong>g>the</str<strong>on</strong>g> actual penalty that should have been assessed would amount to a whopping Rs<br />

650 crores (over 131 milli<strong>on</strong> US$). 15<br />

If <str<strong>on</strong>g>the</str<strong>on</strong>g> final outcome of such enforcement litigati<strong>on</strong>s cannot be guaranteed (given <str<strong>on</strong>g>the</str<strong>on</strong>g> climate of lax<br />

implementati<strong>on</strong> and fraudulent or absent regulatory compliance), <str<strong>on</strong>g>the</str<strong>on</strong>g> future oversight of questi<strong>on</strong>able<br />

business practice will remain under a cloud of suspici<strong>on</strong>. Mukesh Ambani complained to n<strong>on</strong>e o<str<strong>on</strong>g>the</str<strong>on</strong>g>r than <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Prime Minister that <str<strong>on</strong>g>the</str<strong>on</strong>g>se lingering questi<strong>on</strong>s are “denting his reputati<strong>on</strong>.”<br />

Claims of unfair business practices being allowed to operate thanks to political c<strong>on</strong>necti<strong>on</strong>s and favoritism<br />

have always accompanied <str<strong>on</strong>g>the</str<strong>on</strong>g> Reliance brand. Its activities in <str<strong>on</strong>g>the</str<strong>on</strong>g> spheres of retail and real estate<br />

developments offer some of <str<strong>on</strong>g>the</str<strong>on</strong>g> starkest examples of how <str<strong>on</strong>g>the</str<strong>on</strong>g> State-corporate Nexus can work to promote<br />

wealth accumulati<strong>on</strong> by <str<strong>on</strong>g>the</str<strong>on</strong>g> rich at <str<strong>on</strong>g>the</str<strong>on</strong>g> cost of people’s livelihoods. Through its supermarket chain, Reliance<br />

Fresh, <str<strong>on</strong>g>the</str<strong>on</strong>g> company has brought about a destructive revoluti<strong>on</strong> that has devastated India’s small retail sector,<br />

in much <str<strong>on</strong>g>the</str<strong>on</strong>g> same way Wal-Mart did in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States. If entry into <str<strong>on</strong>g>the</str<strong>on</strong>g> retail sector was <strong>on</strong>ce regulated<br />

with an eye to protecting small producers, corporate interests now are succeeding in bringing down <str<strong>on</strong>g>the</str<strong>on</strong>g> last<br />

vestiges of <str<strong>on</strong>g>the</str<strong>on</strong>g>se regulati<strong>on</strong>s. For example, India’s private sector has lobbied successfully for 100% Foreign<br />

Direct Investment in retail. Currently, Reliance is earmarking plots of agricultural land for future food<br />

producti<strong>on</strong>. This c<strong>on</strong>stitutes <str<strong>on</strong>g>the</str<strong>on</strong>g> last step in <str<strong>on</strong>g>the</str<strong>on</strong>g> privatizati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong>s, where food becomes a private<br />

commodity and is no l<strong>on</strong>ger an intrinsic right of <str<strong>on</strong>g>the</str<strong>on</strong>g> greater human community. In Andhra Pradesh’s<br />

Kakinara SEZ, <str<strong>on</strong>g>the</str<strong>on</strong>g> company has earmarked 200 acres for Jatropha plantati<strong>on</strong>s for biofuels.<br />

In 2005, <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> Special Ec<strong>on</strong>omic Z<strong>on</strong>e (SEZ) Act opened up land development as a huge<br />

profit-making sector for private domestic and foreign corporati<strong>on</strong>s facilitated by massive tax c<strong>on</strong>cessi<strong>on</strong>s and<br />

incentives. Meanwhile, <str<strong>on</strong>g>the</str<strong>on</strong>g> 1894 Land Acquisiti<strong>on</strong> Act, which instituti<strong>on</strong>alized dispossessi<strong>on</strong>, was left<br />

untouched in its col<strong>on</strong>ial state. Reliance’s resort to violent land acquisiti<strong>on</strong> in Dadri and in Haryana offers a<br />

chilling dem<strong>on</strong>strati<strong>on</strong> of how <str<strong>on</strong>g>the</str<strong>on</strong>g> government’s legislative machinery can functi<strong>on</strong> to serve corporate<br />

interests over <str<strong>on</strong>g>the</str<strong>on</strong>g> interests of comm<strong>on</strong> citizens.<br />

After Reliance declared a Special Ec<strong>on</strong>omic Z<strong>on</strong>e at Dadri, squads of armed police, acting <strong>on</strong> Anil Ambani’s<br />

behalf, brutally fired <strong>on</strong> protestors, assaulted locals and destroyed villages as people attempted to resist <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

corporate acquisiti<strong>on</strong> of 2,500 acres of productive farmland. 16 At Jajjar, Haryana, 25,000 acres of fertile land<br />

were grabbed by RIL from farmers.<br />

The Electricity Act 2003 and <str<strong>on</strong>g>the</str<strong>on</strong>g> Energy C<strong>on</strong>servati<strong>on</strong> Act 2001 introduced neoliberal c<strong>on</strong>diti<strong>on</strong>s and<br />

deregulati<strong>on</strong> in order to favor private sector participati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> energy and power sectors. These new acts<br />

made specific menti<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> need to revise <str<strong>on</strong>g>the</str<strong>on</strong>g> Land Acquisiti<strong>on</strong> process to facilitate power-generating<br />

industries. 17 RIL has benefited massively from <str<strong>on</strong>g>the</str<strong>on</strong>g>se new laws. In additi<strong>on</strong> to being <str<strong>on</strong>g>the</str<strong>on</strong>g> leading power<br />

distributor in Mumbai and Delhi, Reliance Power’s Sasan power generating plant in Madhya Pradesh has been<br />

registered with <str<strong>on</strong>g>the</str<strong>on</strong>g> UN Clean Development Mechanisms program, which has opened <str<strong>on</strong>g>the</str<strong>on</strong>g> door for Reliance to<br />

claim additi<strong>on</strong>al profits of more than Rs 2000 crores from <str<strong>on</strong>g>the</str<strong>on</strong>g> sale of Certified Emissi<strong>on</strong> Reducti<strong>on</strong> credits. 18<br />

The super-critical technology based pit-head coal-fired plant was granted Host Country approval by Minister<br />

of Envir<strong>on</strong>ment & Forests Jairam Ramesh who claimed <str<strong>on</strong>g>the</str<strong>on</strong>g> project c<strong>on</strong>tributes to India’s sustainable<br />

development. The news was received with str<strong>on</strong>g criticism by envir<strong>on</strong>mentalists as well as climate change<br />

experts; in fact, <str<strong>on</strong>g>the</str<strong>on</strong>g> methodology panel which advises <str<strong>on</strong>g>the</str<strong>on</strong>g> CDM executive board supported <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>cerns as<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> methodology under which firms can apply for offsets by cutting greenhouse gas emissi<strong>on</strong>s through more<br />

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– THE INDIAN OLIGARCHS –<br />

efficient technology ‘may lead to significant overestimati<strong>on</strong> of emissi<strong>on</strong> reducti<strong>on</strong>s 19’. Besides, to qualify for<br />

CER credits <str<strong>on</strong>g>the</str<strong>on</strong>g> projects must prove that <str<strong>on</strong>g>the</str<strong>on</strong>g>y would be unviable without <str<strong>on</strong>g>the</str<strong>on</strong>g> additi<strong>on</strong>al revenue; <str<strong>on</strong>g>the</str<strong>on</strong>g> Reliance<br />

plant was instead well underway already.<br />

Anil Ambani’s Reliance is also prominent player in <str<strong>on</strong>g>the</str<strong>on</strong>g> world of finance, providing insurance and commercial<br />

services. Ambani’s fortunes have blossomed since <str<strong>on</strong>g>the</str<strong>on</strong>g> banking and financial sector was gradually privatized<br />

beginning in 1992 to allow for <str<strong>on</strong>g>the</str<strong>on</strong>g> entry of private and foreign entities.<br />

Mukesh Ambani’s Antilla, an ostentatious 27-floor high-rise mansi<strong>on</strong> in Mumbai (“<str<strong>on</strong>g>the</str<strong>on</strong>g> city of slums”) has<br />

come to stand as a blatant symbol of <str<strong>on</strong>g>the</str<strong>on</strong>g> gross inequality that <str<strong>on</strong>g>the</str<strong>on</strong>g> current ec<strong>on</strong>omic and political system of<br />

deregulati<strong>on</strong>, privatizati<strong>on</strong> and liberalizati<strong>on</strong> is pushing forward.<br />

3. THE RUIA FAMILY – ESSAR GROUP<br />

STEEL, MINING, OIL, POWER, TELECOMMUNICATIONS<br />

Liberalizati<strong>on</strong> has similarly favored <str<strong>on</strong>g>the</str<strong>on</strong>g> fortunes of ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r family, <str<strong>on</strong>g>the</str<strong>on</strong>g> Ruia tribe of Mumbai. The Essar<br />

group, set up in 1969 by bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs Shashi and Ravi Ruia, exploited new avenues of profit accumulati<strong>on</strong> and<br />

proceeded to establish a varied business empire that rocketed <str<strong>on</strong>g>the</str<strong>on</strong>g> bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs <strong>on</strong>to <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s billi<strong>on</strong>aires list.<br />

Born into a business family, <str<strong>on</strong>g>the</str<strong>on</strong>g> Ruias started off as owners of a c<strong>on</strong>structi<strong>on</strong> company. The turning point in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Ruia’s saga came with <str<strong>on</strong>g>the</str<strong>on</strong>g> deregulati<strong>on</strong> and liberalizati<strong>on</strong> of India’s ec<strong>on</strong>omy. During <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s, India’s<br />

state-operated shipping and drilling sectors were opened up for private business. During <str<strong>on</strong>g>the</str<strong>on</strong>g> 1990s, most of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> remaining sectors – including power, telecommunicati<strong>on</strong>s, mining, ports, roads and banking – were<br />

liberalized. The Essar group took advantage of <str<strong>on</strong>g>the</str<strong>on</strong>g>se newly available avenues and substantially increased its<br />

wealth after having initiated a process of business diversificati<strong>on</strong> in steel, oil, gas and telecommunicati<strong>on</strong>s.<br />

India, Ind<strong>on</strong>esia, Canada and North America now host Essar’s steel manufacturing facilities while its retailing<br />

and processing activities cover India, Ind<strong>on</strong>esia, <str<strong>on</strong>g>the</str<strong>on</strong>g> UAE and <str<strong>on</strong>g>the</str<strong>on</strong>g> UK.<br />

As part of <str<strong>on</strong>g>the</str<strong>on</strong>g> “backward integrati<strong>on</strong>” of its steel-making ventures, Essar now is involved in mining<br />

operati<strong>on</strong>s in India, Ind<strong>on</strong>esia, Mozambique, Brazil and <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. These efforts are focused <strong>on</strong> excavating ir<strong>on</strong><br />

ore (for a total reserve of 1.6 billi<strong>on</strong> t<strong>on</strong>s) and coal (for a total of 450 milli<strong>on</strong> t<strong>on</strong>s). 20 Growing domestic<br />

demand from <str<strong>on</strong>g>the</str<strong>on</strong>g> steel industry in a newly industrializing India has led to a boom in metals prices. Minerals<br />

are increasingly highly valued <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al market: increasing scarcity at a time of rising<br />

industrializati<strong>on</strong> and urbanizati<strong>on</strong> c<strong>on</strong>tinue to be significant factors pushing demand.<br />

While it must be said that developed ec<strong>on</strong>omies’ mineral and metal c<strong>on</strong>sumpti<strong>on</strong> has suffered from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

effects of <str<strong>on</strong>g>the</str<strong>on</strong>g> global recessi<strong>on</strong>, which has caused <str<strong>on</strong>g>the</str<strong>on</strong>g> closure of smelters and plants, developing and emerging<br />

ec<strong>on</strong>omies have not aband<strong>on</strong>ed plans to scale-up <str<strong>on</strong>g>the</str<strong>on</strong>g>ir capacity, producti<strong>on</strong> and c<strong>on</strong>sumpti<strong>on</strong>. This trend –<br />

also arguably favored by carb<strong>on</strong>-trading approaches to mitigate climate change – is based <strong>on</strong> a model of<br />

“outsourcing of polluti<strong>on</strong>,” <str<strong>on</strong>g>the</str<strong>on</strong>g> resource-intensive, resource-hungry and envir<strong>on</strong>mentally damaging industries<br />

like steel and ir<strong>on</strong> and aluminum and automobile manufacture are increasingly being shut in <str<strong>on</strong>g>the</str<strong>on</strong>g> West and<br />

opened up in <str<strong>on</strong>g>the</str<strong>on</strong>g> East. This is happening with polluting metal smelters and even with nuclear power stati<strong>on</strong>s,<br />

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as global capital moves across borders to run invasive, polluting business; as global divisi<strong>on</strong>s of labour dictate<br />

which country should produce what most cheaply; as <str<strong>on</strong>g>the</str<strong>on</strong>g> CDM reverses <str<strong>on</strong>g>the</str<strong>on</strong>g> principle that polluter pays.<br />

If India is <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> receiving end of “polluti<strong>on</strong> outsourcing,” it is also actively reproducing <str<strong>on</strong>g>the</str<strong>on</strong>g> same model as<br />

Indian corporati<strong>on</strong>s target fragile countries with weak regulatory systems as c<strong>on</strong>venient locati<strong>on</strong>s to relocate<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir unsustainable operati<strong>on</strong>s. Human Rights Watch has raised an alert about Asian, European and North<br />

American companies that are still investing in Burma/Myanmar despite <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that foreign financing serves<br />

to support a military junta accused of multiple human rights abuses. In a bid to c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s remaining<br />

oil and natural resources, <str<strong>on</strong>g>the</str<strong>on</strong>g>se resource-hungry foreign interests are fuelling c<strong>on</strong>flict and violating human<br />

rights from oil-rich Burma to mineral-rich Central India. Am<strong>on</strong>gst <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian companies that have not<br />

divested <str<strong>on</strong>g>the</str<strong>on</strong>g>ir holdings in Burma/Myanmar are GAIL, ONGS Videsh, Sun Group and <str<strong>on</strong>g>the</str<strong>on</strong>g> Ruia family’s<br />

ESSAR Oil. 21<br />

It is often <str<strong>on</strong>g>the</str<strong>on</strong>g> case that <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>s or countries with <str<strong>on</strong>g>the</str<strong>on</strong>g> richest mineral and natural resources are also<br />

am<strong>on</strong>gst <str<strong>on</strong>g>the</str<strong>on</strong>g> most impoverished and are often torn by armed c<strong>on</strong>flict, if not outright civil war. In India, too,<br />

as <str<strong>on</strong>g>the</str<strong>on</strong>g> government went ahead with its privatizati<strong>on</strong> program, Essar was granted a prospecting license in<br />

Dantewada, Chattisgarh State, 22 <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>s most affected by violent resource wars. Similarly, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

creati<strong>on</strong> of Essar Steel’s plant in Dhurli, Dhantewada State, required <str<strong>on</strong>g>the</str<strong>on</strong>g> forceful acquisiti<strong>on</strong> of 600 hectares<br />

of land 23 at <str<strong>on</strong>g>the</str<strong>on</strong>g> cost of <str<strong>on</strong>g>the</str<strong>on</strong>g> locals’ livelihoods, human rights and democracy. Interestingly, <str<strong>on</strong>g>the</str<strong>on</strong>g> Salwa Judum, a<br />

violent anti-Naxal civilian militia operati<strong>on</strong> armed and equipped by <str<strong>on</strong>g>the</str<strong>on</strong>g> Government, was launched <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

same day as Tata Steel and Essar Steel signed Memorandums of Understanding for <str<strong>on</strong>g>the</str<strong>on</strong>g> set up of steel plants<br />

in <str<strong>on</strong>g>the</str<strong>on</strong>g> regi<strong>on</strong>.<br />

This trend of plunder-and-profit by seizing oil and mineral resources – encouraged by deregulati<strong>on</strong> and<br />

privatizati<strong>on</strong> in mining policies – offers a stark example of <str<strong>on</strong>g>the</str<strong>on</strong>g> process of wealth accumulati<strong>on</strong> by<br />

encroachment and dispossessi<strong>on</strong>. First, comm<strong>on</strong> property resources are privatized for individual<br />

accumulati<strong>on</strong>; sec<strong>on</strong>dly, <str<strong>on</strong>g>the</str<strong>on</strong>g> industrial-capitalistic sector expands by encroaching and expropriating <str<strong>on</strong>g>the</str<strong>on</strong>g> living<br />

space and resources of pre-capitalist sectors; 24 thirdly public utilities become private-sector domains, thus<br />

allowing for private wealth accumulati<strong>on</strong>. Essar al<strong>on</strong>g with Tata now c<strong>on</strong>trol a great part of <str<strong>on</strong>g>the</str<strong>on</strong>g> Sabri River in<br />

Chattisgarh, which <str<strong>on</strong>g>the</str<strong>on</strong>g>y use for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir industrial operati<strong>on</strong>s. 25 Water and land “give-outs” to corporati<strong>on</strong>s have<br />

impoverished locals and blocked <str<strong>on</strong>g>the</str<strong>on</strong>g>ir access to essential resources linked fundamentally to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir very right to<br />

life.<br />

Up until, July 2011, Essar Group also c<strong>on</strong>trolled Vodaf<strong>on</strong>e Essar, India’s third-largest telecommunicati<strong>on</strong><br />

provider. Essar Group held 22% through its Mauritius arm as well as an 11% stake through <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian Joint<br />

Venture. The total of <str<strong>on</strong>g>the</str<strong>on</strong>g> shares was sold back to Vodaf<strong>on</strong>e in two transacti<strong>on</strong>s, leaving 26% ownership with<br />

Indian shareholders.<br />

Only few m<strong>on</strong>ths earlier, Essar Group’s CEO Prashant Ruia was questi<strong>on</strong>ed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Central Bureau of<br />

Investigati<strong>on</strong> in relati<strong>on</strong> to its involvement in <str<strong>on</strong>g>the</str<strong>on</strong>g> 2G-spectrum scam. Never<str<strong>on</strong>g>the</str<strong>on</strong>g>less, <str<strong>on</strong>g>the</str<strong>on</strong>g> newly appointed<br />

Corporate Affairs Minister Veerappa Moily c<strong>on</strong>firmed his intenti<strong>on</strong>s to proceed with <str<strong>on</strong>g>the</str<strong>on</strong>g> investigati<strong>on</strong>s into<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> role played by Loop Telecom as an alleged cover up for Essar-Vodaf<strong>on</strong>e to obtain favorable spectrum<br />

allocati<strong>on</strong>s. From a regulatory point of view, Loop was ineligible to receive allocated licenses. Yet, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

company has so far been given a clean chit by <str<strong>on</strong>g>the</str<strong>on</strong>g> Corporate Affairs Ministry headed by Murli Deora, who<br />

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resigned in July 2011 ahead of a Cabinet reshuffling – quite possibly in sight of pressing allegati<strong>on</strong>s of his<br />

c<strong>on</strong>necti<strong>on</strong>s to powerful business groups that he may have favored, including Reliance.<br />

4. THE JINDALS – JINDAL STEEL AND POWER LIMITED<br />

MINING, STEEL, POWER, INFRASTRUCTURE<br />

Jindal Steel was started in 1952 by O.P. Jindal, a farmer’s s<strong>on</strong>, who began by trading in steel pipes. He moved<br />

<strong>on</strong> to manufacturing steel pipes and fittings and opened his first factory near Kolkata. In a pattern familiar to<br />

o<str<strong>on</strong>g>the</str<strong>on</strong>g>r billi<strong>on</strong>aire family companies, <str<strong>on</strong>g>the</str<strong>on</strong>g> Jindal group took advantage of expanding via “backward integrati<strong>on</strong>.”<br />

While steel remained <str<strong>on</strong>g>the</str<strong>on</strong>g> primary focus of business, <str<strong>on</strong>g>the</str<strong>on</strong>g> company went <strong>on</strong> to diversify its holdings to include<br />

a wide portfolio ranging from mining operati<strong>on</strong>s to power generati<strong>on</strong>, infrastructure projects and<br />

telecommunicati<strong>on</strong>s, making it <strong>on</strong>e of India’s biggest private c<strong>on</strong>glomerates.<br />

Since <str<strong>on</strong>g>the</str<strong>on</strong>g> founder’s demise, <str<strong>on</strong>g>the</str<strong>on</strong>g> Jindal family’s assets have been managed by his widow, Savitri Jindal, and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

couple’s four children, PR Jindal, Sajjan Jindal, Ratan Jindal and Navin Jindal. Under a complex crossownership<br />

agreement, each bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r holds <str<strong>on</strong>g>the</str<strong>on</strong>g> largest holding of <str<strong>on</strong>g>the</str<strong>on</strong>g> arm he manages while holding shares in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> all <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs’ business operati<strong>on</strong>s. 26<br />

Source: The Financial Express: What not for <str<strong>on</strong>g>the</str<strong>on</strong>g> Jindal empire?<br />

Politicians, bureaucrats and business houses in India are not <strong>on</strong>ly a closely-knit clique; indeed, in many cases,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir roles appear interchangeable. Savitri Jindal, India’s richest woman, is also a C<strong>on</strong>gress Member of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Legislative Assembly and was Minister of State for Revenue, Disaster Management, Rehabilitati<strong>on</strong> and<br />

Housing in Haryana. Navin Jindal is a standing Member of Parliament. Before his demise, O.P. Jindal was<br />

also active in politics, winning a seat in Haryana State Assembly in 1991 and in Lokh Sabha in 1996. At <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

time of his death, O.P. Jindal was also Power Minister in Haryana 27 .<br />

The Jindal Group also has resorted to forceful land acquisiti<strong>on</strong> to fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r its mining and industrial operati<strong>on</strong>s,<br />

opening way for additi<strong>on</strong>al violence and repressi<strong>on</strong>. In November 2009, a bomb blast targeted a c<strong>on</strong>voy<br />

c<strong>on</strong>taining <str<strong>on</strong>g>the</str<strong>on</strong>g> West Bengal Chief Minister and Uni<strong>on</strong> Steel Minister Paswan. Their vehicles were returning<br />

after having inaugurated <str<strong>on</strong>g>the</str<strong>on</strong>g> Jindal Steel plant at Salb<strong>on</strong>i. This incident unleashed a fury of brutal repressi<strong>on</strong><br />

<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> part of <str<strong>on</strong>g>the</str<strong>on</strong>g> police forces. The corporate-led scramble to exploit Central India’s natural resources, land<br />

and minerals particularly, justified by <str<strong>on</strong>g>the</str<strong>on</strong>g> corporate-state in <str<strong>on</strong>g>the</str<strong>on</strong>g> name of development comes with<br />

dispossessi<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> expropriati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong>s for private interests as well as C<strong>on</strong>stituti<strong>on</strong>al and human<br />

rights violati<strong>on</strong>s; this is fuelling <str<strong>on</strong>g>the</str<strong>on</strong>g> Naxal c<strong>on</strong>flict, <str<strong>on</strong>g>the</str<strong>on</strong>g> armed struggle between people who have resorted to<br />

violence to protest exploitati<strong>on</strong>, loot and forceful displacement, and <str<strong>on</strong>g>the</str<strong>on</strong>g> Government, which acts through<br />

police forces that routinely, in <str<strong>on</strong>g>the</str<strong>on</strong>g> name of anti-Naxal operati<strong>on</strong>s, resort to unrestricted violence. Following<br />

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<str<strong>on</strong>g>the</str<strong>on</strong>g> bomb attack, several local boys and young villagers were labeled as Maoists and harassed, while three<br />

innocent tribals were killed in a clash with police.<br />

In ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r case of expropriati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong>s, Jindal Steel and Power Limited (JSPL) was widely<br />

protested in Orissa after it acquired forest and community land for <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>structi<strong>on</strong> of a 12.5 MTPA (milli<strong>on</strong><br />

t<strong>on</strong>es per annum) steel plant without providing compensati<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> local residents. 28 The locals complained<br />

that what <str<strong>on</strong>g>the</str<strong>on</strong>g> government calls its property is actually a community managed resource. They argue that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

n<strong>on</strong>-recogniti<strong>on</strong> of comm<strong>on</strong> property for <str<strong>on</strong>g>the</str<strong>on</strong>g> sake of private appropriati<strong>on</strong> c<strong>on</strong>stitutes <str<strong>on</strong>g>the</str<strong>on</strong>g> central weap<strong>on</strong> in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> unequal battle of accumulati<strong>on</strong> by dispossessi<strong>on</strong>. The protests were inflamed by death of an indigenous<br />

Adivasi tribal woman (who died while taking part in a hunger strike protesting JSPL’s takeover of water from<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> local river to cool <str<strong>on</strong>g>the</str<strong>on</strong>g> furnaces of its steel plant). 29 Stories of distraught farmers forced to become casual<br />

laborers after being displaced from <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ancestral lands near <str<strong>on</strong>g>the</str<strong>on</strong>g> Rabo village tell ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r tale of <str<strong>on</strong>g>the</str<strong>on</strong>g> human<br />

impact of privatizati<strong>on</strong> and of <str<strong>on</strong>g>the</str<strong>on</strong>g> broader trend that allows industries a free run as far as resources and<br />

regulati<strong>on</strong>s are c<strong>on</strong>cerned. Dams built by private companies have risen aplenty across rural India – even in<br />

defiance of Governmental objecti<strong>on</strong>s – robbing comm<strong>on</strong> people of livelihoods, land and water.<br />

Jindal Steel is am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> top tier of companies profiting through a more covert route: JSPL is building <strong>on</strong>e of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> world’s largest Clean Development Mechanism (CDM) projects in Chattisgarh. Clean Development<br />

Mechanisms were born as an initiative to fight climate change through Carb<strong>on</strong> Trading. Jindal’s sp<strong>on</strong>ge-ir<strong>on</strong><br />

plant, spread over 320 hectares in Chattisgarh, is supposed to help address climate change. Instead, JSPL’s<br />

plant is polluting groundwater, air and c<strong>on</strong>taminating crops. 30 Through such CDMs, companies claim benefits<br />

(often even in c<strong>on</strong>traventi<strong>on</strong> with <str<strong>on</strong>g>the</str<strong>on</strong>g> CDM policy itself). Polluters also profit from this newly opened<br />

commercial opportunity in several ways. Meanwhile <str<strong>on</strong>g>the</str<strong>on</strong>g> ability of CDMs to reduce Greenhouse Gases<br />

remains c<strong>on</strong>troversial. CDMs functi<strong>on</strong> by establishing a system of “outsourcing polluti<strong>on</strong>” that actually<br />

benefits polluters.<br />

Using CDMs set up under <str<strong>on</strong>g>the</str<strong>on</strong>g> Kyoto Protocol, countries obtain a carb<strong>on</strong> emissi<strong>on</strong> certificate that can is <str<strong>on</strong>g>the</str<strong>on</strong>g>n<br />

sold through <str<strong>on</strong>g>the</str<strong>on</strong>g> free market. These certificates have been criticized as a way to buy a “permit to pollute.”<br />

Instead of actually reducing <str<strong>on</strong>g>the</str<strong>on</strong>g>ir greenhouse emissi<strong>on</strong>s, developed countries are buying <str<strong>on</strong>g>the</str<strong>on</strong>g>se certificates<br />

from developing countries to meet <str<strong>on</strong>g>the</str<strong>on</strong>g>ir producti<strong>on</strong> targets without having to reduce <str<strong>on</strong>g>the</str<strong>on</strong>g>ir carb<strong>on</strong> polluti<strong>on</strong>.<br />

At <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, Indian companies transfer <str<strong>on</strong>g>the</str<strong>on</strong>g> costs of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir profit making and polluti<strong>on</strong> to communities<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment <strong>on</strong>ly to gain additi<strong>on</strong>al benefits and even a green reputati<strong>on</strong> through <str<strong>on</strong>g>the</str<strong>on</strong>g> CDM façade.<br />

In July 2011, <str<strong>on</strong>g>the</str<strong>on</strong>g> Karnataka Lokayukta (Ombudsman) for Karnataka State found three companies (NMDC,<br />

Adani Enterprises and <str<strong>on</strong>g>the</str<strong>on</strong>g> Jindal Group) guilty of “financial irregularities” and trading in illegally mined ir<strong>on</strong><br />

ore 31 .<br />

5. GAUTAM ADANI – ADANI GROUP<br />

INFRASTRUCTURE, OIL, ENERGY, REAL ESTATE, AGRICULTURE<br />

Gautam Adani started out as a diam<strong>on</strong>d trader, but he went <strong>on</strong> to accumulate a huge fortune as <strong>on</strong>e of India’s<br />

most powerful industrialists. Adani has prospered by building infrastructure (including ports) and through<br />

real estate development, power generati<strong>on</strong>, oil and trade in agricultural commodities. His first break came<br />

when his bro<str<strong>on</strong>g>the</str<strong>on</strong>g>r purchased a plastic manufacturing unit in Ahmedabad, which Gautam was invited to run.<br />

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Importing polyvinyl chloride (PVC) as a raw material for <str<strong>on</strong>g>the</str<strong>on</strong>g> business, Adani did not see <str<strong>on</strong>g>the</str<strong>on</strong>g> group’s profits<br />

soar substantially until after <str<strong>on</strong>g>the</str<strong>on</strong>g> liberalizati<strong>on</strong> of India’s ec<strong>on</strong>omy.<br />

The policies of <str<strong>on</strong>g>the</str<strong>on</strong>g> ‘90s were str<strong>on</strong>gly centered <strong>on</strong> facilitating foreign trade. As tariffs were slashed and trade<br />

barriers removed, import and export became a thriving business. Taking advantage of this favorable<br />

envir<strong>on</strong>ment, Adani went <strong>on</strong> to build his empire through an uncanny ability to adapt his business to <str<strong>on</strong>g>the</str<strong>on</strong>g> local<br />

ec<strong>on</strong>omic and political climate. Adani is known to share friendly relati<strong>on</strong>s with Gujarat’s Chief Minister<br />

Narendra Modi and he regularly makes c<strong>on</strong>tributi<strong>on</strong>s to <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>servative, free-market-friendly Bharatiya<br />

Janata Party (BJP) yet maintains good relati<strong>on</strong>s with <str<strong>on</strong>g>the</str<strong>on</strong>g> liberal Indian Nati<strong>on</strong>al C<strong>on</strong>gress (INC). 32 The<br />

billi<strong>on</strong>aire’s companies – Adani Enterprises, Adani Power and Mundra Port and Special Ec<strong>on</strong>omic Z<strong>on</strong>e –<br />

have grown in sectors that have significantly benefited from liberalizati<strong>on</strong> and deregulati<strong>on</strong>. These freemarket<br />

initiatives have given Adani greater access to raw materials through mining, land and real estate<br />

development through infrastructure, and his Special Ec<strong>on</strong>omic Z<strong>on</strong>e has undertaken a number of extremely<br />

profitable ventures since 1991.<br />

The Mundra SEZ is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest in India. Spread over 10,000 hectares of land, its creati<strong>on</strong> caused <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

destructi<strong>on</strong> of a rich mangrove ecosystem that <strong>on</strong>ce lined <str<strong>on</strong>g>the</str<strong>on</strong>g> coasts of <str<strong>on</strong>g>the</str<strong>on</strong>g> Kutch Gulf. Destructi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

mangroves has had severe c<strong>on</strong>sequences <strong>on</strong> water availability, fishing activities and livelihoods of <str<strong>on</strong>g>the</str<strong>on</strong>g> local<br />

populati<strong>on</strong>.<br />

A representative of <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al Fishworkers <str<strong>on</strong>g>Forum</str<strong>on</strong>g> clearly framed <str<strong>on</strong>g>the</str<strong>on</strong>g> problem as <strong>on</strong>e of malindustrializati<strong>on</strong><br />

at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of traditi<strong>on</strong>al livelihoods: "Hazardous units, manufacturing petrochemicals,<br />

pesticides and agrochemicals, have mushroomed al<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> Gujarat coast. Refineries and private ports have<br />

compounded <str<strong>on</strong>g>the</str<strong>on</strong>g> misery of people living in <str<strong>on</strong>g>the</str<strong>on</strong>g>se areas. Our survey shows that <str<strong>on</strong>g>the</str<strong>on</strong>g> worst culprits are <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Adani group, which is building a port at Mundra, Sanghi Cement Company in Sanghipur in Saurashtra and<br />

Atul Agrochemicals in Bharuch.” 33<br />

The SEZ and its captive port were developed in <str<strong>on</strong>g>the</str<strong>on</strong>g> prohibited coastal z<strong>on</strong>e after <str<strong>on</strong>g>the</str<strong>on</strong>g> Adani group presented<br />

misleading evidence of its plans to obtain necessary clearance. Never<str<strong>on</strong>g>the</str<strong>on</strong>g>less, <str<strong>on</strong>g>the</str<strong>on</strong>g> regulatory scenario works to<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> advantage of big business houses ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than forcing compliance with existing legislati<strong>on</strong>s. The Coastal<br />

Regulati<strong>on</strong> Z<strong>on</strong>e (CRZ) notificati<strong>on</strong> prohibiting development <strong>on</strong> coastal areas was amended in 2002, <str<strong>on</strong>g>the</str<strong>on</strong>g>n<br />

again in 2011 by India’s Ministry of Envir<strong>on</strong>ment and Forests. The Ministry’s ruling allowing for industrial<br />

development in fragile coastal ecosystems was accompanied by a telling remark by <str<strong>on</strong>g>the</str<strong>on</strong>g>n-Envir<strong>on</strong>ment<br />

Minister Jairam Ramesh who reflected that India “must get used” to such industrial plants being located in<br />

fragile coastal areas.<br />

Thanks to government policies, Special Ec<strong>on</strong>omic Z<strong>on</strong>es (SEZs) have emerged as huge m<strong>on</strong>eymaking<br />

enterprises for private developers. The relaxati<strong>on</strong> of regulati<strong>on</strong>s and <str<strong>on</strong>g>the</str<strong>on</strong>g> wide applicati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> Land<br />

Acquisiti<strong>on</strong> Act have resulted in land being acquired cheaply in prime locati<strong>on</strong>s, with sufficient infrastructure<br />

and close to urban areas. The Act has been <str<strong>on</strong>g>the</str<strong>on</strong>g> instrument to facilitate <str<strong>on</strong>g>the</str<strong>on</strong>g> rulers’ takeover of land under <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

noti<strong>on</strong> of “eminent domain” i.e. that <str<strong>on</strong>g>the</str<strong>on</strong>g> State has overwhelming power and c<strong>on</strong>trol over <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s<br />

resources. Through <str<strong>on</strong>g>the</str<strong>on</strong>g> invocati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> broad and ill-defined ‘public purpose’, <str<strong>on</strong>g>the</str<strong>on</strong>g> Government has<br />

promoted takeover of land for very private profits under pretence of public good. State agencies act as agents<br />

and facilitators in <str<strong>on</strong>g>the</str<strong>on</strong>g> process, favoring industrial houses at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of local farmers and citizens. SEZs<br />

bypass most of <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s relevant legislati<strong>on</strong>, including requiring Envir<strong>on</strong>mental Assessments as part of<br />

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– THE INDIAN OLIGARCHS –<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> applicati<strong>on</strong> for expansi<strong>on</strong> through new units. 34 On <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand, developers are attracted by <str<strong>on</strong>g>the</str<strong>on</strong>g> offer<br />

of tax holidays and financial incentives, framing SEZs as gated enclaves for very private profit making.<br />

Adani’s Mundra Port and SEZ, for instance, stands like an island <strong>on</strong> its own – completely furnished with<br />

private schools, private hospitals and exclusive residences for <str<strong>on</strong>g>the</str<strong>on</strong>g> very rich.<br />

Adani also profits massively from mining – probably <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most envir<strong>on</strong>mentally damaging and socially<br />

impoverishing activities short of war. In a bid to c<strong>on</strong>trol raw materials at <str<strong>on</strong>g>the</str<strong>on</strong>g> source and given <str<strong>on</strong>g>the</str<strong>on</strong>g> domestic<br />

c<strong>on</strong>straints, such as infrastructure and high demand Adani’s company has bought up mining assets across<br />

Australia, Africa and Asia. In India, Adani operates two coalmines in Chattisgarh and <strong>on</strong>e in Orissa. It is also<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> country’s largest importer of coal. Once again, <str<strong>on</strong>g>the</str<strong>on</strong>g> claim that introducing competitive bidding in order to<br />

allow for private competiti<strong>on</strong> and transparency was proven to be vacuous. A case in point: <str<strong>on</strong>g>the</str<strong>on</strong>g> Punjab State<br />

Electricity Board has been accused of having favored Adani over o<str<strong>on</strong>g>the</str<strong>on</strong>g>r bidders for a tender to import 22 lakh<br />

[2,200,000] metric t<strong>on</strong>s of coal for its power plants. This apparent act of favoritism resulted in a 100-crore<br />

loss for <str<strong>on</strong>g>the</str<strong>on</strong>g> nati<strong>on</strong>al Treasury. 35<br />

It is such instances that stand out as glaring examples of <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tradicti<strong>on</strong>s and failures of <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian growth<br />

story. The old networks of patr<strong>on</strong>age and influence are still very much in place. They c<strong>on</strong>tinue to work by<br />

c<strong>on</strong>centrating favors and resources within <str<strong>on</strong>g>the</str<strong>on</strong>g> liberalized ec<strong>on</strong>omy. In additi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> very process of<br />

deregulati<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> removal of welfare provisi<strong>on</strong>s that accompany neoliberal growth have left comm<strong>on</strong><br />

citizens at <str<strong>on</strong>g>the</str<strong>on</strong>g> bottom of an exploitative chain. Meanwhile, <str<strong>on</strong>g>the</str<strong>on</strong>g> bureaucracy, <str<strong>on</strong>g>the</str<strong>on</strong>g> corporate tyco<strong>on</strong>s and<br />

political agents collude in exploiting every avenue for pers<strong>on</strong>al accumulati<strong>on</strong>. Not <strong>on</strong>ly are public goods no<br />

l<strong>on</strong>ger provided, <str<strong>on</strong>g>the</str<strong>on</strong>g>y are simply snatched away – becoming accessible <strong>on</strong>ly through purchasing power. The<br />

fishermen of Mundra are fighting <str<strong>on</strong>g>the</str<strong>on</strong>g>ir case in court but <str<strong>on</strong>g>the</str<strong>on</strong>g>y realize <str<strong>on</strong>g>the</str<strong>on</strong>g> importance of political c<strong>on</strong>necti<strong>on</strong>s:<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>y know <str<strong>on</strong>g>the</str<strong>on</strong>g>ir bargaining power will never match that of <strong>on</strong>e of India’s greatest oligarchs.<br />

Adani has been assigned a c<strong>on</strong>tract for building a 1320-MW coal-fired <str<strong>on</strong>g>the</str<strong>on</strong>g>rmal power plant in Chindwara.<br />

The adjacent Pinch River will be diverted for <str<strong>on</strong>g>the</str<strong>on</strong>g> project. The land for <str<strong>on</strong>g>the</str<strong>on</strong>g> project is agricultural land. Farmers<br />

have been protesting against <str<strong>on</strong>g>the</str<strong>on</strong>g> displacement caused by a planned dam and <str<strong>on</strong>g>the</str<strong>on</strong>g> Adani power project.<br />

At 6 PM <strong>on</strong> May 24, 2011, two local Kisan leaders, Dr. Sunilam and Aradhana Bhargava of Kisan Sangarsh<br />

Samiti were attacked by go<strong>on</strong>s hired by Adani Power. Their car was smashed. Dr. Sunilam suffered a head<br />

injury and both his arms were broken. As a press statement issued by <str<strong>on</strong>g>the</str<strong>on</strong>g> Peoples Uni<strong>on</strong> of Democratic<br />

Rights states: “<str<strong>on</strong>g>the</str<strong>on</strong>g> attack by Adani Power Limited’s armed go<strong>on</strong>s is yet ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r instance of how powerful<br />

corporate houses are resorting to organized violence perpetrated through <str<strong>on</strong>g>the</str<strong>on</strong>g>ir private mafias to silence those<br />

who come in <str<strong>on</strong>g>the</str<strong>on</strong>g> way of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir interests and break peoples’ attempts to organize <strong>on</strong> issues of land, water,<br />

forests.” 36<br />

The Ombudsman (Lokayukta) report <strong>on</strong> mining in Karnataka found Adani involved in illegal mining and<br />

recommended that Adani enterprises be blacklisted and its port lease cancelled. 37<br />

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– THE INDIAN OLIGARCHS –<br />

6. SUNIL MITTAL – BHARTI AIRTEL<br />

TELECOMMUNICATIONS, RETAIL<br />

Sunil Mittal founded Bharti Enterprises in 1976. Bharti Airtel, his flagship company, is <str<strong>on</strong>g>the</str<strong>on</strong>g> largest ph<strong>on</strong>e<br />

operator in India and now stands as <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s fifth largest telecom operati<strong>on</strong> with business spread across 19<br />

countries. Starting out modestly as a bicycle part maker, Sunil Mittal moved to Bombay in search for a more<br />

favorable business envir<strong>on</strong>ment. Once in Mumbai, he entered into <str<strong>on</strong>g>the</str<strong>on</strong>g> internati<strong>on</strong>al trade arena by beginning<br />

to import different products, zinc, brass, plastics etc. Mittal says it was at this point that he learned to navigate<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Indian regulatory envir<strong>on</strong>ment. It was precisely around this time that <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s ec<strong>on</strong>omic scenario<br />

also began changing substantially. Mittal acknowledges that as <str<strong>on</strong>g>the</str<strong>on</strong>g> trade and regulatory barriers came down,<br />

his company’s fortunes turned and Mittal became <strong>on</strong>e a tide of entrepreneurs who rose to great heights<br />

advantaged by deregulati<strong>on</strong> and de-licensing. Previously, <str<strong>on</strong>g>the</str<strong>on</strong>g> telecom sector had been restricted by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

c<strong>on</strong>straints of manufacturing capacity, importing and exporting. Mittal recalls how from strict Government<br />

regulati<strong>on</strong>, <strong>on</strong>e day <str<strong>on</strong>g>the</str<strong>on</strong>g> Government suddenly announced that licenses were no l<strong>on</strong>ger required to run<br />

businesses. “From c<strong>on</strong>trolling what you could do [snaps fingers] it was g<strong>on</strong>e in <strong>on</strong>e day.” 38<br />

Today, Bharti Airtel is expanding bey<strong>on</strong>d India’s borders: focusing <strong>on</strong> Africa, it is striking deals with local<br />

providers across <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tinent and has acquired assets in more than 16 African countries.<br />

Sunil Mittal’s name came up recently in <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>going Government investigati<strong>on</strong>s over <str<strong>on</strong>g>the</str<strong>on</strong>g> 2G-spectrum scam.<br />

Lobbyist Niira Radia menti<strong>on</strong>ed <str<strong>on</strong>g>the</str<strong>on</strong>g> tyco<strong>on</strong> in <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> taped c<strong>on</strong>versati<strong>on</strong>s regarding <str<strong>on</strong>g>the</str<strong>on</strong>g> fixing of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Telecom Ministry. Radia hoped to find a way to favor her big-business clients, including Tata and Reliance<br />

ADAG. The allocati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> 2G-spectrum certificate was found to be absolutely tainted by powerful vested<br />

interests, some of which have been brought to justice while o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs managed to get a clean chit. While Sunil<br />

Mittal spoke in support of <str<strong>on</strong>g>the</str<strong>on</strong>g> investigati<strong>on</strong>, he also has argued against <str<strong>on</strong>g>the</str<strong>on</strong>g> Telecom Regulatory Authority of<br />

India’s (TRAI) attempts at regulating spectrum price. Mittal insists <strong>on</strong> advocating for competitive bidding,<br />

even at a time when <str<strong>on</strong>g>the</str<strong>on</strong>g> evidence clearly indicates that unfair and corrupt practices were routinely involved in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> process.<br />

As <str<strong>on</strong>g>the</str<strong>on</strong>g> head of Airtel, Mittal is a leader in <str<strong>on</strong>g>the</str<strong>on</strong>g> telecom sector, but he is also involved in retail through a<br />

c<strong>on</strong>troversial partnership with <str<strong>on</strong>g>the</str<strong>on</strong>g> giant U.S. supermarket chain, Wal-Mart. Mittal has forged <str<strong>on</strong>g>the</str<strong>on</strong>g> alliance with<br />

Wal-Mart in hopes of introducing a chain of hundreds of similar retail stores across India.<br />

Wal-Mart is already widely despised in its home country for its destructive impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> small retail sector. In<br />

India – where this sector counts, at a minimum, 40 milli<strong>on</strong> small retailers – <str<strong>on</strong>g>the</str<strong>on</strong>g> effects of bringing Wal-Mart’s<br />

to India’s cities and towns will be equally if not more devastating.<br />

The move is <strong>on</strong>e last step in <str<strong>on</strong>g>the</str<strong>on</strong>g> corporate sector’s ultimate strategy to hijack <str<strong>on</strong>g>the</str<strong>on</strong>g> entire food chain – from<br />

seed to table. As corporati<strong>on</strong>s increasingly c<strong>on</strong>trol everything from producti<strong>on</strong> to marketing and distributi<strong>on</strong>,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> local food system in India is being undermined – with severe c<strong>on</strong>sequences for comm<strong>on</strong> people. Under<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> corporatizing process, food ultimately becomes just ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r commodity and henceforth ceases to be<br />

treated as a fundamental right intrinsic in our right to life.<br />

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– THE INDIAN OLIGARCHS –<br />

7. RATAN TATA – TATA GROUP<br />

STEEL, ENERGY, AUTOMOBILES, CHEMICALS,<br />

TELECOMMUNICATIONS, AGRICULTURE, PHARMA, CONSTRUCTION,<br />

AEROSPACE<br />

Tata is not <strong>on</strong>ly a household name in India, but it is also <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s most renowned brand names<br />

around <str<strong>on</strong>g>the</str<strong>on</strong>g> world, where it is c<strong>on</strong>sidered a symbol of renascent India. According to <str<strong>on</strong>g>the</str<strong>on</strong>g> Reputati<strong>on</strong> Institute,<br />

Tata is <str<strong>on</strong>g>the</str<strong>on</strong>g> sec<strong>on</strong>d most-trusted brand in India and <str<strong>on</strong>g>the</str<strong>on</strong>g> 11 th most-reputable brand in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Ratan Naval<br />

Tata, <str<strong>on</strong>g>the</str<strong>on</strong>g> fifth-generati<strong>on</strong> chair of <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s biggest private c<strong>on</strong>glomerate, is also <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />

respected and trusted tyco<strong>on</strong>s. Unlike <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r billi<strong>on</strong>aires, he does not appear in <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes list: this is<br />

because <str<strong>on</strong>g>the</str<strong>on</strong>g> majority of his company’s shares are held under his charitable trusts.<br />

After looking after <str<strong>on</strong>g>the</str<strong>on</strong>g> family’s Tata Steel business in Jamshedpur, Ratan Tata was appointed to head <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

company in 1991. Under Ratan Tata, <str<strong>on</strong>g>the</str<strong>on</strong>g> company began its internati<strong>on</strong>al operati<strong>on</strong>s and went <strong>on</strong> to become<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> giant that it is today – with 96 companies and operati<strong>on</strong>s spread over 56 countries. Out of <str<strong>on</strong>g>the</str<strong>on</strong>g>se, <str<strong>on</strong>g>the</str<strong>on</strong>g> steel<br />

business remains <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s largest, followed by Tata’s automotive empire and <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s outsourcing<br />

services.<br />

As <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy was liberalized at <str<strong>on</strong>g>the</str<strong>on</strong>g> time of Ratan Tata’s appointment as company chair, <str<strong>on</strong>g>the</str<strong>on</strong>g> firm had been<br />

shedding a number of less relevant activities in hopes of achieving global competitiveness and domestic<br />

leadership. Ratan Tata is said to have foreseen and strategically anticipated <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic restructuring,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>reby managing to use it to its advantage. By streamlining and refocusing operati<strong>on</strong>s while also initiating<br />

mergers and acquisiti<strong>on</strong>s <strong>on</strong> an internati<strong>on</strong>al scale, he transformed Tata S<strong>on</strong>s into a group that could not <strong>on</strong>ly<br />

benefit from <str<strong>on</strong>g>the</str<strong>on</strong>g> reforms of <str<strong>on</strong>g>the</str<strong>on</strong>g> 90s but also rise to become a leading c<strong>on</strong>glomerate. Providing everything<br />

from salt to luxury cars and service delivery, Tata S<strong>on</strong>s made it to heights of success. Admirers attribute<br />

Tata’s success to its ability to deliver goods and services tailored to <str<strong>on</strong>g>the</str<strong>on</strong>g> needs of <str<strong>on</strong>g>the</str<strong>on</strong>g> every sector of <str<strong>on</strong>g>the</str<strong>on</strong>g> public,<br />

providing everything from luxury items to cheap opti<strong>on</strong>s for <str<strong>on</strong>g>the</str<strong>on</strong>g> less–well-off.<br />

Tata also stood apart thanks to its numerous charitable initiatives – including a “better than <str<strong>on</strong>g>the</str<strong>on</strong>g> rest”<br />

rehabilitati<strong>on</strong> policy for people displaced by industrial projects – and this has granted <str<strong>on</strong>g>the</str<strong>on</strong>g> company an aura of<br />

trust and benevolence. But <str<strong>on</strong>g>the</str<strong>on</strong>g>re was ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r side to this growth story. While to many, Tata represented<br />

admirable business acumen in <str<strong>on</strong>g>the</str<strong>on</strong>g> service of his company and c<strong>on</strong>sumers, to ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r set of people, Tata has<br />

meant something quite different: loss of land, loss of livelihood and loss of life. The Tata groups have, in fact,<br />

been involved more or less directly in many envir<strong>on</strong>mental and social c<strong>on</strong>flicts stemming from its industrial<br />

operati<strong>on</strong>s. Tata Steel, in particular, has been at <str<strong>on</strong>g>the</str<strong>on</strong>g> center of numerous c<strong>on</strong>troversies including <str<strong>on</strong>g>the</str<strong>on</strong>g> Dhamara<br />

Port project in Orissa. Operated through a joint venture between Tata Steel and L&T (Larsen & Toubro),<br />

Dhamara Port was found to be in violati<strong>on</strong> of Forest C<strong>on</strong>servati<strong>on</strong> Act, yet despite this ruling and despite<br />

huge protests, <str<strong>on</strong>g>the</str<strong>on</strong>g> project was allowed to operate in an ecologically sensitive area, without due assessment of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> baseline ecology, <str<strong>on</strong>g>the</str<strong>on</strong>g> impacts of polluti<strong>on</strong> and operati<strong>on</strong>s <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> nearby Sanctuary and nesting site for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Olive Ridley turtles and <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> broader ecosystem.<br />

As <str<strong>on</strong>g>the</str<strong>on</strong>g> government deregulated mining and mineral processing, <str<strong>on</strong>g>the</str<strong>on</strong>g> Tata company began to eye <str<strong>on</strong>g>the</str<strong>on</strong>g> uranium<br />

mines in a fertile agricultural z<strong>on</strong>e in Tamil Nadu. Tata proceeded with its plans to mine this uranium despite<br />

encountering oppositi<strong>on</strong> from a local populati<strong>on</strong> that was prepared to resist land dispossessi<strong>on</strong>, livelihood<br />

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– THE INDIAN OLIGARCHS –<br />

destructi<strong>on</strong> and envir<strong>on</strong>mental degradati<strong>on</strong>. Similarly, in Orissa and Jharkand, planned land takeovers to make<br />

space for Tata Steel plants, led to <str<strong>on</strong>g>the</str<strong>on</strong>g> killing of innocent Adivasis and <str<strong>on</strong>g>the</str<strong>on</strong>g> injuring of many women and<br />

children.<br />

The most infamous instance of Tata’s forceful land acquisiti<strong>on</strong> occurred at Singur in West Bengal State. This<br />

regi<strong>on</strong>, <strong>on</strong>ce famous for land reforms aimed at empowering landless laborers and small farmers, had<br />

succumbed to neo-liberal pressures and, under Chief Minister Bhattacharya, embarked <strong>on</strong> a path of intensive<br />

industrializati<strong>on</strong> to make way for private investments. As part of this ambitious plan, land in Singur was<br />

acquired for a plant to build Tata’s Nano, <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s cheapest car, costing <strong>on</strong>ly Rs 1 lakh (2000 US$) But<br />

what was presented as a milest<strong>on</strong>e for <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s comm<strong>on</strong> man, actually translated into a spectacle of<br />

violent repressi<strong>on</strong> as thousands of police brutally put down local resistance to <str<strong>on</strong>g>the</str<strong>on</strong>g> forceful land takeover. The<br />

company was forced to relocate and build it’s line of Nano’s elsewhere.<br />

When Mamata Banerjee, a former resistance leader came to power as West Bengal’s New Chief Minister, <strong>on</strong>e<br />

of her first acts was to pass a resoluti<strong>on</strong> for a Land Bill designed to return <str<strong>on</strong>g>the</str<strong>on</strong>g> seized land to <str<strong>on</strong>g>the</str<strong>on</strong>g> original<br />

owners. Tata challenged <str<strong>on</strong>g>the</str<strong>on</strong>g> move in court, labeling it “unc<strong>on</strong>stituti<strong>on</strong>al” and lamenting <str<strong>on</strong>g>the</str<strong>on</strong>g> protestors’<br />

n<strong>on</strong>violent occupati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> land, at night and without prior notice or c<strong>on</strong>sent. Isn’t this <str<strong>on</strong>g>the</str<strong>on</strong>g> crux that<br />

protesting farmers c<strong>on</strong>stantly face whenever State governments grab land for corporati<strong>on</strong>s? As has happened<br />

in too many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r sites, <str<strong>on</strong>g>the</str<strong>on</strong>g> farmers’ cries were met with teargas, fire, bullets and charges of police armed with<br />

lathi – India’s versi<strong>on</strong> of a trunche<strong>on</strong>. 39.<br />

Tata was also involved in land grabbing in Kalinganagar, in <str<strong>on</strong>g>the</str<strong>on</strong>g> State of Orissa where 13 tribals were killed. In<br />

Gopalpur, Orissa, protests forced Tata to aband<strong>on</strong> plans to build <str<strong>on</strong>g>the</str<strong>on</strong>g> Gopalpur Steel plant.<br />

Still, <str<strong>on</strong>g>the</str<strong>on</strong>g> TATA name remains practically stain free. Because <str<strong>on</strong>g>the</str<strong>on</strong>g> company’s charitable initiatives have granted<br />

it a c<strong>on</strong>siderable degree of respect and justificati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> general public tends to overlook such violent<br />

instances as an act of <str<strong>on</strong>g>the</str<strong>on</strong>g> State al<strong>on</strong>e. And <strong>on</strong>ce <str<strong>on</strong>g>the</str<strong>on</strong>g>se episodes are placed in a c<strong>on</strong>text of “industrializati<strong>on</strong><br />

and development” even forceful operati<strong>on</strong>s come to be accepted as needed. This falls in line with <str<strong>on</strong>g>the</str<strong>on</strong>g> idea<br />

that “some<strong>on</strong>e has to pay <str<strong>on</strong>g>the</str<strong>on</strong>g> price for <str<strong>on</strong>g>the</str<strong>on</strong>g> country to develop.” It also builds <strong>on</strong> an outdated view that those<br />

living outside <str<strong>on</strong>g>the</str<strong>on</strong>g> industrial-c<strong>on</strong>sumerist model are retrograde, poor and in need of rescue.<br />

Such regressive thinking leads to <str<strong>on</strong>g>the</str<strong>on</strong>g> acceptance of dispossessi<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> destructi<strong>on</strong> of traditi<strong>on</strong>al<br />

livelihoods, as l<strong>on</strong>g as a top-down opti<strong>on</strong> is presented as <str<strong>on</strong>g>the</str<strong>on</strong>g> “modern alternative.” Tata Steel Vice President<br />

H.H. Nerukar’s words <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> rehabilitati<strong>on</strong> of Adivasis and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r rural communities go a l<strong>on</strong>g way in<br />

explicating this mentality: “Tata Steel has improved <str<strong>on</strong>g>the</str<strong>on</strong>g> standard of living. There are many special initiatives<br />

for tribal development. In spite of doing this, tribals have not reached where <str<strong>on</strong>g>the</str<strong>on</strong>g>y ought to have, even in<br />

Jamshedpur. Tribals have to be looked after much more.” And fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r: “These people haven’t seen anything<br />

positive in life. So, we’ll give <str<strong>on</strong>g>the</str<strong>on</strong>g>m training. It will be a residential course. We’ll take <str<strong>on</strong>g>the</str<strong>on</strong>g>m and give <str<strong>on</strong>g>the</str<strong>on</strong>g>m 10<br />

days of attitude training. We’ll get <str<strong>on</strong>g>the</str<strong>on</strong>g>m to quit <str<strong>on</strong>g>the</str<strong>on</strong>g>ir habits.” 40<br />

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– THE INDIAN OLIGARCHS –<br />

8. ANIL AGARWAL – VEDANTA RESOURCES<br />

(ALUMINUM, COPPER, ZINC)<br />

The 12 th richest Indian in <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes List (and <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s 154 th richest individual), Anil Agarwal was born<br />

into a business family already involved in manufacturing aluminum c<strong>on</strong>ductors. He went <strong>on</strong> to found his own<br />

company, Sterlite Industries Limited, and proceeded to expand his metal empire by acquiring previously<br />

government-owned assets. In 2001, thanks to <str<strong>on</strong>g>the</str<strong>on</strong>g> government’s privatizati<strong>on</strong> program, Agarwal’s company<br />

was able to acquire 51% ownership of <str<strong>on</strong>g>the</str<strong>on</strong>g> previously publicly owned Baharat Aluminum Company Ltd.<br />

(BALCO), for a giveaway price. BALCO was allegedly worth Rs 3,000 crores [approximately 613.000.000<br />

US$] whereas <str<strong>on</strong>g>the</str<strong>on</strong>g> deal with Agarwal totaled <strong>on</strong>ly Rs 551 crores. [approximately 113.000.000 US$] At <str<strong>on</strong>g>the</str<strong>on</strong>g> same<br />

time as <str<strong>on</strong>g>the</str<strong>on</strong>g> takeover, Agarwal also signed a Memorandum of Understanding under which <str<strong>on</strong>g>the</str<strong>on</strong>g> Orissa<br />

Government was to supply of ir<strong>on</strong> ore to Agarwal’s newly acquired plant.<br />

In 1974, BALCO had become <str<strong>on</strong>g>the</str<strong>on</strong>g> first Public Sector Undertaking (PSU) to begin producing aluminum in<br />

India so Agarwal’s 2001 takeover of <str<strong>on</strong>g>the</str<strong>on</strong>g> historic plant was widely protested. Chattisgarth Chief Minister Ajit<br />

Jogi joined <str<strong>on</strong>g>the</str<strong>on</strong>g> public protests in support of striking BALCO workers opposed to <str<strong>on</strong>g>the</str<strong>on</strong>g> takeover. The case was<br />

brought to <str<strong>on</strong>g>the</str<strong>on</strong>g> Supreme Court with Agarwal’s critics arguing that <str<strong>on</strong>g>the</str<strong>on</strong>g> sale violated nati<strong>on</strong>al laws written to<br />

protect <str<strong>on</strong>g>the</str<strong>on</strong>g> rights of tribal people, in particular, <str<strong>on</strong>g>the</str<strong>on</strong>g> V Schedule of <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian C<strong>on</strong>stituti<strong>on</strong>, which states that<br />

tribal land cannot be transferred to private owners. Chief Minister Jogi also filed serious corrupti<strong>on</strong><br />

allegati<strong>on</strong>s against top political figures, while protesting <str<strong>on</strong>g>the</str<strong>on</strong>g> Central Government’s attempts to bypass <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Chattisgarh State Government. The bureaucratic apparatus remained unfazed, however, and (as is often <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

case) <str<strong>on</strong>g>the</str<strong>on</strong>g> deal was justified <strong>on</strong> financial grounds.<br />

Local people were quick to understand how <str<strong>on</strong>g>the</str<strong>on</strong>g> policy of privatizati<strong>on</strong> that <str<strong>on</strong>g>the</str<strong>on</strong>g> government was so vigorously<br />

pursuing would spell disaster for <str<strong>on</strong>g>the</str<strong>on</strong>g> disadvantaged and marginal communities of <str<strong>on</strong>g>the</str<strong>on</strong>g> country. The protesters<br />

had a clear visi<strong>on</strong> of how, <strong>on</strong>ce BALCO’s public assets were placed in private hands, <str<strong>on</strong>g>the</str<strong>on</strong>g>y would have forever<br />

lost rights inscribed in <str<strong>on</strong>g>the</str<strong>on</strong>g> C<strong>on</strong>stituti<strong>on</strong>. Agarwal’s takeover of BALCO illustrates, <strong>on</strong>ce again, how wealth is<br />

accumulated through dispossessi<strong>on</strong>. Land that had originally been recognized as tribal land protected by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

C<strong>on</strong>stituti<strong>on</strong>, became “publicly owned” when <str<strong>on</strong>g>the</str<strong>on</strong>g> Government acquired <str<strong>on</strong>g>the</str<strong>on</strong>g> property (for a mere Rs 20 peracre)<br />

under <str<strong>on</strong>g>the</str<strong>on</strong>g> “public purpose” exempti<strong>on</strong>. Ultimately, land that had historically been recognized as tribal<br />

property was transferred to a private company. While <str<strong>on</strong>g>the</str<strong>on</strong>g> transfer generated profits for Sterlite’s shareholders,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> deal clearly violated tribal C<strong>on</strong>stituti<strong>on</strong>al rights, increased regi<strong>on</strong>al insecurity and undermined <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

livelihoods of <str<strong>on</strong>g>the</str<strong>on</strong>g> local residents.<br />

Similarly, <str<strong>on</strong>g>the</str<strong>on</strong>g> government’s proposal to divest from <str<strong>on</strong>g>the</str<strong>on</strong>g> Nati<strong>on</strong>al Aluminum Company Limited (NALCO)<br />

was received with huge protests from <str<strong>on</strong>g>the</str<strong>on</strong>g> public, trade uni<strong>on</strong>s and political parties. Vedanta’s Sterlite and<br />

Hindalco were am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> top bidders. Acquiring NALCO would make Agarwal India’s largest player in<br />

aluminum and copper. He also bought a majority share in <str<strong>on</strong>g>the</str<strong>on</strong>g> formerly government-owned Hindustan Zinc<br />

Limited (HZL) and in <str<strong>on</strong>g>the</str<strong>on</strong>g> Madras Aluminum Company. Agarwal recently proposed to buy out <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

government’s remaining 49% stake in BALCO and 29 % in HZL. Agawal’s Sterlite also owns 51% of SESA<br />

Goa, India’s largest ir<strong>on</strong>-ore producer and exporter: <str<strong>on</strong>g>the</str<strong>on</strong>g> deal raised allegati<strong>on</strong>s of severe financial irregularities<br />

and came under <str<strong>on</strong>g>the</str<strong>on</strong>g> scrutiny of <str<strong>on</strong>g>the</str<strong>on</strong>g> Serious Fraud Investigati<strong>on</strong> Office. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r questi<strong>on</strong>s were raised about <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

NALCO divestment move after it was pointed out that Finance Minister (now Home Minister) P.<br />

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– THE INDIAN OLIGARCHS –<br />

Chidambaram was, in fact, <strong>on</strong> Vedanta’s board of directors before becoming Finance Minister, a c<strong>on</strong>flict of<br />

interest which has raised very serious questi<strong>on</strong>s.<br />

While divestment advocates often can make sound arguments for selling off <str<strong>on</strong>g>the</str<strong>on</strong>g> government’s m<strong>on</strong>ey-losing<br />

PSUs, investigators deemed <str<strong>on</strong>g>the</str<strong>on</strong>g> BALCO and NALCO buyouts were unnecessary since both state-owned<br />

companies were successful operati<strong>on</strong>s running at a profit: it made no sense to sell <str<strong>on</strong>g>the</str<strong>on</strong>g>m to private interests –<br />

especially at such meager rates. The big winner clearly was Agarwal. Owning and managing <str<strong>on</strong>g>the</str<strong>on</strong>g> ex-PSUs<br />

would allow huge turnovers owing to near-total market dominati<strong>on</strong> and free access to <str<strong>on</strong>g>the</str<strong>on</strong>g> State-owned hugely<br />

sought-after raw materials – <str<strong>on</strong>g>the</str<strong>on</strong>g> ir<strong>on</strong> ore, bauxite and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r mineral riches that lie deep in India’s earth.<br />

Anil Agarwal‘s strategy of buying out PSUs has paid out handsomely by allowing him to create a lucrative<br />

quasi-m<strong>on</strong>opoly in aluminum, copper and zinc that has propelled his rise in <str<strong>on</strong>g>the</str<strong>on</strong>g> Forbes list of India’s dollar<br />

billi<strong>on</strong>aires.<br />

In 2003, <str<strong>on</strong>g>the</str<strong>on</strong>g> listing of Vedanta Resources <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> L<strong>on</strong>d<strong>on</strong> Stock Exchange made it <str<strong>on</strong>g>the</str<strong>on</strong>g> first Indian company<br />

listed <strong>on</strong> internati<strong>on</strong>al markets and this move proved to be a turning point for Agarwal’s richness.<br />

Unlike o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs who managed to maintain a good name despite serious malpractice allegati<strong>on</strong>s, Agarwal’s ill<br />

reputati<strong>on</strong> grew al<strong>on</strong>g with his business plans. Vedanta’s most egregious move, and <strong>on</strong>e that shot its chairman<br />

into <str<strong>on</strong>g>the</str<strong>on</strong>g> top tiers of corporate infamy, was a callous attempt at mining bauxite from <str<strong>on</strong>g>the</str<strong>on</strong>g> hills of Niyamgiri,<br />

part of <str<strong>on</strong>g>the</str<strong>on</strong>g> ancient homeland of <str<strong>on</strong>g>the</str<strong>on</strong>g> D<strong>on</strong>gria K<strong>on</strong>dh, <strong>on</strong>e of India’s protected indigenous Primitive Tribal<br />

groups. Niyamgiri means “<str<strong>on</strong>g>the</str<strong>on</strong>g> mountain that upholds <str<strong>on</strong>g>the</str<strong>on</strong>g> law of <str<strong>on</strong>g>the</str<strong>on</strong>g> Earth” and local residents revere <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

mountain as a “living God.” The D<strong>on</strong>gria K<strong>on</strong>dh reside inside <str<strong>on</strong>g>the</str<strong>on</strong>g> mountain’s cover of thick and lush<br />

vegetati<strong>on</strong> and thrive within a str<strong>on</strong>gly knit community that lives and functi<strong>on</strong>s according to <str<strong>on</strong>g>the</str<strong>on</strong>g> laws of<br />

Nature.<br />

The D<strong>on</strong>gria K<strong>on</strong>dh do not require a legal framework to determine how and when <str<strong>on</strong>g>the</str<strong>on</strong>g>y are permitted to<br />

access and use <str<strong>on</strong>g>the</str<strong>on</strong>g>ir resources: <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own ancient principles of sustainability, equity and community guide<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir lifestyle. Yet it is precisely this system – and even ideology of “comm<strong>on</strong> property resource” – that has<br />

been bashed by <str<strong>on</strong>g>the</str<strong>on</strong>g> advocates of divestment and privatizati<strong>on</strong>. The instituti<strong>on</strong>al system based <strong>on</strong> individual<br />

rights not <strong>on</strong>ly fails to protect customary values of indigenous people, but it also threatens <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

implementati<strong>on</strong> of any rights at all.<br />

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– THE INDIAN OLIGARCHS –<br />

Despite having introduced specific legislati<strong>on</strong> such as <str<strong>on</strong>g>the</str<strong>on</strong>g> 2006 Provisi<strong>on</strong>s for Extensi<strong>on</strong> Scheduled Areas<br />

(PESA) and <str<strong>on</strong>g>the</str<strong>on</strong>g> Forest Rights Act to “undo centuries of historic injustice” suffered by tribal groups in India,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> government has repeatedly failed to impose <str<strong>on</strong>g>the</str<strong>on</strong>g> same operati<strong>on</strong>al prohibiti<strong>on</strong>s <strong>on</strong> corporate-led industrial<br />

initiatives, hence leaving business leaders free to deny tribal land-dwellers even most basic rights enshrined in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> C<strong>on</strong>stituti<strong>on</strong>.<br />

The model of development that has been promoted is authoritarian and top–down and, hence, totally<br />

undemocratic. The impositi<strong>on</strong> of an alien way of life and an imposed system of foreign governance has had<br />

devastating c<strong>on</strong>sequences <strong>on</strong> traditi<strong>on</strong>al livelihoods. As Vedanta lobbied hard to feed its aluminum smelters<br />

by mining bauxite from <str<strong>on</strong>g>the</str<strong>on</strong>g> rich hills of Niyamgiri, <str<strong>on</strong>g>the</str<strong>on</strong>g> D<strong>on</strong>gria K<strong>on</strong>dh faced displacement, loss of livelihood<br />

and, ultimately, genocide.<br />

The Niyamgiri battle is probably <str<strong>on</strong>g>the</str<strong>on</strong>g> most revealing dem<strong>on</strong>strati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> link between wealth accumulati<strong>on</strong><br />

for <str<strong>on</strong>g>the</str<strong>on</strong>g> few and impoverishment for <str<strong>on</strong>g>the</str<strong>on</strong>g> many. Vedanta’s predatory modus operandi clearly uncovers <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

c<strong>on</strong>necti<strong>on</strong> between privatizati<strong>on</strong>, accumulati<strong>on</strong> by dispossessi<strong>on</strong>, and <str<strong>on</strong>g>the</str<strong>on</strong>g> infringement of rights and<br />

regulati<strong>on</strong>s that occur when <str<strong>on</strong>g>the</str<strong>on</strong>g> State becomes an agent of forced industrializati<strong>on</strong>.<br />

CONCLUSION<br />

India is comm<strong>on</strong>ly hailed as “<str<strong>on</strong>g>the</str<strong>on</strong>g> world’s biggest democracy.” It is also famously <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />

multicultural, multilingual and multiethnic countries in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. Its C<strong>on</strong>stituti<strong>on</strong> incorporates provisi<strong>on</strong>s<br />

and principles from a number of o<str<strong>on</strong>g>the</str<strong>on</strong>g>r C<strong>on</strong>stituti<strong>on</strong>s in an attempt to design a framework for <str<strong>on</strong>g>the</str<strong>on</strong>g> protecti<strong>on</strong><br />

and empowerment of all segments of <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s extremely diverse society. India is also celebrated as <strong>on</strong>e<br />

of globalizati<strong>on</strong>’s “winners,” a country whose GDP has picked up and remained higher than most o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

world ec<strong>on</strong>omies.<br />

But presenting India exclusively as a “miracle growth story” fails to account for <str<strong>on</strong>g>the</str<strong>on</strong>g> greater reality. The grim<br />

fact is that, out of a populati<strong>on</strong> of <strong>on</strong>e billi<strong>on</strong>, <strong>on</strong>ly 50 have attained sufficient wealth to sit am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s<br />

richest individuals. The extravagant wealth of 50 billi<strong>on</strong>aires is no reas<strong>on</strong> to feel proud – not when this<br />

“success” is c<strong>on</strong>textualized within a country that cannot feed half of its children. Nor is it reas<strong>on</strong> to gloat<br />

about <str<strong>on</strong>g>the</str<strong>on</strong>g> success of globalizati<strong>on</strong> – whose failures become apparent <strong>on</strong>ce <str<strong>on</strong>g>the</str<strong>on</strong>g> victims of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealth-creati<strong>on</strong><br />

process are included in <str<strong>on</strong>g>the</str<strong>on</strong>g> picture.<br />

A closer look at <str<strong>on</strong>g>the</str<strong>on</strong>g> means through which such riches were achieved forces <str<strong>on</strong>g>the</str<strong>on</strong>g> questi<strong>on</strong>: is wealth really<br />

being “created” or is it mostly being redistributed from <str<strong>on</strong>g>the</str<strong>on</strong>g> weaker to <str<strong>on</strong>g>the</str<strong>on</strong>g> more powerful? India’s founding<br />

social policy has similarly inverted. From a political philosophy based <strong>on</strong> advancing <str<strong>on</strong>g>the</str<strong>on</strong>g> ideals of social justice<br />

and equity, India has increasingly adopted a series of governing <str<strong>on</strong>g>the</str<strong>on</strong>g>ories dangerously based <strong>on</strong> cr<strong>on</strong>y<br />

capitalism – where rights and fortunes are increasingly dependent <strong>on</strong> who you know and what you possess.<br />

What does this mean for citizenship? What does it mean for development? When huge m<strong>on</strong>etary wealth is<br />

accumulated through <str<strong>on</strong>g>the</str<strong>on</strong>g> dispossessi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> vulnerable <strong>on</strong>ly to be applauded globally, citizens lose faith in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> system and lose faith in democracy.<br />

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– THE INDIAN OLIGARCHS –<br />

The government professes an interest in promoting inclusive growth: yet what this has come to mean for<br />

India’s majority – agricultural communities, fishermen, landless laborers, Adivasis and tribals – is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

destructi<strong>on</strong> of homes and livelihoods, <str<strong>on</strong>g>the</str<strong>on</strong>g> loss of a sense of community and kin. What is gained in exchange is<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> superimpositi<strong>on</strong> of an alien way of life – a fundamentally unsustainable <strong>on</strong>e – where wealth translates into<br />

nothing more than c<strong>on</strong>sumerism, <str<strong>on</strong>g>the</str<strong>on</strong>g> pursuit of material possessi<strong>on</strong>s and overc<strong>on</strong>sumpti<strong>on</strong> in a dense, urban<br />

c<strong>on</strong>text. The word “rural” has come to mean primitive, n<strong>on</strong>-c<strong>on</strong>sumerist and poor. If <str<strong>on</strong>g>the</str<strong>on</strong>g> success stories of a<br />

few billi<strong>on</strong>aires are <str<strong>on</strong>g>the</str<strong>on</strong>g> yardsticks we use to measure progress and growth, we might say India has been<br />

successful. But India’s “miracle story” is actually a work of ficti<strong>on</strong> – a biased and partial perspective that<br />

ignores <str<strong>on</strong>g>the</str<strong>on</strong>g> unrelieved misery of milli<strong>on</strong>s.<br />

If we do account for those who have lost <str<strong>on</strong>g>the</str<strong>on</strong>g>ir land, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir sustenance, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir homes and even <str<strong>on</strong>g>the</str<strong>on</strong>g>ir lives in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

battle between <str<strong>on</strong>g>the</str<strong>on</strong>g>se two opposing paradigms, surely <str<strong>on</strong>g>the</str<strong>on</strong>g> story of India’s “miraculous growth” takes a hit. If<br />

we account for <str<strong>on</strong>g>the</str<strong>on</strong>g> hectares of land diverted for industries and, hence, removed from food producti<strong>on</strong>, that’s<br />

ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r hit. If we start factoring in <str<strong>on</strong>g>the</str<strong>on</strong>g> increasing costs of food imports and of healthcare (compounded by<br />

increased exposure to industrial polluti<strong>on</strong>, chemical exposure, and a range of “lifestyle diseases” attributed to<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> extremes of poverty and overc<strong>on</strong>sumpti<strong>on</strong>) and <str<strong>on</strong>g>the</str<strong>on</strong>g>n add <str<strong>on</strong>g>the</str<strong>on</strong>g> costs of internal c<strong>on</strong>flict and growing<br />

extremism, it becomes fairly evident that <str<strong>on</strong>g>the</str<strong>on</strong>g> end result will look much different than India’s “Shining<br />

Miracle.” And, if we start accounting for <str<strong>on</strong>g>the</str<strong>on</strong>g> impacts of <str<strong>on</strong>g>the</str<strong>on</strong>g> LPG “revoluti<strong>on</strong>” in social and envir<strong>on</strong>mental<br />

terms, we will realize that it is not just <str<strong>on</strong>g>the</str<strong>on</strong>g> present that is at risk but that our future is at stake, as well.<br />

The process of integrating with <str<strong>on</strong>g>the</str<strong>on</strong>g> global ec<strong>on</strong>omy– which is fundamentally centered <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> neoliberal tenets<br />

of deregulati<strong>on</strong>, privatizati<strong>on</strong> and opening new markets – has had a tremendous impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

global ec<strong>on</strong>omy, <strong>on</strong> governance and <strong>on</strong> society. The shift of ownership from public to private c<strong>on</strong>trol –<br />

privatizati<strong>on</strong> – has been imposed in <str<strong>on</strong>g>the</str<strong>on</strong>g> name of efficiency. Deregulati<strong>on</strong>, its byproduct, has created a freewheeling,<br />

business-friendly envir<strong>on</strong>ment that encourages companies to seize properties and assets previously<br />

held in <str<strong>on</strong>g>the</str<strong>on</strong>g> public domain and operate <str<strong>on</strong>g>the</str<strong>on</strong>g>m, not for <str<strong>on</strong>g>the</str<strong>on</strong>g> public good, but according to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own bottom-line<br />

rules and standards.<br />

According to <str<strong>on</strong>g>the</str<strong>on</strong>g> LPG Mantra, self-regulati<strong>on</strong> al<strong>on</strong>e should be sufficient to ensure a company’s compliance<br />

with laws and policies; yet extensive evidence has proven this claim fictitious. But even as projects laced in<br />

illegalities, misdeeds and unfair practices c<strong>on</strong>tinue to be exposed – more often than not, <str<strong>on</strong>g>the</str<strong>on</strong>g>se activities have<br />

been c<strong>on</strong>d<strong>on</strong>ed. One of <str<strong>on</strong>g>the</str<strong>on</strong>g> foremost issues that has arisen with <str<strong>on</strong>g>the</str<strong>on</strong>g> growing dominance of private actors has<br />

been <str<strong>on</strong>g>the</str<strong>on</strong>g> so-called “enclosure of <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong>s” in which resources born as comm<strong>on</strong> property are taken over<br />

and henceforth treated not as an entitlement but as a functi<strong>on</strong> of purchasing power. In such a situati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

comm<strong>on</strong> historical heritage of people’s traditi<strong>on</strong>al income and livelihoods are simultaneously and irreparably<br />

destroyed. In <str<strong>on</strong>g>the</str<strong>on</strong>g> official discourse (as well as in practice), <str<strong>on</strong>g>the</str<strong>on</strong>g>se grim and wrenching local realities fail to be<br />

accounted for – <strong>on</strong>ly <str<strong>on</strong>g>the</str<strong>on</strong>g> most positive assessments of globalizati<strong>on</strong>’s impacts are admitted to <str<strong>on</strong>g>the</str<strong>on</strong>g> debate.<br />

Similarly, “<str<strong>on</strong>g>the</str<strong>on</strong>g> rise of <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian billi<strong>on</strong>aires” has been hailed as proof of <str<strong>on</strong>g>the</str<strong>on</strong>g> neoliberal paradigm – i.e., that<br />

LPG opens up avenues for wealth creati<strong>on</strong>. But this is <strong>on</strong>ly a partial picture that accounts for n<strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

lasting social, ec<strong>on</strong>omic and envir<strong>on</strong>mental costs – and refuses to accept <str<strong>on</strong>g>the</str<strong>on</strong>g> failure of <str<strong>on</strong>g>the</str<strong>on</strong>g> “trickle–down”<br />

paradigm. An impartial analysis of <str<strong>on</strong>g>the</str<strong>on</strong>g> processes that sp<strong>on</strong>sored <str<strong>on</strong>g>the</str<strong>on</strong>g> rise of Indian billi<strong>on</strong>aires reveals that<br />

what is presented as wealth-creati<strong>on</strong> is instead wealth-accumulati<strong>on</strong> – achieved through dispossessi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

poor and encroachment <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong>s. In practice, this “success story” required removing wealth from a<br />

broadly shared community base and c<strong>on</strong>centrating it in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands of a small elite at <str<strong>on</strong>g>the</str<strong>on</strong>g> top of <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic<br />

pyramid.<br />

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– THE INDIAN OLIGARCHS –<br />

While it is worrying enough that India’s growth is following such a lopsided pattern, it is even more troubling<br />

to realize how <str<strong>on</strong>g>the</str<strong>on</strong>g> few powerful individuals at <str<strong>on</strong>g>the</str<strong>on</strong>g> top are becoming increasingly denati<strong>on</strong>alized. As <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />

collaborate with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir o<str<strong>on</strong>g>the</str<strong>on</strong>g>r super-rich counterparts at home and abroad, billi<strong>on</strong>aires in India (and elsewhere<br />

around <str<strong>on</strong>g>the</str<strong>on</strong>g> world) are becoming increasingly removed from <str<strong>on</strong>g>the</str<strong>on</strong>g> reality of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own countries. And this trend<br />

towards “cultural globalism” is not limited to multinati<strong>on</strong>al corporati<strong>on</strong>s, even domestic businesses are<br />

becoming increasingly rootless as <str<strong>on</strong>g>the</str<strong>on</strong>g> drive to increase profits pushes <str<strong>on</strong>g>the</str<strong>on</strong>g>m into new partnerships and joint<br />

ventures, mergers and acquisiti<strong>on</strong>s <str<strong>on</strong>g>the</str<strong>on</strong>g> world over.<br />

Foreign companies eye <str<strong>on</strong>g>the</str<strong>on</strong>g> dynamic Indian ec<strong>on</strong>omy both as a vast, potential market for goods and services<br />

and as an open door to gain access to India’s wealth of natural resources. Indian companies are following this<br />

lead, ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r to avoid domestic regulati<strong>on</strong> (where it still exists) or to duplicate <str<strong>on</strong>g>the</str<strong>on</strong>g> same plunder-and-profit<br />

model abroad, often in weaker ec<strong>on</strong>omies or fragile states. While <str<strong>on</strong>g>the</str<strong>on</strong>g> neoliberal ec<strong>on</strong>omic agenda was initially<br />

justified <strong>on</strong> grounds that it would enhance domestic ec<strong>on</strong>omies by attracting foreign investment, what we<br />

find instead – especially am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> ranks of India’s billi<strong>on</strong>aire oligarchs – is a disturbing outflow of investment.<br />

During 2010-2011, Shashi Ruia of Essar invested $1.2 billi<strong>on</strong> abroad and $200 milli<strong>on</strong> in India. Mukesh<br />

Ambani’s domestic investments were $2.7 billi<strong>on</strong> and investments abroad were $8 billi<strong>on</strong>. Ratan Tata invested<br />

$200 milli<strong>on</strong> in India and $3 billi<strong>on</strong> abroad. Anil Ambani invested $400 milli<strong>on</strong> in India and $3 billi<strong>on</strong> abroad.<br />

Sunil Mittal invested $2 billi<strong>on</strong> in India and $16 billi<strong>on</strong> abroad 41.<br />

The disregard for nati<strong>on</strong>al priorities – which can be attributed to <str<strong>on</strong>g>the</str<strong>on</strong>g> change in ideology from <strong>on</strong>e dominated<br />

by <str<strong>on</strong>g>the</str<strong>on</strong>g> sense of community to that of individual welfare – seems to be a comm<strong>on</strong> characteristic of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy<br />

family of global oligarchs increasingly removed from <str<strong>on</strong>g>the</str<strong>on</strong>g> reality of society. Through <str<strong>on</strong>g>the</str<strong>on</strong>g> LPG process, local<br />

ec<strong>on</strong>omies are being destroyed as comm<strong>on</strong> people and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir rights are increasingly rendered invisible. Cities<br />

are increasingly fragmented and <str<strong>on</strong>g>the</str<strong>on</strong>g> poor are being marginalized both symbolically and physically, failed by<br />

both <str<strong>on</strong>g>the</str<strong>on</strong>g> State and <str<strong>on</strong>g>the</str<strong>on</strong>g> market and pushed to <str<strong>on</strong>g>the</str<strong>on</strong>g> far borders of society. The super–rich, <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r hand,<br />

work towards <str<strong>on</strong>g>the</str<strong>on</strong>g> shared objective of amassing great wealth, creating gated islands of luxury bey<strong>on</strong>d <str<strong>on</strong>g>the</str<strong>on</strong>g> reach<br />

of comm<strong>on</strong> people and feeding into <str<strong>on</strong>g>the</str<strong>on</strong>g>ir disengagement with <str<strong>on</strong>g>the</str<strong>on</strong>g> broader reality while, at <str<strong>on</strong>g>the</str<strong>on</strong>g> same time,<br />

ensuring that <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth is <strong>on</strong> c<strong>on</strong>venient display for o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs to admire and covet.<br />

Mukesh Ambani’s towering Mumbai residence, <str<strong>on</strong>g>the</str<strong>on</strong>g> 27-floor Antilla skyscraper-cum-mansi<strong>on</strong>, symbolizes this<br />

dichotomy. Similarly, India’s Special Ec<strong>on</strong>omic Z<strong>on</strong>es stand in defiant oppositi<strong>on</strong> to any sense of community<br />

obligati<strong>on</strong>. They act as foreign entities, with <str<strong>on</strong>g>the</str<strong>on</strong>g> near-sovereign power to grab land and resources. Nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

oligarchs nor <str<strong>on</strong>g>the</str<strong>on</strong>g>ir quasi-legal SEZ fiefdoms, share any abiding c<strong>on</strong>cern for <str<strong>on</strong>g>the</str<strong>on</strong>g> displacement of local<br />

communities and <str<strong>on</strong>g>the</str<strong>on</strong>g> destructi<strong>on</strong> of small, sustainable livelihoods. Under <str<strong>on</strong>g>the</str<strong>on</strong>g> banner of LPG, <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchs<br />

have <strong>on</strong>ly <strong>on</strong>e abiding missi<strong>on</strong>: to take full advantage of <str<strong>on</strong>g>the</str<strong>on</strong>g> huge incentives for profit accumulati<strong>on</strong> that exist<br />

outside <str<strong>on</strong>g>the</str<strong>on</strong>g> realm of law and bey<strong>on</strong>d <str<strong>on</strong>g>the</str<strong>on</strong>g> loyalties of citizenship.<br />

NOTES<br />

1 The World Bank Group: Independent Evaluati<strong>on</strong> Group: Structural Adjustment in India<br />

http://lnweb90.worldbank.org/oed/oeddoclib.nsf/b57456d58aba40e585256ad400736404/0586cc45a28a2749852567<br />

f5005d8c89?OpenDocument<br />

2 Aghi<strong>on</strong>, Burgess, Redding, Ziliboti: The unequal effects of liberalizati<strong>on</strong>: <str<strong>on</strong>g>the</str<strong>on</strong>g>ory and evidence from India, March 2003<br />

3 Jenkins: Democratic Politics and Ec<strong>on</strong>omic Reforms in India<br />

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– THE INDIAN OLIGARCHS –<br />

4 Prabhat Patnaik: The Ec<strong>on</strong>omics of <str<strong>on</strong>g>the</str<strong>on</strong>g> New Phase of Imperialism<br />

5 Parthapratim Pal and Jayati Gosh: Inequality in India: A survey of recent trends, DESA working paper no. 45, July<br />

2007<br />

6 Greenfield projects involve <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>structi<strong>on</strong> of new operati<strong>on</strong>al facilities as opposed to brownfield projects which<br />

involve redevelopment or expansi<strong>on</strong> of existing <strong>on</strong>es<br />

7 Steeling <str<strong>on</strong>g>the</str<strong>on</strong>g> show, N.B. Rao www.ibef.org<br />

8 ibid<br />

9 India’s mixed ec<strong>on</strong>omy before of liberalizati<strong>on</strong> was characterized by what is known as ‘License Raj’ a system of<br />

Government c<strong>on</strong>trol over business set up and functi<strong>on</strong>ing through licenses and regulati<strong>on</strong>s<br />

10 Harris and Corbridge: Reinventing India<br />

11 A loss making venture, Outlook India 7 th June 2004<br />

12 The Statesman: CAG says Govt favored Reliance, 13 th June 2011<br />

13 Business Standard: Anil Ambani faces Parliament in 2G scam, 5 th April 2011<br />

14 India today: 2G scam: Hit by PIL, Sibal denies favours to Reliance Infocomm<br />

15 Business Line: Sibal favored Reliance Infocomm says NGO, 7 th July 2011<br />

16 Corporate Hijack of Land, Navdanya 2011<br />

17 Power and Energy Industry in India<br />

18 Reliance Power Press Release, 3 rd February 2011<br />

19 http://in.reuters.com/article/2011/07/12/idINIndia-58214120110712<br />

20 Essar Company Profile, www.essar.com<br />

21 http://www.hrw.org/legacy/campaigns/burma/drilling/<br />

22 Down to Earth: Essar gets Bailadila prospecting lease<br />

23 Down to Earth: Land Factor, 31 st October 2006<br />

24 Prabhat Patnaik: The Ec<strong>on</strong>omics of <str<strong>on</strong>g>the</str<strong>on</strong>g> new phase of Imperialism”<br />

25 Tehelka: The water wars, 29 th January 2011<br />

26 Business today: Jindal vs Jindal…or Jindal plus Jindal? 9 th October 2010<br />

27 Naveen Jindal website<br />

28 Down to Earth: villagers protest forest acquisiti<strong>on</strong>, Jan 31 st 2011<br />

29 Tehelka: Water wars, 29 th January 2011<br />

30 Soil not oil<br />

31 http://news.<strong>on</strong>eindia.in/2011/07/29/karnataka-lokayukta-5-firms-indicted-for-illegal-mining.html<br />

32 Business Standard: Newsmaker: Gautam Adani, 6 th August 2010<br />

33 Down to Earth: Fishworkers’ campaign draws attenti<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> sale of marine waters<br />

34 Corporate Hijack of Land, Navdanya 2011<br />

35 Tehelka: Power of Black gold, 10 th September 2011<br />

36 http://sanhati.com/articles3610<br />

37 The Financial Express, S.C. Bans, Mining in Bellary: Hegde wants JSW, Adani role probed, July 30, 2011<br />

38 Bharti’s group Sunil Mittal <strong>on</strong> Less<strong>on</strong>s of Entrepreneurship and Leadership, available at<br />

http://knowledge.whart<strong>on</strong>.upenn.edu/india/article.cfm?articleid=4306<br />

39 Lathi is <str<strong>on</strong>g>the</str<strong>on</strong>g> wooden stick tipped with metal used as a weap<strong>on</strong> by <str<strong>on</strong>g>the</str<strong>on</strong>g> Indian police<br />

40 Excerpts from Corpwatch: Interview with Mr H.H. Nerurkar, Vice President Tata Steel<br />

41 India Today, “Flight of Capital,” August 1, 2011<br />

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— CHINA: OLIGARCHY IN THE MAKING —<br />

CHINA<br />

OLIGARCHY IN THE MAKING<br />

DR. DALE WEN<br />

China is evolving rapidly with its break-neck ec<strong>on</strong>omic growth. Some people are getting rich at unbelievable<br />

speed; some interests are getting entrenched. The rapid polarizati<strong>on</strong> between <str<strong>on</strong>g>the</str<strong>on</strong>g> rich and poor is alarming.<br />

China’s “Gini index”, <str<strong>on</strong>g>the</str<strong>on</strong>g> measure of inequality comm<strong>on</strong>ly used, was below 30 in <str<strong>on</strong>g>the</str<strong>on</strong>g> 1980s, comparable to<br />

more egalitarian countries like Norway and Sweden; yet it has climbed to around 45 today, more similar to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

U.S. or Latin America countries. While <str<strong>on</strong>g>the</str<strong>on</strong>g> rich today comes from all kinds of social and ec<strong>on</strong>omic<br />

background, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are worrisome signs that social mobility may be decreasing. For example, when <strong>on</strong>e looks<br />

at <str<strong>on</strong>g>the</str<strong>on</strong>g> student compositi<strong>on</strong> of elite universities, <str<strong>on</strong>g>the</str<strong>on</strong>g> percentage of youngsters from rural backgrounds has<br />

dropped rapidly after <str<strong>on</strong>g>the</str<strong>on</strong>g> urbanizati<strong>on</strong> rate is taken into c<strong>on</strong>siderati<strong>on</strong>.<br />

According to <str<strong>on</strong>g>the</str<strong>on</strong>g> newest Forbes China Rich List released in September 2011, <str<strong>on</strong>g>the</str<strong>on</strong>g> number of billi<strong>on</strong>aires<br />

am<strong>on</strong>g China’s richest 400 people increased to a record 146 from 128 a year earlier. The total wealth of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

richest 400 people <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> mainland is US$459 billi<strong>on</strong>, an increase of 8% from $423.2 billi<strong>on</strong> before, but <strong>on</strong>ly<br />

4% in local currency terms. That is less than <str<strong>on</strong>g>the</str<strong>on</strong>g> 10% increase in China’s GDP in 2010. The Forbes report<br />

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— CHINA: OLIGARCHY IN THE MAKING —<br />

commented “slowing growth in China’s wealth is a warning sign for global luxury good suppliers.” This could<br />

be good sign for <str<strong>on</strong>g>the</str<strong>on</strong>g> average Chinese people, maybe not very significant, but still a positive sign.<br />

It is hard to say “who is who” within China’s emerging oligarchy. For individual billi<strong>on</strong>aires, <str<strong>on</strong>g>the</str<strong>on</strong>g>y are not<br />

quite entrenched and stable as in some o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries, say, <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. For example, Huang Guangyu, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

number <strong>on</strong>e richest pers<strong>on</strong> in China in 2008 according <str<strong>on</strong>g>the</str<strong>on</strong>g> influential Hurun Report, was charged with<br />

bribery and insider trading so<strong>on</strong> after. He was sentenced to 14 years in pris<strong>on</strong> and fined 800 milli<strong>on</strong> Yuan<br />

(1dollar~6.5 Yuan). His case was not al<strong>on</strong>e. In August 2009, Hurun Report issued a special report with<br />

following statistics: am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> 1,330 Chinese milli<strong>on</strong>aires or billi<strong>on</strong>aires which had made <str<strong>on</strong>g>the</str<strong>on</strong>g> Hurun Rich List<br />

between 1999 and 2008, 16 had been sentenced into pris<strong>on</strong>, three were waiting for sentence at <str<strong>on</strong>g>the</str<strong>on</strong>g> time, 10<br />

were under investigati<strong>on</strong>, seven were missing or had escaped abroad with debt disputes or pending criminal<br />

investigati<strong>on</strong>. Total 36 out of 1,330, or 2.7%, being rich is indeed a risky business.<br />

While collusi<strong>on</strong> of m<strong>on</strong>ey and power is a usual and comm<strong>on</strong> feature of oligarchy, nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r offers sure<br />

immunity from <str<strong>on</strong>g>the</str<strong>on</strong>g> law in China, at least for now. With <str<strong>on</strong>g>the</str<strong>on</strong>g> aforementi<strong>on</strong>ed Huang Guangyu case, five<br />

officials were sent into pris<strong>on</strong>, with <str<strong>on</strong>g>the</str<strong>on</strong>g> highest ranking <strong>on</strong>e a provincial level official (roughly equivalent to<br />

state heads level in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S.). These 5 were <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>es publicly announced, while it is comm<strong>on</strong>ly assumed that<br />

probably dozens of officials were implicated in Huang’s case and ended up in pris<strong>on</strong>. In 2010, 11 high−level<br />

officials (at least provincial or ministerial level) were sentenced into pris<strong>on</strong> due to corrupti<strong>on</strong> and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

charges, 4 with life impris<strong>on</strong>ment, 7 with death penalty with a suspensi<strong>on</strong> of executi<strong>on</strong> (which would<br />

normally be c<strong>on</strong>verted to life impris<strong>on</strong>ment later).<br />

With its rising income gap, <str<strong>on</strong>g>the</str<strong>on</strong>g>oretically progressive taxati<strong>on</strong> should be <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> measures government can<br />

deploy to address this issue. So far this vehicle has not worked so well. Chinese government started to collect<br />

pers<strong>on</strong>al income tax in 1980. There are 9 tax brackets, with tax rates ranging between 5% and 45%. People<br />

with low income are exempted from pers<strong>on</strong>al income tax, with <str<strong>on</strong>g>the</str<strong>on</strong>g> threshold previously set at 2,000 Yuan per<br />

m<strong>on</strong>th, but raised to 3,500 Yuan since September 1, 2011. With lots of ec<strong>on</strong>omic transacti<strong>on</strong>s still d<strong>on</strong>e in<br />

cash, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is massive under-reporting. An effective m<strong>on</strong>itoring and taxati<strong>on</strong> system is yet to be established. It<br />

is estimated that 84 milli<strong>on</strong> people paid pers<strong>on</strong>al income tax with <str<strong>on</strong>g>the</str<strong>on</strong>g> previous 2,000 Yuan threshold and <strong>on</strong>ly<br />

24 milli<strong>on</strong> people will have to pay now with <str<strong>on</strong>g>the</str<strong>on</strong>g> new 3,500 Yuan threshold. A number for comparis<strong>on</strong> is that<br />

automobile ownership has risen sharply in recently years, exceeding 70 milli<strong>on</strong> now. In a country where<br />

private automobile is not essential for most places, it is hard to believe that <str<strong>on</strong>g>the</str<strong>on</strong>g> majority of car owners actually<br />

earn less than 3,500 Yuan (~540 dollars) per m<strong>on</strong>th. Pers<strong>on</strong>al income tax accounts for less than 7% of total<br />

government tax revenues in all of <str<strong>on</strong>g>the</str<strong>on</strong>g> previous 5 years, ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r sign that so far it is not an effective tool for<br />

wealth redistributi<strong>on</strong>.<br />

Yet in recent years <str<strong>on</strong>g>the</str<strong>on</strong>g> government has taken some c<strong>on</strong>crete steps to address <str<strong>on</strong>g>the</str<strong>on</strong>g> rising inequality, most<br />

notably <strong>on</strong> improvement of <str<strong>on</strong>g>the</str<strong>on</strong>g> rural situati<strong>on</strong>. The income and welfare gap between urban and urban areas in<br />

China have been enlarging since mid 1980s. As measures to address <str<strong>on</strong>g>the</str<strong>on</strong>g> ever-pressing rural crisis, all<br />

agricultural taxes have been eliminated since 2006, as well as tuiti<strong>on</strong> fees for all rural students for <str<strong>on</strong>g>the</str<strong>on</strong>g> first 9<br />

years of educati<strong>on</strong>. Funds have been allocated to provide free textbooks and scholarships to poor students<br />

who need more help. Investment for rural infrastructure has been increasing at 20-30% a year.<br />

With all <str<strong>on</strong>g>the</str<strong>on</strong>g>se measures, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are positive signs that <str<strong>on</strong>g>the</str<strong>on</strong>g> urban-rural gap has plateaued and is starting to<br />

decrease. Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r very visible progress is in health care. The 2003 SARS outbreak exposed many problems of<br />

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— CHINA: OLIGARCHY IN THE MAKING —<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> health care system. It was estimated that about 80% of <str<strong>on</strong>g>the</str<strong>on</strong>g> rural populati<strong>on</strong> did not have any form of<br />

health insurance at <str<strong>on</strong>g>the</str<strong>on</strong>g> time. This sounded <str<strong>on</strong>g>the</str<strong>on</strong>g> alarm and sent <str<strong>on</strong>g>the</str<strong>on</strong>g> government into acti<strong>on</strong>. In July 2005, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Development Research Center of <str<strong>on</strong>g>the</str<strong>on</strong>g> State Council released an official document admitting that <str<strong>on</strong>g>the</str<strong>on</strong>g> marketoriented<br />

health care reform had not been a success. After that, a New Rural Cooperative Medical Insurance<br />

System was established as well as a Basic Medical Insurance System for Urban Residents. Now it is estimated<br />

that 1.27 billi<strong>on</strong> people or 95% of <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong> have health insurance. While <str<strong>on</strong>g>the</str<strong>on</strong>g> new system needs more<br />

time and practice for fine-tuning and improvement, <str<strong>on</strong>g>the</str<strong>on</strong>g> positive sea change comparing to <str<strong>on</strong>g>the</str<strong>on</strong>g> situati<strong>on</strong> mere 5<br />

or 6 years ago is undeniable.<br />

Needless to say, all <str<strong>on</strong>g>the</str<strong>on</strong>g>se social programs need significant amount of resources to run. So it begs <str<strong>on</strong>g>the</str<strong>on</strong>g> obvious<br />

questi<strong>on</strong>: where does <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ey come from? Taxing multi-nati<strong>on</strong>al corporati<strong>on</strong>s have proven to be difficult<br />

for all governments, including <str<strong>on</strong>g>the</str<strong>on</strong>g> Chinese government as well. As menti<strong>on</strong>ed before, pers<strong>on</strong>al income tax<br />

makes up less than 7% of total tax revenues. The answer partly lies with <str<strong>on</strong>g>the</str<strong>on</strong>g> special role played by China’s<br />

SOEs (State Owned Enterprises).<br />

Before <str<strong>on</strong>g>the</str<strong>on</strong>g> reform era, with <str<strong>on</strong>g>the</str<strong>on</strong>g> socialist planning ec<strong>on</strong>omy, all of China’s enterprises were state owned. With<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> market-oriented reform starting in <str<strong>on</strong>g>the</str<strong>on</strong>g> mid 1980s, most of <str<strong>on</strong>g>the</str<strong>on</strong>g> small or medium-sized enterprises have<br />

been privatized; <str<strong>on</strong>g>the</str<strong>on</strong>g> remaining big <strong>on</strong>es also went through reforms and re-organizati<strong>on</strong>s, with almost all of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>m becoming publicly traded companies, but <str<strong>on</strong>g>the</str<strong>on</strong>g> state still holds <str<strong>on</strong>g>the</str<strong>on</strong>g> majority share (at least 51%). It is<br />

estimated that currently SOEs accounts for about 27%-30% of China’s GDP, but <str<strong>on</strong>g>the</str<strong>on</strong>g>y pay a disproporti<strong>on</strong>ate<br />

higher percentage of <str<strong>on</strong>g>the</str<strong>on</strong>g> corporate taxes.<br />

For year 2009, <str<strong>on</strong>g>the</str<strong>on</strong>g> raw tax rate (tax collected versus profit) was 8.8% for SOEs c<strong>on</strong>trolled by <str<strong>on</strong>g>the</str<strong>on</strong>g> central<br />

government--<str<strong>on</strong>g>the</str<strong>on</strong>g>se are normally <str<strong>on</strong>g>the</str<strong>on</strong>g> big <strong>on</strong>es like SINOPEC, 3.1% for SOEs c<strong>on</strong>trolled by local<br />

governments--<str<strong>on</strong>g>the</str<strong>on</strong>g>se are normally smaller, and 3.1% for n<strong>on</strong> SOEs (including privately-owned enterprises,<br />

joint-stock enterprises, foreign invested enterprises, etc.) When <strong>on</strong>e calculates tax versus revenue, <str<strong>on</strong>g>the</str<strong>on</strong>g> rate was<br />

3.2% for SOEs c<strong>on</strong>trolled by <str<strong>on</strong>g>the</str<strong>on</strong>g> central government, much higher than 1.9% for both SOEs c<strong>on</strong>trolled by<br />

local governments and n<strong>on</strong> SOEs. For year 2009, SOEs paid 122,000 Yuan total tax per employee, while n<strong>on</strong><br />

SOEs <strong>on</strong>ly paid less than half of that, 56,000 Yuan per employee. Unlike some U.S.-based global corporati<strong>on</strong>s<br />

like GE and Google, which paid zero tax in recent years, China’s SOEs are shouldering a disproporti<strong>on</strong>ately<br />

larger part of corporate social resp<strong>on</strong>sibility, even though many of <str<strong>on</strong>g>the</str<strong>on</strong>g>m are <strong>on</strong>ly starting to learn buzz word<br />

like “corporate social resp<strong>on</strong>sibility” from foreign corporati<strong>on</strong>s by paying <str<strong>on</strong>g>the</str<strong>on</strong>g> li<strong>on</strong> share of corporate taxes<br />

which underwrite government social programs,<br />

To date, 61 of <str<strong>on</strong>g>the</str<strong>on</strong>g> Fortune 500 firms in <str<strong>on</strong>g>the</str<strong>on</strong>g> world are Chinese (up from just 12 in 2001), all but two of <str<strong>on</strong>g>the</str<strong>on</strong>g>m<br />

state owned. Yet when <strong>on</strong>e looks at Hurun China Rich List or Forbes China Rich List, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no <strong>on</strong>e from<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> top management of SOEs. It is ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r sign that <str<strong>on</strong>g>the</str<strong>on</strong>g> gains and profits from SOEs are more equally<br />

distributed to <str<strong>on</strong>g>the</str<strong>on</strong>g> employees and <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong> in general. Corrupti<strong>on</strong> scandals involving SOE officials do<br />

break out now and <str<strong>on</strong>g>the</str<strong>on</strong>g>n. But all in all, <str<strong>on</strong>g>the</str<strong>on</strong>g> top management of SOEs are not getting filthily rich, unlike many<br />

of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir counterparts in n<strong>on</strong> SOE.<br />

- 109 -


POWER PLAYERS IN TODAY’S GLOBAL ECONOMIC SYSTEM<br />

POWER PLAYERS IN TODAY’S<br />

GLOBAL ECONOMIC SYSTEM<br />

Globalizati<strong>on</strong> has c<strong>on</strong>centrated financial wealth and political power in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands<br />

of increasingly fewer individuals at <str<strong>on</strong>g>the</str<strong>on</strong>g> top, who in turn exert undue influence<br />

over policy-making processes that are meant to protect people and <str<strong>on</strong>g>the</str<strong>on</strong>g> planet.<br />

- 110 -


— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

WEALTH, POWER AND THE FUTURE OF THE PLANET:<br />

FOUR ARGUMENTS AGAINST THE EXTREME<br />

CONCENTRATION OF WEALTH<br />

JACK SANTA BARBARA, PH. D<br />

SUMMARY<br />

C<strong>on</strong>trary to popular beliefs, extremes in wealth are bad for society, <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy, and <str<strong>on</strong>g>the</str<strong>on</strong>g> planet.<br />

C<strong>on</strong>centrati<strong>on</strong> of wealth is unjust and c<strong>on</strong>fers undue advantage to those with <str<strong>on</strong>g>the</str<strong>on</strong>g> most wealth, who <str<strong>on</strong>g>the</str<strong>on</strong>g>n use<br />

this wealth primarily to usurp <str<strong>on</strong>g>the</str<strong>on</strong>g> democratic process and fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r enrich <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

majority, and <str<strong>on</strong>g>the</str<strong>on</strong>g> ecosystems that support all life.<br />

There is no moral or ec<strong>on</strong>omic justificati<strong>on</strong> for extremes in wealth.<br />

Wealth accumulati<strong>on</strong> is often accomplished by illegal means, but it can also derive from <str<strong>on</strong>g>the</str<strong>on</strong>g> unjust (but legal)<br />

pressure that <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy use to influence lawmakers to legislate in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir favor. The accumulati<strong>on</strong> of extreme<br />

wealth 1 is <str<strong>on</strong>g>the</str<strong>on</strong>g> result of laws that inappropriately reward <str<strong>on</strong>g>the</str<strong>on</strong>g> marginal c<strong>on</strong>tributi<strong>on</strong>s of individual innovati<strong>on</strong><br />

but ignore <str<strong>on</strong>g>the</str<strong>on</strong>g> vastly larger c<strong>on</strong>tributi<strong>on</strong>s that flow from <str<strong>on</strong>g>the</str<strong>on</strong>g> heritage of comm<strong>on</strong> knowledge. This extreme<br />

wealth, which has g<strong>on</strong>e into private hands, truly bel<strong>on</strong>gs in <str<strong>on</strong>g>the</str<strong>on</strong>g> public purse. The very wealthy “didn’t earn it<br />

and d<strong>on</strong>’t deserve it.”<br />

Reducing <str<strong>on</strong>g>the</str<strong>on</strong>g> extremes in wealth is <str<strong>on</strong>g>the</str<strong>on</strong>g>refore a major goal for progressives of all kinds.<br />

- 111 -


HOW MUCH IS A BILLION DOLLARS?<br />

— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

As of 2011, <str<strong>on</strong>g>the</str<strong>on</strong>g>re were well over <strong>on</strong>e thousand billi<strong>on</strong>aires <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> planet. C<strong>on</strong>sider for a moment what $1<br />

billi<strong>on</strong> represents. If you were to count out <strong>on</strong>e dollar a sec<strong>on</strong>d <strong>on</strong> a 24/7 basis, it would take you about 12<br />

days to reach <strong>on</strong>e milli<strong>on</strong> dollars. But you would not reach <strong>on</strong>e billi<strong>on</strong> dollars until almost 32 years after you<br />

began this boring process! 2<br />

At a mere 2% rate of interest, this sum would provide you an annual income of $20 milli<strong>on</strong> dollars. Simply<br />

with this interest income, you would have to spend some $55,000 a day, every day of <str<strong>on</strong>g>the</str<strong>on</strong>g> year, to clear out<br />

your account to make room for <str<strong>on</strong>g>the</str<strong>on</strong>g> next $20 milli<strong>on</strong> to come in <str<strong>on</strong>g>the</str<strong>on</strong>g> next year.<br />

The pers<strong>on</strong> identified by <str<strong>on</strong>g>the</str<strong>on</strong>g> 2011 Forbes list of billi<strong>on</strong>aires 3 as <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s wealthiest pers<strong>on</strong> is Carlos Slim<br />

Helú of Mexico, with some $74 billi<strong>on</strong> in assets. At a ridiculously low 2% interest rate, Mr Slim would have<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> arduous task of spending more than $4 milli<strong>on</strong> each and every day of <str<strong>on</strong>g>the</str<strong>on</strong>g> year to make room for <str<strong>on</strong>g>the</str<strong>on</strong>g> next year’s<br />

interest income. But he may well own <str<strong>on</strong>g>the</str<strong>on</strong>g> bank, so it should be quite easy for him to not <strong>on</strong>ly hold <strong>on</strong> to this<br />

modest income, but to actually make c<strong>on</strong>siderably more m<strong>on</strong>ey with it. This is exactly what he did in 2010,<br />

having amassed some $ 22 billi<strong>on</strong> dollars in that year al<strong>on</strong>e.<br />

While <str<strong>on</strong>g>the</str<strong>on</strong>g> thousands of people who own billi<strong>on</strong>s of dollars—or even hundreds of milli<strong>on</strong>s of dollars—<br />

become ever richer, at least a quarter of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s populati<strong>on</strong> lives below <str<strong>on</strong>g>the</str<strong>on</strong>g> official (and totally artificial)<br />

“poverty line” of less than $2 a day. In 2005, <str<strong>on</strong>g>the</str<strong>on</strong>g> World Bank defined <str<strong>on</strong>g>the</str<strong>on</strong>g> poverty line as $1.25-per-day in<br />

terms of purchasing power parity. 4 However, if poverty were to be defined in terms of meeting basic needs<br />

and providing a minimum of creature comforts, <str<strong>on</strong>g>the</str<strong>on</strong>g> proporti<strong>on</strong> of people living in poverty would be<br />

c<strong>on</strong>siderably higher.<br />

To provide a stark visualizati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> unequal distributi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s income, picture a parade in which<br />

all 30 milli<strong>on</strong> Canadians are invited to march. The year is 2007 and <str<strong>on</strong>g>the</str<strong>on</strong>g> height of <str<strong>on</strong>g>the</str<strong>on</strong>g> marchers is determined<br />

by <str<strong>on</strong>g>the</str<strong>on</strong>g>ir income. The entire parade takes <strong>on</strong>e hour. The parade starts with <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest income marchers and<br />

ends with <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthiest. In <str<strong>on</strong>g>the</str<strong>on</strong>g> first few minutes, <str<strong>on</strong>g>the</str<strong>on</strong>g> first marchers are <strong>on</strong>ly about a foot tall–those earning<br />

<strong>on</strong>ly a few thousand dollars a year. The height of <str<strong>on</strong>g>the</str<strong>on</strong>g> marchers slowly rises until, at about 15 minutes into <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

hour, <str<strong>on</strong>g>the</str<strong>on</strong>g> marchers are about 3 feet tall. The parade c<strong>on</strong>tinues for about 40 minutes before we start to see<br />

people of normal height (that is, after more than 66% of <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong> has marched by). In <str<strong>on</strong>g>the</str<strong>on</strong>g> last 10<br />

minutes, marchers of about 7 or 8 feet in height appear. In <str<strong>on</strong>g>the</str<strong>on</strong>g> last 6 minutes, we behold a c<strong>on</strong>tingent of<br />

marchers more than 14 feet tall.<br />

But <str<strong>on</strong>g>the</str<strong>on</strong>g> last minute of this hour-l<strong>on</strong>g parade is what is eye-popping. With <strong>on</strong>ly 25 sec<strong>on</strong>ds left in <str<strong>on</strong>g>the</str<strong>on</strong>g> parade,<br />

marchers towering 30 feet high appear. In <str<strong>on</strong>g>the</str<strong>on</strong>g> last few sec<strong>on</strong>ds, <str<strong>on</strong>g>the</str<strong>on</strong>g> real giants march past, some thousands of<br />

feet tall. The final marcher in <str<strong>on</strong>g>the</str<strong>on</strong>g> parade towers over 8,000 feet tall—more than a mile high!<br />

The Canadian parade, however, is small stuff compared to a similar parade for <str<strong>on</strong>g>the</str<strong>on</strong>g> United States populati<strong>on</strong>.<br />

For most of <str<strong>on</strong>g>the</str<strong>on</strong>g> parade, <str<strong>on</strong>g>the</str<strong>on</strong>g> heights of marchers are pretty similar. But in <str<strong>on</strong>g>the</str<strong>on</strong>g> last fracti<strong>on</strong> of a sec<strong>on</strong>d we<br />

would need binoculars to see <str<strong>on</strong>g>the</str<strong>on</strong>g> faces of <str<strong>on</strong>g>the</str<strong>on</strong>g> marchers, some three miles high, with <str<strong>on</strong>g>the</str<strong>on</strong>g> last marcher topping out<br />

at <str<strong>on</strong>g>the</str<strong>on</strong>g> level of a high-flying aircraft, some 110 miles above <str<strong>on</strong>g>the</str<strong>on</strong>g> surface of <str<strong>on</strong>g>the</str<strong>on</strong>g> planet.<br />

- 112 -


— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

Note that <str<strong>on</strong>g>the</str<strong>on</strong>g> above examples reflect annual income, not accumulated wealth, which would dem<strong>on</strong>strate an<br />

even more dramatic distributi<strong>on</strong> of wealth.<br />

The current extreme distributi<strong>on</strong> of wealth is unprecedented in human history. At <str<strong>on</strong>g>the</str<strong>on</strong>g> very top end of wealth<br />

distributi<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>re are some 9.5 milli<strong>on</strong> people (a mere 0.14 % of <str<strong>on</strong>g>the</str<strong>on</strong>g> global populati<strong>on</strong>) who own about 25%<br />

of <str<strong>on</strong>g>the</str<strong>on</strong>g> total financial wealth <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> planet. 5 If we look at <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthiest 10% of <str<strong>on</strong>g>the</str<strong>on</strong>g> global populati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />

own a staggeringly disproporti<strong>on</strong>ate 85% of global wealth. 6 At <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r extreme, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are some 2.5 billi<strong>on</strong><br />

people who live <strong>on</strong> less than $2.50 a day. 7 The entire bottom half of humanity owns <strong>on</strong>ly about 1% of global<br />

wealth. 8 Note that this terribly skewed distributi<strong>on</strong> of wealth leaves very little for <str<strong>on</strong>g>the</str<strong>on</strong>g> “middle class,” up<strong>on</strong><br />

whom <str<strong>on</strong>g>the</str<strong>on</strong>g> li<strong>on</strong>’s share of tax burden generally falls.<br />

M<strong>on</strong>ey or financial wealth represents a claim <strong>on</strong> resources. According to <str<strong>on</strong>g>the</str<strong>on</strong>g> above figures, this means that<br />

some 10% of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s populati<strong>on</strong> currently has a legal claim to 85% of <str<strong>on</strong>g>the</str<strong>on</strong>g> planet’s total resources, leaving<br />

90% of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s populati<strong>on</strong> with access to a mere 15% of global resources. The absurdity of this situati<strong>on</strong><br />

is self-evident and a critical indicator that <str<strong>on</strong>g>the</str<strong>on</strong>g> current global ec<strong>on</strong>omy is not functi<strong>on</strong>ing for <str<strong>on</strong>g>the</str<strong>on</strong>g> benefit of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

majority, but for a select few.<br />

THE MYTHOLOGY OF WEALTH ACCUMULATION<br />

Is this c<strong>on</strong>centrati<strong>on</strong> of wealth a good thing or bad thing for society as a whole? This is a questi<strong>on</strong> that rarely<br />

receives any serious attenti<strong>on</strong>. In fact, to even ask this questi<strong>on</strong> is to be accused of engaging in “<str<strong>on</strong>g>the</str<strong>on</strong>g> politics of<br />

envy.” Our global culture is now predisposed to regard <str<strong>on</strong>g>the</str<strong>on</strong>g> accumulati<strong>on</strong> of wealth as a good thing. The<br />

arguments are made that those who earn vast fortunes deserve <str<strong>on</strong>g>the</str<strong>on</strong>g>m because of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir hard work, cleverness,<br />

creativity and by outperforming o<str<strong>on</strong>g>the</str<strong>on</strong>g>r worthy competitors. This is <str<strong>on</strong>g>the</str<strong>on</strong>g> fairness argument. It is fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r argued that<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se smart folks are <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>es who know best what to do with all this wealth—by creating jobs and<br />

c<strong>on</strong>tributing to ec<strong>on</strong>omic growth. This is <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic or public good argument. A related argument is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

motivati<strong>on</strong>al <strong>on</strong>e—great financial rewards are essential to motivate people to strive for big achievements. It is<br />

also argued that by engaging in philanthropy to help those in need, <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy make a significant<br />

c<strong>on</strong>tributi<strong>on</strong> to society. This is <str<strong>on</strong>g>the</str<strong>on</strong>g> redistributi<strong>on</strong> argument. With all <str<strong>on</strong>g>the</str<strong>on</strong>g>se supporting arguments, how could<br />

any<strong>on</strong>e think wealth accumulati<strong>on</strong> is a bad thing?<br />

Let us count <str<strong>on</strong>g>the</str<strong>on</strong>g> ways.<br />

MYTH # 1: The Fairness Argument: “They Earned It Therefore They Deserve It”<br />

First of all, <str<strong>on</strong>g>the</str<strong>on</strong>g>y may not have earned it, <str<strong>on</strong>g>the</str<strong>on</strong>g>y may have inherited it. The easiest way of acquiring a large<br />

fortune is to be born into a wealthy family that has been accumulating wealth for a l<strong>on</strong>g time, preferably<br />

centuries. The Rothschilds 9 would be a good example but <str<strong>on</strong>g>the</str<strong>on</strong>g>re are many o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs. Examples of inherited<br />

wealth <strong>on</strong> a shorter time scale would include families like <str<strong>on</strong>g>the</str<strong>on</strong>g> Rockefellers and <str<strong>on</strong>g>the</str<strong>on</strong>g> Morgans; <str<strong>on</strong>g>the</str<strong>on</strong>g>re are many<br />

more. 10 This unearned, inherited wealth grants enormous privileges and benefits that allow <str<strong>on</strong>g>the</str<strong>on</strong>g>se inheritors to<br />

amass even larger fortunes and, if <str<strong>on</strong>g>the</str<strong>on</strong>g>y so choose, to reshape society, <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy and even <str<strong>on</strong>g>the</str<strong>on</strong>g> political<br />

lanscape. Estate or inheritance taxes have largely been eliminated in many countries. And where estate taxes<br />

do exist, <str<strong>on</strong>g>the</str<strong>on</strong>g> threshold for applying <str<strong>on</strong>g>the</str<strong>on</strong>g>m is often quite high (a few milli<strong>on</strong> dollars), so <str<strong>on</strong>g>the</str<strong>on</strong>g>se taxes would apply<br />

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to very few situati<strong>on</strong>s. And with careful—and entirely legal—estate planning, <str<strong>on</strong>g>the</str<strong>on</strong>g>se taxes can be avoided<br />

altoge<str<strong>on</strong>g>the</str<strong>on</strong>g>r.<br />

But with a globalized ec<strong>on</strong>omy and <str<strong>on</strong>g>the</str<strong>on</strong>g> evoluti<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> modern corporati<strong>on</strong>, it is now possible to amass<br />

significant fortunes in a relatively short period of time—especially if you have a combinati<strong>on</strong> of luck and<br />

talent, can be ruthless in your pursuit of wealth, and are willing to engage in illegal activities to achieve your<br />

goal. And of course, it doesn’t hurt if you have been born into <str<strong>on</strong>g>the</str<strong>on</strong>g> right family in <str<strong>on</strong>g>the</str<strong>on</strong>g> right country in <str<strong>on</strong>g>the</str<strong>on</strong>g> right<br />

ec<strong>on</strong>omic envir<strong>on</strong>ment—<strong>on</strong>e that is “open for business.”<br />

Sec<strong>on</strong>dly, very large fortunes are not infrequently obtained by illegal means, even by “respectable” people. 11<br />

For example, Joe Kennedy, <str<strong>on</strong>g>the</str<strong>on</strong>g> fa<str<strong>on</strong>g>the</str<strong>on</strong>g>r of JFK and RFK, made much of his fortune bootlegging liquor during<br />

Prohibiti<strong>on</strong>. This phenomen<strong>on</strong> is, of course, not restricted to <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. 12<br />

Thirdly, even when large fortunes are made by perfectly legal means, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are almost always o<str<strong>on</strong>g>the</str<strong>on</strong>g>r factors in<br />

play—factors involving luck, good c<strong>on</strong>necti<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g> ability to influence laws that have a bearing <strong>on</strong> <strong>on</strong>e’s<br />

fortune, and sheer ruthlessness. Talent, creativity and hard work may indeed be involved, but it is rare that<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se factors al<strong>on</strong>e determine who amasses great wealth.<br />

Bill Gates could be used as an example here. 13 His access to a computer at a private school (l<strong>on</strong>g before this<br />

was comm<strong>on</strong>), his access to publicly funded advanced computer systems, a parent’s c<strong>on</strong>necti<strong>on</strong> to IBM, and<br />

his willingness to ignore <str<strong>on</strong>g>the</str<strong>on</strong>g> superior talent of some<strong>on</strong>e who was a friend (and had actually d<strong>on</strong>e <str<strong>on</strong>g>the</str<strong>on</strong>g> major<br />

development work l<strong>on</strong>g before Gates became involved), indicates how factors o<str<strong>on</strong>g>the</str<strong>on</strong>g>r than talent and hard<br />

work can determine who becomes super wealthy. There is even an argument to be made that Gates actually<br />

retarded <str<strong>on</strong>g>the</str<strong>on</strong>g> development of pers<strong>on</strong>al computers; that his involvement led to a more commercially oriented<br />

system; and that a superior alternative would have produced greater social benefits.<br />

Are we rewarding genius or stealing from <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong> treasury? The history of inventi<strong>on</strong> and innovati<strong>on</strong> is filled with<br />

examples of multiple individuals or organizati<strong>on</strong>s coming up with very similar ideas almost at <str<strong>on</strong>g>the</str<strong>on</strong>g> same time.<br />

There are also many cases where <str<strong>on</strong>g>the</str<strong>on</strong>g> original inventors lost out <strong>on</strong> financial rewards for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir inventi<strong>on</strong>s to<br />

some<strong>on</strong>e with a bit more business savvy or who was more ruthless in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir pursuit of pers<strong>on</strong>al gain. Talent<br />

and hard work are not always rewarded.<br />

This is not to say that Bill Gates did not work hard and made some c<strong>on</strong>tributi<strong>on</strong> to a social good—i.e., by<br />

making pers<strong>on</strong>al computers readily available to large numbers of people. But Gates’ history does call into<br />

questi<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>cept of a “uniquely talented” innovator and suggests his fans may have seriously overlooked<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> role of comm<strong>on</strong> intellectual property in making any inventi<strong>on</strong> worthwhile.<br />

Bill Gates did not invent <str<strong>on</strong>g>the</str<strong>on</strong>g> pers<strong>on</strong>al computer, nor did he make a significant c<strong>on</strong>tributi<strong>on</strong> to software for<br />

operating systems. He did make a c<strong>on</strong>tributi<strong>on</strong>, but it was marginal compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> vast store of comm<strong>on</strong><br />

knowledge that preceded his involvement. The history of <str<strong>on</strong>g>the</str<strong>on</strong>g> technology for <str<strong>on</strong>g>the</str<strong>on</strong>g> computer goes back, at least,<br />

to 17 th century weaving in France, where a system of punched cards was used to significantly increase<br />

weaving efficiency. This was later improved somewhat by Herman Hollerith 14 who modified <str<strong>on</strong>g>the</str<strong>on</strong>g> basic idea for<br />

use in providing inputs to computers. There were literally hundreds, if not thousands, of small steps that have<br />

brought pers<strong>on</strong>al computers to <str<strong>on</strong>g>the</str<strong>on</strong>g> point where <str<strong>on</strong>g>the</str<strong>on</strong>g>y are today.<br />

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The critical point here is that humanity has a vast store of knowledge that is in <str<strong>on</strong>g>the</str<strong>on</strong>g> public domain—an<br />

intellectual comm<strong>on</strong>s—that is a shared heritage. To significantly reward <strong>on</strong>ly <str<strong>on</strong>g>the</str<strong>on</strong>g> marginal improvement any<br />

<strong>on</strong>e pers<strong>on</strong> or team makes to a technological inventi<strong>on</strong> or innovati<strong>on</strong> totally ignores this comm<strong>on</strong> heritage<br />

and <str<strong>on</strong>g>the</str<strong>on</strong>g> critical role it plays in <str<strong>on</strong>g>the</str<strong>on</strong>g> producti<strong>on</strong> of any good or service.<br />

Given that <str<strong>on</strong>g>the</str<strong>on</strong>g> benefits of any marginal improvements are totally dependent <strong>on</strong> this vast comm<strong>on</strong> heritage it<br />

would seem fair to acknowledge this role and ensure that a significant porti<strong>on</strong> of any financial benefits are<br />

returned to <str<strong>on</strong>g>the</str<strong>on</strong>g> community for general use, ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than to <str<strong>on</strong>g>the</str<strong>on</strong>g> party that makes <str<strong>on</strong>g>the</str<strong>on</strong>g> marginal improvement.<br />

The latter, of course, should be rewarded, but <strong>on</strong>ly marginally. That is all <str<strong>on</strong>g>the</str<strong>on</strong>g>y deserve: <str<strong>on</strong>g>the</str<strong>on</strong>g> li<strong>on</strong>’s share of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

rewards <str<strong>on</strong>g>the</str<strong>on</strong>g>y now receive should instead go back to <str<strong>on</strong>g>the</str<strong>on</strong>g> broader community. The laws and regulati<strong>on</strong>s that<br />

currently allow this to happen can be c<strong>on</strong>sidered a type of <str<strong>on</strong>g>the</str<strong>on</strong>g>ft from <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong> purse. These laws and<br />

regulati<strong>on</strong>s were, of course, devised by <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own benefit.<br />

This is true even for highly specialized areas of knowledge, most of which were developed at public expense.<br />

Since <str<strong>on</strong>g>the</str<strong>on</strong>g> public originally paid for <str<strong>on</strong>g>the</str<strong>on</strong>g>m, it is fair that <str<strong>on</strong>g>the</str<strong>on</strong>g> li<strong>on</strong>’s share of any benefits go to <str<strong>on</strong>g>the</str<strong>on</strong>g> public purse.<br />

Even when research is privately funded, it still relies <strong>on</strong> a vast store of comm<strong>on</strong> knowledge that is part of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

human heritage and should be acknowledged as such—and rewarded appropriately. This storehouse of<br />

comm<strong>on</strong> knowledge is <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> reas<strong>on</strong>s that innovati<strong>on</strong>s in any particular field often occur at roughly <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

same time, in a variety of locati<strong>on</strong>s, and are announced by individuals or teams working entirely<br />

independently.<br />

It is easy to forget this history and focus <strong>on</strong> whatever innovati<strong>on</strong> is at hand. The media ignore this comm<strong>on</strong><br />

heritage and elevate <str<strong>on</strong>g>the</str<strong>on</strong>g> inventors or business entrepreneurs to <str<strong>on</strong>g>the</str<strong>on</strong>g> status of “genius” as though <str<strong>on</strong>g>the</str<strong>on</strong>g>ir success<br />

was <str<strong>on</strong>g>the</str<strong>on</strong>g> result of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir sole efforts. A moment’s reflecti<strong>on</strong> indicates that this is never <str<strong>on</strong>g>the</str<strong>on</strong>g> case; but <str<strong>on</strong>g>the</str<strong>on</strong>g> myths<br />

persist and are used to justify <str<strong>on</strong>g>the</str<strong>on</strong>g> enormous financial rewards that accrue to <str<strong>on</strong>g>the</str<strong>on</strong>g>se individuals. The means by<br />

which laws and regulati<strong>on</strong>s are manipulated by <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy to ensure this outcome are generally ignored.<br />

Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r perspective <strong>on</strong> this “great men (usually) deserve great rewards” rati<strong>on</strong>alizati<strong>on</strong> has to do with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

public resources <str<strong>on</strong>g>the</str<strong>on</strong>g>se individuals exploit to acquire <str<strong>on</strong>g>the</str<strong>on</strong>g>ir fortunes. We tend to take for granted <str<strong>on</strong>g>the</str<strong>on</strong>g> vast store<br />

of physical, social, and regulatory infrastructure that has been funded by taxes over <str<strong>on</strong>g>the</str<strong>on</strong>g> decades. Educati<strong>on</strong>,<br />

healthcare, roads, public transportati<strong>on</strong>, radio and televisi<strong>on</strong>, property and tax laws, and law enforcement, to<br />

menti<strong>on</strong> just a few, are examples of shared infrastructures that have evolved at public expense but are<br />

disproporti<strong>on</strong>ately used by those with means to fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r increase <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth.<br />

When an entrepreneur hires an engineer or accountant or lawyer, he or she is unlikely to give much thought<br />

to <str<strong>on</strong>g>the</str<strong>on</strong>g> educati<strong>on</strong>al and health systems that supported <str<strong>on</strong>g>the</str<strong>on</strong>g> development of <str<strong>on</strong>g>the</str<strong>on</strong>g>se highly skilled professi<strong>on</strong>als.<br />

Nor is <str<strong>on</strong>g>the</str<strong>on</strong>g> average entrepreneur likely to give much thought to <str<strong>on</strong>g>the</str<strong>on</strong>g> transportati<strong>on</strong> infrastructure that allowed<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se professi<strong>on</strong>als to come to work, or to <str<strong>on</strong>g>the</str<strong>on</strong>g> electric power system that allows <str<strong>on</strong>g>the</str<strong>on</strong>g>m to operate <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

companies. We are all much more likely to complain about any unfair harm d<strong>on</strong>e to us ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than to express<br />

gratitude for any unfair benefits we might have received.<br />

Of course, <str<strong>on</strong>g>the</str<strong>on</strong>g>se services are at least partially covered by taxes—as it is <str<strong>on</strong>g>the</str<strong>on</strong>g> purpose of taxes to pay for<br />

comm<strong>on</strong> services—or by direct payments for <str<strong>on</strong>g>the</str<strong>on</strong>g>se services. Regarding <str<strong>on</strong>g>the</str<strong>on</strong>g> latter, we know that many general<br />

services such as power generati<strong>on</strong> are highly subsidized by governments and that <str<strong>on</strong>g>the</str<strong>on</strong>g> fees or payments made<br />

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by individuals and corporati<strong>on</strong>s almost never cover <str<strong>on</strong>g>the</str<strong>on</strong>g>ir externalized social and envir<strong>on</strong>mental costs—<br />

industrial polluti<strong>on</strong> and climate change being a major example.<br />

Indeed, <str<strong>on</strong>g>the</str<strong>on</strong>g> very market in which <str<strong>on</strong>g>the</str<strong>on</strong>g>se fortunes are made are <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves social creati<strong>on</strong>s. Markets are<br />

regulated to protect <str<strong>on</strong>g>the</str<strong>on</strong>g> parties involved in any transacti<strong>on</strong>, albeit <strong>on</strong>e party may receive c<strong>on</strong>siderably more<br />

protecti<strong>on</strong> than ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r. Governments not <strong>on</strong>ly make <str<strong>on</strong>g>the</str<strong>on</strong>g> laws that govern market behaviour, but <str<strong>on</strong>g>the</str<strong>on</strong>g>y also<br />

enforce those laws. Clearly, such laws provide more benefit to those with more property to protect. This<br />

reality is generally overlooked in c<strong>on</strong>sidering <str<strong>on</strong>g>the</str<strong>on</strong>g> broader public benefits of <str<strong>on</strong>g>the</str<strong>on</strong>g> market.<br />

The disproporti<strong>on</strong>ate benefits from public resources—such as <str<strong>on</strong>g>the</str<strong>on</strong>g> entire market system, which is maintained<br />

at public expense and now primarily benefits innovators and entrepreneurs — is not a b<strong>on</strong>us <str<strong>on</strong>g>the</str<strong>on</strong>g>y deserve.<br />

Compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> enormous treasury of comm<strong>on</strong>-heritage resources up<strong>on</strong> which <str<strong>on</strong>g>the</str<strong>on</strong>g>ir innovati<strong>on</strong>s are based,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir c<strong>on</strong>tributi<strong>on</strong>s are marginal. Therefore <str<strong>on</strong>g>the</str<strong>on</strong>g>y do not deserve <str<strong>on</strong>g>the</str<strong>on</strong>g> enormous fortunes <str<strong>on</strong>g>the</str<strong>on</strong>g>y accrue, but <strong>on</strong>ly<br />

marginal rewards for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir commeasurate c<strong>on</strong>tributi<strong>on</strong>s.<br />

Why is it that this equati<strong>on</strong> of what rewards go to which parties is so out of balance? The answer to this important<br />

questi<strong>on</strong> is quite simple: vested interests unduly influence legislators to favour <str<strong>on</strong>g>the</str<strong>on</strong>g> entrepreneur and private<br />

interests over <str<strong>on</strong>g>the</str<strong>on</strong>g> public interests.<br />

Am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> public service factors that entrepreneurs do pay attenti<strong>on</strong> to is <str<strong>on</strong>g>the</str<strong>on</strong>g> regulatory framework that<br />

determines how an entrepreneur can operate his or her business and <str<strong>on</strong>g>the</str<strong>on</strong>g> tax laws that determine how much<br />

of a company’s profits can be retained. Most developed nati<strong>on</strong>s have a vast array of laws defining and<br />

protecting private property, including intellectual property. This allows wealth seekers to invoke <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

protecti<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> law and court systems to ensure <str<strong>on</strong>g>the</str<strong>on</strong>g>se rights and privileges. Without <str<strong>on</strong>g>the</str<strong>on</strong>g>se laws and<br />

regulati<strong>on</strong>s, any efforts made to operate a business would leave that business vulnerable to ruthless<br />

competitors and outright <str<strong>on</strong>g>the</str<strong>on</strong>g>ft. The results would be chaotic for both businesses and people wanting various<br />

goods and services.<br />

The stability and operating norms provided by <str<strong>on</strong>g>the</str<strong>on</strong>g> regulatory framework make it possible to start up and<br />

operate a business with <str<strong>on</strong>g>the</str<strong>on</strong>g> assurances that some of <str<strong>on</strong>g>the</str<strong>on</strong>g> benefits of ownership will, in fact, accrue to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

owner. These regulatory frameworks are <str<strong>on</strong>g>the</str<strong>on</strong>g>refore essential public goods, which have been developed and are<br />

maintained and paid for from general tax revenues.<br />

But public goods can be lopsided and favour some parties more than o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs. The “golden rule” often applies<br />

(i.e., “Those with <str<strong>on</strong>g>the</str<strong>on</strong>g> gold make <str<strong>on</strong>g>the</str<strong>on</strong>g> rules”). When corporate insiders are recruited to senior government<br />

positi<strong>on</strong>s to manage government departments, it should be no surprise that those government departments<br />

are managed with corporate interests in mind. (A recent case in point: The team of Wall Street insiders who<br />

were invited to take over financial planning for <str<strong>on</strong>g>the</str<strong>on</strong>g> Treasury Department under <str<strong>on</strong>g>the</str<strong>on</strong>g> Obama Administrati<strong>on</strong>.)<br />

So it is no w<strong>on</strong>der that <str<strong>on</strong>g>the</str<strong>on</strong>g> regulatory system, while supposedly supplying overall stability to protect all<br />

parties, unduly favours <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy, who are able to use <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth to direct <str<strong>on</strong>g>the</str<strong>on</strong>g> regulati<strong>on</strong>s (or lack <str<strong>on</strong>g>the</str<strong>on</strong>g>reof)<br />

to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own benefit.<br />

These regulatory frameworks are, of course, designed and modified from time to time by <str<strong>on</strong>g>the</str<strong>on</strong>g> elected officials<br />

who are formally resp<strong>on</strong>sible for such changes. It is well documented that regulatory frameworks change with<br />

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different administrati<strong>on</strong>s, and through <str<strong>on</strong>g>the</str<strong>on</strong>g> direct or indirect interventi<strong>on</strong> of self-interested parties. In additi<strong>on</strong>,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>re is <str<strong>on</strong>g>the</str<strong>on</strong>g> well-documented process of financial resources being used legally or illegally by wealthy<br />

individuals to influence electi<strong>on</strong>s and legislati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own self-interest. 15<br />

The Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs’ funding of Tea Party activists, uni<strong>on</strong> busting, and climate deniers is <strong>on</strong>e current<br />

example. 16 These billi<strong>on</strong>aire owners of privately held Koch Industries are also accused of attempting to<br />

influence <str<strong>on</strong>g>the</str<strong>on</strong>g> United States Supreme Court with respect to <str<strong>on</strong>g>the</str<strong>on</strong>g> opportunities for corporati<strong>on</strong>s to fund political<br />

candidates with unlimited amounts of campaign cash. 17 The activities of <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs illustrates how<br />

wealthy parties attempt to influence <str<strong>on</strong>g>the</str<strong>on</strong>g> establishment of laws that favour <str<strong>on</strong>g>the</str<strong>on</strong>g>ir narrow self interests—<br />

interests that are hardly benign and that, all-too-often, have destructive global ecological and social impacts.<br />

It is not uncomm<strong>on</strong> for legislators, <strong>on</strong>ce <str<strong>on</strong>g>the</str<strong>on</strong>g>y step down from public office, to be hired by <str<strong>on</strong>g>the</str<strong>on</strong>g> very industries<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>y were formally resp<strong>on</strong>sible for regulating. The simple awareness of such opportunities (always<br />

accompanied by very lucrative salaries) can be enough to steer legislators in <str<strong>on</strong>g>the</str<strong>on</strong>g> directi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> particular<br />

desires of <str<strong>on</strong>g>the</str<strong>on</strong>g> industry in questi<strong>on</strong>. This so-called “revolving door” phenomen<strong>on</strong> also works in reverse—<br />

senior executives from large corporati<strong>on</strong>s are recruited by governments to play key roles in government<br />

departments that ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r manage or regulate <str<strong>on</strong>g>the</str<strong>on</strong>g> industry from which <str<strong>on</strong>g>the</str<strong>on</strong>g> executive is recruited. Such<br />

executives are well aware <str<strong>on</strong>g>the</str<strong>on</strong>g>y are very likely to return to <str<strong>on</strong>g>the</str<strong>on</strong>g> corporate sector after spending time as a “public<br />

servant.” 18<br />

But is <str<strong>on</strong>g>the</str<strong>on</strong>g> public genuinely served by this process? Promoting <str<strong>on</strong>g>the</str<strong>on</strong>g> success of a corporati<strong>on</strong> or industrial sector<br />

is quite a different task from regulating it and ensuring that it is operating safely and fairly. The tasks are not<br />

<strong>on</strong>ly different but often oppositi<strong>on</strong>al. Requiring policies designed to protect workers, society and nature can<br />

create expenses corporati<strong>on</strong>s would ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r not absorb while freeing corporati<strong>on</strong>s from health, safety and<br />

envir<strong>on</strong>mental c<strong>on</strong>cerns generally provides greater profit. With <str<strong>on</strong>g>the</str<strong>on</strong>g> revolving-door phenomena so prevalent<br />

in government agencies, <str<strong>on</strong>g>the</str<strong>on</strong>g> role of promoting corporate interests can easily take precedence over <str<strong>on</strong>g>the</str<strong>on</strong>g> goal of<br />

pursuing protective regulati<strong>on</strong>s.<br />

Corporati<strong>on</strong>s and various interest groups spend billi<strong>on</strong>s of dollars annually to lobby legislators at various<br />

levels of government. The role of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy in distorting democracy is not a new phenomen<strong>on</strong> but it<br />

remains invisible to most, even though it has become a major factor in <str<strong>on</strong>g>the</str<strong>on</strong>g> development of vast fortunes.<br />

Indeed, over 2,000 years ago, Aristotle noted “where <str<strong>on</strong>g>the</str<strong>on</strong>g> possessi<strong>on</strong> of political power is due to <str<strong>on</strong>g>the</str<strong>on</strong>g> possessi<strong>on</strong> of ec<strong>on</strong>omic<br />

power or wealth... that is oligarchy, and when <str<strong>on</strong>g>the</str<strong>on</strong>g> unpropertied class has power, that is democracy.”<br />

A few centuries later, Plutarch lamented that “an imbalance between rich and poor is <str<strong>on</strong>g>the</str<strong>on</strong>g> oldest and most fatal ailment of<br />

all republics.” In more recent times, U.S. Supreme Court Justice Louis Brandeis stated: “We can have democracy in<br />

this country, or we can have great wealth c<strong>on</strong>centrated in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands of a few, but we can't have both.”<br />

Despite this l<strong>on</strong>g history of warnings, <str<strong>on</strong>g>the</str<strong>on</strong>g> extremes of global wealth have corrupted governments around <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

world. Justice Brandeis’s observati<strong>on</strong> is now true not <strong>on</strong>ly of <str<strong>on</strong>g>the</str<strong>on</strong>g> United States but also of <str<strong>on</strong>g>the</str<strong>on</strong>g> entire planet, as<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> number of billi<strong>on</strong>aires c<strong>on</strong>tinues to grow in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S., Russia, China, India, Mexico, Egypt, Ind<strong>on</strong>esia, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Philippines and elsewhere.<br />

And as fortunes become larger and larger for a small number of people, <str<strong>on</strong>g>the</str<strong>on</strong>g>se individuals are able to exert<br />

even greater influence over legislators. Sometime <str<strong>on</strong>g>the</str<strong>on</strong>g>se wealthy individuals are quite open about <str<strong>on</strong>g>the</str<strong>on</strong>g>ir political<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

activities. Sometimes <str<strong>on</strong>g>the</str<strong>on</strong>g>y prefer to operate behind <str<strong>on</strong>g>the</str<strong>on</strong>g> scenes by funding lobby groups such as <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S.<br />

Chamber of Commerce, 19 or engaging with intermediaries who make pers<strong>on</strong>al c<strong>on</strong>tact with key legislators. 20<br />

Indeed, formal lists of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy (such as <str<strong>on</strong>g>the</str<strong>on</strong>g> list published annually by Forbes magazine) are believed by<br />

scholars to capture <strong>on</strong>ly some of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s wealthiest people. 21<br />

A bit of historical perspective makes it clear that <str<strong>on</strong>g>the</str<strong>on</strong>g> tensi<strong>on</strong> between <str<strong>on</strong>g>the</str<strong>on</strong>g> undue influence of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy and<br />

genuine democratic processes waxes and wanes over time. Such extreme distributi<strong>on</strong>s of wealth as now exist<br />

do not always occur in history. There are many historical periods when wealth was more evenly divided<br />

am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong>, and indeed, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are nati<strong>on</strong>s that today have much more even distributi<strong>on</strong>s of wealth<br />

than <str<strong>on</strong>g>the</str<strong>on</strong>g> global picture presented above.<br />

In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1920’s, U.S. banking law forbade banks from trading in stocks and b<strong>on</strong>ds, as <str<strong>on</strong>g>the</str<strong>on</strong>g>se were c<strong>on</strong>sidered too<br />

risky. To get around this legislati<strong>on</strong>, many banks established “bank securities affiliates,” which allowed <str<strong>on</strong>g>the</str<strong>on</strong>g>m<br />

to do at arm’s length what was o<str<strong>on</strong>g>the</str<strong>on</strong>g>rwise forbidden by law. However, President Taft began c<strong>on</strong>sidering a plan<br />

to shut down <str<strong>on</strong>g>the</str<strong>on</strong>g>se affiliates, forcing <str<strong>on</strong>g>the</str<strong>on</strong>g> banks to comply with <str<strong>on</strong>g>the</str<strong>on</strong>g> spirit of <str<strong>on</strong>g>the</str<strong>on</strong>g> law. Learning of this<br />

possibility, <str<strong>on</strong>g>the</str<strong>on</strong>g> powerful Rockefeller and Morgan banks sent <str<strong>on</strong>g>the</str<strong>on</strong>g>ir representatives to meet secretly with Taft<br />

and c<strong>on</strong>vince him to drop any plans to curtail <str<strong>on</strong>g>the</str<strong>on</strong>g>se bank affiliates. They not <strong>on</strong>ly succeeded, but President<br />

Taft so<strong>on</strong> began reversing <str<strong>on</strong>g>the</str<strong>on</strong>g> existing protective banking legislati<strong>on</strong> that was put in place as early as 1864 to<br />

keep banks out of <str<strong>on</strong>g>the</str<strong>on</strong>g>se risky areas. This change resulted in <str<strong>on</strong>g>the</str<strong>on</strong>g> bubble of speculati<strong>on</strong> that sowed <str<strong>on</strong>g>the</str<strong>on</strong>g> seeds of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Wall Street crash of 1929.<br />

In <str<strong>on</strong>g>the</str<strong>on</strong>g> years leading up to <str<strong>on</strong>g>the</str<strong>on</strong>g> Great Depressi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g>re was a significant increase in inequality, largely as a<br />

result of large fortunes being made by speculati<strong>on</strong> in land and <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> stock market. As a resp<strong>on</strong>se to this<br />

ec<strong>on</strong>omic crash, <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. and many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r nati<strong>on</strong>s enacted laws that put a curb <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> speculati<strong>on</strong> that led to<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> pre-crash spike in inequality. Indeed, <str<strong>on</strong>g>the</str<strong>on</strong>g> inequality itself is viewed as a major cause of <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic<br />

meltdown of <str<strong>on</strong>g>the</str<strong>on</strong>g> late ‘20s and early ‘30s. Extreme wealth creates a c<strong>on</strong>centrati<strong>on</strong> of excess capital that needs<br />

to find a use—this leads to speculati<strong>on</strong> and higher-risk investments that create bubbles that ultimately<br />

collapse. Such risky behaviour is greatly reduced when <str<strong>on</strong>g>the</str<strong>on</strong>g>re is not so much excess capital in <str<strong>on</strong>g>the</str<strong>on</strong>g> system—and<br />

what is available is being put to good use meeting real broadly based community needs.<br />

The decades that followed <str<strong>on</strong>g>the</str<strong>on</strong>g> Great Depressi<strong>on</strong> benefited from a new regulatory framework imposed by<br />

President Franklin Delano Roosevelt that saw very high taxati<strong>on</strong> of income (up to 90% at <str<strong>on</strong>g>the</str<strong>on</strong>g> highest rates).<br />

These were decades of high productivity and a thriving middle class. This greater equality meant that more<br />

people had m<strong>on</strong>ey to spend <strong>on</strong> real goods and companies were willing to invest to meet c<strong>on</strong>sumer needs.<br />

With greater equality, all parties benefit, and <str<strong>on</strong>g>the</str<strong>on</strong>g> benefits are widely distributed.<br />

But <str<strong>on</strong>g>the</str<strong>on</strong>g>se benefits were short-lived. In <str<strong>on</strong>g>the</str<strong>on</strong>g> 1970s, Reaganomics and Thatcherism began to undo many of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

regulatory reforms enacted during <str<strong>on</strong>g>the</str<strong>on</strong>g> Roosevelt Era. This era of deregulati<strong>on</strong>, especially of <str<strong>on</strong>g>the</str<strong>on</strong>g> financial<br />

industry, eventually led to ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r spike in inequality, which lead to <str<strong>on</strong>g>the</str<strong>on</strong>g> financial meltdown of 2008. Some<br />

major “pro-business reforms” allowed investment bankers, who previously were <strong>on</strong>ly allowed to risk <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

own m<strong>on</strong>ey (making <str<strong>on</strong>g>the</str<strong>on</strong>g>m cautious) to risk o<str<strong>on</strong>g>the</str<strong>on</strong>g>r people’s m<strong>on</strong>ey (making <str<strong>on</strong>g>the</str<strong>on</strong>g>m c<strong>on</strong>siderably less cautious).<br />

The Regan era deregulati<strong>on</strong>, which allowed savings and investment services to operate within a single<br />

corporate entity, now made funds available to <str<strong>on</strong>g>the</str<strong>on</strong>g> investment sector to speculate <strong>on</strong> riskier projects.<br />

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History has repeated itself—but <strong>on</strong>ly up to a point. Unfortunately, today’s political system seems to have little<br />

stomach for ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r round of genuine reforms that will reduce inequality. Indeed, recent government<br />

acti<strong>on</strong>s 22 have rewarded <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy speculators who have increased <str<strong>on</strong>g>the</str<strong>on</strong>g>ir already enormous fortunes at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

expense of milli<strong>on</strong>s of middle income and poor people around <str<strong>on</strong>g>the</str<strong>on</strong>g> world. As a c<strong>on</strong>sequence of <str<strong>on</strong>g>the</str<strong>on</strong>g> 2008<br />

financial meltdown, tens of milli<strong>on</strong>s of people have lost <str<strong>on</strong>g>the</str<strong>on</strong>g>ir jobs or homes, or both. At <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, we<br />

are witnessing crop failures caused by unusual wea<str<strong>on</strong>g>the</str<strong>on</strong>g>r events (driven by climate change), which in turn have<br />

led to record high levels of prices for basic foods. Hundreds of milli<strong>on</strong>s of people are affected as basic food<br />

staples take up an increasing percentage of <str<strong>on</strong>g>the</str<strong>on</strong>g> meagre incomes of those at <str<strong>on</strong>g>the</str<strong>on</strong>g> bottom of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealth pyramid.<br />

There is clearly something wr<strong>on</strong>g with this extreme distributi<strong>on</strong> of wealth that exists in <str<strong>on</strong>g>the</str<strong>on</strong>g> world today.<br />

Those at <str<strong>on</strong>g>the</str<strong>on</strong>g> very top of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealth pyramid collectively own most of <str<strong>on</strong>g>the</str<strong>on</strong>g> planet’s wealth. Yet a fracti<strong>on</strong> of<br />

that collective wealth would be more than enough to eradicate hunger and poverty for <str<strong>on</strong>g>the</str<strong>on</strong>g> majority of people,<br />

while, at <str<strong>on</strong>g>the</str<strong>on</strong>g> same time, financing soluti<strong>on</strong>s to a host of pressing global problems, from removing toxins from<br />

our water, air and soil, to increasing simple literacy for <str<strong>on</strong>g>the</str<strong>on</strong>g> hundreds of milli<strong>on</strong>s of people who cannot read or<br />

write.<br />

In summary, <str<strong>on</strong>g>the</str<strong>on</strong>g> evidence shows that <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy generally have not earned <str<strong>on</strong>g>the</str<strong>on</strong>g> extreme riches <str<strong>on</strong>g>the</str<strong>on</strong>g>y have<br />

accrued. To <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>trary, <str<strong>on</strong>g>the</str<strong>on</strong>g>se lopsided benefits are <str<strong>on</strong>g>the</str<strong>on</strong>g> result of a distorted system of taxati<strong>on</strong> and<br />

regulati<strong>on</strong> that ignores <str<strong>on</strong>g>the</str<strong>on</strong>g> value of public knowledge (our comm<strong>on</strong> human heritage) and provides publicly<br />

funded programs that disproporti<strong>on</strong>ately benefit <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy. They didn’t earn it and d<strong>on</strong>’t deserve it.<br />

MYTH # 2: The Ec<strong>on</strong>omic or Public Good Argument: “The Wealthy Create Jobs and<br />

Stimulate <str<strong>on</strong>g>the</str<strong>on</strong>g> Ec<strong>on</strong>omy; What’s Good for General Motors Is Good for America”<br />

Part of <str<strong>on</strong>g>the</str<strong>on</strong>g> official rati<strong>on</strong>ale for Washingt<strong>on</strong>’s recent enormous bailouts of <str<strong>on</strong>g>the</str<strong>on</strong>g> finance sector and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r key<br />

businesses was <str<strong>on</strong>g>the</str<strong>on</strong>g> “public good” argument that equates <str<strong>on</strong>g>the</str<strong>on</strong>g> very wealthy with ec<strong>on</strong>omic progress and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

public good – i.e., <str<strong>on</strong>g>the</str<strong>on</strong>g> idea that great wealth is good for <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy and good for society becasue “creating<br />

wealth means creating jobs.”<br />

The actual evidence regarding <str<strong>on</strong>g>the</str<strong>on</strong>g> supposed c<strong>on</strong>necti<strong>on</strong> between wealth creati<strong>on</strong> and job growth shows that<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> opposite is true—extremes in wealth are bad for both social stability and <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy.<br />

Inequality Is Bad for Society<br />

There is overwhelming evidence that great inequality gives rise to a variety of health and social ailments. 23 A<br />

major c<strong>on</strong>clusi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> extensive research by Wilkins<strong>on</strong> and Pickett is that “what matters in determining mortality<br />

and health in a society is less <str<strong>on</strong>g>the</str<strong>on</strong>g> overall wealth of that society and more how evenly that wealth is distributed. The more equally<br />

wealth is distributed, <str<strong>on</strong>g>the</str<strong>on</strong>g> better <str<strong>on</strong>g>the</str<strong>on</strong>g> health of that society.” 24 The list of health and social indices that show a positive<br />

relati<strong>on</strong>ship with greater equality include:<br />

o life expectancy<br />

o infant mortality<br />

o obesity<br />

o child wellbeing<br />

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o amount of mental illness<br />

o use of illegal drugs<br />

o teenage pregnancy rates<br />

o homicide<br />

o fighting and bullying am<strong>on</strong>g children<br />

o impris<strong>on</strong>ment rates<br />

o levels of mutual trust between citizens<br />

o math and literacy attainment<br />

o social mobility (children rising in social scale compared with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir parents)<br />

o <str<strong>on</strong>g>the</str<strong>on</strong>g> status of women<br />

o inventiveness and innovati<strong>on</strong><br />

o waste recycling<br />

o spending <strong>on</strong> foreign aid.<br />

One of <str<strong>on</strong>g>the</str<strong>on</strong>g> interesting findings from this exhaustive study is that, while <str<strong>on</strong>g>the</str<strong>on</strong>g> benefits of greater equality are<br />

largest for <str<strong>on</strong>g>the</str<strong>on</strong>g> poor, “greater equality brings substantial gains even in <str<strong>on</strong>g>the</str<strong>on</strong>g> top occupati<strong>on</strong>al class and am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> richest or besteducated<br />

quarter or third of <str<strong>on</strong>g>the</str<strong>on</strong>g> populati<strong>on</strong>.” These relati<strong>on</strong>ships exist both between nati<strong>on</strong>s as well as within<br />

nati<strong>on</strong>s, regardless of <str<strong>on</strong>g>the</str<strong>on</strong>g> absolute level of wealth. It is <str<strong>on</strong>g>the</str<strong>on</strong>g> extremes in inequality that are <str<strong>on</strong>g>the</str<strong>on</strong>g> problem (given<br />

that <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest incomes provide a basic livelihood)—and <str<strong>on</strong>g>the</str<strong>on</strong>g> greater <str<strong>on</strong>g>the</str<strong>on</strong>g> extremes, <str<strong>on</strong>g>the</str<strong>on</strong>g> worse <str<strong>on</strong>g>the</str<strong>on</strong>g> problems in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> areas listed above.<br />

This means that being a billi<strong>on</strong>aire in a world with a few billi<strong>on</strong>aires and <str<strong>on</strong>g>the</str<strong>on</strong>g> majority impoverished is not<br />

benign. Being ultra-rich is bad for society from <str<strong>on</strong>g>the</str<strong>on</strong>g> perspective of <str<strong>on</strong>g>the</str<strong>on</strong>g> many social and health issues affected<br />

by gross inequality.<br />

The myth that ec<strong>on</strong>omic expansi<strong>on</strong> creates jobs is not supported by <str<strong>on</strong>g>the</str<strong>on</strong>g> evidence that greater inequality is<br />

associated with c<strong>on</strong>siderably l<strong>on</strong>ger working hours. Workers in highly unequal societies work an extra 2-3<br />

m<strong>on</strong>ths a year compared to workers in more equal societies. More egalitarian societies also experience more<br />

savings and fewer bankruptcies. 25 One of <str<strong>on</strong>g>the</str<strong>on</strong>g> ways corporati<strong>on</strong>s increase profits is to reduce employment and<br />

automate as much as possible. Jobs that are created are often minimum wage and part time positi<strong>on</strong>s that<br />

help <str<strong>on</strong>g>the</str<strong>on</strong>g> company avoid having to provide healthcare and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r benefits.<br />

Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r social c<strong>on</strong>sequence of extreme inequality is isolati<strong>on</strong> and separati<strong>on</strong> of segments of society with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

wealthy relaxing in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir gated communities and <str<strong>on</strong>g>the</str<strong>on</strong>g> poor suffering in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir slums. The separati<strong>on</strong> and envy<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se extremes can provoke inevitably leads to a decline in trust am<strong>on</strong>gst people. Many of <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r social and<br />

health c<strong>on</strong>sequences of inequality can be linked to this decline in trust within unequal societies. Highly<br />

unequal societies invariably have low levels of trust. Trust requires more egalitarian distributi<strong>on</strong> of social and<br />

ec<strong>on</strong>omic benefits.<br />

This myth that <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy c<strong>on</strong>tribute to society in general is based <strong>on</strong> ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r even deeper and more<br />

pervasive myth—<str<strong>on</strong>g>the</str<strong>on</strong>g> idea that ec<strong>on</strong>omic growth is invariably a good thing. This is an assumpti<strong>on</strong> that<br />

underlies just about every political persuasi<strong>on</strong>, whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r oriented toward capitalism or socialism.<br />

But <str<strong>on</strong>g>the</str<strong>on</strong>g> evidence for this assumpti<strong>on</strong> <strong>on</strong>ly holds for very low levels of income. At very low levels of income,<br />

people need ec<strong>on</strong>omic activity to provide employment and basic goods and services to meet <str<strong>on</strong>g>the</str<strong>on</strong>g>ir essential<br />

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needs. But <str<strong>on</strong>g>the</str<strong>on</strong>g> evidence is overwhelming that, <strong>on</strong>ce this basic level of income is obtained, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are<br />

diminishing returns from <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tinued accumulati<strong>on</strong> of wealth—both in terms of declared levels of<br />

happiness and across a variety of objective measures. Once basic needs are met (which can be achieved at a<br />

relatively low levels of per-capita energy use [which reflects income levels]), <str<strong>on</strong>g>the</str<strong>on</strong>g>re is little to be gained in terms<br />

of objective measures of access to nutritious foods and educati<strong>on</strong>al opportunities, infant mortality and<br />

maternal health (always a good index of a populati<strong>on</strong>’s general health). 26<br />

We do not need c<strong>on</strong>tinued ec<strong>on</strong>omic growth and ever-higher incomes to be happy or comfortable. Increased<br />

wealth, driven by ec<strong>on</strong>omic growth, serves a very different purpose <strong>on</strong>ce basic needs are achieved—at this<br />

point, its <strong>on</strong>ly purpose is to display an individual’s status and to acquire power over o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs.<br />

The c<strong>on</strong>spicuous or status-driven c<strong>on</strong>sumpti<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> very wealthy creates a situati<strong>on</strong> where every<strong>on</strong>e else’s<br />

satisfacti<strong>on</strong> is reduced—because, by comparis<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir level of c<strong>on</strong>sumpti<strong>on</strong> is less and of inferior quality.<br />

Layard 27 describes this dissatisfacti<strong>on</strong> as a “tax” <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy impose <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> rest of society. Layard, an<br />

ec<strong>on</strong>omist at <str<strong>on</strong>g>the</str<strong>on</strong>g> L<strong>on</strong>d<strong>on</strong> School of Ec<strong>on</strong>omics, actually calculated that a 60% tax rate <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumpti<strong>on</strong> of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy would be required to cover <str<strong>on</strong>g>the</str<strong>on</strong>g> cost of this dissatisfacti<strong>on</strong>.<br />

A related c<strong>on</strong>sequence of gross inequality is <str<strong>on</strong>g>the</str<strong>on</strong>g> kind of competitive c<strong>on</strong>sumpti<strong>on</strong> that it stimulates. In a<br />

society where material goods are taken as signs of success, talent and virtue, having a few more c<strong>on</strong>spicuous<br />

goods than <strong>on</strong>e’s peers or neighbors is a way of feeling good about <strong>on</strong>eself, and clearly dem<strong>on</strong>strating <strong>on</strong>e’s<br />

status. But with advertisers pushing ever “new and improved” products, it is never l<strong>on</strong>g before <strong>on</strong>e may be<br />

upstaged by <strong>on</strong>e’s peers—stimulating yet ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r round of status c<strong>on</strong>sumpti<strong>on</strong>.<br />

The c<strong>on</strong>sumpti<strong>on</strong> patterns of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy set a very high standard to emulate. The c<strong>on</strong>sumpti<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> truly<br />

hyper wealthy includes having <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own pers<strong>on</strong>al jet aircraft—ranging up to $320 milli<strong>on</strong> for an Airbus 380. 28<br />

Of course, that is <strong>on</strong>ly for <str<strong>on</strong>g>the</str<strong>on</strong>g> basic plane—milli<strong>on</strong>s more are spent <strong>on</strong> opulent interiors. The so-called “yacht<br />

wars” am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> super wealthy was set off in 1997 by Leslie Wexler of Limited Brands with <str<strong>on</strong>g>the</str<strong>on</strong>g> purchase of a<br />

316-foot vessel—some 110 feet l<strong>on</strong>ger than anything in its category. At least $300 milli<strong>on</strong> is needed to play<br />

this game, and some billi<strong>on</strong>aires, such as Russia’s Roman Abramovich, own three super yachts. One of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

latest super-yachts, owned by Microsoft co-founder Paul Allen, extends 413-feet in length and boasts a<br />

basketball court, a heliport, a movie <str<strong>on</strong>g>the</str<strong>on</strong>g>atre and a submarine in <str<strong>on</strong>g>the</str<strong>on</strong>g> hold. 29<br />

These levels of c<strong>on</strong>sumpti<strong>on</strong> are generally adulated by <str<strong>on</strong>g>the</str<strong>on</strong>g> media, which holds <str<strong>on</strong>g>the</str<strong>on</strong>g>m up as <str<strong>on</strong>g>the</str<strong>on</strong>g> rewards of hard<br />

work and excepti<strong>on</strong>al skill and cleverness. The subtle messages c<strong>on</strong>veyed are that <str<strong>on</strong>g>the</str<strong>on</strong>g> benefits of ec<strong>on</strong>omic<br />

growth and wealth accumulati<strong>on</strong> are well-rewarded, so d<strong>on</strong>’t tamper with this incredible system of wealth<br />

accumulati<strong>on</strong>—just get your shoulder to <str<strong>on</strong>g>the</str<strong>on</strong>g> wheel if you wish to participate and dem<strong>on</strong>strate your own true<br />

worth.<br />

Such ostentatious indulgence by <str<strong>on</strong>g>the</str<strong>on</strong>g> hyper wealthy has serious c<strong>on</strong>sequences for <str<strong>on</strong>g>the</str<strong>on</strong>g> rest of society because<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>y set examples that many wish to follow. There are innumerable rungs <strong>on</strong> this status ladder and, no matter<br />

where <strong>on</strong>e stands, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is always an opportunity to purchase something to raise <strong>on</strong>eself a rung or two—if<br />

you can afford it, or borrow to pay for it.<br />

Such status-driven c<strong>on</strong>sumpti<strong>on</strong>, which is well bey<strong>on</strong>d <str<strong>on</strong>g>the</str<strong>on</strong>g> level of both necessity and comfortable<br />

sufficiency, has significant envir<strong>on</strong>mental c<strong>on</strong>sequences. The more material goods that are produced, used up,<br />

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and eventually disposed of, <str<strong>on</strong>g>the</str<strong>on</strong>g> greater <str<strong>on</strong>g>the</str<strong>on</strong>g> negative impact <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment. Global ecosystems are in<br />

terrible shape and <str<strong>on</strong>g>the</str<strong>on</strong>g> causes are directly attributable to <str<strong>on</strong>g>the</str<strong>on</strong>g> expansi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy. 30 Many natural—and<br />

even what should be renewable resources—are now being depleted by <str<strong>on</strong>g>the</str<strong>on</strong>g> drive for c<strong>on</strong>tinued ec<strong>on</strong>omic<br />

growth. 31 The majority of natural resources c<strong>on</strong>sumed and disposed each year are used up by a relatively small<br />

percentage of <str<strong>on</strong>g>the</str<strong>on</strong>g> global populati<strong>on</strong>. As always, <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sumpti<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> hyper wealthy is disproporti<strong>on</strong>ately<br />

large. And what <str<strong>on</strong>g>the</str<strong>on</strong>g>y d<strong>on</strong>’t c<strong>on</strong>sume directly, <str<strong>on</strong>g>the</str<strong>on</strong>g>y inspire o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs to c<strong>on</strong>sume by <str<strong>on</strong>g>the</str<strong>on</strong>g>ir example and c<strong>on</strong>tinual<br />

ratcheting up of <str<strong>on</strong>g>the</str<strong>on</strong>g> stakes of what c<strong>on</strong>stitutes <str<strong>on</strong>g>the</str<strong>on</strong>g> good life.<br />

Gross inequity degrades <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment in a variety of ways. The wealthy c<strong>on</strong>tinually increase <str<strong>on</strong>g>the</str<strong>on</strong>g> amount of<br />

material goods <str<strong>on</strong>g>the</str<strong>on</strong>g>y c<strong>on</strong>sume as status symbols because that is what <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy do. At <str<strong>on</strong>g>the</str<strong>on</strong>g> o<str<strong>on</strong>g>the</str<strong>on</strong>g>r end of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

wealth c<strong>on</strong>tinuum, <str<strong>on</strong>g>the</str<strong>on</strong>g> poorest degrade <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment simply to stay alive, denuding forests, for example,<br />

to provide fuel for cooking. A fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r ir<strong>on</strong>y is that <str<strong>on</strong>g>the</str<strong>on</strong>g> poor are also <str<strong>on</strong>g>the</str<strong>on</strong>g> most likely victims of ecological<br />

degradati<strong>on</strong>. 32<br />

So-called “externalized” costs—whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r social or envir<strong>on</strong>mental—are costs to a transacti<strong>on</strong> not borne by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

actual parties to <str<strong>on</strong>g>the</str<strong>on</strong>g> transacti<strong>on</strong>. That is, <str<strong>on</strong>g>the</str<strong>on</strong>g> costs are displaced <strong>on</strong>to some third party. These costs can be<br />

local (in <str<strong>on</strong>g>the</str<strong>on</strong>g> case of an industry polluting local air or water) or global (in <str<strong>on</strong>g>the</str<strong>on</strong>g> case of greenhouse gas emissi<strong>on</strong>s<br />

c<strong>on</strong>tributing to global climate chaos). These costs have been estimated to be so great as to make fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

ec<strong>on</strong>omic growth “unec<strong>on</strong>omic” in <str<strong>on</strong>g>the</str<strong>on</strong>g> sense that <str<strong>on</strong>g>the</str<strong>on</strong>g> costs outweigh <str<strong>on</strong>g>the</str<strong>on</strong>g> benefits—with <str<strong>on</strong>g>the</str<strong>on</strong>g> costs largely<br />

borne by innocent third parties. 33<br />

The more unnecessary and unec<strong>on</strong>omic growth and accumulati<strong>on</strong> of extreme wealth, <str<strong>on</strong>g>the</str<strong>on</strong>g> greater <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />

externalized costs. They involve destroying cultures and livelihoods by moving milli<strong>on</strong>s of people to build<br />

dams for hydropower; <str<strong>on</strong>g>the</str<strong>on</strong>g>y involve <str<strong>on</strong>g>the</str<strong>on</strong>g> enduring legacy of a Bhopal or Chernobyl or BP Deepwater Horiz<strong>on</strong><br />

disaster; <str<strong>on</strong>g>the</str<strong>on</strong>g>y involve <str<strong>on</strong>g>the</str<strong>on</strong>g> killing and forced displacement of indigenous peoples to provide access to mining<br />

and timber resources; <str<strong>on</strong>g>the</str<strong>on</strong>g>y involve <str<strong>on</strong>g>the</str<strong>on</strong>g> death and disability of workers from agricultural pesticides; <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />

involve <str<strong>on</strong>g>the</str<strong>on</strong>g> nitrificati<strong>on</strong> of large tracts of ocean from agricultural runoff, creating “dead z<strong>on</strong>es” for all living<br />

sea creatures; <str<strong>on</strong>g>the</str<strong>on</strong>g>y involve putting <str<strong>on</strong>g>the</str<strong>on</strong>g> price of basic foods out of reach of <str<strong>on</strong>g>the</str<strong>on</strong>g> very poor because what should<br />

be food stocks are now used for transportati<strong>on</strong> fuels; and so <strong>on</strong>. There is an almost endless list of destructi<strong>on</strong><br />

of human and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r living creatures that is directly attributable to this quest for more wealth, power and<br />

status. Indeed, this destructi<strong>on</strong> is now threatening <str<strong>on</strong>g>the</str<strong>on</strong>g> global survival of humans (through human-induced<br />

climate change) as well as many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r species, leading to what scientists are calling <str<strong>on</strong>g>the</str<strong>on</strong>g> planet’s Sixth Great<br />

Extincti<strong>on</strong>.<br />

So ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than being a positive influence for society in general, <str<strong>on</strong>g>the</str<strong>on</strong>g> accumulati<strong>on</strong> of extreme wealth<br />

(significantly bey<strong>on</strong>d what is needed for a comfortable life) and <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omic growth paradigm that supports<br />

such accumulati<strong>on</strong>, are now destroying <str<strong>on</strong>g>the</str<strong>on</strong>g> very ecological foundati<strong>on</strong>s of society — and <str<strong>on</strong>g>the</str<strong>on</strong>g> diversity of life<br />

itself. All of <str<strong>on</strong>g>the</str<strong>on</strong>g> major causes of <str<strong>on</strong>g>the</str<strong>on</strong>g> sixth largest mass extincti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> history of our planet are directly<br />

traceable to <strong>on</strong>e or ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r facet of ec<strong>on</strong>omic growth. 34 The evidence is now clear that ec<strong>on</strong>omic growth,<br />

which enriches <str<strong>on</strong>g>the</str<strong>on</strong>g> already wealthy, and <str<strong>on</strong>g>the</str<strong>on</strong>g> accumulati<strong>on</strong> of ever more riches, does not produce greater<br />

happiness 35 or improve <str<strong>on</strong>g>the</str<strong>on</strong>g> quality of life when objective measures are c<strong>on</strong>sidered. Ec<strong>on</strong>omic growth and<br />

wealth accumulati<strong>on</strong> are not social benefits that are to be applauded.<br />

The idea that ec<strong>on</strong>omic growth and wealth accumulati<strong>on</strong> are good for society is a myth. And as with so many<br />

myths, <str<strong>on</strong>g>the</str<strong>on</strong>g> exact opposite is true. We now have a global system where wealth is increasingly c<strong>on</strong>centrated in<br />

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<str<strong>on</strong>g>the</str<strong>on</strong>g> hands of <str<strong>on</strong>g>the</str<strong>on</strong>g> few at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of <str<strong>on</strong>g>the</str<strong>on</strong>g> many. This ec<strong>on</strong>omic system is destroying <str<strong>on</strong>g>the</str<strong>on</strong>g> ecological life<br />

support systems that are <str<strong>on</strong>g>the</str<strong>on</strong>g> foundati<strong>on</strong>s of all genuine wealth. Yet our media and dominant social values<br />

c<strong>on</strong>tinue to applaud and support a most dangerous myth about <str<strong>on</strong>g>the</str<strong>on</strong>g> social benefits of wealth accumulati<strong>on</strong> and<br />

an expanding ec<strong>on</strong>omy. Focusing <strong>on</strong> growth is a smoke screen used to obscure <str<strong>on</strong>g>the</str<strong>on</strong>g> necessity of undertaking a<br />

more just distributi<strong>on</strong> of finite resources.<br />

Inequality Is Bad for Democracy<br />

Power corrupts, and <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy have c<strong>on</strong>siderable power at <str<strong>on</strong>g>the</str<strong>on</strong>g>ir disposal. The excess wealth of <str<strong>on</strong>g>the</str<strong>on</strong>g> top<br />

earners can easily be used to corrupt <str<strong>on</strong>g>the</str<strong>on</strong>g> democratic process, <str<strong>on</strong>g>the</str<strong>on</strong>g>reby allowing <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy to c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> very<br />

legislati<strong>on</strong> that allows <str<strong>on</strong>g>the</str<strong>on</strong>g>m to actually increase <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth. The wealthy are able to retain and enhance <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

positi<strong>on</strong>, at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of <str<strong>on</strong>g>the</str<strong>on</strong>g> majority; and <str<strong>on</strong>g>the</str<strong>on</strong>g>y are quite accomplished at this.<br />

This noti<strong>on</strong> that <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy exert undue influence in <str<strong>on</strong>g>the</str<strong>on</strong>g> political arena runs counter to <str<strong>on</strong>g>the</str<strong>on</strong>g> myth that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

developed democratic societies are pluralistic. Pluralism is <str<strong>on</strong>g>the</str<strong>on</strong>g> noti<strong>on</strong> that <str<strong>on</strong>g>the</str<strong>on</strong>g> broad interests of <str<strong>on</strong>g>the</str<strong>on</strong>g> public are<br />

protected because politicians must rely <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> public’s votes. It assumes that all groups have equal access to<br />

government and influence, and that no <strong>on</strong>e group dominates. Not <strong>on</strong>ly is this noti<strong>on</strong> of pluralism naive, it is<br />

also wr<strong>on</strong>g.<br />

Acknowledging that pluralism <strong>on</strong>ce worked in America, political scientists 36 researching <str<strong>on</strong>g>the</str<strong>on</strong>g>se issues<br />

dem<strong>on</strong>strated that <str<strong>on</strong>g>the</str<strong>on</strong>g> noti<strong>on</strong> of pluralism in <str<strong>on</strong>g>the</str<strong>on</strong>g> USA is now seriously in error. They point out that disparities<br />

of income and wealth c<strong>on</strong>fer extraordinary advantages and disadvantages that extend to political influence.<br />

They note that “more m<strong>on</strong>ey, energy and organizati<strong>on</strong>al strength is [sic] thrown into obstructing equality than achieving it”<br />

and that “to democratize <str<strong>on</strong>g>the</str<strong>on</strong>g> American polyarchy fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r will require a redistributi<strong>on</strong> of wealth and income.” In a 2001<br />

statement, <str<strong>on</strong>g>the</str<strong>on</strong>g> American Political Science Associati<strong>on</strong> stated: “citizens with a lower or moderate income speak with a<br />

whisper... while <str<strong>on</strong>g>the</str<strong>on</strong>g> advantaged roar with a clarity and c<strong>on</strong>sistency that policy makers readily hear and routinely follow.” The<br />

problem is a “growing c<strong>on</strong>centrati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> country’s wealth and income in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands of <str<strong>on</strong>g>the</str<strong>on</strong>g> few.”<br />

Being wealthy means having c<strong>on</strong>siderable disposable income, income not required for well being, or even for<br />

a comfortable life. Using this disposable income to influence <str<strong>on</strong>g>the</str<strong>on</strong>g> political process to <strong>on</strong>e’s own advantage is<br />

what <str<strong>on</strong>g>the</str<strong>on</strong>g> very rich have become very good at. They use <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth directly and indirectly, and are able to<br />

intervene <strong>on</strong> a broad scale. They not <strong>on</strong>ly fund various political campaigns (often backing opposing<br />

candidates to ensure influence) but also assist with <str<strong>on</strong>g>the</str<strong>on</strong>g> financing and organizing of political campaigns. They<br />

c<strong>on</strong>tribute to drafting party platforms; <str<strong>on</strong>g>the</str<strong>on</strong>g>y support special interest groups and set up think tanks to push<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir narrow self-interested agendas; <str<strong>on</strong>g>the</str<strong>on</strong>g>y often are involved in <str<strong>on</strong>g>the</str<strong>on</strong>g> drafting and amending of important<br />

legislati<strong>on</strong>. In additi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g>y c<strong>on</strong>trol <str<strong>on</strong>g>the</str<strong>on</strong>g> media, which ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r ensures secrecy for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir activities or ensures<br />

those activities are presented in a positive light to <str<strong>on</strong>g>the</str<strong>on</strong>g> general public. Their sway <strong>on</strong> public opini<strong>on</strong> greatly<br />

exceeds that of <str<strong>on</strong>g>the</str<strong>on</strong>g> majority.<br />

This disproporti<strong>on</strong>ate impact <strong>on</strong> government policies often occurs in <str<strong>on</strong>g>the</str<strong>on</strong>g> face of significant oppositi<strong>on</strong> from<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> majority. A good example is climate change policy. Surveys indicate that <str<strong>on</strong>g>the</str<strong>on</strong>g> majority of U.S. citizens<br />

support policies that would mitigate climate change. But well-funded and organized special interest groups<br />

have supported climate deniers and influenced lawmakers to favor narrow ec<strong>on</strong>omic interests over not <strong>on</strong>ly<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> wishes of <str<strong>on</strong>g>the</str<strong>on</strong>g> majority, but also over <str<strong>on</strong>g>the</str<strong>on</strong>g> potential survival of much of life <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> planet. Being a<br />

billi<strong>on</strong>aire with such interests is hardly benign.<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

An unacknowledged c<strong>on</strong>sequence of this phenomen<strong>on</strong> is that ordinary caring citizens feel disempowered and<br />

unable to influence governments in matters that directly influence <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own well-being and possible survival.<br />

This sense of disempowerment and alienati<strong>on</strong>—from both <str<strong>on</strong>g>the</str<strong>on</strong>g> very wealthy and elected officials—is <strong>on</strong>e of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> most serious c<strong>on</strong>sequences of gross inequity. It also is likely a significant factor leading to <str<strong>on</strong>g>the</str<strong>on</strong>g> many and<br />

various health and social problems so str<strong>on</strong>gly linked with inequity. 37<br />

Many citizens in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. feel that <str<strong>on</strong>g>the</str<strong>on</strong>g>re is too much inequality and that it is not a good thing for society, 38 but<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>y are ignored by <str<strong>on</strong>g>the</str<strong>on</strong>g> politicians who cater to <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy. One of <str<strong>on</strong>g>the</str<strong>on</strong>g> ir<strong>on</strong>ies of inequity is that <str<strong>on</strong>g>the</str<strong>on</strong>g> poor do<br />

least well when inequity is greatest. When great fortunes are being made is <str<strong>on</strong>g>the</str<strong>on</strong>g> time when <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy are<br />

most inclined to use <str<strong>on</strong>g>the</str<strong>on</strong>g>ir excess wealth to influence governments—pushing changes to increase <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth<br />

at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of <str<strong>on</strong>g>the</str<strong>on</strong>g> poor, ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than seeking to redress <str<strong>on</strong>g>the</str<strong>on</strong>g> inequity of poverty and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r social ills. The<br />

wealthy can be quite aggressive in pushing <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth-accumulati<strong>on</strong> “reforms”—and <str<strong>on</strong>g>the</str<strong>on</strong>g>n manipulating<br />

public opini<strong>on</strong> to support those reforms. Government policies regarding inflati<strong>on</strong> and tax laws are favorite<br />

targets for <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy. The hyper wealthy have mastered <str<strong>on</strong>g>the</str<strong>on</strong>g> art of perpetuating <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves.<br />

Lakshmi Mittal, CEO of <str<strong>on</strong>g>the</str<strong>on</strong>g> Arcelor Mittal steel group is <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s top billi<strong>on</strong>aires. With reported<br />

wealth of some $31 billi<strong>on</strong>, 39 he is said to be <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthiest pers<strong>on</strong> in India. His steel group is incorporated in<br />

Holland and his family holdings are based in Luxembourg, <str<strong>on</strong>g>the</str<strong>on</strong>g> Canary Islands, and <str<strong>on</strong>g>the</str<strong>on</strong>g> Virgin Islands. He<br />

lives in L<strong>on</strong>d<strong>on</strong>. A Mittal spokespers<strong>on</strong> indicates: “Nothing unusual in that. The structure resp<strong>on</strong>ds to fiscal<br />

optimizati<strong>on</strong> c<strong>on</strong>cerns. The Arcelor Group also uses tax havens. It even has subsidiaries incorporated in <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Cayman Islands.” 40 Such arrangements may not be unusual for <str<strong>on</strong>g>the</str<strong>on</strong>g> ultra wealthy but for any<strong>on</strong>e else <str<strong>on</strong>g>the</str<strong>on</strong>g>y are<br />

indeed unusual.<br />

More importantly, <str<strong>on</strong>g>the</str<strong>on</strong>g> ability to globaize operati<strong>on</strong>s provides ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r example of how <str<strong>on</strong>g>the</str<strong>on</strong>g> super wealthy use<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir resources to avoid taxes through a variety of legal, and sometimes illegal, loopholes. Tax havens are a<br />

favorite means of avoiding taxes. Certain jurisdicti<strong>on</strong>s—am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g>m Switzerland, <str<strong>on</strong>g>the</str<strong>on</strong>g> Cayman Islands,<br />

Luxembourg, <str<strong>on</strong>g>the</str<strong>on</strong>g> Channel Islands, and Liechtenstein—ensure complete secrecy for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir m<strong>on</strong>eyed<br />

depositors. While it is not illegal to deposit funds in <str<strong>on</strong>g>the</str<strong>on</strong>g>se banks, it is illegal not to declare income from <str<strong>on</strong>g>the</str<strong>on</strong>g>se<br />

deposits. Secrecy is <str<strong>on</strong>g>the</str<strong>on</strong>g> main service <str<strong>on</strong>g>the</str<strong>on</strong>g>se banks provide: o<str<strong>on</strong>g>the</str<strong>on</strong>g>r than secrecy <str<strong>on</strong>g>the</str<strong>on</strong>g>y provide no o<str<strong>on</strong>g>the</str<strong>on</strong>g>r services<br />

that are not available from o<str<strong>on</strong>g>the</str<strong>on</strong>g>r banks. It is estimated that <str<strong>on</strong>g>the</str<strong>on</strong>g> $8 to 10 trilli<strong>on</strong> dollars stored in <str<strong>on</strong>g>the</str<strong>on</strong>g>se foreign<br />

tax havens allows <str<strong>on</strong>g>the</str<strong>on</strong>g>ir owners to avoid billi<strong>on</strong>s of dollars in taxes. 41<br />

These tax havens are much more than a minor aberrati<strong>on</strong>. They involve half of all world trade, deflecting to<br />

private pockets billi<strong>on</strong>s of dollars that would o<str<strong>on</strong>g>the</str<strong>on</strong>g>rwise go to state treasuries. Tax havens played a key role in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> financial crisis of 2008 by allowing U.S.-based financial firms to flog toxic debts out of <str<strong>on</strong>g>the</str<strong>on</strong>g> sight of<br />

domestic regulators. And tax havens serve as a c<strong>on</strong>duit for dictators and <str<strong>on</strong>g>the</str<strong>on</strong>g> mafia to launder funds into <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

legitimate banking system. 42 And it is not <strong>on</strong>ly small Caribbean or European nati<strong>on</strong>s that provide such<br />

services—<str<strong>on</strong>g>the</str<strong>on</strong>g> islands of Manhattan and Great Britain also play a major role in providing <str<strong>on</strong>g>the</str<strong>on</strong>g>se services.<br />

Tax revenues are essential for democratic governments to provide public goods and services. Ir<strong>on</strong>ically, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

wealthy actually make more use of this physical and social infrastructure than <str<strong>on</strong>g>the</str<strong>on</strong>g> poor or average citizen, but<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>y pay proporti<strong>on</strong>ally less. Taxing <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy is a means toward creating a more equal society. As argued<br />

above, <str<strong>on</strong>g>the</str<strong>on</strong>g> ultra wealthy do not deserve <str<strong>on</strong>g>the</str<strong>on</strong>g>ir extreme wealth given that it is obtained by <strong>on</strong>ly marginally<br />

improving goods or services based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> great store of comm<strong>on</strong> knowledge that is <str<strong>on</strong>g>the</str<strong>on</strong>g> human heritage.<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

Progressive taxati<strong>on</strong> would be a way of bringing <str<strong>on</strong>g>the</str<strong>on</strong>g>se financial rewards back into <str<strong>on</strong>g>the</str<strong>on</strong>g> public treasury where<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>y bel<strong>on</strong>g.<br />

However, current tax laws provide a variety of loopholes for creative accountants who serve <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy and<br />

have been able to reduce <str<strong>on</strong>g>the</str<strong>on</strong>g> impact of progressive taxati<strong>on</strong> by leveling off and lowering <str<strong>on</strong>g>the</str<strong>on</strong>g> tax rates <strong>on</strong>ce<br />

paid by <str<strong>on</strong>g>the</str<strong>on</strong>g> very highest income sectors. The interference of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy in establishing tax regulati<strong>on</strong>s also<br />

leads to generally lower rates of taxati<strong>on</strong> for every<strong>on</strong>e, although <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthiest individuals benefit <str<strong>on</strong>g>the</str<strong>on</strong>g> most.<br />

The wealthy argue that high taxes discourage ec<strong>on</strong>omic growth. However, many instances can be found of<br />

countries with very high rates of taxati<strong>on</strong> and effective progressive tax systems (where <str<strong>on</strong>g>the</str<strong>on</strong>g> rates increase with<br />

levels of income) that are also ec<strong>on</strong>omically successful. These countries <str<strong>on</strong>g>the</str<strong>on</strong>g>n have <str<strong>on</strong>g>the</str<strong>on</strong>g> tax revenues to provide<br />

a variety of public goods for all citizens, creating more equal societies that benefit all members. Scandinavian<br />

countries provide examples.<br />

Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r ploy <str<strong>on</strong>g>the</str<strong>on</strong>g> very wealthy are good at is insuring that corporate taxes are kept low. This allows senior<br />

managers to make use of corporate funds for a variety of private benefits. (Why bo<str<strong>on</strong>g>the</str<strong>on</strong>g>r with income if you<br />

can spend company funds for fancy food, expensive vacati<strong>on</strong>s, and luxury toys like corporate jets and various<br />

hi-tech electr<strong>on</strong>ics, etc?)<br />

More equal societies are better off <strong>on</strong> all <str<strong>on</strong>g>the</str<strong>on</strong>g> social and health indicators listed above. Extreme wealth<br />

accumulati<strong>on</strong> leads to degradati<strong>on</strong> of all <str<strong>on</strong>g>the</str<strong>on</strong>g>se indicators, an inevitable c<strong>on</strong>sequence because tax revenues that<br />

might be used for public goods and services remain in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy.<br />

Inequality Is Bad for <str<strong>on</strong>g>the</str<strong>on</strong>g> Ec<strong>on</strong>omy<br />

Every social species engages in exchanges of goods and services, whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g>y are bees, chimps, elephants or<br />

humans. Exchanging goods and services is a drive that is lodged deep within <str<strong>on</strong>g>the</str<strong>on</strong>g> genes of all social animals.<br />

Exchange and sharing greatly expands and enhances <str<strong>on</strong>g>the</str<strong>on</strong>g> goods and services available to us, as well as<br />

establishing a more or less specialized role for us in our community. While <str<strong>on</strong>g>the</str<strong>on</strong>g> share market is a relatively new<br />

phenomen<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> marketplace is at least as old as humanity.<br />

The purpose of <str<strong>on</strong>g>the</str<strong>on</strong>g> marketplace is to provide a wider range of goods and services than we can or wish to<br />

produce ourselves. This is <str<strong>on</strong>g>the</str<strong>on</strong>g> most fundamental purpose of <str<strong>on</strong>g>the</str<strong>on</strong>g> marketplace ec<strong>on</strong>omy—to improve <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

quality of life for every<strong>on</strong>e in <str<strong>on</strong>g>the</str<strong>on</strong>g> community by encouraging various parties to provide what <str<strong>on</strong>g>the</str<strong>on</strong>g>y can best<br />

c<strong>on</strong>tribute while obtaining a fair exchange for it.<br />

The purpose of <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy is not to simply increase ec<strong>on</strong>omic growth or to accumulate wealth. Both of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se comm<strong>on</strong> policy objectives are, or should be, means to <str<strong>on</strong>g>the</str<strong>on</strong>g> broader goal of improving <str<strong>on</strong>g>the</str<strong>on</strong>g> quality of life<br />

for every<strong>on</strong>e in <str<strong>on</strong>g>the</str<strong>on</strong>g> community. The overarching goal of an ec<strong>on</strong>omy should not be to accumulate great<br />

wealth—and certainly not to accumulate great wealth for <str<strong>on</strong>g>the</str<strong>on</strong>g> few at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of <str<strong>on</strong>g>the</str<strong>on</strong>g> many. But this is<br />

precisely <str<strong>on</strong>g>the</str<strong>on</strong>g> mandate of <str<strong>on</strong>g>the</str<strong>on</strong>g> global ec<strong>on</strong>omic system we now have—a perversi<strong>on</strong> of what it should be. This<br />

system exists not because it has evolved as a natural law but because gross inequality has allowed <str<strong>on</strong>g>the</str<strong>on</strong>g> few to<br />

subvert <str<strong>on</strong>g>the</str<strong>on</strong>g> democratic process and steer various laws, regulati<strong>on</strong>s, and even public attitudes, in directi<strong>on</strong>s<br />

that serve <str<strong>on</strong>g>the</str<strong>on</strong>g> narrow interests of <str<strong>on</strong>g>the</str<strong>on</strong>g> rich and powerful.<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

So in this very fundamental sense of what c<strong>on</strong>stitutes a desirable ec<strong>on</strong>omy - enhancing <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong> good —<br />

gross inequality is a symptom that <str<strong>on</strong>g>the</str<strong>on</strong>g> system has failed.<br />

Extremes in wealth also lead to separati<strong>on</strong> and alienati<strong>on</strong> of society’s haves and have-nots. For those not <strong>on</strong><br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> top tip of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealth pyramid, trust in ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r “o<str<strong>on</strong>g>the</str<strong>on</strong>g>r people” or “<str<strong>on</strong>g>the</str<strong>on</strong>g> system” suffers. “Inequality... is a<br />

powerful social divider...affecting our ability to identify with and empathize with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r people... even small differences seem to<br />

make an important difference.” 43<br />

This relati<strong>on</strong>ship between trust and inequality is more than just a correlati<strong>on</strong>. According to political<br />

scientists 44 at <str<strong>on</strong>g>the</str<strong>on</strong>g> University of Maryland, it is inequality that affects trust: “<str<strong>on</strong>g>the</str<strong>on</strong>g> causal directi<strong>on</strong> starts with<br />

inequality.” Their research shows that “trust cannot thrive in an unequal world,” that income inequality is <str<strong>on</strong>g>the</str<strong>on</strong>g> prime<br />

mover of trust, and that inequality has a str<strong>on</strong>ger impact than rates of unemployment, inflati<strong>on</strong> or general<br />

ec<strong>on</strong>omic growth. Trust is necessary for empathy and cooperati<strong>on</strong> in a society. Mistrust and inequality<br />

reinforce each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r.<br />

It must also be kept in mind that trust is <str<strong>on</strong>g>the</str<strong>on</strong>g> basis of any fiat m<strong>on</strong>ey system. 45 If people do not trust each<br />

o<str<strong>on</strong>g>the</str<strong>on</strong>g>r or <str<strong>on</strong>g>the</str<strong>on</strong>g> system, fiat m<strong>on</strong>ey (m<strong>on</strong>ey not backed by a useful commodity such as gold or cows) becomes<br />

worthless. So <str<strong>on</strong>g>the</str<strong>on</strong>g> more inequality we generate, <str<strong>on</strong>g>the</str<strong>on</strong>g> greater <str<strong>on</strong>g>the</str<strong>on</strong>g> distrust and <str<strong>on</strong>g>the</str<strong>on</strong>g> greater <str<strong>on</strong>g>the</str<strong>on</strong>g> vulnerability of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

m<strong>on</strong>ey system we all take for granted and depend <strong>on</strong> daily. Most modern ec<strong>on</strong>omies functi<strong>on</strong> with a m<strong>on</strong>ey<br />

system. How much wealth has to be c<strong>on</strong>centrated at <str<strong>on</strong>g>the</str<strong>on</strong>g> top for trust in a currency to wi<str<strong>on</strong>g>the</str<strong>on</strong>g>r?<br />

Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r fundamental purpose of an ec<strong>on</strong>omy is to sustain itself. Which means an ec<strong>on</strong>omy must protect and<br />

sustain those factors that allow it to functi<strong>on</strong> and survive. Given that all wealth is ultimately derived from<br />

nature, any ec<strong>on</strong>omy that destroys nature’s capacity to c<strong>on</strong>tinue providing resources is self-destructive; any<br />

such ec<strong>on</strong>omy will ultimately fail and fail miserably. The inequality of <str<strong>on</strong>g>the</str<strong>on</strong>g> current system, addicted to<br />

c<strong>on</strong>tinued growth and wealth accumulati<strong>on</strong>, is pushing <str<strong>on</strong>g>the</str<strong>on</strong>g> entire planet toward several ecological tipping<br />

points, which if passed, will result in dramatic reducti<strong>on</strong>s in ec<strong>on</strong>omic opportunities and activities.<br />

Only <str<strong>on</strong>g>the</str<strong>on</strong>g> most resilient and self-sustaining local ec<strong>on</strong>omic activities will survive <str<strong>on</strong>g>the</str<strong>on</strong>g> ravages of climate change,<br />

biodiversity loss, and <str<strong>on</strong>g>the</str<strong>on</strong>g> polluti<strong>on</strong> of our air, water and soils. And even such local ec<strong>on</strong>omies will remain<br />

incredibly fragile and vulnerable to unpredictable natural events. An ec<strong>on</strong>omy that destroys its natural base<br />

cannot be c<strong>on</strong>sidered successful—and extreme inequality is <strong>on</strong>e perverse expressi<strong>on</strong> of that destructi<strong>on</strong>. What<br />

is even more perverse is that our culture c<strong>on</strong>tinues to ignore this destructi<strong>on</strong> and hold up <str<strong>on</strong>g>the</str<strong>on</strong>g> super wealthy as<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> epitome of “<str<strong>on</strong>g>the</str<strong>on</strong>g> best that life has to offer.”<br />

Inequality stimulates c<strong>on</strong>sumpti<strong>on</strong>. This is reflected in <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that spending <strong>on</strong> advertising is directly related<br />

to inequality. In more unequal countries, a higher porti<strong>on</strong> of GDP is spent <strong>on</strong> advertising. People also work<br />

more in unequal societies, save less and experience more bankruptcies. These are all indicators of excess<br />

c<strong>on</strong>sumpti<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g>y clearly dem<strong>on</strong>strate that attempts to maintain status (ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than to provide for basic<br />

necessities) can be bad for <str<strong>on</strong>g>the</str<strong>on</strong>g> psyche, bad for <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment and bad for <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy.<br />

There are many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r ways in which inequality is bad for <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy. Extreme inequality means that <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

few have much more financial wealth than <str<strong>on</strong>g>the</str<strong>on</strong>g>y can reas<strong>on</strong>ably use for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own pleasure. This excess wealth<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>n becomes available not <strong>on</strong>ly to subvert democracy and to distort regulatory processes, but also to engage<br />

in speculative ventures in <str<strong>on</strong>g>the</str<strong>on</strong>g> mainstream ec<strong>on</strong>omy that are inherently risky. 46<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

One example is <str<strong>on</strong>g>the</str<strong>on</strong>g> devastating collapse of <str<strong>on</strong>g>the</str<strong>on</strong>g> speculative mortgage housing bubble in 2008. Excess capital in<br />

search of a profit found its way into risky housing mortgage loans (loans that should never have been made<br />

because <str<strong>on</strong>g>the</str<strong>on</strong>g> borrowers had little chance of repaying <str<strong>on</strong>g>the</str<strong>on</strong>g>m). Being well aware of <str<strong>on</strong>g>the</str<strong>on</strong>g>se risks, <str<strong>on</strong>g>the</str<strong>on</strong>g> original lenders<br />

packaged <str<strong>on</strong>g>the</str<strong>on</strong>g>se subprime mortgage loans with more secure loans (<str<strong>on</strong>g>the</str<strong>on</strong>g>reby obfuscating <str<strong>on</strong>g>the</str<strong>on</strong>g> risks) and sold<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>m off at a profit—unloading <str<strong>on</strong>g>the</str<strong>on</strong>g> risks <strong>on</strong>to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r parties. Some of <str<strong>on</strong>g>the</str<strong>on</strong>g> parties who were in-<str<strong>on</strong>g>the</str<strong>on</strong>g>-know about<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> real risks involved in <str<strong>on</strong>g>the</str<strong>on</strong>g>se loans, <str<strong>on</strong>g>the</str<strong>on</strong>g>n took out insurance policies (called Credit Default Swaps or CDSs)<br />

<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> bundled loans <str<strong>on</strong>g>the</str<strong>on</strong>g>y sold to o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs — in many cases betting that <str<strong>on</strong>g>the</str<strong>on</strong>g> loans would default and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

insurance payments could be collected to make yet more profit.<br />

One greedy New York hedge fund manager, John Pauls<strong>on</strong>, was frustrated that <str<strong>on</strong>g>the</str<strong>on</strong>g>re were not enough<br />

bundled loans to bet against, so he approached various investment banks to create more such loans and<br />

helped <str<strong>on</strong>g>the</str<strong>on</strong>g> banks assemble <str<strong>on</strong>g>the</str<strong>on</strong>g> loan packages know as Collateral Debt Obligati<strong>on</strong>s or CDOs. Pauls<strong>on</strong><br />

succeeded in getting Goldman Sachs to create CDOs that both he, and <str<strong>on</strong>g>the</str<strong>on</strong>g>y, knew were faulty. His goal was<br />

to insure <str<strong>on</strong>g>the</str<strong>on</strong>g>se CDOs would fail, so he could collect <str<strong>on</strong>g>the</str<strong>on</strong>g> insurance. Despite this inherent c<strong>on</strong>flict of interest,<br />

Pauls<strong>on</strong> succeeded in winning almost all his bets, taking home some $3.7 billi<strong>on</strong> in a single year. This was like<br />

arranging to have an aircraft manufacturer sell a jet plane knowingly built with poor aerodynamics, so that<br />

when <str<strong>on</strong>g>the</str<strong>on</strong>g> plane crashed, he could collect <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> insurance he had taken out <strong>on</strong> a plane he did not even own!<br />

Ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than being scorned or prosecuted for <str<strong>on</strong>g>the</str<strong>on</strong>g>se shady deals, Pauls<strong>on</strong> has been li<strong>on</strong>ized in <str<strong>on</strong>g>the</str<strong>on</strong>g> financial<br />

press. This praise occurred despite <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that his machinati<strong>on</strong>s helped trigger <str<strong>on</strong>g>the</str<strong>on</strong>g> 2008 financial collapse,<br />

whose shockwaves reverberated around <str<strong>on</strong>g>the</str<strong>on</strong>g> world, putting hundreds of milli<strong>on</strong>s of people out of work and<br />

causing many to lose <str<strong>on</strong>g>the</str<strong>on</strong>g>ir homes. Various investors lost billi<strong>on</strong>s of dollars and several large corporati<strong>on</strong>s<br />

went bankrupt. In <str<strong>on</strong>g>the</str<strong>on</strong>g> aftermath, many small businesses are still having difficulties obtaining bank loans for<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir legitimate operati<strong>on</strong>s because of <str<strong>on</strong>g>the</str<strong>on</strong>g> tightening of credit following <str<strong>on</strong>g>the</str<strong>on</strong>g> financial meltdown triggered, in<br />

part, by Pauls<strong>on</strong>’s big win.<br />

Goldman Sachs, <str<strong>on</strong>g>the</str<strong>on</strong>g> investment bank that played a significant role in <str<strong>on</strong>g>the</str<strong>on</strong>g> irresp<strong>on</strong>sible financial engineering<br />

that promoted <str<strong>on</strong>g>the</str<strong>on</strong>g>se risky loans, has a l<strong>on</strong>g history of questi<strong>on</strong>able deals involving rogue traders and inside<br />

trading. 47 When <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. Security and Exchange Commissi<strong>on</strong> (SEC) charged Goldman Sachs with fraud over<br />

its failure to disclose its relati<strong>on</strong>ship with Pauls<strong>on</strong> with respect to <str<strong>on</strong>g>the</str<strong>on</strong>g>se dealings, <str<strong>on</strong>g>the</str<strong>on</strong>g> firm’s main defense what<br />

that what <str<strong>on</strong>g>the</str<strong>on</strong>g>y did was “business as usual” <strong>on</strong> Wall Street. The fraud charge was settled with Goldman Sachs<br />

paying more than $500 milli<strong>on</strong> in civil penalties, without, of course, admitting any wr<strong>on</strong>gdoings. Not a bad<br />

deal for an investment bank that handed out some $15.4 billi<strong>on</strong> in b<strong>on</strong>uses in 2010.<br />

Just how risky <str<strong>on</strong>g>the</str<strong>on</strong>g> activities of such a major investment instituti<strong>on</strong> can be is indicated by <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that<br />

Goldman Sachs itself was having difficulties borrowing m<strong>on</strong>ey in 2008—just to finance its own operati<strong>on</strong>s.<br />

To overcome this hurdle, <str<strong>on</strong>g>the</str<strong>on</strong>g> company quickly transformed itself into a bank holding company, which made<br />

it eligible to receive short-term loans from <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. Federal Reserve Bank, <str<strong>on</strong>g>the</str<strong>on</strong>g>reby allowing <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. taxpayer<br />

to fund Goldman Sachs’ questi<strong>on</strong>able activities.<br />

History is filled with examples of this kind of immoral and antisocial financial behavior. The resulting<br />

inequality and ec<strong>on</strong>omic instability has c<strong>on</strong>tributed to recurring recessi<strong>on</strong>s and depressi<strong>on</strong>s that have left a<br />

trail of broken dreams and damaged lives.<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

When <str<strong>on</strong>g>the</str<strong>on</strong>g>re is greater equality in a society, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are fewer occasi<strong>on</strong>s of <str<strong>on</strong>g>the</str<strong>on</strong>g>se kinds of highly risky and quasilegal<br />

(if not downright unethical) financial manipulati<strong>on</strong>s. People without a gross excess of financial wealth<br />

are much less likely to take speculative risks with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir m<strong>on</strong>ey, focusing, instead, <strong>on</strong> meeting basic needs and<br />

comfortable sufficiency.<br />

The period between <str<strong>on</strong>g>the</str<strong>on</strong>g> Great Depressi<strong>on</strong> and <str<strong>on</strong>g>the</str<strong>on</strong>g> rise of Reganism was such a period of greater equality in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> United States. The post-WWII period was a time of ec<strong>on</strong>omic growth and a prospering middle-class that<br />

benefited from new jobs and increased purchasing power. This allowed companies to stay profitable and keep<br />

investing to meet c<strong>on</strong>tinuing c<strong>on</strong>sumer demands. It was also a time of high tax rates for <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy and a<br />

time when more of <str<strong>on</strong>g>the</str<strong>on</strong>g>se taxes were used for public goods and services. More people than ever before felt<br />

prosperous and positive about life. It was a time of both prosperity and reduced inequality.<br />

But it did not last. The resurgent financial influence of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy gradually began to eat away at many of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

reforms of <str<strong>on</strong>g>the</str<strong>on</strong>g> Roosevelt era. An increase in overseas investment (where post-Depressi<strong>on</strong> restricti<strong>on</strong>s <strong>on</strong> U.S.<br />

corporate behavior often did not apply) gave <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy a taste for what was possible back in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. More<br />

complex financial instruments were invented and <str<strong>on</strong>g>the</str<strong>on</strong>g> growing financial prosperity gave a false sense of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

power of <str<strong>on</strong>g>the</str<strong>on</strong>g> marketplace—a <str<strong>on</strong>g>the</str<strong>on</strong>g>me reinforced by many think tanks and media that were discretely funded by<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy.<br />

The U.S. and UK took dramatic turns toward deregulating many of <str<strong>on</strong>g>the</str<strong>on</strong>g> social and financial safeguards that<br />

had been put in place by earlier administrati<strong>on</strong>s. R<strong>on</strong>ald Reagan not <strong>on</strong>ly took down <str<strong>on</strong>g>the</str<strong>on</strong>g> solar panels his<br />

predecessor, Jimmy Carter, put <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> White House roof, he also dismantled <str<strong>on</strong>g>the</str<strong>on</strong>g> banking regulati<strong>on</strong>s that<br />

inhibited risky speculati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> financial sector. The Reagan tax cuts, mostly for <str<strong>on</strong>g>the</str<strong>on</strong>g> benefit of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy,<br />

led to a significant increase in inequality. His attack <strong>on</strong> organized labor also served <str<strong>on</strong>g>the</str<strong>on</strong>g> interests of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy<br />

owners at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of <str<strong>on</strong>g>the</str<strong>on</strong>g> workers. The more <str<strong>on</strong>g>the</str<strong>on</strong>g>se tax cuts benefited <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy, <str<strong>on</strong>g>the</str<strong>on</strong>g> more m<strong>on</strong>ey <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />

were able to pour into <str<strong>on</strong>g>the</str<strong>on</strong>g> hands of think tanks and lobbyists. The more workers lost, <str<strong>on</strong>g>the</str<strong>on</strong>g> more corporati<strong>on</strong>s<br />

(and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir owners and stockholders) gained. The more workers lost, <str<strong>on</strong>g>the</str<strong>on</strong>g> less <str<strong>on</strong>g>the</str<strong>on</strong>g>y were able to save and<br />

c<strong>on</strong>sume, <str<strong>on</strong>g>the</str<strong>on</strong>g> more <str<strong>on</strong>g>the</str<strong>on</strong>g>y went into debt. As <str<strong>on</strong>g>the</str<strong>on</strong>g> spending power of U.S. workers declined, globalized<br />

corporati<strong>on</strong>s became less interested in serving domestic needs. Corporati<strong>on</strong>s began to shift <str<strong>on</strong>g>the</str<strong>on</strong>g>ir attenti<strong>on</strong> to<br />

more lucrative markets elsewhere.<br />

Over time, ec<strong>on</strong>omic growth and prosperity became something c<strong>on</strong>fined to <str<strong>on</strong>g>the</str<strong>on</strong>g> already wealthy. A 2005<br />

Citibank newsletter sent to wealthy clients noted that, in <str<strong>on</strong>g>the</str<strong>on</strong>g> advanced ec<strong>on</strong>omies of <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S., Canada and <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

UK, “plut<strong>on</strong>omies” were evolving—ec<strong>on</strong>omies where growth was restricted to <str<strong>on</strong>g>the</str<strong>on</strong>g> rich and where <str<strong>on</strong>g>the</str<strong>on</strong>g> rich<br />

were advised to cater to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r rich people in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir investments. 48<br />

The ultra wealthy actively encouraged this turn toward a c<strong>on</strong>servative agenda, and benefited from it. Wall<br />

Street played a big role in this transformati<strong>on</strong> that occurred over a couple of decades. Influence exerted by<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy led to <str<strong>on</strong>g>the</str<strong>on</strong>g> repeal of anti-trust legislati<strong>on</strong>, made it impossible to regulate <str<strong>on</strong>g>the</str<strong>on</strong>g> market to rein-in<br />

speculative instruments like <str<strong>on</strong>g>the</str<strong>on</strong>g> credit default swaps, deflected attempts by <str<strong>on</strong>g>the</str<strong>on</strong>g> European Uni<strong>on</strong> to regulate<br />

risky speculative investments, weaken <str<strong>on</strong>g>the</str<strong>on</strong>g> already modestly funded financial regulatory agencies such as <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Office of Thrift Supervisi<strong>on</strong>, thwarted attempts by <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. Commodity Futures Trading Commissi<strong>on</strong> to<br />

regulate derivatives markets, and worked toward <str<strong>on</strong>g>the</str<strong>on</strong>g> eliminati<strong>on</strong> or reducti<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> estate tax and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

progressive taxes. 49<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

N<strong>on</strong>e of this was accidental. It was a c<strong>on</strong>certed effort by <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy to expand <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth and power over<br />

governments. MIT business professor, Sim<strong>on</strong> Johns<strong>on</strong>, describes <str<strong>on</strong>g>the</str<strong>on</strong>g> current c<strong>on</strong>solidati<strong>on</strong> of political power<br />

by <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. financial elite as having created <str<strong>on</strong>g>the</str<strong>on</strong>g> “most advanced oligarchy” in <str<strong>on</strong>g>the</str<strong>on</strong>g> world. 50 With <str<strong>on</strong>g>the</str<strong>on</strong>g> growing<br />

number of billi<strong>on</strong>aires in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r nati<strong>on</strong>s, this phenomen<strong>on</strong> now has a global dimensi<strong>on</strong>.<br />

Inflati<strong>on</strong> erodes wealth because it acts as a progressive tax. C<strong>on</strong>trolling inflati<strong>on</strong> and keeping it at a minimum<br />

favors those with large financial assets much more than those with fewer assets. Inflati<strong>on</strong> can actually be a<br />

b<strong>on</strong>us for many in <str<strong>on</strong>g>the</str<strong>on</strong>g> middle class who have fixed mortgages. 51 If inflati<strong>on</strong> increases, <str<strong>on</strong>g>the</str<strong>on</strong>g>n paying off a fixedrate<br />

mortgage with inflated dollars is cheaper than if inflati<strong>on</strong> stays low. And, if salaries rise with inflati<strong>on</strong> (as<br />

is often <str<strong>on</strong>g>the</str<strong>on</strong>g> case), this makes paying off <str<strong>on</strong>g>the</str<strong>on</strong>g> mortgage even cheaper.<br />

But low inflati<strong>on</strong> is often associated with high unemployment — which is good for <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy few and bad<br />

for <str<strong>on</strong>g>the</str<strong>on</strong>g> majority. Central banks, like <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. Federal Reserve, strive for low inflati<strong>on</strong>, clearly siding with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

interests of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy over <str<strong>on</strong>g>the</str<strong>on</strong>g> middle class. 52 When powerful instituti<strong>on</strong>s such as a central bank favors<br />

policies that support <str<strong>on</strong>g>the</str<strong>on</strong>g> retenti<strong>on</strong> and accumulati<strong>on</strong> of wealth, it becomes that much easier for <str<strong>on</strong>g>the</str<strong>on</strong>g> already<br />

rich to increase <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of <str<strong>on</strong>g>the</str<strong>on</strong>g> majority. Most central banks have an official mandate to<br />

balance inflati<strong>on</strong> and employment but, in most cases, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir focus is <strong>on</strong> maintaining <str<strong>on</strong>g>the</str<strong>on</strong>g> interests of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

primary c<strong>on</strong>stituents—<str<strong>on</strong>g>the</str<strong>on</strong>g> major banks that are part of <str<strong>on</strong>g>the</str<strong>on</strong>g> Federal Reserve banking system. These banks,<br />

al<strong>on</strong>g with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir regi<strong>on</strong>al branches and affiliates across <str<strong>on</strong>g>the</str<strong>on</strong>g> country, provide a powerful lobby network for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Federal Reserve to retain its political independence, and thus, its ec<strong>on</strong>omic power.<br />

Few legislators, and even fewer citizens, understand <str<strong>on</strong>g>the</str<strong>on</strong>g> enormous power <str<strong>on</strong>g>the</str<strong>on</strong>g> Federal Reserve has over a<br />

nati<strong>on</strong>’s ec<strong>on</strong>omy. By <str<strong>on</strong>g>the</str<strong>on</strong>g> very structure of <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. Federal Reserve Bank, it is independent of political<br />

c<strong>on</strong>trol, <str<strong>on</strong>g>the</str<strong>on</strong>g>reby taking up<strong>on</strong> itself <str<strong>on</strong>g>the</str<strong>on</strong>g> resp<strong>on</strong>sibility for c<strong>on</strong>trolling <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy. The Fed’s leadership wants<br />

to keep it that way and does so by catering to <str<strong>on</strong>g>the</str<strong>on</strong>g> interests that lobby <strong>on</strong> its behalf when necessary — <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

nati<strong>on</strong>’s largest banks.<br />

The ec<strong>on</strong>omic power of <str<strong>on</strong>g>the</str<strong>on</strong>g> Federal Reserve is reflected in <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that it sets interest rates, dictates <str<strong>on</strong>g>the</str<strong>on</strong>g> size<br />

of <str<strong>on</strong>g>the</str<strong>on</strong>g> m<strong>on</strong>ey supply, and determines <str<strong>on</strong>g>the</str<strong>on</strong>g> rate of inflati<strong>on</strong> and unemployment. It also has a large influence <strong>on</strong><br />

how banks operate and are regulated. In many ways, <str<strong>on</strong>g>the</str<strong>on</strong>g> power of <str<strong>on</strong>g>the</str<strong>on</strong>g> Federal Reserve Bank is similar to that<br />

of <str<strong>on</strong>g>the</str<strong>on</strong>g> Chinese Politburo in <str<strong>on</strong>g>the</str<strong>on</strong>g> Chinese ec<strong>on</strong>omy. Both are unelected bodies and both are managed<br />

ec<strong>on</strong>omies, not market ec<strong>on</strong>omies. They are managed with particular ec<strong>on</strong>omic and social goals in mind.<br />

However, <str<strong>on</strong>g>the</str<strong>on</strong>g>se goals are rarely made explicit to <str<strong>on</strong>g>the</str<strong>on</strong>g> general public, and alternative goals (for example, striving<br />

to provide more stable ec<strong>on</strong>omies and greater social equality) are rarely discussed or c<strong>on</strong>sidered in public.<br />

Like <str<strong>on</strong>g>the</str<strong>on</strong>g> Chinese Politburo, <str<strong>on</strong>g>the</str<strong>on</strong>g> Federal Reserve has a political agenda as well as an ec<strong>on</strong>omic <strong>on</strong>e. In additi<strong>on</strong><br />

to preserving its independence through indirect lobbying efforts, <str<strong>on</strong>g>the</str<strong>on</strong>g> Fed ensures that its political network of<br />

financiers (who do its lobbying) are well rewarded—by keeping inflati<strong>on</strong> low and deregulating banking to<br />

allow for maximum profits in <str<strong>on</strong>g>the</str<strong>on</strong>g> financial sector. Deregulating <str<strong>on</strong>g>the</str<strong>on</strong>g> financial sector is, of course, associated<br />

with an increase in risky investments—which appeals to those with excess capital in search of ever greater<br />

profit, who are willing to take risks, especially if <str<strong>on</strong>g>the</str<strong>on</strong>g>y can use o<str<strong>on</strong>g>the</str<strong>on</strong>g>r people’s m<strong>on</strong>ey. And this is precisely what<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> regulators at <str<strong>on</strong>g>the</str<strong>on</strong>g> Federal Reserve allow, and even encourage—always, mind you, couched in <str<strong>on</strong>g>the</str<strong>on</strong>g> most<br />

arcane ec<strong>on</strong>omic terminology that <strong>on</strong>ly <str<strong>on</strong>g>the</str<strong>on</strong>g> initiated can understand. 53<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

Even legislators who are supposed to regulate <str<strong>on</strong>g>the</str<strong>on</strong>g> finance sector often do not understand all <str<strong>on</strong>g>the</str<strong>on</strong>g> social and<br />

ec<strong>on</strong>omic c<strong>on</strong>sequences of <str<strong>on</strong>g>the</str<strong>on</strong>g> Federal Reserves’ activities. And even if <str<strong>on</strong>g>the</str<strong>on</strong>g>y do, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is always <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

temptati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> revolving door — i.e., <str<strong>on</strong>g>the</str<strong>on</strong>g> promise of a lucrative new career in <str<strong>on</strong>g>the</str<strong>on</strong>g> private sector can<br />

redirect a legislator’s focus regarding his or her future interests. This revolving door saw Wall Street take over<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> top ec<strong>on</strong>omic management positi<strong>on</strong>s inside <str<strong>on</strong>g>the</str<strong>on</strong>g> incoming Obama Administrati<strong>on</strong>. With many top<br />

government financial positi<strong>on</strong>s now held by l<strong>on</strong>g-time members of <strong>on</strong>e Wall Street firm, Goldman Sachs, it<br />

has become a case of <str<strong>on</strong>g>the</str<strong>on</strong>g> inmates running <str<strong>on</strong>g>the</str<strong>on</strong>g> asylum.<br />

With <str<strong>on</strong>g>the</str<strong>on</strong>g> Federal Reserve and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r powerful financial instituti<strong>on</strong>s such as credit rating agencies 54already<br />

predisposed to be open to <str<strong>on</strong>g>the</str<strong>on</strong>g> interests of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy, it is no surprise that <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy take advantage of this<br />

special privilege to make <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wishes known to <str<strong>on</strong>g>the</str<strong>on</strong>g>se instituti<strong>on</strong>s. In <str<strong>on</strong>g>the</str<strong>on</strong>g> process, both <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy and<br />

society as a whole are adversely affected. The inevitable speculative bubbles that are encouraged by<br />

deregulated finance lead to recessi<strong>on</strong>s and depressi<strong>on</strong>s that put milli<strong>on</strong>s of people out of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir homes and<br />

jobs, while fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r enriching <str<strong>on</strong>g>the</str<strong>on</strong>g> few. Such risky behavior is greatly reduced when <str<strong>on</strong>g>the</str<strong>on</strong>g>re is little excess capital<br />

in <str<strong>on</strong>g>the</str<strong>on</strong>g> system and what is available has to be put to practical use by actually making goods people need.<br />

This dynamic is repeated internati<strong>on</strong>ally where global instituti<strong>on</strong>s like <str<strong>on</strong>g>the</str<strong>on</strong>g> World Bank, <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Internati<strong>on</strong>al</str<strong>on</strong>g><br />

M<strong>on</strong>etary Funds, and <str<strong>on</strong>g>the</str<strong>on</strong>g> World Trade Organizati<strong>on</strong> focus <strong>on</strong> increasing <str<strong>on</strong>g>the</str<strong>on</strong>g> wealth and power of <str<strong>on</strong>g>the</str<strong>on</strong>g> global<br />

elite at <str<strong>on</strong>g>the</str<strong>on</strong>g> expense of <str<strong>on</strong>g>the</str<strong>on</strong>g> majority. Entrapping poor nati<strong>on</strong>s into debt slavery by fostering loans that <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />

cannot afford has been a favorite ploy of <str<strong>on</strong>g>the</str<strong>on</strong>g>se instituti<strong>on</strong>s. 55 The so-called benefits of ec<strong>on</strong>omic globalizati<strong>on</strong><br />

largely accrue to <str<strong>on</strong>g>the</str<strong>on</strong>g> few bankers and corporate owners involved in <str<strong>on</strong>g>the</str<strong>on</strong>g>se schemes, leaving impoverished<br />

nati<strong>on</strong>s with costly infrastructure “improvements” that provide little benefits to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir citizens and encouraging<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> extracti<strong>on</strong> and sale of local resources to service foreign debts.<br />

Even when manufacturing plants are c<strong>on</strong>structed and jobs promised, <str<strong>on</strong>g>the</str<strong>on</strong>g> beneficiaries are few. The <str<strong>on</strong>g>the</str<strong>on</strong>g>ory of<br />

globalizati<strong>on</strong> says that Third World incomes will rise with ec<strong>on</strong>omic growth but <str<strong>on</strong>g>the</str<strong>on</strong>g> reality is more often<br />

increased inequality. 56 What jobs are created generally provide subsistence wages, often under abysmal<br />

working c<strong>on</strong>diti<strong>on</strong>s, with local political elites pocketing <str<strong>on</strong>g>the</str<strong>on</strong>g> loaned funds that <str<strong>on</strong>g>the</str<strong>on</strong>g> citizens ultimately will be<br />

obligated to repay. Such arrangements ensure <str<strong>on</strong>g>the</str<strong>on</strong>g> degradati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> poor nati<strong>on</strong>s’ cultures and envir<strong>on</strong>ments<br />

al<strong>on</strong>g with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ec<strong>on</strong>omies.<br />

There are many examples of nati<strong>on</strong>s that were touted as shining examples of globalizati<strong>on</strong> that appeared to<br />

thrive when foreign investments first poured in, <strong>on</strong>ly to be vilified later, <strong>on</strong>ce <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ec<strong>on</strong>omies failed. But<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se ec<strong>on</strong>omies failed precisely because <str<strong>on</strong>g>the</str<strong>on</strong>g>y had followed <str<strong>on</strong>g>the</str<strong>on</strong>g> prescripti<strong>on</strong>s of <str<strong>on</strong>g>the</str<strong>on</strong>g> instituti<strong>on</strong>s promoting<br />

globalizati<strong>on</strong>—<str<strong>on</strong>g>the</str<strong>on</strong>g>y accepted loans <str<strong>on</strong>g>the</str<strong>on</strong>g>y could never repay, or <str<strong>on</strong>g>the</str<strong>on</strong>g>y allowed <str<strong>on</strong>g>the</str<strong>on</strong>g>ir resources to be depleted, or<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>y were outcompeted by o<str<strong>on</strong>g>the</str<strong>on</strong>g>r nati<strong>on</strong>s that (encouraged by <str<strong>on</strong>g>the</str<strong>on</strong>g> same internati<strong>on</strong>al instituti<strong>on</strong>s to be part of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> global ec<strong>on</strong>omy) produced similar exports at a lower cost. Ec<strong>on</strong>omic globalizati<strong>on</strong> has brought <str<strong>on</strong>g>the</str<strong>on</strong>g> many<br />

problems associated with inequities in wealth to be writ large across <str<strong>on</strong>g>the</str<strong>on</strong>g> globe. 57<br />

This globalizati<strong>on</strong> of great extremes of wealth and poverty has benefited <str<strong>on</strong>g>the</str<strong>on</strong>g> few and impoverished <str<strong>on</strong>g>the</str<strong>on</strong>g> many,<br />

destroying ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than building genuine ec<strong>on</strong>omies designed to support people into <str<strong>on</strong>g>the</str<strong>on</strong>g> future. The<br />

c<strong>on</strong>sequences of growing inequality are well understood by <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy, but <str<strong>on</strong>g>the</str<strong>on</strong>g> fact that <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own special<br />

interests can be served by <str<strong>on</strong>g>the</str<strong>on</strong>g>se policies and regulati<strong>on</strong>s overshadows any impulses to fairness and equity <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />

may experience.<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

It must be noted that <str<strong>on</strong>g>the</str<strong>on</strong>g> symbiotic relati<strong>on</strong>ship between those with extreme wealth and elected or appointed<br />

officials grossly distorts <str<strong>on</strong>g>the</str<strong>on</strong>g> democratic process. In additi<strong>on</strong> to corrupting democracy, extremes of wealth<br />

stifle upward social mobility, which is a cornerst<strong>on</strong>e of a just society, especially <strong>on</strong>e supposedly based <strong>on</strong> a<br />

meritocracy.<br />

President Franklin Roosevelt reflected this sentiment when he warned: “Government by organized m<strong>on</strong>ey is as<br />

dangerous as government by <str<strong>on</strong>g>the</str<strong>on</strong>g> organized mob.”<br />

Clearly, what is best for <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy is not good ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r for <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy, for society, or for democratic<br />

instituti<strong>on</strong>s and processes. The relati<strong>on</strong>ship between those with extreme wealth and <str<strong>on</strong>g>the</str<strong>on</strong>g> majority is not <strong>on</strong>e of<br />

mutual benefit, but <strong>on</strong>e that more resembles that of a vampire bat and its prey.<br />

MYTH # 3: High Financial Rewards Are Required To Motivate People<br />

One of <str<strong>on</strong>g>the</str<strong>on</strong>g> arguments invoked to support <str<strong>on</strong>g>the</str<strong>on</strong>g> idea that wealth accumulati<strong>on</strong> is not <strong>on</strong>ly good but necessary is<br />

based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> noti<strong>on</strong> that high rewards are required for high achievements. The argument goes that if we want<br />

a prosperous, innovative society, <str<strong>on</strong>g>the</str<strong>on</strong>g>n we need to provide high rewards for those that are high achievers. This<br />

is what motivates people to succeed and make great things happen. According to this argument, a society<br />

devoid of high rewards would be grey and stagnant, with no motivati<strong>on</strong> for any<strong>on</strong>e to innovate or apply <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

genius to what <str<strong>on</strong>g>the</str<strong>on</strong>g> world needs. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, <str<strong>on</strong>g>the</str<strong>on</strong>g> high rewards must be financial in nature.<br />

There are multiple problems with this myth.<br />

First of all, intrinsic rewards can be as least as powerful and motivating as financial rewards. Focusing<br />

exclusively <strong>on</strong> financial rewards reflects a c<strong>on</strong>stricted homo ec<strong>on</strong>omicus view of humanity—<str<strong>on</strong>g>the</str<strong>on</strong>g> prevailing<br />

assumpti<strong>on</strong> of neoclassical ec<strong>on</strong>omics. This is a partially valid but significantly incomplete view of human<br />

nature. People are motivated for a wide variety of reas<strong>on</strong>s, many of which cannot be replaced by m<strong>on</strong>ey. In<br />

fact, some of our most powerful motivati<strong>on</strong>s derive from altruistic impulses that are as much part of human<br />

nature as self-interest and greed. These altruistic impulses push us to make sacrifices for o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs, whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />

are members of our own family whom we love, or even complete strangers whose lives are saved by <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

heroic acti<strong>on</strong>s of a Good Samaritan.<br />

The enormous amount of volunteerism that people engage in is ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r example of n<strong>on</strong>-m<strong>on</strong>etary<br />

motivati<strong>on</strong>s making important c<strong>on</strong>tributi<strong>on</strong>s to society. Such activities may involve visiting shut-ins at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

local retirement villa, as well as highly qualified professi<strong>on</strong>als who engage in pro b<strong>on</strong>o work because a cause<br />

arouses <str<strong>on</strong>g>the</str<strong>on</strong>g>ir pers<strong>on</strong>al interests. Many groundbreaking legal precedents have been set by lawyers working as<br />

volunteers. Many important scientific discoveries and technical inventi<strong>on</strong>s have also been produced by<br />

individuals driven by intellectual curiosity or a desire to provide a service with little c<strong>on</strong>siderati<strong>on</strong> of<br />

remunerati<strong>on</strong>.<br />

O<str<strong>on</strong>g>the</str<strong>on</strong>g>r examples of intrinsic motivati<strong>on</strong>s are seen when people do things for <str<strong>on</strong>g>the</str<strong>on</strong>g> sheer pleasure of doing <str<strong>on</strong>g>the</str<strong>on</strong>g>m.<br />

This can apply to athletes who strive to be <str<strong>on</strong>g>the</str<strong>on</strong>g> best, artists who are absorbed with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir craft, scientists who<br />

enjoy <str<strong>on</strong>g>the</str<strong>on</strong>g> thrill of discovery, or even business people who take pride in providing an important good or<br />

service to a community <str<strong>on</strong>g>the</str<strong>on</strong>g>y are part of. Human nature requires community as much as it does self-interest.<br />

Surely <str<strong>on</strong>g>the</str<strong>on</strong>g> world is a better place for <str<strong>on</strong>g>the</str<strong>on</strong>g>se pursuits, n<strong>on</strong>e of which require large financial rewards.<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

Much of our sense of self (how we value ourselves and how o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs view us) derives from <str<strong>on</strong>g>the</str<strong>on</strong>g> work we do and<br />

how we c<strong>on</strong>tribute to <str<strong>on</strong>g>the</str<strong>on</strong>g> community we are part of. For many small local businesses, being a useful part of a<br />

community is as important as profit. It is when we make a transiti<strong>on</strong> from providing a genuinely useful good<br />

or service to a community we care about, to focus <strong>on</strong> making a profit by selling something, that our<br />

motivati<strong>on</strong> changes.<br />

And this change is not necessarily <str<strong>on</strong>g>the</str<strong>on</strong>g> better for society as a whole. Indeed, when financial rewards become<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> dominant focus of activities, <str<strong>on</strong>g>the</str<strong>on</strong>g>y can have a significant distorting effect <strong>on</strong> that activity. A few decades<br />

ago, various athletic achievements were pursued with c<strong>on</strong>siderable vigor and skill (e.g. <str<strong>on</strong>g>the</str<strong>on</strong>g> number of home<br />

runs in a baseball seas<strong>on</strong>). However, with <str<strong>on</strong>g>the</str<strong>on</strong>g> introducti<strong>on</strong> of skyrocketing salaries now offered for top<br />

athletes, <str<strong>on</strong>g>the</str<strong>on</strong>g> temptati<strong>on</strong> to use cheat or use performance-enhancing drugs has increased.<br />

The same distorti<strong>on</strong>s occur in business and finance. The opportunities that today’s regulati<strong>on</strong>s allow for<br />

obtaining enormous salaries or profits can drive owners and senior managers to take safety shortcuts, illegally<br />

evade taxes, abuse <str<strong>on</strong>g>the</str<strong>on</strong>g> rights of indigenous peoples, ignore <str<strong>on</strong>g>the</str<strong>on</strong>g> human or envir<strong>on</strong>mental impacts of polluti<strong>on</strong>,<br />

cheat employees of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wages or pensi<strong>on</strong>s, depress shareholder value, or wreak havoc with ecosystems. The<br />

Big Prize (profit and payout) for <str<strong>on</strong>g>the</str<strong>on</strong>g> few does indeed become a powerful motivator. But, in such cases, it is<br />

difficult to see how <str<strong>on</strong>g>the</str<strong>on</strong>g>se distorti<strong>on</strong>s make a positive c<strong>on</strong>tributi<strong>on</strong> to bettering society. Perhaps it would be<br />

better if such powerful motivati<strong>on</strong>s were not encouraged or allowed.<br />

Questi<strong>on</strong>ing <str<strong>on</strong>g>the</str<strong>on</strong>g> role of big financial rewards in motivating great achievements means we also have to<br />

questi<strong>on</strong> what is c<strong>on</strong>sidered a “great achievement.” The example of hedge fund operator John Pauls<strong>on</strong>—a<br />

man who earned several billi<strong>on</strong> dollars in <strong>on</strong>e year and is c<strong>on</strong>sidered a great success in <str<strong>on</strong>g>the</str<strong>on</strong>g> financial media—<br />

shows just how destructive such achievements can be. Ostentatious c<strong>on</strong>sumpti<strong>on</strong> of luxury items is portrayed<br />

as a great achievement; so is making a marginal c<strong>on</strong>tributi<strong>on</strong> to some technology while ignoring <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong><br />

heritage of knowledge that made that marginal c<strong>on</strong>tributi<strong>on</strong> possible. When accumulating wealth becomes <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

<strong>on</strong>ly goal, ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than making a genuine c<strong>on</strong>tributi<strong>on</strong> to people’s well being, we should know we are running<br />

<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> wr<strong>on</strong>g track.<br />

Wal-Mart’s success as a profitable business is often held up as a great achievement. It is <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> largest and<br />

most profitable corporati<strong>on</strong>s <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> planet, with annual revenues in excess of many nati<strong>on</strong>s. It is argued that<br />

Wal-Mart has d<strong>on</strong>e much good in bringing inexpensive goods to people who o<str<strong>on</strong>g>the</str<strong>on</strong>g>rwise might not be able to<br />

afford <str<strong>on</strong>g>the</str<strong>on</strong>g>m while creating thousands of jobs—including those of <str<strong>on</strong>g>the</str<strong>on</strong>g> Chinese and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r Asian workers who<br />

produce most of <str<strong>on</strong>g>the</str<strong>on</strong>g> goods sold in Wal-Mart stores.<br />

But what is ignored in this analysis is <str<strong>on</strong>g>the</str<strong>on</strong>g> thousands of jobs and small businesses destroyed by Wal-Mart’s bixbox<br />

invasi<strong>on</strong> of a community, <str<strong>on</strong>g>the</str<strong>on</strong>g> enormous envir<strong>on</strong>mental damage d<strong>on</strong>e by using declining resources (that<br />

could be used locally for more important tasks) to manufacture cheap goods that quickly enter <str<strong>on</strong>g>the</str<strong>on</strong>g> waste<br />

stream. Creating low-paying jobs in China and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r cheap labor markets is not necessarily a good thing,<br />

ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r for <str<strong>on</strong>g>the</str<strong>on</strong>g> laborers directly involved, or for <str<strong>on</strong>g>the</str<strong>on</strong>g> home-based employees <str<strong>on</strong>g>the</str<strong>on</strong>g>y displace. And <str<strong>on</strong>g>the</str<strong>on</strong>g> hugh scale<br />

of <str<strong>on</strong>g>the</str<strong>on</strong>g> Wal-Mart’s commercial exchanges with China provides Beijing with <str<strong>on</strong>g>the</str<strong>on</strong>g> more funds to c<strong>on</strong>tinue<br />

growing <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ec<strong>on</strong>omy at an Earth-destroying rate, while creating troublesome trade balances with <str<strong>on</strong>g>the</str<strong>on</strong>g> United<br />

States.<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

Great achievements driven by intrinsic motivati<strong>on</strong>s are likely to be much more beneficial to society than socalled<br />

“great achievements” driven by greed. An ec<strong>on</strong>omic system that focuses <strong>on</strong> rewarding c<strong>on</strong>tinued<br />

expansi<strong>on</strong> and wealth accumulati<strong>on</strong> is <strong>on</strong>e that will destroy people’s lives, whole societies, and <str<strong>on</strong>g>the</str<strong>on</strong>g> natural<br />

world that remains is <str<strong>on</strong>g>the</str<strong>on</strong>g> fundamental source of all our genuine wealth.<br />

Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r hole in this argument that high rewards are needed to ensure great achievements is that high rewards<br />

are not always associated with high performance. Top CEO salaries have increased many times faster than<br />

ei<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g> ec<strong>on</strong>omy in general or even than <str<strong>on</strong>g>the</str<strong>on</strong>g> corporati<strong>on</strong>s <str<strong>on</strong>g>the</str<strong>on</strong>g>y manage. In 1950, General Motors was a<br />

thriving corporati<strong>on</strong> that paid its CEO just over half a milli<strong>on</strong> dollars a year (about $5 milli<strong>on</strong> in today’s<br />

dollars). In 2007, GM ran a loss of $39 billi<strong>on</strong> but paid its <str<strong>on</strong>g>the</str<strong>on</strong>g>n-CEO ore than $15 milli<strong>on</strong>. After <str<strong>on</strong>g>the</str<strong>on</strong>g> 2008<br />

financial meltdown, many Wall Street financial firms resp<strong>on</strong>sible for <str<strong>on</strong>g>the</str<strong>on</strong>g> meltdown paid executive b<strong>on</strong>uses<br />

totaling $18.4 billi<strong>on</strong>, even while <str<strong>on</strong>g>the</str<strong>on</strong>g> firms <str<strong>on</strong>g>the</str<strong>on</strong>g>y led were collapsing.<br />

Ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r problem with <str<strong>on</strong>g>the</str<strong>on</strong>g> “motivati<strong>on</strong>” argument is that high rewards are most important for those at <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

low end of <str<strong>on</strong>g>the</str<strong>on</strong>g> income spectrum, not at <str<strong>on</strong>g>the</str<strong>on</strong>g> top end. If some<strong>on</strong>e is making a minimal wage, a small increase in<br />

pay can make a significant difference in <str<strong>on</strong>g>the</str<strong>on</strong>g>ir lives. Whereas a proporti<strong>on</strong>al increase in income for some<strong>on</strong>e at<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> top end is much less noticeable, and unlikely to make much of a difference, o<str<strong>on</strong>g>the</str<strong>on</strong>g>r than in some<strong>on</strong>e’s<br />

perceived status.<br />

Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>rmore, while jobs that are dreary, repetitive and unpleasant are often low-paid, <str<strong>on</strong>g>the</str<strong>on</strong>g>y are often very<br />

important to society. Whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r it is cleaning toilets or digging ditches, if <str<strong>on</strong>g>the</str<strong>on</strong>g>se activities were not d<strong>on</strong>e, life<br />

would be c<strong>on</strong>siderably less pleasant. The intrinsic satisfacti<strong>on</strong>s that come with performing higher paying roles<br />

(e.g., artistic endeavors or professi<strong>on</strong>al activities of various sorts) are often not available to those with menial<br />

but necessary jobs. By rights, <str<strong>on</strong>g>the</str<strong>on</strong>g>se individuals with menial jobs should have higher pay to make up for <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

lack of intrinsic satisfacti<strong>on</strong>s available to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r workers, to ensure <str<strong>on</strong>g>the</str<strong>on</strong>g>y do <str<strong>on</strong>g>the</str<strong>on</strong>g>ir jobs well and receive fair<br />

compensati<strong>on</strong>. For menial laborers, <str<strong>on</strong>g>the</str<strong>on</strong>g> absolute level of pay is critically important to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir general<br />

satisfacti<strong>on</strong>. 58<br />

As with many myths, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are some elements of truth in <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e about high rewards being important. But<br />

what is important is not what <str<strong>on</strong>g>the</str<strong>on</strong>g> myth says is important. Financial rewards are more important for those at<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> bottom of <str<strong>on</strong>g>the</str<strong>on</strong>g> wage scale and financial rewards are important for most people, but <strong>on</strong>ly up to a certain<br />

level. Much evidence is available to c<strong>on</strong>clude that <strong>on</strong>ce people achieve a basic level of material well being,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>y become less motivated by m<strong>on</strong>ey. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r c<strong>on</strong>siderati<strong>on</strong>s—such as being with family and friends,<br />

engaging in pers<strong>on</strong>al interests, and c<strong>on</strong>necting with <strong>on</strong>e’s community—become more important determinants<br />

of happiness and pers<strong>on</strong>al satisfacti<strong>on</strong>. 59<br />

What does matter is <str<strong>on</strong>g>the</str<strong>on</strong>g> relative rewards some<strong>on</strong>e receives compared to o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs, not <str<strong>on</strong>g>the</str<strong>on</strong>g> absolute level. As<br />

social creatures, we compare ourselves with o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs, especially those we c<strong>on</strong>sider to be our peers. 60 The<br />

questi<strong>on</strong> to ask is: “What level of relative rewards c<strong>on</strong>tributes to positive motivati<strong>on</strong> to stretch <strong>on</strong>eself to<br />

achieve more”? The answer appears to be “not much.” Higher pay can indeed motivate people to try harder,<br />

to think more creatively and work l<strong>on</strong>ger hours. But <str<strong>on</strong>g>the</str<strong>on</strong>g> incentives do not have to be <str<strong>on</strong>g>the</str<strong>on</strong>g> huge multiples <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />

now are in many companies. Currently all <str<strong>on</strong>g>the</str<strong>on</strong>g> cream rises to <str<strong>on</strong>g>the</str<strong>on</strong>g> top.<br />

A senior U.S. sociologist reports “<str<strong>on</strong>g>the</str<strong>on</strong>g> median [annual] compensati<strong>on</strong> for CEO's in all industries as of early 2010 is $3.9<br />

milli<strong>on</strong>; it's $10.6 milli<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> companies listed in Standard and Poor's 500, and $19.8 milli<strong>on</strong> for <str<strong>on</strong>g>the</str<strong>on</strong>g> companies listed in<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Dow-J<strong>on</strong>es Industrial Average. Since <str<strong>on</strong>g>the</str<strong>on</strong>g> median worker's pay is about $36,000, <str<strong>on</strong>g>the</str<strong>on</strong>g>n you can quickly calculate that CEOs<br />

in general make 100 times as much as <str<strong>on</strong>g>the</str<strong>on</strong>g> workers, that CEO's of S&P 500 firms make almost 300 times as much, and that<br />

CEOs at <str<strong>on</strong>g>the</str<strong>on</strong>g> Dow-J<strong>on</strong>es companies make 550 times as much.” 61<br />

Apparently, South Africa has <str<strong>on</strong>g>the</str<strong>on</strong>g> largest differences between CEO and worker pay: A top corporate official<br />

takes home 1278 times more than <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest-paid worker. 62<br />

It is doubtful whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r any of <str<strong>on</strong>g>the</str<strong>on</strong>g>se CEOs would have worked less hard or been less creative if <str<strong>on</strong>g>the</str<strong>on</strong>g>ir income<br />

<strong>on</strong>ly increased by say 10 % instead of <str<strong>on</strong>g>the</str<strong>on</strong>g> 31% reported. CEOs’ compensati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> past was not such a high<br />

multiple of worker’s salaries, nor are <str<strong>on</strong>g>the</str<strong>on</strong>g> salaries of CEO’s in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r prosperous nati<strong>on</strong>s so much higher than<br />

that of <str<strong>on</strong>g>the</str<strong>on</strong>g> average workers, yet <str<strong>on</strong>g>the</str<strong>on</strong>g>ir companies and nati<strong>on</strong>al ec<strong>on</strong>omies are successful.<br />

Extremely high financial rewards are not needed to ensure performance. This is evident from <str<strong>on</strong>g>the</str<strong>on</strong>g> poor<br />

performances associated with some very high CEO salaries, <str<strong>on</strong>g>the</str<strong>on</strong>g> ratio of CEO salaries to those of <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest<br />

paid workers from both <str<strong>on</strong>g>the</str<strong>on</strong>g> past, and compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> ratios in o<str<strong>on</strong>g>the</str<strong>on</strong>g>r successful ec<strong>on</strong>omies. It is <strong>on</strong>ly <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

CEOs who benefit from <str<strong>on</strong>g>the</str<strong>on</strong>g>se high ratios, not necessarily <str<strong>on</strong>g>the</str<strong>on</strong>g> companies <str<strong>on</strong>g>the</str<strong>on</strong>g>y manage nor <str<strong>on</strong>g>the</str<strong>on</strong>g> societies <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />

operate in.<br />

Are <str<strong>on</strong>g>the</str<strong>on</strong>g>se high salaries needed to recruit <str<strong>on</strong>g>the</str<strong>on</strong>g> “best talent” that might o<str<strong>on</strong>g>the</str<strong>on</strong>g>rwise be lost to better-paying<br />

competitors? This is <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most frequent arguments used to justify extreme levels of compensati<strong>on</strong>. The<br />

answer is simply, “no.” Financial compensati<strong>on</strong> al<strong>on</strong>e is not <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly c<strong>on</strong>siderati<strong>on</strong> for a senior manager to<br />

accept a positi<strong>on</strong>. Relative rewards are important, not absolute levels.<br />

CEO pay is determined by boards of directors, whose compensati<strong>on</strong> is, in turn, determined by <str<strong>on</strong>g>the</str<strong>on</strong>g> CEO. This<br />

cozy relati<strong>on</strong>ship (often am<strong>on</strong>g former classmates and colleagues) has been described by a U.S. Court of<br />

Appeals judge who is also a University of Chicago Law professor. He notes: “Shareholder electi<strong>on</strong> of directors [of<br />

large corporati<strong>on</strong>s] resembles <str<strong>on</strong>g>the</str<strong>on</strong>g> system of voting in <str<strong>on</strong>g>the</str<strong>on</strong>g> Soviet Uni<strong>on</strong> and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r totalitarian nati<strong>on</strong>s.” 63 Directors and CEOs<br />

do a lot of mutual back-scratching, including making sure that <str<strong>on</strong>g>the</str<strong>on</strong>g>ir collective salaries are as high as possible.<br />

This process has a far greater impact <strong>on</strong> compensati<strong>on</strong> packages than competing for talent am<strong>on</strong>g<br />

corporati<strong>on</strong>s.<br />

Indeed, <str<strong>on</strong>g>the</str<strong>on</strong>g>re are many social, populati<strong>on</strong>, health, envir<strong>on</strong>mental and ec<strong>on</strong>omic problems associated with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

inequality that <str<strong>on</strong>g>the</str<strong>on</strong>g>se extreme compensati<strong>on</strong> packages reflect.<br />

One of <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sequences of <str<strong>on</strong>g>the</str<strong>on</strong>g>se high salaries is that much of <str<strong>on</strong>g>the</str<strong>on</strong>g>m become wasted resources. Such high<br />

salaries are not needed to ensure high performance. The m<strong>on</strong>ey spent <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g>se salaries could be used to<br />

better compensate o<str<strong>on</strong>g>the</str<strong>on</strong>g>r employees, used for R&D within <str<strong>on</strong>g>the</str<strong>on</strong>g> company, or paid in taxes. It is a squandering<br />

of valuable resources that could be used to greater benefit of both <str<strong>on</strong>g>the</str<strong>on</strong>g> companies involved and society in<br />

general. These excess financial resources give a few individuals enormous political power, adversely<br />

influencing <str<strong>on</strong>g>the</str<strong>on</strong>g> lives and well being of milli<strong>on</strong>s of people.<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

MYTH # 4: The Wealthy Give Back to Society through Philanthropy<br />

One of <str<strong>on</strong>g>the</str<strong>on</strong>g> justificati<strong>on</strong>s for wealth accumulati<strong>on</strong> is that <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy are <str<strong>on</strong>g>the</str<strong>on</strong>g> biggest philanthropists,<br />

benefitting society with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir largess. This largess is said to provide a range of public services unfunded or<br />

underfunded by governments, and redistribute wealth in <str<strong>on</strong>g>the</str<strong>on</strong>g> general populati<strong>on</strong>.<br />

Charitable d<strong>on</strong>ati<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. topped $200 billi<strong>on</strong> in 2007, a large amount with great potential to do good.<br />

Most of <str<strong>on</strong>g>the</str<strong>on</strong>g>se d<strong>on</strong>ati<strong>on</strong>s come from individuals ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than corporati<strong>on</strong>s, and higher income families provide<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> largest amount of charitable c<strong>on</strong>tributi<strong>on</strong>s in absolute dollars. Recently, a “Billi<strong>on</strong>aires’ Club” of some<br />

very wealthy individuals has pledged to give significant amounts of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir sizeable fortunes to charity—over<br />

time. 64<br />

C<strong>on</strong>trary to popular belief, however, it is lower-income families that actually d<strong>on</strong>ate <str<strong>on</strong>g>the</str<strong>on</strong>g> highest percent of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir income to charitable causes 65 and, in absolute dollar terms, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir c<strong>on</strong>tributi<strong>on</strong>s are significant.<br />

Charitable c<strong>on</strong>tributi<strong>on</strong>s almost always involve <str<strong>on</strong>g>the</str<strong>on</strong>g> opportunity for tax deducti<strong>on</strong>s. Wealthy individuals are<br />

likely to benefit more from <str<strong>on</strong>g>the</str<strong>on</strong>g>se deducti<strong>on</strong>s, especially compared to <str<strong>on</strong>g>the</str<strong>on</strong>g> lowest income earners who likely pay<br />

little if any tax, yet d<strong>on</strong>ate <str<strong>on</strong>g>the</str<strong>on</strong>g> highest percentage of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir incomes of all groups.<br />

The groups that benefit most from charitable d<strong>on</strong>ati<strong>on</strong>s are religious organizati<strong>on</strong>s (almost a third of all U.S.<br />

d<strong>on</strong>ati<strong>on</strong>s) and educati<strong>on</strong>al instituti<strong>on</strong>s (receiving about 14%), with arts, culture and <str<strong>on</strong>g>the</str<strong>on</strong>g> humanities also<br />

receiving several billi<strong>on</strong> dollars a year in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. 66<br />

Canadian mining executive, Peter Munk, recently d<strong>on</strong>ated $35 milli<strong>on</strong> dollars to establish a global affairs<br />

institute at <str<strong>on</strong>g>the</str<strong>on</strong>g> University of Tor<strong>on</strong>to. Naturally <str<strong>on</strong>g>the</str<strong>on</strong>g> institute is named <str<strong>on</strong>g>the</str<strong>on</strong>g> Munk School of Global Affairs.<br />

This charitable d<strong>on</strong>ati<strong>on</strong> allowed him to deduct at least $16 milli<strong>on</strong> from his taxes over several years (more, if<br />

he made <str<strong>on</strong>g>the</str<strong>on</strong>g> d<strong>on</strong>ati<strong>on</strong> in shares of a publicly traded company, as most wealthy d<strong>on</strong>ors do to fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r reduce<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir taxes). The funds d<strong>on</strong>ated, however, were <strong>on</strong>ly part (and a small part, at that) of <str<strong>on</strong>g>the</str<strong>on</strong>g> capital needed to<br />

establish <str<strong>on</strong>g>the</str<strong>on</strong>g> centre. The rest of <str<strong>on</strong>g>the</str<strong>on</strong>g> funds are being provided by <str<strong>on</strong>g>the</str<strong>on</strong>g> Ontario and Canadian governments (i.e.,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> taxpayers). In fact, <str<strong>on</strong>g>the</str<strong>on</strong>g> li<strong>on</strong>’s share of <str<strong>on</strong>g>the</str<strong>on</strong>g> cost of <str<strong>on</strong>g>the</str<strong>on</strong>g> Munk School is being covered by taxpayers, who will<br />

c<strong>on</strong>tinue to c<strong>on</strong>tribute over <str<strong>on</strong>g>the</str<strong>on</strong>g> life of <str<strong>on</strong>g>the</str<strong>on</strong>g> center.<br />

What M<strong>on</strong>k has d<strong>on</strong>e is establish himself as a major philanthropist, arranged to have his name h<strong>on</strong>orably and<br />

prominently displayed in a major public area of Tor<strong>on</strong>to, Ontario, and received c<strong>on</strong>siderable media adulati<strong>on</strong>.<br />

He has also avoided some taxes but, most importantly, he has managed to thwart scholarly discussi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

mining industry, and has d<strong>on</strong>e so largely at public expense. How likely is it that any academic at this center<br />

will attempt to research <str<strong>on</strong>g>the</str<strong>on</strong>g> social or envir<strong>on</strong>mental impacts of mining? University officials are not likely to<br />

appoint academics to this school (or o<str<strong>on</strong>g>the</str<strong>on</strong>g>r departments in <str<strong>on</strong>g>the</str<strong>on</strong>g> university) who might have political views or<br />

c<strong>on</strong>duct research that would offend <str<strong>on</strong>g>the</str<strong>on</strong>g> sensibilities of this generous benefactor. The fact that Munk’s mining<br />

ventures have been attacked by envir<strong>on</strong>mentalists and indigenous peoples in Chile, Argentina, Peru, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

Philippines and Tanzania—and that <str<strong>on</strong>g>the</str<strong>on</strong>g>re is an annual Global Day of Acti<strong>on</strong> Against Barrick Gold<br />

Corporati<strong>on</strong> (Munk’s company)—goes unnoticed in <str<strong>on</strong>g>the</str<strong>on</strong>g> Canadian media.<br />

A c<strong>on</strong>siderable amount of charitable d<strong>on</strong>ati<strong>on</strong>s by <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy is of this self-aggrandizing nature. Arts<br />

Centers, sports stadiums, hospitals and research institutes are often named after wealthy d<strong>on</strong>ors who receive<br />

c<strong>on</strong>siderable public (and pers<strong>on</strong>al) benefits for <str<strong>on</strong>g>the</str<strong>on</strong>g>ir c<strong>on</strong>tributi<strong>on</strong>s. In additi<strong>on</strong>, because of <str<strong>on</strong>g>the</str<strong>on</strong>g> size of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

d<strong>on</strong>ati<strong>on</strong>s, large d<strong>on</strong>ors often influence <str<strong>on</strong>g>the</str<strong>on</strong>g> directi<strong>on</strong> of research and public policies, often in a directi<strong>on</strong> that<br />

benefits <str<strong>on</strong>g>the</str<strong>on</strong>g> d<strong>on</strong>or. Pharmaceutical company d<strong>on</strong>ati<strong>on</strong>s to cancer research provide a prime example. Ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

than focus <strong>on</strong> preventing cancers that have envir<strong>on</strong>mental/chemical triggers, <str<strong>on</strong>g>the</str<strong>on</strong>g> Big Pharma companies<br />

encourage research into <str<strong>on</strong>g>the</str<strong>on</strong>g> efficacy of drugs to treat <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>diti<strong>on</strong>s ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than preventing <str<strong>on</strong>g>the</str<strong>on</strong>g> cause. 67<br />

According to some sources, Bill Gates is secretly funding geo-engineering soluti<strong>on</strong>s to climate change. Gates<br />

has invested in a company that is promoting a scheme called StratoShield, which would pump sulphur dioxide<br />

into <str<strong>on</strong>g>the</str<strong>on</strong>g> upper atmosphere—a proposed geo-engineering soluti<strong>on</strong> to offset Global Warming. O<str<strong>on</strong>g>the</str<strong>on</strong>g>r wellmeaning<br />

billi<strong>on</strong>aires are also looking at geo-engineering soluti<strong>on</strong>s to climate change. 68 Even if we put aside<br />

any financial self-interest in such activities and acknowledge <str<strong>on</strong>g>the</str<strong>on</strong>g> good intenti<strong>on</strong>s behind <str<strong>on</strong>g>the</str<strong>on</strong>g>se endeavors,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>re is <str<strong>on</strong>g>the</str<strong>on</strong>g> danger that some individuals with sufficient financial resources could actually unilaterally attempt<br />

some of <str<strong>on</strong>g>the</str<strong>on</strong>g>se dangerous geo-engineering soluti<strong>on</strong>s without any democratic civilian or scientific oversight.<br />

Many d<strong>on</strong>ors sit <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> boards of <str<strong>on</strong>g>the</str<strong>on</strong>g> instituti<strong>on</strong>s <str<strong>on</strong>g>the</str<strong>on</strong>g>y d<strong>on</strong>ate to, providing <str<strong>on</strong>g>the</str<strong>on</strong>g>m an opportunity to exert<br />

direct influence. Not many wealthy patr<strong>on</strong>s sit <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> boards of poverty coaliti<strong>on</strong>s, food banks or<br />

envir<strong>on</strong>mental advocacy groups.<br />

The wealthy have many ways of directing <str<strong>on</strong>g>the</str<strong>on</strong>g>ir m<strong>on</strong>ey to causes <str<strong>on</strong>g>the</str<strong>on</strong>g>y support—causes that may or may not be<br />

in <str<strong>on</strong>g>the</str<strong>on</strong>g> public interest. For example, <str<strong>on</strong>g>the</str<strong>on</strong>g> Bill and Melinda Gates Foundati<strong>on</strong> recently purchased some 500,000<br />

shares of M<strong>on</strong>santo for about $23 milli<strong>on</strong>. M<strong>on</strong>santo had recently purchased <str<strong>on</strong>g>the</str<strong>on</strong>g> largest mercenary army in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> world, formerly known as Blackwater. A related company, Total Intelligence Soluti<strong>on</strong>s, is used by<br />

M<strong>on</strong>santo to spy <strong>on</strong> and infiltrate organizati<strong>on</strong>s of animal rights activists, anti-GM and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r dirty activities of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> biotech giant. 69 The Gates Foundati<strong>on</strong> is said to share M<strong>on</strong>santo’s interest in replacing traditi<strong>on</strong>al African<br />

seeds with corporately c<strong>on</strong>trolled “patented” seeds.<br />

Not a great deal of charitable d<strong>on</strong>ati<strong>on</strong>s from <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy end up benefitting <str<strong>on</strong>g>the</str<strong>on</strong>g> poorest members of society,<br />

or address significant social or envir<strong>on</strong>mental problems. But even when wealthy philanthropists make a<br />

serious effort in <str<strong>on</strong>g>the</str<strong>on</strong>g>se directi<strong>on</strong>s, things do not always turn out as planned.<br />

The Bill and Melinda Gates Foundati<strong>on</strong> is to be credited with making significant financial c<strong>on</strong>tributi<strong>on</strong>s to<br />

tasks like eradicating polio and improving public educati<strong>on</strong>. Unfortunately, both of <str<strong>on</strong>g>the</str<strong>on</strong>g>se $1 billi<strong>on</strong>-plus<br />

projects failed. Polio c<strong>on</strong>tinues to spread across Africa and Gates himself admitted that <str<strong>on</strong>g>the</str<strong>on</strong>g> Foundati<strong>on</strong>’s<br />

educati<strong>on</strong>al programs were not working. 70<br />

Part of <str<strong>on</strong>g>the</str<strong>on</strong>g> challenge for <str<strong>on</strong>g>the</str<strong>on</strong>g> Gates Foundati<strong>on</strong> is that it relies heavily <strong>on</strong> technical soluti<strong>on</strong>s to <str<strong>on</strong>g>the</str<strong>on</strong>g> problems it<br />

addresses, not a surprising bias for a foundati<strong>on</strong> funded by some<strong>on</strong>e who made his fortune in computer<br />

software.<br />

But even a health problem like polio is embedded in political and social systems that can interfere with<br />

technical soluti<strong>on</strong>s, which is what WHO officials identified as <str<strong>on</strong>g>the</str<strong>on</strong>g>y assessed <str<strong>on</strong>g>the</str<strong>on</strong>g> impact of <str<strong>on</strong>g>the</str<strong>on</strong>g> Gates<br />

Foundati<strong>on</strong> program.<br />

It appears that much of <str<strong>on</strong>g>the</str<strong>on</strong>g> philanthropic activities of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy do not assist <str<strong>on</strong>g>the</str<strong>on</strong>g> poorest members of<br />

society. Indeed, <str<strong>on</strong>g>the</str<strong>on</strong>g>se charitable activities provide c<strong>on</strong>siderable benefits to <str<strong>on</strong>g>the</str<strong>on</strong>g> givers, including <str<strong>on</strong>g>the</str<strong>on</strong>g> creati<strong>on</strong> of<br />

a pers<strong>on</strong>al legacy <str<strong>on</strong>g>the</str<strong>on</strong>g>y can feel proud of, and <strong>on</strong>e that can obscure some of <str<strong>on</strong>g>the</str<strong>on</strong>g> d<strong>on</strong>or’s more questi<strong>on</strong>able<br />

activities.<br />

- 136 -


— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

Mr. and Mrs. Gates and Warren Buffett have been outstanding am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy in champi<strong>on</strong>ing worthy<br />

causes and—putting aside any possible obfuscati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir activities for financial self-interest—<str<strong>on</strong>g>the</str<strong>on</strong>g>re seems<br />

to be a genuine impulse to c<strong>on</strong>tribute to <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong> good. And <str<strong>on</strong>g>the</str<strong>on</strong>g>y have inspired o<str<strong>on</strong>g>the</str<strong>on</strong>g>r ultra-wealthy<br />

individuals to make similar d<strong>on</strong>ati<strong>on</strong>s.<br />

Michael Bloomberg, for example, has admitted that his wealth (some $18 billi<strong>on</strong>) is much more than he could<br />

possibly spend in his lifetime and that <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly real security is comm<strong>on</strong> security. Bloomberg reas<strong>on</strong>s: "If you<br />

really care about your family, it's best to do something to make <str<strong>on</strong>g>the</str<strong>on</strong>g> world a better place for your children and grandchildren,<br />

ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than just giving <str<strong>on</strong>g>the</str<strong>on</strong>g>m m<strong>on</strong>ey.” 71<br />

However, this noble sentiment and <str<strong>on</strong>g>the</str<strong>on</strong>g> good intenti<strong>on</strong>s behind <str<strong>on</strong>g>the</str<strong>on</strong>g> Billi<strong>on</strong>aires’ Club overlooks <str<strong>on</strong>g>the</str<strong>on</strong>g> inherent<br />

dangers of leaving “how to make <str<strong>on</strong>g>the</str<strong>on</strong>g> world a better place” in <str<strong>on</strong>g>the</str<strong>on</strong>g> hands of a few people who, by <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth<br />

and status, are alienated and removed from <str<strong>on</strong>g>the</str<strong>on</strong>g> people and problems that need <str<strong>on</strong>g>the</str<strong>on</strong>g> most urgent attenti<strong>on</strong>.<br />

It is a w<strong>on</strong>derful step that so many ultra-rich people have come to understand that <str<strong>on</strong>g>the</str<strong>on</strong>g>y cannot really use <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

financial resources <str<strong>on</strong>g>the</str<strong>on</strong>g>y have accumulated for <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves and that <str<strong>on</strong>g>the</str<strong>on</strong>g>re are urgent needs in <str<strong>on</strong>g>the</str<strong>on</strong>g> world that<br />

could benefit from directing <str<strong>on</strong>g>the</str<strong>on</strong>g>se funds elsewhere. But it is ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r step entirely to use <str<strong>on</strong>g>the</str<strong>on</strong>g>ir power and<br />

influence to acknowledge that <str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth accumulati<strong>on</strong> should not have occurred in <str<strong>on</strong>g>the</str<strong>on</strong>g> first place—i.e., that<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>y gained great wealth largely based <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong> heritage of human knowledge that we discussed above.<br />

Some wealthy individuals, Buffett am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g>m, have called for higher taxes for <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy, acknowledging<br />

that <str<strong>on</strong>g>the</str<strong>on</strong>g> tax rates for <str<strong>on</strong>g>the</str<strong>on</strong>g> super-rich are “absurdly low.” 72 In a fair tax system, <str<strong>on</strong>g>the</str<strong>on</strong>g>se funds would have ended<br />

up in <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong> treasury ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than private hands, to be used for <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong> good. As a b<strong>on</strong>us, under<br />

such a fair tax system, <str<strong>on</strong>g>the</str<strong>on</strong>g> opportunity to interfere with <str<strong>on</strong>g>the</str<strong>on</strong>g> democratic process would be reduced.<br />

This is <str<strong>on</strong>g>the</str<strong>on</strong>g> basic problem with philanthropy <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> scale it exists today. The enormous extremes of wealth<br />

bestow unprecedented power <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> super-rich and allow <str<strong>on</strong>g>the</str<strong>on</strong>g>m to influence decisi<strong>on</strong>s that affect <str<strong>on</strong>g>the</str<strong>on</strong>g> lives of<br />

billi<strong>on</strong>s of people, <str<strong>on</strong>g>the</str<strong>on</strong>g> survival of o<str<strong>on</strong>g>the</str<strong>on</strong>g>r species, and <str<strong>on</strong>g>the</str<strong>on</strong>g> very nature of future societies. To date, this<br />

philanthropy has not shown itself to be equal to <str<strong>on</strong>g>the</str<strong>on</strong>g> task of effectively addressing <str<strong>on</strong>g>the</str<strong>on</strong>g> most serious social and<br />

envir<strong>on</strong>mental problems that challenge humanity. 73 Extreme wealth accumulati<strong>on</strong> has arguably d<strong>on</strong>e<br />

c<strong>on</strong>siderably more harm to people and <str<strong>on</strong>g>the</str<strong>on</strong>g> planet than philanthropy will ever be able to overcome.<br />

This form of philanthropy is nei<str<strong>on</strong>g>the</str<strong>on</strong>g>r a democratic nor a just process because it arises from an ec<strong>on</strong>omic<br />

system that both allows and encourages <str<strong>on</strong>g>the</str<strong>on</strong>g> accumulati<strong>on</strong> of extreme wealth. The extraordinarily unbalanced<br />

power of today’s philanthropy is yet ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r symptom of a broken ec<strong>on</strong>omic and political system. Such<br />

philanthropy is not currently (and may never be) capable of redressing <str<strong>on</strong>g>the</str<strong>on</strong>g>se problems unless, as a starting<br />

point, it is used to advocate for reforms that would prevent extreme wealth accumulati<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> first place.<br />

CONSPIRACY OR AD HOC OLIGARCHY?<br />

<str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g> is government by <str<strong>on</strong>g>the</str<strong>on</strong>g> few.<br />

History has seen various versi<strong>on</strong>s of oligarchies emerge, but today’s globalizati<strong>on</strong> has created a new set of<br />

super-elite whose c<strong>on</strong>centrati<strong>on</strong>s of ec<strong>on</strong>omic wealth and political power are unprecedented. Today’s<br />

powerful minority of super-rich are am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> biggest threats to peace, justice and survival <strong>on</strong> our planet.<br />

- 137 -


— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

When <str<strong>on</strong>g>the</str<strong>on</strong>g> global justice movement first emerged in <str<strong>on</strong>g>the</str<strong>on</strong>g> mid-1990s, much attenti<strong>on</strong> focused <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

globalizati<strong>on</strong> of power by instituti<strong>on</strong>s ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r than individuals, especially via <str<strong>on</strong>g>the</str<strong>on</strong>g> expansi<strong>on</strong> of free trade and<br />

investment agreements—like NAFTA, <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO, and <str<strong>on</strong>g>the</str<strong>on</strong>g> MAI (Multilateral Agreement <strong>on</strong> Investment) —as<br />

well as <str<strong>on</strong>g>the</str<strong>on</strong>g> policies of <str<strong>on</strong>g>the</str<strong>on</strong>g> IMF and World Bank.<br />

True, unrelenting protests by global civil society successfully managed to derail fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r expansi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

WTO, but <str<strong>on</strong>g>the</str<strong>on</strong>g> policies already in place have allowed transnati<strong>on</strong>al businesses to establish a global presence,<br />

opening up unprecedented opportunities for nati<strong>on</strong>al elites from previously closed ec<strong>on</strong>omies to emerge as<br />

new global players. The result is that internati<strong>on</strong>al instituti<strong>on</strong>s seem to be increasingly impervious to public<br />

pressure for change, while <str<strong>on</strong>g>the</str<strong>on</strong>g> individuals who benefit most from current arrangements are ever more<br />

insulated from public scrutiny and accountability. In turn, <str<strong>on</strong>g>the</str<strong>on</strong>g>se individuals’ expansi<strong>on</strong> of assets—coupled<br />

with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir secrecy—has empowered <str<strong>on</strong>g>the</str<strong>on</strong>g>m even more to c<strong>on</strong>spire to c<strong>on</strong>trol governments.<br />

Too little is known about today’s invisible—yet informal—group of individuals who secretly and c<strong>on</strong>sistently<br />

influence government policy decisi<strong>on</strong>s and overall directi<strong>on</strong>s <strong>on</strong> fundamental issues through <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own<br />

pers<strong>on</strong>al interests in finance, military, resource extracti<strong>on</strong>, etc.<br />

Oligarchies are as old as civilizati<strong>on</strong> and, as new forms of government emerge, <str<strong>on</strong>g>the</str<strong>on</strong>g>y each have to deal with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

dominant oligarchy of <str<strong>on</strong>g>the</str<strong>on</strong>g> time. A scholar who has studied oligarchies throughout history notes: “Democracy<br />

does not displace oligarchy but ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r fuses with it.” 74<br />

Given <str<strong>on</strong>g>the</str<strong>on</strong>g> extremes of wealth that exist today—and <str<strong>on</strong>g>the</str<strong>on</strong>g> social, political and envir<strong>on</strong>mental c<strong>on</strong>sequences of<br />

this wealth accumulati<strong>on</strong>, including <str<strong>on</strong>g>the</str<strong>on</strong>g> distorti<strong>on</strong> of what is comm<strong>on</strong>ly understood to be democratic<br />

processes—today’s oligarchy is far from benign. Understanding who is involved in <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy, how <str<strong>on</strong>g>the</str<strong>on</strong>g>y<br />

operate and <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>sequences of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir influence <strong>on</strong> major political decisi<strong>on</strong>s and ecological sustainability, is<br />

vitally important for all progressive movements that seek a better world.<br />

The piece in this publicati<strong>on</strong> called “The Planet’s Worst 50” identifies at least some of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthiest people<br />

<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> planet and how <str<strong>on</strong>g>the</str<strong>on</strong>g>y are c<strong>on</strong>tributing to some of our most significant envir<strong>on</strong>mental problems—<br />

climate change, biodiversity loss, and toxic polluti<strong>on</strong> of our air, land and waters. This is not an exhaustive list:<br />

it is merely intended to be illustrative of <str<strong>on</strong>g>the</str<strong>on</strong>g> scope and power of <str<strong>on</strong>g>the</str<strong>on</strong>g>se individuals.<br />

It is hoped that, by highlighting who <str<strong>on</strong>g>the</str<strong>on</strong>g>se individuals are and <str<strong>on</strong>g>the</str<strong>on</strong>g> negative impacts arising from <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

accumulati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir vast fortunes, progressive groups around <str<strong>on</strong>g>the</str<strong>on</strong>g> world will focus some of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir attenti<strong>on</strong><br />

and energies <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> elite individuals behind <str<strong>on</strong>g>the</str<strong>on</strong>g> corporati<strong>on</strong>s and instituti<strong>on</strong>s <str<strong>on</strong>g>the</str<strong>on</strong>g>y are currently challenging.<br />

Reform campaigns that ignore <str<strong>on</strong>g>the</str<strong>on</strong>g> very influential roles of <str<strong>on</strong>g>the</str<strong>on</strong>g> elite risk deflecting attenti<strong>on</strong> and energy away<br />

from <str<strong>on</strong>g>the</str<strong>on</strong>g> largely hidden impact <str<strong>on</strong>g>the</str<strong>on</strong>g>se elites exert <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> democratic process.<br />

The elites would prefer to have reform campaigns c<strong>on</strong>tinue to focus <strong>on</strong> governments and instituti<strong>on</strong>s, well<br />

aware that <str<strong>on</strong>g>the</str<strong>on</strong>g>y have <str<strong>on</strong>g>the</str<strong>on</strong>g> resources and power to outcompete reform groups for <str<strong>on</strong>g>the</str<strong>on</strong>g> attenti<strong>on</strong> and c<strong>on</strong>trol of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se groups. Focusing <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> elites <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves could be a game-changer that could result in reform faster<br />

than traditi<strong>on</strong>al approaches.<br />

- 138 -


— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

There are many c<strong>on</strong>spiracy <str<strong>on</strong>g>the</str<strong>on</strong>g>ories about <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy. Some involve <str<strong>on</strong>g>the</str<strong>on</strong>g> Bilderberg Group, <str<strong>on</strong>g>the</str<strong>on</strong>g> Council <strong>on</strong><br />

Foreign Relati<strong>on</strong>s, <str<strong>on</strong>g>the</str<strong>on</strong>g> Trilateral Commissi<strong>on</strong>, while o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs detail how wealthy and powerful individuals meet<br />

regularly to discuss issues and plan strategies to manage world affairs at private retreats like <str<strong>on</strong>g>the</str<strong>on</strong>g> forested<br />

enclave at California’s Bohemian Grove. While much of what happens in <str<strong>on</strong>g>the</str<strong>on</strong>g>se meetings is not public<br />

informati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no denying that <str<strong>on</strong>g>the</str<strong>on</strong>g>se meetings are held. On occasi<strong>on</strong>, some privileged informati<strong>on</strong> from<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se meetings is strategically “leaked” and post-event public positi<strong>on</strong> statements are sometimes posted <strong>on</strong><br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> websites of <str<strong>on</strong>g>the</str<strong>on</strong>g> attending corporati<strong>on</strong>s and organizati<strong>on</strong>s. Still, in <str<strong>on</strong>g>the</str<strong>on</strong>g> most fundamental sense of<br />

“breathing toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r,” <str<strong>on</strong>g>the</str<strong>on</strong>g>se secret ga<str<strong>on</strong>g>the</str<strong>on</strong>g>rings, c<strong>on</strong>ducted in well-guarded enclaves, clearly c<strong>on</strong>stitute<br />

c<strong>on</strong>spiracies.<br />

The basic noti<strong>on</strong> of a c<strong>on</strong>spiracy is that a group of people agrees to deceive, mislead, or defraud o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs of<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir legal rights, or to gain an unfair advantage. There are innumerable examples of very wealthy individuals<br />

engaging with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r wealthy individuals and politicians in all of <str<strong>on</strong>g>the</str<strong>on</strong>g>se self-interested activities. By definiti<strong>on</strong>,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se elite groups are c<strong>on</strong>spiracies, and many of <str<strong>on</strong>g>the</str<strong>on</strong>g>m form, achieve <str<strong>on</strong>g>the</str<strong>on</strong>g>ir goal, and move <strong>on</strong> to o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

priorities—toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r or with o<str<strong>on</strong>g>the</str<strong>on</strong>g>r elites.<br />

However, an enduring <str<strong>on</strong>g>the</str<strong>on</strong>g>me in many of <str<strong>on</strong>g>the</str<strong>on</strong>g>se groups is <str<strong>on</strong>g>the</str<strong>on</strong>g> noti<strong>on</strong> of developing a world government, an<br />

issue rarely discussed in public.<br />

C<strong>on</strong>spiracy <str<strong>on</strong>g>the</str<strong>on</strong>g>ories often go bey<strong>on</strong>d <str<strong>on</strong>g>the</str<strong>on</strong>g>se basic characteristics and assume or imply a well-structured<br />

organizati<strong>on</strong> of elites, or propose that <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a single global organizati<strong>on</strong> that c<strong>on</strong>trols elite activities.<br />

However, from what has been revealed of <str<strong>on</strong>g>the</str<strong>on</strong>g>se c<strong>on</strong>fidential meetings, <str<strong>on</strong>g>the</str<strong>on</strong>g>re does not appear to be an<br />

appointed leadership, nor a formally agreed plan of acti<strong>on</strong> that necessarily arises from <str<strong>on</strong>g>the</str<strong>on</strong>g>se meetings. At<br />

times, <str<strong>on</strong>g>the</str<strong>on</strong>g>re even appears to be heated c<strong>on</strong>flicts and debates within <str<strong>on</strong>g>the</str<strong>on</strong>g>se groups. And while some individuals<br />

seem to be c<strong>on</strong>stant participants, attendance at <str<strong>on</strong>g>the</str<strong>on</strong>g>se rare, exclusive meetings is fluid.<br />

These observati<strong>on</strong>s suggest that <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy is not a c<strong>on</strong>spiracy in <str<strong>on</strong>g>the</str<strong>on</strong>g> sense in which it is often meant—an<br />

organizati<strong>on</strong> that is operated like a well-managed corporati<strong>on</strong>, with a defined hierarchy, accountabilities, a<br />

ratified strategy and coordinated operati<strong>on</strong>s.<br />

But a moment’s reflecti<strong>on</strong> indicates that <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy does not need to operate this way to be successful.<br />

Their comm<strong>on</strong> purpose, wealth accumulati<strong>on</strong>, is now well-embedded in our global culture and many<br />

instituti<strong>on</strong>s at all levels reinforce and support this goal. It is a goal shared by all <str<strong>on</strong>g>the</str<strong>on</strong>g> ultra-rich. They have<br />

mastered all <str<strong>on</strong>g>the</str<strong>on</strong>g> various means that are at <str<strong>on</strong>g>the</str<strong>on</strong>g>ir disposal to reinforce <str<strong>on</strong>g>the</str<strong>on</strong>g>se instituti<strong>on</strong>s to retain and enhance<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth and power.<br />

Very often, self-interested acti<strong>on</strong>s by <strong>on</strong>e wealthy party will benefit many o<str<strong>on</strong>g>the</str<strong>on</strong>g>rs in <str<strong>on</strong>g>the</str<strong>on</strong>g> ultra-rich<br />

community—a rapidly rising tide raises all yachts, even if it swamps many smaller boats (and does nothing to<br />

help those clinging to inflatable life-vests). For example, any influence a wealthy individual may have <strong>on</strong><br />

destroying plans for a progressive taxati<strong>on</strong> system will benefit o<str<strong>on</strong>g>the</str<strong>on</strong>g>r wealthy people. Any influence a wealthy<br />

pers<strong>on</strong> has <strong>on</strong> deregulating banking c<strong>on</strong>straints allows all those with excess wealth to benefit. Any influence a<br />

wealthy pers<strong>on</strong> may have <strong>on</strong> internati<strong>on</strong>al organizati<strong>on</strong>s like <str<strong>on</strong>g>the</str<strong>on</strong>g> WTO, IMF or World Bank that benefit <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

own narrow interests, may also benefit <str<strong>on</strong>g>the</str<strong>on</strong>g> interests of many o<str<strong>on</strong>g>the</str<strong>on</strong>g>r wealthy people. Any influence by a wealthy<br />

corporate leader to undermine uni<strong>on</strong>s or reduce envir<strong>on</strong>mental regulati<strong>on</strong>s directly or indirectly benefits o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

corporate owners. Any initiative by a wealthy individual to influence public opini<strong>on</strong> by funding a think tank<br />

study <strong>on</strong> cutting business taxes helps reduce taxes for all wealthy people, and so <strong>on</strong>.<br />

Because <str<strong>on</strong>g>the</str<strong>on</strong>g> ultra-rich and powerful have many comm<strong>on</strong> interests in terms of maintaining and expanding<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>ir wealth and power, it would be surprising if, from time to time, at least some of <str<strong>on</strong>g>the</str<strong>on</strong>g>m did not meet to<br />

discuss comm<strong>on</strong> interests and acti<strong>on</strong>s. Some wealthy individuals such as <str<strong>on</strong>g>the</str<strong>on</strong>g> Koch bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs are relatively<br />

open about at least some of <str<strong>on</strong>g>the</str<strong>on</strong>g> areas in which <str<strong>on</strong>g>the</str<strong>on</strong>g>y exert <str<strong>on</strong>g>the</str<strong>on</strong>g>ir influence. 75 More often than not, however, <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

ultra-rich operate in secrecy, drawing little attenti<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g>mselves and <str<strong>on</strong>g>the</str<strong>on</strong>g>ir acti<strong>on</strong>s.<br />

Organizati<strong>on</strong>s like <str<strong>on</strong>g>the</str<strong>on</strong>g> Bilderberg Group and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r groups menti<strong>on</strong>ed above require secrecy as a c<strong>on</strong>diti<strong>on</strong> of<br />

membership. The agendas of <str<strong>on</strong>g>the</str<strong>on</strong>g>se meetings are secret (although many have been leaked) and what is<br />

discussed is never officially revealed to <str<strong>on</strong>g>the</str<strong>on</strong>g> public. Media coverage is forbidden, although media tyco<strong>on</strong>s are<br />

often present. Also present at many of <str<strong>on</strong>g>the</str<strong>on</strong>g>se meetings are senior politicians who, although <str<strong>on</strong>g>the</str<strong>on</strong>g>y may not own<br />

fortunes, hold positi<strong>on</strong>s (or may hold positi<strong>on</strong>s in <str<strong>on</strong>g>the</str<strong>on</strong>g> future) that allow <str<strong>on</strong>g>the</str<strong>on</strong>g>m to influence regulati<strong>on</strong>s and<br />

laws of interest to <str<strong>on</strong>g>the</str<strong>on</strong>g> very wealthy. There is no accountability for <str<strong>on</strong>g>the</str<strong>on</strong>g>se politicians to divulge to <str<strong>on</strong>g>the</str<strong>on</strong>g> public<br />

what “understandings” <str<strong>on</strong>g>the</str<strong>on</strong>g>y may have come to in <str<strong>on</strong>g>the</str<strong>on</strong>g>se private, off-<str<strong>on</strong>g>the</str<strong>on</strong>g>-record meetings.<br />

In terms of secrecy and dealing with self-interests that may well be incompatible with <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong> good,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se groups can legitimately be labeled as c<strong>on</strong>spiracies. However, <str<strong>on</strong>g>the</str<strong>on</strong>g>se groupings of <str<strong>on</strong>g>the</str<strong>on</strong>g> rich and powerful<br />

are fluid and unc<strong>on</strong>strained by fixed structures or procedures. They come toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r out of self-interest, argue<br />

with each o<str<strong>on</strong>g>the</str<strong>on</strong>g>r when <str<strong>on</strong>g>the</str<strong>on</strong>g>ir interests compete, and return to <str<strong>on</strong>g>the</str<strong>on</strong>g>ir discrete areas of operati<strong>on</strong>. In some ways,<br />

with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir practice of coming toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r to talk shop and <str<strong>on</strong>g>the</str<strong>on</strong>g>n go <str<strong>on</strong>g>the</str<strong>on</strong>g>ir separate ways <str<strong>on</strong>g>the</str<strong>on</strong>g>se ga<str<strong>on</strong>g>the</str<strong>on</strong>g>rings of <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

wealthy elite resemble a summit of mafia bosses. In fact, many of <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy elite do have traceable links<br />

with intelligence agencies and organized crime. 76<br />

Exactly what is discussed at <str<strong>on</strong>g>the</str<strong>on</strong>g>se meetings, what agreements are made, or understandings reached, are secret<br />

by design. This is a serious problem, given that <str<strong>on</strong>g>the</str<strong>on</strong>g> rich and powerful can wield such a significant influence<br />

over <str<strong>on</strong>g>the</str<strong>on</strong>g> lives and well being of billi<strong>on</strong>s of people. Whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r we regard <str<strong>on</strong>g>the</str<strong>on</strong>g> power elite as a c<strong>on</strong>spiratorial<br />

group or as an ad hoc associati<strong>on</strong>, we would be well advised to treat <str<strong>on</strong>g>the</str<strong>on</strong>g>m with c<strong>on</strong>siderable suspici<strong>on</strong>. And,<br />

of course, <str<strong>on</strong>g>the</str<strong>on</strong>g>y may be much better organized than we know.<br />

Why Focus <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> <str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g>?<br />

The purpose of drawing attenti<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy is to highlight <str<strong>on</strong>g>the</str<strong>on</strong>g> role <str<strong>on</strong>g>the</str<strong>on</strong>g> ultra-rich play in <str<strong>on</strong>g>the</str<strong>on</strong>g> lives of<br />

most of humanity, especially <str<strong>on</strong>g>the</str<strong>on</strong>g> negative role with respect to global inequity, envir<strong>on</strong>mental degradati<strong>on</strong>, and<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> perversi<strong>on</strong> of democracies. They collectively c<strong>on</strong>stitute an unofficial source of power that, if not<br />

understood or ignored, cannot be countered. To comprehend <str<strong>on</strong>g>the</str<strong>on</strong>g> dynamics of oligarchy is also to begin to<br />

appreciate <str<strong>on</strong>g>the</str<strong>on</strong>g>ir tenuous hold <strong>on</strong> power. Their self-appointed role as Masters of <str<strong>on</strong>g>the</str<strong>on</strong>g> Universe derives largely<br />

from <str<strong>on</strong>g>the</str<strong>on</strong>g> ignorance and acquiescence of <str<strong>on</strong>g>the</str<strong>on</strong>g> rest of us. Our avoidance of this “taboo” subject makes us all coc<strong>on</strong>spirators<br />

in both <str<strong>on</strong>g>the</str<strong>on</strong>g>ir assumpti<strong>on</strong> of power and <str<strong>on</strong>g>the</str<strong>on</strong>g> devastati<strong>on</strong> it imposes <strong>on</strong> people and <str<strong>on</strong>g>the</str<strong>on</strong>g> land.<br />

To understand how <str<strong>on</strong>g>the</str<strong>on</strong>g>y have accumulated wealth and power is to questi<strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> legitimacy of that wealth and<br />

power—and inevitably raises <str<strong>on</strong>g>the</str<strong>on</strong>g> questi<strong>on</strong> of how to begin <str<strong>on</strong>g>the</str<strong>on</strong>g> redistributi<strong>on</strong> of that wealth and power to <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

public sphere.<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

To focus <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy is not about assigning blame for <str<strong>on</strong>g>the</str<strong>on</strong>g> global inequity and ecological devastati<strong>on</strong> that<br />

c<strong>on</strong>fr<strong>on</strong>ts us all. We all c<strong>on</strong>tribute to this system by both ignoring <str<strong>on</strong>g>the</str<strong>on</strong>g> role of <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy and by being<br />

c<strong>on</strong>sumers in <str<strong>on</strong>g>the</str<strong>on</strong>g> global ec<strong>on</strong>omy. The goal here is to understand <str<strong>on</strong>g>the</str<strong>on</strong>g> dynamics that allow <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy to<br />

c<strong>on</strong>tinue and to understand how we all c<strong>on</strong>tribute to maintaining this system by playing into it.<br />

Understanding <str<strong>on</strong>g>the</str<strong>on</strong>g> unique and powerful role of <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy is an essential part of addressing our global<br />

challenges.<br />

The increasing scarcity of natural resources and degradati<strong>on</strong> of global ecosystems will affect us all. It is<br />

reas<strong>on</strong>able to assume that <str<strong>on</strong>g>the</str<strong>on</strong>g> elite are well aware of <str<strong>on</strong>g>the</str<strong>on</strong>g>se issues and will do what <str<strong>on</strong>g>the</str<strong>on</strong>g>y can to ensure <str<strong>on</strong>g>the</str<strong>on</strong>g>y are<br />

<strong>on</strong>ly minimally affected. If <str<strong>on</strong>g>the</str<strong>on</strong>g>y have <str<strong>on</strong>g>the</str<strong>on</strong>g>ir way, it will mean increasingly less for <str<strong>on</strong>g>the</str<strong>on</strong>g> rest of humanity: fewer<br />

natural resources, less land, less clean water, less energy, fewer healthy ecosystem services, fewer healthy<br />

communities and fewer social supports.<br />

The increasing c<strong>on</strong>trol that governments have claimed over citizens’ freedoms, combined with <str<strong>on</strong>g>the</str<strong>on</strong>g> increasing<br />

c<strong>on</strong>trol that corporati<strong>on</strong>s have over essential goods, and <str<strong>on</strong>g>the</str<strong>on</strong>g> increasing c<strong>on</strong>trol unelected elites have over <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

political sphere, are all cause for c<strong>on</strong>cern. Unless <str<strong>on</strong>g>the</str<strong>on</strong>g>se issues are c<strong>on</strong>fr<strong>on</strong>ted directly, <str<strong>on</strong>g>the</str<strong>on</strong>g>re may be little hope<br />

of progress <strong>on</strong> critical issues such as climate, energy, water, biodiversity or global equity.<br />

On <str<strong>on</strong>g>the</str<strong>on</strong>g> positive side, a small but increasing number of wealthy elites seem to be acknowledging that <str<strong>on</strong>g>the</str<strong>on</strong>g>y wish<br />

to use <str<strong>on</strong>g>the</str<strong>on</strong>g>ir vast resources to do good. Unfortunately, <str<strong>on</strong>g>the</str<strong>on</strong>g>ir noti<strong>on</strong>s of what priority issues require support, or<br />

how best to support <str<strong>on</strong>g>the</str<strong>on</strong>g> needed reforms, often seem far off <str<strong>on</strong>g>the</str<strong>on</strong>g> mark. Herein lay opportunities for integrating<br />

a deep understanding of social and ecological challenges with real power to change. Progressive movements<br />

for str<strong>on</strong>g sustainability and social justice know what needs to be d<strong>on</strong>e. Those with <str<strong>on</strong>g>the</str<strong>on</strong>g> financial resources to<br />

make fundamental change happen do not understand what fundamental reforms are needed. Somehow,<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se very different and seemingly divergent resources need to come toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r. Why Worry About Inequality?<br />

Why Not Focus <strong>on</strong> Poverty Reducti<strong>on</strong> Instead?<br />

One argument made against dealing with inequality is that a focus <strong>on</strong> poverty reducti<strong>on</strong> would be more<br />

c<strong>on</strong>structive. The argument is that poverty is <str<strong>on</strong>g>the</str<strong>on</strong>g> problem and <str<strong>on</strong>g>the</str<strong>on</strong>g>refore reducing it should be <str<strong>on</strong>g>the</str<strong>on</strong>g> priority; if<br />

some individuals attain great wealth that is less of a c<strong>on</strong>cern than eliminating poverty—let’s help every<strong>on</strong>e<br />

become wealthy.<br />

There is no questi<strong>on</strong> that <str<strong>on</strong>g>the</str<strong>on</strong>g> poor deserve a better life. But poverty is <strong>on</strong>ly <strong>on</strong>e significant social problem.<br />

The data indicate that extreme inequality has <str<strong>on</strong>g>the</str<strong>on</strong>g> same impact as poverty; “...all problems which are more comm<strong>on</strong><br />

at <str<strong>on</strong>g>the</str<strong>on</strong>g> bottom end of <str<strong>on</strong>g>the</str<strong>on</strong>g> social ladder are more comm<strong>on</strong> in more unequal societies.” 77 If <str<strong>on</strong>g>the</str<strong>on</strong>g> problems associated with<br />

extreme inequality are <str<strong>on</strong>g>the</str<strong>on</strong>g> same as those associated with poverty, <str<strong>on</strong>g>the</str<strong>on</strong>g>n surely both issues deserve <str<strong>on</strong>g>the</str<strong>on</strong>g> same<br />

effort.<br />

In additi<strong>on</strong>, part of <str<strong>on</strong>g>the</str<strong>on</strong>g> soluti<strong>on</strong> to poverty is redistributing <str<strong>on</strong>g>the</str<strong>on</strong>g> benefits of ec<strong>on</strong>omic activities. Making<br />

every<strong>on</strong>e super-wealthy is not an opti<strong>on</strong> <strong>on</strong> a finite planet. The mistaken noti<strong>on</strong> that ec<strong>on</strong>omic growth is <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

route to poverty reducti<strong>on</strong> fails to acknowledge that sharing of finite resources is <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly path to both social<br />

equity and poverty reducti<strong>on</strong>. As l<strong>on</strong>g as <str<strong>on</strong>g>the</str<strong>on</strong>g>re is a belief that ec<strong>on</strong>omic growth can raise people out of<br />

poverty, <str<strong>on</strong>g>the</str<strong>on</strong>g>re is no need to face <str<strong>on</strong>g>the</str<strong>on</strong>g> justice issue—or <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy. We are coming to <str<strong>on</strong>g>the</str<strong>on</strong>g> end of ec<strong>on</strong>omic<br />

growth as we have known it over <str<strong>on</strong>g>the</str<strong>on</strong>g> past two centuries—energy descent (owing to <str<strong>on</strong>g>the</str<strong>on</strong>g> depleti<strong>on</strong> of Earth’s<br />

cheap fossil fuels) will ensure this outcome. 78 Whe<str<strong>on</strong>g>the</str<strong>on</strong>g>r humanity comes up with a plan to end inequality will<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

depend <strong>on</strong> how well we c<strong>on</strong>fr<strong>on</strong>t <str<strong>on</strong>g>the</str<strong>on</strong>g> oligarchy now that <str<strong>on</strong>g>the</str<strong>on</strong>g> limits of global resources, carb<strong>on</strong>-sinks and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

critical waste absorbing capacities of ecosystems are becoming increasingly apparent.<br />

The opti<strong>on</strong>s before us include: (1) a c<strong>on</strong>tinuing extensi<strong>on</strong> of extreme inequality, with more and more people<br />

moving toward <str<strong>on</strong>g>the</str<strong>on</strong>g> poverty end of <str<strong>on</strong>g>the</str<strong>on</strong>g> spectrum, or (2) a significant redistributi<strong>on</strong> of existing wealth with<br />

much str<strong>on</strong>ger prohibiti<strong>on</strong>s against accumulating extreme wealth in <str<strong>on</strong>g>the</str<strong>on</strong>g> future.<br />

The first opti<strong>on</strong> foresees authoritarian regimes and extreme bifurcati<strong>on</strong>s of society, c<strong>on</strong>siderable internati<strong>on</strong>al<br />

c<strong>on</strong>flict and social violence. Such an opti<strong>on</strong> would also guarantee <str<strong>on</strong>g>the</str<strong>on</strong>g> steady degradati<strong>on</strong> of planetary<br />

resources bey<strong>on</strong>d <str<strong>on</strong>g>the</str<strong>on</strong>g> limits of resilience or recovery. Such a future Earth would be a bleak place, with few<br />

ecosystems capable of meeting human needs; it is <str<strong>on</strong>g>the</str<strong>on</strong>g> route to a planet with a diminished layer of life forms—<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> Midas touch will have destroyed our means of survival.<br />

The natural instincts of <str<strong>on</strong>g>the</str<strong>on</strong>g> elite will move <str<strong>on</strong>g>the</str<strong>on</strong>g>m to ensure <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own survival and well being, pushing <str<strong>on</strong>g>the</str<strong>on</strong>g>m<br />

toward this disaster opti<strong>on</strong> in <str<strong>on</strong>g>the</str<strong>on</strong>g> mistaken belief that <str<strong>on</strong>g>the</str<strong>on</strong>g>y can remain <strong>on</strong> top of a collapsing biosphere. Their<br />

deeply entrenched sense of entitlement and misplaced faith in technology will blind <str<strong>on</strong>g>the</str<strong>on</strong>g>m to <str<strong>on</strong>g>the</str<strong>on</strong>g> inevitability<br />

of destroying <str<strong>on</strong>g>the</str<strong>on</strong>g>ir own nest—until it is too late. Such people are used to getting <str<strong>on</strong>g>the</str<strong>on</strong>g>ir way and will expect to<br />

prosper, even in a resource-depleted world. Accepting limits is not a part of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir repertoire. But <str<strong>on</strong>g>the</str<strong>on</strong>g> reality of<br />

a cataclysmic “overshoot” of <str<strong>on</strong>g>the</str<strong>on</strong>g> natural resources that support human life 79 is not something <str<strong>on</strong>g>the</str<strong>on</strong>g>y will be<br />

able to buy <str<strong>on</strong>g>the</str<strong>on</strong>g>ir way out of—at least not for l<strong>on</strong>g. Helping <str<strong>on</strong>g>the</str<strong>on</strong>g>m understand that <str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>ly genuine security is<br />

comm<strong>on</strong> security is <strong>on</strong>e of <str<strong>on</strong>g>the</str<strong>on</strong>g> most important tasks we face.<br />

The opti<strong>on</strong> of redistributing existing wealth and prohibiting <str<strong>on</strong>g>the</str<strong>on</strong>g> accumulati<strong>on</strong> of extreme wealth in <str<strong>on</strong>g>the</str<strong>on</strong>g> future<br />

may seem an impossible ideal. There are, however, many policy opti<strong>on</strong>s available to make significant moves<br />

in this directi<strong>on</strong>. Technically we have a fair idea of how to accomplish <str<strong>on</strong>g>the</str<strong>on</strong>g>se life-saving goals<br />

FOSTERING GREATER EQUALITY AS A ROUTE TO SUSTAINABILITY AND FAIRNESS<br />

Understanding <str<strong>on</strong>g>the</str<strong>on</strong>g> finite nature of natural resources and fostering greater social equality can be seen as a<br />

means to both ecological sustainability and greater fairness in <str<strong>on</strong>g>the</str<strong>on</strong>g> distributi<strong>on</strong> of finite resources. Fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r<br />

appreciating <str<strong>on</strong>g>the</str<strong>on</strong>g> enormous claim <strong>on</strong> global resources now held by <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthiest 10% of <str<strong>on</strong>g>the</str<strong>on</strong>g> global populati<strong>on</strong><br />

(estimated at 85%), <str<strong>on</strong>g>the</str<strong>on</strong>g> need for redistributing financial wealth becomes evident.<br />

The global pie cannot be made bigger; it must be shared more equitably.<br />

Appreciating that humanity has come to <str<strong>on</strong>g>the</str<strong>on</strong>g> limits of ec<strong>on</strong>omic growth and resource depleti<strong>on</strong> creates an<br />

imperative to protect what remaining biocapacity 80 we have. To do this, ecological sustainability requires a<br />

steady-state ec<strong>on</strong>omy, 81 and for a steady-state ec<strong>on</strong>omy to endure requires equitable distributi<strong>on</strong> of nature’s<br />

bounty. 82 Our focus here is <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> negative role played by extremes in wealth in achieving <str<strong>on</strong>g>the</str<strong>on</strong>g>se critical goals.<br />

There are two broad objectives to c<strong>on</strong>sider: redistributing wealth to address <str<strong>on</strong>g>the</str<strong>on</strong>g> extreme inequities that<br />

currently exist, and ensuring that such extremes cannot occur in <str<strong>on</strong>g>the</str<strong>on</strong>g> future. Some remedies can address both<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g>se objectives.<br />

There are a variety of policies that could reduce extreme inequality, such as:<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

Inheritance Taxes: Inheritance or estate taxes would see <str<strong>on</strong>g>the</str<strong>on</strong>g> reducti<strong>on</strong> of vast fortunes being passed <strong>on</strong> from<br />

<strong>on</strong>e generati<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> next. To be effective, estate taxes must be triggered at a low enough level and increase<br />

with <str<strong>on</strong>g>the</str<strong>on</strong>g> size of <str<strong>on</strong>g>the</str<strong>on</strong>g> inheritance. There should be no levelling off at <str<strong>on</strong>g>the</str<strong>on</strong>g> higher end, as currently occurs in<br />

many jurisdicti<strong>on</strong>s.<br />

Wealth or Luxury Taxes: Given <str<strong>on</strong>g>the</str<strong>on</strong>g> resource c<strong>on</strong>straints of a finite planet and <str<strong>on</strong>g>the</str<strong>on</strong>g> basic needs of an everexpanding<br />

human populati<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> best soluti<strong>on</strong> to <str<strong>on</strong>g>the</str<strong>on</strong>g> waste implicity in creating luxury goods might be to<br />

simply ban fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r producti<strong>on</strong> of such goods. How many luxury yachts and private jets does an energy<br />

c<strong>on</strong>strained world really need? An alternative approach would be to place high taxes <strong>on</strong> purchases of luxury<br />

goods. However, this approach necessitates identifying luxury goods, which could increase bureaucratic<br />

procedures and costs.<br />

A simpler and more efficient approach would be a progressive c<strong>on</strong>sumpti<strong>on</strong> tax, which would see no tax <strong>on</strong><br />

low levels of c<strong>on</strong>sumpti<strong>on</strong> (so that it would not be regressive) but would increase as c<strong>on</strong>sumpti<strong>on</strong> increased.<br />

As ec<strong>on</strong>omist Robert Frank explains: “<str<strong>on</strong>g>the</str<strong>on</strong>g> progressive c<strong>on</strong>sumpti<strong>on</strong> tax is...<strong>on</strong>e that will free up literally<br />

trilli<strong>on</strong>s of dollars each year to spend in ways that will create lasting improvements in <str<strong>on</strong>g>the</str<strong>on</strong>g> quality of our lives.<br />

This is m<strong>on</strong>ey for nothing, in <str<strong>on</strong>g>the</str<strong>on</strong>g> sense that we can get it without having to sacrifice anything of enduring value<br />

[emphasis added].” 83<br />

Income Schemes that Limit Ratio of Highest to Lowest Salaries: Some societies manage equity by preventing large<br />

discrepancies in wealth from occurring in <str<strong>on</strong>g>the</str<strong>on</strong>g> first place (e.g. Japan and <str<strong>on</strong>g>the</str<strong>on</strong>g> M<strong>on</strong>drag<strong>on</strong> Cooperative in Spain).<br />

In <str<strong>on</strong>g>the</str<strong>on</strong>g>se societies, excessive pay is avoided by adhering to a ratio of highest-to-lowest salaries that ranges from<br />

3:1 to 30:1, which is significantly lower than <str<strong>on</strong>g>the</str<strong>on</strong>g> current 500:1 ratio for U.S. executive pay.<br />

Progressive Income Taxes: If incomes are not limited, <str<strong>on</strong>g>the</str<strong>on</strong>g>n greater equity can be achieved by progressive income<br />

taxes whereby those with <str<strong>on</strong>g>the</str<strong>on</strong>g> highest incomes pay increasingly higher rates of income tax. Those with low<br />

incomes may pay little or no taxes. Even in <str<strong>on</strong>g>the</str<strong>on</strong>g> United States, <str<strong>on</strong>g>the</str<strong>on</strong>g>re have been periods when <str<strong>on</strong>g>the</str<strong>on</strong>g> top tax rates<br />

have been in <str<strong>on</strong>g>the</str<strong>on</strong>g> 90% range. Such schemes still allow for <str<strong>on</strong>g>the</str<strong>on</strong>g> status value of incomes to be enjoyed by high<br />

earners—and <str<strong>on</strong>g>the</str<strong>on</strong>g>y get <str<strong>on</strong>g>the</str<strong>on</strong>g> fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r satisfacti<strong>on</strong> of making relatively larger c<strong>on</strong>tributi<strong>on</strong>s to <str<strong>on</strong>g>the</str<strong>on</strong>g> comm<strong>on</strong> good<br />

through taxati<strong>on</strong>.<br />

Many current progressive tax schemes actually level off at <str<strong>on</strong>g>the</str<strong>on</strong>g> extremely high end, allowing those with <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

highest incomes to avoid significant amounts of tax. Such loopholes should be filled so that all parties<br />

participate fairly.<br />

Closing Tax Loopholes for Tax Avoidance or Reducti<strong>on</strong>: Tax regulati<strong>on</strong>s can be complex and <str<strong>on</strong>g>the</str<strong>on</strong>g> complexity is<br />

subject to political influence by <str<strong>on</strong>g>the</str<strong>on</strong>g> wealthy, creating many opportunities for loopholes. Such loopholes<br />

should be plugged.<br />

The game of finding creative ways around tax regulati<strong>on</strong>s could be fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r thwarted by removing <str<strong>on</strong>g>the</str<strong>on</strong>g> taboo<br />

against public disclosure of income. Incomes of senior public sector executives is already disclosed in Canada<br />

and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r countries while executive pay is disclosed for publicly traded companies in <str<strong>on</strong>g>the</str<strong>on</strong>g> U.S. and elsewhere.<br />

Some countries, such as Finland and Norway, make every<strong>on</strong>e’s income and taxes public. 84 Such disclosures<br />

would help establish a norm of equitable distributi<strong>on</strong> and help reduce <str<strong>on</strong>g>the</str<strong>on</strong>g> game of creative accounting<br />

associated with tax avoidance.<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

Removing Tax Havens Used for Tax Avoidance: As noted above, trilli<strong>on</strong>s of dollars of annual global financial<br />

transacti<strong>on</strong>s find <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ways into secret bank accounts held both by corporati<strong>on</strong>s and individuals. A simple law<br />

requiring all banks to disclose who owns <str<strong>on</strong>g>the</str<strong>on</strong>g>se accounts and automatic reporting of transacti<strong>on</strong>s in those<br />

accounts would ensure that “off-shore” accounts could not be used to avoid taxati<strong>on</strong>. Such a law would not<br />

<strong>on</strong>ly bring billi<strong>on</strong>s of dollars back into U.S. Treasury, it would present a serious obstacle to criminal networks<br />

laundering funds into <str<strong>on</strong>g>the</str<strong>on</strong>g> legitimate banking system. It would also thwart companies attempting to keep risky<br />

financial schemes away from <str<strong>on</strong>g>the</str<strong>on</strong>g> scrutiny of regulators.<br />

Adopt a Tobin Tax <strong>on</strong> Financial Transacti<strong>on</strong>s: Many financial transacti<strong>on</strong>s no l<strong>on</strong>ger take place in <str<strong>on</strong>g>the</str<strong>on</strong>g> “real<br />

ec<strong>on</strong>omy”—<str<strong>on</strong>g>the</str<strong>on</strong>g> <strong>on</strong>e that produces actual physical goods that people need. Around three quarters of current<br />

stock trading now involves "fast trading," a specialized form of speculati<strong>on</strong> carried out by computers. 85 Well<br />

over 80 % of daily financial transacti<strong>on</strong>s take place in <str<strong>on</strong>g>the</str<strong>on</strong>g> currency exchanges of <str<strong>on</strong>g>the</str<strong>on</strong>g> “virtual ec<strong>on</strong>omy,”<br />

where small differences are turned into large profits because of <str<strong>on</strong>g>the</str<strong>on</strong>g> computer-driven magnitude of <str<strong>on</strong>g>the</str<strong>on</strong>g> trades.<br />

Such high-volume, cross-border currency transacti<strong>on</strong>s add nothing to <str<strong>on</strong>g>the</str<strong>on</strong>g> real ec<strong>on</strong>omy. A Tobin Tax (first<br />

proposed by <str<strong>on</strong>g>the</str<strong>on</strong>g> Nobel Prize-winning ec<strong>on</strong>omist James Tobin in 1974) would place a small excise fee <strong>on</strong> such<br />

transacti<strong>on</strong>s, with <str<strong>on</strong>g>the</str<strong>on</strong>g> fee increasing relative to <str<strong>on</strong>g>the</str<strong>on</strong>g> speed and volume of <str<strong>on</strong>g>the</str<strong>on</strong>g> trade. While such a tax would<br />

discourage short-term transacti<strong>on</strong>s, it would not affect <str<strong>on</strong>g>the</str<strong>on</strong>g> traditi<strong>on</strong>al l<strong>on</strong>g term investments that are needed<br />

for projects of genuine value.<br />

A Tobin Tax would be an administratively simple means of raising billi<strong>on</strong>s of dollars annually without<br />

compromising legitimate l<strong>on</strong>g-term investments. It would also have <str<strong>on</strong>g>the</str<strong>on</strong>g> benefit of not allowing huge profits<br />

to be made <strong>on</strong> such transacti<strong>on</strong>s—profits that fur<str<strong>on</strong>g>the</str<strong>on</strong>g>r c<strong>on</strong>tribute to <str<strong>on</strong>g>the</str<strong>on</strong>g> extremes of wealth now evident.<br />

While Wall Street hates <str<strong>on</strong>g>the</str<strong>on</strong>g> idea, <str<strong>on</strong>g>the</str<strong>on</strong>g> Tobin Tax is seen as a simple way to rein-in greed while tapping new<br />

revenue streams for social needs. This is why <str<strong>on</strong>g>the</str<strong>on</strong>g> Tobin Tax has been endorsed by German Chancellor<br />

Angela Merkel and former British Prime Minister Gord<strong>on</strong> Brown.<br />

Str<strong>on</strong>ger Regulati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> Finance Industry: There are several historical examples of what can happen when <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

finance industry ends up dominating <str<strong>on</strong>g>the</str<strong>on</strong>g> industrial sector. When <str<strong>on</strong>g>the</str<strong>on</strong>g> finance sector has few c<strong>on</strong>straints <strong>on</strong><br />

speculati<strong>on</strong> and risk-taking, <str<strong>on</strong>g>the</str<strong>on</strong>g> inevitable results are financial bubbles that inevitably explode, hurting both<br />

companies and workers. But unregulated finance is a bo<strong>on</strong> to those focused <strong>on</strong> accumulating financial wealth.<br />

A range of regulati<strong>on</strong>s are available to curb such speculati<strong>on</strong> and risky behaviours. These include: increasing <str<strong>on</strong>g>the</str<strong>on</strong>g><br />

requirements for fracti<strong>on</strong>al reserves to 100 percent; ensuring <str<strong>on</strong>g>the</str<strong>on</strong>g> separati<strong>on</strong> of savings and speculative banks; placing limits <strong>on</strong><br />

leveraging; increasing <str<strong>on</strong>g>the</str<strong>on</strong>g> authority of financial regulators to stop risky speculati<strong>on</strong>; imposing str<strong>on</strong>ger regulati<strong>on</strong> of credit-rating<br />

agencies; requiring much str<strong>on</strong>ger fines and penalties for activities such as insider trading and fraud; enforcing str<strong>on</strong>ger laws for<br />

disclosures of deposit transacti<strong>on</strong>s to reduce opportunities for tax avoidance; and limiting <str<strong>on</strong>g>the</str<strong>on</strong>g> size of banks so that n<strong>on</strong>e are “too<br />

big to fail.” These and o<str<strong>on</strong>g>the</str<strong>on</strong>g>r regulati<strong>on</strong>s are all technically feasible. As with so many reforms, enacting <str<strong>on</strong>g>the</str<strong>on</strong>g>m is<br />

simply a matter of political will.<br />

Redesigning Corporati<strong>on</strong>s: Multinati<strong>on</strong>al corporati<strong>on</strong>s have come to dominate <str<strong>on</strong>g>the</str<strong>on</strong>g> global ec<strong>on</strong>omy, with many<br />

having ec<strong>on</strong>omies larger than those of many nati<strong>on</strong> states. 86 These corporati<strong>on</strong>s are by law required to ignore<br />

n<strong>on</strong>-financial aspects of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir operati<strong>on</strong>s if doing so would interfere with <str<strong>on</strong>g>the</str<strong>on</strong>g>ir ability to increase <str<strong>on</strong>g>the</str<strong>on</strong>g>ir profits.<br />

Corporati<strong>on</strong>s are legally permitted to ignore acti<strong>on</strong>s that would cost <str<strong>on</strong>g>the</str<strong>on</strong>g>m m<strong>on</strong>ey if such costs were<br />

internalized, for example, legal levels of polluti<strong>on</strong> may be externalized to workers or communities but such<br />

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— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

costs are not borne by <str<strong>on</strong>g>the</str<strong>on</strong>g> corporati<strong>on</strong>. This narrow focus gives many corporati<strong>on</strong>s <str<strong>on</strong>g>the</str<strong>on</strong>g> characteristics of a<br />

psychopath 87—arrogance and deceptiveness combined with a lack of human empathy. The implicati<strong>on</strong>s for<br />

communities and <str<strong>on</strong>g>the</str<strong>on</strong>g> envir<strong>on</strong>ment are profound in terms of <str<strong>on</strong>g>the</str<strong>on</strong>g> damages that can be inflicted by powerful—<br />

and totally amoral—corporati<strong>on</strong>s.<br />

Anti- trust Legislati<strong>on</strong>: In <str<strong>on</strong>g>the</str<strong>on</strong>g> past, effective laws have been passed to help reduce <str<strong>on</strong>g>the</str<strong>on</strong>g> size and power of<br />

corporati<strong>on</strong>s. But more fundamental reforms are likely needed, such as <str<strong>on</strong>g>the</str<strong>on</strong>g> mandatory renewal of corporate charters<br />

every few years. Making <str<strong>on</strong>g>the</str<strong>on</strong>g> renewal of an operating license c<strong>on</strong>tingent <strong>on</strong> first meeting various social and<br />

envir<strong>on</strong>mental objectives could be <strong>on</strong>e helpful step.<br />

With energy descent inevitable, <str<strong>on</strong>g>the</str<strong>on</strong>g> need to revitalize local ec<strong>on</strong>omies and to establish regi<strong>on</strong>al self sufficiency<br />

becomes increasingly important. A case could be made for restricting corporate charters to special cases<br />

where, for example, a local project may require pooled investments that are not possible <strong>on</strong> a local or regi<strong>on</strong>al<br />

level. Such charters could be granted for a limited time and with specific goals. The Subsidiarity Principle 88<br />

could be applied to producti<strong>on</strong> of goods and services so that c<strong>on</strong>trol over what is produced—and how it is<br />

produced (e.g. with sustainable business practices)—remains local or regi<strong>on</strong>al.<br />

Sustainable Trade: Streng<str<strong>on</strong>g>the</str<strong>on</strong>g>ning local ec<strong>on</strong>omies will require a significant reducti<strong>on</strong> (but not eliminati<strong>on</strong>) of<br />

interregi<strong>on</strong>al trade. As communities and regi<strong>on</strong>s become increasingly dependent <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> resources within <str<strong>on</strong>g>the</str<strong>on</strong>g>ir<br />

community and regi<strong>on</strong>, <str<strong>on</strong>g>the</str<strong>on</strong>g> importance of sustainable trade practices will become increasingly evident.<br />

Sustainable trade involves ensuring that <str<strong>on</strong>g>the</str<strong>on</strong>g> biocapacity resources needed to sustain <strong>on</strong>e regi<strong>on</strong> are not<br />

exported to ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r regi<strong>on</strong>. To export <strong>on</strong>e’s essential biocapacity is to degrade <strong>on</strong>e’s capacity to supply<br />

<strong>on</strong>eself with essential goods and services, and to c<strong>on</strong>demn future generati<strong>on</strong>s to a reduced standard of living.<br />

If a regi<strong>on</strong> has a level of biocapacity in excess to its needs, it could be desirable to engage in exports that<br />

reduce that biocapacity. But mechanisms would be required to m<strong>on</strong>itor this export activity to ensure a shortterm<br />

excess does not turn into a future deficit.<br />

Sustainable trade also means <strong>on</strong>ly accepting exports from regi<strong>on</strong>s that enjoy a biocapacity excess. While <str<strong>on</strong>g>the</str<strong>on</strong>g>re<br />

might be a short-term gain for <str<strong>on</strong>g>the</str<strong>on</strong>g> importing area, it would be unfair to deprive ano<str<strong>on</strong>g>the</str<strong>on</strong>g>r regi<strong>on</strong>’s populati<strong>on</strong><br />

of <str<strong>on</strong>g>the</str<strong>on</strong>g>ir essential biocapacity. Such unsustainable imports could lead to unwanted immigrati<strong>on</strong> pressures as<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> future populati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> depleted area attempts to move to <str<strong>on</strong>g>the</str<strong>on</strong>g> importing area. Such migrati<strong>on</strong> could<br />

quickly change what was an excess biocapacity to a deficit situati<strong>on</strong> where every<strong>on</strong>e loses.<br />

Moving toward a sustainable trade regime is likely to be a major internati<strong>on</strong>al challenge due to <str<strong>on</strong>g>the</str<strong>on</strong>g> c<strong>on</strong>tinuing<br />

envir<strong>on</strong>mental and ec<strong>on</strong>omic legacy of past injustices. 89 The biocapacity of many poor nati<strong>on</strong>s has been<br />

depleted significantly by <str<strong>on</strong>g>the</str<strong>on</strong>g> col<strong>on</strong>ial impacts of wealthy nati<strong>on</strong>s and this historic fact will require some form<br />

of equitable distributi<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s remaining biocapacity.<br />

Additi<strong>on</strong>al features of a sustainable trade regime have been outlined in <str<strong>on</strong>g>the</str<strong>on</strong>g> IFG publicati<strong>on</strong>, Alternatives to Ec<strong>on</strong>omic<br />

Globalizati<strong>on</strong>.<br />

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NOTES<br />

— WEALTH, POWER, AND THE FUTURE OF THE PLANET —<br />

1 For purposes of this essay let us c<strong>on</strong>sider “extreme wealth” as <str<strong>on</strong>g>the</str<strong>on</strong>g> net assets of <str<strong>on</strong>g>the</str<strong>on</strong>g> top 1/10 th of 1% of <str<strong>on</strong>g>the</str<strong>on</strong>g> global<br />

populati<strong>on</strong>, or less than 7 milli<strong>on</strong> people worldwide.<br />

2 Thanks to Linda McQuaig for this and <str<strong>on</strong>g>the</str<strong>on</strong>g> following “parade” perspective <strong>on</strong> billi<strong>on</strong>aires, in McQuaig, L. and Brooks,<br />

N. The Trouble with Billi<strong>on</strong>aires, Viking Canada, 2010.<br />

3 Forbes list of Billi<strong>on</strong>aires. http://www.forbes.com/wealth/billi<strong>on</strong>aires<br />

4 http://en.wikipedia.org/wiki/Poverty#Absolute_poverty<br />

5 World Wealth Report, Merrill Lynch, 2007. http://www.mlbs.ch/en2/aboutus/files/WWR07.pdf<br />

6 “Wealth” in this study c<strong>on</strong>sidered assets minus liabilities and <str<strong>on</strong>g>the</str<strong>on</strong>g>refore represents a somewhat different picture than<br />

income al<strong>on</strong>e. Wealth so defined is a more useful indicati<strong>on</strong> of actual purchasing power and influence than income<br />

al<strong>on</strong>e.<br />

7 Poverty Facts and Stats — Global Issues http://www.globalissues.org/article/26/poverty-facts-and-stats<br />

8 The World Distributi<strong>on</strong> of Household Wealth (exact copy of report published at United Nati<strong>on</strong>s website), James B.<br />

Davies, Susanna Sandstrom, Anth<strong>on</strong>y Shorrocks, and Edward N. Wolff. 5, December 2006. “Wealth” in this study<br />

was assets minus liabilities. http://escholarship.org/uc/item/3jv048hx#page-1<br />

9 Mort<strong>on</strong>, F. The Rothschilds: Portrait of a Dynasty, Kodansha America, Inc., New York, 1998.<br />

10 Lundberg, F. The Rich and <str<strong>on</strong>g>the</str<strong>on</strong>g> Super-Rich, Bantam Books, Tor<strong>on</strong>to, Canada, 1968<br />

11 Vulliamy,E. How a Big US Bank Laundered Billi<strong>on</strong>s from Mexico’s Murderous Drug Gangs, Go to Original –<br />

guardian.co.uk<br />

12 Swiss NGO Links Los Angeles Killing to Timber Corrupti<strong>on</strong> in Malaysia http://www.ensnewswire.com/ens/mar2011/2011-03-09-01.html<br />

13 See McQuaig, L. And Brooks, N. The Trouble with Billi<strong>on</strong>aires, Viking Canada, 2010. for a more complete story.<br />

14 http://en.wikipedia.org/wiki/Herman_Hollerith<br />

15 Vulliamy, E. How a big US bank laundered billi<strong>on</strong>s from Mexico's murderous drug gangs, The Observer, Sunday 3<br />

April 2011. http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs<br />

LICHTBLAU, E., Comm<strong>on</strong> Cause Asks Court About Thomas Speech, NY Times, February 14, 2011.<br />

http://www.nytimes.com/2011/02/15/us/politics/15thomas.html<br />

Stewart, B. Just where does Hosni Mubarak's wealth come from really? CBC News Posted: Feb 8, 2011 5:32 PM ET<br />

http://www.cbc.ca/news/world/story/2011/02/08/f-vp-stewart.html<br />

16Koch Bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs + US Chamber = Why C<strong>on</strong>gress Doesn't Care About Climate Change by Bill McKibb<strong>on</strong>, Huffint<strong>on</strong><br />

Post, Posted: March 11, 2011 09:41 AM http://www.huffingt<strong>on</strong>post.com/bill-mckibben/koch-bro<str<strong>on</strong>g>the</str<strong>on</strong>g>rs-<str<strong>on</strong>g>the</str<strong>on</strong>g>-uscham_b_834462.html<br />

17 Advocacy Group Says Justices May Have C<strong>on</strong>flict in Campaign Finance Cases By Eric Lichtblau, Published: January<br />

19, 2011, New Your Times http://www.nytimes.com/2011/01/20/us/politics/20koch.html.<br />

See also Anne Le<strong>on</strong>ard’s The Story of Citizens United v. FEC, an explorati<strong>on</strong> of <str<strong>on</strong>g>the</str<strong>on</strong>g> crisis of corporate influence in<br />

American democracy. storyofcitizensunited.org.<br />

18 Domhoff, W. G. The Class-Dominati<strong>on</strong> Theory of Power, The Power Elite and Government, April 2005<br />

19WHAT DOES THE U.S. CHAMBER OF COMMERCE HAVE TO DO WITH CLIMATE CHANGE?<br />

http://chamber.350.org/get-local/recruit/<br />

20 McQuaig, L. And Brooks, N. The Trouble with Billi<strong>on</strong>aires, Viking Canada, 2010. See Chapter 10 , Why Billi<strong>on</strong>aires<br />

Are Bad for Dem<strong>on</strong>cracy.<br />

21 Winters, J.A. <str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g>, Cambridge University Press, 2011.<br />

See also Hidden trilli<strong>on</strong>s widen China's wealth gap: study http://www.reuters.com/article/2010/08/12/us-china-wealthidUSTRE67B1W720100812.<br />

SAINATH, P. Karma for Billi<strong>on</strong>aires: Gates, Buffet & <str<strong>on</strong>g>the</str<strong>on</strong>g> Art of Giving, The Hindu, March 15, 2011<br />

22 Taibbi, M. The Big Takeover: How Wall Street Insiders are Using <str<strong>on</strong>g>the</str<strong>on</strong>g> Bailout to Stage a Revoluti<strong>on</strong>. The global<br />

ec<strong>on</strong>omic crisis isn't about m<strong>on</strong>ey - it's about power. Published <strong>on</strong> Sunday, March 22, 2009 by Rolling St<strong>on</strong>e.<br />

23 Wilkins<strong>on</strong>, R. and Pickett, K., 2nd editi<strong>on</strong>. The Spirit Level: Why Equality is Better for Every<strong>on</strong>e, Penguin Books,<br />

2010.<br />

24 Wilkins<strong>on</strong>, R. and Pickett, K., 2nd editi<strong>on</strong>. The Spirit Level: Why Equality is Better for Every<strong>on</strong>e, Penguin Books,<br />

2010.<br />

25 Frank, R.H., and Levine, A.S., Expenditure Cascades. Cornell University mimeograph, Ithaca: Cornell University,<br />

2005; and Frank, R.H., Falling Behind: How rising inequality harms <str<strong>on</strong>g>the</str<strong>on</strong>g> middle class. Berkeley, CA: University of<br />

California Press, 2007.<br />

26 Smil, V. Energy at <str<strong>on</strong>g>the</str<strong>on</strong>g> Cross Roads: Global Perspectives and Uncertainties, Cambridge, The MIT Press, 2003.<br />

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27 Layard, R. Happiness, L<strong>on</strong>d<strong>on</strong>: Allen Lane, 2005.<br />

28 http://hubpages.com/hub/Private-Jets-of-<str<strong>on</strong>g>the</str<strong>on</strong>g>-Rich<br />

29 McQuaig, L. And Brooks, N. The Trouble with Billi<strong>on</strong>aires, Viking Canada, 2010.<br />

30 Millennium Ecosystems Assessment Report: Ecosystsms and Human Well Being, Washingt<strong>on</strong>: Island Press, 2003.<br />

31Heinberg, R. Peak Everything: Waking up to <str<strong>on</strong>g>the</str<strong>on</strong>g> century of decline, Gabriola Isl, B.C., New Society Publishers, 2007.<br />

32 Westra, L. And Laws<strong>on</strong>, B.E. Faces of Envir<strong>on</strong>mental Racism: C<strong>on</strong>fr<strong>on</strong>ting Issues of Global Justice ( 2 nd Ed).<br />

Rowman &Littlefield Publishers, Inc. 2001.<br />

33 Daly, H., and Farley, J. Ecological Ec<strong>on</strong>omics: Principles and Practices, Washingt<strong>on</strong>, Island Press, 2004.<br />

34 Czech, B., P. R. Krausman, and P. K. Devers. 2000. Ec<strong>on</strong>omic associati<strong>on</strong>s am<strong>on</strong>g causes of species endangerment in<br />

<str<strong>on</strong>g>the</str<strong>on</strong>g> United States. Bioscience 50(7):593-601. While this report focuses <strong>on</strong> <str<strong>on</strong>g>the</str<strong>on</strong>g> USA, <str<strong>on</strong>g>the</str<strong>on</strong>g> relati<strong>on</strong>ship can be extended<br />

globally.<br />

35 Kasser, T. The High Price of Materialism, Cambridge, <str<strong>on</strong>g>the</str<strong>on</strong>g> MIT Press, 2002.<br />

36 Dahl, R. A. and Lindblom, C. E. Politics, Ec<strong>on</strong>omics and Welfare, Chicago: Chicago University Press, 1976.<br />

37 Wilkins<strong>on</strong>, R. and Pickett,K., 2nd editi<strong>on</strong>, The Spirit Level: Why Equality is Better for Every<strong>on</strong>e, Penguin Books,<br />

2010.<br />

38 Page, B., and Jacobs, L. Class War: What Americans Really Think About Inequality from LM<br />

39 Forbes List of Billi<strong>on</strong>aires, http://www.forbes.com/wealth/billi<strong>on</strong>aires<br />

40 Kempf, H. How <str<strong>on</strong>g>the</str<strong>on</strong>g> Rich Are Destroying <str<strong>on</strong>g>the</str<strong>on</strong>g> Earth, Chelsea Green Publishing Company, Verm<strong>on</strong>t, 2008 p 49<br />

41 McQuaig, L. And Brooks, N. The Trouble with Billi<strong>on</strong>aires, Viking Canada, 2010.<br />

42 Shaxs<strong>on</strong>, N. Treasure Islands: Tax Havens and <str<strong>on</strong>g>the</str<strong>on</strong>g> Men Who Stole <str<strong>on</strong>g>the</str<strong>on</strong>g> World , <str<strong>on</strong>g>the</str<strong>on</strong>g> Bodley Head, L<strong>on</strong>d<strong>on</strong>, 2011; see<br />

also Stock, R. Tax Havens, where <str<strong>on</strong>g>the</str<strong>on</strong>g> rich.... get richer, 2011. http://www.stuff.co.nz/sunday-startimes/business/4866191/Where-<str<strong>on</strong>g>the</str<strong>on</strong>g>-rich-get-richer<br />

43 Wilkins<strong>on</strong>, R. and Pickett, K., 2nd editi<strong>on</strong>. The Spirit Level: Why Equality is Better for Every<strong>on</strong>e, Penguin Books,<br />

2010, page 52.<br />

44 Rothstein, B. and Uslander, E. The Moral Foundati<strong>on</strong>s of Trust, Cambridge: Cambridge University Press, 2002.<br />

45 Greider, W. Secrets of <str<strong>on</strong>g>the</str<strong>on</strong>g> Temple: How <str<strong>on</strong>g>the</str<strong>on</strong>g> Federal Reserve Runs <str<strong>on</strong>g>the</str<strong>on</strong>g> Country, New York, Sim<strong>on</strong> and Schuster Inc,<br />

1987.<br />

46Milanovic, B. The Haves and <str<strong>on</strong>g>the</str<strong>on</strong>g> Have-Nots: A Brief and Idiosyncratic History of Global Inequality, Basic Books,<br />

2010<br />

47 Cohan, W. D. M<strong>on</strong>ey and Power: How Goldman Sachs Came to Rule <str<strong>on</strong>g>the</str<strong>on</strong>g> World, Random House, 2011.<br />

48Citigroup Oct 16, 2005 Plut<strong>on</strong>omy Report http://www.scribd.com/doc/6674234/Citigroup-Oct-16-2005-<br />

Plut<strong>on</strong>omy-Report-Part-1<br />

49 McQuaig, L. And Brooks, N. The Trouble with Billi<strong>on</strong>aires, Viking Canada, 2010.<br />

50 Johns<strong>on</strong>, S. “The Quite Coup,” Atlantic M<strong>on</strong>thly, May, 2009.<br />

51 Minarik, J.J. The Distributi<strong>on</strong>al Effects of Inflati<strong>on</strong> and Their Implicati<strong>on</strong>s, in Stagflati<strong>on</strong>: <str<strong>on</strong>g>the</str<strong>on</strong>g> Causes, Effects and<br />

Soluti<strong>on</strong>s, Joint Ec<strong>on</strong>omic Committee, U.S.C<strong>on</strong>gress, 1980.<br />

52 Greider, W. Secrets of <str<strong>on</strong>g>the</str<strong>on</strong>g> Temple: How <str<strong>on</strong>g>the</str<strong>on</strong>g> Federal Reserve Runs <str<strong>on</strong>g>the</str<strong>on</strong>g> Country, New York, Sim<strong>on</strong> and Schuster Inc,<br />

1987.<br />

53 See Greider, W. Inside <str<strong>on</strong>g>the</str<strong>on</strong>g> Temple, for a detailed history of how <str<strong>on</strong>g>the</str<strong>on</strong>g> US Federal Reserve has d<strong>on</strong>e this over <str<strong>on</strong>g>the</str<strong>on</strong>g> years.<br />

54 http://www.huffingt<strong>on</strong>post.com/2011/07/22/credit-rating-agencies-debt-ceiling-greece_n_907006.html<br />

55 Perkins, J. C<strong>on</strong>fessi<strong>on</strong>s of an Ec<strong>on</strong>omic Hit Man, Berrett-Koehler Publishers, Inc. San Francisco, 2004.<br />

56 Milanovic, B. The Haves and <str<strong>on</strong>g>the</str<strong>on</strong>g> Have-Nots: A Brief and Idiosyncratic History of Global Inequality, Basic Books,<br />

2010<br />

57 Mander, J. and Goldsmith, E. The Case Against <str<strong>on</strong>g>the</str<strong>on</strong>g> Global Ec<strong>on</strong>omy: and For a Turn Toward <str<strong>on</strong>g>the</str<strong>on</strong>g> Local, Sierra Club<br />

Books, San Francisco, 1996.<br />

58 Lane, R. E., The Market Experience, Cambridge, Cambridge University Press, 1991.<br />

59 Frank, R.H., Luxury Fever: M<strong>on</strong>ey and Happiness in an Era of Excess, New York, The Free Press, 1999.<br />

60 Lane, R. E., The Market Experience, Cambridge, Cambridge University Press, 1991.<br />

61 Domhoff, G. W. Wealth, Income, and Power, September 2005 (updated January 2011)<br />

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html<br />

62 Pat<strong>on</strong>, C. The disparity between SA CEO and worker salaries is am<strong>on</strong>g <str<strong>on</strong>g>the</str<strong>on</strong>g> world’s largest<br />

Wednesday, 15 Dec 2010 http://www.fm.co.za/Article.aspx?id=129612<br />

63 Posner, R. A., “Are American CEOs overpaid, and if so, what if anything should be d<strong>on</strong>e about it?” Duke Law<br />

Journal, Vol. 58: 1023. 2009.<br />

64 US billi<strong>on</strong>aires club toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r – to give away half <str<strong>on</strong>g>the</str<strong>on</strong>g>ir fortunes to good causes<br />

http://www.guardian.co.uk/technology/2010/aug/04/us-billi<strong>on</strong>aires-half-fortune-gates<br />

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65 http://www.nytimes.com/2010/08/22/magazine/22FOB-wwln-t.html<br />

66 "http://www.america.gov/st/washfile-english/2007/June/200706261522251CJsamohT0.8012354.html" \l<br />

"ixzz1IQAyIUjH"<br />

67 Epstein, S. S. (1978), The Politics of Cancer, San Francisco:<br />

68 Hamilt<strong>on</strong>, C. The powerful coaliti<strong>on</strong> that wants to engineer <str<strong>on</strong>g>the</str<strong>on</strong>g> world's climate, guardian.co.uk, M<strong>on</strong>day 13 September<br />

2010 16.16 BST http://www.guardian.co.uk/envir<strong>on</strong>ment/2010/sep/13/geoengineering-coaliti<strong>on</strong>-world-climate<br />

69 Machines of War: Blackwater, M<strong>on</strong>santo, and Bill Gates http://english.pravda.ru/business/companies/14-10-<br />

2010/115363-machines_of_war_blackwater_m<strong>on</strong>santo_billgates-0/<br />

70 Bill Gates and <str<strong>on</strong>g>the</str<strong>on</strong>g> problem with philanthropy. http://americansituati<strong>on</strong>.com/2010/04/27/gates-and-<str<strong>on</strong>g>the</str<strong>on</strong>g>problem-with-philanthropy/<br />

71US billi<strong>on</strong>aires club toge<str<strong>on</strong>g>the</str<strong>on</strong>g>r – to give away half <str<strong>on</strong>g>the</str<strong>on</strong>g>ir fortunes to good causes<br />

72Wealth for Justice. http://dandeli<strong>on</strong>salad.wordpress.com/2010/04/30/wealth-for-justice-by-ralph-nader/<br />

73 Callahan, D. “The Problem With Billi<strong>on</strong>aire Philanthropist”, Huffingt<strong>on</strong> Post, August 13, 2010 11:20 AM<br />

http://www.huffingt<strong>on</strong>post.com/david-callahan/<str<strong>on</strong>g>the</str<strong>on</strong>g>-problem-with-billi<strong>on</strong>a_b_681335.html<br />

Sainath, P. Karma for Billi<strong>on</strong>aires: Gates, Buffet & <str<strong>on</strong>g>the</str<strong>on</strong>g> Art of Giving, The Hindu, March 15, 2011<br />

74 Winters, J.A. <str<strong>on</strong>g>Oligarchy</str<strong>on</strong>g>, Cambridge University Press, 2011.<br />

75 Koch’s Web of Influence: Koch spends tens of milli<strong>on</strong>s trying to shape federal policies that affect <str<strong>on</strong>g>the</str<strong>on</strong>g>ir global business<br />

empire. Published <strong>on</strong> Wednesday, April 6, 2011 by Center for Public Integrity<br />

76 Deep Politics III by Peter Dale Scott OVERVIEW: THE CIA, THE DRUG TRAFFIC, AND OSWALD IN<br />

MEXICO, December 2000 http://www.history-matters.com/pds/DP3_Overview.htm<br />

M<strong>on</strong>ey Laundering and <str<strong>on</strong>g>the</str<strong>on</strong>g> Global Drug Trade are Fueled by <str<strong>on</strong>g>the</str<strong>on</strong>g> Capitalist Elites. Tom Burghardt<br />

http://www.globalresearch.ca/index.php?c<strong>on</strong>text=va&aid=20210<br />

See also Rupert, M. Crossing <str<strong>on</strong>g>the</str<strong>on</strong>g> Rubic<strong>on</strong>: The Decline of <str<strong>on</strong>g>the</str<strong>on</strong>g> American Empire at <str<strong>on</strong>g>the</str<strong>on</strong>g> End of <str<strong>on</strong>g>the</str<strong>on</strong>g> Age of Oil, New<br />

Society Publishers, Gabriola Island, B.C. 2004<br />

77 Wilkins<strong>on</strong>, R. and Pickett, K., 2nd editi<strong>on</strong>. The Spirit Level: Why Equality is Better for Every<strong>on</strong>e, Penguin Books,<br />

2010, page 18.<br />

78 Heinberg, R. The End of Growth: Adapting to Our New Ec<strong>on</strong>omic Reality, Gabriola Island, B.C., New Society<br />

Publishers, 2011.<br />

79 Catt<strong>on</strong>, W. Overshoot: The Ecological Basis of Revoluti<strong>on</strong>ary Change, University of Illinois, 1982<br />

80 Biocapacity refers to <str<strong>on</strong>g>the</str<strong>on</strong>g> capacity of a given biologically productive area to generate an <strong>on</strong>-going supply of renewable<br />

resources and to absorb its spillover wastes. Unsustainability occurs if <str<strong>on</strong>g>the</str<strong>on</strong>g> area’s ecological footprint exceeds its<br />

biocapacity. http://www.greenfacts.org/glossary/abc/biocapacity.htm<br />

81 Daly, H. 1991. Steady-State Ec<strong>on</strong>omics, 2nd editi<strong>on</strong>. Island Press, Washingt<strong>on</strong>, DC.<br />

See also <str<strong>on</strong>g>the</str<strong>on</strong>g> Centre for <str<strong>on</strong>g>the</str<strong>on</strong>g> Advancement of a Steady State Ec<strong>on</strong>omy, CASSE, at www.steadystate.org<br />

82 SANZ, Str<strong>on</strong>g Sustainability, http://nz.phase2.org/<br />

83 Frank, R. H. Luxury Fever: Why M<strong>on</strong>ey Fails to Satisfy in an Ear of Excess, <str<strong>on</strong>g>the</str<strong>on</strong>g> Free Press, A Divisi<strong>on</strong> of Sim<strong>on</strong> and<br />

Schuster, 1999, pg 279.<br />

84 http://taxjustice.blogspot.com/2009/07/paying-taxes-is-public-in-finland.html<br />

85 http://m<strong>on</strong>eymorning.com/2010/05/27/tobin-tax/]<br />

86 Anders<strong>on</strong>, S. and Cavanagh, J. Top 200: The Rise of Corporate Global Power, Institute for Policy Studies,<br />

Washingt<strong>on</strong>, D.C. 2000.<br />

http://www.ips-dc.org/reports/top_200_<str<strong>on</strong>g>the</str<strong>on</strong>g>_rise_of_corporate_global_power<br />

87 Bakan, J. The Corporati<strong>on</strong>: <str<strong>on</strong>g>the</str<strong>on</strong>g> Pathological Pursuit of Profit and Power, Viking Canada, 2004.<br />

88 The principle of subsidiarity holds that a larger and greater body should not exercise functi<strong>on</strong>s which can be carried<br />

out efficiently by <strong>on</strong>e smaller and lesser, but ra<str<strong>on</strong>g>the</str<strong>on</strong>g>r <str<strong>on</strong>g>the</str<strong>on</strong>g> former should support <str<strong>on</strong>g>the</str<strong>on</strong>g> latter and help to coordinate its<br />

activity with <str<strong>on</strong>g>the</str<strong>on</strong>g> activities of <str<strong>on</strong>g>the</str<strong>on</strong>g> whole community.” Source:<br />

http://democraciaparticipativa.net/documentos/Principle_of_Subsidiarity.htm<br />

89 Sims, A. Ecological Debt: <str<strong>on</strong>g>the</str<strong>on</strong>g> Health of <str<strong>on</strong>g>the</str<strong>on</strong>g> Planet and <str<strong>on</strong>g>the</str<strong>on</strong>g> Wealth of Nati<strong>on</strong>s, Pluto Press, L<strong>on</strong>d<strong>on</strong>, 2005.<br />

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