Capitalism: a crock of crooks

For months, the bosses, their stenographers in the mass media and their political agents have been publicising corruption in the East Branch of the Health Services Union to tar the whole of the labour movement.

The responses from the Killard government and the ACTU have been as tardy as they have been lame. The best their leaders can mouth is that the HSU is the one rotten apple. This apologetic line is the latest instance of how organised labour is on the back foot.

The most obvious example of this retreat has been in regard to the Australian Building and Construction Commission where the Construction Division of the CFMEU has never taken the fight up to the bosses by focusing on their ‘ingrained culture’ of criminality. Too often the union pleads: ‘we’re not as thuggish as they say we are’.

The union is vigorous in attacking OH&S violations and detailing non-payment of wages, Super and taxes, But these offences are confined to the workplace and don’t help the populace to see the nature of capitalism.

Exploitation is not theft
Before documenting a few recent instances from the avalanche of the activities considered crimes even by the standards of bourgeois justice, it is vital to be clear about how the capitalist system works. All the money that capitalists steal from each other and swindle out of governments and the public comes from the surplus value added by wage-slaves.

That exploitation is not theft. On average, capitalists pay wage-slaves the full value of the cost of producing the one commodity – their labour-power – that we have for sale.

That exchange is the core of capitalism. Once that surplus value has been produced, sections of capital battle to get their hands on as much of it as possible.

That is where the most of the swindling comes in. In some cases, the original capitalist can be left with no profit. No commentator on the accumulation of capital has paid as much attention to swindling as did Marx who nonetheless kept it in its place.

Collusive tendering and price-fixing are the ‘ingrained culture’ of the employers in this sector. In 1995, Leighton’s then CEO, Wal King, justified his company’s use of false invoices to conceal price-fixing on the Sydney Casino as ‘the culture … and custom that had been long-standing in the industry that had been handed on for years.’ So had King’s excuse. In 1911, the NSW MBA justified its members’ involvement in illegal commissions by saying that they ‘should be openly recognised’ as ‘universal and worldwide’. The 1995 report branded King and Leightons as ‘not of good repute, having regard to character, honesty and integrity’. Despite this, he and Leightons continued to flourish. They were not banned from sites, unlike CFMEU organisers defending the lives of their members.

The NSW Gyles Royal Commission in 1990 forced the resignation of the executive of the NSW MBA which had been a clearing house for collusive tenders. This unanticipated outcome was similar to that from the Royal Commission into the Ship Painters and Dockers which had exposed bottom-of-the harbor schemes across the big end of town.

Howard did not make that mistake in setting the terms of reference for the Cole inquisition into the building and construction unions. Killard followed suit when she excluded health and safety from the review of the ABCC, which thereby had an easy time in finding that her ‘tough cop on the beat’ was necessary.

The gravest matter in building and construction is the Hardie Asbestos case. The High Court endorsed the disbarring of its directors for seven years for rigging the books about the compensation fund. There is no chance of their being charged with complicity in the mass murder of workers since, under capitalism, killing is not murder when done for profit.

In April, Lend Lease was made to pay fines and restitution of $54USm. for ten years of ‘a systematic pattern of audacious fraud’ in the US of A.  Yet again, the company’s defence was ‘everyone does it’. Yet again, Lend Lease is allowed to tender for government contracts.

Funny money
John Gay, former head at Gunns in Tasmania, has been charged on two counts of insider trading late in 2011. It is alleged that he sold shares in Gunns knowing that funds for its pulp mill were not going forthcoming.

In the same week as Gay faced court on 14 May, the Securities Commission (ASIC) reported a boom in insider-trading, with as many as 200 alerts received every day, that is, some 50,000 a year. The authorities managed to get eleven convictions in the three years to December, a slight improvement over their ten successes in the decade before 2008. The financialisation of the economy has inserted multiple levels of intermediaries with access to advance information about company accounts. The disproportion of alerts to convictions is a measure of how light is the hand of the law on corporate crooks.

The shopping center giant Centro lost track of more than $3 billion and thereby misled shareholders in 2007. A judge fined its Chief Financial Officer $30,000 and disqualified him for two years. In delivering his findings, his honour warned off ASIC by ruling that the Centro board had not been personally dishonest. Indeed, they had been ‘intelligent, conscientious and well-advised’. Perhaps if they had been stupid, lazy and ignorant they would not have lost anything? We might compare the court’s kid-glove treatment of Centro’s bosses with what its managers would have done to an honest, intelligent, conscientious and well-advised shopkeeper who happened to lose track of even $3,000 in unpaid rents.

Much smaller in one sense yet also far larger in its implication is the plundering of Super fund Trio by its executives. Alongside the Wollongong battlers whose losses were covered by government guarantees were several hundred leafy North Shore investors who went for Trio’s self-managed funds because they promised higher returns. Where did those ‘victims’ think the extra spondoolicks were going to come from if not from shonky deals such as Trio’s transferring $124m. to a tax haven? The problem is not the individual rip-off merchant or a few greedy Pymble millionaires, but the institutionalisation of tax havens with the connivance of governments across the globe.  

ASIC recently fined Leightons $300,000 for non-disclosure of information to the stock exchange. That is a hanging offence because they were ripping off other capitalists. A fine for killing for profit can be as little as $35,000. Bourgeois justice values a worker’s life at one-eighth of a share-holder’s monetary loss.

Leighton’s is also under investigation here and in Iraq into whether one of its subsidiaries paid bribes to get information to win a contract with South Oil Co.

Queensland ex-Minister Gordon Nuttall is in jail for taking bribes from mining magnate Ken Talbot. Talbot was due to stand trial on thirty-five charges of corruption but died in a plane crash between Cameroon and the Congo, two of the most corrupt countries on that continent. You can bet your bottom dollar that Talbot had been as generous to the thugs ruling over those mines as he was to Nuttall. Perhaps his plane crashed because it was overloaded with gifts.

In the wake of the Wheat Board’s bribery in Iraq, the Reserve Bank of Australia got around to cleaning up its act. Between 2001 and 2009, two subsidiaries, Note Printing Australia and Securency, paid $50m. to agents to win contracts to supply plasticised bank notes. How much of this payout ended up bribing officials in places like Nepal? How much did the RBA oard know, and when did they know it?

On 4 April this year, thirty Victorian building inspectors were charged with ‘alleged corruption, serious misconduct and harassment’; they allegedly took kickbacks to block formal investigations. On the same day, the State government announced the formation of its own Construction Stasi to ban the flying of the Eureka flag on sites. There will be no special police to investigate who bribed the inspectors.

Killing no murder
Four trucking companies are up on 1,000 charges of disabling the speed governors on their trucks. The practice came to light after a truck killed three people in January. In the aftermath, NSW police found that scores of governors at four firms had been tampered with. The Transport Workers’ Union repeated its accusation against Coles and Woolworths for imposing unsafe delivery schedules. For proof, stop at the Truckies’ memorial at Tarcutta. The employers’ association defence is that executives sit in offices and don’t sully their suits by tinkering with accelerators. Hence, any blame rests with the drivers. At law, corporations don’t have a soul to condemn or a backside to kick, yet they seem well supplied with arseholes.

One QANTAS executive in the US went to gaol for eight months in 2008 for colluding with competitors to fix freight rates. Qantas has also been fined by the European Commission, the New Zealand authorities and paid $26m. in penalties early last year in the US of A. If Qantas bosses were indigenous lads in Western Australia they would be behind bars under the three-strikes-and-you’re-in rule.

Dick Pratt made a name for himself as a philanthropist before the Competition Commission fined him $36m. for price-fixing. By colluding on the price of cardboard cartons, Pratt’s Visy and rival Amcor stole money from every pensioner who bought a packet of corn-flakes. Out of that rip-off of the most vulnerable, Pratt made a big fellow of himself. It is typical of the ingrained culture of capitalism that his associates said that the head of the Competition Commission, Gordon Samuel, had behaved badly in pursuing the case because he had been a guest at Pratt’s house. Prime Minister Rudd knew about the scam yet flew to the funeral to pay homage to one of the biggest crooks yet to be exposed in Australia. 

Transfield’s co-founder, Franco Belgiorno-Nettis, subsidised the visual arts out of the profits he made from exploiting workers while swindling customers and governments. He confessed to his corporation’s official historian that he had engaged in corruption and strong-arm tactics: ‘We cover this with a veneer of civilization.’ In a class society, each act of civilisation is met by a piece of barbarism exacted from workers whose creativity and suffering pay for the benefactor’s noble gestures.

Activists must voice class bitterness and class contempt. We lose by cringing before bad behaviour in one union. Instead, we must go straight for the corporate jugular to publicise organised robbers and serial killers.

Dickens got it half wrong in Bleak House when he has detective Bucket observe that, while murder could be done by amateurs, thieving needed professionals. Dickens was right to foresee that Pratt did not wake up one morning after a blameless career in business and decide to steal tens of millions of dollars. He was a professional thief. Moreover, killing for profit is no work for amateurs as asbestos makes clear. An International Class-War Crimes Tribunal would charge the Hardie executives with ‘prole-cide’.