| Enron-Style Corporate Crime and Privatization: A Look at the U.S. Coalition of Service Industries
(A report by Polaris Institute) June 19th, 2003 ***As community groups gear up for the WTO meetings in Montreal (July) and Cancun (Sept.) and the FTAA meetings in Miami (Nov.), a major driving force behind the scenes pushing for the privatization of services, including public services, is the U.S. Coalition of Service Industries (USCSI). The following report provides an inside look at how it works.*** INTRODUCTION: The U.S. Coalition of Service Industries (CSI or USCSI - www.uscsi.org) is the largest services oriented lobby group in the United States. With prime access to elite government and corporate circles, its various corporate members gain handsomely from international trade agreements, from IMF or World Bank handouts, and from privatization programs. As well, many USCSI corporate members have been embroiled in the corporate scandals that have rocked the U.S. and the world in the past two years. You can almost pick at random from the USCSI membership to find a corporation that is either privatizing public services, embroiled in financial controversy, or gaining from the misery imposed by an IMF loan. The degree to which members of the USCSI were among the corporations most involved in the recent wave of corporate scandals is disturbingly high. For example, Enron, Andersen, and WorldCom were all USCSI members at the time they were hit with the scandals (Enron and Andersen have since left the coalition). Enron was the company that hid debt from its books in order to artificially inflate its value to shareholders and was also heavily involved in the illegal trading which led to the California energy crisis in 2001. Andersen was Enron's accountant who let this all happen. And Worldcom was the corporation that inflated profits by nearly $4bn through deceptive accounting and later went bankrupt (only to reemerge as MCI). And, we shall see, this is just the tip of the iceberg, as many other USCSI corporations were heavily involved in various forms of illegal and unethical activity. Further, the USCSI is one of the best examples of how corporations have positioned themselves to heavily influence the structure of trade agreements through the formation of corporate lobby coalitions that are well connected to government. The USCSI membership uses their collective power to push for more favourable rules in cross-border trade-in-services such as the WTO's General Agreement on Trade in Services (GATS) and the services sections of the Free Trade Area of the Americas (FTAA). Here, the direct connection between the corporations involved in the push privatization of services (including many public services) and the push for trade agreements which will provide a legally binding lock-in for privatized services (through GATS and FTAA) is clear. In short, the USCSI acts as the access point to trade policy for US services corporations. Looking through this lens of the USCSI's association with both the corporate scandals and the push for ever more free trade, this article is an exposé of the USCSI, shedding light on its members' connections to many of the biggest corporate problems and scandals of our time. After a brief background on the USCSI and its connections to the trade negotiations process (Part I), three social and political exposés will be outlined where USCSI members have been heavily involved: Corporate scandals - A look many of the USCSI members which have been implicated in the recent corporate scandals (Part II) Public Service Privatization - An exposé of the many CSI members which have been frontrunners in the current rapid and international expansion of privatization of public services, and have a long history of causing social and environmental problems in this pursuit (Part III) Public Financing - A look at some of the many USCSI members have profited enormously from International Monetary Fund and/or World Bank project funding at the expense of the people in the countries involved (Part IV). Full report is available at http://www.polarisinstitute.org/pubs/pubs_uscsi.htm
with a large number of links to background info, or in better formatted PDF form but without the links at http://www.polarisinstitute.org/pubs/pubs_pdfs/uscsi.pdf
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