10 Great Moments in Corporate Malfeasance

Swiss pharmaceutical maker Roche made Multinational Monitor's "10 Worst Corporations of 2008" list because of a statement made by one of its executives regarding the company's HIV drug Fuzeon.

Roche made $266 million from worldwide sales of the drug and had created a firm sales price of $25,000 for a year's supply [source: Multinational Monitor]. Typically, drugs -- especially life-saving ones -- are sold around the world on a sliding scale, with developing countries paying less than industrialized nations, which pay the highest prices. Roche bucked this trend with its global price for Fuzeon.

When South Korea's Ministry of Health, Welfare and Family Affairs valued a year's supply of Fuzeon at $18,000 -- essentially setting the limit Roche could charge for the drug within the country's borders -- Roche balked and refused to sell the drug there any longer. Because of the lack of alternative drugs, the company effectively withdrew treatment for South Korea's HIV patients, despite the fact that the company still would've realized a profit from sales, even at the $18,000 price limit.

When the decision was challenged, the head of Roche's Korea division reportedly said, "We are not in the business to save lives, but to make money. Saving lives is not our business" [source: JMR Portfolio Intelligence].

The American oil company Halliburton has been a major point of scrutiny since the Iraq War, when it moved into the government contract business. This move sent up red flags in a number of quarters, since the administration of President George W. Bush awarded the contracts. Bush's vice president, Dick Cheney, had served as CEO of Halliburton until he became Bush's running mate in 2000; Cheney was awarded a $34 million payout when he left his position for the White House [source: Politifact].

The company received billions from government contracts for services it provided to the military in Iraq. A 2005 study found that the company received about 52 percent of the $25.4 billion on contracted services in Iraq [source: Chatterjee]. Yet, news has emerged time and again the Halliburton overcharged the government for these services.

Accusations of perhaps the most cynical malfeasance came from the same study. Halliburton employees revealed the company's policy of delivering spoiled and out-of-date food to U.S. troops stationed in Iraq. In some cases, the food was spoiled enough that it would be refused at camp. In this case, said Halliburton delivery drivers, the food would be taken to the next camp until it was accepted [source: Chatterjee]. In 2004, the value of Halliburton's contract to supply U.S. troops in Iraq increased to $7.2 billion [source: Towns].

By the end of the 1940s, the American-owned United Fruit Company controlled 42 percent of the land in Guatemala and wasn't using much of it [source: Third World Traveler].

In the early 1950s, democratically elected Guatemalan president Jacobo Arbenz carried out a land reform package that included the forced purchase of idle land owned by the United Fruit Company and redistributing it to indigenous farmers. The company approached Allen Dulles, the former president of United Fruit in the 1930s who had become the director of the CIA, and offered to use their fruit transportation network to smuggle arms into the country to spark a rebel movement [source: Spartacus Educational].

Dulles, framing land redistribution as a patently communist act and a sign that Guatemala was courting the Soviets as patrons, sanctioned a CIA-backed overthrow of Arbenz, led by Guatemalan army officer Carlos Castillo Armas. The U.S. agreed to supply aircraft for the rebel army to bomb Guatemala City, set up propaganda outlets in Latin America, bribed Arbenz's military commanders into surrendering and pressured the American media not to report on the story.

In 1954, Arbenz resigned and was replaced by Castillo Armas, who outlawed political parties and shut down opposition media outlets. In 1960, a 36-year-long civil war began in Guatemala.

The debate over U.S. health care reform that raged in 2010 shed a spotlight on health insurance companies, and not all of them stood up to the public scrutiny.

One notable example is WellPoint, one of the nation's biggest insurers, which turned out to have created an algorithm that flagged the accounts of women who were diagnosed with breast cancer. Called recission, or the policy of finding ways to cancel contracts, this common cost-saving measure had never before been so egregiously abused by an insurance company. A federal investigation of a number of women whose policies had been discontinued for various reasons shortly after they were diagnosed uncovered the abuse.

Under WellPoint's policy, a breast cancer diagnosis meant a woman's policy was flagged for investigation. It would be searched for any type of error, including clerical errors, which would then be used to revoke the patient's insurance coverage [source: Reuters]. Health and Human Services secretary Kathleen Sebilius quickly wrote a letter taking the company to task for the practice, which was technically legal.

In a response to Sebilius' letter, the company denied the accusation [source: Weaver].

In 1914, Henry Ford decided to put "Jesus Christ in [his] factory" by introducing ethical standards to his employees in Dearborn, Mich. [source: Russell]. He organized the Sociological Department, a group of 50 employees tasked with interviewing employees, their families, neighbors and friends to determine if workers were using their wages ethically and morally, while resisting temptations like alcohol, gambling and tobacco. Those who didn't meet his standards weren't eligible for raises and promotions.

While the Sociological Department served largely as a moral spying arm of the company, it's also credited with helping workers with illness, debt and other quandaries unrelated to work.

Much less ambiguous is the nature of Ford's Service Department, a security and intelligence division. At a time when unionization was gathering strength as a practice, the Service Department spied on labor groups and employees, breaking up meetings and assemblies, and even roughing up workers and union representatives.

In 1932, at the Ford plant in Dearborn, Service Department members worked in concert with local police to break up an unemployment protest using machine guns; four unarmed workers were killed [source: Grevatt]. Five years later, the "Battle of the Overpass" took place, where Service Department employees beat up union organizers allowed at the plant to distribute leaflets.

Under traditional circumstances, investment banks assemble pools of funds that it believes will grow over time. The endorsement of an investment fund, which is generally pooled by a bank-selected investment expert, indicates the bank believes the stocks included may grow in value. As they grow, anyone invested in them will see a return on investment. There is, of course, risk of losing rather than gaining money, and this risk is indicated by the category into which the fund is placed.

One type of fund in particular has a 50percent chance of success: the credit default obligation, essentially a bet on whether an investment will succeed or fail. In 2007, the big investment to bet on were mortgage-backed securities; since they'd shown nothing but high rates of return, investors were willing to bet on their success.

So investment banking house Goldman Sachs created Abacus 2007-ACI, a fund of mortgages it sold to investors. What Goldman didn't tell Abacus fund investors was that the mortgages they were betting would succeed had been handpicked by a favorite Goldman investor to actually lose. The favored investor, John Paulson, was allowed to compile the mortgage-backed securities (meaning subprime) that he thought would lose so he could bet against them. It was up to Goldman to sell the fund to investors who would bet on them [source: Nocera]. Paulson won the bet, making $1 billon from the fund.

They're not in contact with the authorities and therefore can't tell anybody what's going on, so bulldozing the protected land of a remote Amazon tribe might seem like something a corporation can get away with.

Such was the case with Brazilian beef company Yaguarete Pora S.A. In 2009, they were found to have bulldozed thousands of hectares of protected Amazon forest land in Paraguay that belongs to the Ayoreo-Totobiegosode people. The Totobiegosode is one of the few remaining uncontacted tribes -- and through international agreement are entitled to its ancestral land [source: GCC]. Yaguarete Pora S.A. bulldozed the forest to create more grazing land for its beef cattle.

In addition to trampling on the rights of protected indigenous people, Yaguarete also broke the law by bulldozing the land without a proper license. The Paraguayan government revoked the company's license to operate in the country after it had been caught illegally bulldozing another tract of protected land [source: Survival]. After news of Yaguarete's rights violation spread, the company made an attempt to spin the crime by announcing it would set up a reserve of land for the Ayoreo-Totobiegosode; the company plans to leave alone 16,784 hectares (41,474 acres) of the 78,549 hectares (194,098 acres) of the Totobiegosode land it's illegally bulldozing [source: GCC].

In 2004, it came out that not all Wal-Mart's 1 million employees were legal residents of the United States and that many of the most vulnerable of the company's employees were being mistreated by the corporation.

Between 1998 and 2003, more than 350 undocumented workers were arrested during their shifts at Wal-Mart stores; officials caught 250 of them in a single-night, 21-state dragnet.

In a lawsuit filed by workers, the company was charged with forcing janitors to work seven-day-weeks for pay as low as $325 a week. The night shift janitorial staff was particularly mistreated in stores across the U.S. In 2004, the New York Times documented a "lock-in" policy that required that cleaning staff be locked in the store -- without an exit -- to prevent shrinkage and cigarette breaks.

The company maintained that a manager with a key was always on hand, but this proved false in some cases. One worker who broke a foot had to wait four hours for a manager to arrive and unlock the door so that he could leave to receive medical treatment; another worker had a similar experience, having to wait until the morning shift arrived to go to the hospital after cutting her hand with box cutters [source: Miller].

On December 3, 1984, a gas leak at the Union Carbide pesticide plant in Bhopal, the capital city of the Indian state of Madhya Pradesh, created a poison cloud that drifted toward the city as the residents slept. Within days of the leak, 8,000 of the city's inhabitants died. In total, another 25,000 residents have succumbed from the effects of the gas leak. It's widely viewed as the worst industrial accident in human history [source: Long].

After the disaster, the company simply closed the plant and left it abandoned, where it continues to pollute the surrounding area and endanger the health of residents. Massive birth defects, chronic illness and disabilities have all been linked to contamination from the plant. Although investigations into the disaster squarely implicate Union Carbide as negligent in preventing the leak, the company settled with the Indian government for $475 million, while the original suit sought $3 billion.

In 2001, Dow Chemical bought Union Carbide, but maintained the latter company's refusal to clean up the site. In 2004, social satirists The Yes Men posed as Dow representatives and were interviewed on the BBC, where they announced Dow would pay $12 billion in compensation to the city's victims. The value of Dow's shares fell by $4 billion in 23 minutes [source: Democracy Now].

While most American companies withdrew trade with Germany during World War II, a few, Coca-Cola, Ford and IBM among them, chose to ignore trade restrictions imposed by the federal government and continued doing business with the Third Reich.

Thomas Watson, the founder of IBM, has long been known to have allowed his company to sell early punch card computers to Nazi Germany. Indeed, in 1937, Watson received the highest honor the country could bestow upon non-Germans, the Grand Cross of the German Eagle [source: Maney]. The company's German subsidiary, Dehomag, leased the IBM Hollerith punch card machines to the ruling Nazi party before and during the war.

In the months leading to World War II, citizens were cataloged using these cards; eventually, these catalogs were used to identify individuals based on their race, religion and sexual preference. These selections became the basis for the annihilation of millions of people during the Holocaust. Eventually, IBM computers came to be used in death camps like Auschwitz to systematically track the arrival, detention and death of Jews, Roma and other groups.

IBM admits that the company's computers were used to carry out the logistics of the Holocaust, but denies awareness of this use at the time [source: Festa].