State and Local Legislation
(See links at the bottom for places to find other model legislation.)
1) Ban Outside Corporate Involvement in Elections
2) Stop Doing Business With Corporate Crooks and War Profiteers Corporations that break the law should not be awarded taxpayer-funded contracts.
For model legislation see the proposed amendment to California's 2003 State Contract Act (AB 1032), which passed the state assembly in 2003. (Go HERE and search for 1032 in 2004). As proposed, it states that companies with 3 or more (a) felonies or (b) violations resulting in $50,000 fines or injunctions would be made ineligible for state contracts. For more information contact Steve Blackledge, legislative director, CalPIRG.
3) Ban Corporate Bad Actors from eligibility for operating licenses. Indiana's Good Character Law bans companies with a history of environmental, antitrust or other criminal lawbreaking from state licenses.
For more information on Indiana's law go to This Summary by the New Rules Project.
According to the Michigan Mortgage Brokers Association, Michigan passed a bad actor law related to Mortgage lenders years ago.
Local bad boy laws are also possible.
For example, in 2003, Allegany County, PA enacted a "bad actor" law for corporate polluters.
4) Tougher Corporate Crime Sanctions.
a) Corporate crime is typically treated much more leniently than street crime. For example, workplace death (manslaughter) is currently considered a misdemeanor under federal law, with a maximum sentence of six months in jail. Even for willful violations, fines are typically under $25,000.
State Attorneys General wishing for stronger tools to hold companies and their executives accountable might want to look at Canada's "Westray law", a new manslaughter statute for corporations and top executives. For background on the law go to this discussion paper by the Canadian Ministry of Justice, the government's response, the Canadian Steelworkers campaign site, this background paper by two labor attorneys.
For a U.S. perspective, see NYCOSH's campaign to stop corporate killing.
b) The Corporate Three Strikes Act (Senate Bill 335) was introduced in California in 2003.
Had it passed, it would have been one of the toughest corporate crime laws in the nation, putting out of business in California any company convicted of three felonies in a ten year period. (For the bill text go Here and search for Senate Bill 335 in 2003).
c) Delaware passed a new bill in 2003 (Senate Bill 60) that holds corporations and their agents criminally liable not only for intentional and knowing violations of state environmental (DNREC) statutes and regulations, but also reckless submissions of false statements to the state agency and reckless tampering with monitoring equipment. The Bill also creates felony punishments for intentional or knowing violations of environmental laws and regulations, when those violations cause serious physical harm to a person or serious damage to the environment. It also establishes criminal sanctions, including felony sanctions, for some intentional or knowing violations by corporate officers.
5) Strengthen Whistleblower Protections and Reporting Out Requirements
In 2002, California's state assembly passed SB 783, a tough whistleblower law subsequently vetoed by governor Gray Davis. The law would have penalized executives who don't come forward if they know about financial fraud. The bill would have required corporate officers, directors and top managers to report financial fraud within 15 days of learning of the fraud in their company; it imposed fines of up to one million dollars on corporations and $100,000 on executives for knowing of the fraud and not reporting it to law enforcement. For more information contact the Foundation for Taxpayer and Consumer Rights.
(For the bill text go Here and search for Senate Bill 783 in 2002).
6) Ban "Corporate Tax Traitors" From Government Contracts
In Congress, the Wellstone Memorial Stop Corporate Expatriates Act (H.R. 1355) was introduced by Rep. DeLauro during the FY 2005 Homeland Security Department Appropriations Bill (FY 2005) markup. The motion, which passed out of committee but was later dropped, would have prohibited the Department from entering into contracts with non-U.S. corporations.
In 2004, a similar bill was introduced in Minnesota.
In the 93rd assembly (2003-2004) Illinois State Comptroller Dan Hynes sponsored a bill -- HB4194, which would amend the state's procurement code to ban "expatriate corporations" (defined in the bill) from bidding for state contracts.
7) Adopt the Precautionary Principle
Efforts to get governments to adopt the Precautionary Principle as a matter of government policy are growing. For instance, in 2003, the City of San Francisco adopted the PP as a guiding principle for procurement. Go to the draft ordinance and final ordinance.
For more on the Precautionary Principle see Rachel's Environment and Health Weekly
8) Expand Corporate Reporting Requirements
Good Jobs First has a new State Disclosure Page that compares corporate disclosure requirements on a state-by-state basis.
In 2002, after Enron and the electricity crisis, California passed a new corporate reporting law (AB 55 - for text go here) which requires annual filings on a variety of information, including executive compensation, criminal record of executives and board members, record of bankruptcy filed by the company or top executives/board in past 10 years, violations of securities law. . All information is to be made available online.
In Massachusetts, H-1930, A Corporate Accountability Act, would expand corporate disclosure by preventing courts from approving of settlements that have the effect of concealing hazards to the public. Also see this fact sheet by Clean Water.
As of August, 2004, ten states had adopted a policy to force company-specific disclosures of economic development subsidies. For example, Illinois Gov. Rod Blagojevich signed the Corporate Accountability for Tax Expenditures Act in 2004. The law, which was promoted by the Illinois AFL-CIO and groups such as the Center for Tax and Budget Accountability and Good Jobs Illinois, provides for electronic dissemination of information on the awarding of subsidies in the state as well as progress reports on job creation by subsidy recipients.
For more on local subsidies, see Good Jobs First
The Corporate Sunshine Working Group has recommended the following specific criteria for expanding corporate disclosure:
1. List of countries where company has facilities or operations, and nature of the operations (e.g. sales, manufacturing, assembly, etc.)
Another area of corporate disclosure is historical ties to slavery. The cities of Chicago ("Business, Corporate and Slavery Era Insurance Ordinance," Mun. Code of Chi. § 292-585, passed in 2002) and Los Angeles have both passed ordinances which require companies wishing to do business with the city to divulge any links to slavery. According to the New York Times, the Chicago ordinance forced JP Morgan Chase to disclose its history of slave ownership. The Times also says "a similar statute covers insurance companies operating in California, where several of the country's largest insurers have divulged links to slavery."
An important element for states to consider is not just what to disclose, but also what categories of companies should be required to disclose such information -- i.e. those getting subsidies, those with a business license, etc.
In the UK, the British Parliament introduced a Parliamentary Bill that seeks to introduce key principles of corporate reporting, directors' duty of care and company liability. For more information see Friends of the Earth's page on corporate responsibility.
9) Limit Corporate Powers
Corporate powers are determined by laws and court doctrines that have granted companies the same constitutional rights as people.
In Maine, a Proposal to Prohibit Corporations from Political Speech (LR 2050 introduced by Rep. Dudley of Portland). As summarized, the bill would "change the definition of "person" for the Maine Business Corporation Act to specify that "person" means a human being and not an entity such as a corporation, a state, the United States or a foreign government. The purpose of this change is to specify that a corporation does not have the same constitutional rights as a human, such as the right to engage in political speech or activity."In Minnesota, a proposed Amendment to the state's Constitution would clarify that Person means Natural Person (i.e. not corporations).
In New Jersey, the Democracy and Corporate Accountability Project helped introduce legislation that would limit corporate powers by altering the state's corporate code of law. The laws -- A3823 and A3824 ( PDFs: A3823; A3824)-- are intended to strip corporations chartered in the state of New Jersey of certain constitutional protections originally intended only for living people. The bills also incorporate a section intended to address the problems created by limited liability.
Local communities have also begun to directly challenge the ability of corporations to use constitutional arguments to undermine democratic decision making. See CELDF for information about ordinances to eliminate corporate rights and preserve self-governance.
These kinds of provisions can be included in local and county ordinances to stave off attempts to undermine local decision-making authority. For instance, see the text of Sonoma County's (CA) proposed ordinance to prevent agricultural and environmental contamination from genetically engineered (transgenic) organisms.
In addition, communities like Berkeley have also passed resolutions opposing corporate constitutional rights.
To learn more about this work, consider attending a Democracy School.
Changing the Duties and Obligations of Corporate Executives and Directors is another way to change state corporate laws in order to force corporations to respond to public concerns rather than simply the incentives and obligations that direct them to make decisions with eye towards maximizing shareholder value.
This approach, known as the Code for Corporate Responsibility (also known as the Code for Corporate Citizenship) was originally proposed by attorney Robert Hinkley. It would broaden the duties and responsibilities of directors and officers of the corporation. Related legislation has been drafted in Minnesota and Maine.
10) Curb Corporate Outsourcing
The outsourcing of jobs not only undermines job security and wage standards, but produces greater income disparity, reduced opportunity and a growing sense of insecurity for American workers, their families and communities. Outsourcing also threatens consumer privacy (by putting their personal financial data at risk) and even undermines our national security to the extent that it weakens the country's long-term economic health. For more information contact CWA.
For model legislation refer to Washtech.org's state-by-state analysis of legislative efforts to curb offshore outsourcing. Early attempts to stop outsourcing at the state level include New Jersey State Senator Shirley Turner's introduction of a bill which would require that companies performing services under state contracts employ U.S. citizens or resident aliens to do the work.
At the federal level, the single best protection against outsourcing and offshoring is through union representation. See the The "Employee Free Choice Act".
Rep. Sanders' (I-VT) "Defending American Jobs Act of 2004" (HR 3888) would deny public subsidies to companies that offshore jobs.
The U.S. Workers Protection Act of 2004 (HR 3820) would prevent federal agencies from awarding procurement contracts to contractors using foreign labor. It extends to subcontractors and to federal funds used by the states.
Bills that address privacy issues elated to outsourcing and offshoring include S. 2312 (regulating the transmission of personally identifiable information to foreign affiliates and subcontractors); and S. 2481 (require relevant Federal agencies to prescribe regulations to ensure the privacy and security of sensitive personal information outsourced abroad), and H.R. 4366 (prohibiting the transfer of personal information to any person outside the United States, without notice and consent, and for other purposes). (Similar bills have been introduced in AZ, CA, MN, MO, OH, TN, and WA).
The "Call Center Consumer's Right to Know Act" (S. 1873) requires call center employees to disclose their physical location at the beginning of each call. In 2004, there were at least 16 state bills that require call center to identify locations.
11) Raise the Minimum Wage
If the minimum wage had risen at the same rate that CEO pay rose in the 1990s, it would have stood at over $25 at the end of the decade.
According to David Bacon, thirty-one of the 50 states, plus the District of Columbia, have either set a minimum wage higher than the federal level of $5.15 per hour, or have had bills introduced in their legislatures this year that would do so.
For more information about the Living Wage:
12) Retain Local/Municipal Control Over Internet Access and Wireless Services
In the past few years, hundreds of municipal governments have begun exploring how to directly provide high-speed broadband and local wireless network services. Major telecom firms have responded by pushing statewide legislation in more than a dozen states that prohibits public entities from entering into the broadband market. A number of additional state legislatures – with more expected soon – are considering similar anti-municipal broadband bills or measures to strengthen existing restrictions.
13) Sweatshop-Free Procurement
San Francisco's new Sweatfree Ordinance prevents the City and County government from purchasing goods produced in sweatshops that refuse to meet minimum standards for wages and working conditions.
To learn more visit Global Exchange.
14) Other ideas:
Stop Privatization of government services: In 1993, the District of Columbia passed an Initiative which requires that before a government service can be contracted out, the government must show it would save at least 10 percent of existing costs over the contract's duration. According to a 2000 report by DC's auditor, the measure has since been plagued by "Noncompliance and Poor Management".
Other Groups That Track or Promote Related Legislation:
New Rules Project (Institute for Local Self-Reliance) has tracked local and state legislation on a variety of issues,
including bans on corporate farming, bans on GMO crops,
and many others.
Progressive Legislative Action
Network (PLAN) is a new coalition developed to provide reform-minded legislators with
strategic and research support as they seek to address the pressing economic and
social issues that are left untended in a time of corporate hegemony. Read a related article in The Nation (8/15/05)