Welcome to the first edition of the Revolving Door Project’s Corporate Crackdown Project newsletter! Presented by the people who infuriate the sponsors of other newsletters.
Every two weeks, we’ll be sending a summary of what the Biden administration has and hasn’t done to police and publicize white-collar crimes and big business abuses. Check out our reports on specific Cabinet departments and our piece for Democracy Journal on “What Biden’s Message Should Be”!
If you have any feedback, suggestions, criticisms, or what-have-you, get in touch any time by emailing moran@therevolvingdoorproject.org.
This week we have…
11 Hits: Rohit Chopra’s CFPB walked the walk after his incredible speech at the University of Pennsylvania last month. The agency scared the “Big Three” credit bureaus into wiping false medical debts from their records, and brought a case against a lying student loan servicer. Not to be outdone, Gary Gensler’s SEC announced a sweeping investigation into the “Big Four” auditors, and Lina Khan’s FTC made a splash suing Intuit — remember those “free free free” ads? Yeah, it wasn’t actually that simple.
3 Settlements: The EEOC settled its case against Activision Blizzard’s horrific culture of sexual harassment for a mere $18 million — a drop in the bucket for a company which victimized hundreds of female employees. Similarly, Deutsche Bank, a true repeat offender on Wall Street, violated a deferred prosecution agreement by lying about their ESG standards. Their punishment? Eh, give them a few years on a federal monitor. Surely they’ll straighten themselves out this time.
6 New Cases: In a week full of hopeful unionization stories, we learned that — surprise! — Starbucks keeps conveniently firing the baristas organizing its stores, in a likely illegal pattern. Plus, Elon Musk’s new seat on Twitter’s board isn’t just about his ego…it’s also about how he uses America’s favorite hellsite to commit stock fraud.
HITS
The SEC Began A Sweeping New Investigation Into Conflicts Of Interest At The “Big Four” Accounting Firms, Which Certify The Ledgers Of 100% Of Publicly-Traded Corporations. “Regulators are carrying out a sweeping investigation of conflicts of interest at the nation’s largest accounting firms, asking whether consulting and other nonaudit services they sell undermine their ability to conduct independent reviews of public companies’ financials, according to people familiar with the matter.” [Wall Street Journal, 3/15/22]
The “Big Three” Credit Reporting Agencies Announced They’d Purge 70 Percent Of Medical Debt In Collections From Credit Reports, After The CFPB Threatened Them With New Regulations. “Equifax Inc, Experian and TransUnion are making broad changes to how they report medical debt beginning this summer. The changes, which have been in the works for several months, will remove nearly 70% of medical debt in collections accounts from credit reports. Beginning in July, the companies will remove medical debt that was paid after it was sent to collections. […] The firms are also trying to appease the Consumer Financial Protection Bureau, according to people familiar with the matter, which has made credit reporting a priority under director Rohit Chopra.” [Wall Street Journal, 3/18/22]
Two Companies Which Make Machines For Unloading Cargo At The Ports Abandoned Plans To Merge One Day After The DOJ Antitrust Division Threatened A Lawsuit. “Cargotec Corporation (Cargotec) confirmed today that it has abandoned its intended merger of equals with Konecranes Plc (Konecranes) one day after the Justice Department’s Antitrust Division informed the parties that the settlement proposal was not sufficient to address concerns that the proposed combination would eliminate important competition in four types of shipping container handling equipment used by port customers to move goods in the global supply chain.” [DOJ press release, 3/29/22]
The FTC Issued Complaints Against Intuit, The Makers Of Turbotax, For Deceptive Advertising Of Their “Free” To File Product Which Is Actually Inaccessible To Most Taxpayers. “The Federal Trade Commission is taking action against Intuit Inc., the maker of the popular TurboTax tax filing software, by issuing an administrative complaint against the company for deceiving consumers with bogus advertisements pitching ‘free’ tax filing that millions of consumers could not use.” [FTC press release, 3/29/22]
FERC Sued Energy Transfer LP For $40 Million After It Poisoned An Ohio Wetland With Drilling Fluid Using An Illegal Technique To Unstick An Oil Drill. “The drilling fluid — about 2 million gallons of it — later surfaced in a pristine wetland across the river. The mud was at least a foot and laced with the toxic fuel. Now, FERC is seeking a $40 million fine from Rover’s developer, Energy Transfer LP. ” [E&E News, 3/24/22]
Major Companies Began Sharing Logistics Data With The White House In A New Effort To Unsnarl Supply Chain Backups At The Ports. “The Biden White House, trying to expand its limited supply of inflation-fighting tools, will on Tuesday unveil a new one. Dubbed ‘Freight Logistics Optimization Works,’ or FLOW, the effort joins administration officials and major private sector businesses in a data-sharing initiative designed to enhance the efficiency with which companies move imported goods to stores.” [CNN, 3/15/22]
Samsung Granted Galaxy Smartphone Owners The Right To Repair After The FTC Issued A Statement Endorsing The Concept And Tacitly Threatening The Consensus Across The Technology Industry. “On Thursday, Samsung announced it will launch a program to support owners of its Galaxy smartphones who want to fix their devices themselves. […] Samsung’s plan comes amid an increased effort supporting consumers’ right to repair their own devices. In July, the Federal Trade Commission unanimously adopted a policy statement supporting the right to repair, including increased enforcement and potentially new regulations.” [USA Today, 3/31/22]
The CFPB Brought A $1 Million Fine Against EdFinancial Services For Lying To Student Borrowers That They Couldn’t Qualify For Loan Forgiveness When They Could. “The Consumer Financial Protection Bureau on Wednesday unveiled a $1 million penalty against a student loan servicer for ‘lying’ to borrowers about federal debt relief as the Education Department warned about similar issues at other companies. EdFinancial Services, based in Knoxville, Tenn., agreed to pay the penalty to resolve the CFPB’s allegations that the company made a series of misleading and deceptive statements to borrowers about the Public Service Loan Forgiveness program.” [Politico Pro, 3/30/22]
The National Highway Traffic Safety Administration Bumped Up Fines For Car Manufacturers That Violate Fuel Economy Standards For The First Time Since 1997. “President Biden is cracking down on automakers who fail to meet fuel economy standards by charging them more for violations. In a final rule released late last week, the National Highway Traffic Safety Administration bumped its corporate average fuel economy, or CAFE, penalty from $5.50 per tenth of a mile per gallon to $14 — a significant increase.” [E&E News, 3/28/22]
NLRB General Counsel Jennifer Abruzzo Began An Effort To Ban Captive Audience Meetings Under The National Labor Relations Act. “Today, National Labor Relations Board General Counsel Jennifer Abruzzo issued a memorandum to all Field offices announcing that she will ask the Board to find mandatory meetings in which employees are forced to listen to employer speech concerning the exercise of their statutory labor rights, including captive audience meetings, a violation of the National Labor Relations Act (NLRA).” [NLRB press release, 4/7/22]
The EPA Announced It Would Conduct A First-Of-Its-Kind Investigation Into Environmental Racism In The Policies Of Two Louisiana Environmental Agencies. “The federal probe comes after EPA Administrator Michael Regan committed to strengthening its enforcement of Title VI of the Civil Rights Act that prohibits discrimination on the basis of race, color or national origin in any program receiving federal money.” [New Orleans Public Radio, 4/7/22]
SETTLEMENTS
Video Game Developer Activision Blizzard Settled A Federal Sexual Harassment Lawsuit For $18 Million Over Its “‘Frat Boy’ Workplace Culture,” Which Was Panned By Unions And Legal Counsel For The Hundreds Of Victims. “A judge approved an $18 million settlement between Activision Blizzard and the U.S. Equal Employment Opportunity Commission Tuesday that resolves the federal sexual harassment lawsuit faced by the video game publisher.” [Washington Post, 3/29/22]
UPS Paid $5.3 Million To Settle Cases Where It Lied About Delivering Government Mail On Time. “USPS contracted with UPS to pick up U.S. mail at six locations in the United States and at various Department of Defense and State Department locations abroad, and then deliver that mail to numerous international and domestic destinations. To obtain payment under the contracts, UPS was required to submit electronic scans to USPS reporting the time the mail was delivered at the identified destinations. The contracts specified penalties for mail that was delivered late or to the wrong location. The settlement resolves allegations that scans submitted by UPS falsely reported the time and fact that it transferred possession of the mail.” [DOJ press release, 3/21/22]
Deutsche Bank’s Asset Management Division Overstated How Much It Considered ESG Factors Without Telling The DOJ, Causing The DOJ To Extend A Deferred Prosecution Agreement With The Company Into 2023. “The complaint, made by a former executive, alleged that Deutsche Bank’s majority-owned asset manager, DWS Group, overstated how much it used environmental, social and governance criteria, or ESG, to manage investments it oversees.” [Wall Street Journal, 3/11/22]
NEW CASES
A Wall Street Journal Analysis Found 58% Of The Time That An Institutional Investor Plans A Major Stock Sale, The Stock’s Price Suddenly Drops Right Beforehand, Suggesting That Insider Information Keeps Getting Out Ahead Of Time. “These transactions, known as block trades, are supposed to be a secret between the selling shareholders and the investment banks they hire to execute the trades. But a Wall Street Journal analysis of nearly 400 such trades over three years indicates that information about the sales routinely leaks out ahead of time—a potentially illegal practice that costs those sellers millions of dollars and benefits banks and their hedge-fund clients.” [Wall Street Journal, 3/30/22]
More Perfect Union Reported Documents Indicating Starbucks Is Engaging In Illegal Firings And Workers Rights Violations As It Attempts To Suppress A Unionization Wave. “Starbucks is engaged in an unprecedented illegal union-busting scheme that spans two dozen states. Unreported documents, filings, and interviews reveal a shocking assault on workers’ rights. Illegal firings. Wage abuse. Harassment. It’s time for Congress to investigate.” [More Perfect Union, 4/3/22]
NPR Found Documents Showing Some Student Loan Servicers Didn’t Even Track When Borrowers On Income-Driven Repayment Plans Made Payments Or Qualified For Cancellation, Which Trapped Millions Of Borrowers Into Forgivable Debt. “NPR obtained two-dozen pages of internal department documents, including emails and, most notably, a previously unreported, 2016 review of student loan servicers’ struggles to implement IDR. The documents shed new light on the 2021 revelation that, at the time, 4.4 million borrowers had been repaying for at least 20 years but only 32 had had loans canceled under IDR. […] In all, these records paint a breathtaking picture of IDR’s failure, and cast a shadow over the federal student loan program.” [NPR, 4/1/22]
Vice Reported That Workers At The Nation’s Largest Freight Railroad Company Have To Be On Call 90% Of All Hours, After The National Transportation Safety Board Previously Found That Overscheduling Rail Workers Can Lead To Deadly Crashes. “Workers, their families, and the unions that represent them not only disagree but speak of Hi Viz in apocalyptic terms. They regard it as a draconian measure that makes no sense except as an effort to get every BNSF employee to quit out of rage, depression, or ill health. […] For worst case scenarios, Iversen cites a 2011 crash in Red Oak, Iowa, when a BNSF train rear-ended a work train, killing both crew members aboard. A National Transportation Safety Board investigation found both workers were asleep “due to fatigue resulting from their irregular work schedules and their medical conditions,” which the NTSB suspected was undiagnosed sleep apnea.” [Vice, 4/5/22]
Apple Whistleblower Ashley Gjovik Highlighted How Elon Musk’s New Seat On Twitter’s Board Grants Him Power Over A Social Media Platform He’s Used To Repeatedly Commit Stock Fraud And Unfair Labor Practices. “March 2021: The US federal government @NLRB ordered Elon Musk to delete one of his @Twitter posts which was found to be an unfair labor practice, anti-union, & violated the National Labor Relations Act. Sept 2018: The US @SEC_Enforcement charged Musk with ‘Securities Fraud for Misleading Tweets’ Musk had tweeted about taking obtaining funding to take Tesla private, causing Tesla stock price to jump, & disrupting the market.” [Ashley Gjovik, Twitter, 4/6/22]
THE SHAMELESS SELF-PROMOTION SECTION
RDP’s Dorothy Slater Wrote About The High Stakes For The EPA’s New Chemical Review Director In Reversing Decades Of Industry Capture Which Led To Dangerous Chemicals Being Approved For Years. “The role of OPPT, and the New Chemicals and Existing Chemicals Divisions within, is to review chemicals, assess their risks and find ways to prevent and reduce both environmental pollution and human health impacts, including by managing which chemicals are allowed to go to the market. But if you live in the United States, odds are high that you are currently moving through everyday life with hundreds of industrial chemicals contaminating your blood and other organs. Not all of these chemicals are safe, and many of them should never have been allowed through the federal government’s chemical review process.” [Talking Points Memo, Dorothy Slater, 4/8/22]
RDP’s Eleanor Eagan Outlined Lessons Congress Should Learn From The Fed’s Trading Scandals As It Prepares To Write Anti-Insider Trading Laws. “As they begin to forge a piece of consensus legislation, they should consider that members of Congress were not the only political leaders to violate public trust throughout the pandemic period. The trading scandals within the Federal Reserve system, for example, revealed material ethical deficiencies that have yet to be satisfactorily addressed. It’s important to recognize that these deficiencies are not unique to the Federal Reserve and that they represent an ongoing threat to public trust in other powerful corners of the government as well. To rebuild that trust, lawmakers must learn the lessons of the Federal Reserve scandals and develop fixes for these deficiencies there and elsewhere.” [Revolving Door Project blog, Eleanor Eagan, 4/6/22]
RDP’s Vishal Shankar Outlined Several Highly Impactful Steps Which HUD Could Take To Combat The Housing And Eviction Crises. “The Department of Housing and Urban Development (HUD) oversees a broad portfolio of public housing, fair housing, and housing assistance policies and programs that have been signed into law by Biden’s predecessors over the last six decades. This portfolio is set to expand slightly with the recent passage of the FY 2022 spending package, which includes increases in HUD housing vouchers for veterans, new HUD grant programs for tenant legal assistance, and greater funding for HUD rural housing vouchers. Congress’ reauthorization of the Violence Against Women Act will also impact HUD greatly, establishing a new Gender-Based Violence Prevention Office in the Department that will protect the housing rights of domestic violence and sexual assault survivors.” [Revolving Door Project blog, Vishal Shankar, 4/7/22]
IMAGE CREDIT: “Symbol of Justice” by DonkeyHotey is licensed under CC A 2.0.
