Jim Hightower

Bankruptcy Scams


Why is it that when George W. says he’s going to “reform†something, I instinctively want to grab my money, my liberties, my family—and flee to the woods? For the Bushites, the word reform means “deform,†to monkeywrench the system so the rich get richer. Still, there’s one system crying out for real reform: the bankruptcy process that corporations are using to stiff their employees while letting CEOs simply walk away from binding contracts on wages, health care, and pensions. At present, the big abusers of employees are United, US Air, Delta, and other major airlines that have been poorly managed and now are being squeezed by their bankers and jet fuel suppliers. Screaming poverty, these airlines have rushed to bankruptcy court, demanding that judges allow them to abrogate legitimate contracts that they had negotiated in good faith with their pilots, flight attendants, mechanics, and others. These are loyal, longtime, hard-working employees who already have made concession after concession. Yet the CEOs demand still more, using the federal bankruptcy law as their weapon for this mugging. This one-sided law apparently legalizes end-runs to let corporations weasel out of their obligations. What an interesting lesson for all of us who’ve been taught that a contract is sacrosanct, a legally binding giving of one’s word. Here’s my question: Why do the CEOs only target the workers for cost-cutting? Why not tell Exxon and the other fuel suppliers “No,†we can’t pay your gouging prices, so we’re abrogating those commitments? Or, why not say to the super-wealthy bankers, you take some of the pain, too? Why do they only pound their workers? It’s time to fix the bankruptcy law that has legalized the corporate robbery of workers. REFORM RIP-OFF George W says that one of his top three legislative priorities is “lawsuit reformâ€â€”to keep us pesky citizens from suing corporations. “Frivolous lawsuits,†he calls them. But I wonder if his legislation will go the other way—stopping corporations from filing frivolous lawsuits against us ordinary Joes and Jills? Take the case of Alvis Coatings Inc., an outfit that makes spray-on siding for homes. Hordes of unhappy customers have complained about the poor quality of its spray-on stuff. But rather than make amends or, in the best free enterprise tradition, improve its product, Alvis has unleashed its corporate legal beagles to sue a Georgia couple who were merely trying to get a little justice over what they consider a rip-off.

Alan and Linda Townsend paid more than $16,000 for an Alvis spray-on job on their home—an unsightly job that left them decidedly unhappy. So they used their First Amendment free speech rights to create a web site about their experience with Alvis’s product. Soon, other angry Alvis customers began posting their own stories on the Townsends’ web site, telling how the coating on their homes had cracked, bubbled, and buckled. Next thing you know, the corporation sued Alan and Linda, asserting that the couple’s web site defames its product, confuses other consumers, and infringes on Alvis’s trademarks. Alvis demanded $75,000 in damages, plus punitive damages and attorneys’ fees. Such a judgment could ruin the Townsends, a middle-class family whose entire home is valued at about $150,000. Of course, corporations file such suits hoping to scare off critics, but Alan and Linda have not backed off. Theirs has become a crucial case about online free speech. “As long as this stuff is on our house,†says Linda, “We’re going to talk about it.†To follow this landmark case and encourage these two fighters for our basic rights, call Public Citizen: 202-588-1000. READING, WRITING—AND RANK HUCKSTERISM Time for another Gooberhead Award—presented periodically to those in the news who have their tongues running 100 miles an hour… but forgot to put their brains in gear. This is a group award, going to the top school officials of Brooklawn, New Jersey. They’ve launched a program there to teach public school kids a big lesson in life: Cash is more important than values. Brooklawn officials have okayed the leasing of their public school properties to corporations that want to put up ads, thus letting them buy access to a captive audience of impressionable youngsters. The first facility to be branded is the gym at Alice Costello Elementary School. Now it’s the ShopRite of Brooklawn Center. For only $100,000, the supermarket chain bought the naming rights to the gym for 20 years. What a cheap sellout! The school system gets a measly $5,000 a year, and in turn it surrenders the principle that public schools are hallowed institutions that exist as a sanctuary from rank hucksterism, created to teach values of citizenship, not commercialism. Do Brooklawn’s officials fret at all that they’re teaching kids that school is just another space for corporate merchandising? Ha! School board president Bruce Darrow giddily says, “It’s the wave of the future. I’m looking into selling advertising on the children’s basketball uniforms.†This Gooberhead then tries to claim that the corporatization process does have standards: “We’re not going to cut a deal where it’s the Alice Costello School sponsored by Playboy Magazine.†Ah, ethics. But what about Cosmopolitan magazine, Victoria’s Secret, or Hooters? And what if Playboy dangled a million dollars in front of these officials? Once you sell the principle, the game is wide open. Schools everywhere are commercializing themselves. If you think school should not be treated as a market, call Commercial Alert and fight back: 503-235-8012.

Jim Hightower is the best-selling author of Thieves In High Places: They’ve Stolen Our Country And It’s Time To Take It Back, on sale now from Viking Press.