April 15, 2003
When deranged American citizens are accused of working
with terrorist groups like al-Qaida, Attorney General
John Ashcroft holds a press conference and the FBI
puts a new name and face on its Top 10 Most Wanted
List, even though the allegations have not been proved
in court.
The suspects can languish in jail for months without
any formal charges.
with terrorist groups like al-Qaida, Attorney General
John Ashcroft holds a press conference and the FBI
puts a new name and face on its Top 10 Most Wanted
List, even though the allegations have not been proved
in court.
The suspects can languish in jail for months without
any formal charges.
Trading with the enemy
Commentary: U.S. companies risk only a wrist slap
By Rex Nutting, CBS.MarketWatch.com
Last Update: 3:14 PM ET April 15, 2003
WASHINGTON (CBS.MW) -- When individual Americans are
accused of helping terrorists, they're thrown in jail
and their names are dragged through the mud.
But when majorU.S.
with the enemy, they get just a slap on the wrist from
the government.
In the past two weeks, the government has revealed
that 57 companies and organizations have been fined
for doing business with terrorists, despots and
tyrants.
However, neither the government nor the companies are
forthcoming with the public about the details of the
illicit trade with rogue governments likeIraq , Cuba ,
North Korea , Iran and Sudan
The fact that the New York Yankees and ESPN have been
caught doing business with Fidel Castro won't be on
any highlight film. ChevronTexaco hasn't bragged about
breaking the sanctions against Saddam Hussein'sIraq
Citigroup hasn't issued a press release extolling how
it helped finance terrorist groups.
With a few exceptions, it is against the law forU.S.
companies and individuals to have commercial or
financial dealings with several countries as well as
dozens of terrorist or drug organizations. Read the
list.
Each year, the government investigates thousands of
cases ofU.S.
violations of the Trading with the Enemy Act and other
statutes and executive orders that restrict free
trade. Each year, the government imposes millions of
dollars in civil penalties and prosecutes 10 or so
criminal cases.
We know why the companies are silent about what
they've done. No one wants to be associated in the
public mind with torturers, thugs and murderers, even
if it's profitable to be associated with them in
private. The companies' explanations, when available,
show that even the most enthusiastic supporter of
sanctions can run afoul of the law through no malice
on their part.
But why are the government's cops so reluctant to tell
us about the crooks they've captured? Who ever heard
of a shy prosecutor, especially one who can show
success in the war against terrorism?
Double standard
When deranged American citizens are accused of working
with terrorist groups like al-Qaida, Attorney General
John Ashcroft holds a press conference and the FBI
puts a new name and face on its Top 10 Most Wanted
List, even though the allegations have not been proved
in court.
The suspects can languish in jail for months without
any formal charges.
And when a Muslim charity is suspected of laundering
funds for alleged terror groups, the Treasury
Department shuts it down and freezes its assets.
But when multinational corporations like Wal-Mart, Dow
Chemical (DOW: news, chart), ExxonMobil and Amazon.com
(AMZN: news, chart) agree with government prosecutors
that they have violated laws that prohibit doing
business with enemy states, the news is buried on an
obscure government Web site.
57 companies fined
In the past two weeks, the Treasury's Office of
Foreign Asset Control has revealed that 57 companies
and organizations have been fined more than $1.35
million for civil violations of the sanctions laws.
For the first time, the government will provide weekly
updates on the status of its civil cases. But the
information provided by the government about these
violations is paltry, and unless you've memorized the
law, you'll never understand that "EO13121 FT" means
an illegal funds transfer to the formerYugoslavia
The government has provided almost no information
about the civil cases except what country the company
traded with and what the penalty was. No dates, no
details, no way of knowing if the violations were
egregious or inadvertent. No way of knowing if the
companies sold brass knuckles to the secret police or
baby formula to an orphanage.
"The Treasury is giving in to corporate pressure,"
said Russell Mokhiber, editor of the Corporate Crime
Reporter, who sued the government under the Freedom of
Information Act to learn the details of earlier
violations of the trade sanctions laws.
"To deter future corporate wrongdoing, [the Treasury]
must stop protecting major American companies from the
glare of adverse publicity," Mokhiber said Monday at a
press conference.
"This is the maximum information that we can make
available consistent with legal concerns," said a
Treasury Department spokesman who would not even
provide his name for publication.
Largest case
The largest penalty levied among the 59 public cases
was $250,000 against Zim American Israeli Shipping Co.
of Norfolk,Va. , for trade with Cuba
about half owned by the Israeli government, is one of
the largest shipping companies in the world.
Nobody at theNorfolk
concrete about the penalty. "I think it happened a
long time ago," said one official.
But they do know about terrorism. The company
relocated from the 16th floor of theWorld Trade
Center
sparking speculation in the conspiracy press that the
Israeli Mossad had tipped off the company ahead of
time.
As for the Cubans, "I think they are very poor," the
Zim official said.
The next largest penalty was imposed on IGI Inc. (IG:
news, chart) ofBuena , N.J.
which recently sold its pet food and veterinary
products units. The government said they exported
something prohibited toIran
would look into the matter and get back to us.
Norwegian-owned shipping company Stolt-Nielsen
Transportation Group (SNSA: news, chart) ofGreenwich ,
Conn. , was fined $95,000 for an illegal fund transfer
toSudan
Yankees and Cubans
The New York Yankees were fined $75,000 for signing a
contract in which the Cuban government had an
interest. Newsday reported Tuesday that the contracts
involved pitcherOrlando
three other unnamed Cuban players.
Hernandez has always maintained that he escaped from
Cuba to the Bahamas
1997 after being banned from baseball in his homeland
following the defection of his brother, Livan, who was
the World Series star for the Florida Marlins that
fall. It is not clear how his subsequent signing by
the Yankees would have involved a payment to the Cuban
government.
The Yankees' contract with Jose Contreras is not in
violation of the law, Yankee president Randy Levine
told the paper.
Wal-Mart (WMT: news, chart) was fined $50,000 for
dealings withCuba
pajamas sold to its Canadian operations "might have
originated inCuba
"voluntarily" after lengthy discussions with
government lawyers and there was "never any
determination of a violation," he said.
Blue chips caught red handed
The other big fines:
ExxonMobil (XOM: news, chart) was fined $50,000 for
exports toSudan
ChevronTexaco (CVX: news, chart) was fined a total of
$14,071.07 for deals withCuba and Iraq
spokesman told the Corporate Crime Reporter that the
company bought oil fromIraq
Food program and that a payment was inadvertently paid
to an Iraqi government port official.
Axon Corp. ofRaleigh , N.C. , was fined $45,000 for
exports toIran
equipment.
Fleet Bank (FBF: news, chart) was fined $41,000 for
financial dealings withCuba and Iran
ESPN was fined $39,000 for a contract withCuba
spokesman at the sports cable network said the
network's South American unit had paid some travel
expenses for the Cuban team at a major international
volleyball tournament held inArgentina
televised by the ESPN Sur network. The company is
owned by Disney (DIS: news, chart) and privately held
Hearst.
Royal Crown was fined $38,000 for exports toSudan
The soft-drink company is now owned by Snapple, which
in turn is owned by Cadbury Schweppes (CSG: news,
chart).
And a couple of minor but intriguing infractions:
Citigroup (C: news, chart) was fined $2,925 for
violating laws against financing terrorism. A
spokesman for the financial services giant did not
return a phone call seeking comment. It was the only
penalty on the government's list for violation of the
anti-terrorism financing law.
The International Union of Pure and Applied Chemistry
inResearch Triangle Park , N.C.
violating laws against the proliferation of weapons of
mass destruction. A spokesman for the group did not
return a phone call. It was the only penalty on the
government's list for violations of nonproliferation
laws.
Rex Nutting isWashington
CBS.MarketWatch.com.
Commentary: U.S. companies risk only a wrist slap
By Rex Nutting, CBS.MarketWatch.com
Last Update: 3:14 PM ET April 15, 2003
WASHINGTON (CBS.MW) -- When individual Americans are
accused of helping terrorists, they're thrown in jail
and their names are dragged through the mud.
But when major
with the enemy, they get just a slap on the wrist from
the government.
In the past two weeks, the government has revealed
that 57 companies and organizations have been fined
for doing business with terrorists, despots and
tyrants.
However, neither the government nor the companies are
forthcoming with the public about the details of the
illicit trade with rogue governments like
The fact that the New York Yankees and ESPN have been
caught doing business with Fidel Castro won't be on
any highlight film. ChevronTexaco hasn't bragged about
breaking the sanctions against Saddam Hussein's
Citigroup hasn't issued a press release extolling how
it helped finance terrorist groups.
With a few exceptions, it is against the law for
companies and individuals to have commercial or
financial dealings with several countries as well as
dozens of terrorist or drug organizations. Read the
list.
Each year, the government investigates thousands of
cases of
violations of the Trading with the Enemy Act and other
statutes and executive orders that restrict free
trade. Each year, the government imposes millions of
dollars in civil penalties and prosecutes 10 or so
criminal cases.
We know why the companies are silent about what
they've done. No one wants to be associated in the
public mind with torturers, thugs and murderers, even
if it's profitable to be associated with them in
private. The companies' explanations, when available,
show that even the most enthusiastic supporter of
sanctions can run afoul of the law through no malice
on their part.
But why are the government's cops so reluctant to tell
us about the crooks they've captured? Who ever heard
of a shy prosecutor, especially one who can show
success in the war against terrorism?
Double standard
When deranged American citizens are accused of working
with terrorist groups like al-Qaida, Attorney General
John Ashcroft holds a press conference and the FBI
puts a new name and face on its Top 10 Most Wanted
List, even though the allegations have not been proved
in court.
The suspects can languish in jail for months without
any formal charges.
And when a Muslim charity is suspected of laundering
funds for alleged terror groups, the Treasury
Department shuts it down and freezes its assets.
But when multinational corporations like Wal-Mart, Dow
Chemical (DOW: news, chart), ExxonMobil and Amazon.com
(AMZN: news, chart) agree with government prosecutors
that they have violated laws that prohibit doing
business with enemy states, the news is buried on an
obscure government Web site.
57 companies fined
In the past two weeks, the Treasury's Office of
Foreign Asset Control has revealed that 57 companies
and organizations have been fined more than $1.35
million for civil violations of the sanctions laws.
For the first time, the government will provide weekly
updates on the status of its civil cases. But the
information provided by the government about these
violations is paltry, and unless you've memorized the
law, you'll never understand that "EO13121 FT" means
an illegal funds transfer to the former
The government has provided almost no information
about the civil cases except what country the company
traded with and what the penalty was. No dates, no
details, no way of knowing if the violations were
egregious or inadvertent. No way of knowing if the
companies sold brass knuckles to the secret police or
baby formula to an orphanage.
"The Treasury is giving in to corporate pressure,"
said Russell Mokhiber, editor of the Corporate Crime
Reporter, who sued the government under the Freedom of
Information Act to learn the details of earlier
violations of the trade sanctions laws.
"To deter future corporate wrongdoing, [the Treasury]
must stop protecting major American companies from the
glare of adverse publicity," Mokhiber said Monday at a
press conference.
"This is the maximum information that we can make
available consistent with legal concerns," said a
Treasury Department spokesman who would not even
provide his name for publication.
Largest case
The largest penalty levied among the 59 public cases
was $250,000 against Zim American Israeli Shipping Co.
of Norfolk,
about half owned by the Israeli government, is one of
the largest shipping companies in the world.
Nobody at the
concrete about the penalty. "I think it happened a
long time ago," said one official.
But they do know about terrorism. The company
relocated from the 16th floor of the
sparking speculation in the conspiracy press that the
Israeli Mossad had tipped off the company ahead of
time.
As for the Cubans, "I think they are very poor," the
Zim official said.
The next largest penalty was imposed on IGI Inc. (IG:
news, chart) of
which recently sold its pet food and veterinary
products units. The government said they exported
something prohibited to
would look into the matter and get back to us.
Norwegian-owned shipping company Stolt-Nielsen
Transportation Group (SNSA: news, chart) of
to
Yankees and Cubans
The New York Yankees were fined $75,000 for signing a
contract in which the Cuban government had an
interest. Newsday reported Tuesday that the contracts
involved pitcher
three other unnamed Cuban players.
Hernandez has always maintained that he escaped from
1997 after being banned from baseball in his homeland
following the defection of his brother, Livan, who was
the World Series star for the Florida Marlins that
fall. It is not clear how his subsequent signing by
the Yankees would have involved a payment to the Cuban
government.
The Yankees' contract with Jose Contreras is not in
violation of the law, Yankee president Randy Levine
told the paper.
Wal-Mart (WMT: news, chart) was fined $50,000 for
dealings with
pajamas sold to its Canadian operations "might have
originated in
"voluntarily" after lengthy discussions with
government lawyers and there was "never any
determination of a violation," he said.
Blue chips caught red handed
The other big fines:
ExxonMobil (XOM: news, chart) was fined $50,000 for
exports to
ChevronTexaco (CVX: news, chart) was fined a total of
$14,071.07 for deals with
spokesman told the Corporate Crime Reporter that the
company bought oil from
Food program and that a payment was inadvertently paid
to an Iraqi government port official.
Axon Corp. of
exports to
equipment.
Fleet Bank (FBF: news, chart) was fined $41,000 for
financial dealings with
ESPN was fined $39,000 for a contract with
spokesman at the sports cable network said the
network's South American unit had paid some travel
expenses for the Cuban team at a major international
volleyball tournament held in
televised by the ESPN Sur network. The company is
owned by Disney (DIS: news, chart) and privately held
Hearst.
Royal Crown was fined $38,000 for exports to
The soft-drink company is now owned by Snapple, which
in turn is owned by Cadbury Schweppes (CSG: news,
chart).
And a couple of minor but intriguing infractions:
Citigroup (C: news, chart) was fined $2,925 for
violating laws against financing terrorism. A
spokesman for the financial services giant did not
return a phone call seeking comment. It was the only
penalty on the government's list for violation of the
anti-terrorism financing law.
The International Union of Pure and Applied Chemistry
in
violating laws against the proliferation of weapons of
mass destruction. A spokesman for the group did not
return a phone call. It was the only penalty on the
government's list for violations of nonproliferation
laws.
Rex Nutting is
CBS.MarketWatch.com.
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