Thursday, June 30, 2011

Coal is Even Dirtier than I Thought

In April of last year, I wrote a post about just how dirty "clean" coal is. Yesterday's New York Times showed that it's even dirtier than I thought.

According to an article by Sabrina Tavernise, "...Massey Energey, the owner of the West Virginia mine where 29 men were killed in an explosion last year, misled government inspectors by keeping accounts of hazardous conditions out of official record books where inspectors could see them." Massey was acquired by Alpha Natural Resources this month.

The 5 April 2010 explosion at the Upper Big Branch mine was the worst U.S. mining disaster in 40 years.

That double books on hazards were kept was only one of many damning findings of the federal investigators' report. In addition, required gas readings were not recorded. Required air readings were not recorded. Training of miners was inadequate or non-existent. Miners were intimidated into not slowing or stopping production for safety reasons.

(The Times has posted the complete report of the West Virginia governor's independent investigation panel, released in May of this year; information about the federal investigation, which is apparently continuing, is available at the Mine Safety and Health Administration site, here)

Massey blamed a "massive inundation" of natural gas for the explosion, according to a report it released in early June, apparently without permission from its parent company. From the government investigations, it appears that coal dust -- improperly allowed to accumulate, highly explosive, and prone to spontaneous combustion -- was at fault.

"Alpha Natural Resources called the report's release 'inappropriate,'" according to an article by E&E Publishing reporter Manuel Quinones.

Just how "inappropriate" was it? Quinones wrote,
In a cover letter accompanying the report, Bobby Inman, the former Massey chairman, said the report's release was delayed to avoid bad publicity in advance of the Alpha-Massey merger. The delay was requested by Alpha executives and major Massey shareholders, he said.
Quinones also reported that "Alpha said it would conduct its own probe into the Upper Big Branch disaster and promised to cooperate with pending government investigations, including a criminal probe by the U.S. Department of Justice."

Two people have been indicted so far. Some of us are waiting for a lot more.

Wednesday, June 29, 2011

Who is That Masked Reviewer, Anyway?

If you're like me, you buy too many books on Amazon. And you probably scan the online reviews. I can't say I've ever been dissuaded from buying something by a review, but I have occasionally been slowed down in my headlong rush to acquire some more printed matter.

And, if you're like me, you've not given much thought to who those reviewers are. If you'd asked me, I would have guessed that they were customers like us, people who love books and sharing "finds", and who have way more time to read and comment than I do.

But that's not exactly the case.

Thanks to, and specifically Laura Hazard Owen, I've learned that "Amazon's customer reviewers -- particularly the top 1,000 reviewers -- do not always make independent decisions about which books and other products they write about." (Full article, here)

And those reviewers aren't exactly like you and me, either: "Seventy percent of the top reviewers are male, their median age is 51-60, and more than half hold a graduate degree."

Ms. Owen's information comes from research conducted by Cornell University professor Trevor Pinch, who surveyed 166 of Amazon's top 1,000 reviewers for his study.. (Cornell press release on the study, here).

Ms. Owen reports,
Respondents to Pinch's survey overwhelmingly mentioned "self-expression" and "enjoyment" as their motivations [for writing the unpaid reviews]. Many respondents also cited altruistic reasons for reviewing -- "hope to help others decide whether to buy," "wanting to share what I have liked with others," etc.
All this is great, but what I found most concerning among Prof. Pinch's key findings was this one: "85 percent [reported that they] had received free products from publishers, agents, authors, and manufacturers."

Why does that concern me? Not just because of my "transparency" mantra, but because we humans are so easy to influence, and so unaware of how we've been influenced.

Two years ago, I wrote a post about "gimme" pens and caps, suggesting that we should simply get rid of all of them. The post was based on findings reported in the New York Times, which asked:

Can a little promotional gift like a pen or a coffee mug inscribed with a drug’s name really make a difference in a doctor’s prescription patterns? It can, researchers say.

A study reports that students from a medical school where such gifts are allowed had a more favorable attitude toward a cholesterol drug than did students from a school where they are banned.
In fact, the research indicated that no gift is "too small" to have an effect on us. Even if we're not aware of it. My own hypothesis -- based on no research at all, but why should I let that stop me? -- is that we are hard-wired for reciprocity, and that as soon as you give me something, I'm going to try to find a way to "even" things up.

Among the comments posted to Ms. Owen's report is this one:

I'm in the 300s in the Amazon ranking.... I get some freebies through Amazon and some through a review site, but most items I purchase. None of the freebies are dependent on a positive review... And then I tell people what I really think. I know a lot of reviewers who won't rock the boat, but in my experience that's a personality trait based on not wanting to be a green meanie and nothing to do with swag.
I have no doubt that this reviewer believes this comment whole-heartedly. And maybe it's true. My point is that it's impossible for her to be sure of herself, and it's impossible for me reading her review to be sure.

Sunday, June 26, 2011

Say It Ain't So, Joe

I'm a big fan of Joe Nocera, columnist for the New York Times (formerly on the business pages, now an Op-Ed columnist). But today, well ... OK, everybody's allowed an off day, right?

Today's "Sunday Review" section of the Times carries a long front-page piece by Nocera, extolling the joys of the Chevy Volt. For those of you who aren't "car guys" like me, the Volt is an electric-gas hybrid, running first off its electric battery and then, when the battery is drained (after about 40 miles) switching seamlessly over to a traditional gasoline-powered combustion engine.

Nocera sounds almost like a GM press guy as he waxes poetic about "the smugness I felt as I drove past gas stations", and about how he was "pleasantly surprised by the car’s power, pickup and handling."

What was most fun, Nocera writes, is the gauge in the $41,000 car that lets you follow your gasoline usage over time:
By the time I gave the car back to General Motors, I had driven 300 miles, without using another drop of gas beyond the original two gallons. I’m not what you’d call a Sierra Club kind of guy, but I have to tell you: I was kind of proud of myself.
Joe, maybe you should be more of a Sierra Club kind of guy, because nowhere in your piece did you mention the ugly truth about electric vehicles: Yes, electric-powered fleets of cars in the U.S. would mean fewer imports of oil from the Middle East, but, alas, most electricity in the U.S. is generated in dirty dirty dirty coal-fired plants.

Despite the coal industry's frantic "clean coal" campaign, coal isn't clean. Not when it's being extracted from the earth; not when it's being transported to power plants; not when it's being burned to generate electricity.

To ignore the issue entirely, Joe, is irresponsible. The (petroleum-based) energy you saved was offset by the (different-fossil-fuel-based) energy you consumed.

'Fess up. Please.

Saturday, June 25, 2011

Let's Really Get Tough on Crime

What does it take to send a crook to jail?

If we're talking about the burglar stealing your family silverware or the shoplifter grabbing twelve cashmere scarves, it may not take much. But if someone steals thousands, if not millions, of dollars from your shareholders... well, that's a different story, isn't it?

James B. Stewart, Pulitzer-Prize-winning journalist at the Wall Street Journal and now a financial columnist for the New York Times, has a depressing example of this in today's paper. Headlined "Bribery, but Nobody was Charged," the piece details years of payments by Tyson Foods to keep veterinarians at a Mexican processing plant happy. The veterinarians were there, Stewart reports, "as part of Mexico's efforts to meet high sanitary and processing standards... [and] certified products as suitable for export."

The payments ($2700 per month, each, made over many years) were originally given to the wives of the veterinarians. When this became known at company headquarters, in 2004, action was swiftly taken.

But it's not the action that you or I would expect.

Participants agreed that the payments to the wives had to stop. But the executives (including, Stewart notes, the president of Tyson International, the vice president for operations, and the vice president for internal audit) then "were tasked with investigating how to shift the payroll payments ... directly to the veterinarians."


As Stewart puts it, "What were these Tyson officials thinking?"

Two years later, the company finally did what it should have done at the outset. Sort of. With the help of outside counsel, "under a government program intended to encourage voluntary disclosure of white-collar crime, [Tyson] turned the results over to the Justice Department and the Securities and Exchange Commission."

In the end, Tyson agreed to a "deferred prosecution agreement", admitted the government's statement of facts, acknowledged its violation of the Foreign Corrupt Practices Act (a.k.a. Paying Bribes), and paid a total of $5.2 million in penalties and SEC charges.

So which Tyson employee went to jail for this appalling scheme?

None of them.

As Stewart writes,
It would seem self-evident that if Tyson engaged in a conspiracy and violated the Foreign Corrupt Practices Act, then someone at Tyson did so as well. The statute specifically provides for fines of up to $5 million and a prison term of up to 20 years for individuals...
Perhaps it is only that the investigation is still continuing?

You wish.
...[Press] officers for both the Justice Department and SEC said the investigation was over and no one would be named or charged. This seems to reflect the belief that the deferred prosecution agreement, penalty and SEC settlement largely achieved the government's objectives, which were to stop the illegal conduct at Tyson and deter future instances.... But surely bribery, not to mention other forms of corporate wrongdoing, would be more effectively deterred if someone was actually held accountable for it.
In this case, none of the senior executives involved have suffered any negative backlash. While none is still employed at Tyson, the former president of Tyson International is now a director of Yuhe International ("China's largest producer of day-old broiler chicks"), and the chief administrative officer, who received the 2004 email first reporting the illegal payments, has taken early retirement, receiving $1 million at retirement and "a 10-year consulting contract providing an additional $3.6 million in compensation", plus such fringe niceties as the use of a car, reimbursement for country-club dues, and some personal use of company aircraft.

It takes a lot, sadly, to shock me these days. But this story recounted so much bad behavior it was hard to know where to start.

And what's particularly frustrating is the feeling that there's nothing we can do about it, that Tyson probably differs from others in its industry in that it 'fessed up and paid the fine (more exactly, the shareholders paid the fine), and that Tyson itself may be back to the same old way of "doing business".

Why didn't the president of Tyson International get charged personally with violation of the Foreign Corrupt Practices Act? It may be, as Stewart suggests, a reflection of "budgetary constraints at both agencies ... and, for the Justice Department, the burden in a criminal case of proving guilt beyond a reasonable doubt."

Call me cynical, but I think it also has to something to do with the well-worn hallways between DOJ and the nation's top law firms, the very firms to which a company like Tyson might turn.

What can we as consumers do? About the only thing we can do is hit 'em where it hurts: boycott the product.

But know that the other guy is likely doing something just as bad.

I'd say it was time to turn vegetarian if it weren't for Germany's recent E. coli-laden sprouts....

Tuesday, June 21, 2011

When You Say, "Confidential", What Exactly Do You Mean?

How you feel about the legal protections now offered to whistle-blowers depends on your background. Americans tend to think they're good, encouraging people to bring illegal or unethical things to light that might otherwise stay hidden. Europeans, with recent memories of secret police and neighborhood informers, are less enthused.

But no matter how you feel about them, I hope you'll agree that if you promise protection to a whistle-blower, you should mean that you'll protect them.

Journalists, in particular, claim to be willing to do almost anything -- even go to jail themselves -- to protect their confidential sources.

For example, a month ago, the New York Times reported that one of its reporters, James Risen, had been subpoenaed by federal prosecutors to require him "to testify at a criminal trial about who leaked information to him about the [Central Intelligence] agency's effort to sabotage the Iranian nuclear program at the end of the Clinton administration." (Full story by Charlie Savage, here)

Mr. Risen's response was, "I am going to fight this subpoena. I will always protect my sources, and I think this is a fight about the First Amendment and the freedom of the press."

I agree with him.... up to a point.

My very first job after college was as a newspaper reporter-photographer for a small-city daily, so I have a soft spot for "print people". But that doesn't mean that I'm blind to everything that goes on.

Journalism may be a "calling", but it's also a business, and big scoops mean more than just bragging rights.

Early this month, the Electronic Frontier Foundation (EFF) reported that "the success of Wikileaks in obtaining and releasing information has inspired mainstream media outlets to develop copycat sites." (Full story by Hanni Fakhoury and Leafan Rosen, here)

The EFF reported specifically on efforts by Al-Jazeera (called "the Al-Jazeera Transparency Unit"; website here) and the Wall Street Journal (called "SafeHouse"; website here). Both appeal to readers for help in the important work of investigative journalism. The WSJ, speaking of its SafeHouse site, says:
Documents and databases: They're key to modern journalism. But they're almost always hidden behind locked doors, especially when they detail wrongdoing such as fraud, abuse, pollution, insider trading, and other harms. That's why we need your help.

If you have newsworthy contracts, correspondence, emails, financial records or databases from companies, government agencies or non-profits, you can send them to us using the SafeHouse service.

This sounds a lot like a fishing expedition, doesn't it?

I'm uncomfortable with that, too. Is this really what journalism is about?

Both Al-Jazeera and the WSJ promise to go to "great lengths" (Al-Jazeera's phrase) to protect sources. But what's that promise worth? According to the EFF, not much. Less than a day after the "SafeHouse" program was launched, online security experts were exposing a number of security problems.

Gawker's Adrian Chen pointed out what he called "a doozy of a caveat":

Except when we have a separately negotiated confidentiality agreement… we reserve the right to disclose any information about you to law enforcement authorities or to a requesting third party, without notice, in order to comply with any applicable laws and/or requests under legal process, to operate our systems properly, to protect the property or rights of Dow Jones or any affiliated companies, and to safeguard the interests of others.

As Chen wrote (full piece here), "So, go ahead and upload your explosive documents to SafeHouse. But if they publish a scoop based on your material and someone gets mad, they can sell you out to anyone for any reason, including the insanely broad one of safeguarding 'the interests of others.'"

EFF also pointed out that the Al-Jazeera site asks, among other things, that you "represent that you 'have full legal right, power and authority' to give them ownership of the material". But isn't that just what leaked documents aren't about?

My issue isn't really with how well or badly these sites protect the sources from whom they hope to obtain material. My point, as usual, is about transparency and trust.

If you can't guarantee me confidentiality, tell me so. Tell me what the risks are. Tell me why you think it's important that I ignore those risks and go ahead and share the material that you want. Tell me why I should trust you with this material.

In other words, journalism sites shouldn't keep their security secrets from whistle-blowers.