Dissolving Unocal

Doug Henwood dhenwood at panix.com
Wed Sep 16 19:09:37 PDT 1998

[a followup to the charter thread]

Date: Wed, 16 Sep 1998 21:48:20 -0400 (EDT) Reply-To: rob at essential.org Originator: corp-focus at essential.org Sender: corp-focus at essential.org Precedence: bulk From: Robert Weissman <rob at essential.org> To: Multiple recipients of list CORP-FOCUS <corp-focus at essential.org> Subject: Dissolving Unocal MIME-Version: 1.0 X-Comment: To unsubscribe from this list, send the one line message "unsubscribe corp-focus" to "listproc at essential.org". Leave the "Subject:" line of your message blank.archive corp-focus /home/listproc/archives/corp-focus %y%m%d corp-focus

Sorry for the delay in getting this out. We've had some problems recently with our listserver.

Robert Weissman Essential Information | Internet: rob at essential.org

The mainstream view among citizen activists is that the most effective means of dealing with corporate crime and violence is through regulation, litigation, legislation, and law enforcement.

But a breakaway group of activists want to move directly to a sanction that will get the attention of every big corporation in America -- revocation of the charters of the most egregious of corporate wrongdoers.

Throughout the nation's history, the states have had the authority to give birth to a corporation, by granting a corporate charter, and to impose the death penalty on a corporate wrongdoer by revoking its charter.

Earlier today, a coalition of more than 30 public interest organizations called on the Attorney General of California to revoke the charter of Union Oil of California (Unocal).

Why Unocal?

The 127-page petition argued that Unocal was a recidivist corporation, engaged in corporate law-breaking, was responsible for the 1969 oil blowout in the Santa Barbara Channel and numerous other acts of pollution, committed hundreds of OSHA violations, treated workers unfairly, is complicit in human rights violations -- in Afghanistan and Burma, and has "usurped political power."

Arguing that the state of California routinely puts out of business hundreds of unruly accountants, lawyers, and doctors every year, the coalition called upon California AG Dan Lungren, who is running for Governor, to revoke Unocal's charter.

"We're letting the people of California in on a well-kept secret," said Loyola Law School Professor Robert Benson, who drafted the petition. "The people mistakenly assume that we have to try to control these giant corporate repeat offenders one toxic spill at a time, one layoff at a time, one human rights violation at a time. But the law has always allowed the attorney general to go to court to simply dissolve a corporation for wrongdoing and sell its assets to others who will operate in the public interest."

If this authority exists, why is that only once this century -- in 1976 when a conservative Republican AG asked a court to dissolve a private water company for allegedly delivering impure water to its customers -- has the Attorney General sought to revoke a corporate charter in California?

"California attorneys general haven't often done it because they've become soft on corporate crime," Benson answers. "Baseball players and convicted individuals in California get only three strikes. Why should big corporations get endless strikes?"

Benson argues that a single act of unlawfulness is enough to trigger charter revocation proceedings, although he admits that if an Attorney General acts against a major company, it will be for a pattern of wrongdoing, not for an isolated act of wrongdoing.

But Unocal's Barry Lane argues that if it is true that one bad act can trigger revocation, then "any company that has ever been found guilty of anything," would face charter revocation proceedings and "the AG would be running every company in the state."

So, which is Unocal -- a sometimes criminal, or a corporate recidivist?

"We have committed misdemeanors in the past," Lane admits, "but then so have many companies. We have operated here for 100 years. Yes we have made some mistakes, but we have always taken responsibility for those mistakes and worked to correct them."

And the company has a friend in the Attorney General. Lungren who is on the cover of the current issue of William Buckley's National Review, under the headline "Great Right Hope."

In other words, the chances are slim to none that Lungren will move against his pals in the oil industry. So, why file the petition?

"We are not politically naive," Benson answers. "We don't think that this is going to get so far along the road that Unocal will actually be broken up anytime soon, although it should be. Much more likely, we think the Attorney General will deny the petition, and then we will use this as a tool to put pressure on the political process."

If an Attorney General were independent enough to file such a petition, a judge could appoint a receiver, so that the assets do not flee the jurisdiction. Then if the judge has the guts to strip the company of its charter, he has the authority to make "such orders and decrees and issue such injunctions in the case as justice and equity and require."

If Benson were the judge, he'd transform the company into a renewable energy company, which would create more jobs and inflict less damage to the environment.

But Benson is not the judge and he admits that Unocal will not lose its charter anytime soon. The petition was filed to spur change in our stagnant legal and political culture, so that, as Benson says, "someday in the future we will dissolve Unocal and other giant corporate repeat offenders."

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor.

(c) Russell Mokhiber and Robert Weissman

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