Once upon a time things were simple. We had governments & they were represented by officials. It was a one to one direct dialogue. All that has changed & there are groups and groups peddling all types of issues on behalf of others. They are acting as go-betweens and paid handsomely to ensure deals come through or government drafts Bills in their favor. All these deals are kept hidden from the public. Today global corporations have become as powerful as governments some generating more GDP than single countries. Slowly we are returning to the concept of a one world government where a handful are seeking to control the world’s people – the world’s economy – the world’s resources which are being slowly transferred to a group of people who own global TNCs/MNCs but influence nation states & their governments. The scenario poses a formidable threat to Sri Lanka’s sovereignty as we try protect not only our territorial waters, our land, our assets, resources & even our people as the race for resources & competition between which global power prevails makes all other states vulnerable.

Increasingly corporations have an impact on how our socio-economic-political system is shaped – they have a say over people, plants, animals, the quality of food, water, energy, transport, housing, media, education & even.

It is no different to the hold that the world’s first commercial corporation the East Indian Company which was set up by British merchants granted by Queen Elizabeth 1 had in 1600. History is being slowly repeated under Queen Elizabeth II.

In its heyday, the East India Trading Company throughout 400 years conquered territories, plundered resources of these territories, manipulated lawmakers, broke laws, murdered natives and gained power & privilege for themselves & their cronies. That was the colonial agenda. The neocolonial agenda is really no different. Territory, resources & people are victims. The kings of former colonies are today replaced by governments whose powers are being slowly clipped without their realization using the slogan good governance/anti-corruption/ transparency/ rule of law.

The corporate agenda to control governments, the regulatory environment, the economic system & society using the influencers of money & other deceptive means has been outsourced to lobby groups on behalf of the corporates.

In 1974, Joseph Nye the American political scientist predicted that 300 giant corporations will run the world economy”.

Multinational companies are indeed powerful. The US economy would not be where it is without US-based multinationals.

Of the Forbes 500 companies employing over 65m people with revenues of $31trillion 128 companies are US. These figures are in contrast to the global GDP of $75trillion. There are more than 30 financial institutions with consolidated assets greater than $50billion each. Connoted, this mean their assets are more than what two-thirds of the world’s countries produce in annual GDP.

Walmart’s annual turnover is more than Austria, South Africa, Venezuela, Colombia, Thailand, UAE, Denmark, Malaysia, Singapore, Nigeria, Chile, Hong Kong, Egypt, Philippines, Finland, Greece, Israel, Pakistan, Portugal, Iraq, Ireland & many more countries!

If a single company can be so powerful imagine what other powerful companies can do! CEOs of these companies are more powerful than politicians!

In the US Corporations spend about $2.6 billion a year on reported lobbying expenditures. The biggest companies are represented by some 100 lobbying groups.

Lobbying is such a lucrative job that 50% of senators and 42% of representatives become lobbyists after leaving Congress.

Corporates are influencing governments. According to economic editor David Smith, Goldman Sachs helped Greece’s public finances look more ‘respectable’ and invented the concept of BRICS (Brazil, Russia, India & China) What Smith meant was that the investment banking community was calling the shots. Banks may well be calling the shots but when it came financial crisis it was the governments that came to their aid with financial bailouts. Royal Bank of Scotland was rescued by the British Government, even Wall Street was helped out after the collapse of Lehman Brothers as were car companies Ford, Chrysler, General Motors.

Economist Jeffrey Sachs claims politics is ‘increasingly being run in the interests of big businesses” as wealth begets power & power begets wealth and companies are ever ready to finance political campaigns, offer jobs requested by politicians and in turn corporates lobby for their needs.

Sachs claims US government is influenced by the military industry complex, Wall Street – virtually every US Treasury secretary is from Wall Street & returns when term ends. That explains the mega-bailouts! Then there is the Oil-Transport industry headed by Exxon-Mobil, Koch industries etc. That explains why wind & solar power energy stand little chances, it explains why Pentagon is made sure the sea-lanes in the Persian Gulf is protected and it explains why US is kept off any agenda on climate change. The last of the big influencers on US government is the healthcare industry which absorbs 17% of US GDP. According to Sachs the Big Pharma sets ‘sky-high prices protected by patent rights’

Big Pharma spends more than $9.6 billion annually on ads. The typical politician received nearly $40,000 from Big Pharma (report Center for Responsible Politics)

According to Centre for Responsive Politics nearly all 46 Senators who voted against gun laws had been recipients of donations from the gun lobby.

In 2016, Hillary Clinton said she accepted $675,000 in speaking fees from Goldman Sachs. Goldman Sachs, Citigroup and J.P. Morgan Chase were all among Clinton’s top five campaign donors. 

Dr Samuel Jutzi of the FAO claims lobbying by “powerful” big food companies is blocking reforms which would improve human health and the environment.

According to a study conducted by Organization for Economic Cooperation and Development analysis of 427 foreign bribery cases from 1994-2014 researchers discovered a steady stream of illicit money exchanges between multinational businesses and public officials in both poor and rich countries” covering some 86 countries round the world…. bribes are being paid across sectors to officials from countries at all stages of economic development,”. More than 50% of the violators were top management – offerers & takers. Some of these bribes were $3b. 2/3 of the bribes were taken by public officials in countries higher on the UN human development index.

Even Wal-Mart, the world’s largest retailers, is currently being probed for bribery in a number of countries.

https://www.washingtonpost.com/news/wonk/wp/2014/12/03/how-the-worlds-biggest-companies-bribe-foreign-governments-in-11-charts/?utm_term=.75fda5b04741

The 39th Vice President of the United States, Spiro Agnew, was investigated in 1973 for extortion, tax fraud, conspiracy, and bribery. He was accused of accepting more than 100k in bribes.

Walter Anderson was convicted of the largest tax evasion scam in U.S. history for evading more than $200 million in taxes. https://tax.findlaw.com/tax-problems-audits/famous-tax-evasion-cases.html

Lobby groups are lobbying foreign governments on behalf of foreign governments.

According to Sunshine Foundation UAE had spent $14.2 to influence ‘Americans, make contacts with columnists, reporters’, hiring PR agencies. Between 2007 and 2012, 200 of America’s most politically active corporations spent a combined $5.8 billion on federal lobbying and campaign contributions

Top 10 foreign governments paying for influence in 2013

1. UAE 14.2 million
2. Germany $12 million
3. Canada $11.2 million
4. Saudi Arabia $11.1 million
5. Mexico $6.1 million
6. Morocco $4 million
7. South Korea $3.9 million
8. Bosnian Serb Republic $2.4 million
9. Georgia $2.3 million
10. Azerbaijan $2.3 million

Companies are also taking advantage of loopholes in various national legislations & transferring operations to these countries to enjoy low taxes & thus evade taxes in their home countries. On the guise of bringing in ‘investment’ they fool foreign governments to offer them tax holidays & other incentives when all the time they are enjoying avoiding tax in their own countries while claiming to bring investment & get maximum profit. https://theconversation.com/these-five-countries-are-conduits-for-the-worlds-biggest-tax-havens-79555 According to Prof Gabriel Zucman nearly 10% of the world’s wealth is held offshore by a few individuals. Taking the example of Google, he says that in 2003 before its initial public offering in August 2004, Google US transferred its search & advertising technologies to Google Holdings” a subsidiary incorporated in Ireland but resident in Bermuda where all profits are sent & after a tax-free detour goes to Netherlands. He says Google Alphabet reported $15.5b in profits in Bermuda where corporate tax is 0%.

Prof Gabriel & team claims 6 Luxembourg, Ireland, Netherlands, Belgium, Malta & Cyprus siphon off €350bn annually. He says more than €600bn is artificially shifted by multinationals to the worlds tax havens annually when Netherlands offers tailored tax deals to multinationals or Switzerland keeps the wealth of corrupt elites out of sight in its coffers, they steal the revenue of other nations”. He says US multinational make 63% of all their foreign profits in 6 havens of which Netherlands is the favored. https://www.theguardian.com/commentisfree/2017/nov/08/tax-havens-dodging-theft-multinationals-avoiding-tax

The Australian company introduced new legislation in 2016 that targets 30 large multinational companies ‘suspected of diverting profits using artificial structures to avoid a taxable presence in Australia”.

The 1973 coup in Chile that led to the ousting of President Allende was a result of the influence of global TNCs. Many other country leaders have been ousted because of the nationalist policies they introduced that impacted global companies operating in these countries. Even in Europe some think tanks have even pushed for military interventions & even military occupations and shows the power these global companies exert over politicians & policies.

In another foreign case study, Odebrecht, a Brazilian construction firm had paid $29 million to Peruvian officials in return for $12.5 billion in contracts. Odebrecht had a whole department, the Structured Operations Division, dedicated to bribing politicians in Latin America. They spent $788 million on bribes.

Bell Pottinger, has been exposed in an undercover sting bragging about its access to the heart of government, even claiming that they had got Cameron to talk to the Chinese premier on behalf of a client.

What is important to take note of is that the westphalian model giving sovereignty to nation states is being incrementally eroded using corporates & their lobbies. The creation of trade communities, economic zones, trade hubs are all to re-align areas by creating micro states redrawing borders primarily based on resources & handing them to corporates to rule over. The diversions that have created mass refugee exodus into countries is part of this bigger game to change demography. There are over 300m migrants. Millions of expats are working in all parts of the world. 9m Americans are living overseas! Trimming down of public sector means more joining the private sectors & thus inadvertently increasing their power base. Notice, private prisons, private armies all increasing!

What all these leads to is a scenario where corporates are getting politicized and politics functioning as corporates!

When businesses spends their energy seeking favor from government, consumers lose out. Preaching about anti-corruption & transparency holds no water when people function as puppets & paid to represent corporate interests & while a handful of people get caught and imprisoned for taking a Rs.100 bribe those that take millions and billions & actually influence even legislation ends up free & untouched.

The system is certainly wrong & the system is certainly corrupt. What is more ridiculous a notion than outsourcing the corrupt to end corruption be they in government, corporates, lobby groups, think tanks, NGOs, UN or any others whose mouths function as per the ‘donations’ they receive?

The underlying dangers are many in particular to national sovereignty & in understanding the scenarios only can the citizens realize the extent of the dangers that prevail.

If ordinary people are accused of being corrupt – that corruption is nowhere near the types of corruption that prevail in both the political & across the corporate system both locally & internationally.

How do we address these scenarios?

Shenali D Waduge