CORPORATE CRACKDOWN UPDATES: 4/25/22
Welcome to the second edition of the Revolving Door Project’s Corporate Crackdown Project newsletter! Presented by the people who infuriate the sponsors of other newsletters.
Every two weeks, we’ll be sending a summary of what the Biden administration has and hasn’t done to police and publicize white-collar crimes and big business abuses. Check out our reports on specific Cabinet departments and our piece for Democracy Journal on “What Biden’s Message Should Be”!
If you have any feedback, suggestions, criticisms, or what-have-you, get in touch any time by emailing email@example.com.
This week we have…
11 Hits: The NLRB is suing Starbucks for retaliating against organizers (remember when Starbucks CEO Howard Schultz was floated to be Hillary Clinton’s Secretary of Labor?), capping off a historic and hopeful few weeks for American labor. Meanwhile, Republicans and corporatists continue to publicly worry about good things, like ED and the CFPB working together on student loans and actual anti-monopolists running the antitrust agencies.
7 New Cases: If Biden wants to do more than just say “Amazon, here we come,” there are a slew of executive actions he can take to hobble their union-busting. Plus, apparently shadow banks have their own shadow banks now, which we’re sure the SEC has no qualms about at all.
The NLRB Sued Starbucks For Retaliating Against Union Organizers. “The National Labor Relations Board has sued the coffee shop chain Starbucks for allegedly retaliating against three employees who were involved in organizing a union. One worker was disciplined, suspended and discharged; another was “constructively discharged” and a third was put on unpaid leave after the company revoked “recently granted accommodations,” the NLRB said in a press release.” [NPR, 4/24/22]
TAP: A Slew Of Actions By NLRB Chief Counsel Jennifer Abruzzo Could Together Bring About A Sea Change For Labor Rights In America. “Should the Board vote to uphold these arguments, the legal playing field for employer-employee relations, which has tilted steeply toward management for the past 50 years, would be considerably evened out. Anzaldua also cited a Supreme Court ruling noting that the Board is free to adapt rulings to changed economic and labor-related circumstances—though it’s far from clear, alas, that the current Supreme Court actually believes that.” [TAP, 4/14/22]
The CFPB Sued TransUnion For Deceptive Marketing After It Had Already Agreed To An Enforcement Order About Deceptive Marketing. “After the order went into effect, TransUnion continued its unlawful behavior, disregarded the order’s requirements, and continued employing deceitful digital dark patterns to profit from customers. The Bureau’s complaint also alleges that TransUnion violated additional consumer financial protection laws.” [CFPB press release, 4/12/22]
After An NPR Investigative Report, The Education Department Began Making Amends To Students Harmed By Mismanagement Of The “Income-Driven Repayment” Student Loan Program, Including Debt Cancellation For Hundreds Of Thousands. “The department estimates that the changes will result in immediate debt cancellation for at least 40,000 borrowers who will now qualify for Public Service Loan Forgiveness. In addition, several thousand borrowers will now qualify for debt cancellation under IDR. This follows a 2021 revelation that, at the time, 4.4 million borrowers had been repaying their loans for at least 20 years but only 32 had had debts canceled under IDR.” [NPR, 4/19/22]
The SEC’s New Climate Disclosure Proposals Were Forcing A Reckoning In The Real Estate Market, Which Depends On Wall Street For Investment Capital, But Isn’t Used To Disclosing Pollution-Heavy Construction Practices. “The new regulations are likely to pressure the industry through the capital markets — publicly traded firms, including investment managers and big banks, which are key sources of debt and equity for major private real estate companies. The new disclosures mean they will ask tougher questions about how the property portfolios they’re backing are being built and operated. Publicly traded firms that lease space will too be pushed to make greater climate-conscious demands of their landlords.” [The Real Deal, 4/12/22]
Republican House Members Accused The Education Department And CFPB Of “Colluding” To Police Student Loan Servicers — Which Not Only Is Not Illegal, But Is Something We Should Encourage From All Of The Federal Government! “The GOP lawmakers accused the Education Department of “colluding in the dark” with the CFPB in a letter to Rich Cordray, the head of the department’s Office of Federal Student Aid, who is also a former director of the CFPB. ‘The net effect has been a gross expansion of federal control over student lending behind closed doors,’ the lawmakers wrote in a separate but similar letter to CFPB Director Rohit Chopra.” [Politico Pro, 4/14/22]
The OCC Issued An Enforcement Action Against America’s First Crypto Bank For Violating Anti-Money Laundering Rules (Shocker.) “The Office of the Comptroller of the Currency has issued an enforcement action against Anchorage Digital Bank for inadequate anti-money-laundering controls. Anchorage, based in Sioux Falls, South Dakota, became the first cryptocurrency company to receive a national bank charter in January 2021. It largely operates as a crypto custody provider and raised $350 million in a Series D funding round a little over three months ago.” [American Banker, 4/21/22]
Activist Investors Are Furious That The SEC’s New Private Capital Rules Would Make It Harder For Them To Stage Hostile Buyouts Of Firms Without Boards Realizing What They’re Up To. “Once an activist campaign becomes public, the stock may rise, but management also scrambles to resist. The whole process becomes harder and more expensive. So activists want maximum time to build voting power (through stocks) and economic exposure (through swaps) unnoticed before launching a campaign. The two rules would slash how much time activists get.” [Financial Times, 4/22/22]
Corporatist Members Of The Antitrust Bar Told Bloomberg They Found Reformers Like Lina Khan And Jonathan Kanter “Terrifying,” And A Threat To Their Own Livelihoods. “At conferences, in op-eds and in speeches, the old guard is in high dudgeon, worried that the aggressive turn threatens the profits of their clients — some of the U.S.’s largest corporations — and potentially their own livelihoods. They complain that the new crew is sowing confusion as it subjects dominant companies to tougher scrutiny.” [Bloomberg, 4/22/22]
The Democratic Party Considered Banning Any Of Its Consultants From Engaging In Anti-Union Activity. “The Democratic Party is considering banning its army of consultants from engaging in anti-union activity following a report that one of its pollsters had helped Amazon combat organizing efforts, according to a document obtained by POLITICO. A union-drafted addendum to any contract between a Democratic Party political committee and a consultant would forbid the consultant — or any of its parents, subsidiaries or affiliates — from participating in an array of activities involving unions. That includes union-busting, aiding an employer in a labor dispute or lobbying against union-backed legislation.” [Politico, 4/19/22]
Crypto Powerhouses Implied They Might Sue The SEC If The Agency Forces Crypto Exchanges To Register And Follow The Same Laws As Traditional Exchanges. “‘The quiet expansion of these registration requirements to DeFi protocols, without explicit justification or grounding in clear statutory text … raises concerns about the Commission overstepping its authority,’ wrote top attorneys for the web3 venture powerhouse Andreessen Horowitz in an April 18 comment letter. […] Similar concerns were included in comment letters submitted by Coinbase, the world’s second-largest crypto exchange, as well as Consensys, a software company that operates on the Ethereum blockchain, as well as industry groups like the Association for Digital Asset Markets, Blockchain Association, DeFi Education Fund and the Crypto Council for Innovation.” [Politico Morning Money, 4/21/22]
Instead Of Just Saying “Amazon, Here We Come,” Biden Could Issue E.O.’s To Require Amazon Disclose Its Union-Busting Spending And End Federal Contracts With The Firm. “For instance, he has refused to reinstate an Obama-era rule requiring companies like Amazon to disclose all of their spending to crush union drives. […] Biden has also declined to use his executive authority to halt federal contracts to Amazon amid its union-busting campaign. In fact, Amazon was awarded a $10 billion contract last summer, months after the president promised on the campaign trail to ‘ensure federal contracts only go to employers who sign neutrality agreements committing not to run anti-union campaigns.’” [The Lever, 4/7/22]
The Biden Administration’s Proposed Omnibus Spending Bill Includes Language Banning The SEC From Requiring Public Companies Disclose Their Political Influence Spending To Investors And The Public. “Every year since December 2015, federal budget legislation has contained a provision prohibiting the U.S. Securities and Exchange Commission (SEC), the federal agency tasked with regulating the securities markets, from developing any new rules pertaining to political spending.” [The Lever, 4/11/22]
Workers Who Cleared A Toxic Coal Ash Spill For The TVA Without Proper Safety Equipment In 2009 Are Suing The Contractor Who Hired Them, And TVA Is Still Trying To Claim Immunity After It Covered Up The Abuses. “Sickened workers and survivors of the dead are suing Jacobs Engineering, the global contractor TVA put in charge of the disaster clean-up, in U.S. District Court. […] TVA did not address whether Jacobs should be granted immunity but argued TVA itself remains – despite a 2019 U.S. Supreme Court decision that stripped the utility of immunity in certain situations – immune in the workers’ case.” [Tennessee Lookout, 4/12/22]
Debt Markets Are Now Available For The Private Equity Industry, Essentially Creating Shadow Banks For Shadow Banks Just As The SEC Is Trying To Cast Some Light On Private Equity Proper. “Debt markets are now wide open to private equity firms and their own funds, much in the same way that leveraged buyout financing markets are on fire. […] Private equity funds also have their own credit facilities, called ‘subscription lines’, which give them the ability to strike deals without immediately drawing capital from their limited partners. Furthermore, buyout firms can now borrow against their management fee streams at rates as low as 2 per cent for a decade, the FT showed earlier this year, conjuring internal cash to invest into new funds. Firms expect the positive carry will yield large windfalls.” [Financial Times, 4/21/22]
Biden’s EXIM Policies To Promote Domestic Production And Exports Could Funnel Money Into Natural Gas Exports. “Exim was long criticized on a bipartisan basis as either picking winners or providing corporate welfare. While it has historically backed large and politically powerful multinationals, Biden has made the case for productive federal investment and has tasked the bank with backing neglected sectors like semiconductors, renewables, and critical minerals.” [TAP, 4/14/22]
A Consumer Financial Protection Bureau (CFPB) Report Found That 15M Student Loan Borrowers Were Likely At Risk When Payment Pause Ends. “We find that about 15 million borrowers have at least one of the potential risk factors considered in this report and over 5 million borrowers have at least two. We also find that borrowers with multiple risk factors are more likely to live in low-income or high-minority census tracts.” [Consumer Financial Protection Bureau, 4/14/22]
A Buzzfeed News Investigation Found That A Private Equity-Owned Services Provider For People With Severe Intellectual And Developmental Disabilities Maintained Horrific Living And Working Standards, Leading To Residents’ Deaths. “Overseen by KKR’s handpicked board of directors, BrightSpring executives in many cases kept wages lower than those at competing facilities or Walmarts, despite pleas from local managers that they were unable to safely staff the homes. Some managers resorted to making employees work three days straight or threatening to have them arrested if they tried to leave. In several cases, state inspectors arrived at homes and found no staff at all.” [Buzzfeed News, 4/25/22]