Tag Archives: ceo

If You Want to Be Part of the Top 1 Percent, You’d Better Be Working For a Top 1 Percent Firm

Mother Jones

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What has caused the explosive growth of income inequality over the past three decades? Is it the fact the CEO pay has skyrocketed, leaving everyone else behind? Maybe. But according to a new paper, that’s not quite the right story.

Basically a group of researchers at NBER have concluded that inequality between firms has skyrocketed, and employees of those firms all go along for the ride. A small number of “super firms” have become enormously successful, and within these super firms inequality between the CEO and the worker bees hasn’t changed much at all. They pay all their employees more than the average firm, from the CEO down.

The chart on the right tells the story. Ignore the green line for the moment and just look at the blue and red lines. The red line shows that the top tenth of firms have far outperformed everyone else. The blue line shows that workers follow the same pattern. The ones who work for the top firms get paid a lot more than the folks who work for average firms.

As it turns out, some industries have more super firms than others and thus contribute more to growing income inequality. The FIRE sector—Finance, Insurance, Real Estate—is the most obvious example. Both firm revenue and individual compensation has gone up far more than in any sector. But other sectors have their superstars too, and individuals at those firms get paid a lot more than a similar worker at a firm that’s not doing so well.

So in addition to talking about the top 1% of individuals, we should be talking about the top 1% of firms. But what does that mean? Things get a little hazy at this point:

Instead of top incomes rising within firms, top-paying firms are now paying even higher wages. This may tend to make inequality more invisible, as individuals do not see rising inequality among their peers. More research needs to be done to understand why inequality between firms has increased so much more than inequality within them. But this fact of stable inequality within firms should inform our understanding of the great increase in inequality within the United States over the last three decades.

Matt O’Brien suggests that this means nearly every industry is now part of the winner-take-all economy. In the same way that modern technology allows a tiny subset of superstar singers or actors to earn huge audiences (and huge paychecks), perhaps it also enables modern firms to do the same. And it could be self-reinforcing. The super firms can afford to hire the best workers, and that in turn drives even more unequal growth.

In any case, if the authors are right, it matters a lot which firm you work for. If you pick the right one, you might ride the income inequality gravy train right to the top. In not, you probably won’t.

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If You Want to Be Part of the Top 1 Percent, You’d Better Be Working For a Top 1 Percent Firm

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This CEO Just Raised His Company’s Minimum Salary to $70,000 a Year

Mother Jones

Inspired by research suggesting that the emotional well-being of many of his employees could be improved by a raise, the owner of a Seattle credit card payment processing company has just announced that he will boost their minimum salary to $70,000.

The New York Times reports Gravity Payments founder Dan Price will slash his own $1 million salary to $70,000 and use a majority of the company’s forecasted $2.2 million profits this year to help pay for the bold move. Many of the workers affected by the raise include sales and customer service representatives.

Of the company’s 120 employees, 30 will see their salaries almost double.

“The market rate for me as a CEO compared to a regular person is ridiculous, it’s absurd,” Price told the Times. “As much as I’m a capitalist, there is nothing in the market that is making me do it.”

In the rest of the country, the wage gap between top executives and well, everyone else, is staggering: In 2014, Wall Street bonuses alone amounted to nearly double the combined income of all Americans working full-time minimum-wage jobs.

Publicity stunt or not, Price’s plan is a unique story about one CEO’s effort to directly address income inequality and create liveable wages for his workers. If successful, we can only hope this turns into a Times trend piece.

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This CEO Just Raised His Company’s Minimum Salary to $70,000 a Year

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Starbucks Wants to Talk Race With Its Customers. What Could Possibly Go Wrong?

Mother Jones

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Judging from its reception on social media yesterday, Starbucks CEO Howard Schultz’s just-announced kumbaya pipe dream is destined for eternal ridicule. The company hopes to address racism by slapping the words “Race Together” on coffee cups and forcing its baristas to coax customers into unsolicited discussions about race relations.

To get a preview of what’s coming, check out this conversation between CBS’s Nancy Giles and DJ Jay Smooth during an appearance on last night’s All In with Chris Hayes.

Giles: “I can’t not tease Jay about the kinda, like, brotha way he was trying to talk. Like, ‘Hey,’ with the rap music in the background, and like down with the people.”

Smooth: “I’m a rap guy!”

Giles: “Yeah, I know, but it’s another interesting funny thing about race. There would be some people that would feel that you co-opted something like that, and other people might feel like, ‘That’s his background, and that’s really cool too.’…These are conversations, you know, ‘Yo, like ya know, yeah, if somebody takes my wallet,’ I mean, it’s really interesting.”

Smooth: “It’s also interesting, because I’m actually black, but you assumed otherwise. And this is the sort of awkwardness we can look forward to at Starbucks across America.”

Giles notes early on that the campaign’s purpose seems noble and that conversations about race should be encouraged. But as the conversation reveals, Starbucks’ bold venture into race relations reeks of clumsy naiveté. Let’s save our baristas the trouble.

(h/t Salon)

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Starbucks Wants to Talk Race With Its Customers. What Could Possibly Go Wrong?

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Russians Dismantle Steve Jobs Memorial After Tim Cook Comes Out as Gay

Mother Jones

Russian media is reporting that a memorial to Steve Jobs in St. Petersburg was dismantled on Friday, one day after current Apple CEO Tim Cook came out as gay.

A group of Russian companies called the Western European Fiscal Union (ZEFS) erected the more than six-foot tall monument, shaped like an iPhone and featuring an interactive screen that showed information about the Apple founder, in January of 2013, outside of an IT research university in St. Petersburg.

The ZEFS press office said the monument was taken down in order to comply with Russia’s law prohibiting “propaganda of nontraditional sexual relations to minors” a broadly-worded law passed in June 2013 that effectively criminalizes most LGBT expression.

ZEFS noted in their statement that the memorial had been “in an area of direct access for young students and scholars.”

“After Apple CEO Tim Cook publicly called for sodomy, the monument was taken down to abide by the Russian federal law protecting children from information promoting denial of traditional family values.”

Shortly after Cook wrote publicly about being gay, famously anti-gay St. Petersburg legislator Vitaly Milonov suggested that Cook be banned from Russia forever, because he might bring Ebola, AIDs, and gonorrhea into the country.

According to Russian media reports, ZEFS gave a second reason for the monument’s removal: revelations by Edward Snowden that Apple sends information about its users to America’s National Security Agency. (When these revelations first came to light, Apple denied having knowledge of the NSA’s surveillance.)

Russian media also reported that the head of ZEFS said he wouldn’t be opposed to re-installing the monument, provided that it had the capability to send a message to the US rejecting all Apple products.

So the next logical step here would be for Russia’s elite to give up their personal iPhones, right? Well, fat chance.

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Russians Dismantle Steve Jobs Memorial After Tim Cook Comes Out as Gay

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How Dr. Bronner’s Soap Turned Activism Into Good Clean Fun

Mother Jones

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CEO David Bronner shows off his company’s suds-spewing fire truck. Gregg Segal

It’s 6 a.m. and my head is splitting from the roar of David Bronner’s Vitamix blender pulverizing frozen berries and hemp milk. The 40-year-old CEO of Dr. Bronner’s Magic Soaps—who looks like a raver version of Captain Jack Sparrow—kept me up past midnight drinking beers, smoking spliffs, and listening to Deltron 3030 and Gorillaz as he regaled me with stories about LSD trips in Burning Man’s Sanctuary tent and his early days as a squatter and club kid in Amsterdam. Shivering out from under the Mexican blanket in his guest bedroom, I dimly recall the two of us dancing in his backyard and expounding upon the hugeness of the universe. “You’ve got to come to our board meeting tomorrow morning,” Bronner told me at some point between the vegan tapas and my fifth Amstel Light.

But the Advil still hasn’t kicked in as we load his extra longboard (“the Shredder”) into his pickup and roll down the hill to Carlsbad’s Terramar Beach, where we meet a crew of Bronner employees and Bronner brahs—including Mike Hynson, the son of the pro surfer featured in the 1966 cult classic The Endless Summer. Out past the breakers, Bronner starts egging me on as a huge wave approaches: “Go Josh! Go!” I flail desperately, wheezing my way into position atop a glassy wall cresting with foam.

It’s been just 21 hours since I showed up at the hive of cheap warehouses that serves as Dr. Bronner’s global HQ and found the CEO at his flimsy Ikea-style desk, ignoring business calls. An amulet dangled on a hemp necklace over his tie-dyed shirt as he leaned in toward his computer screen, staring at what really mattered to him: the latest internal poll for Washington Initiative 522, a ballot measure to require the labeling of foods containing genetically modified organisms that was coming up for a vote the following month. The initiative, which voters ultimately rejected, was among the costliest in state history: Its backers raised $8 million while its foes in biotech and Big Food poured nearly three times as much into its defeat. Dr. Bronner’s alone donated $2.2 million to the Yes on 522 campaign—after sinking $620,000 into a similar California ballot measure in 2012. “If we don’t win the right to label and enable people to choose non-GMO,” Bronner told me, “then everything is going to be GMO.”

The GMO battle is just the latest in a line of feisty political campaigns waged by the lovably weird cleaning products dynasty, best known for its tingly peppermint liquid soap with the earnestly logorrheic label. (“Absolute cleanliness is Godliness! Teach the Moral ABC that unites all mankind free, instantly 6 billion strong we’re All-One.”) Since its founding in 1948 by Bronner’s grandfather, the Southern California company has become a soapbox for a variety of causes—from its founder’s religious universalism to its recent campaigns to legalize hemp and marijuana, clean up fair trade and organic standards, and combat income inequality. Activism and charitable donations consume about half of the company’s healthy profits. “If we are not maxed out and pushing our organization to the limit, then what are we doing?” Bronner asks.

Embracing lefty lifestyle politics might not seem like the best way to grow a business—until you sit on the orange velour couch in Bronner’s Tibetan-flag-draped office in Escondido and watch the phone light up with calls from buyout firms. In the 15 years since he took over, annual sales have grown 1,300 percent, from $5 million to $64 million. Along the way, the company’s castile soaps have gone from hippie niche products to staples on the aisles at Target. And yet Bronner says he has twice refused offers from Walmart to carry his soaps, even at the undiscounted wholesale price, because he can’t stomach the chain’s politics and crummy worker pay. The best way to go mainstream, he has found, is to be as unapologetically countercultural as possible.

At a time when companies strive to concoct “brand stories” of authenticity and altruism, Dr. Bronner’s succeeds by being itself. “Their activism as a company is not engineered; it wasn’t coached by a public relations firm,” says Joel Solomon, the president of Renewal Partners, a venture capital firm that invests in socially responsible businesses. “Dr. Bronner’s does their thing the way they think it should be done, and nobody is going to change them.”

The company shares a niche with progressive rabble-rousers like Working Assets (annual sales: $100 million) and Patagonia ($540 million), but no other brand can match its idiosyncratic story. Emanuel Heilbronner was born into a German Jewish family of soap factory owners in 1908 and immigrated to the United States in 1929. His parents died in Nazi concentration camps, and he dropped “Heil” from his last name because of its associations with Hitler. More interested in godliness than cleanliness, Bronner—who wasn’t really a doctor—invented a Judeo-Unitarian pop religious philosophy, publicizing its tenets on the labels of the soap bottles that he gave away at his lectures. He became so obsessed with spreading his All-One faith that he and his sickly wife put their three children in foster homes for long stretches so he’d have more time to travel and speak. In 1945, he was arrested after a particularly fervent speech at the University of Chicago and committed to a mental hospital for two months. He escaped and fled to Los Angeles, where he founded Dr. Bronner’s All-One God Faith, which now does business as Dr. Bronner’s Magic Soaps.

Dr Bronner’s founder Emanuel Bronner (left and left in family photo) was the son of a soapmaker who was killed by the Nazis. The company was revitalized by his son Jim (left, with brother Ralph.) Courtesy of the Bronner family.

“The soap was there to sell his message,” David Bronner tells me, “and if you didn’t want to hear it, he didn’t want to sell to you.” Emanuel Bronner’s cosmic ideals and his soap’s 18 suggested uses (contraceptive douche!) found a following among hikers and commune dwellers, even though he was hardly a flower child; he hated communists and never smoked pot. His son Jim rejected his father’s mystical ramblings and went to work for a chemical company, where he developed a firefighting foam for Monsanto that still doubles as fake snow on movie sets. But in 1988, he stepped in to rescue Dr. Bronner’s Magic Soaps after it lost its nonprofit status and declared bankruptcy, recapitalizing it as a for-profit company.

David Bronner, Jim’s son, wasn’t sure he wanted to become the next standard-bearer for a soap-making dynasty. After graduating from Harvard in 1995 with a biology degree, he immersed himself in Amsterdam’s drug culture. “I just had my life explode on many levels of identity,” he recalls of a late-night ecstasy and acid trip at a gay trance club. These experiences, as well as the writings of authors such as Noam Chomsky and Paul Hawken, eventually opened his eyes to the value of his grandfather’s All-One philosophy and the power of the soap company as a vehicle for change. In 1997, he let his dad know that he was ready to work for the family business, but only “on activist terms.”

A year later, Jim Bronner died of lung cancer and David, just 25, took over as CEO. He decided early on that he’d rather feel good about his job than worry about making a ton of money. In 1999, he capped the company’s top salary at five times that of the lowest-paid warehouse worker—Bronner now makes about $200,000 a year. He has hired a lot of people he met at Burning Man, including Tim Clark (official title: Foam Maestro), a muscular guy whose job mostly consists of driving a psychedelic, soapsuds-spewing fire truck to music festivals. That’s about as close as the company gets to actual marketing. “We’re basically like a nonprofit,” Bronner explained as we grabbed coffee in the office of his mom, Trudy, the firm’s chief financial officer. “But we aren’t,” countered Trudy, who could easily pass for a church lady with her silver cross centered on a prim maroon turtleneck sweater. “We’re a for-profit business. And we make good money and pay our employees really well.”

Still, the minuscule ad budget and cap on executive pay leave the company with plenty of cash to improve its products and fund social campaigns—goals that, as luck or savvy would have it, often go hand in hand. At one point, for example, Bronner decided to add a new ingredient, hemp oil, which gave the soap a smoother lather. But there was a hitch: Not long after he acquired a huge stockpile of Canadian hemp oil, the Bush administration outlawed most hemp products. “Technically, we were sitting on tens of thousands of pounds of Schedule I narcotics,” he recalls.

Rather than destroy his inventory, Bronner sued the Drug Enforcement Administration to change its stance on hemp, a nonpsychoactive strain of cannabis. Hemp oil contains so little THC that you’d have to consume a bathtub full of the stuff to get high. To press the point, Adam Eidinger, who has since become the company’s “director of social activism,” set up in front of DEA headquarters and served agents free bagels with poppy seeds (which in theory could be used to make heroin) and orange juice (which naturally contains trace amounts of alcohol). In 2004, a federal court sided with the company and struck down the ban.

Three years later Dr. Bronner’s, by then the world’s first certified-organic soap company, sued rivals such as Kiss My Face and Avalon Organics for falsely advertising their products as organic. (The suit, rendered largely moot after Whole Foods began policing the organic claims of its personal-care suppliers, was ultimately dismissed.) When Bronner couldn’t find certified-organic and fair-trade sources for palm, coconut, and olive oil, he grew his own in Ghana and Sri Lanka, and scaled up existing projects in Israel and the West Bank. Coconut oil now accounts for 12 percent of Dr. Bronner’s sales, almost as much as bar soap.

In recent years, Bronner has been arrested twice for his activism. In 2009, he planted hemp seeds on the lawn of DEA headquarters in Washington, DC, to protest a ban on domestic cultivation. He was busted again in 2012 for milling hemp oil in front of the White House—he’d set up shop in a cage, and police had to saw through the bars to take him into custody. Next he hopes to partner with renegade farmers to manufacture America’s first line of domestically grown hemp-based foods. “The activism side of the company enables us to take risks that no sane company would,” Bronner says. “The point of what we are doing is to fight, and the products serve that.”

Nowhere has that attitude been more evident than in the Washington GMO battle. While many organics companies contributed money to the campaign, Dr. Bronner’s temporarily turned its soap label into a Yes on 522 ad, and ran it in magazines (including Mother Jones). “Taking sides on a political campaign like that is totally unprecedented in the world of product labeling,” Robert Parker, the president of the company that prints Dr. Bronner’s labels, told me as we bobbed in the waves off Terramar Beach.

David Bronner Gregg Segal

On the day I met Bronner, his activism director Eidinger was arrested for a Yes Men-style stunt lampooning the biotech industry’s clout in Washington, DC. Posing as a Monsanto lobbyist, he entered a Senate office building and dumped $2,000 in singles—”enough to look like money raining down,” he later explained—from a balcony. Eidinger is also the brains behind the anti-GMO group Occupy Monsanto and a fleet of cute “Fishy Food” art cars (Fishy Sugar Beet, Fishy Tomato, etc.) that Dr. Bronner’s commissioned to drive cross-country and make light of how transgenic crops sometimes incorporate fish genes. “I have no in-principle objection to genetic engineering or synthetic biology,” Bronner insists, citing his biology background and his dad’s work for Monsanto. His real problem with GMOs has less to do with Frankenfood fears than with the documented effects of herbicide- and pest-resistant GM crops, which were sold as a way to reduce harmful spraying. Studies have found that they’ve instead given rise to new superbugs and superweeds that demand ever-stronger pesticides and herbicides. “Far from freeing us from the chemical treadmill,” Bronner says, “GMOs are doubling down on it.”

His loss to the biotech industry in Washington state hasn’t dampened Bronner’s lust for battle. “If this was 2016″—a presidential election year—”we would have destroyed them,” he says, blaming low turnout for the measure’s defeat. “And that’s what we are going to do.” (A second try in California could be next, Eidinger says.)

Before we headed to his house, Bronner took me to see the company’s future headquarters—a bright, 120,000-square-foot warehouse a few hundred yards down the road from a Home Depot. There, Bertine Kabellis, his spunky, Haitian-born factory manager, details what they’re doing to turn the bland corporate space into something more homey. The factory store will include a “fragrance bar,” a soap-bottle refill station, and a hemp activism diorama featuring a Bronner look-alike mannequin sorting through cannabis plants in a cage. The store, Kabellis enthuses, will also carry Dr. Bronner-branded pinhole glasses—which create strange visual effects.

“Leopard-print Speedos?” Bronner asks, out of the blue. “Which I have to get for Palm Springs Pride. I’m gonna rock ’em.”

As Kabellis explains the layout of the organic farm-to-table employee cafeteria, Bronner interrupts. He wants to show us a photo he’s just received on his phone: It’s Eidinger in his business suit, making snow angels in a big pile of dollar bills.

“That’s so ridic-u-lous!” Bronner intones, beaming as he slips the phone back into his baggy hemp trousers. “It’s so rad!”

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How Dr. Bronner’s Soap Turned Activism Into Good Clean Fun

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OkCupid’s CEO Donated to an Anti-Gay Campaign Once, Too

Mother Jones

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Last week, the online dating site OkCupid switched up its homepage for Mozilla Firefox users. Upon opening the site, a message appeared encouraging members to curb their use of Firefox because the company’s new CEO, Brendan Eich, allegedly opposes equality for gay couples—specifically, he donated $1000 to the campaign for the anti-gay Proposition 8 in 2008. “We’ve devoted the last ten years to bringing people—all people—together,” the message read. “If individuals like Mr. Eich had their way, then roughly 8% of the relationships we’ve worked so hard to bring about would be illegal.” The company’s action went viral, and within a few days, Eich had resigned as CEO of Mozilla only weeks after taking up the post. On Thursday, OkCupid released a statement saying “We are pleased that OkCupid’s boycott has brought tremendous awareness to the critical matter of equal rights for all individuals and partnerships.”

But there’s a hitch: OkCupid’s co-founder and CEO Sam Yagan once donated to an anti-gay candidate. (Yagan is also CEO of Match.com.) Specifically, Yagan donated $500 to Rep. Chris Cannon (R-Utah) in 2004, reports Uncrunched. During his time as congressman from 1997 to 2009, Cannon voted for a constitutional amendment banning same-sex marriage, against a ban on sexual-orientation based job discrimination, and for prohibition of gay adoptions.

He’s also voted for numerous anti-choice measures, earning a 0 percent rating from NARAL Pro Choice America. Among other measures, Cannon voted for laws prohibiting government from denying funds to medical facilities that withhold abortion information, stopping minors from crossing state lines to obtain an abortion, and banning family planning funding in US aid abroad. Cannon also earned a 7 percent rating from the ACLU for his poor civil rights voting record: He voted to amend FISA to allow warrant-less electronic surveillance, to allow NSA intelligence gathering without civil oversight, and to reauthorize the PATRIOT act.

Of course, it’s been a decade since Yagan’s donation to Cannon, and a decade or more since many of Cannon’s votes on gay rights. It’s possible that Cannon’s opinions have shifted, or maybe his votes were more politics than ideology; a tactic by the Mormon Rep. to satisfy his Utah constituency. It’s also quite possible that Yagan’s politics have changed since 2004: He donated to Barack Obama’s campaign in 2007 and 2008. Perhaps even Firefox’s Eich has rethought LGBT equality since his 2008 donation. But OkCupid didn’t include any such nuance in its take-down of Firefox. Combine that with the fact that the company helped force out one tech CEO for something its own CEO also did, and its action last week starts to look more like a PR stunt than an impassioned act of protest. (Mother Jones reached out to OkCupid for comment: We’ll update this post if we receive a response.)

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OkCupid’s CEO Donated to an Anti-Gay Campaign Once, Too

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Washington NFL Team’s New Native American Foundation Is Already Off to a Great Start

Mother Jones

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The CEO of the Washington football team’s recently unveiled Original Americans Foundation also runs an organization that was criticized in a federal investigation for wasting nearly $1 million and providing “no benefit” after receiving a Bureau of Indian Affairs contract.

Gary Edwards, who was announced as head of the team’s foundation this week, is CEO of the National Native American Law Enforcement Association. In 2009, the NNALEA won a contract with the Bureau of Indian Affairs to “recruit for and hire critically needed law enforcement officers (police, corrections, and criminal investigator positions) to work in Indian Country.” According to a 2012 investigation into the contract, first reported by USA Today, NNALEA produced 748 applicants for law enforcement positions—only about 4 percent of which were Native American. Even worse, not a single applicant was qualified, meaning the $967,100 in funds amounted to absolutely nothing.

The investigation mostly comes down hard on Bureau of Indian Affairs officials for allowing Edwards to negotiate the terms of the contract into something essentially useless. While the contract’s original language called for “500 qualified Native American law enforcement applicants,” according to the investigation, it was later modified to “500 pre-screened potential applicants,” effectively removing the requirements that the NNALEA provide applicants who are Native American and qualified for law enforcement jobs. In its invoices to the Bureau, NNALEA reported holding a recruiting event at the 2009 Crow Fair Celebration and placing ads in South Dakota’s Aberdeen News, though according to the investigation an official who attended the fair saw no recruiting booth or NNALEA representatives, and the Aberdeen News had no record of NNALEA ever ordering the ads.

“The NNALEA believes it met and exceeded all of its obligations under the contract with the Bureau of Indian Affairs’ Office of Justice Services, and subsequently was paid after the contract was completed,” Edwards said in a statement released Thursday night.

See the full investigation below:

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NNALEA contract investigation (PDF)

NNALEA contract investigation (Text)

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Washington NFL Team’s New Native American Foundation Is Already Off to a Great Start

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"I Don’t Want to Create a Paper Trail": Inside the Secret Apple-Google Pact

Mother Jones

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Whether waxing poetic about net neutrality or defending the merits of outsourcing, Silicon Valley execs love to talk about how a free market breeds innovation. So it might come as a surprise that some of those execs were engaged in a secret pact not to recruit one another’s employees—in other words, to game the labor market. The potentially illegal deals suppressed salaries across the sector by a whopping $3 billion, claims a class-action lawsuit scheduled for a May trial in San Jose, and were done to juice the bottom lines of some of the nation’s most profitable companies.

Documents filed in conjunction with the litigation, first reported last month by PandoDaily’s Mark Ames, offer a fascinating behind-the-scenes glimpse of interactions among the likes of Apple’s Steve Jobs, Google’s Eric Schmidt, and Intuit Chairman Bill Campbell. In early 2005, the documents show, Campbell brokered an anti-recruitment pact between Jobs and Schmidt, confirming to Jobs in an email that “Schmidt got directly involved and firmly stopped all efforts to recruit anyone from Apple.” On the day of that email, Apple’s head of human resources ordered her staff to “please add Google to your ‘hands off’ list.'” Likewise, Google’s recruiting director was asked to create a formal “Do Not Cold Call List” of companies with which it had “special agreements” not to compete for employees.

A few months later, Schmidt instructed a fellow exec not to discuss the no-call list other than “verbally,” he wrote in an email, “since I don’t want to create a paper trail over which we can be sued later?”

Eric Schmidt Google

Good luck with that. The “no poaching policies,” as they were known among senior-level executives at companies such as Adobe, Intuit, Intel, and Pixar, were first exposed by a 2010 anti-trust lawsuit filed by the Department of Justice. The DOJ complaint is the basis for the current class action, which was filed in 2011 by the San Francisco law firm Lieff Cabraser Heimann & Bernstein, alleging that some 64,000 tech workers were harmed.

The case, interestingly, has garnered little attention outside of the tech world. Sure, the average middle-class worker probably won’t shed a tear for the most likely victim here: Silicon Valley code jockeys and junior execs banking six-figure salaries and perhaps million-dollar stock options. The Bay Area, after all, is recently ablaze with animosity over tech-fueled gentrification and income inequality. And yet the collusion of CEOs to artificially suppress high-end salaries speaks to an economic malaise that affects every working stiff: The widening gap between the rich and poor isn’t some accident of free-market capitalism, but the product of a system that puts corporate leaders and their shareholders ahead of everyone else.

The lawsuit describes the rapid spread of anti-recruitment pacts between 2004 and 2007—arrangements perhaps facilitated by the overlap on Silicon Valley’s corporate boards: Jobs, who became Disney’s largest shareholder after it bought Pixar, served on Disney’s board until his death in 2011. Eric Schmidt sat on Apple’s board until 2009, and Intuit Chairman Bill Campbell (a former Schmidt advisor) still does. Intel CEO Paul Otellini has held a seat on Google’s board since 2004. Such close ties have long been seen as a problem for shareholders, but the non-recruitment pacts suggest that such cozy relationships could harm workers, too.

Steve Jobs, according to unsealed court documents obtained by Mother Jones, was a leading advocate and enforcer of the non-recruitment pacts. Two months after entering into the agreement with Google, he emailed Bruce Chizen, then Adobe’s CEO, complaining that Adobe was poaching Apple employees. Chizen’s reply, that he thought they’d agreed only to avoid “senior level employees,” didn’t satisfy Jobs. “OK, I’ll tell our recruiters that they are free to approach any Adobe employee who is not Sr. Director or VP,” he shot back. “Am I understanding your position correctly?”

Steve Jobs Acaben

Chizen responded that he would rather the arrangement apply to all employees:

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Adobe Apple Emails (PDF)

Adobe Apple Emails (Text)

The next day, Adobe’s vice president of human resources announced to her recruiting team that “Bruce and Steve Jobs have an agreement that we not solicit ANY Apple employees, and vice versa.”

In one instance not yet reported, Jobs allegedly played hardball with a reluctant CEO. In mid-2007, he called Edward Colligan, then president and CEO of Palm, to propose “an arrangement between Palm and Apple by which neither company would hire the other’s employees,” Colligan testified in a sworn deposition. When he refused, citing the deal’s possible illegality, Jobs threatened to sue Palm for patent infringement. “I’m sure you realize the asymmetry in financial resources of our respective companies…,” he wrote Colligan in a followup email. “My advice is to take a look at your patent portfolio before you make a final decision here.”

The Valley’s hush-hush wage-control policies have been in play at least since the 1980s, soon after Jobs bought Lucasfilm’s “computer graphics division” and renamed it Pixar. As George Lucas later put it in a deposition, firms in the digital-filmmaking realm “could not get into a bidding war with other companies because we don’t have the margins for that sort of thing.” Lucas and Pixar’s then-president, Edward Catmull, made the following agreement, according to the lawsuit:

(1) not to cold call each other’s employees; (2) to notify each other when making an offer to an employee of the other company even if that employee applied for a job on his or her own initiative; and (3) that any offer would be “final” and would not be improved in response to a counter-offer by the employee’s current employer (whether Lucasfilm or Pixar).

George Lucas redtouchmedia/flickr

After its purchase by Disney in 2006, Pixar made the same “gentleman’s agreement” with Apple, according to unsealed emails from the lawsuit. (Last year, Pixar, Lucasfilm, and Intuit settled their part of the class-action lawsuit for an undisclosed sum in a deal that allows the affected employees to file anonymous claims.)

In its earlier anti-trust suit, the DOJ argued that the Valley’s no-poaching agreements were patently illegal—clear violations of the Sherman Antitrust Act’s ban on restraining interstate commerce. In 2011, without admitting fault or paying fines, Google, Apple, and four other tech firms settled with the DOJ and agreed to discontinue their anti-competitive behavior.

Representatives for Apple and Google declined to comment for this story, but Google argued at the time that its pacts hadn’t hurt workers. There’s “no evidence that our policy hindered hiring or affected wages,” a Google attorney wrote on the company’s public policy blog. But “we abandoned our ‘no cold calling’ policy in late 2009 once the Justice Department raised concerns, and are happy to continue with this approach as part of the settlement.”

Whether and how the pacts truly affected wages is at the heart of the ongoing suit, which is slated for trial May 27. The defendant firms insist that their employees’ salaries weren’t widely suppressed because they were based on a “pay for performance” model. That is, workers got raises based on their accomplishments, not on what their co-workers earned.

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"I Don’t Want to Create a Paper Trail": Inside the Secret Apple-Google Pact

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The Koch Brothers Left a Confidential Document at Their Last Donor Conference—Read It Here

Mother Jones

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There’s one main rule at the conservative donor conclaves held twice a year by Charles and David Koch at luxury resorts: What happens there stays there.

The billionaire industrialists and their political operatives strive to ensure the anonymity of the wealthy conservatives who fund their sprawling political operation—which funneled more than $400 million into the 2012 elections—and to keep their plans private. Attendees of these summits are warned that the seminars, where the Kochs and their allies hatch strategies for electing Republicans and advancing conservative initiatives on the state and national levels, are strictly confidential; they are cautioned to keep a close eye on their meeting notes and materials. But last week, following the Kochs’ first donor gathering of 2014, one attendee left behind a sensitive document at the Renaissance Esmeralda resort outside of Palm Springs, California, where the Kochs and their comrades had spent three days focused on winning the 2014 midterm elections and more. The document lists VIP donors—including John Schnatter, the founder of the Papa John’s pizza chain—who were scheduled for one-on-one meetings with representatives of the political, corporate, and philanthropic wings of Kochworld. The one-page document, provided to Mother Jones by a hotel guest who discovered it, offers a fascinating glimpse into the Kochs’ political machine and shows how closely intertwined it is with Koch Industries, their $115 billion conglomerate.

The more than 40 donors courted by the Kochs include hedge fund and private-equity billionaires, real estate tycoons, and executives of top corporations, including Jockey International and TRT Holdings, owner of Omni Hotels and Gold’s Gym. A number of them have never been identified as members of the Koch donor network, including Schnatter, one of the more prominent names on the list. An outspoken opponent of the Affordable Care Act, he is a longtime Republican donor who hosted a fundraiser for Mitt Romney’s presidential campaign. The document notes that the pizza mogul was scheduled to meet with Ryan Stowers, the director of higher education at the Charles G. Koch Foundation. (Schnatter did not respond to requests for comment.)

Another top conservative contributor on the list is TRT Holdings’ cofounder Robert Rowling, whose net worth is estimated at $4.9 billion. During the 2012 election, Rowling directed $3.5 million to American Crossroads, the super-PAC spearheaded by Karl Rove, and he cut a $100,000 check to the pro-Romney super-PAC Restore Our Future. According to the document, Rowling was scheduled to sit down with Charles Koch at the “Koch residence”—presumably a reference to the Wichita businessman’s vacation home at the Vintage Club, a short drive from the resort where the donor conference was held. Top Koch operatives were expected to participate in this session, including Kevin Gentry, the Koch brothers’ fundraising guru; Daniel Garza, the director of the Libre Initiative, a Koch-funded organization dedicated to Latino outreach; and Marc Short, who runs Freedom Partners, the centerpiece of the Kochs’ political network, which distributes donor funds to a large web of conservative nonprofit groups. (Rowling did not respond to requests for comment.)

Other heavy hitters slated for meetings with the Koch brothers or their representatives included Carl Berg, a Silicon Valley real estate tycoon worth $1.1 billion; Ken Griffin, who founded the hedge fund Citadel and clocks in at No. 103 on the Forbes 400 (net worth, $4.4 billion); John W. Childs, a top private-equity investor; and Fred Klipsch, the chairman of the headphone and speaker company Klipsch Group.

The meeting list illustrates the interwoven nature of the Koch brothers’ corporate, political, and philanthropic activities. The donor meetings featured various senior Koch Industries executives, including the company’s chief financial officer, Steve Feilmeier. He was scheduled to join Charles Koch for a sit down with Berg. Charles Koch’s 36-year-old son, Chase, the president of Koch Fertilizer, was also scheduled to take part in a meeting with a donor named George Gibbs. (Koch Industries spokesman Rob Tappan would not comment on the conference document, only confirming that company employees attend the donor summits. Freedom Partners spokesman James Davis said he was “uncertain” about the document and did not respond to further questions.)

At least half of the one-on-one sessions involved representatives of Americans for Prosperity, the political advocacy group founded by the Koch brothers and their top political adviser and strategist, Richard Fink, a Koch Industries executive vice president and board member. The AFP officials called to duty for these discussions included AFP’s president Tim Phillips, chief operating officer Luke Hilgemann, vice president for state operations Teresa Oelke, and vice president for development Chris Fink (Richard Fink’s son). The state directors for AFP’s Wisconsin, Michigan, Pennsylvania, and Florida chapters were also slated for tête-à-têtes during the Koch summit. (AFP spokesman Levi Russell declined to comment on the meeting document.)

In the past, Koch Industries has distanced itself from AFP and its political activities. The company has said the group is just one of “hundreds of organizations” that receive funding from the Kochs and that it operates “independently” of Koch Industries. But the document suggests a close collaboration between officials of Koch Industries, AFP, and Freedom Partners, whose staff and board are stacked with numerous current and former Koch Industries employees. Michael Lanzara and Jeff Noble, who transitioned over to Freedom Partners from Koch Companies Public Sector—the company’s legal, lobbying, and public affairs branch—were scheduled to meet with donors alongside AFP staffers. The Koch brothers and Richard Fink were also listed as taking part in some of these sessions. (Fink, a man of many hats within the Koch firmament, is also an AFP board member; David Koch chairs the board of the Americans for Prosperity Foundation.)

Heading into the midterm elections, AFP has emerged as one of the right’s most active and well-financed political outfits. In recent months, it has spent more than $20 million on ads clobbering congressional Democrats for supporting Obamacare. And the group is merely one piece of the Kochs’ massive political operation, which in size, scope, and fundraising prowess has come to resemble a political party in its own right. During the 2012 election cycle, in fact, the Koch network managed to raise as much as the Republican National Committee itself.

After the brothers and their allies failed to win the Senate or unseat Obama in 2012, David Koch told Forbes that this setback would do little to deter them: “We’re going to fight the battle as long as we breathe.” At the Palm Springs conference, as the left-behind-list of VIP meetings shows, the Kochs are lining up serious financial firepower for the political fights of 2014 and beyond.

Read the meeting list, along with a guide to the participants in them, below.

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Koch Donor Conference Meetings (PDF)

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DONORS

Carl Berg: Ranking No. 308 on the Forbes 400, Berg is a Silicon Valley real estate titan with an estimated fortune of $1.1 billion.

Ronnie Cameron: He runs agribusiness giant Mountaire Corporation. During a meeting of the Kochs’ donor network in 2011, Charles Koch recognized Cameron (and other donors) for donating at least $1 million to their cause.

Charles Chandler: Based in the Kochs’ hometown of Wichita, Kansas, Chandler is the CEO of Intrust Bank.

John Childs: He runs the Boston-based private equity firm J.W. Childs & Associates.

Jamie Coulter: Haling from Wichita, Coulter is the former CEO of the Lone Star Steakhouse and Saloon restaurant chain.

Bob and Steve Fettig: The Fettigs run the metal fabrication company Tankcraft, based in Darien, Wisconsin. Steve is the company’s CFO; Bob is CEO.

Richard and Leslie Gilliam: Richard founded Virginia-based coal mining company Cumberland Resources Corporation, which he sold to Massey Energy for nearly a billion dollars in 2010.

Ken Griffin: A major conservative donor, the Chicago-based businessman founded the hedge fund Citadel and is worth an estimated $4.4 billion.

John Griffin: He’s the founder of Blue Ridge Capital, a New York hedge fund.

Dick Haworth: He’s the chairman emeritus of Holland, Michigan-based office furniture company Haworth.

Richard “Ric” Kayne: He’s the founder and chairman of Los Angeles-based investment firm Kayne Anderson Capital Advisors.

Dan Kirby: He’s president of Sioux Falls, South Dakota-based Kirby Financial.

Fred Klipsch: He’s the chairman of Klipsch Group, a speaker and headphone manufacturer.

Frank Kozel: He’s the principal of Pittsburgh-based Keystone Energy Oil & Gas Inc.

Francis “Franc” Lee: He’s the president and CEO of Flowood, Mississippi-based lender First Tower, LLC.

Robert “Bob” Luddy: He’s president of CativeAire Systems Inc. in Raleigh, North Carolina.

Hugh Maclellan: He’s the executive chairman of Chattanooga, Tennessee’s Maclellan Foundation, which make grants to Christian causes.

Cecil O’Brate: He’s the CEO of Garden City, Kansas-based Palmer Manufacturing & Tank.

Verl Purdy: He’s the chairman and CEO of Charlotte, North Carolina-based AGDATA Inc.

Tom Rastin: He’s a director and vice chairman of the Mount Vernon, Ohio-based Ariel Foundation, started by his wife, Karen Buchwald Wright, the CEO of Ariel Corporation. Rastin is the company’s vice president of engineering, sales, and marketing.

George Records: A member of the Hoover Institution’s board of overseers, Records is the retired chairman of Oklahoma City’s Midland Group.

Robert Rowling: Ranking No. 93 on the Forbes 400 with an estimated fortune of $4.9 billion, Rowling is the cofounder of TRT Holdings, which owns Gold’s Gym and Omni Hotels.

John Schnatter: He’s the founder and CEO of Papa John’s International.

Tina and Craig Snider: They are the children of Ed Snider, a founding contributor of the Ayn Rand Institute and chairman of Comcast Spectacor, a sports and entertainment company that owns the Philadelphia Flyers.

Dian Stai: Based in Texas, Stai cofounded Owen Healthcare Inc. with her late husband. She’s a top conservative donor who gave $125,000 to the pro-Mitt Romney super-PAC Restore Our Future during the 2012 election cycle.

Jim Stephenson: He’s the president and CEO of Georgia-based Yancey Bros. Co., “which provides Caterpillar, AGCO, and Blue Bird Bus Co. products and services throughout the state of Georgia.” Stephenson is also an Americans for Prosperity board member.

Jim Von Ehr: He’s the CEO and founder of Richardson, Texas-based Zyvex Labs.

Debra Waller: Since 2001, she’s been the chairman and CEO of Jockey International Inc.

Lew Ward: He’s the founder of Oklahoma-based Ward Petroleum Corporation.

Dick Weiss: He’s the Core Equity senior portfolio manager at Wells Capital Management.

Karen Wright: She’s the founder and CEO of the Ariel Foundation, a private philanthropy group based in Mount Vernon, Ohio. She’s also CEO of the Ariel Corporation, a natural gas compression company.

*Mother Jones was unable to confirm the identities of some donors on the list, including Steve Clark, Paul Foster, George Gibbs, George Jenkins, Jerry Hayden, Kent McCarthy, Andrew Miller, Ted Saunders, Tom Smith, Jaime Snider, and Dean Williams.

“PLAYERS”

Charles Koch: He’s the chairman and CEO of Koch Industries.

David Koch: He’s Koch Industries’ executive vice president and a board member.

Michael Lanzara: A former director for special projects at Koch Companies Public Sector, Lanzara now works for Freedom Partners.

Steve Feilmeier: He’s chief financial officer and executive vice president of Koch Industries.

Kevin Gentry: A vice president at Koch Companies Public Sector, Gentry is the Koch brothers’ top fundraiser. He also serves on the board of Freedom Partners.

Jeff Noble: A former senior development associate at Koch Companies Public Sector, Noble currently works for Freedom Partners.

Tim Phillips: He’s the president of Americans for Prosperity, the political advocacy group founded by the Koch brothers and Richard Fink.

Chris Fink: He’s Americans for Prosperity’s vice president of development and the son of Richard Fink.

Teresa Oelke: She’s Americans for Prosperity’s vice president for state operations.

David Fladeboe: He’s the state director for Americans for Prosperity-Wisconsin.

Brett Hinkey: A former senior development associate at Koch Companies Public Sector, Hinkey now works for Freedom Partners.

Daniel Garza: He’s the executive director of the Libre Initiative, a Koch-funded nonprofit focused on Hispanic outreach.

Chase Koch: He’s Charles’ son and the president of Koch Fertilizer.

Richard Fink: He’s the chairman and CEO of Koch Companies Public Sector and a board member of Koch Industries. A founder of the Mercatus Center and Americans for Prosperity, Fink is the Koch’ top strategist and political adviser.

Ryan Stowers: He’s the director for higher education at the Charles G. Koch Foundation.

Brian Hooks: He’s the executive director and chief operating officer of the Mercatus Center.

Marc Short: Short heads Freedom Partners, the centerpiece of the Koch brothers’ political operation. Short is a former chief of staff of the House Republican Conference.

Scott Hagerstrom: He’s the state director of Americans for Prosperity-Michigan.

Jennifer Stefano: She’s the state director for Americans for Prosperity-Pennsylvania.

Tommy Von der Heydt: He’s a former regional development officer for Americans for Prosperity.

Corey Lewandowski: He’s the East Coast regional director for Americans for Prosperity.

Slade O’Brien: He’s state director of Americans for Prosperity-Florida.

John Hardin: He’s a program manager at the Charles G. Koch Foundation.

Michael Palmer: He is the president of i360, which bills itself as the “leading data and technology resource for the pro-free-market political and advocacy community.” Palmer’s firm has worked closely with the Kochs’ voter microtargeting operation, Themis.

Derek Johnson: He’s a program officer for higher education at the Charles G. Koch Foundation.

Nathan Nascimento: He’s an employee of Freedom Partners.

James Davis: He’s the vice president of strategic communications at Freedom Partners.

Luke Hilgemann: He’s Americans for Prosperity’s chief operating officer.

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The Koch Brothers Left a Confidential Document at Their Last Donor Conference—Read It Here

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Chevron CEO admits fracking raises “legitimate” safety concerns

Chevron CEO admits fracking raises “legitimate” safety concerns

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Is Chevron more clued in to the dangers of fracking than the federal government?

It would seem so. The company’s CEO said this week that the industry needs to do a better job of resolving concerns about the safety of the practice. From Bloomberg:

Energy producers must deal with the “legitimate concerns” that gas development associated with hydraulic fracturing is unsafe by adopting tougher standards, Chevron Corp. Chief Executive Officer John Watson said. …

“Public expectations are very high, and there’s no reason they shouldn’t be high,” Watson said. “There are some risks out there. Some risks are overstated. But we have to engage them either way.”

Kurt Glaubitz, a Chevron spokesman, said Watson was referring to concerns with truck traffic and the disposal of hazardous wastewater from the fracking process as areas of concern the industry needs to confront.

Those are stronger words than we’ve heard from the Obama administration, which is taking a less-than-aggressive approach to regulating the fracking industry — much to the anger of environmentalists.

Still, the comments amount to little more than rhetoric. Chevron is being sued by neighbors in Pennsylvania over pollution and noise from its gas fracking wells. And Chevron’s overall safety record is appalling. A string of accidents, including an explosion at a San Francisco Bay Area refinery last year, recently cost Watson some of his annual bonus. (But don’t worry about him, he still took home more than $30 million last year.)

John Upton is a science fan and green news boffin who tweets, posts articles to Facebook, and blogs about ecology. He welcomes reader questions, tips, and incoherent rants: johnupton@gmail.com.

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Chevron CEO admits fracking raises “legitimate” safety concerns

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