While we’d like to think that all companies follow the law and conduct business ethically, the reality is, this is not always the case. While President Taft helped curb corruption in the early 1900s, having initiated 80 antitrust lawsuits, there is still more to be done. That being said, we’ve compiled a list of some of the most corrupt businesses in the US. Read on to find out what they are (and why you need to conduct a Kentucky Secretary of State business search).
1. Anheuser-Busch: ALEC Member and Supporter of Anti- Worker and Union Initiatives
Anheauser-Busch makes the list because of its membership with the American Legislative Exchange Council, otherwise known as ALEC. As reported by Upworthy, on paper ALEC is a nonprofit organization in charge of promoting free-market capitalism. Below the lines though, ALEC spurs on congress to pass pro-corporate laws. Upworthy goes on to state that Annheiser-Busch not only is an ALEC member but also has encouraged and supported initiatives that were anti-worker and anti-union.
2. Volkswagen: Cheating EPA Tests
While Volkswagen is a German company, being that it has factories in the US, it is on the list. As reported by Fortune, Volkswagen illegally installed software in several (by several, we mean millions) of its cars to bypass EPA emission tests. In other words, it cheated the tests, making it appear as if the Volkswagen cars were more environmentally friendly than they really were—unbeknownst to the drivers who purchased their cars.
Once the scandal was found out, Volkswagen car owners were financially compensated, not to mention that Volkswagen lost $20 billion in capital and suffered a serious reputation loss, which may only mean more of a decline in the short future.
3. Wells Fargo: Employees Creating Fake Accounts in Customers’ Names
According to Fortune, Wells Fargo executives turned on the pressure for employees to hit specific high sales quotes. So much so that many turned to using illegal methods. In other words, creating fake accounts. Why this company makes the list comes down to who the fake accounts were made out to: real customers.
While some employees did (less ethically?) close the accounts once created, some forgot. This lead to several real Wells Fargo customers receiving fees and a decline in their credit scores…again, repercussions for accounts they did not know they had. Once the scandal came to light, Wells Fargo gave back $2.6 million in fees and paid out $1.86 million in fines to the government.
4. Goldman Sachs: Employee Illegally Gave Information to Client
The American investment company had to pay the steep price of $50 million for not overseeing an employee who supposedly gave a client confidential information. As reported by Inc., the employee used his previous employment history and contacts from working at the Federal Reserve Bank to get the confidential information. While this may not make Goldman Sachs the most corrupt business in the US, $50 million is a steep slap on the wrist and you can bet it paid seriously in reputational losses.
5. Hampton Creek: Instructing Employees to Buy Its Product
Food startup, Hampton Creek created its eggless mayonnaise, Just Mayo. According to Business Insider, the company instructed its employees to purchase Just Mayo in grocery stores over the course of 2014 to 2015, resulting in a $77,000 loss once found out. Business Insider reports that the product buyback was done to impress prospective investors. A federal investigation probably wasn’t what Hampton Creek was looking for.
6. Worldcam: Shifty Accounting
As reported by CNN Money, back in the early 2000s, Worldcam (US long-distance phone company) executives used shady accounting methods, claiming assets were in the $11 billions. Eventually, this was revealed to not be true. Worldcam went into bankruptcy.
7. Enron: Largest Class Action Suit
According to Forbes, US energy company, Enron was one of the heavy hitters in the US. That is until it was revealed that the company had participated in accounting fraud. While Worldcam’s accounting fraud may look like (and is) a huge step in the wrong direction, Enron made it look like Worldcam had only taken a hop and a skip. The energy company caused the demise of Aruthur Andersen, not to mention leading to the creation of the Sarbanes-Oxley Act. And that’s not all. As Forbes goes on to state, it decimated $78 billion in stock market value.
What makes Enron one of the (if not the) most corrupt business in the US was its record-shattering class action suit against it. The dollar amount was around a whopping $7.1 billion. Needless to say, that several higher-ups are seeing the inside of a jail cell. And Enron, for the large energy corporation that it was, is now no more.
Bonus: KBR Inc.: Bribing Nigerian Officials
Engineering firm, Kellogg Brown & Root, perhaps takes the crown for scandals. According to Investopedia, the company bribed Nigerian officials millions of dollars for a natural gas contract. Investopedia goes on to report that the company paid the SEC $177 million and $402 million in fines, on top of pleading guilty. As Investopedia states, this goes down as one of the biggest bribe cases, not to mention a hallmark example of business corruption’s finest.
Final Thoughts: The Future of Business Corruption
Despite it seeming like corruption in business is rampant, you may be surprised (and relieved) to know that this is not the case. According to the New York Times, Center of Politics director at University of Virginia, Larry J. Sabato states that corruption in business was actually more commonplace in the 1800s and 1900s compared to today. Who knows? —Perhaps this trend will continue? What do you think? Agree or disagree, let us know by leaving a comment in the comments section below.
Why Conduct a Kentucky Secretary of State Business Search
If you’re thinking of starting a business in Kentucky, this is a good place to start. Or looking for a business in NJ, try this New Jersey entity search. What about a start-up in Cali? Conduct a California business name availability search. Sec States, an easy-to-use database of secretary of state pages, makes navigation simple and easy to find what you’re looking for, no matter what state you intend to do business in.