Jack Welch, former GE CEO, Imagination At Work

By David Roknich

The creative accounting of Welch's reign had lasting effects.For 20 years, Jack Welch stood at the helm of one of our great corporations. After a rapid rise from within the ranks, he was Chief Executive Officer of General Electric from 1981 to 2001. Thanks to agressive warmongering and inflated government contracts, GE saw great growth and expansion under Mr. Welch's leadership. Today he returns to the limelight to bite the hand that feeds him, as he attacks the accuracy of current employment figures. According to the US Bureau of Labor Statistics,"The unemployment rate decreased to 7.8 percent in September, and total nonfarm payroll employment rose by 114,000." Jack Welch asserts that these figures are the result of a vast conspiracy to make President Obama look good, but even Bloomberg News now publicly questions the reality contact of former CEO Welch.

see - http://www.bloomberg.com/news/2012-10-05/welch-conspiracy-theory-on-jobs-data-not-tied-to-reality.html
 

Welch's company was a leader in providing materials for nuclear weapons, and enjoyed profitable deals with friends and foes of the US abroad. They were so prolific that they became the favorite target of corporate boycotts during the 80s and 90s. In 1986, they aquired RCA, the company that owned NBC, and with the confidence of media ownership they marched forward to blaze a trail of previously unimaginable pillage and plunder.

 Imagination At Work

(source: crocodyl.org/wiki/general_electric)

On July 22, 1992, GE "... [pled] guilty to diverting some $26.5 million from the U.S. foreign military aid program used to finance General Electric's sale of F-16 jet engines and support equipment to Israel ." (United States v General Electric, Docket #90-CV-792, US DC SD OH, Cincinnati) (See: Defense Contracting: Contractor Claims for Legal Costs Associated with Stockholder Lawsuits, GAO/NSIAD-95-66 (July 1995). GE agreed to pay a $69 million fine under the Foreign Corrupt Practices Act to the U.S. government — one of the largest defense contracting fines ever. The company said in a statement that it took responsibility for the actions of a former marketing employee who, along with an Israeli Air Force General, diverted Pentagon funds to their own bank accounts and to fund Israeli military programs not authorized by the United States.

On February 3, 1990 GE was convicted in U.S. District Court in Philadelphia of defrauding the government out of $10 million for a battlefield computer system. GE pled guilty on May 19, 1985 to charges of fraud and falsifying 108 claims on a missile contract. GE was convicted of defrauding the Air Force out of $800,000 on the Minuteman Missile Project.

GE’s civil and criminal transgressions stemming from the Israeli military program are by no means isolated. GE is a repeat offender when it comes to Defense Department fraud. The company has repeatedly violated the False Claims Act — a measure originally proposed by Lincoln to protect federal coffers. When the Project on Government Oversight surveyed defense contractors, it found that General Electric was responsible for 15 instances of fraudulent activity in just a four year period (1990-1994) — more than any other defense contractor.

On August 10, 1995 the U.S. Department of Justice announced (# 95-438) that GE would pay $7.1 million to settle a contract fraud suit initiated by Ian Johnson, an engineer at GE's Aircraft Engines plant in Evendale, Ohio in 1993. Johnson had alleged that GE "sold several thousand jet engines to the military that did not comply with military electrical bonding and electromagnetic interference testing requirements," according to DoJ. (Subsequently, the Air Force tested the engines and found them to be safe.) Johnson filed the suit on behalf of the United States under the qui tam provisions of the False Claims Act.

On January 10, 1997, the U.S. Department of Justice announced (# 97-012) that GE would pay $950,000 to settle allegations that it fraudulently to have had conducted certain test procedures on circuit boards for hundreds of aircraft engine controls when in fact the tests were not conducted.

GE paid $5.87 million (along with Martin Marietta) to settle a qui tam suit associated with improper sales of radar systems to Egypt.

GE paid fines between 1990 and 1994 ranging from a $20,000 criminal fine to a $24.6 million civil fine for a variety of defense contracting frauds, including: misrepresentation, money laundering, defective pricing (2 incidents), cost mischarging (3 incidents), false claims, product substitution, conspiracy/conversion of classified documents, procurement fraud and mail fraud.

 

Much to Welch's credit, the skullduggery of GE accounting practices was not fully appreciated until August of 2009, and the corporation rolled over as quickly as possible - to pay a large fine while pleading nolo contendre in order to avoid prosecution for fraud. In previous years, they would not have had the opportunity to dodge a criminal trial.

see: http://sec.gov/litigation/litreleases/2009/lr21166.htm

The practice of"deferred prosecution" was an innovation of the Bush administration that helped great corporations prosper at our expense. When caught with their hands in the cookie jar, all they had to do was sign an agreement to future compliance to avoid criminal prosecution. General Electric is one company that benefits from the continuation of this policy by the current DOJ.

In recent years., GE has been so successful with creative accounting that they don't even have to pay taxes anymore.

see: http://www.theblaze.com/stories/pay-your-fair-share-protesters-heckle-ge-ceo-obama-admin-jobs-czar/

And they are modest, since they don't brag about awards they've won. General Electric makes effective use of the 10 worst corporate habits usually associated with Enron. In fact Enron placed second GE in this contest: http://www.faireconomy.org/press_room/2002/report_harmful_enron_practices_widespread

Jack Welch should be thankful, while he laughs on his way to the collect his dividend checks, thankful to Barack Obama and Eric Holder for not taking a serious bite out of the Corporation that continues to provide him with an enviable lifestyle, but instead he chooses to bite the hand that feeds him.

 

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