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Saturday, April 02, 2005


Western Pennsylvania Connection, Halliburton, Bush Family, Asbestos, Tort Reform...

George W. Bush and his corporate friends have invented another new "crisis." If you want a better understanding of the issue (tort reform), think of the recent tobacco industry litigation.

The tobacco industry was forced to pay billions of dollars in damages. In short, this important litigation allowed trial attorneys to proved that a corrupt tobacco industry deliberately concealed information on the known dangers of cigarette smoking and generations of American children became victims.

Of course the president's friends, corporate lobbyists, don't want to talk about lung cancer, birth defects and the like, when they discuss frivolous lawsuits. They refer to a few real or invented examples of ridiculous lawsuits. They suggest to the public that these few examples of ridiculous lawsuits drive up the cost of insurance. And, if you listen to the president, hundreds of firms face the imminent threat of bankruptcy at the hands of a predatory trial bar with the economic calamities that inevitably result: lost jobs, a depleted source of settlements and destruction of the retirement pensions of tens of thousands of employees.

Corporate lobbyists want to create a new set of barriers designed to keep victims from ever getting their day in court. They focus on "trial lawyers" because it sounds better to beat up on trial lawyers than the innocent people who have been injured or killed because of corporate misconduct. That is, they want to make it more difficult to hire a lawyer to go up against a big corporation. They purposed a limit to the fees that trial lawyers can collect -- even when the attorney wins a case for his client. And, they want to make it easier to fine lawyers for unsuccessful suits.

So! What really is the story with George W. Bush and tort reform?

For the answer one should consider the thousands of truly impaired asbestos victims that have been deprived just compensation by Harbison-Walker Refractories, Dresser, and/or Halliburton. Even the Republican Congress has come on board with purposed legislation to replace the current litigation system (establishment of an asbestos fund). The trust fund model would set up medical criteria for determining eligibility, as well as compensation based upon impairment. In short, asbestos claims would be theoretically removed from the tort system and become ineligible for compensation from other sources of funding (such as the U.S. Treasury).

It all started in 1865, then known as the Fire Brick company, a Pittsburgh-Based Harbison-Walker Refractories Company was formed for the purpose of manufacturing and selling refractory products. Asbestos, a fire-resistant material, was a key ingredient of Harbison-Walker manufacturing products called refractories used to line industrial blasts furnaces. The dusty fiber-filled products, with names such as Micracrete 7, Harbison-Walker Lightweight Castable 10 and Chromerpak G, contained as much as one third asbestos.

Workers, many of which were my dad's older relatives, made little money mixing the products with water and spraying it in furnaces. They unknowingly put their health at risk trying to pay for food, rent, transportation, and other necessities. Asbestos causes mesthelioma, a rare cancer, and can lead to lung cancer and asbestosis (a debilitating lung disease). My dad, now deceased, previously explained how the large asbestos dust clouds were spawned when the furnances that only lasted a few months (because of the intense heat) were broken down.

My dad was a former newspaper editor, after retiring from journalism, he took a mundane job with Harbison-Walker, photocopying documents. Because of his age, he was eventually forced out of work, given a $35 monthly pension, but no health benefits. I should also mention that I received a $250 Harbison-Walker college scholarship.

Nonetheless, as many of you probably are aware, Harbison-Walker documents did show that the company's safety officer began writing memos in 1962 on the hazards of asbestos and continued to do so after Dresser acquired the company in 1967. In particular, Dresser's Harbison-Walker Division received warnings from safety officers and in 1972, was asked by the federal occupational safety and health administration to add a warning: "Harbison-Walker has been acutely aware of the asbestos problem for years." Additionally, a document from 1976 specifically noted that Harbison-Walker made $10 million a year supplying asbestos in direct-bonded brick for industrial furnances, the only company carrying the product with asbestos.

I can still remember my weekly visits to my dad's One Gateway Center office, departing the elevator, and my dad pointing to photographs of Prescott Bush (President George W. Bush's grandfather and Harbison-Walker board member for decades until he became a U.S. Senator -- by 1941 Prescott still held 1,900 shares of Dresser stock), and the first George H.W. Bush (President George W. Bush's great grandfather's first job was on the Dresser payroll, i.e., when Dresser went-public in the 1920's, it turned to W.A. Harriman & Co. whose president was George H.W. Bush).

My dad often explained to me that President George W. Bush's dad (George H.W. Bush a former U.S President) was once being groomed to run Dresser the company that his father and grandfather had reshaped decades earlier, but opted for intelligence roles. My dad suggested George H.W. Bush's connection to Cuban exiles, explaining the close proximately of the Zapata oil platform to Cuba and the naming of boats for the "Bay of Pigs" invasion -- notably the "Barbara" (his wife's name). He even told the story of H. Neil Mallon, a Dresser executive selected by Prescott Bush to be president of company. Mr. Mallon was so close to former president George H.W. Bush, that he has been described as a "surrogate uncle and father-confessor." The former U.S. President named one of his son's (Neil Mallon Bush) after him.

In 1967, the Western Pennsylvania company merged with others into Dresser, in an attempt to shelter itself from possible asbestos liability/litigation, Harbison-Walker became an unincorporated operating division. Note: Please See my earlier post (February 16, 2005 -- Kaplan, Inc. Open Letter) that provides detail of how the Washington Post Company (WPO) and/or Kaplan, Inc. (wholly owned subsidiary), used the "unincorporated division" defense as an attempt to avoid constitutional claims, absentee student issues (alleged inflated enrollment). The Kaplan case demonstrates the Bush administration's effort to eliminate the "50 percent rule" that governs student financial aid eligibility and is designed to prevent corruption (inflated enrollment, diploma mills, etc.). The Bush administration wants to change the Higher Education Act (eliminate the 50 percent rule) for the direct benefit of for-profit education lobbyists.

In 1992, pursuant to a distribution agreement, the assets comprising the Harbison Division were sold to Indresco, Inc., a wholly owned subsidiary of Dresser, in exchange for Indresco's assumption of certain specified liabilities of Dresser. Shortly thereafter, Dresser distributed the common stock of Indresco to its shareholders, leaving Indresco as a stand-alone company. Indresco eventually changed its name to Harbison-Walker Refractories Company. That is, Dresser executives spun off Harbison-Walker into a separate company, and the new entity indemnified Dresser from asbestos claims filed after the spinoff. The companies have since directed all sick workers to sue the new Harbison-Walker Company, knowing it would collaspe and file bankruptcy.

And, Dresser and Halliburton have since merged when vice president Dick Cheney was the chairman of the board and held a $45.5 million stake as Hilliburton's biggest individual stockholder.

Hilliburton accounting practices have been questioned in the past, and it also faced inquiry regarding suspect payments involving officials in Iran, Nigeria and Kuwait. Its subsidiary companies, using the same address as the parent company, were also still doing business in places such as Iran. The company has also faced scrutiny involving alleged overcharging the defense department for gasoline and army mess halls in Iraq. Investigations appear to reflect Hilliburton's interests in overseas activities. Seventy percent of its annual $13 billion business is conducted overseas in 100 countries. But, it's the $9 billion in Iraq-related work that intensified the glare of the public spotlight on the company. In short, it has built a worldwide business, centered on providing services to support U.S. troops in battle. (Kuwait, Iraq, Afghanistan, and Kosovo).

Erie Palmer Halliburton pawned his wife's wedding ring and founded the Houston, Texas company in 1919. Starting at first as an oil drilling services company, it had sites in Louisiana, Arkansas and Oklahoma. Soon it would expand globally with a stead volume of its business linked to the federal government. In 1963, Halliburton acquired the Brown and Root Company. Political connections involving Brown and Root can be traced as far back as the late 1930's when its founders George and Herman Brown would send cash-filled envelopes to then-congressman Lyndon B. Johnson, who distributed them to other members of Congress as campaign contributions. President Johnson steered all sorts of federal projects to the firm in exchange for millions of dollars in political contributions. Brown and Root would become LBJ's most important political benefactor and played a key role throughout his political career.

Prescott Bush (George W. Bush's grandfather) was a partner of the Brown Brothers. His wife's father George H. Walker, also worked for them. What is interesting is the money Prescott Bush made off of Nazi Germany in the years leading up to World War II. Both Prescott and his father-in-law financed Hitler before and during the war through their Union Banking Corporation.

In conclusion, George W. Bush signed legislation that would make class-action suits seeking $5 million or more, heard in state courts, only if the primary defendant and more than one-third of the plaintiffs are from the same state. But, if fewer than one-third of the plaintiffs are from the same state as the primary defendant, and more than $5 million is at issue, than the case would go back to federal court. The clear message to the nation: The rights of large corporations that have taken advantage of seniors, low-wage workers, and local communities are more important than the rights of average American citizens. Mr. Bush's goal is to protect corporate interests, not to protect the interests of the small business with a hardware store on Main Street. His interest is the corporate conglomerate that does not pay any taxes and gets million in taxpayer subsidies, and bribes our politicians yearly. He has returned our country to the days of industrialism where the rights of business trumps the welfare of the individual.


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