5 U.S. Businesses That Ought to Be Ashamed of Themselves

Goldman Sachs London officeWhen a big company gains enough momentum that its direction becomes self-sustaining, its influence can ripple through society with a bevy of positive consequences -- like the creation of jobs, the spread of ideas, and a general improvement in living standards.

But capitalism -- like any other -ism -- is far from a perfect system. Along with a host of American companies that we should view with pride, there are a number that have created situations we think are downright evil. For exploitative behaviors that harm customers, employees, shareholders and the general public, these companies (and one whole industry) have earned their seats on the corporate netherworld's board of shame.

5 U.S. Businesses That Ought to Be Ashamed of Themselves
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5 U.S. Businesses That Ought to Be Ashamed of Themselves

Wal-Mart (WMT)
Those being exploited: employees, general public

What's the big deal?: It's no secret that Wal-Mart has been the ire of organized labor for years. The company's anti-union stamce, and its salary and benefits programs for employees pales in comparison to those offered at rivals like Costco. In addition, the company has been blamed for the commodification of small-town America. Mom-and-pop stores, once the backbone of rural life, have been unable to compete with the price and selection Wal-Mart has to offer.

But that alone isn't why Wal-Mart landed on this list. A recent New York Times story shows that the company has been using bribes to rapidly expand its footprint in Mexico. The country is now home to roughly 20% of Wal-Mart's stores[BS3]. If that wasn't bad enough, it seems as though Wal-Mart officials at the highest level knew about this scheme years ago, but essentially covered it up and swept it under the rug. That's the exact opposite of corporate responsibility.

Goldman Sachs (GS)

Those being exploited: customers

What's the big deal? Let's forget about the recent rant published by former Goldman employee Greg Smith. Instead, let's focus on the fact that a Senate subcommittee singled out the company as representative of the corruption and conflicts of interest that pervaded Wall Street -- and that helped accelerate the Great Recession.

Now, many argue -- with merit -- that every trade is based on different opinions about where investments will head in the future, and proprietary information is often critical to investing success. But this was indicative of a larger problem with the company.

None may serve as a more telling tale than the company's 2010 memo on ethics. It covered all the usuals, like: "Each employee and director should endeavor to deal fairly with the firm's clients." But as fellow Motley Fool writer Morgan Housel pointed out, the document ended with an ominous: "From time to time, the firm may waive certain provisions of this Code." As Morgan suggests, it's crystal clear that ethics are only used when convenient for the company.

Cigarette industry
Those being exploited: customers

What's the big deal? No, cigarettes shouldn't be outlawed because they're dangerous. Making them illegal would set this country on a slippery slope that could lead to the elimination of anything from liquor companies to fast-food chains. Nor should we shy away from holding customers responsible for the consequences of their decisions. That's not why the producers of cancer sticks are included here.

Instead, the tobacco industry deserves a spot on this list for what Frontline called its "intentional deception" of the American public over the past four decades. As Frontline reported, CEOs for seven of the country's biggest cigarette makers went before Congress in 1994 and testified they didn't believe tobacco use was addictive. But internal corporate documents show that the companies had evidence as far back as the 1970s that their products were both addictive and harmful. It's hard to find such clear-cut cases of brazen lying to the public at such high corporate levels.

Chesapeake Energy (CHK)
Those being exploited: shareholders

What's the big deal? When it comes to CEOs with dubious track records, Chesapeake Energy's Aubrey McClendon is in a class of his own. Just this past week, it was revealed that McClendon had secured over $1.1 billion in loans to participate in a program that allowed him to buy personal stakes in his company's wells. Several market pundits are openly questioning whether or not that creates a conflict between McClendon's and shareholders' long-term interests in the company.

But such dealings are old hat for the CEO. In 2007, he owned 5.7% of the company, but margin loans gone bad later forced him to sell almost his entire stake. In 2008, McClendon received an enormous compensation package of $112 million; later that year, the company spent $12 million to buy historical maps from McClendon. It seems clear to me that shareholders are getting the shaft from this company.

Monsanto (MON)
Those being exploited: customers, general public

What's the big deal?: When a team of professionals from MIT and Columbia were recently asked to come up with a simple way to improve the health of Americans, they recommended a diversified regional food economy.

Of course, we all have some level of choice over our diets, but as long as we allow Monsanto to dictate to farmers what kind of seeds can be used, our available choices will be limited. As of 2008, Monsanto had between a 20% and 40% market share in worldwide seeds for corn, soybeans, tomatoes, and onions -- to name a few.

And even if farmers don't use Monsanto seeds or chemicals, they can still suffer when weed-killers drift onto their productive land. The company has its boots not only on farmers' necks, but on those of consumers as well.

Think the list is missing a few candidates -- or that some of these are being included unfairly? Sound off below with your thoughts.


Think the list is missing a few candidates -- or that some of these are being included unfairly? Sound off below with your thoughts.

Motley Fool contributor Brian Stoffel does not own shares of any companies mentioned in this story. You can follow him on Twitter, where he goes by TMFStoffel. The Motley Fool owns shares of Wal-Mart Stores. Motley Fool newsletter services have recommended buying shares of Wal-Mart Stores, Goldman Sachs and Chesapeake Energy, creating a modified stock repair against synthetic long position in Monsanto and a diagonal call position in Wal-Mart Stores.

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