An investigative series by the New York Times and a performance piece by Mike Daisey featured on This American Life have put the spotlight on Foxconn, the Taiwanese company whose massive Chinese factories manufacture some of the world's most popular consumer electronics.

As well as working with companies like Dell, Motorola, Nokia and Hewlett-Packard, Foxconn assembles popular Apple products like the iPhone and iPad.

Here's a quick look at what we know about Foxconn. (The company disputes workers' accounts of abusive conditions. In a 2010 company report, Foxconn said it promotes "employee respect, an atmosphere of trust, and personal dignity.")

Working for Foxconn

1.2 million: number of workers employed by Foxconn in China, according to the New York Times.

40: Estimated percent of the world's consumer electronics manufactured by Foxconn.

7: seconds it takes Foxconn's workers to complete a single step of their work, according to a survey cited by the New York Times.

12: Hours in a typical work shift, according to interviews with Foxconn employees.

83.2: Average hours of overtime worked each month, according to a 2010 survey of Foxconn employee.

13: age of a Foxconn employee Mike Daisey interviewed outside the gates of a Foxconn plant in Shenzen.

91: cases of underage labor found by Apple's audits of its suppliers in 2010, the year Daisey visited China.

3,000: number of workers Foxconn could hire overnight, according to Apple's former worldwide supply demand manager.

10-20: percent estimated monthly turnover in Foxconn's workforce.

$7,500: amount founder Terry Gou used to start the anchor company of Foxconn Technology Group in 1974, according to the company website.

$5.7 billion: Terry Gou's estimated net worth as of March 2011.

Living Conditions

230,000: number of workers at "Foxconn City" in Shenzen, according to the New York Times.

13: tons of rice prepared each day at the central kitchen at Foxconn City.

$0.65: meal allowance for dinner at the Foxconn City canteen in 2010.

2: number of free swimming pools there, according to The Telegraph, which noted that the pools "are said to be quite dirty."

70,000: number of workers at Foxconn's Chengdu plant who live in company dorms, according to the New York Times.

20: number of employees sometimes packed into a three-room apartment.

200: Reported number of police officers who responded to a Foxconn dormitory riot.

Deaths

17: Number of reported suicides of Foxconn workers in China between 2007 and February 2011, according to Wired. Eleven workers died after jumping off buildings in the Foxconn Campus in Shenzen, which were then draped with preventive netting. (Wired noted that the rate actually seems to be below China's national averages.)

70: number of psychiatrists employed by Foxconn to prevent suicides, according to a 2010 announcement by CEO Terry Gou.

100: Estimated number of employees at a Foxconn factory in Wuhan who stood on the roof of a factory building this month to protest working conditions and wages. Several threatened to commit suicide, according to the New York Times.

$450: monthly salary a worker involved in that protest said employees had been promised for moving from the Foxconn campus in Shenzen to one in Wuhan.

34: continuous hours a Foxconn employee worked in 2010 before he collapsed and died, according to media reports.

4: workers killed last year by an explosion at a Foxconn factory in Chengdu, China that assembles iPads.

$22: approximate daily salary earned by Lai Xiaodong, a 22-year-old college graduate, working at a Foxconn factory in Chengdu, China, according to the New York Times.

$150,000: approximate amount the company wired Lai's family after he was killed in the aluminum dust explosion.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

What do you do if in the stress of crisis you make the right decision, but execute it in a way that discounts the human impact -- which only makes the crisis worse?

Joe Paterno in 2006.

If you are a trustee of Pennsylvania State University, you discover that the window of mitigating flawed execution can close well before you are ready.

Although the child sex abuse crisis at Penn State erupted in early November 2011, and some steps have been taken to try and restore trust, a series of blunders persisted into January 2012 that continued to discount the emotional impact of crisis.

On January 20, 2012, Penn State trustees met and elected new leadership – the officers who had fired iconic football coach Joe Paterno by telephone were replaced. The trustees announced a series of actions that begin to address some of the very human issues the crisis has been about, including paying for victims abuse-related health costs, and employee training on reporting abuse.

Whether the trustees’ new chair Karen Peez, vice chairman of the Bank of New York Mellon, would have tried to enlist Paterno’s support in healing the wound of those anguished by his firing became a moot point. On January 22, 2012, Paterno -- considered the “winningest” college coach in football history -- died of lung cancer that was discovered after he was fired. The wound for students and alumni only deepened.

Going forward, re-uniting the Penn State community and rebuilding trust needs to be less about brand building (“We are Penn State”) and more focused on connecting, particularly with student and alumni stakeholders, around the concept of the university as a learning environment – admitting mistakes and what specifically should have been done differently. Statements like “All of us, including the board, with the wisdom of hindsight could have done things differently,” said by Peez at the trustee meeting January 20, miss the point.

There is a rich opportunity for real dialogue in small and large groups and in university-wide forums about what went wrong, beginning with what is obvious now, without waiting for the results of the five investigations underway (federal, state and internal) including:

-- Students and alumni already know that firing anyone by telephone is totally disrespectful; doing it to someone who was the face of Penn State for 46 years, with whom most had a greater emotional connection than with any of Penn State’s presidents, caused outrage. How the trustees own the mistake non- defensively (as opposed to their justification given January 18, 2011) is a teachable moment and a stepping stone to trust.

Penn State Athletics Web Site - January 23, 2012

-- While respecting all Paterno’s accomplishments, part of the teachable moment is his 2002 leadership failure. He didn’t follow up on information he passed on about a young boy potentially being sexually molested. In his only interview following his firing, it was clear Paterno hadn’t come to terms with the impact of what he failed to do. Understanding that even iconic leaders make mistakes and how mistakes can be avoided is an important discussion topic for students.

-- Saying your administration will stand for transparency and communication to move the Penn State community forward raises expectations you will deliver on it. President Rodney Erickson (promoted from provost to president after Graham Spanier was fired with Paterno) hosted “Town Hall” meetings attended by over 1,000 alumni earlier this month. However, their value was severely compromised when, to the irritation of alumni, he deferred the bulk of their questions, which were about Paterno’s firing, to the trustees who weren’t represented at the meeting. One alumnus commented,  "the guy that’s taking the bullets is not the guy that we need to hear from. It’s the trustees. It speaks volumes that he’s up there and they’re not."

To pass through the crisis successfully, it will be essential for the trustees, the administration, students, faculty, staff, and alumni to own the crisis without PR equivocation. During the “Town Hall” meetings, Erickson told alumni that it “grieves”  him when people talk about "the Penn State scandal." He said it should be called, “the Sandusky scandal,” after the former PSU football coach now facing more than 50 charges of child sex abuse.

Like it or not, Penn State has become another learning lab for crisis and its aftermath. It may be a year or more before the findings of all the investigations on what went wrong are concluded. The criminal trials – Sandusky’s for sexually molesting minors and two former Penn State administrators’ for perjury and failure to report child sex abuse - haven’t started yet.

In the meantime, Penn State has the opportunity to wrestle with important questions that can define whether it will become stronger because of the crisis: questions like what priority to place on the human impact (emotional intelligence and how respect and compassion play out); what is meant and expected by ethical behavior and compliance; what was there about the culture that made the crisis possible;  how to measure the football culture’s impact on the rest of the university; and how to tolerate discomfort with unflattering headlines while the focus is on trust building, not brand building.

Photos: Joe Paterno on sidelines in 2006 via Wikimedia Commons; Paterno on GoPSUsports.com.

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a thought leader on building leadership, trust, and reputation and writes The Week in Ethics.

The private equity practice of buying out a firm and restructuring its operations — often involving job layoffs at the target company — has been criticized for its negative effects on human lives and communities but also praised for improving businesses and making them more efficient and profitable. Past research has tried to weigh and assess these dynamics, but it has often been limited by such factors as incomplete data sets and a failure to compare employment changes at comparable firms during that same period, according to researchers at the University of Chicago Booth School of Business, Harvard Business School, the University of Maryland and the U.S. Census Bureau.

Their 2011 study for the National Bureau of Economic Research, “Private Equity and Employment,” uses comprehensive data from the U.S. Census Bureau’s Longitudinal Business Database between 1980 to 2005 to assess the average outcomes of private equity buyouts. The researchers study some 3,200 U.S. companies bought by private equity firms and the effects on 150,000 “establishments” — “specific factories, offices, retail outlets and other distinct physical locations where business takes place.”

The study’s findings include:

-- Relative to comparable businesses in the same industry — and with similar profiles in terms of size, age, and prior growth — establishments bought by a private equity firm will see, on average, a decline of “about 3% of initial employment over two years and 6% over five years.” Moreover, “gross job destruction at these target establishments outpaces destruction at controls [comparable industry businesses] by a cumulative 10 percentage points over five years post buyout.” This means that turnover of workers is indeed accelerated by private equity buyouts.

-- However, many bought-out firms either grow establishments in fresh directions or create new establishments — so-called “greenfield establishments” — in the wake of a private equity sale. Indeed, analysis “reveals that target firms create new jobs in greenfield establishments at a faster pace than control firms.” Taking these total effects into account, the employment growth differential is only about 1% less for bought-out firms compared to similar firms in the first two years.

-- Private equity’s impact on jobs varies widely among industries and by the nature of the buyout; it can indeed be net neutral or positive, depending on the case. The greatest losses are typically evident in the retail sector and for publicly-traded firms that are taken private: “Public-to-private deals, which tend to be highly visible, also involve large employment losses at targets relative to [other comparable firms]. In contrast, independently owned firms exhibit large employment gains relative to controls in the wake of buyouts, mainly due to greater acquisitions.”

-- Overall, “the sum of gross job creation and destruction at target firms exceeds that of controls by 13 percent of employment over two years. In short, private equity buyouts catalyze the creative destruction process in the labor market, with only a modest net impact on employment. The creative destruction response mainly involves a more rapid reallocation of jobs across establishments within target firms.”

Despite the study’s finding of a modest overall impact on employment at firms, the research does support the idea that “pre-existing employment positions are at greater risk of loss in the wake of private equity buyouts.”

John Wihbey is a Policy Journalist and Editor at Journalist's Resource, a project of the Harvard Kennedy School's Shorenstein Center and the Carnegie-Knight Initiative. This article is republished under terms of a Creative Commons license.

The concept of corporate social responsibility (CSR) — the idea that companies directly contribute to the common good — is gaining adherents throughout the business world.  However, what constitutes responsible corporate behavior is open to interpretation by the firms themselves and the larger cultures in which they operate.

A 2011 paper from INSEAD Business School published in the Socio-Economic Review, “The Spirits of Corporate Social Responsibility: Senior Executive Perceptions of the Role of the Firm in Society in Germany, Hong Kong, Japan, South Korea and the USA,” surveyed 73 senior executives of large corporations and asked them to articulate their thoughts relating to corporate responsibility. The researchers focused on distinguishing between two types of corporate charity: implicit (“our goods benefit society”) and explicit (“we contribute to charitable causes.”)

Key study findings include:

- The senior executives of Germany, Japan, South Korea, and the United States espoused an implicit philosophy of charity: “A large majority of executives in each economy agreed on the importance of taking society into account in the running of the firm.” However, there was “no sense that responsibilities towards society represented voluntary corporate action. This suggests that executives in these four societies tended to view their relationships with society as ‘implicit.’ ”

- Hong Kong executives adhered to explicit standards of corporate responsibility, with 60% mentioning “charity” as an obligation of successful corporations. Charitable contributions were seen as supporting Hong Kong’s economic well-being and elevating the status of the contributors; however, charity still remained subordinate to a company’s ability to generate wealth for its stakeholders and create jobs.

- U.S. executives were “unusually clear in assessing societal concerns as secondary, with primacy accorded to shareholder interests,” and society was positioned as a “constraint” to be overcome. Corporate responsibility was seen primarily in relation to job creation and innovation; only 14% of U.S. executives mentioned charity directly. Overall, there was a “strong emphasis on the provision of employment as a contribution to society, a claim that may ring hollow in the aftermath of the U.S. financial crisis but was credible for most of the [2000s].”

- Only 40% of financial sector executives in the U.S. alluded to the importance of society or community: “at the root of the financial crisis may not only have been insufficient regulatory oversight, but also a proliferation of financial executives with possibly deviant value systems.”

- “Germany emerged as a unique case. While the other three societies with implicit CSR tended to focus on one type of stakeholder — the state and society as a whole in Korea, employees in Japan and shareholders in the USA — German executives chose to emphasize the societal value of production in itself. This is consistent with the high rate of engineering doctorates among German executives outside the financial sector, which is likely to condition executives’ views to focus on the productive function of the firm.”

The paper’s authors worried that corporate behaviors may be divorced from broader societal benefits; they call for additional research to refine the evolution of executive values and the link between cultural context and corporate behavior.

Margaret Weigel is Policy Journalist and Editor at Journalist's Resource, a project of the Harvard Kennedy School's Shorenstein Center and the Carnegie-Knight Initiative.

American corporations today are like the great European monarchies of yore: They have the power to control the rules under which they function and to direct the allocation of public resources. This is not a prediction of what’s to come; this is a simple statement of the present state of affairs. Corporations have effectively captured the United States: its judiciary, its political system, and its national wealth, without assuming any of the responsibilities of dominion. Evidence is everywhere.

• The “smoking gun” is CEO pay. Compensation is an expression of concentrated power — of enterprise power concentrated in the chief executive officer and of national power concentrated in corporations. Median US CEO pay for 2010 was up 35 percent in the midst of a lingering recession, while CEO pay over the last decade has doubled as a percentage of pre-tax corporate income. Yet there has been no justification for current levels of CEO pay based on economic value added.

When Lee Raymond retired as CEO of ExxonMobil at the end of 2005, after six years at the helm of the merged firm and another six as head of Exxon before that, he walked away with more than a quarter billion dollars in realizable equity. In his final year alone, Raymond received in excess of $70 million in total compensation — an hourly wage of about $34,500 calculated at 40 hours a week for 50 weeks. No metric can justify such a raid on the corporate treasury and shareholder equity, but Raymond is only a particularly egregious and early example of what has since become common practice. Little wonder that the driving concern of banks receiving TARP “bailout” money was to pay it back so as to escape any restriction on executive pay.

• Retirement risk has been transferred to employees. During the same period that CEOs were doubling their own compensation, the “best” CEOs of the “best” companies abrogated the century-old commitment by employers to provide pensions to their workers. IBM has been the corporate leader in abolishing a “real” pension system for its employees. The 2006 elimination of on-going defined benefit plans will “save [IBM] as much as $3 billion through the next few years and provide it with a more ‘predictable cost structure’,” TK said at the time. Translation: The worker bees are on their own.

This is the essence of “capture” – CEOs are enriched, while all other corporate constituencies, including government, are left with liabilities. A relatively few autocrats have taken control over the policies and wealth allocation of the United States.

• The financial power of American corporations now controls every stage of politics — legislative, executive, and ultimately judicial. With its January 2010 decision in the Citizens United case, the Supreme Court removed all legal restraints on the extent of corporate financial involvement in politics, a grotesque decision that can have only one effect: maximizing corporate – not national — value. Today’s CEOs have been granted the power to direct political payments and organize PAC programs to achieve objectives entirely in their own self-interest, and they have been quick to use it.

More than $300 million was “invested” by corporations in the 2008 Presidential elections. The totals will be vastly higher in 2012 when the full impact of Citizens United is expressed, and the distribution will be politically agnostic. As Bill Moyers recently noted, President Obama “has raised more money from banks, hedge funds and private equity managers than any Republican candidate.”[1]

• Capture has been further implemented through the extensive lobbying power of corporations. Abraham Lincoln’s warning  about “corporations enthroned” and Dwight Eisenhower’s about the “unwarranted influence by the military/industrial complex” have been fully realized in our own time. Reported lobbying expenditures have risen annually, to $3.5 billion in 2010. Half of the Senators and 42 percent of House members who left Congress between 1998 and 2004 became lobbyists, as did 310 former appointees of George W. Bush and 283 of Bill Clinton.

Capture has focused on particular industries. Two powerful Democratic administrations have not been able even to propose a system of “single payer” health insurance.  Meanwhile, business interests have assured that whatever program of “universal coverage” emerges will lock in the interests of the insurance and the pharmaceutical industries.

History has yet to sort out whether the second Iraq War served any national objectives beyond military and industrial ones, but the suspicion that oil interests played a critical role in the rush to battle is enhanced by Vice President Cheney’s refusal to reveal the names of the participants in his energy transition committee. Simultaneously, the inability to force public disclosure of those participants offers a window into how thoroughly the energy industry controls its own agenda, destiny, and information flow. Not only has the industry succeeded in achieving and maintaining special regulatory and tax treatment; in multiple other ways, it functions virtually as an independent state.

• Capture has placed the most powerful CEOs above the reach of the law and beyond its effective enforcement. Extensive evidence of Wall Street’s critical involvement in the financial crisis notwithstanding, not a single senior Wall Street executive has lost his job, and pay levels have been rigorously maintained even when, as noted earlier, TARP payments had to be refinanced in order to remove any possible restrictions.

While several financial firms have paid civil penalties for their abuses, the amounts involved bear little relation to the malfeasance. US District Judge Jed S. Rakoff recently — and rightly — rejected the $285-million settlement agreed to between Citigroup Inc. and the Securities and Exchange Commission as “neither fair, nor reasonable, nor adequate, not in the public interest.”

Worse, such fines as have been imposed on the financial industry are basically being paid by the government itself. At the same time that various regulatory agencies boast of record setting penalties assessed against banks, the Federal Reserve pays banks interest on money that is not being lent, resulting in an “interest margin” realized by U.S. banks in the first six months of this year of $211 billion — more than ample funding for any penalties suffered.

• Finally, capture has been perpetuated through the removal of property “off shore,” where it is neither regulated nor taxed. The social contract between Americans and their corporations was supposed to go roughly as follows: In exchange for limited liability and other privileges, corporations were to be held to a set of obligations that legitimatized the powers they were given. But modern corporations have assumed the right to relocate to different jurisdictions, almost at will, irrespective of where they really do business, and thus avoid the constraints of those obligations.

As Nicholas Shaxson writes in Treasure Islands, “The privileges have been preserved and enhanced, but the obligations have withered.” Meanwhile, the U.S. Treasury is estimated to be losing $100 billion annually from off-shore tax abuses.

Government cannot and will not hold corporations to account. That much is now obvious.  Indeed, the dawning realization of this truth is what has informed the Occupy movement, but only the owners of corporations can create the accountability that will ultimately unwind the knot of government capture.

The essence of the problem is quite straightforward: a failed system of corporate governance. So is the cause: the unwillingness of trustee owners of America’s corporations to assert their responsibility, legal duty, and civic obligation to monitor and oversee the corporations they invest in. Fiduciary institutions own 80 percent of the outstanding shares of corporate America and thus bear at least 80 percent of the responsibility for present circumstances as well as 80 percent of the onus for saving the system itself. And the largest institutional investors — the Bill and Melinda Gates Foundation, Harvard University, and others — must take the lead because (a) they should and (b) all other courses have failed.

Urban park by urban park, campus by campus, the Occupiers are bearing sometimes inchoate witness to America’s capture by corporate interests. Now, men and women of conscience need to reoccupy the boardrooms of America’s corporations. The boardroom is where the takeover began, and it’s where capture can finally be undone and a government of, by, and for the people, not the corporations, restored to the land.

Robert AG Monks is a shareholder activist and corporate governance adviser who has written widely about shareholder rights & responsibility, government capture, corporate impact on society and global corporate issues.

Mr. Monks is an expert on retirement and pension plans and was appointed director of the United States Synthetic Fuels Corporation by President Reagan, who also appointed him one of the founding Trustees of the Federal Employees’ Retirement System.  Mr. Monks served in the Department of Labor as Administrator of the Office of Pension and Welfare Benefit Programs having jurisdiction over the entire U.S. pension system.

Mr. Monks was a founder of Institutional Shareholder Services (ISS), now the leading corporate governance consulting firm.  He also founded Lens Governance Advisers and co-founded The Corporate Library (now Governance Metrics International).  He is a shareholder in and advisor to Trucost, the environmental research company.

The good news is that on-the-job misconduct by American workers may be at an all-time low, and when misconduct is detected it’s likely to be reported by co-workers.

The bad news is that whistle-blowers are being retaliated against for their truth-telling at a “shocking” rate – suggesting a “looming ethics downturn” for U.S. businesses.

Those are the primary conclusions of the seventh National Business Ethics Survey (NBES) conducted by the Ethics Resource Center, a Washington, D.C.-based non-profit organization.  The bi-annual report is based on telephone and web responses from 4,683 employees of for-profit organizations during September 2011.

The percentage of employees who witnessed misconduct at work fell to a new low of 45 percent last year, according to the survey, compared with 49 percent in 2009 and a record high of 55 percent in 2007. The leading types of misconduct cited were misuse of company time (33%), abusive behavior (21%), lying to employees (20%), company resource abuse (20%) and violating company Internet use policies (16%).

And those who reported the bad behavior they saw reached a record high of 65 percent, up from 63 percent two years earlier and 12 percentage points higher than the record low of 53 percent in 2005, according to the survey.

However, while reporting was up, the survey found that retaliation against whistle-blowers hit “alarming levels,” with more than one in five (22 percent) experiencing some form of retaliation in return.  That compares with reported retaliation by 12 percent in 2007and 15 percent in 2009.

According to the survey, these were most common forms of retaliation:

Source: Ethics Resource Center - 2011 National Business Ethics Survey

In addition, the survey found, the percentage of employees “who perceived pressure to compromise standards in order to do their jobs” climbed five points to 13 percent, just shy of the all-time high of 14 percent in 2000.

“While most U.S. workers are currently ‘doing the right thing’ by following company standards and reporting wrongdoing when they see it, we see trouble ahead,” said ERC President Patricia J. Harned, Ph.D. “Retaliation against whistleblowers and pressure on employees to compromise their ethics standards are at or near all-time highs. These are factors that historically indicate that American business may be on the cusp of a large downward shift in ethical conduct.”

“The data make a very clear case that if business leaders will take heed of these findings and make ethics a business priority, they can have a dramatic impact on the conduct of their workforce. Risks noted in this report can be mitigated,” said Dr. Harned and former Congressman Michael Oxley, now chair of the ERC board, in introducing the survey findings.

Economy and Social Media

To help explain the “co-existence of widespread retaliation and pressure with historically low mis­conduct and high reporting,” the NBES cited two factors: the sluggish U.S. economy and employees who use social media while on the job.

“Thirty percent of employees agree that bad actors in their company are laying low because of fears about the recession,” the survey reported. “As the economy gets better – and companies and employees become more optimistic about their financial futures – it seems likely that misconduct will rise and reporting will drop, mirroring the growth in pressure and retaliation that have already taken place and conforming to historic patterns.”

As for social networkers, the Center found that 11% of the respondents identified themselves as “active social networkers”– meaning they spent 30% or more of their workday on social networks, even though that was not part of their job – while another 29% of workers devoted at least 10% to 20% of their workday to social networking. A surprising finding to the survey analysts: more than half (51%) of the social networkers identified themselves as “top or middle management.”

The survey reported: “A surprising and worrisome divide exists within the workplace between employ­ees who spend substantial time on social networks and those who do not. Active social networkers report far more negative experiences in their workplaces. As a group, they are much more likely to experience pressure to compromise ethics standards and to experi­ence retaliation for reporting misconduct than co-workers who are less involved with social networking.”

However, the survey found, active social networkers also “show a higher tolerance for certain activities that could be considered questionable.”  Among active social networkers, for example, 50 percent said it is ac­ceptable to keep copies of confidential work documents in case they need them in their next job, compared to only 15 percent of their colleagues. And 46 percent of social networkers said it is acceptable to take work software home to use on a personal computer, compared to only 7 percent of their colleagues.

In 2011, Business Ethics Magazine republished a number of articles by ProPublica related to drug companies and their payments to doctors.  This article is a year-end look at where things stand as of December 2011.

Some of the nation's top medical schools cracked down on professors who give paid promotional talks for drugmakers last year, and the firms themselves cut back on such spending in the wake of mounting scrutiny.

Last year began with the University of Colorado Denver and its affiliated teaching hospitals launching an overhaul of conflict-of-interest policies after ProPublica found that more than a dozen of its faculty members had given paid promotional talks.

"We're going to just have to say we're not going to be involved with these speakers bureaus because they're primarily marketing," Dr. Richard Krugman, vice chancellor for health affairs, said in an interview in January 2011.

A few months later, Stanford University took disciplinary action against five faculty members identified by ProPublica who had taken money to deliver drug company speeches, a violation of university policy.

And by last fall, there were indications that pharmaceutical companies were also reducing the money they spent on doctor speakers.

ProPublica first published its Dollars for Docs database in October 2010 listing payments to doctors from seven drug companies. When we updated it this September -- with data from five additional companies -- spending by some of the firms was down.

Cephalon, a relatively small Pennsylvania company that specializes in pain, cancer and central nervous system drugs, paid physicians nearly $9.3 million in 2009 for speaking and consulting. That figure dropped to $5 million in 2010.

AstraZeneca cut its spending on speakers from roughly $22.8 million in the first half of 2010 to about $9.2 million in the second half. Both companies cited business reasons for the decline.

Throughout 2011, ProPublica also examined the hefty financial support drug and medical-device makers give to medical societies and health advocacy groups and the impact it has on the groups' positions.

At the national conference of the Heart Rhythm Society in San Francisco, companies sponsored much of what doctors saw -- hotel key cards, bus banners, ads on staircases, even motorcyclists driving mini-billboards in a continuous loop around the Moscone convention center. Nearly 50 percent of the society's funding in 2010 came from the drug and medical device industry. (We even created a neat interactive graphic that allows you to virtually tour the hotel and exhibit hall.)

The society, which represents doctors who treat abnormal heart rhythms, said its funders don't influence its positions, but it unveiled a new policy requiring more detailed disclosure of board members' industry ties.

Then, last month, ProPublica reported about the extensive ties between makers of narcotic painkillers and the American Pain Foundation, which bills itself as the nation's largest organization representing patients afflicted by pain. The foundation received nearly 90 percent of its income in 2010 from drug and device makers and takes positions that closely align with the companies.

Despite a steep rise in overdose deaths tied to the drugs, the foundation has said the risk of addiction to the drugs has been overhyped and that, if anything, they are underused.

Like the heart society, the pain foundation said its funders have no influence on its positions.

ProPublica also investigated why physicians were not disciplined or prosecuted after they were accused in federal lawsuits of taking kickbacks from drug or device companies or pushing drugs for unapproved uses.

We reviewed lawsuits against 15 drug and device companies that were settled since 2006. None of the more than 75 doctors named as participants in alleged schemes were sanctioned by state medical boards or pursued by prosecutors, ProPublica found.

Last year, dozens of news outlets around the country used our data to localize stories about conflicts of interest in medicine -- bringing the discussion to communities large and small.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

December 2011 brings to a close the official commemoration of the 50^th anniversary of the Freedom Riders.  While tolerance, justice and equality in American life and globally continue to beg for champions, the culture the Freedom Riders created offers inspiration on ways people can work together to foster change in society as well as organizations - using mutual respect and support to create a spirit of community united by common purpose, ingredients also found in common purpose companies.

The Freedom Riders were primarily college students, with a mix of clergy, teachers, artists, journalists, housewives, civil rights activists, and many other professions. Like other movements, a cross section of races, ages, and geography.

The distinguishing common denominator here for Freedom Riders is an overriding, compelling sense of purpose, infused with passion, courage, discipline, resilience, and a strategy of nonviolent direct action.

Their focus? The 1960 Supreme Court ruling that segregation was unconstitutional in interstate travel. From May 1961 until December 1961, the Freedom Riders traveled interstate bus and rail routes in the south to test whether desegregation was being followed.

As we’ve read about or seen in the PBS documentary Freedom Riders that aired in May, 2011 (still available to view free online)  the riders endured firebombing, savage beatings and demeaning treatment -- chronicled by national media along the routes. They also tolerated harsh prison conditions. Through all of this, they never deviated from their commitment to meet violence with nonviolence.

In November 1961, the “colored only,” “white only” signs came down; lunch counters, rest rooms, and interstate travel desegregated.

The Freedom Riders had won their battle, giving a huge impetus to the Civil Rights movement.

Mission and Community

While the tactics piece has certainly been employed since by social justice advocates, the enduring legacy of the Freedom Riders lies in something more ethereal - the possibility that an organization can create a spirit, a common purpose and passion that can infuse followers, turning them into a community capable of doing great things.

Listening to the Freedom Riders reminiscences – in the documentary and the forums that have occurred around the country – a picture is painted where mission and community inextricably became one. You can tangibly feel why they were so successful; what they built reignites inspiration 50 years later.

Glenda Gaither Davis, who became a Freedom Rider at 18, says of her experience,  “There was that underlying togetherness that stood all the tests we were put through. We sang, and we talked, and we prayed, and ... we worked together regardless of where we came from. And we had a common cause ... to make things equal for all people.”

Ernest “Rip” Patton, Jr. spoke recently at a community forum particularly for teachers and students in the Los Angeles area. It was sponsored by Facing History and Ourselves,  an organization that supports teachers in helping students link history to moral choices. Patton, who had been a student at Tennessee State 50 years ago, described how the Freedom Riders seamlessly worked together to integrate lunch counters in Nashville.

Students asked what it had felt like to face the risks he had. The large theatre auditorium felt more like a living room as he answered.

He was arrested after his ride to Jackson, Mississippi, and sent to the formidable Parchman Penitentiary. He was one of more than 300 Freedom Riders incarcerated there that summer and fall. To keep up their spirits in dealing with the oppressive guards, he said, he and other prisoners sang all the time, which had the added benefit of irritating the guards.

Freedom riders James Lawson (who taught the principles of Gandhian nonviolence), Ralph Abernathy, James Farmer and Diane Nash were among the leaders of the group. However, because the byproduct of everyone’s efforts was to create a community of mutual support and strength, everyone had a role as a leader.

Creating Common Purpose

There are many aspects of the culture created by the Freedom Riders that can inspire both organizations and companies that seek to bring out the best in their people.

• Training was a top priority. Freedom riders were taught and helped to understand and embrace Gandhian nonviolence principles. They tested themselves and were tested against the types of intimidation and degradation they anticipated. They knew how to behave. That was removed as a potential anxiety. Similar to Mary Gentiles’ work Giving Voice to Values, they had practiced and rehearsed how they would act. They had a chance to become confident and comfortable with how they wanted to show up.
• While ego is inevitable, the Freedom Riders navigated in such a way that they didn’t let personal agendas or disagreements derail their purpose. The driver of behavior was the common purpose for both white and black Freedom riders, equality for all.
• In the discipline, focus and clarity of what would be undertaken, the Freedom Riders were united by clear, common goals. They acted in a manner that we’ve come to associate with successful serial entrepreneurs. They had a defined purpose. They kept taking small steps, learning as they went, building on what they had done, moving consistently toward their goal, moving to Plan B when it was warranted.
• Respect and mutual support defined the treatment they received and gave to each other. While each person was individually exposed, they were connected to a greater whole that embraced them. They created community  that fueled them even during the worst experiences.
• They embraced a code of conduct that also became an operational strategy. For their purpose, it was nonviolence. Their tactics and strategy were consistent, made sense based on who they said they were. They knew what they wanted to accomplish and they delivered to that goal with discipline and authenticity.

Ultimately, the Freedom Riders gained strength from the clarity of their mission, how well prepared they were to go after it, and the system of support that developed in serving a higher purpose.

The Freedom Riders’ legacy is that they developed an approach they consistently and genuinely honored. Their enduring inspiration is that they lighted the way to the power of a dream fearlessly pursued. They showed what people connected by a common purpose to do good can accomplish together.

Photo by snakepliskens via Flickr.

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a thought leader on building leadership, trust, and reputation and writes The Week in Ethics.

The news about narcotic painkillers is increasingly dire: Overdoses now kill nearly 15,000 people a year -- more than heroin and cocaine combined. In some states, the painkiller death toll exceeds that of car crashes.

The head of the Centers for Disease Control and Prevention has declared the overdoses from opioid drugs like OxyContin an "epidemic." And a growing group of experts doubts that they work for long-term pain.

But the pills continue to have an influential champion in the American Pain Foundation, which describes itself as the nation's largest advocacy group for pain patients. Its message: The risk of addiction is overblown, and the drugs are underused.

What the nonprofit doesn't highlight is the money behind that message.

The foundation collected nearly 90 percent of its $5 million funding last year from the drug and medical-device industry -- and closely mirrors its positions, an examination by ProPublica found.

Although the foundation maintains it is sticking up for the needs of millions of suffering patients, records and interviews show that it favors those who want to preserve access to the drugs over those who worry about their risks.

Some of the foundation's board members have extensive financial ties to drugmakers, ProPublica found, and the group has lobbied against federal and state proposals to limit opioid use. Painkiller sales have increased fourfold since 1999 , but the foundation argues that pain remains widely undertreated.

The group says industry money has had no effect on its advocacy.

"I'm convinced with every shred of my body that our interest is improving the lives of people affected by pain," said Will Rowe, the foundation's chief executive, "and we want to do that the best way we can."

The problem isn't opioids, Rowe and other group leaders say. It's poorly trained doctors who prescribe them too easily or in excess.

Yet, critics say the Baltimore-based foundation is making it harder to address a major public-health problem.

"If you were a drug company, wouldn't it be smart to make it look like you had a patient-oriented group?" said Dr. Gary Franklin, a Washington state official who tussled with the foundation over new restrictions on high-dose painkillers.

Its funding makes the group "one and the same" with the pain industry, Franklin said.

In stories this year, ProPublica has detailed the close entanglements between pharmaceutical companies and groups representing doctors. Reporting showed that the positions of societies representing specialty physicians often reflected the views of their major funders.

The American Pain Foundation falls into a different category -- health advocacy. It harnesses the power of patient stories to sway politicians, state medical boards, judges and government health regulators, emphasizing that it represents grassroots voices.

ProPublica's review found that the foundation's guides for patients, journalists and policymakers play down the risks associated with opioids and exaggerate their benefits. Some of the foundation's materials on the drugs include statements that are misleading or based on scant or disputed research.

The group has intervened in court cases in ways that appear to counter its stated mission. In one example, it sided with Purdue Pharma, its longtime funder, to block a 2001 class-action case filed by Ohio patients who had become addicted to or dependent on the company's blockbuster painkiller, OxyContin.

And the foundation mobilizes patients to send "outraged" email messages to news organizations that run stories it believes reinforce "stigmas and stereotypes" about the risks of pain medication.

The group's board includes some patients but also doctors who are paid to speak and consult for drug companies, a researcher whose clinic has relied on their funding for survival and a public-relations executive whose firm represents them.

Last year, one board member was the lead author of a study about a Cephalon drug. Cephalon sponsored the study, and its employees were co-authors. The study found that the drug, Fentora, was "generally safe and well-tolerated" in non-cancer patients even though it is only approved for severe cancer pain.

Dr. Andrew Kolodny, a New York psychiatrist who heads Physicians for Responsible Opioid Prescribing, said the foundation has built credibility with politicians and regulators who may not be aware of the extensive industry ties.

"I don't think they realize that in many ways the American Pain Foundation is a front for opioid manufacturers," Kolodny said.

Rowe, however, said it can be hard for critics to understand the mindset of patients whose pain is so severe they are willing to risk serious side effects to gain relief.

"Policymakers can go to bed at night and say, 'Well, I protected society,'" by restricting access to a risky painkiller," he said. "The person with pain or the person with cancer could say, 'You know, I'm sorry. I'm living with this, and I want to take this chance.'"

'The System Is Awash in Opioids'

In the late 1980s and early '90s, physicians who cared for pain patients excitedly embraced opioids as a low-risk treatment for suffering.

Derived from the opium plant, opioids reduce the perception of pain by attaching to opioid receptors in the brain, spinal cord and elsewhere in the body.

"We bought into this idea that opioids would be effective and that the risk of addiction would be low," said Dr. Jane Ballantyne, a longtime pain expert and a professor at the University of Washington.

But along the way, pain doctors split. Some, like Ballantyne, began decrying the increasingly widespread use of opioids and questioned whether the drugs worked. Others, like the foundation's leaders, said the drugs were being unfairly maligned, making pain patients feel like criminals and discouraging doctors from prescribing them.

Despite the debate, sales of the drugs have skyrocketed.

Last year, $8.5 billion worth of narcotic painkillers were sold in the United States, according to the prescription-tracking company IMS Health. Enough of the drugs were prescribed last year to "medicate every American adult around the clock for a month," the CDC said.

"Right now, the system is awash in opioids, dangerous drugs that got people hooked and keep them hooked," said CDC Director Thomas Frieden in a recent news briefing.

Some of the pills have become household names: Vicodin, Percocet, OxyContin. On its own, OxyContin, an extended-release painkiller, accounted for $3.1 billion in sales last year, up from $752 million in 2006, according to IMS Health.

There's little dispute that many people endure chronic pain. In the past, many doctors, especially those providing primary care, ignored pain as a condition that warranted its own treatment.

A report from the prestigious Institute of Medicine last summer said 116 million American adults suffer from chronic pain. The report also cited legal and regulatory barriers to opioids, especially for cancer and end-of-life pain. The findings are lauded by the foundation as underscoring the concern about undertreatment.

In an email to ProPublica, however, the report's chairman said the study panel took a broad look at chronic pain and didn't examine the use of opioids with "rigor or detail."

"It does seem like the issue of opioid use is worthy of a separate study," wrote Dr. Philip A. Pizzo, dean of Stanford University's medical school.

Guides Offer Reassurance About Pain Drugs

The American Pain Foundation's website offers publications for patients, policymakers and even journalists. Each depicts the benefits of opioids, and each is underwritten by the makers of those drugs.

Its patient guide, paid for by four companies, discusses several treatments for pain. It says such pain relievers as aspirin, ibuprofen and naproxen commonly cause gastrointestinal bleeding or ulcers, delay blood clotting, decrease kidney function and may increase the risk of stroke or heart attack. And it warns patients to use these pain pills at the lowest dose and stop them unless clearly needed.

The side effects of opioids, on the other hand, are minor, and most go away "after a few days," the foundation's guide says. The underuse of opioids, it says, "has been responsible for much unnecessary suffering."

Patients, it says, shouldn't worry if they need more of a drug. They are not developing an addiction.

"Many times when a person needs a larger dose of a drug," the guide says, "it's because their pain is worse or the problem causing their pain has changed."

Another guide, written for journalists and supported by Alpharma Pharmaceuticals, likewise is reassuring. It notes in at least five places that the risk of opioid addiction is low, and it references a 1996 article in Scientific American, saying fewer than 1 percent of children treated with opioids become addicted.

But the cited article does not include this statistic or deal with addiction in children.

"I would much prefer that they would put in there something that could be substantiated by a real reference," said Dr. Leonard Paulozzi, a CDC medical epidemiologist specializing in drug overdoses. "That would present a much less rosy picture of the risk."

A recent report by the National Institute on Drug Abuse said estimates of addiction among chronic pain patients using opioids range from 3 percent to as high as 40 percent .

One Foundation-related publication this year provided a case study of how physicians could convince patients that the drugs are not addictive.

In an e-newsletter paid for by a drug company, Florida family physician Louis Kuritzky summed up the advice he'd give to a patient with knee pain: "We have learned that when patients have important pain problems like you do, they can use such medications successfully over the long term without any major risk of addiction."

This advice is contradicted by a respected medical review organization that looked at research on the use of opioids for osteoarthritis of the knee or hip. The Cochrane Collaboration concluded that "the small to moderate" benefits of opioids "are outweighed by large increases in the risk of adverse events" and the drugs should not be routinely used.

Kuritzky said he had not read the Cochrane review but believes that the downside of opioids is "very, very small" based on his experience with his patients.

"There are many issues where you will see wise men and women differ about the right answer to a difficult and important question," he said.

Rowe, the foundation's chief executive, acknowledged that some of its publications need updating. He pointed to additional materials on the group's new PainSAFE website, which include a broader description of the risks. But the foundation continues to post outdated guides and even refers to them in newer materials.

And while the PainSAFE site discusses the risks more completely, it is based on the assumption that the drugs have proven to work well for chronic pain sufferers. The site says studies have shown opioids improve daily function and quality of life for such patients. In contrast, a new guide by New York City's Department of Health and Mental Hygiene says there is "insufficient evidence" that "pain relief is sustained or function improves."

Dr. Lewis Nelson, chairman of the federal Food and Drug Administration's Drug Safety and Risk Management Advisory Committee, said he believes the foundation's guides can't help but be biased.

"If you're taking drug-company money and you're working as an advocacy group for patients, I think by definition you're biased," said Nelson, an emergency room physician in New York. "I take everything they say with a grain of salt."

Fighting in Court for Painkiller Access

The foundation doesn't just offer advice about opioids; it takes its arguments into court.

In 2005, it filed a friend-of-the-court brief in the U.S. Fourth Circuit Court of Appeals in support of Dr. William Hurwitz, a pain doctor in Virginia who had been convicted on 50 counts of drug trafficking.

The doctor had been accused of prescribing a single patient as many as 1,600 Roxicodone pain pills in one day. Hurwitz allegedly had prescribed that patient alone more than 500,000 pills between July 1999 and October 2002.

The pain foundation and its allies argued that the jury instructions in the case didn't distinguish between criminal behavior and mistakes by a well-intentioned physician. "It is not drug dealing to prescribe opioids to patients that might be 'suspected' addicts or substance abusers," the foundation and two other groups wrote in a brief.

Rowe said the foundation intervened in the case on principle, fearing the drugs would be "demonized." The appeals court threw out the conviction, but Hurwitz was retried and convicted on 16 counts of trafficking.

Years earlier, the foundation opposed several pain patients who had sued Purdue Pharma in an Ohio county court for allegedly obscuring the risks of OxyContin.

The foundation filed a friend-of-the-court brief backing Purdue, arguing that the health of all pain patients would be harmed if the class-action lawsuit went forward because doctors would become fearful of prescribing opioids.

Ohio was plagued by "opiophobia" according to a brief co-authored by the foundation and two smaller pain nonprofits. "Consequently many, if not most, of the state's residents had been deprived of adequate pain care," it said.

The Ohio Supreme Court decided in 2004 not to allow a class action.

In a separate federal case in 2007, Purdue pleaded guilty to misbranding OxyContin "in an effort to mislead and defraud physicians and consumers," according to a statement from prosecutors. The company agreed to pay $600 million in penalties. Three top officials also pleaded guilty to misdemeanors and agreed to pay $34.5 million.

Two months after the conviction, however, then-foundation chairman Dr. James Campbell praised Purdue in a statement to a U.S. Senate committee.

"I believe Purdue and its management deserve recognition for their contribution to the welfare of these many patients," Campbell wrote. Prosecuting the executives, he wrote, sent a "chilling message to those who dare to develop high-risk drugs for important diseases."

Campbell mentioned his foundation role in his remarks. Rowe said the former board chairman was not speaking for the group, and stressed that strict rules keep funders from influencing its work. The foundation is working to diversify its support, Rowe and others said.

Nevertheless, the group often finds itself on the same side as drugmakers in state and federal debates over how to regulate painkillers.

In 2009, the FDA suggested changes to address concerns about the risks of long-acting opioids, recommending that physicians and pharmacists be certified to ensure they had been educated about those risks.

Although foundation officials blame poorly educated physicians for the growing problems with opioids, the officials joined with other pain groups and drugmakers to assail the plan.

The FDA backed off key elements of its proposal last year and said doctors could voluntarily attend courses about the risks.

That move was criticized by an FDA advisory committee, which voted overwhelmingly that it wasn't enough to stem the tide of overdose deaths.

"When you look at 14,000 people dying on an annual basis, that's more than we've lost in Iraq and Afghanistan since 2001 in active duty," Dr. Mori Krantz, an advisory panel member and director of the prevention center at the University of Colorado in Denver, said during the meeting.

Little Evidence That Narcotics Work for Chronic Pain

Missing from the American Pain Foundation literature is any suggestion that the drugs don't work for many chronic pain sufferers.

Recent editorials in medical journals and scientific reviews cite little evidence of long-term benefit.

Most of the clinical trials for opioids to treat chronic pain "were small, lasted less than 16 weeks and excluded patients with a history of substance abuse, psychiatric illness and depression, who are at increased risk for opioid misuse and abuse," three physicians wrote in an editorial this year in the Archives of Internal Medicine.

"How can a therapy be considered if there's no evidence that it works and there's evidence of lots of side effects?" Dr. Mitchell Katz, one of the authors and director of the Los Angeles County Department of Health Services, said in an interview.

Rowe said he knows plenty of patients for whom the drugs work, "and their lives are together because they use them."

The foundation board's chairman and president, Dr. Scott Fishman, is stepping down at the end of the month. In a statement to ProPublica, he said his views have evolved and that he now believes opioids are both overused and addictive. But he defended the group.

"I have not always agreed with APF positions and have had disagreements with some APF leaders and patient advocates about many issues in pain management, including the appropriate place of chronic opioid therapy," wrote Fishman, chief of pain medicine at University of California, Davis.

"Nonetheless, I have always believed that patients in pain in the United States need strong patient advocacy, which APF has offered."

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

When former CEO Don Blankenship left Massey Energy a year ago taking $12 million in severance, a consulting contract for two years, and hefty retirement and pension packages, he also left refusing to participate in federal investigations into his mine’s deadly explosion.

In April 2010, 29 miners died in Massey’s Upper Big Branch (UBB), the worst mining disaster in 40 years. Massey, under Blankenship, never accepted responsibility for the explosion and blamed the federal government.

On December 6, 2011, the U.S. Department of Mine Safety and Health Administration (MSHA) issued a 1,000 page report of its investigation into the UBB tragedy. Alpha Natural Resources, which bought Massey earlier this year, agreed to pay $209 million in penalties (civil, criminal and restitution) for Massey Energy’s role in the explosion. While criminal action won’t be pursued against Alpha, the settlement doesn’t cover Blankenship or other Massey managers.

The settlement agreement with Alpha includes a requirement that $80 million be spent to improve safety and infrastructure in UBB and all underground mines Alpha owns while another $48 million will finance academic research on mine safety.

Also on December 6, MHSA fined Alpha $10.8 million, the largest penalty in agency history, and cited Massey’s corporate culture as the root cause of the tragedy. They issued 369 citations for violations, saying that Massey “promoted and enforced a workplace culture that valued production over safety, and broke the law as they endangered the lives of miners.”

Included in the findings are:

• Examples of systematic, intentional, and aggressive efforts by Massey to avoid compliance with health and safety standards
• Testimony management intimidated miners saying their raising safety issues jeopardized their jobs
• Advance notification to mine personnel of state and federal inspections
• Two sets of books kept regarding safety and health hazards concealing certain hazards
• Failure to perform required mine examinations adequately and remedy known hazards and violations
• Failure to provide adequate training
• Failure to take necessary precautions that would have prevented the April 5, 2010 explosion

Massey’s legacy is that its leadership — Blankenship and the board of directors — failed to follow laws or create a work climate that would have avoided the conditions that led to the explosion and loss of life. Whether or not criminal charges are brought against Blankenship or any members of its previous leadership, the report’s findings indicate Massey was run in a manner that put its employees and shareholders at risk.

In any risk management study its board addressed, culture was apparently overlooked as Massey’s leading vulnerability. Massey became another poster child proving that culture matters; when tone at the top, transparency, integrity, and building trust are subsumed by short-term profits, crisis inevitably ensues.

So, in this case, culture killed.

“The best tribute to the 29 Massey workers” who died, I wrote in an April 2010 column on Blankenship ” is that safety really becomes Massey’s top priority and that going forward, no one should ever be injured or die in a Massey mine from issues the company can prevent. There is no acceptable tolerance level for deaths in the workplace; to operate as if there is constitutes a failure of leadership.”

Small comfort to the 29 families and hundreds of people affected by the UBB tragedy, but it is a start.

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a thought leader on building leadership, trust, and reputation and writes The Week in Ethics, a weekly column where this article was first published.