10 Insane Ways Companies Profited From Incompetence And Violence
Most of us are aware by now that corporations do some pretty crappy things. Things like poisoning an entire town, facilitating torture and slavery, or funneling money to Mexican drug cartels. Yet they often get away with it because they’re rich and provide an essential service.
Or do they? Look through the annals of corporate malfeasance, and you’ll find many tales of companies being rewarded for their incompetence. Companies that failed to deliver on any of their promises and still came out on top. Companies like these.
10 Thomas Cook Kills Two Children, Receives Massive Payout
In 2006, Neil Shepard and his new girlfriend took Neil’s kids Bobby and Christi on vacation to Corfu. The hotel they chose was part of the gigantic Thomas Cook network, a widely trusted company. The hotel was also improperly maintained. On the third night of their visit, a carbon monoxide leak killed Bobby and Christi.
In the inquest that followed nine years later, the jury gave a verdict of “unlawful killing” and said Thomas Cook had breached their duty of care. The coroner said the company should “hang its head in shame.” He had no idea how truthful he was being. It was later revealed Thomas Cook had received more compensation for the accident than the dead children’s parents.
As a result of Bobby and Christi’s deaths, Thomas Cook reportedly received a £3.5 million payout to cover trial costs, 10 times what Neil Shepard and his ex-wife received. They also refused to apologize at the inquest, even claiming they’d written a separate letter of apology to Bobby and Christi’s parents. According to Neil Shepard, no such letter had ever been received.
As an added kick in the teeth, Thomas Cook refused to accept any responsibility, or offer either parent a penny of that £3.5 million. Instead, they claimed they were within their rights to seek compensation, giving you a good idea of exactly what value they place on children’s lives.
9 Aggregate Industries Defrauds Massachusetts, Gets Lucrative Contract
In 1991, Boston began a $22 billion mega-project known as the “Big Dig.” Designed to reroute Interstate 93 under the city center, it was one of the most ambitious construction challenges in Massachusetts history. It also made a lot of companies a lot of money, chief among them Aggregate Industries. In 2006, it emerged that Aggregate had knowingly provided substandard concrete and falsified records to defraud the government. Six people were arrested, and Aggregate was never employed in Massachusetts again.
Whoops, our mistake. We meant they immediately hoovered up the next big government contract to come along, totaling $8.9 million. As part of the Obama administration’s stimulus program, Massachusetts’s Highway Division farmed out multimillion-dollar contracts for improving the state’s roads. One of the biggest winners from the project was Aggregate Industries, which pocketed two extremely lucrative contracts less than 24 months after the discovery that it had defrauded the people of Boston.
Depressingly, they weren’t the only ones. The New England Center for Investigative Reporting found that over half the companies to get money under the scheme had a history of misconduct.
8 G4S Bungles A Government Contract, Immediately Gets Another
The London 2012 Olympics are generally agreed to have been a great show and a positive moment for the British capital. They were very nearly a total disaster, thanks to one company: G4S.
A private security firm, G4S was given a multimillion-pound contract to provide 13,000 staff to police the London games. Then, two weeks before the games began, the company admitted they wouldn’t be able to cope. They backed out of the contract, and the British army was called in at the last second, resulting in more troops being on the ground in London than in Afghanistan. G4S still had the nerve to charge the British taxpayer £31 million for the pleasure of “managing” the contract.
By rights, this should have been the end of G4S’s relationship with the UK government. Instead, the UK’s Department of Work and Pensions immediately offered them a lucrative contract running its call centers.
At this point, we should mention G4S was already under criminal investigation in the UK for charging the government £109 million to electronically tag prisoners who were already released or dead. So that’s a company that repeatedly cheats you and nearly ruins your big event, and Westminster still insists on rehiring them.
7 Boeing Repeatedly Screws Over Government, Repeatedly Gets Rehired
We’ve all heard the famous quote “insanity is doing the same thing over and over again and expecting a different result.” If true, it would mean the US government is the craziest entity on Earth. Over the past few decades, they’ve repeatedly handed lucrative contracts to Boeing despite the company screwing them over nearly every time.
In 1989, Boeing was found to have accepted some stolen documents from the Pentagon that were considered top secret. Although the company was fined $5.2 million, it didn’t stop them getting defense contract work. Only nine years later, they were again fined, this time for overcharging the Pentagon millions of dollars.
We’re only just getting started. In 1997, the company knowingly sold defective helicopters to the US Army. Six years later, one of their staff used the prospect of a job offer to bribe a Pentagon official into waving through excessively priced contracts. Three years after that, they again knowingly sold the government defective equipment—this time an entire fleet of badly repaired aircraft.
Go looking, and you’ll find many, many more examples of Boeing treating the federal government like some know-nothing buck-toothed hick with too much money. Yet they keep getting rehired. In 2008, they landed a new contract to supply anti-missile decoy systems. In 2010, they were fined $4 million for overcharging on them. It’s almost as if there’s a pattern here.
6 America’s Prison Giant Sucks At Running Prisons
One of the largest private prison owners in the country, the Corrections Corporation of America (CCA) has been in the prison game since 1983. Every year, they sweep up new contracts, and they are currently responsible for 67 facilities totaling some 100,000 people. This is strange, as CCA utterly sucks at running prisons.
Over the years, they’ve repeatedly proven themselves to be the last guys you’d want responsible for violent criminals. In 1989, they cut so many corners building a prison in Florida that four inmates escaped within the first year. In 1999, they accidentally released a dozen criminals early. In 1998, a bored guard allowed someone to bring some bolt cutters into prison, resulting in four inmates escaping in broad daylight.
This alone should probably disqualify them from the prisons game, but CCA also has trouble with riots. Thanks to a combination of overcrowding, substandard facilities, and undertrained staff, violent riots are a frequent fixture of CCA institutes. In multiple instances, these have led to the death of staff and inmates, especially since CCA guards tend to flee at the first sign of trouble. That’s before we get on to the facilities accused of organizing gladiator-style combat between inmates. Yet the contracts (and taxpayer money) keep right on flowing.
5Atos Costs The UK Millions
In 2008, the UK government got tough on welfare claimants. Worried some people receiving disability benefits might be faking, they hired French IT contractor Atos to design a new test that would weed out the malingerers from the truly disabled. Unfortunately, the test was so flawed that it wound up removing welfare from terminally ill cancer patients. Undeterred, the government extended Atos’s contract and rolled out the scheme nationwide. It was an utter disaster.
The test was so unfair that it declared people who were days from death “fit for work.” Permanently disabled people had their benefits withdrawn, resulting in hundreds of thousands appealing the decision at a tribunal. The influx totally overwhelmed the UK court system. New judges had to be hired and courts opened on Saturdays. Forty percent of claimants wound up having their disability benefits reinstated. By 2012, it was estimated Atos’s faulty tests were costing the Ministry of Justice £60 million each year. Around 1,300 people the company ruled fit to work were found to have died weeks later. It was later discovered the company had also lied to win its contract.
In 2015, the UK government finally terminated their contract with Atos. By that point, the company had been making £700 million a year for failing to do their jobs properly. Did they pay any of it back? What do you think?
4 Serco Abuses Human Rights, Gets Rehired By Australia
We recently told you about the horrors of Australia’s offshore refugee detention centers. Meet the people responsible for some of those horrors: outsourcing company Serco, which runs 12 of the facilities. Despite doing some truly appalling work and constantly teetering near the edge of bankruptcy, the company was recently awarded a brand new contract by Canberra worth $950 million to $1.4 billion Australian.
This goes against Australia’s advice to its own government. In July 2014, the Australian Human Rights Commission visited one of Serco’s facilities and voiced “grave concerns” about human rights abuses. A huge number of refugee mothers were found to be suicidal, conditions were filthy, and cases of self-harm were off the scale. Worst of all, babies were found to have been confined to tiny metal containers, where they could neither learn to walk nor crawl. The government issued a damning report . . . then proceeded to rehire Serco anyway.
At time of writing, Serco stands to make £100 million to £150 million annually from their new contract. We can only hope some of that money goes toward making life better for the people in its centers.
3 Pacific Rim Sues Country That Turned Down Its Shoddy Mining Proposal
A few years back, mining company Pacific Rim (now part of OceanaGold) submitted a proposal to the El Salvador government to mine for gold on a site they owned near the San Sebastian River. It was the sort of application private companies make all the time, and El Salvador considered the request before turning it down. In a report, they said the company’s application had failed to meet environmental safety standards. Pacific Rim responded by trying to sue them for everything they could get.
In first one court, then another, the company demanded the government compensate them to the tune of $300 million, which is almost half of El Salvador’s annual budget. When people pointed out that gold mining creates environmentally damaging byproducts, Pacific Rim claimed their mine would be the exception. When others talked about how El Salvador’s water supply is already so poisoned only 2 percent of it is considered drinkable, Pacific Rim ignored them. (We should point out here that early exploration at the mine had already resulted in clean water becoming seriously degraded.)
When OceanaGold took over Pacific Rim, they continued to push the lawsuit. At time of writing, it’s still going ahead. Any day now, we could hear that a Central American nation has been bankrupted for turning down a company’s shoddy mining “proposal.”
2The East India Company Crashes Two Continents, Receives Unprecedented Bailout
The words “government bailout” today conjure images of bankers laughing as they suck up trillions in taxpayer dollars. But the economy-crashing banks of the 21st century have nothing on the original corporate welfare queens. In 1772, the East India Company (EIC) single-handedly brought Europe and India to their knees. The British government responded by becoming the company’s private bank account.
Thirteen years earlier, the EIC had raised a private army and single-handedly conquered India. It then used its loot to woo British MPs and buy up parliamentary seats. These MPs then lobbied the government to provide military support to the EIC’s campaign of conquest, despite it being a privately owned corporation. This allowed the EIC to expand at a phenomenal rate. It created an unprecedented bubble. In 1772, that bubble popped with a bang that was heard around the world.
Across Europe, banks collapsed, paralyzing the continent. The system in India nearly disintegrated. Yet the British government not only bailed the EIC out, they gave even greater powers to it. By 1803, the company thought of itself as “an Empire within an Empire.” It had the British government twisted round its finger. It wasn’t until 1859 that London grew tired of the company’s excesses and finally nationalized it.
1 DynCorp Somehow Keeps Getting Hired
Of all the evil companies we’ve covered on Listverse, DynCorp may be the most reprehensible. A private military contractor, its employees have repeatedly been found doing things most of us would call immoral. Yet they keep on receiving lucrative contracts from everyone from the US to the UN.
In the late 1990s, DynCorp was contracted to work in Bosnia. With the knowledge of some UN workers, its employees kidnapped, raped, and trafficked local women. They forced children into brothels, tortured war survivors, and even murdered. When an employee blew the whistle on them, they fired her under false pretenses. In 2002, a British tribunal ruled she had been wrongly dismissed and was likely telling the truth. A separate UN probe confirmed the existence of a trafficking network in Bosnia. In 2003, DynCorp dropped all their appeals. Three days later, they were awarded a new contract to work in Iraq.
DynCorp’s crimes aren’t regulated solely to abuse. According to the Center for Economic and Policy Research (CEPR), their accounts in Iraq contained a $1 billion black hole. They also failed to apply proper oversight to their training of Afghan police, resulting in billions of taxpayers’ dollars being wasted. A Wikileaks cable also accused them of helping their Afghan subcontractors procure sexual favors from children.
After all these scandals, you would think governments would stop hiring DynCorp. No such luck. In 2013, they picked up a brand new billion-dollar contract to continue their “good” work in Haiti.