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MORE REASONS TO RESIGN FROM THE MIT MEDIA LAB

MIT Media Lab image by ckelly, CC BY 2.0. Modified by Jason Pramas.
MIT Media Lab image by ckelly, CC BY 2.0. Modified by Jason Pramas.

 

The connection to Jeffrey Epstein is just one of many questionable relationships

 

Recently, two scholars announced their plans to cut ties with the MIT Media Lab over its longstanding relationship with Jeffrey Epstein—the New York financier who had been arrested on federal charges for the alleged sex trafficking of minors in Florida and New York and committed (a suspiciously convenient) suicide in custody on Aug 10. Ethan Zuckerman, director of the Center for Civic Media at MIT (which is “a collaboration between the MIT Media Lab and Comparative Media Studies at MIT,” according to its website) and an associate professor of the practice at the MIT Media Lab, and J. Nathan Matias, a Cornell University professor and visiting scholar at the lab, are certainly to be commended for having the courage of their convictions. Particularly Zuckerman, who is literally leaving his job over the Epstein affair.

 

The lab’s direct connection to such a highly placed, dangerous, previously convicted sex offender is certainly more than enough reason for staffers, affiliates, and grad students to consider resigning their posts. However, it must be said to those who stay on that there have always been plenty of other reasons to resign from the MIT Media Lab from the moment it opened its doors. Because “capitalism’s advanced R&D lab”—as a colleague of mine close to the current fray calls it—has never been picky about which donors it will accept funding from. And that presents a major dilemma for other people of good conscience who happen to be working there.

 

So, I decided it would be worth a quick spin through some of the misdeeds of a few of the most well-known Media Lab corporate donors. In hopes that other people connected to the highly problematic institution might also decide to announce an abrupt career change in the name of social justice. Better still, they could organize themselves into a movement to either reform where the lab gets its money—and on whose behalf it works—or simply break it up. And maybe spread its projects around to other, less compromised, institutions.

 

BP and ExxonMobil. Every energy company engaged in extracting oil, natural gas, and coal, processing it, and/or distributing it to be burned in internal combustion engines or power plants is hastening the extinction of the human race by inducing ever-worsening global warming. With knowledge aforethought. As evinced by the organized campaign of disinformation they have all led against climate science, according to the noted book and documentary Merchants of Doubt by Naomi Oreskes of Harvard University and Erik M. Conway of NASA’s Jet Propulsion Laboratory at the California Institute of Technology. There is no way to take this money and still have clean hands. Whether it’s a thousand dollars or a million. MIT Media Lab leadership knows this and does it anyway.

 

Ford Motor Company. A company as old and as large as Ford has inevitably done a lot of reprehensible things. Two of the worst: a) producing carbon-burning, greenhouse gas-emitting vehicles for over a century (almost 400 million since 1903) and b) working with energy companies like the ones that became ExxonMobil to form the Global Climate Coalition—a key international lobby group that spearheaded the fight by major corporations against climate science to prevent environmental regulation that would negatively affect their bottom line, according to Oreskes and Conway. It is the fifth-largest vehicle manufacturing company in the world.

 

Hyundai Motor Company. The third-largest vehicle manufacturing company in the world. And therefore another corporate scofflaw even without looking at its miserable record of union busting. Continuing to flood the planet with millions more carbon-spewing, global warming exacerbating machines every year. Oh, and the Korean conglomerate also got caught “overstating” its vehicles’ mileage a few years back, according to US News and World Report.

 

Honeywell SPS. While the Safety and Productivity Solutions “strategic business unit” of Honeywell International Inc. is the one giving money to the MIT Media Lab, its parent corporation is a major defense contractor. And a particularly dangerous strain of that breed of sociopathic capitalist entity. According to the Don’t Bank on the Bomb website produced by the interfaith Dutch antiwar group PAX, “Honeywell is involved in US nuclear weapon facilities as well as producing key components for the US Minuteman III ICBM and the Trident II (D5) system, currently in use by the US and UK.” Because what could possibly go wrong with continuing to produce more nukes? 

 

Citigroup. One of the main American banks responsible for the 2008 global financial collapse thanks to heavy investment in derivatives based on subprime housing mortgages. Also, the recipient of one of the largest bailout packages from the federal government in US history. That was either as “little” as $45 billion in Troubled Asset Relief Program (TARP) money (which it paid back), or as much as $500 billion—when all government assistance it received is included (much of which it didn’t have to pay back)… according to a Wall Street Journal op-ed by James Freeman, co-author of the critical Citigroup history Borrowed Time. Most of the tens of thousands of working families whose lives were ruined when their homes were seized for mortgage nonpayment by the banks which set them up to fail did not get a bailout.

 

GE. A company I have written a baker’s dozen pieces on, between the start of the GE Boston Deal in 2016 and this year (when said deal fell apart). Once a major employer in Massachusetts, GE not only destroyed the economies of several cities around the state by precipitously shutting down major plants—in part to cut costs by eliminating thousands of good unionized jobs—but also polluted the entire Housatonic River valley from northwest Mass to Long Island Sound, as I covered in parts one and seven of my GE Boston Deal: The Missing Manual series. Yet is still trying to avoid having to finish cleaning that toxic mess up. Furthermore, GE was heavily involved in causing the 2008 global financial collapse through its former “shadow bank” division GE Capital and was the recipient of a huge government bailout via $90 billion in cheap credit it definitely did not deserve, as I outlined in parts two and three of my series.

 

McKinsey & Company. A virtually unaccountable private consulting firm with its fingers in many multinational corporate pies—and a special emphasis on working with authoritarian governments. The New York Times has spent years exposing some of its more sordid activities, including running the $12.3 billion offshore hedge fund MIO Partners, identifying the social media accounts of three prominent online critics of the Saudi government (one of whom was subsequently arrested), and helping Boeing find some needed titanium by getting a Ukrainian oligarch to bribe eight Indian officials. Plus, it reported—close to home and perhaps worst of all—that the “[Commonwealth] of Massachusetts released new documents from 2013 that detailed McKinsey’s recommendations on how Purdue Pharma could ‘turbocharge’ sales of its widely abused opioid OxyContin. The state said McKinsey advised Purdue to sharply increase sales visits to targeted doctors and to consider mail orders as a way to bypass pharmacies that had been tightening oversight of opioid prescriptions.” The thousands of opiate deaths in the Bay State alone since that time are on the criminal consultancy’s head—along with Purdue, and other corrupt pharmaceutical companies.

 

GlaxoSmithKline, F. Hoffmann-La Roche AG (Roche), Novartis, and Takeda. And speaking of pharmas, here are four that donate to the Media Lab. All of which make huge profits by converting largely publicly funded basic science research into privately owned drug formulas protected by patents and other exclusive rights granted to them by governments. Then repurposing older medications for different uses—for which they receive new patents. According to a Washington Post op-ed by Robin Feldman, the author of Drugs, Money, & Secret Handshakes, “…78 percent of the drugs associated with new patents were not new drugs coming on the market but existing ones. The cycle of innovation, reward, then competition is being distorted into a system of innovation, reward, then more reward.” Ultimately, big pharmas extend their monopolies over the most profitable drugs by using their dominant positions to keep cheaper generic versions produced by smaller pharmas from gaining a foothold for years after they’re finally allowed to enter the market. The amount of unnecessary misery created by such companies in countries like the US that lack a comprehensive national healthcare system able to keep drug prices low is, therefore, immense. On top of the more specific misery caused when Takeda’s diabetes drug Actos was found to cause bladder cancer, according to the New York Times. Or when Roche made serious bank by convincing government to stockpile the influenza drug Tamiflu and was later found to have been withholding vital clinical trial data showing it wasn’t very effective, according to the Guardian. Or when GlaxoSmithKline “agreed to plead guilty to criminal charges and pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug,” according to the New York Times. Or the ongoing scandal resulting from the FDA accusing Novartis of manipulating the “data used to support approval of the drug Zolgensma,” according to Stat. Which is supposed to be a treatment for the rare baby-killing genetic disorder spinal muscular atrophy and is the most expensive drug in the world at $2.1 million for a one-dose treatment, according to NPR.

 

Deloitte. Just a bunch of harmless accountants, right? Wrong. According to Canada’s National Observer, Deloitte is the largest of the “Big Four” audit firms that have “emerged as central players in the creation and abuse of offshore tax havens.” They also “become champions of the privatization of government services.” Giving a hearty assist to the consolidation of wealth by ever smaller numbers of corporations and individuals. Thus diminishing the governments that were once able to tax the rich and powerful and use the money to provide the very public services that have gradually been privatized—and concentrating more of the remaining public funds in those same private hands.

 

That’s just a sample of the dozens of MIT Media Lab “member companies.” Not all of them are as bad as the ones above. But few are above reproach. Check them out yourself at media.mit.edu/posts/member-companies/. And consider what kind of university would allow one of its major initiatives to run for decades with such little regard for social responsibility.

 

Full disclosure: Jason Pramas has interacted with Ethan Zuckerman professionally from time to time.

 

Apparent Horizon—recipient of 2018 and 2019 Association of Alternative Newsmedia Political Column Awards—is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s executive director, and executive editor and associate publisher of DigBoston. Copyright 2019 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.

THE FALL OF THE GE BOSTON DEAL, PART II

  AG Healey should form independent commission to investigate the failed agreement   Last week in the first installment of this two-part column, I ran through the many problems with […]

THE FALL OF THE GE BOSTON DEAL, PART I

  The official narrative and the real story   Readers might feel that this should be a time for me to take a victory lap. The GE Boston deal that […]

GENERAL ELECTRIC FAIL

 

Conglomerate’s woes throw Boston HQ deal contradictions into bold relief

 

November 15, 2017

BY JASON PRAMAS @JASONPRAMAS

 

What a surprise. General Electric is tanking, and the scheme to bring the multinational’s headquarters to Boston is looking worse by the day. And whom shall the public blame if that once-secret deal cut by Gov. Charlie Baker and Mayor Marty Walsh in January 2016 goes south? Potentially tossing away millions in tax breaks and direct aid to a company that has already done massive damage to the Bay State over the past few decades? Readers of the dozen columns I’ve written criticizing the boondoggle will already know the answer to that question. But for those of you who have made the mistake of believing all the massive amounts of PR bullshit that the Boston Globe and other area press have been tossing around about the affair since that time, here’s a bit of a recap.

 

Where to begin? So, the governments of Boston and Massachusetts agreed to shovel tens of millions of dollars at GE in “exchange” for “800 jobs” in a new corporate headquarters campus in the Fort Point district of the Hub. Many of which would simply be transferred from the old headquarters, and most of which would be executive level jobs that will not help Boston’s struggling, underemployed working class.

 

Now there’s a problem. GE’s been losing money all year. According to the New York Times, its stock price had already dropped by 35 percent since January. Then, according to CNBC, the company’s share value dropped another 13 percent this week as of this writing after new CEO John Flannery announced a restructuring initiative—including the one thing investors hate most of all: dividend cuts. Only the second for GE since the Great Depression. So the knives are coming out around the beleaguered behemoth, and it remains to be seen whether some internal reorganization (doubtless costing legions of employees their jobs) and some belt-tightening by its execs will be enough to stop investors from moving to carve the conglomerate up like a Thanksgiving turkey. But let’s not assume the worst just yet.

 

Funny thing about that belt-tightening, though. According to the Boston Herald, cuts are now in store for GE’s still-small local workforce, and construction of the new Fort Point headquarters building was already pushed back two years from 2019 to 2021 in August. The plan is to make do with the two old Necco buildings already being refurbished on the site at first. The PILOT (payment in lieu of taxes) agreement signed by the Boston Planning and Development Agency (formerly the Boston Redevelopment Authority) and the city of Boston guarantees up to $25 million in tax breaks to GE if it provides the much-ballyhooed 800 full-time jobs. But by what date?

 

The discussion around GE moving its HQ to Boston has focused on the corporation creating those jobs by 2024. Herein, then, lies the rub about the PILOT deal: The agreement is framed around GE hiring “approximately 800 employees at the Headquarters Building and the Necco Buildings within eight years of the Occupancy Date.” But that occupancy date is explicitly defined as “the date upon which the Company initially occupies the Headquarters Building.” Which has now been pushed back from 2019 to 2021, according to the Boston Business Journal. So 2024 cannot be the year that GE will need to have 800 employees on its new campus. 2027 would have been the earliest it had to meet that target. And now that’s been pushed back to 2029, given the delay with the headquarters building.

 

Yet it turns out that the PILOT agreement doesn’t actually require 800 jobs to be created. Remember, it starts by stating GE will employ “approximately” 800 people on the Fort Point campus. But further down in the document, in a table explaining the specific tax break the city will actually give the company during each year of the deal, it allows for the creation of as few as 400 jobs in a chart with five tax break tiers between “Job Figure is between 400 and 499” and “Job Figure meets or exceeds 800.” Keeping in mind that the agreement also specifies a “stabilization” period of seven years between 2018 and 2024, during which GE gets $5.5 million in tax breaks no matter what and isn’t required to provide any jobs at all for the first six years. GE is then only required to provide between 400 and 800 jobs from 2024 until the agreement ends in 2037.

 

Job figure table from the GE Boston PILOT agreement
Job figure table from the GE Boston PILOT agreement

 

What’s super puzzling is that agreement first requires the company to start providing annual job figures “from and after” the aforementioned occupancy date. But the agreement already established that it only really has to start meeting any job targets as far out as eight years from the date it occupies its headquarters building. Making the job target requirement trigger as late as 2029, according to current plans. Despite the tax break table in the PILOT agreement using job targets to calculate tax breaks beginning in 2025 based on the 2024 job count.

 

The state, for its part, committed a total of about $120 million to the project. Late last year, GE spent $25.6 million to buy 2.5 acres on the Fort Point Channel that includes the land the existing buildings sit on and the land the new headquarters building will (perhaps) one day occupy from Procter & Gamble. MassDevelopment, part of the Commonwealth’s economic development apparatus, took out a $90 million loan from Citizens Bank—an interesting maneuver worth looking into—using $57.4 million to purchase the two old Necco buildings on the site from P&G, and the rest to refurbish the buildings. The remainder of the state’s “investment” is slated to go to fixing up the area around the site.

 

So, GE is getting basically free rent on the Necco buildings plus free upgrades on abutting public land courtesy of the state. And a big chunk of the taxes it would normally pay over the next 20 years is coming free from the city. Without any real requirement that it actually provide any jobs in Boston for many years, and then only (maybe) 400 jobs by 2029—assuming the headquarters building is built in 2021.

 

Which is the problem with all such erstwhile “economic development” deals in the Bay State. From their origin as a way to help encourage investment in areas of the state that were down on their luck precisely because GE and companies like it moved their manufacturing operations away from cities like Pittsfield, Lynn, and Fitchburg to places without the decent labor and environmental regulation that was in place by the 1970s, they have become yet another way for rich and powerful corporations to get richer and more powerful. Worst of all, such corporations hold all the cards in the deals. If they don’t get lavished with free public money, they can refuse to move their operations here or can leave if they’re already operating in the area. Once they get the cash they’re looking for, they can basically pull out at any time. Or as is the case with GE, they can “alter” the deal Darth Vader-style, leaving our local “Lando Calrissians” like Baker and Walsh to “pray” the deal is not altered “any further.”

 

The Boston Business Journal was correct to point out that GE will get $2.1 million in tax breaks on the Fort Point Complex by 2021—the year that the company now claims it’ll be completing its new 12-story headquarters building on the site. But what if it doesn’t build the new structure at all? It’s not clear. Because the PILOT agreement is pegged to job creation starting as far out as eight years after the headquarters building is built, and then allows for the company providing as few as 400 jobs between 2024 and 2037 rather than the 800 everyone’s been assuming. While not actually demanding any job creation until as late as 2029, making it unclear how the tax break will be calculated between 2025 and 2029 should GE drag its feet for the full eight years. The conditions for the company defaulting on the agreement are also pegged to job creation. Not to the construction of the headquarters building. Oh, and by the way, the PILOT deal only covers the headquarters building and the land the company purchased under and just around it (which the agreement calls the “Headquarters Project”). Not the Necco buildings, now owned by the state. Also, there’s no word about what happens if the company has less than 400 workers in Boston at any point from 2024 to 2037. Do these curious contradictions amount to loopholes for GE to bag the whole deal? It certainly looks that way.

 

The minimum GE will get in tax breaks from the city of Boston over 20 years is $5.5 million by 2024 plus whatever breaks it qualifies for between 2025 and 2037. However, the amount the company actually puts out in annual PILOT payments after 2024 is calculated by a complicated formula based on the taxes that would have been assessed without the PILOT agreement. And the assessed value of the relevant property could change from current projections. So it’s hard to know what the total value of the PILOT deal will ultimately be to GE, other than that it will be a bunch of money… however many jobs it actually creates.

 

But why exactly are Boston and Massachusetts giving a huge company that’s still profitable any money at all? And what happens if GE bails on the scheme by hook (simply running and fighting its PILOT default in court with its vast legal department) or by crook (not building the headquarters building at Fort Point and possibly getting away with delaying the job creation target trigger until the deal ends in 2037)? And what happens if worse comes to worst for GE, and the company actually does collapse?

 

These remain my central questions. And I continue to encourage all of you to ask those and related questions to every Boston and Massachusetts politician you can find. And ask the Globe while you’re at it. They’ve got a loooot of ’splaining to do about their cheap boosterism… which they’ve become awfully quiet about of late. Preferring, it seems, to focus on the next giant company that’s demanding public bribes to come to town, Amazon.

 

A shorter version of this column appears in this week’s DigBoston print edition.

 

Apparent Horizon is syndicated by the Boston Institute for Nonprofit Journalism. Jason Pramas is BINJ’s network director, and executive editor and associate publisher of DigBoston. Copyright 2017 Jason Pramas. Licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.