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April 5, 1998
GE: BUYING NBC's SILENCE ? General Electric is once again under fire for environmental damage... ...and once again reporters at GE-owned and operated NBC News have told this journal they do not feel free to cover the story. Concern is also growing, according to one veteran Los Angeles-based journalist*, that financial and stock inducements paid by General Electric to top-earning anchors and executives leaves a perception that the News Division is not just muzzled by GE policy in cases such as this, but compromised, as well, by the deep pockets of its controversial parent. At issue is the Housatonic River at the city of Pittsfield, Mass., one of at least 78 toxic waste sites across the U.S. for which General Electric is responsible, in whole or in part. A sprawling GE plant at Pittsfield used PCBs as an insulating fluid in transformers made over a 40-year period ending in 1975. PCBs were banned in 1977 as a probable cancer-causing agent. This past Friday, April 3, GE lawyers -- instructed directly by company chairman John F. Welch -- refused to budge on demands to clean up PCB-laden soil and river mud from the community, effectively nullifying seven months of negotiations between the company and the Environmental Protection Agency. It appears that the EPA will now be forced to nominate the GE plant site at Pittsfield, residential sites and a long stretch of the Housatonic to the Superfund National Priority List. Since General Electric has frustrated other Superfund initiatives, the people of Pittsfield fear there will be years of delay getting any significant cleanup started. "The government did make substantial movement toward a settlement," Mayor Gerald S. Doyle says, "and I don't think GE did enough." The local Berkshire Eagle, whose journalists have broken many key stories about GE legal manoeuvring, reported that other officials close to the negotiations said "the government's concessions could be measured in feet and yards, while GE wouldn't move more than a fraction of an inch." However nothing of this reached NBC's airwaves. Although the Pittsfield story has been documented by other national broadcasters and newspapers, including the Wall Street Journal (December 4, 1997), NBC's news programs appear to regard GE's liability over damage to the American landscape as a no-go area. (See Reporter's Journal entries September 28, 1997 and November 19, 1997). Which is not to say that NBC News staffers don't wish to report the story; many do. A large number of the Peacock network's journalists either live or weekend in the Berkshire Hills region through which both the PCB-laced Housatonic and Hudson Rivers flow. But, as with other GE-related controversies, suggesting a story on Pittsfield is seen as a "career-stopper" at NBC, especially with leading figures such as Tom Brokaw and News Division president Andy Lack showing no enthusiasm for the issue. That, in turn, raises the issue of GE stockholding -- Brokaw and Lack, together with the division's vice-presidents, its senior legal, public affairs and other management figures, are thought to be on the receiving end of the most substantial handouts of General Electric Company stock. "Many of us get modest awards of GE shares from time to time," one reporter comments from NBC's Burbank bureau, "but it's assumed that bigfoot salaries come with bigfoot share options. "If anchors are getting up to $7 million a year, you've got to expect that some whopping big bundles of GE shares are coming with it. With all these Superfund cases in the news, our anchors and executives should either divest themselves of their shares, or at least declare their interests. That way the public would be clearly advised that NBC is not exactly the best place to tune in for straight news about GE and the environment." Increasing share value, of course, is key to GE Chairman Jack Welch's obsession with avoidance or reduction of Superfund penalties. In the Wall Street Journal story, Massachusetts Rep. Christopher Hodgkins said of GE: "They resist testing, they push minimalist solutions, they make regulators refight every site, while fully aware that -- because of the time value of money -- every delay increases GE's profits." Company lore has it that, decades ago, John F. Welch Jr. first caught the attentions of the GE board as a lawyer battling to reduce environmental damage claims. After intital setbacks with federal and New York state authorities, Welch secured a deal with the State of New York limiting the company's PCB-related liability for polluting the Hudson to $3 million. The lawyer became an instant star, rising eventually to chief executive of the giant corporation -- America's most profitable as of this writing. According to a senior Senate investigator, decisions on litigation under Superfund go up to Welch to this day. "Because everyone in the company wants to be Welch, GE's attorneys are the most litigious in the country. And they can pay to attract the best people out of Justice and the EPA." But while that makes GE a daunting adversary, it does little to help the company's worsening image problems. The conduct of Mr. Welch and his attorneys in the Pittsfield case has been roundly condemned by citizens and by lawmakers and regulators at every level of government. One of reporter Theo Stein's best scoops for the Berkshire Eagle, for example, was the revelation last August of an internal GE memo dated 1981 which proved the company had been cautioned by one of its own officials that PCB-contaminated landfill had been taken off site and scattered around the community. Yet it was only in March, 1997 that GE finally turned the memo over to regulators. "It's an outrage," state Rep. Peter J. Larkin said of the revelation. "It's a betrayal of the community." Larkin had, until then, been a supporter of GE; now he has sided with Hodgkins, a Democrat, to press for immediate action to force the company to start cleaning up and compensating the town. (The Boston Globe also disclosed an internal memo, this one dated 1992, which warned of debris being dumped around town. It, too, was disclosed by GE only last March. Evidence in other cases, such as my own against the GE management team at NBC, reveals a similar pattern of legal behavior. See RISK AND REDEMPTION, pages 207-208.) Two other classic GE ploys have angered the people of Pittsfield. Jack Welch has threatened to pull a GE Plastics plant out of the city if Superfund legislation is enacted. And when negotiations broke down last week, GE abruptly pulled off the table an interim deal between the company and the city of Pittsfield to clean up the defunct transformer plant and to remove PCB-laden soil from a school playground. A company spokesman said bluntly that the arrangement "was only offered in the context of the larger negotiations." The deal, he said, was off. So the school yard will just have to wait, along with the plant, the Housatonic and homeowners' lots and gardens. City councilor Timothy J. DiSilva told the Eagle: "This was never about Pittsfield as far as GE was concerned. It was about their responsibility to communities across the country. They were not about to set a precedent here that could be used against them in other communities." All of which, in any news editor's judgement, would constitute at least the beginnings of a good national story. But not at Jack Welch's NBC. As of this writing, Nightly News, for example, has no plan to examine Pittsfield or the coast-to-coast scale of GE's resistance to cleaning up past abuses -- as both the law and common sense would dictate. Finally, this chilling reality for NBC News staffers and their viewers: General Electric's lawyers are beginning to take a more aggressive role in the management of the News Division itself. We'll have more on that in upcoming editions of the journal. |
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* This journal strives to obtain full attribution from all sources and to publish names -- except in situations where it is clear that there is a very real likelihood of reprisal from corporate or official quarters. For documented evidence of GE management tactics in dealing with employees, see RISK AND REDEMPTION, Chapter 12, "No Such User."