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Ralph Nader > In the Public Interest > Governor Schaefer Can’t Say No to Corporations

Annapolis, MD — The new Governor of Maryland, Democrat William Schaefer, has trouble saying No to corporations. This inebriation with “business climate politics” at the expense of peoples’ rights does not bother him in the least; the Governor is a man with a mission to project nationwide the perception that Maryland’s government is so pro-business that it will demonstrate that fealty right down to the last victim’s legal rights to take those corporations to court.
Here in this pretty state capitol, I criticized the rough politics which were going on in the state legislature. The Governor and his aides are putting very heavy pressure on legislators not to say no to companies, chambers of commerce and the physician advocates. These businesses are demanding that laws be passed making it more difficult fcr Marylanders to sue the perpetrators of their injuries or diseases and make it more likely that they will receive less than an adequate award should they sue and win.

What’s more, the Governor wants legislation to make it impossible for the owners of businesses — the shareholders — to sue their company’s directors for negligence, even gross negligence, in mismanaging their corporation. Shareholders would have to prove willful or deliberate misconduct to prevail. This proposal was submitted notwithstanding months of disclosures about officers and directors being very negligent in not catching crimes by their colleagues in savings banks and other firms. The Schaefer crew certainly was determined to win the legislative battle. But their cause did not pass what one legislator called “the smell test.” Imitating Delaware’s ‘corporate Reno’ laws did not sit well with lawmakers on the House Judiciary Committee who rejected any further insulation of directors from accountability to their owners and, indirectly, to workers and the economy they damage.

The Judiciary Committee also rejected a Schaefer measure to reduce court awards by the amount that the victim receives from other public or private insurance paid for by the plaintiff or taxpayers.

There were other Schaefer bills. One would have made it more arduous for youngsters to sue their malpracticing physicians — the restriction on the so-called statute of limitations. It would also limit the period for a malpractice suit tc five years after exposure to the harm, even if the victim could not possibly have discovered the toxic damage until it surfaced in cancer or another incubating disease.

Although not in his formal package to the legislature, the Governor supported other bills to restrict liability on behalf of defendants, such as joint toxic chemical polluters.

Charges flew thick and fast along the corridors outside the committee rooms that the Governor’s lobbyists were playing hardball with legislators about various projects in their districts which could or could not be forthcoming. Similar complaints were made more vehemently in a closed door session of the House Judiciary Committee.

At a time of booming insurance industry profits, including a 34% average return on equity from 1980 to 1985 for the workman’s compensation carriers in Maryland, the Governor is bowing to the extortionate demands of this industry to curtail victim’s rights to have their day in court.

At a time of greater public knowledge about the cancer-causing effects of toxic chemicals and the injuries from defective products, the Governor wants to reduce not only the authority of judge and jury to decide compensatory justice. His policies would also limit their deterrent effect against future carelessness in the business and medical community.

Sacrificing the rights of the most vulnerable people in his state on the platform of business climate politics is unworthy of any Governor. Furthermore, giving Maryland a replication in business circles that it can be had only leads to greater posturing and demands by overweening business lobbyists. Schaefer is overly impressed by Delaware which for almost 90 years has been weakening its corporate law to attract corporate charters from other states. But for all its kowtowing is Delaware better off than Maryland economically?

While Mayor of Baltimore, Schaefer discovered that shifting public resources to showy corporate building projects brought him headlines as an urban booster. Less publicized were the neglects and costs of these direct and indirect business subsidies on many less affluent people in Baltimore. The poverty level increased and, school budgets suffered along with other social services.

Now as Governor, he is going for bigger kowtows. Weaken the environmental laws to satisfy the coal mining companies! Have the public utility commission reduce commercial rates for big business wanting to locate in the state! Never mind scholarly study after scholarly study that concludes such concessions are minor potatoes in the clutter of variables that make for business location decisions. Sure, businesses will take whatever they are donated. But why does the Governor of Maryland want to give away rights and resources that belong to workers, consumers and taxpayers?