Is Indiana University Trustee appointed by Daniels a Corporate Criminal?

[Chiyo-chichi]

If you are connected with Indiana University - on any campus - in any way - I need your help on this one. I found some facts about one of the trustees that Mitch Daniels appointed in July. I passed them along to Mike Leonard, who will write about it in his column in the Bloomington Herald-Times on Sunday.

In short, Thomas Reilly, Jr. is the former chairman of Reilly Industries, an Indianapolis chemical company owned by his family. While Reilly was chairman of the company, Reilly Industries was indicted on federal charges for price fixing niacin (vitamin B3) and niacinamide (the biologically active amide of niacin.) The company pled guilty to felonious criminal price fixing before a federal grand jury in May of 2000 and paid a $2 million fine. The company paid additional civil damages of $4.2 million for its involvement in the B3 conspiracy.

DOJ press release on the conviction: http://www.usdoj.gov/atr/public/press_releases/2000/4684.htm

INTERNATIONAL BUSINESS; "Four Drug Companies to Pay $33 Million in Fines", New York Times, May 6, 2000: http://query.nytimes.com/gst/health/article-page.html?res=9800EEDA1438F935A35756C0A9669C8B63

Read more & comment here: http://reillymustresign.blogspot.com/

No charges were brought against Reilly executives - but that doesn't mean that they were innocent - only that they cooperated after they got caught. IS THAT WHAT WE WANT IN AN IU TRUSTEE?

AFTER the story is published on Sunday, I will post it here (as the HT is subscription-only access.)

AFTER the story is published, please give it the old Media Blast, blog it, write letters to the editor, and tell anyone who cares about Indiana University. I don't intend to let up until Reilly gives a full & honest accounting or resigns.

Reilly is a big Republican donor, which is no surprise. The 9 trustees that Daniels appointed to IU, Purdue, Indiana State, & Ivy Tech gave a total of more than $52,000 to his campaign.

Reilly Industries also has a loooong history of polluting.

[salin]

1. Great info.

will look for Leonard's column. And will pass it along.

[Chiyo-chichi]

13. nt

[Chiyo-chichi]

2. IU trustee's firm ran afoul of the law

Commentary by Mike Leonard
Hoosier Times columnist | [e-mail]
September 18, 2005
Running an enterprise as big and complex as Indiana University is a tough job - too tough for some people, it might be suggested, based on the shortcomings IU's trustees have demonstrated over the past couple of decades.

Gov. Mitch Daniels clearly must have realized this when he tapped the blunt and assertive Thomas E. Reilly Jr. this year as his gubernatorial appointment to the IU board.

Reilly never attended IU but brings a unique business background to the institution.

In May 2000, while Reilly was chief executive officer of Reilly Industries, his company pleaded guilty to violating antitrust laws in what one Purdue University business professor described last week as participation in "the mother of all cartels," operating in virtually every continent on the planet.

"This was no run-of-the-mill crime," said John M. Connor, professor of industrial economics at Purdue. "This is as serious a corporate crime as tax evasion or any number of other corporate crimes under federal law."

For its role in what the Department of Justice termed "worldwide conspiracies to suppress and eliminate competition in the vitamin industry," Reilly Industries paid a $2 million criminal fine and an estimated $4.2 million more in damages.

Specifically, Reilly Industries pleaded guilty to conspiring to set prices and stifle competition in the manufacture and distribution of Vitamin B3, or niacin, according to a news release still posted on the Justice Department's Web site.



Pollution, too
Reilly Industries and its former incarnation as Reilly Tar & Chemical also have been involved in pollution lawsuits and Superfund clean-up sites in several states. One site on the south side of Indianapolis was termed by the Environmental Protection Agency in the mid-1980s as "a significantly polluted location" responsible for air, ground and groundwater pollution, an EPA spokesman said in 1992.

Reilly acknowledges that his company - he still sits on its board of trustees - has paid more than $100 million in Superfund and other pollution cleanup costs.

The appointment of Reilly by Daniels has been viewed as an attempt to make IU run more like a business. Let's just hope it isn't a business like Reilly Industries.

The Indianapolis businessman attended Wednesday's trustees' retreat in Brown County, but missed Thursday and Friday's sessions because of a previously scheduled trip to Russia with colleagues from the Harvard business school, from which he graduated. He participated in some of the Thursday and Friday trustee sessions by telephone and spoke to The Herald-Times by phone late Thursday afternoon from a New York airport.



The Reilly report
He described his company's guilty plea for anti-trust violations as "certainly one of the low points of my career" and said he had no personal knowledge of the global cartel in which the company participated.

He said the company conducted an internal investigation when it became aware of antitrust allegations, cooperated with the government investigation and agreed to plead guilty as "a more effective means of resolution" than prosecution and further litigation.

Reilly also noted that the fine and damages paid by his company were very small in comparison to the millions ultimately paid out by co- conspirators.

Connor, the Purdue expert on international trade cartels, predicted Reilly's response.

"The usual story is that the company agreed to cooperate with the government at an early stage of the investigation, and in return, they are given concessions, such as, for example, that no officer of the company would be indicted for individual responsibility," he said.

Two executives from the drug firm Nepera agreed to serve prison time, according to the Justice Department's statement in 2000.

Connor also noted "it would be somewhat of a surprise if a hands-on CEO was not aware of a conspiracy that went on for six or seven years" and asserted, "The personal involvement of Mr. Reilly is not known, but it did happen on his watch."

Reilly was CEO of Reilly Industries from 1990 to 2001 or 2002, he said Thursday. The Department of Justice said Reilly Industries participated in the cartel from roughly 1992-98.

Reilly brushed aside the suggestion that if he didn't know about the cartel, he was asleep at the helm, by saying "We hopped on it and made it right, right away."

For his part, the Purdue international cartel specialist said he isn't making any pronouncements on the IU trustee's business acumen or character. "Frankly, Reilly Industries is a privately held company and it doesn't issue public reports. It puts a researcher at a great disadvantage because they're not required to issue footnotes in their financial statements, telling you about material events.

"I don't want to prejudge this. A man's innocent until proven guilty," Connor said. "But why appoint somebody that was so close to something that was illegal? Is this really the kind of person we want to be an exemplar for university students?"


© 1997 - 2005 Hoosiertimes Inc. No commercial reproduction without prior written consent.

[Chiyo-chichi]

6. Letters?

Anyone up for some scathing LTTEs? I've e-mailed this info to just about every media outlet in the state, IU administrators, and all Democratic state Reps & Senators from districts where IU has a campus.

Happy Sunday morning,everyone! Mike Leonard did a great job on this story. I appreciate anything any of you can do to help me see that the story doesn't die.

[thinkingwoman]

3. It got a top of the 1st page teaser!

"Can we trust the new trusteee? Reilly's firm paid millions in fines"

Pretty good placement for a teaser for a column--even if it is Mike Leonard's.

[Chiyo-chichi]

4. This is my favorite line...

"The appointment of Reilly by Daniels has been viewed as an attempt to make IU run more like a business. Let's just hope it isn't a business like Reilly Industries."

[thinkingwoman]

5. LOL

I haven't read it yet...am in line to read the paper here this morning.
:eyes:

Looking forward to it though.

[Chiyo-chichi]

7. photoshop satire

[Chiyo-chichi]

8. Does nobody remember the "Don's Guns" commercials?

Am I amusing myself only?

[izzybeans]

10. I remember them. And I laughed mightly at this when you posted it.

sorry for the late kudos.

[Chiyo-chichi]

9. Can I get some outrage?

Just yesterday, I learned of a macabre side note to this story. The German firm Degussa, one of the co-conspirators in the niacin cartel, was guilty of heinous Nazi war crimes.

They used Auschwitz prisoners as slave laborers: http://news.bbc.co.uk/1/hi/world/europe/51440.stm

"Much of the gold and silver extorted from Europe’s Jews or ripped from their corpses passed through Degussa’s refineries, as did some of the far larger quantities of precious metals plundered from the treasuries and citizenries of occupied Europe. Not only was the gold indispensable as a means of paying for the import of vital war materials from Portugal and through Switzerland, but also the silver almost literally gave eyes to the Luftwaffe, since much of it was sold to manufacturers of photographic film. Germany’s warplanes also depended on Degussa’s cyanide output for the Plexiglas that girded their cockpits, on Degussa’s sodium for the tetraethyl lead in their fuel, and on Degussa’s rare metal alloys for some of their propellers and engine parts. Later, Degussa’s hydrogen peroxide helped propel German torpedoes and U-boats, the V-rockets that Hitler launched against England, and the jets that he hoped would turn the tide of the war. On the ground, German troops rode on tires made with Degussa’s carbon black, carried gas masks turned out by Degussa’s Auergesellschaft subsidiary, deployed equipment fabricated from Degussa-hardened steel, and fired anti-aircraft shells that contained explosives from Degussa-managed installations. The Zyklon B used to asphyxiate some one million people at Auschwitz and Majdanek was a Degussa product. Had Germany developed a genuine research project for an atomic bomb, Degussa, as the nation’s principal producer of uranium and other radioactive metals, surely would have played an essential part in it."
--From Cooperation to Complicity: Degussa in the Third Reich
By Peter Hayes
http://print.google.com/print?id=TNULLgE7IfcC&oi=fnd&pg=PA1&sig=wY6sYsALwNVOD3_BxJwBjk8F2pA


While I'm not fond of him, I can't pin Nazi war crimes on Thomas Reilly, BUT he did enter into a business partnership with Degussa in 1991 (I'm not talking about the cartel) AND Reilly Industries bought out Degussa's part of the niacin business in 2003. I don't know if Thomas Reilly was still CEO when they bought out Degussa, but I found it interesting that, in his interview with Mike Leonard, he couldn't remember when he retired. It was actually 2003, not "2000 or 2001" - at least according to Indiana University. I wonder if he was hedging because he was afraid that Mike was going to ask him why he established a business partnership with a firm that had a history of Nazi war crimes? He certainly would have known about that in 2003.

Some have argued that it has been 60 years and that Degussa has made amends, but they've been embroiled in controversy as recently as a couple of years ago: http://news.bbc.co.uk/2/hi/europe/3219199.stm

[izzybeans]

11. Somehow I imagine Mike Leonard missing this bit of information.

Thanks! Here's some outrage for you :puke:

I remember there being a required ethics class for business majors. I wonder how well he did in that one way back when. Ethic number 1 should be "Don't do business with Corporate and or War Criminals".
Commandment number 2 "If you aren't sure its the right thing to do, then don't."

[Chiyo-chichi]

12. How does a non-alumnus get to be an IU trustee?

There has been maybe one other person in the history of Indiana University appointed to the Board of Trustees who was not an alumnus or alumna of IU. So how do you get to be a trustee if you're not an alum?
Simple. Give the following amounts to Repuke candidates in a given election cycle:

Mitch Daniels - $2,000
Mitch Daniels - $5,000
Steve Carter - $1,000
Republican National Committee - $1,200
Republican National Committee - $1,000
Indiana Republican State Central Committee - $5,000
John Thune - $1,000
Andy Horning - $250
John Hoestettler - $250
The House Republican Campaign Committee of Indiana - $2,500
Roxanne Butler - $500
R. Brooks LaPlante - $500 (Daniels appointed him as a trustee of Indiana State.)
Mike Pence – $500 (12/12/03)
Mike Pence - $500 (4/12/04)
Dan Burton - $1,000 (6/27/2003)
Dan Burton - $1,000 (8/05/2004)
Marvin B. Scott – $500
George Bush – $2,000 (9/3/2003)
His wife gave $2,000 to Bush on the same date.
Chris Chocola – $1,000

grand total: $28,700.

[Chiyo-chichi]

14. How do you follow up...

felonious criminal price-fixing,
massive pollution,
and being business partners with former Nazi war criminals?

why, animal cruelty, of course!
http://www.peta.org/Automation/AlertItem.asp?id=1403

IU Trustee Thomas Reilly, Jr. may not be the CEO any more, but he still sits on the board of directors, he still owns the company, his name is still on the sign, and the profits still go to him... and through him to Republican pols.

Kick this bum OUT!

[Chiyo-chichi]

15. Long-Time Reilly Employee Speaks Out

Sorry to keep bumping my own thread, but a former Reilly employee posted this on my blog. I'm sure he/she found the blog because it was mentioned in the Star. I honestly don't know who he or she is, but their post has the ring of truth.
_________________________________________
I was a long-term (over 20 years) employee of Reilly Industries, Inc. and I worked for the company during the period they successfully skirted prosecution on the charges brought by the DOJ.

Reilly would have done anything to keep the door from being opened even further than this scandal opened it. There were many, many more instances of criminal activity within this company. And many of these were being directed by employees currently living outside of the U.S. It was well known throughout the company that a former sales manager would set prices on an entire array of products with Nepera and the competitors from Japan.

I hold several degrees from Indiana University and I have known Tom Reilly and his family for over twenty years. Having said that, I can tell you I am personally embarassed over Mitch Daniel's appointment of Tom Reilly, Jr. to the IU Board of Trustees. It smacks of the same political payback appointment that earmarked the illustrious tenure of Michael Brown at FEMA. Reilly Industries, Inc. is a privately-held company that has never been interested in doing anything except getting away with whatever it could, whenever it could. Its recent history has been created by dim-witted attorneys and engineers who believe there is nothing they cannot get away with.

The company has wreaked havoc with the lives of countless families and has created more superfund sites than any other chemical manufacturer even twice its size.

Shame on you, Tom Reilly! And shame on Mitch Daniels for bringing his arrogant penchant for mindless government back to our State.
_____________________________________________________________
They also posted this:
_____________________________________________________________

As an Insider at Reilly for over twenty years, I can tell you there is no question Tom Reilly knew of Degussa's horrid Nazi past!

In fact, when working to obtain Kosher Certification for their Vitamin B3 process, the Jewish Authorities continually brought up in written correspondence to the upper levels of Reilly management, the atrocities committed by Degussa.

None of it made any difference to anyone on Reilly's management team. The only question (as with every other potential ethical or legal snafu) was: "How can we get around it and move forward with our business?" The answer: throw some money at the problem and it will go away (and it did.)

Reilly/Degussa Vitamin B3 has been Kosher Certified for years and sold to companies producing enriched flours for baking into Kosher foodstuffs. Consumed by Jews who would surely rather starve than eat a product developed by the folks responsible for enslaving and killing their forefathers.

Tom Reilly Jr. concerned with business ethics? You cannot be serious.

[Chiyo-chichi]

16. I am getting Freeper-type comments

on the blog. I've been called a socialist, told to get a job and contribute (I have a job, but I don't know what he wants me to contribute to. Society? The ACLU?), accused of Republican bashing, and called a coward.

PLEASE, surf over and post some DU-style comments if you are so inclined: http://reillymustresign.blogspot.com

I can refute this Freeper all day, but I could use some support. Thanks.