Nader, An Analysis

Ralph Nader… back in college, I lost an elimination round at a high-profile debate tournament because I didn’t know much about him and his affects on the “political equation.” Who is Ralph Nader? What is the current political equation and how does Nader’s bid for the Presidency affect it?

Ralph Nader is a lawyer who makes his career as a consumer/citizen advocate. His connections with trial lawyers and various interest groups have proved invaluable in creating numerous non-profit organizations that have fought for so many citizens against huge corporations. According to his own website, www.votenader.org,

His groups have made an imprint on many areas including civic skills, tax reform, pensions, aviation, regulation of atomic power, renewable energy, clean air and water, clean elections, food, medicine and auto safety, safety in the workplace, access to healthcare, civil rights, civil justice, Congressional ethics, campaign finance, discriminatory lending, the tobacco industry, corporate crime and reform, investor protection, corporate globalization, agribusiness and small farms, intellectual property, medicine prices abroad, freedom of information, and government procurement.

There is no question that Ralph Nader has done much good for the individual citizen/consumer. However, his ability to lead a nation has many questions. For instance, he uses his non-profit organizations to hide the millions of dollars worth of contributions1. Nader’s Public Interest Research Groups (PIRGs) that are set up on college campuses are funded by mandatory student fees ($2 – $6). When Penn State’s Board of Overseers elected to make those contributions voluntary, Nader lashed back with accusations of “sabotage” and “tyranny” and called for an investigation of the school’s trustees for conflicts of interest. The Board backed down and to this day those mandatory PIRG fees are still collected. The millions of dollars raised through these PIRGs, then, are effectively forced2.

Apprarently, it’s not easy to work for one of Nader’s organizations. Disgruntled workers have complained about long hours, low pay, and being called in the early hours of the morning. When such workers tried to unionize in one of his organizations, he fired the three editors who were leading the unionization and sued them for $1.2 million. Nader agreed to drop the intimidation suit only after the three dropped their labor complaints. Nader explains, “Public interest groups are like crusades… you can’t have work rules, or 9 to 5. Small public interest organizations would go broke in a month” if they were unionized.3

From the other articles that I’ve read about Nader, he seems a bit too authoritarian and secretive for my tastes. Granted, he’s done a lot for consumers. Yet he profits tremendously from these crusades:

For example, Nader is the president and treasurer of the Public Safety Research Institute. Back in 1970, PSRI traded on the stock market 67 times, buying and selling $750,000 worth of stock, though the organization only had $150,000 worth of assets. These trades included a number of short sales, high-risk and tricky transactions. Some worked, some lost money. In later years, PSRI traded less, for a good reason: the IRS audited them after 1970 and charged the organization with “churning”, excessive stock trades whose risk threatens the charitable purposes of the organization. It paid a fine and did not contest the charge. Thereafter, PSRI continued to play the market with fewer, generally long positions. Likewise, the Safety Systems Foundation (SSF) – run by Nader’s sister, and entirely funded by him personally – engaged in a number of stock and bond transactions in the late 1960s and early 1970s. It was also fined by the IRS and paid without contest.

Several of these trades were poised to take advantage of Nader’s activities, by selling short the stock of companies Nader’s groups attacked, or buying stock of their competitors. In 1973, PSRI bought stock in Allied Chemical, the primary manufacturer of airbags, on the very day before GM announced they would offer optional airbags on 1974 models. PSRI made a 12.5% profit in 3 and a half months. In 1976, PSRI and the SSF bought stock in Goodyear just as the National Highway Traffic Safety Administration – then run by former top Nader aide Joan Claybrook – announced an investigation of the Firestone 500 series of steel-belted radials. The 2 organizations held onto the stock for 2 years until there was a recall, and Firestone (Goodyear’s major competitor) suffered.

In 1970, IT&T attempted to merge with the Hartford Fire Insurance Company. Nader filed a 50 page brief attacking the merger, then SSF sold IT&T stock short. It made almost 10% on its money in 6 DAYS, then closed its position two days before the merger was approved. When pressed by a reporter, Nader said the timing was “mere coincidence” and said he had no control over the investment. However, his sister Laura Nader Millerson was the sole trustee of SSF throughout its existence, and Nader was the sole contributor.4

So, Nader is essentially a successful consumer advocate who has helped many people and kept many corrupt corporations in check. He is difficult to work with and is not forthcoming with his own organization’s finances. Although he leads his network of consumer advocacy groups effectively (some may even say iron-handedly), his leadership as head-of-state is suspect.

Nader is certainly distinguished from the other presidential candidates. He is anti-big business and big on regulation. Domestic and global trade issues seem to be his main focuses whereas the other candidates tend to emphasize Iraq, the economy, and other vote-senstive issues. I think Nader’s track record would appeal to many jaded voters. However, electability is a huge factor. People who want to re-elect Bush would not want to vote for Nader in any case. So, I believe those who desperately want Bush out of office will not jeopardize the Democratic Party’s agenda to that end.

Nader’s bid for the presidency will allow him to voice other pressing national issues that do not seem to get much media spotlight. So, his presence, I feel, will force the other candidates to stand on other matters other than those that will get the most votes.

1Abuse of Trust: A Report on Ralph Nader’s Network, by Dan Burt (Chicago: Regnery Gateway), 1982, pp. 81-95
2Me & Ralph: Is Nader Unsafe for America?, David Sanford (New Republic Books) 1976, p52-55
3“Editors Claim Firing By Nader Based on Unionization Attempt,” by Peter Perl, Washington Post, June 28, 1984 pB3
4“Inside Nader’s stock portfolio”, by Jake Tapper, Salon Magazine, October 28, 2000
Me & Ralph: Is Nader Unsafe for America?, David Sanford (New Republic Books) 1976, p28-31

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