Wall Street midway: Step right up!
Latest Bush appointees are new faces pitching
same old shell games
BY Molly Ivins
Creators Syndicate
workingforchange.com 12.12.02
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AUSTIN, Texas -- Gosh, I'm feeling ever so much
better about the economy with the new Bush team
on the job. William H. Donaldson to head the
Securities and Exchange Commission: just the man
to take on the Establishment! Founder of the Wall
Street investment firm Donaldson, Lufkin and
Jenrette, former chairman of the New York Stock
Exchange and former chairman of insurance giant
Aetna. A veritable Ralph Nader.
The media report "Wall Street is delighted" that
71-year-old Donaldson, a longtime friend of the
Bush family, will be their new regulator. Of course it
is all-important that Wall Street should be
delighted. Who do you think we're running this
game for?
Some of you may have thought that the problem
was unnerved investors, profoundly uneasy about
putting money into a stock market so rigged by
Wall Street it is an open, running scandal. But
Gee Dubya clearly sees beyond such petty concerns
and so has named as his top regulator the man who
advocates looser accounting standards for foreign
firms doing business here. Heaven forbid that
foreign firms should have to live up to those tight
accounting standards demanded of Enron,
WorldCom and Tyco. Yep, this Donaldson is clearly
our boy.
Now just because he had that little problem at
Aetna, don't worry about a thing. According to The
Wall Street Journal, "In Dec. 2000, nine months
after he took over, Mr. Donaldson told investors
that the company's problem with skyrocketing
medical costs were finally under control and
projected rosy 2001 earnings, driving Aetna's stock
price up.
"It turned out that Aetna's system for calculating
costs was out of whack (oops!). In April, four
months after Mr. Donaldson's upbeat predictions,
Aetna announced that earnings would be
'significantly lower' than expected, driving its stock
price down by 18 percent in one day.
"Mr. Donaldson had retired 10 days before the
profit warning. Aetna's board months earlier had set
his compensation for his 10 months of service as
CEO in 2000 at a $1 million salary, a $6 million
bonus and more than $11 million in restricted stock
and options." Our kind of guy.
Donaldson was also on the board of a dotcom that
went public in 1999, after a reported loss of $13.5
million in the previous year, but the stock shot up
$271 per share. It is now trading at under dollar.
But hell, didn't that happen to everyone? At least
Donaldson, unlike some people we could name (the
president of the United States) didn't unload his
stock on insider information. According to the
Journal, he still has it.
And the new treasury secretary, what a record we
have here! John Snow, chairman of a champion
corporate tax-dodger. According to Citizens for Tax
Justice, Snow's company, CSX Corp., a railroad,
paid no federal income tax at all in three of the
past four years. Instead of paying taxes, CSX
supplemented its over $1 billion in pretax profits
(Los Angeles Times) over the four years with a
total of $164 million in tax rebate checks from the
federal government. Just the guy we need at
Treasury -- makes a profit, pays no taxes and gets
tax rebates on the taxes he didn't pay. According
to the Los Angeles Times, during the same
four-year period, CSX gave Snow $36 million in
salary, bonuses, stock and options, and forgave a
$24 million loan so he would not lose money along
with other shareholders as the company's stock
price declined. Lends a whole new meaning to
"Snow job" doesn't it?
Snow's appointment also enthused our friends at
Public Campaign, who announced: "John Snow is a
poster child for all the things that are wrong about
our pay-to-play system of financing campaigns. His
appointment to the Bush Cabinet marks the
beginning of a 'perfect storm' of special interest
greed and policy paybacks, as a Congress and
White House more beholden to wealthy special
interests than any in memory comes under pressure
to deliver on a host of anti-consumer and
anti-environmental measures."
Public Campaign finds that under Snow's leadership,
CSX became one of the 100 biggest overall
campaign contributors from 1989 to the present.
"The company consistently ranked in the top 10
among transportation companies in
influence-buying, giving $5.9 million in that period.
Republicans got 72 percent of the total."
But what a payoff on the investment! A mere $5.9
million in campaign contributions over 13 years and
they got $164 million in the last four years in tax
rebates without ever paying taxes. I'm telling you,
this guy Snow is a genius, and I have perfect faith
that as the Bush team moves ahead to cut more
taxes for the rich -- because we already have
deficit -- fight a $200 billion war and increase
defense spending, the books at Treasury will
balance nicely. It all makes perfect sense to me.
Hey, it worked for Reagan, didn't it? Except for that
$2 trillion deficit.
Read more in the Molly Ivins archive.
Molly Ivins is the former editor of the liberal
monthly The Texas Observer. Her bestselling book,
Molly Ivins Can't Say That Can She?, is available
through ShopForChange. |
