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Non-Tech : The ENRON Scandal -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (3077)	2/26/2002 3:12:32 AM
From: Patricia Trinchero	Read Replies (1) \| Respond to of 5185

Riordan's LA Electric Power CO was one of the generators that was bilking the rest of the state with exorbitant power costs. He charged high rates along with Enron and the rest of the generators. Riordan didn't cut his own state any slack..............he wasn't too honest back when he was charging the high prices and capitalizing on the high rates charged by Enron,etc. He sure didn't try to underbid them.

To: Raymond Duray who wrote (3077)	2/26/2002 3:11:08 PM
From: Skywatcher	Read Replies (1) \| Respond to of 5185

Riordan is going to be the victim of just plain crappy campaign managers who don't have a CLUE that the state of California is a LOT of farmers and people in the country....when an excellent local reporter/writer in the LATIMES asked people at the RIORDAN LIBRARY in downtown LA who was running for governor....it was like a nightmare from the tonight show.....right in front of the sign almost no one could name ONE person running for governor...in his home city! he's got some very serious problems...and Simon might now beat him when Riordan had a 14 point lead just weeks ago. He's a good guy...but has bumpkins for managers CC

To: Raymond Duray who wrote (3077)	3/11/2002 12:19:44 AM
From: Mephisto	Respond to of 5185

Fixing Corporate Disclosure The Washington Post Sunday, March 10, 2002; Page B08 THE MOST troubling revelation from the Enron affair is that corporate accounts can be meaningless. Companies can conceal their activities in special partnerships that don't get reported to investors, leaving investors no way to assess risks. The Financial Accounting Standards Board, a private rule-writing body, is laboring to close some of these partnership loopholes and may issue a new draft regulation later this month. The signs are that the rule could fall short of what is needed. At present, a company doesn't have to report a partnership if 3 percent of the partnership's capital is provided by an outside investor. A company can set up a partnership, pump in $97 million of its own cash, and then wheel and deal in secret, so long as somebody else has put up $3 million. In theory, the $3 million is supposed to be equity capital: The idea is that the third party will be the first to lose if the investments go wrong, and so will object to reckless investments. But this check against secretive risk-taking has had little effect, because outside equity investors have in practice been protected from the usual risks of ownership by tricks of financial engineering. The board's new rule would strengthen the checks. Rather than having to put up a mere 3 percent of a partnership's capital, third-party investors would have to provide at least 10 percent. Moreover, the tricks that currently shield them from losses would be more explicitly forbidden. A company could still set up a partnership, lend it $90 million and persuade somebody else to put in $10 million. But if the partnership lost money, that somebody else would be on the hook, and the sponsoring company's $90 million would be safe. Unfortunately, the standards board reckons that this means the sponsor's shareholders don't need to be told about the partnership. This raises two immediate questions. What is the harm in disclosing the partnerships, even if the Financial Accounting Standards Board is right that the shareholders' capital is safe? Second, how safe is it, really? The partnership may hold volatile instruments that lose more than 10 percent of their value, with the result that all its equity is wiped out and the loan cannot be repaid in full. The board's experts acknowledge this danger and urge that partnerships with risky investments have a thicker equity cushion. But urging companies to be sensible has not worked. The board should spell out exactly how much extra outside equity is required if risky partnerships are going to be concealed from shareholders. A further problem: The Financial Accounting Standards Board has yet to decide how its new rule should treat complex partnerships set up jointly by several firms to borrow money. These partnerships take in promises of future payments -- for example, rent payments -- and borrow against those promises; then they pass the borrowed money back to the sponsoring companies. This is a way for companies to cleanse their balance sheets of payment promises and report hard cash instead; it disguises the uncertain nature of future receipts and the fact that the cash has been borrowed. The disguise is bad for shareholders. But the banks that earn large fees for setting up these partnerships are anxious to preserve it. The Financial Accounting Standards Board is due to discuss its new rule on March 13, and may circulate a draft soon afterward. A period of comment will ensue, which is when the battle begins. In the past, lobbyists have descended upon draft rules, sometimes enlisting congressional allies to blur disclosure. This time it is essential that the friends of disclosure -- particularly the institutional investors who hold a large proportion of corporate stock -- fight equally hard. Stock markets can allocate capital efficiently only if investors have all the information they need to understand companies. Without proper disclosure, capitalism can't work properly. © 2002 The Washington Post Company

To: Raymond Duray who wrote (3077)	3/11/2002 12:54:35 AM
From: Mephisto	Respond to of 5185

California's GOP: Toast on the Coast? March 9, 2002, 12:53AM By CRAGG HINES Copyright 2002 Houston Chronicle For several years, California Republicans have been living in a mortuary, producing their own dysfunctional version of the cable- TV series Six Feet Under. In last week's episode, the party bought a coffin and climbed in to try it on for size. Between now and November, California voters will decide whether to slam the the lid and let Democrats nail it shut. President Bush and White House political chief Karl Rove have been playing comic supporting roles. Star of the season so far, oddly, has been a Democratic strategist. The story to date: In the nation's most populous state, Republicans hold only one statewide office, and that lone ranger, Secretary of State Bill Jones, was unable to raise enough money to mount a television ad campaign and ran third in the gubernatorial primary Tuesday. The nomination was won in a theatrical upset by neophyte Bill Simon Jr., an aggressively conservative financier known when he entered the race only as the son of the late Treasury Secretary William E. Simon. Even some supporters whisper that the younger Simon hasn't the faintest clue of what the race or politics is about (which, given the primary result, may not be all bad). The odds-on favorite as late as a month ago was former Los Angeles Mayor Richard J. Riordan, who was elected and ran the nation's second most populous city in a bipartisan manner. This model of moderation certainly wasn't to the taste of hard-core conservatives who hold sway in the semi-closed Republican primary. The only reason the trogs stomached Riordan in the early months of the campaign was that he seemed the likeliest candidate to topple incumbent Democratic Gov. Gray Davis, whose modest popularity has been dimmed by the state's electricity troubles and other problems. Riordan's ranking against Davis appealed to Bush and Rove, who last year urged an initially reluctant Riordan to get in the race. It wasn't the first time the Bush team had proven tone-deaf on the Coast. Rove directed millions of dollars into a lost-cause California campaign for Bush in 2000, money that could have been better spent in, just to pick a state at random, Florida. (Bush lost California by 1.2 million votes). White House involvement irked some top California Republicans. Former Gov. George Deukmejian, a Jones supporter, once railed: "I just can't understand how any responsible Republicans would even be thinking about supporting someone like" Riordan. Davis accepted that Riordan would be his toughest competition and did something about it. In the shrewdest move of the nascent campaign year, Davis' strategist Garry South dumped almost $10 million in anti-Riordan ads onto the state's influential airwaves. The ads painted Riordan as a rudderless pol who flip-flopped on issues such as abortion. Riordan didn't respond quickly, and his stock fell faster than Enron's. Two words figured prominently in analyses just before the election: "implode" and "souffle." When the Riordan bubble balloon burst, conservatives flocked to Simon, who ended up winning by almost 18 percentage points. It allowed doctrinaire conservatives to be truer to their narrow beliefs, which for some in that camp is more important than winning. In the afterglow from Tuesday, Simon and his folks are euphoric. But, as is so often the wont of office seekers, they're not dealing with reality. Simon didn't win so much as Riordan lost. (Aficionados of Texas politics may want to compare the situation to that of Ann Richards in 1990. She didn't win so much as the gaff-prone Clayton Williams lost. Richards' failure to deal with her conditional victory left her a sitting duck for the more sure-footed George W. Bush four years later.) Now we have eight months for what could be a grand -- and certainly expensive -- campaign. Davis should be able to paint Simon into a right-wing corner. Simon may have to depend on fate. The Republican's best chance appears to be beyond his control: that voters will decide it's time for anybody but Davis. "If the voters get real frustrated, and if things go badly for the governor, they will vote for the anti-Davis candidate no matter who he is," said Sherry Jeffe, a political scientist at the University of Southern California. What could go wrong? Come on, it's California. The list is long, topped by a state budget crisis and the prospect of more blackouts. Then there's the threat of natural (earthquakes) and unnatural (terrorism) disasters. With those exceptions, though, it may not be too early for Republicans to book mourning garb. The smell of formaldehyde is strong. If there's an inquest, the party is in such sad shape that it may be ruled a mercy killing. Hines is a Houston Chronicle columnist based in Washington, D.C. cragg.hines@chron.com chron.com