Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Mephisto who wrote (4202)	7/4/2002 1:56:49 AM
From: Raymond Duray	Respond to of 5185

BECAUSE TOO MUCH IS NEVER ENOUGH kennyskids.org

To: Mephisto who wrote (4202)	7/4/2002 2:49:03 AM
From: Mephisto	Respond to of 5185

W: Scourge of Corporate Misbehavior RELEASE: TUESDAY, JULY 2, 2002, AND THEREAFTER By Molly Ivins AUSTIN, Texas -- Our personal trainer the president, up and running after his colonoscopy (I did not need to know about that), is trying out a new role -- Scourge of Corporate Misbehavior. This has approximately the same effect as opening the refrigerator door and finding Fidel Castro inside. Smoking a cigar. "Hard to believe" barely begins to hint at the surrealism of this development. The Bush people are going to force us to take this nonsense seriously. I guarantee we will soon be hearing about the Pepster's long-cherished populist beliefs. Ever since the man told us he was the Father of the Texas Patients' Bill of Rights (which he first vetoed and then refused to sign), I have been resigned to the Red Queen quality of his political act. Just grab a flamingo and get ready to play croquet here. In the interest of lending some verisimilitude to this new pose --Dubya Does Nader -- let us pass lightly over Bush's own business career, including insider dealing and the time he dumped his Harken Energy stock just before the announcement that the company was going bankrupt. In violation of SEC rules, Bush failed to report that sale to the Securities and Exchange Commission until eight months after the fact. The SEC contented itself with a warning letter but has specifically stated that Bush was "not exonerated." And let's also pass over his six-year record as governor of Texas, an unbroken stretch of kissing corporate butt, including firing an agency head for enforcing state law against one of Bush's biggest contributors. Instead, let us concentrate on the repairable. A few things the Pepster can do to bolster his brand-new image as a champion against corporate malfeasance. How to Pretend to Be a Populist in 10 easy steps: -- Appoint someone to head the SEC who has not spent his career as a lawyer for accounting firms, including advising them to destroy documents in case of lawsuit. Chairman Harvey Pitt has been criticized even by The Wall Street Journal's editorial page, not a bastion of flaming liberalism, for being too easy on his old accounting clients and for having lost all credibility after his meeting with Xerox's auditor. -- Stop the government loans to Enron, which is still manipulating Third World energy markets while applying for $125 million in taxpayer money from the Inter-American Development Bank. -- Come out in favor the Sarbanes bill, now stuck in the Senate. It's the only serious proposal to deal with corporate chicanery -- the Republican plans are a sick joke. Call off Sen. Phil Gramm, who is working closely with the White House to block the bill. He has already done enough damage as the Senator from Enron. -- Stop actively working with the business lobby to block the accounting reforms that would prevent Enron from happening again. -- In order to avoid the appearance that you have been bought outright by corporate contributions, try not to make a recess appointment to the Federal Elections Commission of someone who has long sworn to oppose every effort at campaign finance reform and who is now destroying the McCain-Feingold bill. -- As you stated in your hilarious radio address, "We must have rules and laws that restore faith in the integrity of American business." So how about reinstating the Clinton policy, which you reversed last year, against giving government contracts to corporations that have repeatedly violated federal laws? -- Supporting the repeal of the alternative minimum tax is probably not smart when giant corporations are already paying less in taxes than the janitors who clean their floors. -- It's not a good time to push for repeal of the estate tax to benefiting only the richest 2 percent of Americans. -- Your proposal to relax New Source Review standards at the Environmental Protection Agency stinks: It allows dirty coal-fired power plants and the nation's other biggest polluters to operate indefinitely and to increase their pollution by massive amounts. -- Next, do something about the other 90-odd actions taken by your administration to help polluters since January 2001, including shifting the cost of cleaning up Superfund waste sites from the polluters to the taxpayers and the recent EPA decision to reverse a 25-year-old policy that flatly forbids dumping mining and other industrial solid waste into the nation's waterways. Your administration decided that all waters across the country are now open to industry for waste disposal. Allowing industry to increase profits at the expense of the public's health and the nation's natural heritage does not fit the "higher calling" to which you said business should aspire. -- Ix-nay on the Republican effort to block closing the Bermuda loophole in the federal tax code. They've taken to doing things like walking out of committee meetings to keep the bill from coming up. It would clearly pass overwhelmingly if it got to the floor. Time to call the boys in for a chat. To find out more about Molly Ivins and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com. COPYRIGHT 2002 CREATORS SYNDICATE, INC. Originally Published on Tuesday July 2, 2002

To: Mephisto who wrote (4202)	7/4/2002 8:17:32 AM
From: Dorine Essey	Read Replies (1) \| Respond to of 5185

www5.bluemountain.com

To: Mephisto who wrote (4202)	7/7/2002 3:12:07 PM
From: Mephisto	Read Replies (1) \| Respond to of 5185

Succeeding in Business The New York Times July 7, 2002 By PAUL KRUGMAN On Tuesday, George W. Bush is scheduled to give a speech intended to put him in front of the growing national outrage over corporate malfeasance. He will sternly lecture Wall Street executives about ethics and will doubtless portray himself as a believer in old-fashioned business probity. Yet this pose is surreal, given the way top officials like Secretary of the Army Thomas White, Dick Cheney and Mr. Bush himself acquired their wealth. As Joshua Green says in The Washington Monthly, in a must-read article written just before the administration suddenly became such an exponent of corporate ethics: "The `new tone' that George W. Bush brought to Washington isn't one of integrity, but of permissiveness. . . . In this administration, enriching oneself while one's business goes bust isn't necessarily frowned upon." Unfortunately, the administration has so far gotten the press to focus on the least important question about Mr. Bush's business dealings: his failure to obey the law by promptly reporting his insider stock sales. It's true that Mr. Bush's story about that failure has suddenly changed, from "the dog ate my homework" to "my lawyer ate my homework - four times." But the administration hopes that a narrow focus on the reporting lapses will divert attention from the larger point: Mr. Bush profited personally from aggressive accounting identical to the recent scams that have shocked the nation. In 1986, one would have had to consider Mr. Bush a failed businessman. He had run through millions of dollars of other people's money, with nothing to show for it but a company losing money and heavily burdened with debt. But he was rescued from failure when Harken Energy bought his company at an astonishingly high price. There is no question that Harken was basically paying for Mr. Bush's connections. Despite these connections, Harken did badly. But for a time it concealed its failure - sustaining its stock price, as it turned out, just long enough for Mr. Bush to sell most of his stake at a large profit - with an accounting trick identical to one of the main ploys used by Enron a decade later. (Yes, Arthur Andersen was the accountant.) As I explained in my previous column, the ploy works as follows: corporate insiders create a front organization that seems independent but is really under their control. This front buys some of the firm's assets at unrealistically high prices, creating a phantom profit that inflates the stock price, allowing the executives to cash in their stock. That's exactly what happened at Harken. A group of insiders, using money borrowed from Harken itself, paid an exorbitant price for a Harken subsidiary, Aloha Petroleum. That created a $10 million phantom profit, which hid three-quarters of the company's losses in 1989. White House aides have played down the significance of this maneuver, saying $10 million isn't much, compared with recent scandals. Indeed, it's a small fraction of the apparent profits Halliburton created through a sudden change in accounting procedures during Dick Cheney's tenure as chief executive. But for Harken's stock price - and hence for Mr. Bush's personal wealth - this accounting trickery made all the difference. Oh, and Harken's fake profits were several dozen times as large as the Whitewater land deal - though only about one-seventh the cost of the Whitewater investigation. Mr. Bush was on the company's audit committee, as well as on a special restructuring committee; back in 1994, another member of both committees, E. Stuart Watson, assured reporters that he and Mr. Bush were constantly made aware of the company's finances. If Mr. Bush didn't know about the Aloha maneuver, he was a very negligent director. In any case, Mr. Bush certainly found out what his company had been up to when the Securities and Exchange Commission ordered it to restate its earnings. So he can't really be shocked over recent corporate scams. His own company pulled exactly the same tricks, to his considerable benefit. Of course, what really made Mr. Bush a rich man was the investment of his proceeds from Harken in the Texas Rangers - a step that is another, equally strange story. The point is the contrast between image and reality. Mr. Bush portrays himself as a regular guy, someone ordinary Americans can identify with. But his personal fortune was built on privilege and insider dealings - and after his Harken sale, on large-scale corporate welfare. Some people have it easy. Copyright 2002 The New York Times Company nytimes.com