May 29 (Bloomberg) -- Richard Kinder, co-founder, chairman and chief executive officer of Kinder Morgan Inc., operator of about 43,000 miles of pipelines in the U.S. and Canada, is leading a group that wants to buy the company for $100 a share or about $13.4 billion.
The group includes a fund run by Goldman Sachs Group Inc., insurer American International Group Inc. and buyout firms Carlyle Group and Riverstone Holdings LLC, according to a May 28 letter to Houston-based Kinder Morgan's board released today by the company. [...]
Kinder Morgan's network of pipelines carries oil, petroleum products like gasoline, natural gas and carbon dioxide. The company operates more than 150 terminals that transfer products such as gasoline, oil and coal, and its utilities provide natural gas to about 1.1 million customers.
Kinder Morgan Inc. was formed in July 1999, when Kinder and his partners bought KN Energy, a Colorado-based pipeline company. Kinder and Bill Morgan, another former Enron executive, formed the company that would become Kinder Morgan Energy by buying Enron's stake in natural-gas liquids and carbon dioxide lines after Kinder left the company. [...]
Last month, Washington-based Carlyle and New York-based Riverstone raised $3.8 billion to purchase power, oil and energy companies. Carlyle and Riverstone have made 19 investments in energy companies since 2000 and their Carlyle/Riverstone Global Energy & Power Fund II generated annual returns of 78 percent as of Sept. 30.
Goldman Sachs raised an $8.5 billion buyout fund in April last year and put more than $2.5 billion of the firm's money into it. The new fund's aim is to double or triple its invested capital, Richard Friedman, head of Goldman's merchant banking division, said in an interview last year.
Going private may allow Kinder to buy assets out of favor with analysts and other investors, acquisitions that could cause a drop in the stock price of a public company, said Simmons, author of "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.''
Kinder has been successful buying assets shunned by other investors, said [investment banker Matthew] Simmons, 63. "It's just exactly the opposite strategy that Rich Kinder's old partner, Ken Lay, did,'' Simmons said. Lay sold assets such as pipelines to build energy trading and telecommunications businesses. [...]
According to an April filing, Kinder owns 24 million shares of Kinder Morgan Inc., or about 18 percent of the company.
Let's see how this works. To reprivatize his company, Ken Lay's former partner Rich Kinder has to buy back his own shares in the publicly held company. Kinder owns 24 million shares and, with the help of Goldman Sachs and the Carlyle Group, he's generously offering himself $100 a share.
I'll do the math for you: $2.4 billion with a capital "B."
Kenny Boy, you was set up but real good. Your $70 million in Enron loans (taken in cash, but repaid in crashing stock) in 2001 seem like cow chips next to Richard Kinder's windfall of $2,400 million. As fellow Texans and energy moguls and Bush Pioneers, looking at the two of you back in 2000 no one could have guessed whose star would rise and whose would set. You and Rich Kinder were probably running about neck and neck in your competition to see who could suck up to the Bush family the most extravagantly. You even got to secretly set US energy policy in 2001 with Dick Cheney. Pretty cool!
I always had Kenny Boy pegged as a plutocrat, but he was actually a patsy. Rich Kinder is the true plutocrat. Six years later, he pulled out ahead, doing what Kenny Boy only hoped to do. He made billions, a bloody fucking fortune, and Kenny Boy's probably going to jail.
Meanwhile, while the average 401(k) account has been flat or underwater for the five long years of Bush 2, "Carlyle and Riverstone have made 19 investments in energy companies since 2000 and their Carlyle/Riverstone Global Energy & Power Fund II generated annual returns of 78 percent as of Sept. 30." Did you think your privatized Social Security account would do as well as that? Guess again.
Other strikingly odd coincidences: Poppy's 80th birthday party was thrown by none other than Rich Kinder, who also happens to have been Dubya's top career patron in 2000. Poppy, of course, is part of the Carlyle Group, which famously also included Osama bin Laden's brother on 9-11-01, and Poppy's Secretary of State James Baker, who also headed Dubya's post-election campaign (i.e., Florida) in 2000. Naturally, Henry M. Paulson, the new Treasury Secretary [!] and former CEO of Goldman Sachs, is a Bush Pioneer. And Rich Kinder's wife Nancy, who also once worked at Enron, was in charge of the invitees who paid $100,000 and $250,000 (no kidding) to Dubya's second inaugural ball.
But let's get back to the original bit of news — the multibillion dollar privatization of 43,000 miles of pipelines in North America. Of all days, what an interesting bit of news to choose to release on Memorial Day, when we're supposed to be honoring those who so recently died for the USA's flagrant ability to waste energy!
(Actually, the sacrilege was probably just an oversight. I doubt that any of this group truly gives a shit about our troops, so much so that they didn't even notice the coincidence. They were probably just waiting for the moment when Enron would fall out of the news cycle — God knows our tonedeaf media can't handle anything more complex than the monotony of their single-minded "narratives." Now that Enron as a narrative told in CNN crawls is finished, Kinder is as anonymous to big media as this teeny-tiny blog.)
After the verdicts were announced, Mr. Lay joined more than a dozen friends and family members in a circle in one corner of the courtroom to pray. One of Mr. Lay's supporters, Rev. Bill Lawson, could be heard invoking the story of Jesus, "who was convicted and even executed," he said.
Comparing Ken Lay to Jesus Christ is even worse than comparing George Bush to his favorite fetishistic disguise: anyone in uniform.
The [Enron] jurors spoke emotionally about the tremendous sacrifice made by themselves, their families and their co-workers to allow them to sit through this case for 17 weeks.
"We were responsible. We were always accountable. We had to find a way to circle back and tie up loose ends. And I think those (Enron) employees were entitled to the same thing," said payroll manager Carolyn Kuchera.
Wendy Vaughan, a business owner, said they were given "a puzzle with about 25,000 pieces dumped on the table."
The jury, a remarkably alert group through the trial and notably well-spoken after it, said it was the evidence on the stand and in the 20 boxes of paperwork that persuaded it. It didn't buy that there was a conspiracy of government cooperators to lie. Though some admired Lay and Skilling, they also thought they lied on the stand.
"I wanted to believe very, very badly what they were saying, very much so," Vaughan said.
Isn't it fascinating that the Enron jurors, in their insistence on responsibility and accountability, held themselves to a higher standard than the CEOs they were trying and the President bought by the CEOs?
Seventeen weeks of bullshit from the most expensive defense attorneys stolen money could buy, and the Enron jurors didn't crack.
Enron jurors are some of the truest American patriots alive today.
Prosecutors alleged Mr. Lay signed 27 documents agreeing to abide by the lending restrictions, called Regulation U, but nonetheless used the loans to buy stock, or repay Enron loans in excess of the 50% limitation. After one loan was discovered to be in violation, he was warned not to violate the provision and subsequently borrowed from another bank, they said.
An FBI agent testified that by skirting the lending provisions Mr. Lay was able to avoid about $12 million in taxes and stock-exercise costs that would have been required to bring the loans into compliance at the end of 1999.
At the time most of the loans were requested, Mr. Lay said he didn't "fully understand it, and I'm not sure my staff did either." Questioned by his defense attorney, Mr. Lay testified that the signatures on several documents were mechanically affixed and dated by an assistant while he was traveling.
With the magic of his Autopen, Ken Lay managed not to pay $12 million in taxes and all he can say is "whoops."
Where was Lay traveling while his Autopen saved him $12 million? Paris, then on to Davos, then India. And all because of a little misunderstanding.
Besides the obvious lure of Tyco lucre, McCloskey is drawn to converts of a particular ideology. His list of converts beyond Belinick and Regnery sounds like a conspiracy theorist's dream:
Dr. Bernard Nathanson, founder of the National Abortion Rights Action League, who was personally involved in 75,000 abortions, before becoming a prominent pro-life advocate with the book "Aborting America" and the stunning video, "The Silent Scream."
- Lawrence Kudlow, a CNBC economic commentator, whose career was nearly ruined by a cocaine addiction before his conversion.
- Robert Novak, a syndicated political columnist for 40 years and a non-practicing Jew, often called "The Prince of Darkness" for his gloomy presence on CNN's "Crossfire" and "The Capital Gang."
- U.S. Sen. Sam Brownback, a Methodist and a conservative who teamed up with liberal Sen. Paul Wellstone to sponsor a law to curb sex trafficking, which brings 50,000 prostitutes for brothels in the U.S. annually.
- Judge Robert Bork, who was nominated by President Reagan to the Supreme Court, but suffered defeat in a Democratic Senate opposed to his pro-life views.
With its single-minded devotion to wealth and power, does it come as any shock that Opus Dei is a glimpse into the most craven soulless Republicanism of the American 21st century?
And McCloskey himself, where did he come from? Why surprise, surprise: he picked up his soul-harvesting tricks at Merrill Lynch, where he learned the sales techniques of the world's Number One wealth manager.
Only this time, instead of selling hedge funds, he's selling homophobia: "[A gay civil union] opens the door to anything from incest to bestiality," said McCloskey. "The whole question is: What is a family? What constitutes a marriage? There's no wiggle room, certainly, in that area." (Let's leave the intensely criminal homosexuality of Catholic clergy aside for the moment. Our theme today is cabalistic power, not institutionally-endorsed pedophilia.)
So is Opus Dei just a curious self-flaggelating cult, or is it the same old conspiracy we've grown so used to: media, publishing, finance and politics — all huddled in one sanctimonious chapel together to screw everyone else?
In its goofy sensationalism, The DaVinci Code tells the wrong Opus Dei story. The one in which its members find themselves in eternal hellfire. But, of course, that's fiction.
64 percent of those [Michigan hunters] polled say the nation is on the wrong track in meeting its energy needs.
65 percent agree that Congress should pass legislation that sets a clear national goal for reducing global warming pollution with mandatory timelines.
74 percent of Michigan sportsmen agree that we can improve the environment and strengthen the economy by investing in clean, renewable energy technologies that create jobs while reducing global warming pollution.
12 percent of those surveyed think drilling for more oil and gas in the U.S., including on public lands, is the best way to address America's energy needs.
I am an urban Democrat who hates guns in the city, because I don't want Chicago to turn into Houston.
But I think that hunting should be like abortion: if you don't like it, don't engage in it. That's your choice. But don't outlaw it.
Democrats should embrace hunters as the true environmentalists so many of them are. After all, their activities take place in relatively unspoiled wilderness areas filled with wildlife. I support those too.
What will the Great Wall of Texas consist of? To keep out all the brown people, Americans will rely on the White GOP Elephant: "Devices like the Tethered Aerostat Radar, a helium-filled airship made for the Air Force by Lockheed Martin that is twice the size of the Goodyear Blimp. Attached to the ground by a cable, the airship can hover overhead and automatically monitor any movement night or day. (One downside: it cannot operate in high winds.)"
The $1.8 billion Great Wall of Texas — the only thing that can bring it down it is the wind.
Petrocelli's abstractions stand in stark contrast with the real burden encountered by Enron's employees, pension funds, mutual funds, and Enron shareholders who were "robbed of their money" by a couple of CEOs with strangely self-indulgent and wealth-secreting agendas.
Consider also Enron's legendary status in supporting a political regime whose primary purpose appears to have been looting the US Treasury (not to mention Baghdad) and mortgaging the country while handing the borrowed piles of money to America's most wealthy.
In other words, "robbing" may not have been such a clever metaphor for Petrocelli's closing argument. But it sure is apt.
1993 Mar 8, On Wall Street, the Dow Jones industrial average soared to a record high, climbing 64.84 to end the day at 3,469.42. (AP, 3/8/98)
1993 May 19, Dow Jones closed above 3,500 For the first Time (3,500.03). (DTnet, 5/19/97)
1994 Jan 21, Dow Jones passed 3900 to a record 3,914.20. (MC, 1/21/02)
1995 Feb 23, The Dow Jones industrial average closed above the 4,000 mark for the first time, ending the day at 4,003.33. (WSJ, 12/16/96, p.C1)(AP, 2/23/00)
1995 Apr 24, Dow Jones Index hit a record 4303.98. (MC, 4/24/02)
1995 Nov 21, The Dow Jones Industrials in the US closed above 5000 for the first time to 5023.55. (WSJ, 11/22/95, p.A-1)(AP, 11/21/97)
1996 Sep 13, The stock market hit a new record of 5,838.52 on the Dow. (SFC, 9/14/96, p.A1)
1997 Feb 13, On Wall Street, the Dow Jones industrial average broke through the 7,000 barrier for the first time, ending the day at 7,022.44. (AP, 2/13/98)
1997 Jun 2, The NASDAQ Stock Exchange began trading in 1/16th-point increments. (WSJ, 5/30/97, p.C1)
1997 Jun 16, The Dow Jones Industrial Average climbed above 8,000 for the 1st time. (SSFC, 2/2/03, p.I4)
1997 Aug 6, The Dow Jones reached an all-time high at 8,259.31. (SFC, 8/16/97, p.A1)
1997 Sep 2, The US stock market made a record 257 point gain. (SFC, 9/3/97, p.B1)
1998 Feb 13, The Dow Jones rose to another record high of 8,370.1. (SFC, 2/14/98, p.D1)
1998 Apr 3, The Dow Jones industrial average climbed above 9,000 for the first time, but finished with a 3.23 point drop at 8,983.41. (AP, 4/3/03)
1998 Apr 6, The Dow Jones industrial average closed above 9,000 for the first time. (CNBC, 4/6/98)(AP, 4/6/99)
1998 Nov 23, The Dow Jones hit a new record high at 9,374.27. (SFC, 11/24/98, p.A1)
1999 Mar 16, The Dow Jones industrial average briefly topped the 10,000 level, reaching a high of 10,001.78 before retreating. (AP, 3/16/00)
1999 Mar 29, The Dow Jones broke the 10,000 level and closed at 10,006. (SFC, 3/30/99, p.A1)
1999 May 3, The Dow Jones industrial average closed above 11,000, just 24 trading days after passing 10,000. (AP, 5/3/00)
1999 May 7, The Dow Jones closed at a record 11,031.59. (SFC, 5/8/99, p.D8)
1999 Aug 23, The Dow Jones industrial average soared 199.15 to a new record of 11,209.84. (AP, 8/23/00)
1999 Dec 31, The DJIA closed the decade at 11,497.12. (WSJ, 9/5/01, p.C1)(WSJ, 4/8/04, p.C4)
2000 Jan 14, The Dow Jones reached a peak high. (NW, 3/17/03, p.44)
Note that even in the Fall of 1998, when Clinton was enduring the Starr Report and the beginnings of the clown-college impeachment witchhunt, the economy — a partial measure of consumer confidence — soared like the proverbial eagle. Approval ratings sometimes do translate into dollars after all.
The Dow Jones Industrial Average doesn't include so-called dot-com and related stocks, so this has nothing to do with all the "New Economy" internet bubble stuff.
I used to think that Republicans were the guys who supposedly listened to what the market was saying.
But what the market actually said was, "Portfolio Manager Clinton, +350% in eight years; Portfolio Manager Bush Junior, near zero in five years."
If you were smart, where would you put your money?
Amid the drive to tie executive pay more closely to company results, a little-known and poorly disclosed practice is allowing many executives to receive hundreds of thousands of dollars a year in dividends on performance stock -- shares that they may never earn.
The money involved isn't huge by the standards of overall executive pay, but it can add up. General Electric Co. Chief Executive Officer Jeffrey Immelt, who gets a growing share of his compensation through what GE calls "performance share units," received more than $1 million last year in dividends on unearned restricted and performance shares.
Gary Neale, chairman and former CEO of NiSource Inc., a Merrillville, Ind., utility-holding company, is in line to receive more than $827,000 in dividends this year on performance shares he hasn't yet earned.
Performance, or "phantom," shares are a form of restricted stock paid to an executive only if the company meets certain performance targets. Dozens of other CEOs are paid dividends on unvested restricted stock, which typically requires the recipient only to wait several years before actually receiving the shares, regardless of performance.
Bank of America Corp. CEO Kenneth Lewis is in line to receive $2.89 million in dividends on restricted stock this year. Altria Group Inc. CEO Louis Camilleri received more than $2 million in dividends on restricted stock last year, even though he won't earn some of the shares until 2011.
All told, among the 50 large-company CEOs who received the largest dollar grants of restricted stock over the past three years and whose companies pay dividends, 37 are paid dividends in cash before the shares vest, according to an analysis for The Wall Street Journal by Equilar Inc., a San Mateo, Calif., compensation-research firm.
According to the article: "It's more stealth compensation," said Paul Hodgson, a senior research associate at the Corporate Library, which monitors corporate governance.
Well, duh. But at least there's some truth in nomenclature for once, in that these stealth CEO dividends are officially called both "phantom" and "unearned." After all, earning your keep is not consistent with our wildly underperforming CEO class (cf. Jeff Skilling, Ken Lay, et al.).
This form of compensation screws ordinary Americans in two principal ways: (1) for shareholders in 401(k) and pension plans, the insane excesses of executive compensation are reducing shareholder value and therefore literally lowering the account balances and taking the savings of tens of millions of US workers; and (2) the lack of taxation on these "unearned" and "phantom" dividends is like a drainpipe on the US Treasury, sucking out millions of dollars that could be used for, say, making the ever-growing mortgage payments on "rebuilding" Iraq.
No Taxation on Dividends™ — an essential part of the Republican class war against ordinary Americans.
Mary Petti worked for 35 years at a community hospital in Orange, N.J., earning a pension with a government guarantee. But now the hospital has closed, money is leaking out of the plan, and Ms. Petti fears the funds will be exhausted by the time she plans to retire in five years. The government guarantee has vanished as well.
Her plight illustrates a little-known aspect of pension law, which allows churches and organizations affiliated with them to escape the costly and complicated rules that apply to secular employers.
Tens of thousands of people work for organizations that have opted out of the law, as Ms. Petti's did. Most do not know that they are exposed to potential losses with little parallel in the corporate world.
For Ms. Petti and her fellow workers, their retirements were put at risk shortly before the hospital failed, when it exempted itself from federal pension law, citing an agreement it had made with the Roman Catholic Archdiocese of Newark.
"I felt that my pension was safe," said Ms. Petti, 60, who worked her way up from nurse to vice president for patient care services in her years at the Hospital Center at Orange. About 950 people participate in the pension plan; together they stand to lose about $10 million, according to one actuarial estimate.
Many of the employees now say they believe that the hospital used its ties to the archdiocese as a tool, Ms. Petti said, "to get out from under the pension obligations."
So the faith-based workplace turns out to be no better than the Church of Enron. Participating in your pension plan means losing all your money.
Faith is for suckers. That's why we have the rule of law and the discoveries of science, two enemies of today's Republican party and their religio-corporate conspirators.
