A high-stakes battle over shareholder rights, dubbed "proxy access," has become a proxy for something else: the performance of Christopher Cox, chairman of the Securities and Exchange Commission.
In a party-line vote, the SEC said companies can reject shareholder efforts to put their own director nominees on corporate ballots.* The move set off a storm of criticism from shareholder activists and Democrats, who responded with their sharpest rebukes yet for Mr. Cox.
In the latest twist in a long-running saga, the chairman voted with the 3-1 majority on what has been dubbed the "nonaccess" proposal, even though Mr. Cox said his ultimate goal is to give shareholders broader proxy rights.
"This action will tar his legacy as an antishareholder chairman and essentially now makes him a lame duck," said Richard Ferlauto, director of corporate governance at labor union American Federation of State, County and Municipal Employees.
*In other words, you can own part of a company but have no say in how it's run.
I've said it before and I'll say it again — the GOP is no longer the party of business.
If you want a strong economy, vote Democratic. Otherwise, ur ownership society -- pwned!
As the U.S. stock market struggles, it is facing another head wind: Some of the nation's most powerful investors are unloading shares in a big way.
Several of the largest public pension funds have been selling billions of dollars held in U.S. stocks, and others are expected to join in. In most cases these actions are unrelated to the recent market jitters, though worries about the economy, the weakening dollar and the credit crisis could be accelerating these moves. [...]
The more sophisticated money managers at endowments devote only about 15% to 25% of their assets to domestic stocks, compared with 35% to 50% at large public pension funds, Ms. Steer said. But over the next few years, she expects the figure for pension funds to drift lower, with the more aggressive ones placing only 25% of their investments in U.S. stocks. Even the conservative funds, she said, eventually will have less than half of total assets in U.S. stocks.
The Teacher Retirement System of Texas holds a $56.7 billion position in U.S. stocks. It plans to halve that position over the next two to four years so U.S. stocks will fall to just 25% of the portfolio. [...]
In Florida, the Retirement System Pension Plan examined the potential returns, relative to perceived risk, for U.S. stocks versus other investments. The $136 billion pension fund decided to cut its target for domestic stocks to 38%, from 48% in 2003, during the previous investment revision. At the same time, the fund raised its targets for foreign stocks, bonds and private equity.
Even Texas and Florida, which both had the benefit of genius governors named Bush, are buying foreign.
Nice to know the grown-ups are in charge while the USA flushes itself down the subprime, plunging dollar, penny-stock economic toilet.
Bucking a national trend, Texas-based corporations have remained loyal to Republican congressional candidates in the 2008 campaign.
According to a Houston Chronicle analysis of Federal Election Committee data, the 46 Texas companies that are included in the Fortune 500 gave 73 percent of their political action committee contributions to Republican House and Senate candidates in Texas, while donating just 27 percent to Lone Star Democrats in the first nine months of 2007. [...]
"There are more Democrats now, and more are in positions of leadership," explained Jim Greenwood, vice president for governmental affairs at heavily Republican Valero Energy Corp. San Antonio-based Valero has shifted its PAC contributions from 9 percent Democratic in the 2005-2006 election cycle to 23 percent this year.
The cash flow toward Capitol Hill Democrats is far more pronounced among businesses in the other 49 states. In the months since Democrats gained control of Congress in January, the 50 biggest American industries have given 57 percent of their contributions to Democrats, according to a Nov. 15 analysis by the nonpartisan Center for Responsive Politics. [...]
Analysts said Texas businesses are more likely to stick with Republicans because Lone Star State businesses tend to be more ideologically conservative than corporations in other states.
Texas companies also are heavily concentrated in the energy sector, which has remained staunchly Republican even in the new period of Democratic control of Capitol Hill.
Come 2008, all the GOP geniuses of Texas will be relieved from their positions on the national stage. Look at the bright side, energy execs — at least you will have more time for your ingenious daddy-daughter abstinence programs.
The American Southeast has been suffering from one of its worst droughts in years. But you wouldn't know it from looking at the emerald-green estates of Palm Beach.
There, despite water restrictions and low reservoirs, lush lawns and verdant hedges line the Florida island's biggest mansions, awaiting the start of the annual winter "season" after Thanksgiving.
To keep their thirsty estates running over the summer and fall, Palm Beachers have been more than willing to pay water surcharges and even fines. And many have found a loophole in the local water rules, allowing them to spritz more often if they pay up to plant new lawns and shrubs.
Consider Nelson Peltz. The investor and food magnate's oceanfront estate, called Montsorrel, is among the island's biggest water consumers. His 13.8-acre spread, which combines two properties, used not quite 21 million gallons of water over the past 12 months -- or about 57,000 gallons a day on average -- at a cost of more than $50,000, according to records obtained from the local water utility. That compares with 54,000 gallons a year for an average single-family residence in Palm Beach, says Ken Rearden, assistant city administrator of West Palm Beach. (West Palm Beach supplies Palm Beach's water.)
This level of thirst is a variation on the epic levels of me-first corruption and greed we've been witnessing in the USA for years now.
It is really necessary to add that Peltz gave $25,000 to the RNC?
The government may go ahead with its bid to seize assets from Ken Lay's estate, a judge ruled Wednesday, denying a request from the Enron chairman's widow to stop the effort.
U.S. District Judge Ewing Werlein's ruling allows the government to seek nearly $13 million from Lay's estate, including the upscale condominium he and wife Linda Lay shared.
The judge wrote that prosecutors had provided "ample allegations" of criminal activity tied to the cash and property in question to pursue its case. [...]
The government contends Ken Lay gained $99 million from criminal activity, mostly by repaying Enron loans with company stock throughout 2001 when the company was in financial turmoil. Prosecutors say they can trace and recover nearly $13 million of that.
The amount includes $2.5 million Lay used to pay off the condominium's mortgage days after Enron went bankrupt in December 2001; $10 million that was controlled by a partnership named after the couple; and about $22,000 in a bank account.
So where's the rest of the money?
My bet is on annuities that are protected from these kinds of proceedings. Kenny Boy probably bought up a bunch of annuities — millions and millions worth — and then killed himself on the 4th of July in order to protect his family from his own wrongdoing.
[Cathy] McBroom was summoned to the judge's chambers on Friday, March 23, at about 3 p.m.
Her hands were full of legal papers when the judge [U.S. District Judge Samuel Kent] — a former high school athlete who is more than 6 inches taller and at least 100 pounds heavier — asked for a hug.
She told him she didn't think that was appropriate, but reluctantly approached.
The judge grabbed McBroom, pulled up her blouse and her bra and put his mouth on her breast. Then, Kent forced her head down toward his crotch.
As McBroom struggled, Kent kept telling the married mother of three what he wanted to do to her in words too graphic to publish. The papers fell to the floor. The pet bulldog Kent kept in his chambers began to bark.
The incident was interrupted by the sound of footsteps from another staff member in the corridor, and the judge loosened his grip. As she left, the judge said McBroom was a good case manager and then made suggestions about engaging in a sexual act.
McBroom ran out crying.
Pickup line: "you're a good case manager"? Pet bulldog in his chambers? Who appointed this veritable Don Juan of the bench? Bush's daddy.
Probably the only homeopathic song you'll hear today with megaphone beatboxing. These guys are great. As they say, "Egy kis örömzene a Zubolytól. Látni kell!" and, elsewhere, "they are descibing themselfs as an 'broken-ethno' band."
Dozens of anti-pornography groups asked the U.S. Congress to force the Pentagon to keep sexually related material from being sold in military stores.
Pornographic material was banned from being sold in military establishments nearly 10 years ago, but Christian group American Family Association claimed that adult fare, including Penthouse and Playboy material, is still being sold in the stores, USA Today reported Monday.
Personally, I find gore porn like Saw IV and The Passion of the Christ more offensive, but I don't try to drive it underground.
Given the sacrifices they make, aren't soldiers entitled to some skin?
The two Senate Democrats who turned the tide for Mr. Mukasey sought over the weekend to explain their planned votes. "The decision in supporting Mukasey was primarily motivated in continuing the work I had done in removing [his predecessor as attorney general], Alberto Gonzales, and to depoliticize and create the independence at the Justice Department," Mr. Schumer said in an interview. Mr. Gonzales stepped down earlier this year after a series of scandals.
Ms. Feinstein, in a CNN interview, said that if Mr. Mukasey wasn't confirmed, the president would likely make a recess appointment, thereby dodging the need for congressional approval. "That would bring about diminished transparency, diminished congressional oversight and would not be for the benefit of the [Justice] Department," she said.
Oh boo fucking hoo. You are squandering your majority, idiot.
The business newspaper Barron's (sub. req'd.) regularly polls the people who manage the Big Money for pension funds, mutual funds, hedge funds, and the wealthy to see what their opinions are on a number of topics.
As you might expect, they are a conservative and wealthy lot so they are quite fond of Bushian tax policy, but they also have enough smarts to distinguish between the military excursion in Afghanistan versus the folly in Iraq.
The most interesting thing is that these largely Republican and wealthy managers view Hillary Clinton's presidency as a fait accompli — a whopping 61 percent said she will win the 2008 election. Also notable is that this conservative group also deservedly flunks George for both energy and healthcare policy.
Economically, there is still trouble ahead: "Tim Call of Capital Management in Richmond, Va., observed that 'peak mortgage defaults do not occur for three years after mortgage origination. Thus, expect to see rising default rates through 2010.'"
Methodology: "The Big Money poll, a survey of professional investors, is conducted twice yearly by Barron's, in the spring and fall, with the help of Beta Research in Syosset, N.Y. Our latest survey drew responses from 112 managers across the U.S., representing a range of investment styles. Many run their own firms, while others manage billions of dollars for mutual-fund complexes, hedge funds, state pension funds and wealthy individuals."
Click on the chart for a clearer view — I have no idea why it's so damn fuzzy.
Now, WellCare is busy promising to cooperate with federal and state authorities. While it has offered investors no details about the probe, the company has pledged to keep its board - and its audit committee in particular - informed about the situation. But that vow could prove less reassuring than it sounds.
Notably, the board counts Alif Hourani - cousin to CEO Todd Farha -- among its "independent" directors. Indeed, Hourani ranks as the only director who sits on WellCare's audit committee and its two other committees to boot.
Unlike Farha, who owns a large stake in WellCare despite some massive stock sales, Hourani has little to lose. After dumping most of his WellCare stock - and becoming a multimillionaire in the process - Hourani now has just 581 shares left.
The "independence" of a multimillionaire who has just made his multimillions from his cousin's "management" is what this is all about. What kind of governance do you get from your cousin who has just made several million dollars from your defrauding Medicaid? (Allegedly, that is, but we all know where this is headed.)
Funny, I've always heard that when something sounds too good to be true, it probably isn't. Too bad they never learned that at Merrill Lynch:
Years ago, in an article published by The Tampa Tribune, WellCare's own CEO predicted that the company would never post margins above 4%. This summer, however, analysts pegged WellCare's margins at 6% -- and even higher - instead.
"This quarter, you're up close to 7% for a government business," Merrill Lynch analyst Doug Simpson marveled during the company's second-quarter conference call.
Seven percent for a "government business" is 75 percent higher than Farha's own estimate of four percent. I guess the era of small government and accountability in spending is no longer a cherished Republican ideal.
Don't make the mistake of relying on "independent" Wall Street analysts to make sense of the whole mess. We learned only days ago about the glorious independence and stunning business insights of Merrill Lynch, with its $161 million payday for outgoing Stan O'Neal, CEO and Bush Pioneer, who managed to "earn" his rich rewards by losing a mere $8 billion.
This is the same Merrill Lynch that did more to enable Enron than even Arthur Andersen.
Does anybody even remember Andersen anymore? Oh, that's right, they were destroyed by the DoJ. That's exactly the punishment you get for auditing Halliburton while Cheney was CEO. No paper trail!
"Independence" is a myth. The entire Republican machine — from the boardrooms to the Oval Office — is a plutocratic circle jerk. The only ones left out of the celebration are the rest of the world, including non-upper-class Republican voters who got fooled by the bogus appeals to Christianity and "values." Nepotism and dynasties and fraud driven by crony capitalism are all they know, and greed is the only real value they hold dear.
WellCare is just a baby Enron. If only we could get it off America's tit...
If you're just tuning in, we last looked at Farha and WellCare here and here.
A crisis at Bear Stearns Cos. this summer came to a head in July. Two Bear hedge funds were hemorrhaging value. Investors were clamoring to get their money back. Lenders to the funds were demanding more collateral. Eventually, both funds collapsed.
During 10 critical days of this crisis -- one of the worst in the securities firm's 84-year history -- Bear's chief executive wasn't near his Wall Street office. James Cayne was playing in a bridge tournament in Nashville, Tenn., without a cellphone or an email device. In one closely watched competition, his team placed in the top third.
As Bear's fund meltdown was helping spark this year's mortgage-market and credit convulsions, Mr. Cayne at times missed key events. At a tense August conference call with investors, he left after a few opening words and listeners didn't know when he returned. In summer weeks, he typically left the office on Thursday afternoon and spent Friday at his New Jersey golf club, out of touch for stretches, according to associates and golf records. In the critical month of July, he spent 10 of the 21 workdays out of the office, either at the bridge event or golfing, according to golf, bridge and hotel records.
Mr. Cayne evidently didn't court business on the links, as some CEOs do. "The golf course for him was an escape," says John Angelo, a hedge-fund client and frequent golf partner.
Needless to say, Cayne is a Bush Pioneer, raising funds at a record clip for that other record-breaking lover of leisure, George W Bush.
This camp of Bush-enabling rich incompetents also includes Stan O'Neal, the Merrill Lynch Chairman who "retired" having lost $8 billion and having kept $161 million for himself; Todd Farha, the Medicaid fraudster behind Wellcare (see a couple of posts below this one); and, of course, the ur-fraudster Ken Lay of Enron fame, who helped finance Bush-Cheney in 2000 on a fat cushion of imaginary profits.
In the critical month of July 2007, James Cayne played golf and bridge. Which reminds us that in the critical month of August 2001, another "CEO" was goofing off with golf and photo ops.
Has uselessness and harmfulness ever been so richly rewarded?
UPDATE:More Republican misbehavior in men's rooms. Omitted above is the Journal's most tabloidesque revelation about James Cayne: "Attendees say Mr. Cayne has sometimes smoked marijuana at the end of the day during bridge tournaments. He also has used pot in more private settings, according to people who say they witnessed him doing so or participated with him. After a day of bridge at a Doubletree hotel in Memphis, in 2004, Mr. Cayne invited a fellow player and a woman to smoke pot with him, according to someone who was there, and led the two to a lobby men's room where he intended to light up. The other player declined, says the person who was there, but the woman followed Mr. Cayne inside and shared a joint, to the amusement of a passerby."
I will write about stoner Republicans another day. Today's theme is rich rewards for lazy incompetence.
