If you're a military officer, you can't miss First Command Financial Planning of Fort Worth.
It sells life insurance and investments to young officers serving around the world. Many of its executives and most of its agents were officers once themselves, and they let you know it. A parade of retired generals and admirals serve on its advisory boards. With more than 300,000 customers, virtually all of them current or former officers, the company depends on the military for its very existence.
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First Command was not happy a year ago when it discovered that a legal office at Air Force headquarters had put out a notice asking military lawyers in the field for feedback on "reports of possible unethical or overly aggressive" sales practices by the company's agents. The notice also raised questions about the suitability of the company's core product, an archaic and expensive type of mutual fund with sales fees that eat up half of an investor's first-year contributions.
First Command fought back: it complained to the second- most-powerful general in the Air Force. And it was heard.
The New York Times has found that within three weeks of the legal office's posting, the Air Force issued a retraction, which it had allowed the company to edit. It gave the company a letter of exoneration, signed by the Air Force's top legal officer, after letting the company edit that, too. The Air Force legal staff stopped cooperating with a securities industry investigation into the company's practices and products. And the Air Force effectively abandoned a broad inquiry of its own, letting local base authorities handle complaints.
One complaint was about a First Command agent who had made veiled threats against a young officer in Charleston, S.C., suggesting he could be court-martialed or sued for criticizing the company in an e-mail message.
I can't be court-martialed, but for those of you who can, please take this advice: Do not buy anything from First Command. Their sales practices for mutual funds and life insurance are punitive, far below civilian standards, and they are here to fleece you. Their CEO contributes to George W Bush, who sent you on a highly questionable mission in Iraq. Invest your money elsewhere, just keep it away from First Command.
For more background on our perspective on First Command, see this series of posts "First Command, Last Resort, Parts 3, 2, and 1."
And when Rush Limbaugh or Fox News or Sean Hannity bitch about liberals, remember who broke this story on behalf of soldiers. It sure as hell wasn't the conservatives.
Martha got a month of prison for roughly each $37,000 of her financial nastiness. Druyun, on the other hand, was sentenced for her conflicts of interest in a Boeing contract worth $23.5 billion of public money. If $37,000 worth of financial misbehavior gets Martha a month of prison, by this formula Darleen Druyun should get 635,000 months of prison, or 53,000 years.
Shouldn't victimless crimes, like drug possession and certain less pernicious forms of insider trading, get smaller sentences or fines, while those white-collar crimes that significantly erode the public trust, like Druyun's, get the book thrown at them? What's the matter with the judicial system? Can't judges do simple calculator-level math?
Our reverse chronology of the Dragon Lady Drama (also starring her daughter and former Boeing CFO and author Michael Sears) starts here.
SPIN BOLDAK, Afghanistan -- Guerrillas from the ousted Taliban regime killed at least 12 government soldiers in southern Afghanistan yesterday in a sharp escalation of violence ahead of the landmark presidential election this month.
At least seven more soldiers were killed in other clashes in the southern province of Zabul on Tuesday and Wednesday, provincial officials said.
They said some Taliban members also were killed, but no details were available.
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The governor did not elaborate on the fighting in Zabul, scene of repeated attacks by the Taliban over the past three days.
On Wednesday, guerrillas attacked a joint convoy of US and Afghan forces. The Taliban said several US soldiers were killed, but there has been no independent verification.
Zabul is near the border with Pakistan and is part of the main bastion of the Taliban. The guerrillas have pledged to derail the Oct. 9 election, in which 17 candidates are standing against incumbent President Hamid Karzai.
Taliban spokesman Hamid Agha told the Pakistan-based Afghan Islamic Press agency that the militia was responsible for a rocket attack Wednesday on a German peacekeeping base in the northern city of Kunduz. Four foreign soldiers were wounded, one seriously.
''All people and forces helping America will come under attack from us," Agha said. The NATO-led peacekeeping force, deployed mainly in Kabul, is investigating the attack.
The Taliban are so nonexistent that they even have a spokesman.
Unfortunately for Bush and for American soldiers, what's nonexistent is Bush's capacity to deal with reality as it occurs, not the version of it spoon-fed to him by his desperately disappointed stage managers Karl Rove and Karen Hughes.
We must have China's leverage on Kim Jong Il, besides ourselves.
So according to Bush when the WMD threats are real, as North Korea's are, we need international allies.
In the case of Iraq, where the WMD threats are bogus and the political friction is based on family feuds, we go it alone at US taxpayer and soldier and reservist expense.
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Saudi Arabia may be hatching an October surprise to benefit President Bush by lowering crude oil prices before the November election, Washington Post reporter Bob Woodward said in an interview aired yesterday.
Saudi Prince Bandar bin Sultan - the longtime ambassador to the U.S. and a close Bush family friend - told the President that oil production will get a boost to strengthen the U.S. economy, said Woodward, author of a new book on White House war planning for Iraq.
RIYADH, Saudi Arabia - Saudi Arabia, the world's largest oil exporter, will raise production from 9.5 million barrels a day to 11 million barrels, an oil ministry official said today in an attempt to rein in crude prices that topped $50 a barrel for the first time.
The increase would go into effect within weeks, according to the senior official, who spoke on condition of anonymity. No further details were provided.
Former Enron executive Michael Kopper spent much of Monday telling a jury about how he and others systematically looted Enron, concocting scheme after scheme to line their pockets with millions of dollars stolen from shareholders.
Kopper, 39, calmly and thoughtfully explained that in 1997 he and ex-Chief Financial Officer Andrew Fastow started to divert funds to themselves, family and friends by breaking laws, breaking internal rules, lying, manipulating and standing in the middle of deals.
Though 14 people have pleaded guilty to crimes in connection with Enron's demise, this is the first time any one of them has publicly discussed the rampant greed and multimillion-dollar plundering in their own words.
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The barge case is based on the government's contention that Enron pretended to sell three electricity-generating barges to Merrill Lynch just so it could claim the earnings from the sale to boost its bottom line and meet Wall Street expectations. Prosecutors contend that the sale was a sham because of an oral promise that Enron would take the bankers out of the deal within six months.
Kopper said Fastow wanted his off-the-books partnership, LJM2, to take the barges off Merrill Lynch's hands. Kopper said it wasn't done like a normal deal, as there was a set 15 percent return and a $350,000 fee LJM2 was guaranteed. Kopper said he felt the partnership had no risk because of Fastow's promises they too would be bought out, as they soon were.
Kopper, who has pleaded guilty in 2002 to two counts of conspiracy, admitted he and his partner William Dodson stole about $16.5 million from Enron between 1997 and 2001.
He said he helped loot about $45 million for Fastow and his family as well. And other friends got anywhere from $60,000 to $1 million, some after investing, others just because Fastow and Kopper wanted to pay them something.
Answering questions from prosecutors or defense attorneys, Kopper remained even and responsive. He agreed his mentor Fastow is brilliant and "very greedy." He noted Fastow sometimes lied to Kopper, once even about Kopper's share of the booty.
In late 2001, when it was clear authorities were looking at Enron, Kopper said he spoke to Fastow about their exposure and then destroyed both his home computer and his laptop by putting them in dumpsters.
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The former executive has clearly done well financially even while a cooperating witness. He forfeited $8 million to the government as well as his disputed rights to another $4 million. His domestic partner William Dodson did not have to forfeit any of the $9 million pre-tax that he benefited from the frauds.
Kopper said he now has a job at a health clinic, is living in a house worth up to $2 million owned by his partner Dodson, just bought a new home worth $380,000, has a 401(k) worth about $300,000, $100,000 in other assets and could possibly get back some of the $500,000 he has on account with his lawyers.
On cross-examination by defense attorney Richard Schaeffer, Kopper described how he and Fastow were able to turn relatively small personal investments into larger payoffs through their inside knowledge of Enron.
Through a partnership they formed called Southampton they were able to get a British Bank, NatWest, to sell its share in an Enron-related partnership for much less than it was worth. Kopper said he and Fastow knew how much the bank was willing to pay and how much Enron would pay for the stake in the partnership.
"We stood between the two parties in order to be able to skim money off of them," Kopper said. He said the group stole $19 million from Enron in this deal alone.
In February 2000, he and Fastow each invested $25,000 into the partnership and got a return of $4.5 million each just a few months later. A number of other former Enron employees invested as little as $5,000 in Swap Sub and received up to $500,000 in return.
"This is what you did when you went to work every day, is you thought up schemes to steal money from people?" asked Schaeffer, attorney for Merrill defendant Daniel Bayly.
"Yes, that's part of what I did," Kopper replied.
The defendants in the barge case, who have pleaded innocent, are: Bayly, former chairman of investment banking for Merrill Lynch; Brown, former head of Merrill Lynch's asset lease and finance group; Robert Furst, former Enron relationship manager for Merrill Lynch; William Fuhs, former Merrill Lynch vice president who answered to Brown; Dan Boyle, a former Enron finance executive on Fastow's staff; and Kahanek, a former in-house Enron accountant.
Prosecutors wanted Kopper to solidify their contention the sale was a sham and verify how Enron arranged for LJM2 to get Merrill Lynch out as promised.
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Kopper mentioned Skilling when he noted that Fastow considered LJM2 taking the barges in 1999, when Merrill Lynch did the deal instead. At that time Fastow said "if LJM could do this deal he would look like a hero to Jeff Skilling," Kopper recalled.
Kopper said Fastow giggled in May or June 2000 when he wanted Kopper to use LJM2 to now buy the barges from Merrill Lynch.
Kopper said the Fastow-controlled partnerships LJM and LJM2 were typically used to help Enron meet financial goals like managing cash flow, debt and earnings.
He said the barges being handed off was all about falsely bolstering Enron's bottom line. "Given that Enron was measured by its earnings, year-end became an important time," Kopper said.
How many Enron ex-employees get to live in a $2 million house owned by a "domestic partner," bought with funds stolen from other ex-employees? The answer is one.
Why do we still obsess about Enron? Because of its symbolic power — Enron perfectly represents the pyramid scheme of Republican power politics, sucking all money upward, leaving nothing but victims in its wake. These are the same people who want to privatize your retirement income to provide more fodder for the Fastows and Skilling and Lays, who will be happy to take your investments, falsify everything in sight, giggling all the while, and immediately shut the door behind them as they waltz into Cheney's office to make energy policy.
Cracker Barrel has doled out roughly half a million dollars in political contributions in the past decade, but a $25,000 donation two years ago has landed the restaurant chain in trouble with the law in Texas.
The Lebanon-based company was one of eight corporations indicted Tuesday by a grand jury on charges of illegal financial activity. The indictment cites a $25,000 contribution in September 2002 from Cracker Barrel to Texans for a Republican Majority, a political action committee with ties to House Majority Leader Tom DeLay, R-Texas.
Cracker Barrel also has contributed $5,000 to DeLay's political action committee, Americans for a Republican Majority, which helped create the Texas committee.
The indictment alleges that Cracker Barrel was part of a scheme to funnel corporate money to political candidates in violation of Texas campaign law. Three of DeLay's closest aides also were indicted on charges of money laundering and accepting unlawful corporate donations. DeLay was not charged.
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Cracker Barrel's political action committee, Citizens for Political Accountability, has been a major corporate backer of GOP politics at the state and national level. Since 1992, it has given $313,250 to Republican candidates compared with $14,250 to Democrats, according to an analysis of campaign finance records by PoliticalMoneyLine, the online arm of FECInfo, which tracks political financial activity.
The restaurant company also shelled out nearly $200,000 in soft-money donations before the large unregulated corporate contributions were outlawed in 2002. That total included more than $69,000 to the Republican National State Elections Committee, which allegedly steered $190,000 in corporate contributions to seven Texas House candidates in 2002.
In addition, Dan Evins, chairman of Cracker Barrel's parent company, has given $131,950 to Republican candidates and political committees, records show.
Here's a handy map of over 500 Cracker Barrel locations you can boycott.
Red State Welfare.TaxProf Blog cites a Tax Foundation study showing which states benefit from federal tax and spending policies, and which states foot the bill. The report shows that of the 32 states (and the District of Columbia) that are "winners" -- receiving more in federal spending than they pay in federal taxes -- 76% are Red States that voted for George Bush in 2000. Indeed, 17 of the 20 (85%) states receiving the most federal spending per dollar of federal taxes paid are Red States.
A southwest Houston man shot and killed his 18-year-old son late Saturday after apparently mistaking him for a burglar, police said.
Eli Johnson, 18, was shot shortly before 10:30 p.m. inside his family's home in the 3900 block of Westhampton. His death comes about six weeks after Alejandra Hernandez, 5, was fatally shot by her stepfather inside their northeast Houston home after he mistook her for an intruder.
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In that incident, Agun Ortega Pina told Houston police he went for his gun Aug. 15 when he heard suspicious noises about 1 a.m. inside the family's home in the 2800 block of Kentucky.
Pina told detectives that he and his wife shared a bed with their three daughters because the only other bedroom in their small home was being rented to a family friend.
Police said Hernandez may have gotten up to use the bathroom and was returning to her parents' bed when she was mistaken for a burglar.
The noise roused Pina from his sleep. He grabbed a pistol from the closet and fired when the girl opened the bedroom door.
She was struck in the chest and taken to LBJ Hospital where she later died.
Texas is such a delightful model for America.
I actually don't object to gun ownership. It's the paranoia behind it, the fear-mongering characteristic of the Gee Dubya Bee era, that is so reprehensible.
These Texans at the shallow end of the gene pool are more concerned with not being burgled than they are about the actual safety of their own children. One has nothing to do with the other.
Just like people in Ohio are more concerned about not being attacked by terrorists than they are about the actual safety of the children they sent to Iraq. One has nothing to do with the other.
