More evidence that the GM IPO is being hurried for political purposes is found in the IPO registration filing yesterday. The company cannot assure the accuracy of its financial information because of weaknesses in its internal controls. How can GM offer and price shares if it cannot even attest to its own financials?
The shares being offered for sale will come from the U.S. government and the United Auto Workers (UAW) trust fund, another red flag. If the UAW has such great confidence in the future of the company, why is it selling? Is it to cash in on the superficial media accounts of GM’s “progress,” when it knows the long-term future of the company is less rosy?
Few shares will initially go to retail investors. Instead they will go to hedge funds and professional investors who have no long-term interest in GM. They seek to flip the shares for … Read More ➡
Sun Chips’ loud bag is getting lots of attention, including a Wall Street Journal story yesterday. PepsiCo’s Frito-Lay division bills it as “The World’s First 100% Compostable Chip Package.”
The overwhelming crinkle of the bag annoys people, and it is inappropriate in certain settings like theaters and schools. It is hard to imagine how this bag ever got off the drawing board when one considers how much PepsiCo spends on perfecting and marketing its products.Actually, it is easy to imagine when one considers the politicization of PepsiCo in recent years, which has accelerated under CEO Indra Nooyi. When proving how “green” you are trumps other considerations, you end up with weird results like this bag.
Even if the bag did not make so much noise, can PepsiCo really make the case for a compostable potato chip bag? How many consumers compost? And even among the tiny percentage who do, … Read More ➡
The unexpected departure of General Motors CEO Ed Whitacre (right) last week was reportedly due to tensions over the timing of a public offering, which the Obama administration wants to take place before the November Congressional elections so that it can declare some kind of “success” for the still-unpopular auto bailout.
A premature IPO must be a really bad idea if it’s too much for Whitacre, who has not exactly demonstrated principled leadership. There’s the problem of taking the GM job in the first place. What kind of capitalist would be a party, or more precisely an accessory after the fact, to the violation of private property rights represented by the crushing of GM bondholders? While CEO, Whitacre did not disappoint his masters in the White House, even appearing in a TV commercial in April in which he falsely claimed that GM had paid back the US government in full … Read More ➡
Former Murtha crony Paul Magliocchetti was indicted yesterday on 11 counts. The indictment was not unexpected and relates primarily to Magliocchetti’s rather hamhanded manuevers to evade campaign contribution limits by having family members, employees and friends make contributions for which they were paid back.
The indictment certainly relates the PMA “pay to play” scheme, but it does not address the underlying possible crimes by members of Congress who secured earmarks for PMA clients in return for campaign contributions and other benefits. It is not known to what extent, if any, the Justice Department has sought a plea bargain with Magliocchetti in return for information about members of Congress. Maggliocchetti’s son Mark is cooperating with prosecutors but it is not known if his information goes beyond his father to members of Congress.
Attorney General Eric Holder has already shown indifference to earmark-related corruption in Congress by choosing not to retry former … Read More ➡
The auto bailout is a massive failure. It did not save jobs. It is a fallacy to claim that more jobs exist in an economy because particular firms have been saved from going out of business. Automobile jobs exist in the United State because of consumer demand for automobiles. Bailing out car companies does not increase demand, nor will it increase the number of cars built and sold.
All the auto bailout did was shift jobs from one set of firms to others. Because GM and Chrysler are poorly managed, and are joined at the hip with the United Auto Workers, they will not produce cars as efficiently as competitors. In the long run, the bailout will cost American jobs.
All car companies, but especially the bailed-out ones, are burdened by government regulations and mandates, like the recently tightened fuel efficiency standards. Obama said today that the standards are “good … Read More ➡
Rep. Carolyn Cheeks Kilpatrick (D-MI) was defeated in a Democratic primary yesterday. Kilpatrick was one of six members of Congress investigated by the Office of Congressional Ethics and the House Ethics Committee for accepting a corporate-sponsored Caribbean junket in November 2008. I attended the event in St. Maarten before organizers had me detained by the Police Korps of St. Maarten. The investigations were launched on the basis of my photographs, audio recordings and other evidence of sponsorship by companies like Citigroup.
The Ethics Committee admonished Rep. Charles Rangel (D-NY), leading him to resign his post as Chairman of the Ways and Means Committee, but let off the hook Kilpatrick and four others. This was despite overwhelming evidence that Kilpatrick was aware of the corporate sponsorship. NLPC provided the Ethics Committee with an audio recording of a Kilpatrick speech at the event, during which she stated:
Mark Hemingway of the Washington Examiner reports that 45 members of Congress are clinging to campaign funds received from Rep. Charles Rangel’s National Leadership PAC during the 2008 election cycle. The total of outstanding funds is $303,000.
“It just shows how out of touch they are and certainly explains Congress’ 11 percent approval rating,” said Ken Boehm, chairman of the National Legal and Policy Center. “It’s a case where greed trumps common sense and everybody knows that returning the money is the ethical thing to do.”
Hemingway reports that a score of members of Congress have parted with hundreds of thousands in donations from Rangel, including several who did so after being contacted by the Examiner. That total is sure to rise as more attention is focused on Rangel’s extensive giving to his House colleagues.
Most if not all of the money has been given to … Read More ➡
One of the more serious violations was Rangel’s failure to disclose or pay taxes on rental income from a vacation home at the Punta Cana resort in the Dominican Republic. Following a review of Rangel’s financial disclosures in August of 2008, NLPC dispatched an investigator to the Dominican Republic who established that Rangel’s beachfront “villa” was continuously rented out.
After NLPC provided the story to the New York Post and other publications, Rangel stated that he was unaware that the beach house was generating income. That assertion was undercut by a 1993 letter secured by the Commiteee from Rangel to the management of the Punta Cana. It reads:
The eight members of the House Ethics Committee sit in judgment on Rep. Charles Rangel (D-NY), but it is hard to see how at least two of them can be impartial when they have received campaign funds from Rangel’s National Leadership PAC.
According to Federal Election Commission records, Rep. Ben Chandler (D-KY), in photo, received two contributions of $5,000 each during the 2004 election cycle, on 12/15/03 and 1/20/04. Rep. G. K. Butterfield (D-NC) received contributions of $1,000 and $2,000 during the 2004 cycle, on 6/29/04 and 7/13/04 respectively.
A third member of the Ethics Committee, Rep. Peter Welch (D-VT), recognized the inherent conflict of investigating Rangel and accepting campaign money from him. He received two contributions of $5,000 each during the 2006 cycle, on 3/30/06 and 10/24/06. He also accepted $5,000 during the 2008 cycle, on 9/25/07. He returned all $15,000 on May 1, 2009.
I was interviewed by David Asman on the Fox Business Network on Wednesday, July 21. The topic is the racial mandates contained in the Dodd-Frank financial services regulatory overhaul. Here’s a transcript:
David Asman: The financial regulation Bill is now law and while we know that the twenty three hundred page document is full of new bureaucracies and regulations you may not know there is actually language in this law that requires racial profiling. Peter Flaherty is President of National Legal and Policy Center an ethics watchdog based in Washington. He has done some digging into this Bill. Peter, you know, I couldn’t believe it when I first heard it – I mean this is an Administration that prides themselves on being anti-racial. They are against racial profiling that doesn’t exist, for example in the Arizona immigration law. Get this: lenders will – these new data collection system that … Read More ➡