Among the explanations for decades of decay in Detroit, public corruption ranks high on the list. Such was evident in a courtroom on December 8, where a federal jury convicted three persons, including Paul Stewart, formerly vice president of the Detroit Police Officers Association and a trustee of the city's Police and Fire Retirement System, on conspiracy to commit honest services fraud through bribes and kickbacks. The cash and other gifts Stewart received weren't enormous - they amounted to a little under $50,000 - but they were enough to induce him and other convicted co-defendants to steer pension plans toward highly risky investments that wound up losing $97 million.
Harry Wilson, the nemesis of General Motors bondholders who were wiped out in the government-orchestrated GM bankruptcy, is back on the scene. On the front page of today's Wall Street Journal, Wilson is portrayed as an "activist" investor, who seeks to maximize shareholder value. While his suggestion that GM buy back $8 billion of common shares would give a temporary boost to share price, Wilson's motivations may not be entirely pure. His real agenda could be to expand the already-favored position of UAW shareholders, and to bolster the political fortunes of unions in general.
Wilson was a retired banker elected to serve on President Obama's Auto Task Force and was the driving force behind preventing old GM bondholders from receiving due process during the GM bankruptcy process. His involvement led to his current status as a "restructuring expert" and CEO of the MAEVA Group. It now seems that our friend Harry is back to make lots of money for hedge funds, as well as for himself.
Former New York State Senator Malcolm Smith was convicted in federal court last week of bribery, wire fraud and extortion. A former majority leader in the New York Senate, Smith was defeated for re-election in 2014.
Convicted at the same time was Vincent Tabone, a former Queens Republican Party official. Smith, Tabone, and other GOP officials conspired to allow Smith, a liberal Democrat, to run for New York City mayor as a Republican in 2013, in return for $25,000.
Smith is the latest associate of U.S. Rep. Gregory Meeks (D-NY) to be convicted of crimes. Formal investigations of several New York politicians began in 2010 after the National Legal and Policy Center (NLPC) exposed corruption through stories in the New York Post, New York Times and New York Daily News.
On Monday, New York City Democratic leader Albert Baldeo was sentenced to 18 months in federal prison. He was convicted of seven counts of obstruction of justice in August of last year.
Baldeo was originally charged with three counts of fraud related to the use of straw donors to qualify for taxpayer matching funds for 2010 for his unsuccessful City Council campaign. The scheme was exposed in aNew York Post story of October 11, 2011, based on information provided by the National Legal and Policy Center as part of our investigation into U.S. Rep. Gregory Meeks (D-NY) and his political network.
The trumpets sounded this morning as General Motors reported its 2014 fourth quarter earnings. GM's bottom line earnings exceeded expectations (although revenue missed and was down from last year) and the pre-market share price of GM immediately jumped over a dollar a share. Despite the victory laps being taken by GM and its friends in the media, it would be wise for individual investors to think twice before jumping on the GM bandwagon.
This time the “research” was conducted at the University of Southern California and the University of California at Los Angeles. The test subjects were 20 children between the ages of 10 and 15, who were exposed to up to 300 micrograms of diesel exhaust particles via nasal spray, as part of a project that ran from 2003 to 2010. The information was uncovered in documents obtained via the Freedom of Information Act by the Energy & Environment Legal Institute and the Committee for a Constructive Tomorrow, and explained in detail at the Web site JunkScience.com.
General Motors recently announced that it bought back preferred stock from the UAW Retiree Medical Benefits Trust and the Canadian government. The deal closed in December of 2014 and supposedly will result in a reduction to GM's fourth quarter earnings to the tune of $800 million. GM had the option to redeem the shares at face value after December 31st of 2014. The timing of the deal brings into question the motivation behind the move and also leads us to reexamine a previous preferred share buyback that occurred in late 2013.
Sound the trumpets! Here comes the next best, all-new, electric wonder-car from General Motors. The dust had not even cleared from the rollout of the new and improved 2016 Chevy Volt when GM CEO Mary Barra announced the newest Tesla-killer from GM, the Chevy Bolt. Let's hope that the engineers working on the Bolt put more thought into the design of the vehicle than the GM executives put into naming the car.