The scenario is all too familiar: A corporation or government agency, having knuckled under to a group of "civil rights" activists and their lawyers, renders itself an easy target for successful copycat shakedowns. The U.S. Department of Agriculture (USDA) for over a decade has epitomized such capitulation. And once again it has come through. On October 19 the department announced the settlement of a longstanding lawsuit in which thousands of American Indian farmers and ranchers had claimed discrimination by USDA credit program administrators. The $760 million agreement, which gained preliminary court approval yesterday, follows the agency's capitulation earlier this year in separate lawsuits filed by black and Hispanic farmers. Taxpayers will be stuck with the bill.
According to unnamed sources, the GM IPO will offer approximately 22% of the company for proceeds of about 10 billion dollars. Shares will be sold at $26 to $29 after a stock split. This puts the company's value at approximately 50 billion dollars, in the same area as Ford's market cap. Arguments can be made whether or not GM is worth more than Ford, but there are other more important facts to ponder. Why did Ed Whitacre recently disclose that the IPO would price between $20 and $25, only to see the media hype a higher figure based on leaks that no doubt came from the company itself.
Probably because today is Election Day. The auto bailout is even more unpopular than the stimulis spending or ObamaCare. The pressure is on GM to shed the "Goverment Motors" label.
Yesterday we reported that the FTC's decision to close its investigation into the Google WiSpy affair came less than a week after President Obama attended a $30,000-plate fundraiser at the California home of senior Google executive Marissa Mayer. It also came four days after Google, after months of denials, admitted for the first time that its "Street View" video cameras were intercepting emails, passwords and website addresses sent by unsuspecting Internet users.
Now we've learned that on September 28, 2009, Becky Burr, a Google lobbyist at Wilmer Hale, emailed White House officials Susan Crawford and Andrew McLaughlin asking for a meeting to request the White House's assistance in urging the Federal Trade Commission to back off on privacy. Her email reads in part:
For union officials who wanted to line their pockets with benefit payments intended for members, Joseph Olivieri was the man to see. Now they will have to go elsewhere. This Wednesday a Manhattan federal jury found Olivieri, ex-executive director of the Long Island-based Association of Wall, Ceiling & Carpentry Industries (WC&C), guilty of perjury in a case that underscored the extent of Genovese crime family control of New York City-area construction contractors and unions. As part of the Justice Department racketeering probe, former Carpenters & Joiners District boss Michael Forde and eight other defendants already had pled guilty. Olivieri, currently out on $500,000 bond, faces up to five years in prison plus prosecution for four other charges, including conspiracy and fraud.
General Motors is expected to begin soliciting for its IPO within the next few weeks. Some warning signs are surfacing regarding the risks relating to investing in New GM. These risks will be easily recognized by astute money managers and may require GM (and its owners, the US Treasury) to rely more upon the Mom and Pop investors who are less sophisticated and more susceptible to being taken advantage of.
Prior to filing for bankruptcy, General Motors funded its operations by borrowing from small investors. This funding came in the form of "baby bonds" that were traded on security exchanges and made readily available to retail buyers. Around the same time that unethical practices led to predatory lending in the mortgage industry, GM engaged in its own practice of predatory borrowing. The individuals who lent money in good faith eventually had their rights subordinated to the politically powerful labor unions.
Rep. Charles Rangel is heading into a Nov. 15 ethics trial with no lawyers, little money and a risky strategy that may turn his trial into a political showdown, rather than a legal face-off, according to sources close to the New York Democrat.
It's not even clear if the ethics trial will start on time. Rangel has asked for a delay in the proceedings, but the ethics committee - with members off running their own reelection campaigns - has not publicly ruled on the request.
James A. Wayne Sr., executive director of Capital Area Legal Services Corporation (CALSC), must have a taste for irony. He's reportedly making a list of employees to lay off by year's end. Yet wasteful and possibly illegal spending by his Baton Rouge-based organization could pay for the annual salary and benefits of a few staffers. That's a logical conclusion anyway in light of a report (see pdf) released September 27 by Legal Services Corporation's Office of Inspector General (OIG) identifying more than $300,000 over several years in undocumented and/or ineligible costs at CALSC. Wayne, though vowing to work with the OIG to better document expenses, has disputed the findings. The accompanying summary broadcast put together by the WBRZ-TV Channel 2 local news team in Baton Rouge suggests he doesn't have an easy case.
Shortly after Labor Day, as polls continued to sink, the Democratic National Committee (DNC) realized it needed a cash infusion for the upcoming midterm elections. Its chairman, former Virginia Governor Tim Kaine, turned to the Bank of America to secure a $15 million revolving credit line. Then, in the middle of this month, the Democratic Congressional Campaign Committee (DCCC) got another loan from BofA for an additional $17 million.
The loans might be illegal. A key question is whether adequate collateral was posted for the loans. The DNC says it pledged its donor mailing list but: