"A wise and frugal government which shall restrain men
from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government."
(Thomas Jefferson)

Monday, November 21, 2011

"Just Give us the Facts" -- Lawsuits targeted board, Cain over retirement fund

How would you like to have been pressured into investing in your company's stock and then find out this:
The utility (Aquila Inc) eventually agreed in a settlement with the Commodity Futures Trading Commission to pay $26.5 million over claims that two of its subsidiaries manipulated natural gas prices by providing false prices and other financial details to trade publications.
That $26.5M used to pay a settlement on manipulation could have been used to pay into employee's retirement funds when the stock went from $37.50 a share in 2001 to $5 a share in 2008. The company also paid $10.5 million it paid to settle claims it failed to protect the retirement savings of its employees.  Earlier the company had opened up stock options that an employee could purchase $10,000 of stock a month at an 'advantageous' rate and pressured employees to buy their stock.   My question would be if the employees and board of Aquila Inc. drove up the stock prices with their purchase of company stock.  Enron's collapse seems to get the blame a lot and Aquila Inc. is no different.  Convenient to blame everything on Enron and not take responsibility.

You have to give it to Cain as he is saying that the board kept the company from going bankrupt.  He loves to throw the word bankrupt around like he was the savior of Godfather and now with Aquila Inc.  He did it with Godfather's Pizza saying they were on the verge of bankruptcy when he took over but that wasn't true:
Thus, in the middle of 1985, days before one of the largest Food companies in America, Pillsbury, bought the company, ten months before Cain took over, analysts were mixed about if Godfather’s would return to profitability in 1985. At this point, Godfather’s had been profitable every year since its inception in 1973 through 1984. There was simply no talk of bankruptcy.
That was another company that profits plummeted after the Cain group took over and closed over half the pizzerias.  Don't think Mr. Cain is a very good businessman but he can spin a tale of how everything was done right and he was the reason.  Facts don't match his rhetoric.
An article published in Bloomberg Businessweek by Tim Jones got the story right. It came out on June 6, 2011[7], the same week that PolitiFact published its article. It noted that he closed 20 percent of the company’s 640 restaurants and fired 300 to 400 people. Jones perceptively wrote, “He is a politician, just one who hasn’t held office. And like most politicians’ log cabin stories, Cain’s oft-told tale of how he rescued Godfather’s is kind to its hero and notable for what it leaves out.” He notes that Cain “has not released details of the company’s performance under his leadership” and ends by correctly stating:
The bottom line: Though Cain says he would revive the economy as he did Godfather’s Pizza, it’s not clear the chain improved much when he was CEO.
Politifact which is supposed to fact check politicians did not do a thorough job on Cain and his time at Godfather Pizza doing more of a puff piece as of October 18, 2011, but even then found Cain was lying or stretching the truth:
As of Oct 18, 2011, PolitiFact had checked out 19 statements by Herman Cain. It judged him telling the truth zero times, “mostly true” 3 times, “half truth” 4 times, “mostly false” 3 times, “false” 7 times, and “pants on fire” 2 times.” That’s 16 out of 19 half truths or worse, which means 84% of Cain’s statements have been judged half truths or worse. Politifacts is obviously willing to call Cain out when he lies. 
That is why it is so disappointing in this case, where PolitiFact should have exposed the fact that Cain wasn’t telling the truth when he talked about his success as manager of Godfather’s. If they had dug a little deeper and understood the situation more clearly, that is what I am sure they would have done.
Even in what turned out to be a puff piece on Cain which was more about style then substance, they found 84% of Cain's statements were half truths or worse and yet he is running for President?  What is with some of these conservative sites pushing Cain?  If he was white, I do not believe that all of this would be ignored in order to prop up Cain.

Conservative pundits/writers seem have the same disease that afflicted liberal pundits on Obama -- afraid to tell the truth and be labeled a racist.  How about telling the truth ignoring what someone may label you?  What some of the  conservative radio pundits like Rush and Hannity are doing is flat out wrong to prop up Cain and blame the media.

Rush went way over the top when he likened Bialek's (Cain accuser) 13-year old son to a Nazi storm trooper.  Rush's attacks on the women who came forward have been demeaning to women so that a lot of women will never listen to him again but his attack on a 13-year old boy was so far over the top that I cannot believe he is still on the air.  Shows that Clear Channel who is owned by Bain Capital (Romney's company) could care less about content or he would have been suspended for his attacks.  Read into it what you want but it smells!

Democrats blame the right wing conspiracy and Republicans blame the liberal media.  The blame game should end today but then pundits and reporters from both sides would be faced with giving us the facts instead of using attack politics when they don't like what someone said or to cover for a candidate.  The day this country becomes color blind is the day that pundits from both sides don't prop up a candidate because of the color of their skin and candidates quit blaming attackers for being racist.  It cuts both ways.  If Weiner or Foley would have been black would they have been forced to resign from the Congress? It is a legitimate question because look what happened to the black Congressman Charles Rangel, Democrat from NYC who had all those ethics complaints, but he only received a slap on the hand.

All the voters want is the facts not some narrative that the media and pundits from both sides want to spin.  I was looking for the origin of 'Just the Facts' and found this gem:
Dragnet, and later Badge 714, always opened with a view of Los Angeles, with Jack Webb narrating the intro with the words, "This is the city. . .my name's Friday, Joe Friday; I'm a cop." Friday's famous line when interviewing witnesses to a crime was always, "Give me the facts--just the facts."
I remember Joe Friday using those words and that is what voters need to tell the candidates: "Give us the facts -- just the facts" of where you stand on issues and your background to be President.  Stop the lies, spin, and flip flops and be honest for a change.  If you make a mistake, admit to the fact don't spin.  Some Republican candidates are lying, spinning, and flip flopping more than I can remember seeing in the Republican Party primary for President.

Voters are also tired of Fox News trying to choose the Republican candidate with their spin as much as football fans are tired of ESPN trying to pick the College Football National Champion and the Heisman winner.  Too much narrative not substance is inflicting the talking class from politics to sports.

How are conservative pundits going to spin this one for Cain today?
Lawsuits targeted board, Cain over retirement fund
ATLANTA (AP) — Republican Herman Cain served on the board of a Midwest utility company that paid $10.5 million to settle claims it failed to protect the retirement savings of its employees and paid another $26.5 million over claims it manipulated gas prices, potentially embarrassing episodes for a candidate running for president on his business experience. 
Cain sat on the board of directors for Aquila Inc., a Kansas City-based utility, from 1992 until it was acquired in 2008 by Great Plains Energy Inc. Employees alleged in a class-action lawsuit that they were pressured into investing their retirement funds and other savings into company stock. Cain has been forced to answer questions on the campaign trail about the lawsuit, which was reported by Mother Jones magazine in May. 
Those employees said Cain and other company officials should have warned their employees that the stock was becoming increasingly risky as the firm floundered financially. The workers said the company's stock should have been eliminated as an investment option in the retirement fund. While Cain sat on the board, Aquila's stock price dropped from roughly $37.50 in 2001 to less than $5 before the company was acquired seven years later. 
Cain denies any wrongdoing and takes credit for helping stave off a corporate bankruptcy.
"There's a degree of risk in all investments in all companies," Cain spokesman J.D. Gordon said. "The actions that the board took saved the company." 
Cain shared responsibility for the company's overall direction as a member of the board. But attorney Fred Isquith, who represented eight workers who started the class-action lawsuit over the employees' retirement fund, said he was unaware of any evidence showing Cain was more culpable than others on the board. He said the utility was effectively run by members of the Green family, which founded it. 
"Could the board have done something? Sure," Isquith said. "Was it run on a day-to-day basis by the Green family? Absolutely. It was the board's responsibility collectively, and Mr. Cain was a member of the board." 
Federal records show Isquith has made thousands of dollars in political donations, predominantly to the Democratic Party and its candidates. He said he does not have a preference for a candidate in the Republican presidential primary.
Lawyers for the workers said Aquila started out as a relatively conservative investment. As a traditional utility, the company produced predictable — though not necessarily large — returns and offered a dependable dividend payment. 
And the company encouraged its employees to invest. Workers enrolled in the company's investment plan could buy Aquila stock, among other options. It matched employee contributions into the plan fund with company stock. It granted stock options to nearly all its employees and allowed them to purchase up to $10,000 monthly in stock at advantageous prices. Workers could also use their dividend payments to buy even more Aquila stock at a discount. 
The lawsuit alleged that the company sent internal publications and set up meetings where employees were encouraged to invest even more. Starting in 1994, the company's annual report listed workers whose stock in the firm was worth at least twice their annual pay.
By the middle of 2001, Aquila stock accounted for two-thirds of the retirement plan's value, lawyers said. 
The root of the company's trouble came when it decided to expand into the energy trading business. The utility, then called UtiliCorp United Inc., started the process of spinning off its trading arm, called Aquila, into a separately traded stock. The timing couldn't have been worse.
A major blow came with the 2001 collapse of Enron, a major energy trader, in one of the biggest corporate scandals in U.S. history. It led to investigations of shady energy trading practices that, according to federal authorities, included parts of Aquila. 
The utility eventually agreed in a settlement with the Commodity Futures Trading Commission to pay $26.5 million over claims that two of its subsidiaries manipulated natural gas prices by providing false prices and other financial details to trade publications. The parent company was the sole or majority owner of those subsidiaries for most of their existence. 
A report from the Federal Energy Regulatory Commission identified Aquila as one of several firms that had manipulated energy prices in Western states. A wholly owned subsidiary of Aquila later agreed to pay nearly $76,000 to settle related complaints. The company denied wrongdoing and said it paid to avoid the cost of litigation.   
Excerpt:  Read More at Yahoo News

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