|
|
 |
 |
 |
|
|
|
|
|
Kit Menkin's Leasing News www.leasingnews.org Monday, July 15, 2002 Accurate, fair and unbiased news for the equipment Leasing Industry ------------------------------------------------------------------------------------- Headlines---- Non-Leasing Business News In Brief The Week Ahead Capital/Finance Leases---Beware! Speros on Feds Nix NextCards Layoffs last longer than unemployment pay Moneyjobstore---New website Key Equipment Names Jim Epstein VP Boomers' farms can go bust A rich history of corporate crime ### Denotes Press Release ------------------------------------------------------------------------------------------------- Non-Leasing Business News In Brief: Officials at WorldCom Inc. shifted accounts around as early as 2000, well before the nearly $4 billion in accounting irregularities that led the government to file civil fraud charges against the company, documents turned over to a House investigative panel show... Pfizer Inc. has agreed to buy rival Pharmacia Corp. for $60 billion in stock in a deal that will create the world's largest pharmaceutical company, according to newspaper report.. Striving for greater clarity in its financial reports, Coca-Cola Co. plans to count stock option grants as employee compensation in a major accounting change later this year... Cable television rate increases for some customers, and possible higher charges for higher-volume cable Internet customers, have consumer advocates trying to reverse the deregulation of the cable industry, and some members of Congress calling for action... Market watchdog Harvey Pitt said Sunday he will not quit as Securities and Exchange Commission chairman despite criticism he has been a lax regulator... The Week Ahead (many on vacation this week ) July 17 MONDAY Inventory-Sales Ratio: May 7/15-17 Equipment Leasing Association Principles of Leasing Workshop Hilton Kansas City Airport Kansas City, MO July 18 TUESDAY Industrial production: June Capacity utilization: June July 19 WEDNESDAY Housing construction: June July 20 THURSDAY Leading indicators: June Weekly jobless claims July 21 FRIDAY Consumer Price Index: June Balance of trade: May Federal budget: June Capital/Finance Leases---Beware! Many states have usury laws regarding business loans. Several of the states consider “capital” or “finance” leases business loans. If they violate the usury laws of the state, it not only invalidates the transaction, but puts the creditor in violation of the state’s law. The Commercial Finance Association has a compendium of commercial law that includes details of commercial usury in each state that is updated at least twice a year by a network of law firms in each state. Irwin uses it extensively and we have not yet found an error. It also provides information on state licenses, guarantees, Tax liens etc. You buy it without being a member and can access it on their website or use a CD Rom. Their website is: www.cfa.com. "The telephone number for the Commercial Finance Association is 212/594-3490. The Compendium of Commercial Finance Law is a great publication. Check it out. " Dennis Brown Commercial Finance Association www.cfa.com 225 West 34th Street Suite 1815 New York, NY 10122 United States Phone: 212-594-3490 Fax: 212-564-6053 E-mail: postmaster@cfa.com Founded in 1944, the Commercial Finance Association is the trade group of the asset-based financial services industry, with members throughout the U.S., Canada and around the world. Members include the asset- based lending arms of domestic and foreign commercial banks, small and large independent finance companies, floor plan financing organizations, factoring organizations and financing subsidiaries of major industrial corporations. CFA membership is by organization, not by individual. Many of the organizations are involved in leasing, either directly to end users, vendors, or providing funds for lessors. http://www.leasingnews.org/associations2.htm --------------------------------------------------------------------------------------------------- Speros on Feds Nix NextCards – (The NextCard home page still encourages people to sign up for the Internet credit card, but the feds, who seized its failed NextBank subsidiary last February, are advising about 800,000 Visa cardholders that their plastic is no longer good.) This is a direct quote from a letter dated July 1 and received July 11 (even though it is uphill from Dallas to Denver, it shouldn't take 10 days for "first class" mail) from the FDIC: "You are obligated to pay the outstanding balance in full. Interest will continue to accrue on your balance, and fees will be assessed in the same manner as before. You may be contacted by the third party that owns your loan with additional information regarding repayment." (emphasis added) I hope they call to offer me a replacement card. I'll be happy to suggest a spot where they can store the card...sideways! Mark Speros, Director Broker Division Landmark Financial Corporation ----------------------------------------------------------------------------------------------- BAD TIMES GET WORSE JOBS: Layoffs last longer than unemployment pay Waiting to work Sam Zuckerman, San Francisco Chronicle Economics Writer
It's been 18 months since Mary McGuire lost her job as a business development specialist at a Palo Alto software company -- the first real spell of unemployment in her adult life. Most of the time, the 41-year-old Noe Valley resident shows the same kind of positive, upbeat face to the world that helped make her a success in business, rising early to search the Internet for jobs. By nature, she is confident and optimistic. But there are bad days too. "There have been times when I cried the whole day, when I burst into tears and say, 'What is going to happen to me?' " McGuire confided. Two years after the Internet bubble burst, plunging the nation into recession, there are tens of thousands of people like McGuire in the Bay Area - - talented, conscientious individuals, both professional and blue collar, who have been unable to find work for six months or more. In California, 171,000 people were out of work for more than 26 weeks in June, a jump of 9,000 in one month and up from 109,000 in June 2001. Yet, because of a quirk in federal law, Californians are no longer eligible for a second 13-week extension of unemployment benefits provided for in an emergency economic stimulus package enacted in March. Separate statistics aren't available for the Bay Area, but labor market experts say the collapse of the region's technology, tourism and travel sectors has devastated employment and made this region one of the nation's centers of long-term joblessness. Nationwide, the number of workers out of work for more than 26 weeks rose to 1.67 million in June, more than twice as many as the 728,000 people who had been jobless that long in June 2001, according to the Labor Department. The numbers don't include people who want to work but have given up looking. "It's a very severe problem," said Maurice Emsellem, public policy director of the National Employment Law Project, a group that lobbies for liberalized unemployment benefits. "There are many more long-term unemployed and the number is growing fast." SILICON VALLEY WORST OFF Nowhere has been hit harder than Silicon Valley, which rode the tech wave up only to see it crash back down to earth. "I would call this a tech depression. There are no jobs," said Los Gatos career counselor Patti Wilson. Blame the persistence of long-term unemployment on a sluggish recovery. After contracting late in 2001, the economy started growing again around the beginning of the year, thanks to steady purchases of homes, cars and electronic gear by ordinary Americans. But, after a burst of speed in the first quarter, the pace of economic growth has slowed as consumers falter and businesses keep the lid on spending. In such a climate, employers aren't hiring new workers. Forecasters expect unemployment to keep rising this year before gradually falling in 2003. "Businesses are going to be cautious," said Mary Daly, senior economist at the San Francisco Federal Reserve Bank. "They are still very challenged on earnings." In the tech sector, Wilson thinks the job downturn could stretch for years to come. "I don't think we're going to see anything positive until 2005," she warned. CALIFORNIA'S LOST BENEFITS To help the long-term jobless, Congress earlier this year approved an extra 13 weeks of unemployment insurance benefits -- beyond the standard 26-week eligibility period. For states with high unemployment rates, lawmakers authorized a second 13-week extension, providing for as much as a full year of coverage. California, where the official unemployment rate is 6.4 percent, has been one of a handful of states that qualified for the second extension. An obscure indicator known as the insured unemployment rate - - the number of people collecting unemployment insurance as a percentage of all people covered by the program -- is used to determine whether a state is eligible for the second extension. But California's insured unemployment rate just dipped below the 4 percent threshold that triggers the second extension. (Only Oregon and Washington state still qualify for this second 13- week period of extra benefits.) That means that any Californian whose first extension ran out after July 6 will not be eligible for a second extension. San Francisco resident Amy McKay, 39, is one of those who could be affected by the cutoff. McKay recently began collecting her first extension of unemployment insurance. Right now, she's hopeful she will be called back to the United Airlines cabin cleaning job she lost last October. But if she doesn't find work before her benefits run out in a few months, she may have to abandon the Bay Area. "I have friends and relatives," said McKay. "If push comes to shove, I could possibly go home to St. Louis." Critics of the current system say the weak job market makes it urgent to keep a full 26 weeks of extended benefits. "We're trying to get policymakers to understand that the extended benefits program is broken and needs to be fixed," said Emsellem of the National Employment Law Project. But employers who have to pay part of the cost of unemployment insurance object. "Unemployment insurance is for temporary, short- term unemployment. Its purpose is not to be a catchall form of income support," said Eric Oxfeld, president of UWC-Strategic Services on Unemployment and Workers' Compensation, an employer group. "Nine months is about the limit of what should be considered temporary unemployment." DEALING WITH STRESS With or without benefits, being without a job for a lengthy period is one of the most traumatic things that can happen. "I've never seen this much depression," said Wilson, the job counselor. "Families are breaking up, people have lost their 401(k)s, they've lost their homes." Most people manage to muddle through, perhaps with help from friends and family, and almost always with a great deal of hardship. "I have the outlook of an engineer. I see it as a problem I need to work on, " said Bandit Gangwere, a 45-year-old systems engineer from Felton whose last significant contract assignment ran out more than a year ago. Gangwere doesn't feel sorry for himself despite burning though savings, investments and his retirement account. "My self-worth has never been wrapped up in the job," he explained, a perspective he said he gets from his religious faith. What he worries about, though, is his wife and 10- year-old son. "I have responsibilities as a husband and a father. Not being able to find a job to fulfill those responsibilities has been a frustrating thing." E-mail Sam Zuckerman at szuckerman@sfchronicle.com. ----------------------------------------------------------------------------------------------- Moneyjobstore---New website New Website Added to Leasing News List of “Employment” Advertising *** Accounting Support :: Accounting :: Corporate Finance :: Investment :: Banking :: Insurance CAREERS You've been invited to MONEYJOBSTORE! MONEYJOBSTORE is a leading career website created for Financial professionals. Please visit us by clicking here or pointing your browser to www.moneyjobstore.com. Our areas of specialty include: Accounting Support Accounting Corporate Finance Investment Banking Insurance Employers - Post your jobs for FREE and enjoy the most comprehensive candidate searching capability on the net. Streamline your recruiting efforts and find your next hire FAST! Job Seekers - Looking for a change? We have over 60,000 jobs to choose from in our database. *** http://65.209.205.32/LeasingNews/Classified.htm www.adams-inc.com www.affinitysearch.com www.careerpath.com www.careerbank.com www.employmax.com www.goldenparachute.com www.Headhunter.net www.hotjobs.com www.insidevcjobs.com Venture County, CA. Newspaper www.jobs.net www.latimes.com www.lessors.com www.MarketingJobs.com www.positionfiller.com www.RecruiterConnection.com www.resumeblaster.com www.vetjobs.com www.worktree.com www.bajobs.com www.elaonline.com www.craigslist.org (available in many cities now, use scroll feature) http://65.209.205.32/LeasingNews/JobPosting.htm September 23 EAEL 19th Annual Expo East Rutherford, NJ (914) 381-5830 (914) 381-5829 -------------------------------------------------------------------------------------------------- ################### ################################## KEY EQUIPMENT FINANCE NAMES JIM EPSTEIN VICE PRESIDENT AND PROGRAM MANAGER, STORAGETEK FINANCIAL SERVICES SUPERIOR, CO Key Equipment Finance, one of the nation's largest bank-affiliated equipment financing companies, announced that Jim Epstein has been named vice president and program manager for StorageTek Financial Services, a captive leasing program within Key's global vendor services division. His office is located at Key Equipment Finance's world headquarters outside Boulder, Colorado. "Throughout his career, Jim has developed and managed a number of high visibility accounts in both the high tech and capital assets sectors," said Paul A. Larkins, president and chief executive officer, Key Equipment Finance. "Jim will bring a positive and fresh focus to one of our premier global vendor accounts: StorageTek Corporation." Epstein joins Key with 30 years of experience in the leasing and financial services industry. He spent 12 years at AT&T Capital (now the CIT Group) where he most recently held the position of vice president of Business Development. He has also worked at GE Capital and Beneficial Finance. Epstein earned his bachelor's degree in business administration, with a major in business law, from Temple University in Philadelphia, Pennsylvania. He is currently completing his M.B.A. at Regis University in Denver, Colorado. He lives with his wife in Evergreen, Colorado, and is active in many professional and civic organizations including the Equipment Leasing Association (ELA), the Denver Metro Chamber Foundation and the former Broncos' Stadium Task Force. Key Equipment Finance is an affiliate of KeyCorp (NYSE: KEY) and provides business-to-business equipment financing solutions to businesses of many types and sizes. They focus on four distinct markets: · small businesses in the U.S.; · mid-to-large size businesses in the U.S. and Canada for acquisitions from $5,000 and up; · equipment manufacturers, distributors and value-added resellers worldwide; and · federal, state and local governments as well as other public sector organizations. Headquartered outside Boulder, Colorado, Key Equipment Finance oversees an $8 billion equipment portfolio with annual originations of approximately $3 billion. The company, which operates in 25 countries and employs more than 600 people worldwide, has been in the equipment financing business for nearly 30 years. Additional information regarding Key Equipment Finance, its products and services can be obtained online at KEFonline.com. Cleveland-based KeyCorp is one of the nation's largest bank-based financial services companies, with assets of approximately $81 billion. Key companies provide investment management, retail and commercial banking, retirement, consumer finance, and investment banking products and services to individuals and companies throughout the United States and, for certain businesses, internationally. The company's businesses deliver their products and services through KeyCenters and offices; a network of approximately 2,400 ATMs; telephone banking centers (1.800.KEY2YOU); and a Web site, Key.com, that provides account access and financial products 24 hours a day. # # # # # Boomers' farms can go bust
Many selling their acreage; children finding other work By Jim Suhr ASSOCIATED PRESS ST. LOUIS – Like many baby boomer farmers, Tim Forkner has found the work so frustrating that he asks himself how much more he can take. "I keep wondering if I want to keep doing this," the corn, wheat and bean grower with more than three decades of experience said from his 4,500-acre Vernon County farm in western Missouri. "It costs so much to plant a crop, and there's so much risk and so little margin – even if you have a good crop," Forkner said. "Then you're dependent on the weather not to mess it up, and on the marketplace for a decent price. "I can't help but think there'll be good times, but I don't know how far away that is." Forkner, 45, has even gently prodded his son Nathan, 22, to consider work with fewer financial hurdles and better paychecks. That's a move many children of baby boomer farmers have already taken. According to the Agriculture Department, the average age of an American farm operator in 1997 was 54.3 years, up from 53.3 years in 1992 and 50.5 years in 1982. With that rise come questions: How many of those farmers over the next decade or so will still be toughing it out or cashing it in? Will their children take over or take off? And how will any shrinkage in the numbers of farmers born between 1946 and 1964 affect the nation's food supply? A USDA census in 1997 found that about 44 percent of the nation's farms were owned or run by people who then were 35 to 54 – largely baby boomers. As boomer farmers have aged, many have withdrawn from farming or switched to other types of work. Many observers of the American farm scene expect that trend to become more pronounced as farmers find they no longer can justify staying with a livelihood that has poor returns on investment, including land, labor and machinery. "The cost is just a killer," said Wayne Prewitt, farm-management specialist for the University of Missouri's Vernon County extension office. "You just can't make a living." More consolidations The conventional wisdom is that boomer farmers will continue one of the last century's dominant trends – selling land to expanding agribusiness operators as the industry becomes more efficient through consolidations. "We'll see the biggest turnover of agricultural wealth in the next 10 to 15 years that we've ever seen," the Missouri Farm Bureau's Kelly Smith predicts, as the nation's food-producing capacity becomes more concentrated. "This ball is tumbling downhill, and there's really no way to stop it." Eldon Cole has seen many boomer farmers and ranchers keeping their land but still easing out of agriculture in southwest Missouri, where he serves as a regional livestock specialist for the University of Missouri extension. "By and large, you're going to see mass production," Cole said. "Big farms are getting bigger, and there'll be a proliferation of small livestock enterprises focusing on a niche market. It's probably the group of farmers in the middle that will be kind of sorted out." Meanwhile, Smith said, boomers' children are leaving the farms to pursue jobs with better pay and less risk, often getting college degrees in agricultural journalism or law or finding farm-related work in sales for chemical or seed companies. Anything but farm production. Case in point: 43-year-old Lesley Daniel and her husband Mike, 45, hoped their son Jason and daughter Casie would stick around their Shelby County farm. But their son "could see us struggling, and he knew there was something better out there," Lesley Daniel said. In May, Jason Daniel, 20, graduated from a Missouri tech school and landed work as an electrical lineman. His sister, 23, got a University of Missouri degree in agricultural journalism and plans to work for a newspaper. Not feasible "It was mostly financial, and my brother's the same way," Casie Daniel said. "We kind of saw that financially, farming wasn't going to be a feasible option for us. We both want to be back there, but we both wanted to find something to make a living at." Lesley Daniel doesn't mind her children's career paths off the family's corn and soybean farm, where in recent years the Daniels jettisoned their underperforming hog operation and sold a couple of hundred acres – about half their land – because "we just couldn't keep up with all the bills." "I don't want them to have the worry and the stress like we've had," said Lesley Daniel. "It would have been nice if they could have stayed, but I see their reasoning why they would pursue something different." Well put, Tim Forkner says. "I don't blame them for wanting to do something else; it's understandable," he said. "I used to worry about who was going to produce all the food for the world. But when you're not getting the price, I guess I'm not too concerned about it anymore." But while Forkner has counseled his son to find another line of work, Nathan Forkner, who owns 160 acres, isn't budging. "I guess it's because of my age," the younger man said, having sampled construction but finding that farming is "what I want to do. I guess I'm more optimistic than my dad, and I think for people in my generation it could be more profitable in the future. I guess I'm willing to risk it and try." ___________________________________________________________ A rich history of corporate crime Fraud dates back to America's Colonial days Carol Emert, San Francisco Chronicle Staff Writer
Americans are perennially shocked -- shocked! -- when a new wave of corporate malfeasance hits the news. But fleecing the masses is every bit as American as barbecue or baseball (witness the 1919 World Series). "These things always happen. It happened in the 1870s, in the 1920s and now you've got it again," said Nathan Miller, author of the book "Stealing from America: A History of Corruption from Jamestown to Reagan. "My guess is that unless there's some revolutionary change in our style of government, you'll have it 50 years from now," Miller added. "People always want to make a buck, and it often happens at the expense of someone else." The common threads running through each chapter of corporate wrongdoing are avaricious entrepreneurs and the political power brokers who are in one way or another -- the details vary with the era -- in bed with them. In 1616, the deputy governor of Jamestown fleeced investors in the Virginia Co. of every chicken and dry good that wasn't nailed down. When he returned to England in a boat stuffed with booty, he left the residents and investors with only six goats. And so it goes throughout history. In the mid-1800s, congressmen lined their pockets by legislating large public subsidies for railroad companies they owned stock in. Deregulation of the banking system in the 1980s led to huge profits for junk bond merchants, and to a $500 billion bailout of the savings and loan industry. Deregulation of the telecommunications and energy industries -- as well as lenient regulation of stock options -- contributed to recent high jinks at companies like Enron Corp. and WorldCom Inc. "The trend in market scandals is that there's something fundamentally wrong in the economic system that only the political system can clear up," said Bryan Jones, director of the Center for American Politics and Public Policy at the University of Washington in Seattle. Each wave of scandal results in stricter regulation, but over time either the reforms become weakened or crafty business folk find new loopholes. U.S. companies are better regulated today than ever before, said Jones, "but we've got a more complex economy, and we need more regulation to catch up with it. The government is always behind, but it doesn't need to be as far behind as it is now." George Kohn, author of the telephone-book size "Encyclopedia of American Scandal," adds another party to the list of the culpable: the voting and stock- buying public, which he accused of remaining asleep at the switch even as each new accounting debacle eats further in to their retirement funds. Americans have consistently proven susceptible to the promise of easy riches during boom times -- whether the hype surrounded dot-com stocks in 1999 or postal coupons peddled by a guy named Ponzi in 1920. "We all live pretty well right now, so we don't care," said Kohn. "When the American people start to hurt, when we all start to suffer and hurt a little like in the '30s, we may wake up." Here, culled from "Stealing from America" and "Encyclopedia of American Scandal," are some legendary imbroglios that have played out on U.S. soil. Many bear a remarkable resemblance to more recent shenanigans. THE VIRGINIA CO. Investors were getting the shaft on this continent four centuries before the advent of day-trading. Capt. Samuel Argall, deputy governor of Jamestown, was best known as the kidnapper of Pocahontas before being appointed to run the British outpost in 1616. Within two years of Argall's taking over Jamestown, the "whole estate of the public was gone and consumed, there being not left to the Company either the land aforesaid or any tenant, servant, rent or tribute corn, cow or salt- work, and but six goats only, without one penny yielded to the Company for their so great a loss," according to an account in "Stealing from America." Argall's private plantation, meanwhile, was thriving. The captain had cornered the market on tobacco and routinely rented out the Virginia Co.'s indentured servants to private farmers, pocketing their wages. Eventually the Virginia Co.'s British investors caught on and dispatched a representative to oust him. But the Earl of Warwick, a friend of Argall's who was largely responsible for his appointment, sent a fast- moving ship to rescue his buddy. Argall loaded the ship with plunder and absconded to England. Audits and investigations followed, but Argall was never punished. Two years after returning home, Argall was knighted. In a Nixonian twist, he later served as an adviser on the governance of Jamestown. THE GILDED AGE Any ghosts from the second half of the 19th century perusing today's headlines might find a familiar theme: big-name corporations and high-profile businessmen, one after another, making vast fortunes at the expense of the public. Like the dear, departed technology boom, the latter 1800s was a time of tremendous growth and innovation in the United States. A cabal of robber barons, including J.P. Morgan, John D. Rockefeller and Cornelius Vanderbilt, played puppet masters to the U.S. economy with unyielding control of industries such as railroads, banking and oil. The ambitious Rockefeller decided in the 1860s that the U.S. oil market was big enough for only one player: his Standard Oil Co. He stitched together a string of refineries under a holding company called the Southern Improvement Co. Refineries that refused to join SIC on principle were soon forced to out of necessity. Rockefeller had convinced his railroad magnate friends, including Vanderbilt, to double the shipping charges of independent refineries while halving costs to SIC partners. In 1872, Rockefeller was burned in effigy by protesters, and SIC's charter was revoked by Pennsylvania. Despite his official monopolist status, Rockefeller continued, in a style worthy of the tech era's Bill Gates, to proclaim his innocence and build his empire. Eventually Rockefeller controlled a Microsoftesque 95 percent of the domestic oil infrastructure. Although the Sherman Antitrust Act was passed in 1890, it wasn't until 1911 that the federal government managed to shut down SIC. A second great scandal of the Gilded Age involved the railroad holding company Credit Mobilier of America, which was set up to oversee construction of the Union Pacific railroad. Rep. Oakes Ames of Massachusetts was one of nine charter investors who skimmed $50 million from public funding for the railroad. He convinced cohorts in Congress to keep quiet by selling them shares for half price. Ames was eventually censured, but never prosecuted. The affair contributed to the Panic of 1873, but that disaster was more directly brought about by a Philadelphia banker and newspaperman named Anthony Drexel. Drexel teamed up with J.P. Morgan to depose a rival bank owned by Civil War hero Jay Cooke. Drexel's Philadelphia Ledger began a campaign of half-baked allegations to undermine public confidence in Cooke. Sure enough, there was a run on Cooke's bank, but doubt infected the entire industry, and dozens of banks and brokerages were forced to close their doors. Railroad construction was halted, 5,000 businesses eventually were shuttered and millions of people were thrown out of work over the next two years. Cooke never recovered, and Drexel's bank became dominant in Philadelphia. THE ORIGINAL PONZI SCHEME The creativity that marked the music and literature of the Roaring Twenties was equally apparent in that era's financial derring-do. Italian immigrant and check forger Charles Ponzi made millions by promising gullible Americans a 50 percent return on investments in International Postal Service reply coupons. The coupons were worth more money in the United States than in Europe, so Ponzi's relatives bought coupons in Italy and he redeemed them in his adopted hometown, Boston. Ponzi soon found it easier to repay investors entirely with cash pouring in from new hopefuls. His business was so profitable that the dapper Ponzi at one time owned 24 diamond stick pins and 200 suits. Ponzi eventually was investigated and sentenced to 13 years in prison. In 1934, he was deported to Italy, where he worked in Benito Mussolini's treasury and embezzled money from the fascists. Samuel Insull was a Ponzi contemporary with an eminently respectable background: He was the protege and one-time secretary of inventor Thomas Alva Edison. Insull was also a philosophical first cousin to the strategic minds that recently ran Enron Corp. In the 1920s, he constructed an elaborate pyramid of electric companies in Chicago that bought and sold power from each other -- each time generating profits and fees for Insull. To keep the money rolling in, Insull lobbied hard to prevent local governments from generating their own power and was caught bribing lawmakers and the Illinois Power Commission. When federal charges were brought in 1932 and his empire crumbled, Insull's investors lost more than $1 billion. Insull fled the country. Although he was eventually extradited and tried, he was acquitted of all charges. TEAPOT DOME Albert Fall, a New Mexico senator who served as Interior secretary under President Warren Harding, was the first Cabinet secretary to serve time in prison. The groundwork was laid in 1920, when Congress passed the Oil Land Leasing Act, allowing private operators to drill on federal oil reserves set aside for the national defense. Harding had been in office just three months when Fall came to him with an executive order transferring control of the reserves to Interior from the Navy. Harding signed the order. Within months, two massive reserves, Elk Hills in California and Teapot Dome in Wyoming, were leased to enterprising businessmen Edward Doheny and Harry Sinclair -- and Fall was mysteriously $400,000 richer. It took lawyers and investigators years to unravel the plot, which included the laundering of $233,000 in bribe-related Liberty Bonds through the Republican National Committee. The case made headlines as it wended its way through both civil and criminal courts. A mistrial was declared in one case after a juror bragged to a friend he expected "an automobile as long as this block" in exchange for guaranteeing a hung jury. Ultimately, Doheny and Sinclair were forced to repay the Treasury $35 million in ill-gotten gains. In 1929, Fall was fined $100,000 and sentenced to a year in jail. Pleading poverty, he never paid the fine and ended his days in El Paso, where his wife ran a small restaurant to support them. ------------------ -------------------------------------------- Brad Austin of Ohio State University contributed to this report. / E-mail Carol Emert at cemert@sfchronicle.com. (Leasing News had an article in the July 3rd edition on the same subject, business scandals in American History: http://www.leasingnews.org/articles.doc/newletter_business.htm ) ------------------------------------------------------------------------------------------------------------ Policy Statement Policy Statement---Nothing is sent out that is not "fair." Always unbiased reporting. Fairness always. If it is questionable, we will ask the writer's permission to quote them. We will print information without attribution, but feel as long as we do not name the person who sent it, we can use the information. Any information we think is suspicious, we try to have if substantiated first by at least two reliable people. We will not purposely send out "negative" news. We prefer "positive" news. We have no "axe" to grind or are not paid or seek or accept any remuneration for product or promotion. We do not Spam anyone. To be added to the mailing list, you must request it. We do not send anything about our company or personal e-mail or jokes to the leasing news list. We do not share our mailing list with anyone. We try not to send more than one report a day, if at that, unless an "alert." We follow Internet Netiquette at all times. Our sole purpose is to provide communication to improve our profession. We reserve the right to deny sending the newsletter when requested. We reserve the right to edit or delete an opinion that is not in good taste or is outright derogatory. Leasingnews.org |
|
