Herman Cain’s Enron-esque Disaster
Cain served on the board of directors throughout Aquila’s ill-fated trading misadventure and the subsequent collapse of the company’s retirement fund. In fact, he chaired the board’s compensation committee, which, according to the lawsuit, had direct oversight of the push to get employees to invest more and more in Aquila stock. As chair of the compensation committee, Cain also saw fit to dole out $30 million in bonuses, not including stock options, to the top five execs at Aquila in 2002, with the company’s stock plummeting. A month after the Kansas City Star reported on the hefty bonuses in July 2002, the company laid off 500 employees, and the losses to employees holding company stock had reached hundreds of millions of dollars.
As a board member, Cain would’ve had direct knowledge of Aquila’s activities, says Fred Taylor Isquith, a New York attorney who litigated the employee class action. Asked if it was fair to place blame on Cain for the debacle at Aquila, Isquith replied, “Yes, I believe it is.”
http://deadlinelive.info/2011/10/02/herman-cains-enron-esque-disaster/
I haven’t heard of any other “baggage” for Cain. We’ll see if this story matters.
I'm sure the "media" has been sitting on this in order to spring it at the right moment. I'd like to hear Cain's side of the story. One of the propagandist interrogators at a future GOP debate will likely spring it on him.
Another analysis of the Aquila down turn. H.Cain was NOT an executive - he was an ‘independent’ outsider - brought in to solve problems.
http://storify.com/karl173/the-truth-behind-aquila-and-herman-cain
excerpt:
The board of directors had separated itself into committees to oversee different aspects of the company early on. Herman Cain was the chairman of the compensation committee that oversaw pay and bonus’ for executives and other positions. The bonuses that he approved were in line for the time when the entire company was seeing high profits in the late 90’s. Bonus’s are based on the previous year performance. The financial problem with Aquila didn’t show up until mid 2001 during the recession.
Mother Jones, Salon, HuffPost, PaulBots and other assorted bloggers have been spitting this out since May. Seems to me if it had legs, it’d walked already, but we’ll see... as I mentioned in my earlier post, it’ll probably be thrown at him during a debate, especially now that Cain’s poll numbers have risen.
That was a Mother Jones article that came out in May? earlier this year - the reason you never heard about it is because it is a non-story.
Here are the facts:
Herman Cain was the chairman of the compensation committee that oversaw pay and bonus’ for executives and other positions. The bonuses that he approved were in line for the time when the entire company was seeing high profits in the late 90’s. Bonus’s are based on the previous year performance.
The financial problem with Aquila didn’t show up until mid 2001 during the recession. There was a Pension and Benefits committee and a retirement committee. Herman Cain was not on either one of those. Thus Cain didn’t come across the activity and paperwork to see what was going on with these committees.
The lawsuit that was filed named all sorts of people at the top even if they didn’t have basic oversight at issue with the lawsuit. Class action lawsuits tend to always do this. The MotherJones article author took a few general details and then made all sorts of claims that weren’t in the lawsuit they referenced. It is typical of liberal writers being lazy.
If Herman had been involved an ANY wrong doing, a) the SEC would have taken action; b) the company would have removed him; and/or c) Cain would have been made to pay a fine. none of these actions occurred. In fact, he was actually rewarded by later being appointed the presiding independent director of the board of directors.
I've seen this happen a number of times with companies that have been circling the bowl. Execs perceived as "Key Resources" are handed exorbitant bonuses in an attempt to keep them on and hold things together long enough while the company is either salvaged or sold.
Doesn't necessarily make it right, and in particular, it looks awful for Joe VP to get 5 mill in bonuses while 500 people are getting the axe. However, good, bad, or indifferent, it's the way business is done.