To get an idea just how serious a problem that is, please read this post (part of a longer discussion on the California Power Crisis).
Feb. 15, 2005
The truth about Arnold
The Schwarzenegger-Shriver economic disclosure statement filed in December 2003 reveals that the couple sold millions of dollars' worth of corporate stocks when the governor assumed office and set up a blind trust. Yet at the time Schwarzenegger's blind trust was created, he and Wachter were jointly invested in 10 partnerships, including Acacia Partners (which deals in public stocks), Angel Investors (a venture capital firm), Apollo Investment Fund (specializing in leveraged buyouts) and Pinpoint Investors (a stockholder in Cell Guide Ltd., which develops cellphone technology).
http://www.dicar.dk/files/Konferencer/mark_hunter/p16execlifeintro.htm
It was a former Drexel executive who helped find a buyer for Executive Life's junk. Leon Black, ex-chief of mergers and acquisitions at Drexel, had set up a new shop, Apollo Investment Funds. Its clients included a Credit Lyonnais subsidiary called Altus Finance, which gave Black $1 billion to invest. Black did not respond to repeated requests for interviews for this article.
http://www.hoovers.com/apollo-advisors,-l.p./--ID__40036--/freeuk-co-factsheet.xhtml
Apollo Advisors earned its reputation as a vulture investor by specializing in distressed assets (junk bonds, troubled companies, real estate). Leon Black, former Drexel Burnham Lambert mergers and acquisitions chief, and twelve other Drexel refugees founded the group, which invested in former Drexel clients after that firm's collapse -- notably the $3 billion dollar junk bond portfolio of failed California insurer Executive Life. Apollo has invested billions from four funds and has launched a fifth fund (specializing in Eastern European real estate investments) that hopes to raise some $4 billion.
http://caag.state.ca.us/newsalerts/2002/02-008.htm
January 30, 2002
(SACRAMENTO) - Attorney General Bill Lockyer today added four associates from former junk bond purveyor Drexel Burnham Lambert to a lawsuit alleging an international conspiracy used to illegally acquire assets held by the state and reap billions of dollars from the State of California and policyholders in the wake of the failure of Executive Life Insurance Co.
The complaint filed earlier against more than a dozen companies and individuals, including Credit Lyonnais, a bank once owned by the French government, was amended Wednesday to include Leon Black, John Hannan, Craig Cogut, Eric B. Siegel and several companies they operated in the alleged scheme.