Posted on 10/18/2002 5:54:02 AM PDT by Libloather
Corporate scandals cost more than $200 billion, report says
Thu Oct 17, 6:32 PM ET
By MARCY GORDON, AP Business Writer
WASHINGTON - Recent corporate scandals have cost Americans more than $200 billion in lost investment savings, jobs, pension losses and tax revenue, according to a report released Thursday.
The report issued by the "No More Enrons" coalition, partially funded by consumer groups and labor unions, said losses from 401(k) investment accounts alone totaled $175 billion and public pension funds nationwide lost at least $6.4 billion as the stock market plummeted amid a crisis of investor confidence.
It estimated that more than a million workers lost their jobs at the affected companies, while company executives cashed out billions of dollars of their stock.
Senate Majority Leader Tom Daschle, D-S.D., seized on the report to decry the scandals' impact and blame President Bush and Republican lawmakers for what he said was failure to take strong action.
"Tens of thousands of jobs, lost. Billions of dollars in personal and public retirement savings, gone. Confidence in our companies and our markets, badly damaged," Daschle said.
"The lesson ought to be clear: When corporate fraud leads to corporate failure, we all get hurt. Unfortunately, this administration and many of our Republican colleagues continue to deny that obvious fact."
Daschle renewed his call for Bush to remove Securities and Exchange Commission Chairman Harvey Pitt, accused by Democrats of heeding the accounting industry and blocking a tough candidate to head a new accounting oversight board.
"It appears that the administration is undermining the new board the law created to hold the accountants accountable," Daschle said. "Replace Harvey Pitt with someone who will enforce the law."
Republicans said the Democrats were simply playing politics.
"With the elections almost two weeks away, the Senate Democratic leadership seems to be more interested in scoring political points than in helping solve people's problems," said Ron Bonjean, a spokesman for Senate Minority Leader Trent Lott, R-Miss.
Bush and administration officials have pointed to the growing number of executives who have been taken away in handcuffs in recent months for corporate malfeasance.
When Andrew Fastow, Enron's former chief financial officer, was charged with fraud and conspiracy earlier this month, Bush told a White House audience: "You might have noticed ... that people are being brought to justice."
In late September, he cited "broad and dramatic progress."
"Our law enforcement agencies are after 'em," Bush said.
Treasury Secretary Paul O'Neill suggested Thursday that the high-flying 1990s, in which the stock market soared, allowed some corporate leaders to stray from their values.
"By the time they realized how far they had strayed, ... it was too late," O'Neill said in a speech at Harvard Business School. "Like frogs in boiling water, they didn't feel the heat until they were cooked."
The new report put together data from government and other public sources to detail the impact of accounting failures at Enron, Arthur Andersen, WorldCom, Global Crossing, Adelphia Communications, Xerox, Tyco International, Qwest Communications and others.
The $200 billion total is "an extremely conservative estimate," said Mike Lux, president of American Family Voices, part of the "No More Enrons" coalition.
The report identified nearly $13 billion in lost federal tax revenue from companies with questionable accounting practices underreporting their profits to the IRS. But Lux said the amount likely was higher.
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Boilerplate Whitewater ~right down tothe straw-man father-in -law
By September it was revealed that Terry had underwritten the Clinton Mortgage in NY ~ the case seems to have died
ELECTRICAL WORKERS (IBEW)
DOL Sues Union Fund Tied to Clinton-Crony McAuliffe
The U.S. Dep't of Labor filed suit May 5 against two trustees of the $8.3 billion Nat. Electrical Benefit Fund charging improper dealings between the fund and top Clinton-fundraiser Terence R. McAuliffe. According to DOL, NEBF trustee John Grau and ex-trustee Jack F. Moore imprudently lent over $6 million in pension assets. NEBF is operated jointly by the Int'l Bhd. of Electrical Workers, from which Moore retired as secretary in 1997, and the Nat. Electrical Contractors Ass'n, of which Grau is a vice president.
The scam involved a $6 million loan in 1992 to Columbia Land & Development Corp. of Orlando to buy a subdivision called Country Run which was to be developed into 545 lots. McAuliffe and his wife, Dorothy S. McAuliffe, own Columbia. The loan was in default from Dec. 1992 to Oct. 1997. DOL says NEBF should have known the loan couldn't be repaid in full with interest. The suit seeks the trustees to reimburse the fund for losses, including interest.
The McAuliffes also own Am. Capitol Management, a partner with NEBF in a separate investment called Am. Capitol Group I Assets LP, which guaranteed payment of the Columbia loan. In a separate 1991 investment, NEBF paid $38.7 million to buy five apartment complexes and a shopping center near St. Petersburg. The partnership bought the properties from the Resolution Trust Corp., which had taken control of them from a bank in receivership that had been owned by McAuliffe's father-in-law.
DOL alleges NEBF imprudently purchased a $2.45 million interests in ACGIA, a move that reduced the value of the ACM guarantee on the Columbia loan. McAuliffe's holdings in ACM had been collateral for the loan. The suit further alleges trustees made one of the purchases in the ACM partnership even though the Columbia loan was in default. The pension fund then reportedly sold its share of the partnership and the Columbia loan to ACM at a loss. [Pensions & Investments 5/17/99]
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The same Daschle who urged Torricelli to quit the NJ Senate race?
The same Daschle who instructed Leahy to table 'conservative ' nominees for judicial positions?
The same Daschle who led a private tour of constituents to Mt. Rushmore at public expense?
There is no honor among thieves.Nor corporate executives. Nor the Clintons who blythely ignored the lack of honor.
For the Clinton sycophants in the media that cried about the $60 million expended pursuing all the Clinton scandals, they might want to ask themselves: gee, maybe those scandals had something to do with the collapse in corporate governance, lack of oversight by auditors/Boards/regulators and general drift toward the "everybody does it" attitude that gave rise to these criminal acts. That slippery slope can be a problem -- but count on the liberal media to turn a blind-eye to the obvious connections and unfortunate results. As George Orwell would say: "into the Memory Hole with inconvenient facts!"
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