Tuesday, December 27, 2011

AG targets 'economic development' slush fund corruption

A preliminary investigation by New York attorney general's office uncovered the potential for self-dealing, nepotism, improper loans and exorbitant expenses at some, reported The Associated Press.

These non-profit, taxpayer-supported rackets do government business but have little oversight and are exempt from being audited by the state comptroller's office.

Such findings echo an earlier assessment from this writer.

Friday, December 23, 2011

Non-ethics in NYS: more of the same

New York state’s new ethics panel has already destroyed its own credibility after a mere two meetings. I reported here about its first introductory meeting, held behind closed doors.

Earlier this week, it had its first working meeting. The Associated Press reported that members of the panel receive $300 for each day they attend meetings, members will be asked to sign non-disclosure' agreements barring public comment, and that its secretive practices will continue.

Then, the board went behind closed doors. The reason? None was given.

This is how ethics oversight works in New York... even under a 'reform' minded governor. Secret meetings with no public announcements. Going behind closed doors without even contriving an excuse. The fact that all this is legal, that this body charged with regulating ethics and transparency is exempt from the Open Meetings Law in the first place, is a damning indictment of what passes for ethics in state government.

Bob over at Planet Albany doesn't appear to be impressed. He quotes someone named David Grandeau: the state ethics body "doesn’t have to abide by Open Meetings Law. Nor does it have to abide by the Freedom of Information Laws... Those laws apply to every other government body, but not the state ethics panel... Tell me again why that is? Tell me how that inspires confidence in government? Tell me how it sets a standard for others to live up to? Tell me how it represents good government?"

The answer is simple. It doesn't.

Monday, December 19, 2011

How ethics and transparency work in NYS

The new panel charged with regulating ethics in state government met late last week.

It met in secret.

It met with no public notice.

A spokesman for the Joint Commission on Public Ethics defended the move, citing the board’s exemption from the state’s Open Meetings Law.

That’s right: a committee set up to regulate public ethics and transparency is legally allowed to meet in complete secrecy.

Is it any wonder why New York state government has such an abysmal reputation for good governance?

Sunday, December 18, 2011

Down by the Levy: the Sinking of Lee

(a continuing series by contributor Mark Wilson on the troubles at Lee Enterprises, Inc. and the Post-Star)

On April 22nd of this year, the Mississippi River, nearing historic levels, jumped its banks and rose to within a city block of Lee Enterprises’ Davenport, Iowa headquarters.

Inside, financial and executive officers for Lee—the corporate owner of the Glens Falls Post-Star—were planning a junk bond issue large enough to pay off nearly a billion dollars in debt that was coming due within a year’s time. The subsequent failure of the junk bond issue ten days later set off a slide in the company’s stock price, as well as its fortunes, that came to a head last week when Lee sought Chapter 11 protection in a Delaware bankruptcy court. Court papers tabulated by Bloomberg News revealed that Lee and its subsidiary companies had—in the vernacular of real estate bank foreclosures—been under water all along.

Total assets: $1.2 billion
Total debts: $1.3 billion
Net worth: minus $100,000,000

In the initial stage of the bankruptcy case, Lee was granted permission to borrow $40 million more to pay bills, meet payroll and keep its presses rolling. The rest of the bankruptcy proceeding will determine whether or not Lee can extend the due dates on its outstanding debts from 2012 to 2015 and 2017, in exchange for double-digit interest rates. Most of Lee’s creditors have already signed on to the refinancing plan, and it is widely seen that the bankruptcy court will play along. The hope underlying the new debt timeline is that within three years the economy will recover enough to rescue the paper with real estate, automobile and jobs advertising revenue, and that by 2017 news publishers will have figured out how to better monetize their internet traffic and stem the collapse of their print audience.

While the courts sort out the longterm picture for Lee, it might be well to consider a more immediate threat in the company’s path. Back in July, the New York Stock Exchange issued a compliance warning to Lee when the price of its stock slipped below one dollar. The warning stated that if the share price did not regain the dollar mark within a six month “cure period,” the exchange would remove Lee from its trading list.

A useful primer on the significance of a stock delisting can be found online at Investopedia.com. The NYSE Listed Company Manual, Section 802.01 C addresses the delisting timeline for companies whose stock price drops below one dollar.

In short, Lee’s one remaining hope to avoid delisting would be if its stock were to close over one dollar per share on January 6th 2012, having sustained an average closing price of one dollar or more over the previous 30-trading-day period.

Fifteen of those thirty trading days have already elapsed with Lee’s daily closing share price averaging only 65 cents. So starting Monday, Lee’s share price must close at or above $1.35, and keep that price (on average) for three straight weeks. This at a time of year when many portfolio managers are tidying up client accounts by killing off their biggest turkeys. To put it bluntly, Lee’s thirty-three-and-a-half year association with the New York Stock Exchange is over.

Apart from the general stigma of joining the ranks of Fannie Mae, Freddie Mac, Lehman Bros. and MF Global, perhaps the most troubling consequence of delisting is that it may well trigger the automatic sell-off of stock holdings by many of Lee’s institutional investors (many pension funds restrict their investments to listed stocks). This in turn could set off a chain reaction run of individual stockholders, driving the share price—and any chances of eventually paying off its debts—to historic, even unsalvageable depths.

Quotes of the week

"So weird to go into journalism to completely obsess on the horserace of who might get power-& be totally indifferent to what they do with it." -Glenn Greenwald, via Twitter, on how 'analysis' has increasingly replaced real journalism.

"Maybe police who stop and ticket people for use of cell phones while driving should be required to confiscate the phones until they show up in court to answer charges." -Commenter Pete Klein on NCPR's In Box blog.

Friday, December 16, 2011

RIP Christopher Hitchens

The prolific and controversial polemicist Christopher Hitchens died yesterday at 62. Although he alienated many on the left with his full-throated support of the Iraq aggression and alliance with Bush-Cheney militarism, his essays were always incisive and relentlessly thought-provoking. This blog is titled as a tribute to his book Letters to a Young Contrarian. NPR has a nice remembrance of The Hitch.

Wednesday, December 14, 2011

The lobbyists of Gov. One Percent

The New York Public Interest Research Group (via the Albany Times-Union) has revealed the 100 top spending special interest groups in New York. Who was the most free spending group? The health care workers union? The evil teachers union? Supporters of civil rights for gays? Opponents thereof? Nope. #1 slot goes to the misnamed Committee to Save New York. This is an organizing comprising the top "donors" to the campaign of Gov. Andrew Cuomo and is dedicated to lobbying on behalf of the agenda of the One Percent.

Monday, December 12, 2011

When did Republicans start hating the rich?

"When I give food to the poor, I'm called a saint. When I ask why they are poor, I'm called a communist." -Archbishop Dom Helder Camara.

I've been a bit bemused by the latest irrelevant kerfuffle obsessing the chattering classes: about Mitt Romney's $10,000 bet gaffe. When a self-entitled multimillionaire wants to dodge taxes, he's an "job creator." But when that self-entitled multimillionaire is a political enemy, he's an "out of touch elitist." Funny how that works.

Thursday, December 08, 2011

That saintly bipartisanship in action (or: it's not just the 1st Amendment they're trying to invalidate)

It's not just the 1st Amendment they want to get rid of. Federal senators have put rancor aside and are working tireless lyto destroy the American way of life before al-Qaeda gets the chance to. They inserted language into a defense budget bill (a way of essentially blackmailing legislators into a yes vote) which would allow American citizens arrested on American soil to be detained indefinitely in military custody. In other words, it would essentially invalidate the 4th Amendment of the Constitution.

As one commentator put it: People in Egypt, Tunisia, and Syria have engaged in revolutions to replace these undemocratic and unjust practices.

There's one other country that engaged in a revolution to get rid of arbitrary arrest and detention without trial or charge: the United States of America.

Sunday, December 04, 2011

Fracking companies lie about leases: homeowners

The excellent non-profit journalism site Pro Publica has done some fantastic journalism about hydrofracking, the hugely controversial natural gas extraction process that is being hotly debated in New York state. Proponents say that it will be a jobs boom in a region that badly needs it. Opponents offer many criticisms, including that the process poisons drinking water. Another site offering good information on fracking is The Rural Blog of the University of Kentucky.

The blog offers statistics that amplify a fear of fracking opponents. Drilling is regulated by many states, but very ineffectively. It notes that in Texas, 96 percent of the tens of thousands of regulatory violations in 2009 resulted in no enforcement action. West Virginia, Wyoming and fracking hotbed Pennsylvania were also cited for their uselessness in protecting citizens from drilling pollution.

The blog also links to a New York Times article which cites the negative experience of homeowners who signed leases with gas companies.

The NYT added that disappointed landowners in Pennsylvania, Colorado and West Virginia have spent hundreds of dollars monthly on bottled water or maintaining large tanks of drinking water in their front lawns. Thousands of landowners in Virginia, Pennsylvania and Texas, who claim "they were paid less than they expected because gas companies deducted costs like hauling chemicals to the well site or transporting gas to market," have responded by joining a class action lawsuit.

The site also offered some useful advice to Republicans in southern New York like powerful state Sen. Tom Libous who are enamored with drilling, regardless of the consequences: sustainable agriculture could improve health, economy for rural areas... presumably without poisoned drinking water.

Saturday, December 03, 2011

Lipstick on a Pig: Lee Enterprises Declares a “Favorable” Bankruptcy

(a continuing series by contributor Mark Wilson on the troubles at Lee Enterprises, Inc. and the Post-Star)

Despite efforts to spin the news favorably, Lee Enterprises, Inc, the deeply-indebted corporate owner of the Glens FallsPost-Star, announced late Friday afternoon that it had failed to reach a refinancing agreement with at least 95% of its lenders. It will file for Chapter 11 bankruptcy protection later this month. 
The move is an effort by the Iowa-based news publisher to coerce a reluctant six percent of the banks who have lent it money to extend the maturity date of roughly one billion dollars in loans. The loans are currently due to be paid in full this coming April.
The refinancing plan, crafted by Lee earlier this year—after it failed to find backing to pay off the banks by issuing junk bonds—divides its current debt load into three parts:
  • a $689.5 million term loan with an additional $40 million revolving credit, both due in December 2015. The interest on this debt will be a minimum of 7.5%.
  • a $175 million second-tier loan with a 15% interest rate due in April 2017.
  • an unspecified $175 million refinancing deal for the balance of the debt the company incurred when it bought newspapers from Pulitzer, Inc. in 2005.
Lee’s failure to find backing to restructure the remaining Pulitzer debt was the deal breaker for the more cautious lenders who must now be forced by the Delaware bankruptcy courts to accept the pre-packaged bankruptcy plan. In place of a new financing to cover the since-adjusted $138 Pulitzer balance, the bankruptcy will extend the maturity of $126 million of the existing notes to December 2015 at an interest rate that starts at 10.55% and increases by .75% annually.
One other significant condition of the bankruptcy plan is the issuance of 6.7 million shares (roughly 13% of outstanding shares) of stock to be divided among second-tier lenders. 
Diluting stock to this degree will depress the share value of Lee stock. Apart from the impact this will have on individual and institutional stock holders (including any Post-Star employees who hold stock and stock and options as part of their compensation packages), the move means Lee’s stock most certainly will be removed from the New York Stock Exchange listings in the new year. As a condition of continued listing, the NYSE requires a company stock to hold a minimum share price of $1.00 and not drop below that threshold for more than 30 days. Lee’s share price dropped below the threshold in mid-July this year and has not risen above it since. In an official delisting warning issued in August, the NYSE compliance board gave Lee until January to correct the situation. 
A share of Lee traded at 53¢ at Friday’s closing bell—shortly before news of the impending bankruptcy filing was released.

Friday, December 02, 2011

Quote of the week

From a piece on Yahoo! News:

"I'm so scared of this anti-Wall Street effort. I'm frightened to death. They're having an impact on what the American people think of capitalism.” –Republican spinmeister Frank Luntz.

Thursday, December 01, 2011

Bits and pieces

Albany (NY) County’s district attorney David Soares has admitted that he and his office has received death threats in response to his refusal to prosecute participants of the Occupy Albany movement for non-violent activities like violating curfew. From the infamous pepper spray police thug in Davis, CA to the violent crackdown against peaceful Occupy movements in places like Oakland and Denver to the above death threats, you’ve seen remarkably little violence from those protesting in the name of democracy with most of the violence being committed by people doing so in the name of ‘respect for law and order.’ Quite a different reality to the one intoned by the yapping heads.

Bravo to the Burlington, mayored by a Progressive Party mayor not coincidentally, for lowering the speed limiton the Vermont city’s streets. The Burlington Free Press reports that it was done to enhance the safety of bicyclists and pedestrians. Yet another reason Burlington is probably the coolest city in the northeastern US.

Recent stories in the soccer world a very troubling, from the attempted suicide of two referees, to the apparent suicide of Wales national team manager Gary Speed to the suicide not that long ago of German goalkeeper Robert Enke. It should serve as a wake-up call reminding soccer fans that a little re-humanization is long past due. There is so much vitriol and nastiness in soccer fandom that it’s easy to forget that the targets are all human beings, with families and emotions. Passion should never be used as an excuse to act like barbarians.

Economic inequality, unemployment, massive corporate welfare, institutionalized anti-democracy... the country is facing so many problems and what is the latest meaninglessness that Theocrats want us to freak out about? The president’s failure to mention God in his Thanksgiving address (only the spoken one; he did include it in the written one). You can just call it The Great Distraction.

I saw this great graphic on Facebook, which showed the covers of TIME magazines editions for other parts of the world compared to its US edition. Gives you an insight into the editorial judgment [sic] of their vaunted professional editors.

I was gobsmacked to read a newspaper article with this headline: "The other student loan problem: too little debt." Only a bank-obsessed culture would look at this issue and wonder if the problem is students with too *little* debt rather than taking a hard look at whether a university education, whether the cost of a fancy piece of paper is massively overpriced. Investigative journalism at its finest.