Daily Archives: January 28, 2004

Worry About Kerry Dept: An Analysis

An analysis by Yvonne Abraham in the Boston Globe suggests the reason for the importance of Kerry’s NH victory:

That is where momentum comes in. Kerry was nowhere in Arizona until he won the Iowa caucuses. But an Arizona Republic poll Sunday showed him leading the field. Because the primary calendar is so short this year (a compression championed by Democratic National Committee chief Terry McAuliffe, in the hopes of quickly uniting the party behind the nominee), bounce will count for a great deal more than in previous years. Although states with earlier primaries, eager for the courting enjoyed by the first two primary states, were all too happy to oblige McAuliffe, the compressed calendar has left precious little time for the wooing, and effectively increased the clout of New Hampshire and Iowa.

Slammed tight together with no time for breath, let alone reflection, voters will tend to go with the flow–and the winner-on-paper. Abraham quotes a voter who is, unfortunately, thinking exactly as I feared voters might be thinking–wait for the winner to emerge and then vote for him:

In Missouri, barber Lee Moss certainly wasn’t committing to anyone before he knew last night’s results. “If you go to a racetrack and see all the horses lined up, the one that [looks like he will be] first isn’t the one that is necessarily going to win,” Moss said in his Webster Groves shop late last week. “I’m still waiting to see what happens in New Hampshire.”

Told ya. Are we doomed yet?

SERVE Security Hopelessly Flawed

The seemingly ubiquitous Benedict Spinoza (that can’t be a real name) of American Samizdat and Benedict@Large has yet another interesting blog, it seems. This one’s called Black Box Notes, and it’s dedicated to news about the electronic voting system. The latest post links to a report on Wired News that a bevy of experts from Lawrence Livermore Laboratories and Johns Hopkins University (among other places) strongly recommends scrapping the SERVE system that’s supposed to be used to collect overseas votes because its security is so flawed.

Researchers warned last week that an Internet voting system designed for Americans overseas to use in the November presidential election should be scrapped — because Internet insecurities could compromise the election.The government dismissed the researchers’ findings, saying the report offered false conclusions about the security of the Secure Electronic Registration and Voting Experiment, or SERVE, system. The evaluation was written for the Defense Department by four of 10 computer experts assembled by the Federal Voting Assistance Program.

“They didn’t know that we would come up with a conclusion as strongly as we did that they really shouldn’t field this system,” David Jefferson, a computer scientist at Lawrence Livermore National Laboratory in California and one of the report authors, said. “But once we decided that the system was sufficiently dangerous, we felt we had to recommend it couldn’t go forward.”

Jefferson expressed concern that the test-run will occur during an important presidential election. “They think the value of the experiment outweighs the risk; we don’t,” he said.

SERVE is the program that will register and count the votes of the absentees, the largest chunk of which would be military, an all-important sector of Bush’s base. After 3 solid years of Republicans cutting veterans’ benefits and making promises they have blithely broken, it would seem that that vote is no longer as automatically Republican as it was last time. I don’t want to sound paranoid but with WH pol-ops outing covert agents and Publican Congressional staffers hacking into Democratic files for more than a year proving that the Pubs don’t have a lot of integrity mixed into their “winning is all that matters” philosophy, the scope for potential vote-theft is massive. There are a number of ways it could be done:

The researchers said an Internet voting system that allows ballots to be cast through personal computers would be vulnerable to viruses and worms, spoofing attacks (in which a hacker could intercept and change votes using a fake site resembling the real voting site) or a DoS attack preventing voters from accessing the real site.

Imagine this not-unimaginable scenario:

Tom DeLay sets up a spoof operated by the same staffers who hacked into the Congressional Democrats’ network and intercepts the estimated 6M votes coming in from overseas, most of them military, before they get to the official server. If they’re Republican votes, he passes them on to the server to be counted; if they’re Democratic, he deletes them or changes them into Republican votes. If done properly, the experts warn, there would be no way to know whether or not the votes had been tampered with.

Too cynical and suspicious? Maybe, but in the last 3 years being cynical and suspicious has been a good way to accurately predict Republican tactics. And with the questions swirling around the oddities in the Georgia voting, for instance, that centered on electronic voting machines spitting out results almost opposite to poll results in the same districts, and with the fact that in almost every single election in which electronic voting results were considered anomalies it was the Republicans who gained from them, a little suspicion may be a necessary defense mechanism.

It’s becoming more obvious every day that we can’t afford a system of voting that doesn’t provide a paper trail for checking electronic results against actual voter intentions. Without a paper trail, the risks of fraud are too great.

Worry About Kerry Dept: Poll Results

CNN has the final results–you probably know them by now:

Kerry……………39%
Dean……………26%
Clark……………12%
Edwards………12%
Liberman………9%
Kucinich………..2%
Sharpton……….Zippo

I have to admit I’m surprised at Dean’s strong showing in a state that has historically disliked him. What the hell did he say up there? Was it Judy that made the difference? Might’ve been. This is the first time she’s campaigned with him in months–and she gave interviews. Interesting woman, comes across a lot warmer than Deano.

Kerry’s victory was predictable but none the less depressing. This gives him a push going into the South, which is too bad. IMO, he’s the worst possible candidate to put against Junior; as I’ve said, they already know how to beat him. Dennis would have a better shot against Bush than Kerry’s got.

Edwards’ poor showing is truly disappointing after the shove he got in Iowa. I thought he’d do better, maybe even a solid second. A lame tie for third doesn’t do much for him or Clark, and both have a far better chance against Bush than Kerry.

My god, what are the Dems doing? Shooting themselves in the foot again? Bush didn’t win the last election; Gore lost it. So what do they do? Put another Gore-type wanna-be on track to do the same damn thing. Will we never learn?

Comments picked up by field reporters in NH in the days leading up to this primary were heavy on the “I wanna vote for the guy that can beat Bush” mantra. Maybe we outsmarted ourselves. On paper, Kerry looks like the best bet and we are desperate to field a winner so we go with the paper. The trouble is, Mondale looked good on paper. So did The Duke. Both suffered massive losses. Gore looked unbeatable on paper, and he turned the election into a squeaker…which he lost. We keep going with the favorite and we keep losing, which anybody who plays the ponies will tell you is standard–“Never bet the favorite; they usually lose.” Maybe it’s time to go with a medium long-shot, say 5- or 6-1–a Dean or an Edwards. Leave the favorite alone for a change.

Well, the South comes up next week. Not much time. Edwards, Dean and Clark all have good chances to blow Kerry out of the top spot–unless, that is, the primary-goers in the South are as determined to go with the winner-on-paper as the guys in NH. If that’s the case, gawd help us–this may be the last genuine election I see in my lifetime.

Go Howie!

How Corporate CEO’s Embezzled $$$Millions$$$

More from FITE–How Corporate CEO’s Embezzled $$$Millions$$$

How did the CEOs embezzle trillions?

We want to make clear that our information is based on many respected sources in the business world. We say this because the information you will read below will probably stun you as it did us. It helps to know that everything we say can be verified by several sources.

What was their goal?

They wanted to eliminate all barriers to giving themselves huge pay increases every year regardless of how well their companies did.

What was stopping them?

Honest accountants who prevented them from lying on company financial reports.

Honest compensation experts who were setting limits on CEO raises based on what other CEOs were getting.

How did they get them to lie?

The CEOs came from the largest corporations in the country, so they provided a lot of work for compensation experts and accountants. They simply let them know that telling the truth would get them in trouble. Head of the corporate giant Citicorp John Reed, who led the charge, called it “education.”

How did the compensation experts help?

They stopped publishing the CEO’s pay. For example, they refused to cooperate any longer with the Wall Street Journal to produce a yearly compensation survey. Without any standards of pay, CEOs could then give themselves whatever they pleased.

How did the accountants help?

As with all accounting schemes, the details are complex. Basically, they helped by certifying false financial reports that ignored about 2/3rds of CEO income, a trick they called “not expensing stock options.” It was as if the CEO got paid under the table. The money came from the owners, but didn’t show up in the books.

That boosted real or non-existent profits, making the CEOs look like heroes. With profits so high, nobody could object to the huge pay raises that amounted to 500% for the average CEO during the 1990s. The compensation experts helped by not supplying standards of reasonable pay.

That’s the short answer. The accounting details could fill volumes. Even the best experts have trouble understanding parts of it. We provide references to sources that explain more of the details in readable form in the last section.

But didn’t the owners protest?

Absolutely. They were very mad. But they didn’t go to the people who police these matters because the powerful Business Round Table and their friends controlled a large number of high ranking officials responsible for enforcing laws against financial fraud. So they hired lawyers who became very rich by winning many court settlements worth hundreds of millions of dollars.

How did the CEOs react?

The justly high settlements only enraged the CEOs who had hatched the plan. A lot of high tech CEOs joined up. Under cover of accusations that the lawyers were the kind we all love to hate, the CEOs pressured congress to pass the Private Securities Litigation Reform Act of 1995 which effectively legalized the embezzlement. Incredibly, this act made it nearly impossible to use perfectly good evidence of the crime in court. For example, the even the best lawyers (like Lerach) found it almost impossible to win a case against a CEO who deliberately and wildly exaggerated future earnings.

This was public information. Lawyer William Lerach testified in congressional hearings that

“most investors have no idea that Congress eliminated the liability of corporate executives for even deliberate lies. I want to say that again. Even deliberate lies about future corporate performance. This was one of the most astonishing parts of the 1995 act.”

Lerach met with another top rate lawyer, President Clinton, to tell him how the act would harm a lot of people. To Clinton’s credit, he agreed and vetoed the act. But the senate, largely led by Democratic Senator Joseph Lieberman (D-Conn), overrode the veto. It was passed both houses with overwhelming majorities. Both parties enthusiastically participated in this trillion dollar lie. The rental market for politicians in Washington DC was alive and well!

How come all the top corporations didn’t all go broke?

The ones that did collapse carried the game too far. Most were smart enough to know that if they embezzled too much, they might be prosecuted for the collapse they would cause. It was no accident that a lot of the corporations that collapsed were run by young entrepreneurs without enough experience to control their greed.

So at least the CEOs were punished in the end by going bankrupt, right?

No. Many were not – or were given a slap on the wrist. In fact, they were in a sense rewarded because they sold their stock at the high point – just before the collapse they knew would happen. They made sure the stock was the highest possible by lying to the public that the company was in great shape.

How many corporations are involved?

Several studies by reputable economist concluded that, in the words of Dr. Francois Degeorge of the University of Chicago, “we have no doubt that [profits] are being manipulated in many, if not all, companies.” They are referring to 4,500 of our largest corporations that are listed on our stock markets. This was public knowledge. David Wessel of The Wall Street Journal concluded that the average high tech corporation listed in Nasdaq made “not a dime.” Put another way, the CEOs had stolen the profits by taking 2/3rds of their compensation under-the-table so they could claim non-existent profits and further enrich their already astronomical compensation.

Why did they keep doing it? Don’t they already have enough money?

It’s hard for those of us who work for living to imagine there’s no end to greed. Stories about it just don’t seem believable. But lawyer William Lerach knows the embezzlers well because he worked for them for several years. It’s worth quoting in detail from a The Nation article by William Greider that described Lerach’s explanation for why these ultra embezzlers simply could not stop embezzling.

Lerach has a simple explanation. “Penis envy,” he said. “I don’t want to use the term, but that’s almost what it is. It’s like, ‘Gee, when the CEO of that company over there is making $20 million, I ought to make $24 million.’ Then the other guy says, ‘Well, if he makes $24 million, then I’ve got to make $30 million.'”

Corporate moguls, Lerach explained, have a character flaw that is often fatal. “The CEO ultimately gets brought down by the very personality characteristics that made him successful in the first place,” he said. “How did these guys get to the point where they control a big public company? It’s not because they take no for an answer. Their whole life has been fighting and overcoming people who say no, you can’t do it, don’t do it, it’s illegal. These guys say, ‘To hell with you, we’re doing it, we’re getting it done, nobody can stop me.'” And, when they get to the top, nobody dares stop them.

Do they steal in other ways?

Yes. We will be writing about two of them, the well-known corporate welfare that has supported by our tax dollars, and the much less known practice of paying substandard wages. Since these employees can’t afford health and other services, taxpayers are forced to pay this bill.