Sunday, July 31, 2005
How to Stop the Contagion - Newsweek World News - MSNBC.com
How to Stop the Contagion - Newsweek World News - MSNBC.com
BG: Where's the info about the Black Ops?
BG: Where's the info about the Black Ops?
How Wall Street Wrecked United's Pension - New York Times
How Wall Street Wrecked United's Pension - New York Times
The New York Times
July 31, 2005
How Wall Street Wrecked United's Pension
By MARY WILLIAMS WALSH
HAD anyone listened to Doug Wilsman, tens of thousands of United Airlines employees would not be facing big cuts in their pensions. And the federal agency that guarantees pensions might not be struggling with its biggest losses ever.
So who is Doug Wilsman? He is a retired pilot and a former fiduciary of United's pension plan for pilots, and in 1987 he discovered that the company had abandoned its older, tried-and-true approach of investing retirees' money in bonds timed to pay when the pensions came due. Instead, it had bought into the promises of Wall Street that it could put less money into the plan - and take out more later - if it just put most of the assets into the stock market.
Mr. Wilsman was skeptical of such promises, and soon after learning of the change in strategy, he filed a grievance with his union, the Air Line Pilots Association. "Hey, you guys are really building yourselves a trap," he recalled warning them at the time. "Someday, at the worst possible moment, when the bottom falls out of the stock market, the plan is going to have to come up with new money, and it's going to be enough to kill the company."
"Everybody knows stocks are cyclical," Mr. Wilsman said last week. So is the airline business. All along, he said, he thought it was almost inevitable that both would one day go south at the same time, with catastrophic results - which is just what happened this year.
Given Mr. Wilsman's prescience, one might think that experts would be examining how United's investment strategies contributed to the demise of its pension funds - and whether similar scrutiny elsewhere could prevent more pension plans from crashing.
Not a chance. Congress, regulators, lobbyists and the news media are all scrambling to find out what has gone wrong with the pension system. Hearings have been convened in the wake of United's default, chief executives examined under oath, bills introduced in Congress, numbers crunched. But virtually everyone is looking at the rules covering how much money a company puts into a pension plan every year - not at what happens to the money after that.
While the money managers and other pension professionals who ran United's pension plan walked away from the wreck unscathed - indeed, they collected about $125 million in fees over the last five years alone, records show - the ones who will have to pick up the bill for the advisers' collective failure will be the airline's 130,000 employees and pensioners, the federal pension guarantor and probably, someday, the taxpayers.
The Pension Benefit Guaranty Corporation has said that since 1974, when the insurance program was created, United has paid a little less than $100 million in premiums to insure employees' pensions. Of the $6.8 billion the agency will pay United's retirees in coming years, all but what United paid in premiums will be borne by the other companies participating in the insurance program.
If those companies ever tire of footing other companies' bills, they may cancel their pension plans and drop out of the system. At that point, the taxpayers will have to step in.
United is far from unique. Lifting the lid on how most pension funds are invested might raise an outcry if the 44 million Americans covered by company plans knew these things:
Pension investing is largely unregulated, even though the federal government effectively covers the investment losses when a defined-benefit plan fails. At United, this freewheeling approach gave rise to investments in junk bonds, dot-coms and even what appears to be an energy venture in Albania.
The Securities and Exchange Commission recently said that more than half of the consultants who help pension funds invest their money have outside business relationships that could taint their advice.
It's impossible to get a current list of a company's pension investments. The most detailed, up-to-date information, on file at the Labor Department, is at least two years old.
The Labor Department records also show that the money managers, actuaries, consultants and other professionals who handled United's pension plan earned about $125 million from 1999 to 2003, paid out of plan assets. The records are silent on how the individual money managers performed, nor do they even mention United's main pension consultant, the Russell Investment Group, or how much it was paid.
OFFICIALS at the Pension Benefit Guaranty Corporation, the federal agency that takes over pension funds when they fail, are combing through United's pension documents, trying to ascertain how much the agency owes. What is clear is that as United's pension obligations soared, its pension assets fell. By the time the airline turned over its plan to the pension agency, the shortfall was $10.2 billion.
While the federal agency tries to pinpoint its obligations, apparently no one in an official capacity is pausing to ask who the plans' outside investment professionals were, much less how they made their decisions and how they responded as the airline's fortunes faded.
"It's just a nonstarter," said Richard A. Ippolito, the pension agency's former chief economist, who is now retired. A few years ago, he recalled, a director of the federal pension agency appeared before Congress and suggested that if companies wanted to invest their pension funds in stocks, they should pay more for their pension insurance coverage.
"I could politely say that he was vilified," he said. "They basically accused him of being un-American because he was asking companies to pay for the privilege of investing in stocks. He just dropped that idea."
United's actions offer a typical example of how most companies manage their pension funds. Its portfolio may look aggressive in hindsight - including high-yield bonds in companies like Adelphia and Bethlehem Steel that eventually went bankrupt, technology stocks that evaporated when the bubble burst and an assortment of private partnerships.
But the general approach was in keeping with what most companies do: about 60 percent stocks, 30 percent bonds and a mixture of "alternatives" including real estate and private equity investments. Local governments often invest their pension funds much more aggressively.
A spokeswoman for United, Jean Medina, said United's pension investments "have outperformed other similar large plans." She added: "United has always operated our plans in the best interests of our participants and beneficiaries, and believe our advisers act similarly."
Companies do not generally invest their pension money themselves, but instead farm out the work to an array of outside professionals. There are pension consultants to help set an investment strategy and recommend the money managers who actually pick the stocks and other particular investments. There are actuaries to design benefits packages and calculate how much companies need to contribute each year.
Custodial banks hold the assets in trust. Brokers execute trades. Once a year, an outside auditor is supposed to review the plan and issue an opinion about its conformity with generally accepted accounting principles.
Problems can arise when there are undisclosed relationships among these different service providers.
"Asset allocation is very much driven by hidden financial considerations," said Edward A. H. Siedle, the president of Benchmark Financial Services, a company that audits pension funds. He said one reason that pension funds tend to invest heavily in high-turnover, active equities is that "those investments have commissions and fees that can be shared with gatekeepers and others that pave the way." Companies that sponsor pension plans can also reap accounting gains if they increase the risk of their pension investments.
There are regulations and other legal safeguards intended to protect pensions, and companies often cite the cost and difficulty of complying with those rules. But much of this protective superstructure was designed decades ago, before the rise of the independent money manager - and before some of today's investment instruments were invented.
"Pensions are heavily regulated," Mr. Siedle said, "yet it's a kind of funny regulation where the regulators who are responsible for pensions really don't know much about managing money."
Thus there are rules to make sure that pension plans are not really tax shelters in disguise, rules to make sure companies treat low- and high-income workers equitably and, since 1989, rules to keep companies from taking money out of pension funds and using it to run their businesses.
But there is no rule limiting aggressive investment strategies or requiring companies that want to pursue them to pay more for their pension insurance.
Congress sets the premium rates, and there are bills in both houses that would raise them. But even now, the bills make no mention of studying, much less capping, investment risk, or of setting insurance premiums based on portfolio risk factors.
The S.E.C. monitors investment advisers but has no legal standing to enforce the pension rules. In a study, released in May, of pension consultants, it found the industry vulnerable to abuse and referred a dozen consultants to its investigative branch for possible enforcement action.
But it did not name individual consulting firms it suspected of conflicts, nor did it look specifically at how United's pension consultant, the Russell Investment Group, performed in the years leading up to the collapse of the airline's plans. Nor did the S.E.C. say if Russell was one of the consultants now being investigated more deeply.
A spokeswoman for Russell, Jennifer Tice, said the company had not received any inquiries from S.E.C. since the commission completed its general examination of the industry.
Ms. Tice said Russell could not explain why its name and fees were not listed in the United plan's official records, noting that plan sponsors file those records, not the consultant. United said Russell's omission from its filings was an oversight. Both Russell and United declined to say how Russell was compensated.
Ms. Tice, however, said Russell helps its clients answer any questions raised by the S.E.C.'s findings, and regularly tells its consulting clients in the United States about potential conflicts of interest and Russell's policies for managing them. "Russell is committed to full and timely disclosure of any potential conflicts of interest," she said.
THE Internal Revenue Service provides yet another layer of protection to pensions, but it has authority only over how companies design their benefits and contribute money to their plans - not over whether they have fulfilled their fiduciary duty to invest prudently. That is a job for the Labor Department.
In June, the Government Accountability Office warned of chronic weakness in the Labor Department's enforcement of the pension law, and said the department ought to be coordinating its efforts with the S.E.C.
The Labor Department also has authority over the disclosure of pension data. It collects long lists of all the investments in each pension fund, and of all of the money managers. But it does not track which money managers were responsible for which investments.
That does not sit well with the United employees and retirees who are waiting to find out how much of their pension benefits is covered by the federal pension agency's insurance and how much they may lose.
"When I get a job, I put my name, my file number and my license in a permanent record, and I'm accountable if something goes wrong," said Bob Stone, a lead mechanic for United Airlines who retired this year. "It's possible for every single aircraft mechanic in the country to keep track of every single job they do. But we can't keep track of the money managers. That's too complicated for us."
Because of limits on the government's pension insurance, they will collectively lose benefits worth about $3.4 billion. Pilots will lose the most because they were promised the richest pensions.
Finally, at the end of the regulatory patchwork is the Pension Benefit Guaranty Corporation. Officials there have access to some of the most current and detailed information about pensions, but they cannot do a lot with it; a 1994 act of Congress requires them to keep it secret.
Officials at the pension agency sometimes confide that they feel like they are running not an agency but a big garbage can, where companies can dump their defunct pension plans, no questions asked.
Earlier this year, when United defaulted, Mr. Stone's union began to ask questions about the money managers who handled its pension plan in its final years - who they were and how they had made their decisions. That labor group, the Aircraft Mechanics Fraternal Association, began to represent United's mechanics only in 2003, after the airline had gone bankrupt. It had no qualms about asking questions about how the pension fund was handled when the previous union had some say over it.
"We have to learn what went wrong," Mr. Stone said. He added that he was sure that some money managers "did their level best for people," but that they all should stand by their decisions. "Unless you separate it out and have accountability," Mr. Stone said, "how are you ever going to reward the good guys and get rid of the bad guys?"
This summer, the labor group wrote to Labor Secretary Elaine L. Chao and Bradley D. Belt, executive director of the pension agency, asking for a forensic audit of United's pension plans, "to determine whether any of the parties providing financial services to the plans may have contributed to their demise."
The letter, signed by the association's national director, O. V. Delle-Femine, cited the recent S.E.C. report warning of potential conflicts of interest among pension professionals, and it urged the pension agency to find out whether tainted advice had played any role in plan losses or underperformance.
"While the plan sponsor may be bankrupt, the parties that have been dealing with the plan are not," Mr. Delle-Femine wrote. "It may be possible to recover assets from these parties on behalf of the plan's participants."
The association also called for an audit of the pension plans at Northwest Airlines, where it also represents the mechanics. Northwest is still running its pension plans but intends to freeze one of them, for salaried employees, at the end of August, locking in employees' benefits at current levels rather than allowing them to increase as they normally would as people worked longer.
Northwest is also seeking its unions' permission to freeze the other three plans. The airline has been warning that if it does not get a break on its pension funding requirements, it may have to declare bankruptcy sometime next year. Bankruptcy is often a prelude to a pension default.
Mr. Delle-Femine sent his letter in June. So far, said the association's legislative liaison, Maryanne DeMarco, there has been no response from the pension agency. The Labor Department told her that Ms. Chao could not participate in an audit of Northwest's pension plans because she served on that airline's board before her confirmation as labor secretary and had recused herself from any involvement in its labor disputes. The Labor Department has yet to respond to the request for an audit of United's pension fund.
"We're all stunned that there isn't a review taking place," said Bill Moons, a United mechanic and the president of the union's local in Denver. "We all want the truth."
He said he and Mr. Stone were two-time losers, having earlier lost another chunk of their retirement savings when United first went bankrupt and its employee stock ownership program lost all of its value.
The pilots' union had pushed hard for the employee stock ownership program back in the 1980's, at about the same time that Mr. Wilsman, the retired pilot, noticed that the airline had changed its previous investment policy for people like him.
In the past, whenever a pilot retired, the airline used money from the pension fund to buy him or her an annuity from an insurance company. Annuities are lifelong streams of monthly payments, but insurance companies pay them, not pension funds.
Insurance companies are regulated differently, and they have no federal guarantor like the Pension Benefit Guaranty Corporation to cover potential losses. Therefore they tend to invest conservatively, in assets that will not become wildly out of step with the payments they owe.
Mr. Wilsman said he thought that an annuity was a surer thing than a pension promise backed by stocks. He also thought United had violated the terms of the pension plan, and maybe the pilots' labor contract, by making the change unilaterally.
He persuaded other retired pilots to join him in bringing a case before the airline's pension board. Each retiree chipped in $25 to cover the cost of a lawyer. At roughly the same time, Mr. Wilsman also filed a grievance with the union.
But the retired pilots were no match for the siren song of the stock market. The union, which handled their grievance, sided with the airline on investment policy. It said it believed that a high-risk, high-return strategy was best because, over time, it would lower United's compensation costs and free up more money to raise salaries.
"The argument was that the new people could get more benefits if they could do it by gambling than if the plan was secure," Mr. Wilsman said.
A spokesman for the pilots' union said he could not recall Mr. Wilsman's grievance and was unable to comment on it.
Ms. Medina, the United spokeswoman, said that United tried to buy all the pilots' annuities in 1985, as part of a plan to terminate the pension fund and take out the surplus assets for business purposes, but that the pilots' union had blocked it. Two years later, when Mr. Wilsman and the other retirees said they wanted annuities, United told them they were too late, she said.
NOT only were United and the pilots' union lined up against the retirees, Mr. Wilsman said. Even the arbitrator who was brought in to hear the case before the pension board said that he couldn't see why the retirees preferred an annuity to a pension, if the monthly payout was the same either way.
"He said that as far as he was concerned, there was absolutely no difference between an annuity and the company's promise," Mr. Wilsman recalled. Afterward, he said, he thought he should have come up with an example of why they weren't the same, but he was tired of arguing with people dead-set against him. So he withdrew the grievance.
"It has always haunted me that I failed to cite an example," he said in a recent telephone interview.
But the best example didn't happen until 18 years later.
The New York Times
July 31, 2005
How Wall Street Wrecked United's Pension
By MARY WILLIAMS WALSH
HAD anyone listened to Doug Wilsman, tens of thousands of United Airlines employees would not be facing big cuts in their pensions. And the federal agency that guarantees pensions might not be struggling with its biggest losses ever.
So who is Doug Wilsman? He is a retired pilot and a former fiduciary of United's pension plan for pilots, and in 1987 he discovered that the company had abandoned its older, tried-and-true approach of investing retirees' money in bonds timed to pay when the pensions came due. Instead, it had bought into the promises of Wall Street that it could put less money into the plan - and take out more later - if it just put most of the assets into the stock market.
Mr. Wilsman was skeptical of such promises, and soon after learning of the change in strategy, he filed a grievance with his union, the Air Line Pilots Association. "Hey, you guys are really building yourselves a trap," he recalled warning them at the time. "Someday, at the worst possible moment, when the bottom falls out of the stock market, the plan is going to have to come up with new money, and it's going to be enough to kill the company."
"Everybody knows stocks are cyclical," Mr. Wilsman said last week. So is the airline business. All along, he said, he thought it was almost inevitable that both would one day go south at the same time, with catastrophic results - which is just what happened this year.
Given Mr. Wilsman's prescience, one might think that experts would be examining how United's investment strategies contributed to the demise of its pension funds - and whether similar scrutiny elsewhere could prevent more pension plans from crashing.
Not a chance. Congress, regulators, lobbyists and the news media are all scrambling to find out what has gone wrong with the pension system. Hearings have been convened in the wake of United's default, chief executives examined under oath, bills introduced in Congress, numbers crunched. But virtually everyone is looking at the rules covering how much money a company puts into a pension plan every year - not at what happens to the money after that.
While the money managers and other pension professionals who ran United's pension plan walked away from the wreck unscathed - indeed, they collected about $125 million in fees over the last five years alone, records show - the ones who will have to pick up the bill for the advisers' collective failure will be the airline's 130,000 employees and pensioners, the federal pension guarantor and probably, someday, the taxpayers.
The Pension Benefit Guaranty Corporation has said that since 1974, when the insurance program was created, United has paid a little less than $100 million in premiums to insure employees' pensions. Of the $6.8 billion the agency will pay United's retirees in coming years, all but what United paid in premiums will be borne by the other companies participating in the insurance program.
If those companies ever tire of footing other companies' bills, they may cancel their pension plans and drop out of the system. At that point, the taxpayers will have to step in.
United is far from unique. Lifting the lid on how most pension funds are invested might raise an outcry if the 44 million Americans covered by company plans knew these things:
Pension investing is largely unregulated, even though the federal government effectively covers the investment losses when a defined-benefit plan fails. At United, this freewheeling approach gave rise to investments in junk bonds, dot-coms and even what appears to be an energy venture in Albania.
The Securities and Exchange Commission recently said that more than half of the consultants who help pension funds invest their money have outside business relationships that could taint their advice.
It's impossible to get a current list of a company's pension investments. The most detailed, up-to-date information, on file at the Labor Department, is at least two years old.
The Labor Department records also show that the money managers, actuaries, consultants and other professionals who handled United's pension plan earned about $125 million from 1999 to 2003, paid out of plan assets. The records are silent on how the individual money managers performed, nor do they even mention United's main pension consultant, the Russell Investment Group, or how much it was paid.
OFFICIALS at the Pension Benefit Guaranty Corporation, the federal agency that takes over pension funds when they fail, are combing through United's pension documents, trying to ascertain how much the agency owes. What is clear is that as United's pension obligations soared, its pension assets fell. By the time the airline turned over its plan to the pension agency, the shortfall was $10.2 billion.
While the federal agency tries to pinpoint its obligations, apparently no one in an official capacity is pausing to ask who the plans' outside investment professionals were, much less how they made their decisions and how they responded as the airline's fortunes faded.
"It's just a nonstarter," said Richard A. Ippolito, the pension agency's former chief economist, who is now retired. A few years ago, he recalled, a director of the federal pension agency appeared before Congress and suggested that if companies wanted to invest their pension funds in stocks, they should pay more for their pension insurance coverage.
"I could politely say that he was vilified," he said. "They basically accused him of being un-American because he was asking companies to pay for the privilege of investing in stocks. He just dropped that idea."
United's actions offer a typical example of how most companies manage their pension funds. Its portfolio may look aggressive in hindsight - including high-yield bonds in companies like Adelphia and Bethlehem Steel that eventually went bankrupt, technology stocks that evaporated when the bubble burst and an assortment of private partnerships.
But the general approach was in keeping with what most companies do: about 60 percent stocks, 30 percent bonds and a mixture of "alternatives" including real estate and private equity investments. Local governments often invest their pension funds much more aggressively.
A spokeswoman for United, Jean Medina, said United's pension investments "have outperformed other similar large plans." She added: "United has always operated our plans in the best interests of our participants and beneficiaries, and believe our advisers act similarly."
Companies do not generally invest their pension money themselves, but instead farm out the work to an array of outside professionals. There are pension consultants to help set an investment strategy and recommend the money managers who actually pick the stocks and other particular investments. There are actuaries to design benefits packages and calculate how much companies need to contribute each year.
Custodial banks hold the assets in trust. Brokers execute trades. Once a year, an outside auditor is supposed to review the plan and issue an opinion about its conformity with generally accepted accounting principles.
Problems can arise when there are undisclosed relationships among these different service providers.
"Asset allocation is very much driven by hidden financial considerations," said Edward A. H. Siedle, the president of Benchmark Financial Services, a company that audits pension funds. He said one reason that pension funds tend to invest heavily in high-turnover, active equities is that "those investments have commissions and fees that can be shared with gatekeepers and others that pave the way." Companies that sponsor pension plans can also reap accounting gains if they increase the risk of their pension investments.
There are regulations and other legal safeguards intended to protect pensions, and companies often cite the cost and difficulty of complying with those rules. But much of this protective superstructure was designed decades ago, before the rise of the independent money manager - and before some of today's investment instruments were invented.
"Pensions are heavily regulated," Mr. Siedle said, "yet it's a kind of funny regulation where the regulators who are responsible for pensions really don't know much about managing money."
Thus there are rules to make sure that pension plans are not really tax shelters in disguise, rules to make sure companies treat low- and high-income workers equitably and, since 1989, rules to keep companies from taking money out of pension funds and using it to run their businesses.
But there is no rule limiting aggressive investment strategies or requiring companies that want to pursue them to pay more for their pension insurance.
Congress sets the premium rates, and there are bills in both houses that would raise them. But even now, the bills make no mention of studying, much less capping, investment risk, or of setting insurance premiums based on portfolio risk factors.
The S.E.C. monitors investment advisers but has no legal standing to enforce the pension rules. In a study, released in May, of pension consultants, it found the industry vulnerable to abuse and referred a dozen consultants to its investigative branch for possible enforcement action.
But it did not name individual consulting firms it suspected of conflicts, nor did it look specifically at how United's pension consultant, the Russell Investment Group, performed in the years leading up to the collapse of the airline's plans. Nor did the S.E.C. say if Russell was one of the consultants now being investigated more deeply.
A spokeswoman for Russell, Jennifer Tice, said the company had not received any inquiries from S.E.C. since the commission completed its general examination of the industry.
Ms. Tice said Russell could not explain why its name and fees were not listed in the United plan's official records, noting that plan sponsors file those records, not the consultant. United said Russell's omission from its filings was an oversight. Both Russell and United declined to say how Russell was compensated.
Ms. Tice, however, said Russell helps its clients answer any questions raised by the S.E.C.'s findings, and regularly tells its consulting clients in the United States about potential conflicts of interest and Russell's policies for managing them. "Russell is committed to full and timely disclosure of any potential conflicts of interest," she said.
THE Internal Revenue Service provides yet another layer of protection to pensions, but it has authority only over how companies design their benefits and contribute money to their plans - not over whether they have fulfilled their fiduciary duty to invest prudently. That is a job for the Labor Department.
In June, the Government Accountability Office warned of chronic weakness in the Labor Department's enforcement of the pension law, and said the department ought to be coordinating its efforts with the S.E.C.
The Labor Department also has authority over the disclosure of pension data. It collects long lists of all the investments in each pension fund, and of all of the money managers. But it does not track which money managers were responsible for which investments.
That does not sit well with the United employees and retirees who are waiting to find out how much of their pension benefits is covered by the federal pension agency's insurance and how much they may lose.
"When I get a job, I put my name, my file number and my license in a permanent record, and I'm accountable if something goes wrong," said Bob Stone, a lead mechanic for United Airlines who retired this year. "It's possible for every single aircraft mechanic in the country to keep track of every single job they do. But we can't keep track of the money managers. That's too complicated for us."
Because of limits on the government's pension insurance, they will collectively lose benefits worth about $3.4 billion. Pilots will lose the most because they were promised the richest pensions.
Finally, at the end of the regulatory patchwork is the Pension Benefit Guaranty Corporation. Officials there have access to some of the most current and detailed information about pensions, but they cannot do a lot with it; a 1994 act of Congress requires them to keep it secret.
Officials at the pension agency sometimes confide that they feel like they are running not an agency but a big garbage can, where companies can dump their defunct pension plans, no questions asked.
Earlier this year, when United defaulted, Mr. Stone's union began to ask questions about the money managers who handled its pension plan in its final years - who they were and how they had made their decisions. That labor group, the Aircraft Mechanics Fraternal Association, began to represent United's mechanics only in 2003, after the airline had gone bankrupt. It had no qualms about asking questions about how the pension fund was handled when the previous union had some say over it.
"We have to learn what went wrong," Mr. Stone said. He added that he was sure that some money managers "did their level best for people," but that they all should stand by their decisions. "Unless you separate it out and have accountability," Mr. Stone said, "how are you ever going to reward the good guys and get rid of the bad guys?"
This summer, the labor group wrote to Labor Secretary Elaine L. Chao and Bradley D. Belt, executive director of the pension agency, asking for a forensic audit of United's pension plans, "to determine whether any of the parties providing financial services to the plans may have contributed to their demise."
The letter, signed by the association's national director, O. V. Delle-Femine, cited the recent S.E.C. report warning of potential conflicts of interest among pension professionals, and it urged the pension agency to find out whether tainted advice had played any role in plan losses or underperformance.
"While the plan sponsor may be bankrupt, the parties that have been dealing with the plan are not," Mr. Delle-Femine wrote. "It may be possible to recover assets from these parties on behalf of the plan's participants."
The association also called for an audit of the pension plans at Northwest Airlines, where it also represents the mechanics. Northwest is still running its pension plans but intends to freeze one of them, for salaried employees, at the end of August, locking in employees' benefits at current levels rather than allowing them to increase as they normally would as people worked longer.
Northwest is also seeking its unions' permission to freeze the other three plans. The airline has been warning that if it does not get a break on its pension funding requirements, it may have to declare bankruptcy sometime next year. Bankruptcy is often a prelude to a pension default.
Mr. Delle-Femine sent his letter in June. So far, said the association's legislative liaison, Maryanne DeMarco, there has been no response from the pension agency. The Labor Department told her that Ms. Chao could not participate in an audit of Northwest's pension plans because she served on that airline's board before her confirmation as labor secretary and had recused herself from any involvement in its labor disputes. The Labor Department has yet to respond to the request for an audit of United's pension fund.
"We're all stunned that there isn't a review taking place," said Bill Moons, a United mechanic and the president of the union's local in Denver. "We all want the truth."
He said he and Mr. Stone were two-time losers, having earlier lost another chunk of their retirement savings when United first went bankrupt and its employee stock ownership program lost all of its value.
The pilots' union had pushed hard for the employee stock ownership program back in the 1980's, at about the same time that Mr. Wilsman, the retired pilot, noticed that the airline had changed its previous investment policy for people like him.
In the past, whenever a pilot retired, the airline used money from the pension fund to buy him or her an annuity from an insurance company. Annuities are lifelong streams of monthly payments, but insurance companies pay them, not pension funds.
Insurance companies are regulated differently, and they have no federal guarantor like the Pension Benefit Guaranty Corporation to cover potential losses. Therefore they tend to invest conservatively, in assets that will not become wildly out of step with the payments they owe.
Mr. Wilsman said he thought that an annuity was a surer thing than a pension promise backed by stocks. He also thought United had violated the terms of the pension plan, and maybe the pilots' labor contract, by making the change unilaterally.
He persuaded other retired pilots to join him in bringing a case before the airline's pension board. Each retiree chipped in $25 to cover the cost of a lawyer. At roughly the same time, Mr. Wilsman also filed a grievance with the union.
But the retired pilots were no match for the siren song of the stock market. The union, which handled their grievance, sided with the airline on investment policy. It said it believed that a high-risk, high-return strategy was best because, over time, it would lower United's compensation costs and free up more money to raise salaries.
"The argument was that the new people could get more benefits if they could do it by gambling than if the plan was secure," Mr. Wilsman said.
A spokesman for the pilots' union said he could not recall Mr. Wilsman's grievance and was unable to comment on it.
Ms. Medina, the United spokeswoman, said that United tried to buy all the pilots' annuities in 1985, as part of a plan to terminate the pension fund and take out the surplus assets for business purposes, but that the pilots' union had blocked it. Two years later, when Mr. Wilsman and the other retirees said they wanted annuities, United told them they were too late, she said.
NOT only were United and the pilots' union lined up against the retirees, Mr. Wilsman said. Even the arbitrator who was brought in to hear the case before the pension board said that he couldn't see why the retirees preferred an annuity to a pension, if the monthly payout was the same either way.
"He said that as far as he was concerned, there was absolutely no difference between an annuity and the company's promise," Mr. Wilsman recalled. Afterward, he said, he thought he should have come up with an example of why they weren't the same, but he was tired of arguing with people dead-set against him. So he withdrew the grievance.
"It has always haunted me that I failed to cite an example," he said in a recent telephone interview.
But the best example didn't happen until 18 years later.
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Umbert The Unborn, the world's most lovable unborn baby (next to yours!)
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The Roots of Prisoner Abuse - New York Times
The Roots of Prisoner Abuse - New York Times The New York Times
July 30, 2005
The Roots of Prisoner Abuse
This week, the White House blocked a Senate vote on a measure sponsored by a half-dozen Republicans, including Senator John McCain, that would prohibit cruel, degrading or inhumane treatment of prisoners. Besides being outrageous on its face, that action served as a reminder of how the Bush administration ducks for cover behind the men and women in uniform when challenged on military policy, but ignores their advice when it seems inconvenient.
Senator Lindsey Graham, a Republican who has shown real political courage on this issue, recently released documents showing that the military's top lawyers had warned a year before the Abu Ghraib nightmare came to light that detainee policies imposed by the White House and Secretary of Defense Donald Rumsfeld violated American and international law and undermined the standards of civilized treatment embedded in the American military tradition.
In February 2003, Maj. Gen. Jack Rives, the deputy judge advocate general of the Air Force, reminded his civilian bosses that American rules on the treatment of prisoners had grown out of Vietnam, where captured Americans, like Mr. McCain, were tortured. "We have taken the legal and moral 'high road' in the conduct of our military operations regardless of how others may operate," he wrote. Abandoning those rules, he said, endangered every American soldier.
General Rives and the other military lawyers argued strongly against declaring that Mr. Bush was above the law when it came to antiterrorism operations. But the president's team ignored them, offering up a pretzel logic that General Rives and the other military experts warned would not fool anyone. Rear Adm. Michael Lohr, the Navy's judge advocate general, said that the situation at the American prison at Guantánamo Bay in Cuba might be so legalistically unique that the Geneva Conventions and even the Constitution did not necessarily apply. But he asked, "Will the American people find we have missed the forest for the trees by condoning practices that, while technically legal, are inconsistent with our most fundamental values?"
General Rives said that if the White House permitted abusive interrogations at Guantánamo Bay, it would not be able to restrict them to that single prison. He argued that soldiers elsewhere would conclude that their commanders were condoning illegal behavior. And that is precisely what happened at Abu Ghraib after the general who organized the abuse of prisoners at Guantánamo went to Iraq to toughen up the interrogation of prisoners there.
The White House ignored these military lawyers' advice two years ago. Now it is trying to kill the measure that would define the term "illegal combatants," set rules for interrogations and prohibit cruel and inhumane treatment of prisoners. The president considers this an undue restriction of his powers. It's not only due; it's way overdue.
July 30, 2005
The Roots of Prisoner Abuse
This week, the White House blocked a Senate vote on a measure sponsored by a half-dozen Republicans, including Senator John McCain, that would prohibit cruel, degrading or inhumane treatment of prisoners. Besides being outrageous on its face, that action served as a reminder of how the Bush administration ducks for cover behind the men and women in uniform when challenged on military policy, but ignores their advice when it seems inconvenient.
Senator Lindsey Graham, a Republican who has shown real political courage on this issue, recently released documents showing that the military's top lawyers had warned a year before the Abu Ghraib nightmare came to light that detainee policies imposed by the White House and Secretary of Defense Donald Rumsfeld violated American and international law and undermined the standards of civilized treatment embedded in the American military tradition.
In February 2003, Maj. Gen. Jack Rives, the deputy judge advocate general of the Air Force, reminded his civilian bosses that American rules on the treatment of prisoners had grown out of Vietnam, where captured Americans, like Mr. McCain, were tortured. "We have taken the legal and moral 'high road' in the conduct of our military operations regardless of how others may operate," he wrote. Abandoning those rules, he said, endangered every American soldier.
General Rives and the other military lawyers argued strongly against declaring that Mr. Bush was above the law when it came to antiterrorism operations. But the president's team ignored them, offering up a pretzel logic that General Rives and the other military experts warned would not fool anyone. Rear Adm. Michael Lohr, the Navy's judge advocate general, said that the situation at the American prison at Guantánamo Bay in Cuba might be so legalistically unique that the Geneva Conventions and even the Constitution did not necessarily apply. But he asked, "Will the American people find we have missed the forest for the trees by condoning practices that, while technically legal, are inconsistent with our most fundamental values?"
General Rives said that if the White House permitted abusive interrogations at Guantánamo Bay, it would not be able to restrict them to that single prison. He argued that soldiers elsewhere would conclude that their commanders were condoning illegal behavior. And that is precisely what happened at Abu Ghraib after the general who organized the abuse of prisoners at Guantánamo went to Iraq to toughen up the interrogation of prisoners there.
The White House ignored these military lawyers' advice two years ago. Now it is trying to kill the measure that would define the term "illegal combatants," set rules for interrogations and prohibit cruel and inhumane treatment of prisoners. The president considers this an undue restriction of his powers. It's not only due; it's way overdue.
White House Memos Offer Opinions on Supreme Court - New York Times
White House Memos Offer Opinions on Supreme Court - New York Times: "
July 30, 2005
White House Memos Offer Opinions on Supreme Court
By JOHN M. BRODER and CAROLYN MARSHALL
LOS ANGELES, July 29 - For those seeking clues to the judicial philosophy of John G. Roberts, documents from his years as a lawyer in the White House counsel's office during the Reagan administration provide revealing evidence.
In early 1983, Mr. Roberts was asked to analyze a proposal pushed by Warren E. Burger, then the chief justice, to create a new, national-level federal appeals court to relieve some of the Supreme Court's workload.
Mr. Roberts wrote in a memorandum to his boss, Fred F. Fielding, the White House counsel, that he thought creation of the new court, known as the intercircuit tribunal, was a 'terrible idea.' Mr. Roberts, who is President Bush's nominee to the Supreme Court, said the court had only itself to blame for its burden of cases.
'If the justices truly think they are overworked, the cure lies close at hand,' Mr. Roberts wrote. 'The fault lies with the justices themselves, who unnecessarily take too many cases and issue opinions so confusing that they often do not even resolve the question presented.'
He wrote that if the court took fewer death penalty and prisoner-rights cases, the docket would be cut by at least a half-dozen cases a year. He added a comment that may signal his view of the Supreme Court's proper role.
'So long as the court views itself as ultimately responsible for governing all aspects of our society, it will, understandably, be overworked,' Mr. Roberts wrote. 'A new court will not solve this problem.'
Mr. Roberts worked in the Reagan White House counsel's office from 1982 to 1986. The files were among pap"
July 30, 2005
White House Memos Offer Opinions on Supreme Court
By JOHN M. BRODER and CAROLYN MARSHALL
LOS ANGELES, July 29 - For those seeking clues to the judicial philosophy of John G. Roberts, documents from his years as a lawyer in the White House counsel's office during the Reagan administration provide revealing evidence.
In early 1983, Mr. Roberts was asked to analyze a proposal pushed by Warren E. Burger, then the chief justice, to create a new, national-level federal appeals court to relieve some of the Supreme Court's workload.
Mr. Roberts wrote in a memorandum to his boss, Fred F. Fielding, the White House counsel, that he thought creation of the new court, known as the intercircuit tribunal, was a 'terrible idea.' Mr. Roberts, who is President Bush's nominee to the Supreme Court, said the court had only itself to blame for its burden of cases.
'If the justices truly think they are overworked, the cure lies close at hand,' Mr. Roberts wrote. 'The fault lies with the justices themselves, who unnecessarily take too many cases and issue opinions so confusing that they often do not even resolve the question presented.'
He wrote that if the court took fewer death penalty and prisoner-rights cases, the docket would be cut by at least a half-dozen cases a year. He added a comment that may signal his view of the Supreme Court's proper role.
'So long as the court views itself as ultimately responsible for governing all aspects of our society, it will, understandably, be overworked,' Mr. Roberts wrote. 'A new court will not solve this problem.'
Mr. Roberts worked in the Reagan White House counsel's office from 1982 to 1986. The files were among pap"
Culture of Life Media News: THAT HIDEOUS STRENGTH CONSPIRACY
Culture of Life Media News: THAT HIDEOUS STRENGTH CONSPIRACY
" THAT HIDEOUS STRENGTH CONSPIRACY
Today is very interesting. Daliwood, one of our wonderful readers, gave me amazing information. I went off to confirm it on the net last night and didn't go to bed until after 1 am. I used a wild combination of key words, googling an increasing stream of key words like "listing" and "Thunderhorse" and "oil rig", "Texas", "Gulf, hurricane Dennis" and finally got a rigger's chat room and Resource Investor.com.
Evidently, they have been covering this story for two weeks.
Now, I watch oil news like a hawk. I muck around in rather obscure corners, seeking information, looking for data and photos. Note I have mentioned nothing about this matter. But the key thing is, not one of our news media have, either! This is a key to what is going wrong with our nation.
The price of oil is hitting everyone. I watch it rise relentlessly. The stock market went up this week on all sorts of data that was produced before the oil rig collapsed. So everyone thinks, the oil problem is solved. No need to change course or even worry! The government data showing we have slid even further behind in our quest for automotive efficiency was deliberately withheld by Bush and Cheney and only appeared in the news, with little comment, because someone brave leaked it to the press, who then didn't say much about it all!
My magic article was about all of this.
Here are more photos of the rigs collapsing courtesy of Resource Investor:f(From MediaLib.com)
f
Another reader of my blog, Stealth Badger, gave me the urls of Investor Resource (which I found also on my own last night, you can bet, it became part of my "must read" bookmarks!). Here is what he said,
Thunderhorse has been listing at 20 degrees for a bit over two weeks now. I'm terribly surprised it's still at that angle, but the fact that it hasn't gotten worse means BP probably dodged a bullet, so to speak.
What I don't understand is why these companies are holding on so tight to fossil fuels, despite the obvious dead-end they represent, in more ways than one. Especially ExxonMobil, the CEO of which believes that some exploration into alternative fuel sources by Exxon in the 80s gives him enough expertise on the subject to dismiss it as categorically worthless.
They see putting a half a billion dollars out in the middle of the ocean as a good investment, where they KNOW every storm that passes by is going to smack the hell out of it, but don't see getting out of the oil trade as necessary for long-term survival.
Our economic system has been, and is, staggeringly myopic and monomaniacal.
I want to thank my readers for this sort of information. This isn't "people giving opinions" but rather, people searching for information and sharing it. And we are reduced to doing in on this small blog because our oil overlords and Bush and Cheney who are the same, are keeping this stuff hidden from view. The mass media cooperates with them.
Don't want to panic us!
They will blandly talk about how the price of oil is going up mysteriously and I do note in my readings, seeing quite a few articles accusing oil futures traders for this. The stock market shot up despite this news existing and I cannot fathom anyone feeling that we will "be going strong" with this data flowing in!
The oil explorations going on in the oceans are vastly more vulnerable and dangerous than on land. In the North Sea, rigs have collapsed spectacularily. It is dangerous work on those rigs. They are much move vulnerable to terrorist attacks than rigs on land and much harder to guard in heavy ocean traffic areas like the Arabian Gulf.
The press pretends the public want to see photos and stories about missing white women on vacation in Aruba but don't want to see this. This is a big, fat lie. If it is true, then the ostrich attitude is perfect for us being decapitated. Even if the masses in America don't want to see this, it should, like the torture pictures we tried to ignore, be shoved in our fat faces. The media isn't merely a money grinding machine, it is there to inform us even if only 10% of the viewers/readers understand the importance of the news and acts accordingly.
Hiding it is a crime. It endangers my life, your lives. It endangers our collective efforts to stay alive and well. This deliberate refusal to cover many important news stories and worse, the refusal of the pundits to connect what looks to me to be obvious events is a crime. They aren't clueless because no one tells them anything! I used to waste two hours every day sending emails for years to the major media, patiently explaining how things work in tandem, suggesting sources, suggesting lines of investigation.
Nothing. I used to get cheeky, breezy replies from reporters, then after 9/11, silence.
My very last email I ever sent to a reporter tallking about coming events was sent at 8:49 am, Sept. 11, 2001. In it, I said, "Because of our pressuring the NYT, WP and Wall Street Journal, the ballot counting being done by this consortium is now finished by they won't reveal that Gore won by over 20,000 votes in Florida and thus, the Supreme Court ruling was false and should be overturned. You can bet, Bush knows this, too, and will have some spectacular attack on NYC to kill this story. So keep your eyes open."
Then my phone rang.
You know the rest. Now how did I know this information? I went to my library yesterday, seeking it. And found it. As a child, I read C.S. Lewis, all his works, and memorized most of them. And here is was, the blueprint for taking over the earth:
f
f
f
This excerpt finishes with the hero marveling how millions read what he writes even though he is clueless about the subject matter. He also marvels about how his misinformation is being slurped up by the major media uncritically. And how they also hide news even from himself. He wonders at the magical change in his status, for he now works for a secret cabal that has great influence but needs human tools to do the work so their own fingerprints won't appear in public.
In America today, many wonder about the interlocking conspiracies and machinations of the Real Rulers. These people exist, they are very much real and they outrageously manipulate information and events so they can run things for their own benefit. They allow us to live but periodically, even that is pulled out from under us, two very spectacular examples are WWI and WWII.
Both wars ended up endangering them and they escaped being executed or assassinated by the skin of their collective teeth. This is why WWIII hasn't happened...yet. For events often escape their controls. You can bet, if they wanted WWIII, it would happen no matter how many humans across the planet march to stop it. They don't need to listen to us, do they?
Right now, they want peace but not quiet. So we must be afraid, be very afraid but not be afraid at all. We must go shopping and be happy but be scared enough to let the police do their brutal work, let the terrorists do their part of the game, let this whole thing trundle along while they set up the next step in this vast game to see who will inherit the earth!
We see the tension in their actions. They reveal and hide simultaneously. They must use courtiers like Murdoch, who they actually despise, doing his job, manipulating the news. You can bet, if he oversteps their boundries or says the wrong thing or whatever, he will, like some of his contemporaries, suddenly fall off his yaught or his jet will crash or his palace will burn down with him inside.
He knows this and is very careful to serve them well.
These rulers don't want us to panic about oil. This is why Bush called the only Representative in the House who finally put the words "Hubbert Oil Peak" into the Congressional Record, into the Oval Office and he sat there with a smirk and pretened to be surprised to hear all the data and information about the Hubbert Oil Peak and the poor Congressman, a smart man but a fool, thought he was giving Bush vital information that Bush didn't already know.
Geeze. You know, Bush has known about this the same number of years I have: 31 years. I lectured about this matter for years, back in the seventies. Then the media suddenly stopped talking to me when Reagan took over and only ABC has broken the silence.
Why did Bush pretend to be unaware of the most important issue wracking the oil industry? Well, readers of this blog know why. And this is why we all know there will be another "terrorist attack" on America. To unite us against some pathetic peasant community that happens to be sitting on some oil."
" THAT HIDEOUS STRENGTH CONSPIRACY
Today is very interesting. Daliwood, one of our wonderful readers, gave me amazing information. I went off to confirm it on the net last night and didn't go to bed until after 1 am. I used a wild combination of key words, googling an increasing stream of key words like "listing" and "Thunderhorse" and "oil rig", "Texas", "Gulf, hurricane Dennis" and finally got a rigger's chat room and Resource Investor.com.
Evidently, they have been covering this story for two weeks.
Now, I watch oil news like a hawk. I muck around in rather obscure corners, seeking information, looking for data and photos. Note I have mentioned nothing about this matter. But the key thing is, not one of our news media have, either! This is a key to what is going wrong with our nation.
The price of oil is hitting everyone. I watch it rise relentlessly. The stock market went up this week on all sorts of data that was produced before the oil rig collapsed. So everyone thinks, the oil problem is solved. No need to change course or even worry! The government data showing we have slid even further behind in our quest for automotive efficiency was deliberately withheld by Bush and Cheney and only appeared in the news, with little comment, because someone brave leaked it to the press, who then didn't say much about it all!
My magic article was about all of this.
Here are more photos of the rigs collapsing courtesy of Resource Investor:f(From MediaLib.com)
f
Another reader of my blog, Stealth Badger, gave me the urls of Investor Resource (which I found also on my own last night, you can bet, it became part of my "must read" bookmarks!). Here is what he said,
Thunderhorse has been listing at 20 degrees for a bit over two weeks now. I'm terribly surprised it's still at that angle, but the fact that it hasn't gotten worse means BP probably dodged a bullet, so to speak.
What I don't understand is why these companies are holding on so tight to fossil fuels, despite the obvious dead-end they represent, in more ways than one. Especially ExxonMobil, the CEO of which believes that some exploration into alternative fuel sources by Exxon in the 80s gives him enough expertise on the subject to dismiss it as categorically worthless.
They see putting a half a billion dollars out in the middle of the ocean as a good investment, where they KNOW every storm that passes by is going to smack the hell out of it, but don't see getting out of the oil trade as necessary for long-term survival.
Our economic system has been, and is, staggeringly myopic and monomaniacal.
I want to thank my readers for this sort of information. This isn't "people giving opinions" but rather, people searching for information and sharing it. And we are reduced to doing in on this small blog because our oil overlords and Bush and Cheney who are the same, are keeping this stuff hidden from view. The mass media cooperates with them.
Don't want to panic us!
They will blandly talk about how the price of oil is going up mysteriously and I do note in my readings, seeing quite a few articles accusing oil futures traders for this. The stock market shot up despite this news existing and I cannot fathom anyone feeling that we will "be going strong" with this data flowing in!
The oil explorations going on in the oceans are vastly more vulnerable and dangerous than on land. In the North Sea, rigs have collapsed spectacularily. It is dangerous work on those rigs. They are much move vulnerable to terrorist attacks than rigs on land and much harder to guard in heavy ocean traffic areas like the Arabian Gulf.
The press pretends the public want to see photos and stories about missing white women on vacation in Aruba but don't want to see this. This is a big, fat lie. If it is true, then the ostrich attitude is perfect for us being decapitated. Even if the masses in America don't want to see this, it should, like the torture pictures we tried to ignore, be shoved in our fat faces. The media isn't merely a money grinding machine, it is there to inform us even if only 10% of the viewers/readers understand the importance of the news and acts accordingly.
Hiding it is a crime. It endangers my life, your lives. It endangers our collective efforts to stay alive and well. This deliberate refusal to cover many important news stories and worse, the refusal of the pundits to connect what looks to me to be obvious events is a crime. They aren't clueless because no one tells them anything! I used to waste two hours every day sending emails for years to the major media, patiently explaining how things work in tandem, suggesting sources, suggesting lines of investigation.
Nothing. I used to get cheeky, breezy replies from reporters, then after 9/11, silence.
My very last email I ever sent to a reporter tallking about coming events was sent at 8:49 am, Sept. 11, 2001. In it, I said, "Because of our pressuring the NYT, WP and Wall Street Journal, the ballot counting being done by this consortium is now finished by they won't reveal that Gore won by over 20,000 votes in Florida and thus, the Supreme Court ruling was false and should be overturned. You can bet, Bush knows this, too, and will have some spectacular attack on NYC to kill this story. So keep your eyes open."
Then my phone rang.
You know the rest. Now how did I know this information? I went to my library yesterday, seeking it. And found it. As a child, I read C.S. Lewis, all his works, and memorized most of them. And here is was, the blueprint for taking over the earth:
f
f
f
This excerpt finishes with the hero marveling how millions read what he writes even though he is clueless about the subject matter. He also marvels about how his misinformation is being slurped up by the major media uncritically. And how they also hide news even from himself. He wonders at the magical change in his status, for he now works for a secret cabal that has great influence but needs human tools to do the work so their own fingerprints won't appear in public.
In America today, many wonder about the interlocking conspiracies and machinations of the Real Rulers. These people exist, they are very much real and they outrageously manipulate information and events so they can run things for their own benefit. They allow us to live but periodically, even that is pulled out from under us, two very spectacular examples are WWI and WWII.
Both wars ended up endangering them and they escaped being executed or assassinated by the skin of their collective teeth. This is why WWIII hasn't happened...yet. For events often escape their controls. You can bet, if they wanted WWIII, it would happen no matter how many humans across the planet march to stop it. They don't need to listen to us, do they?
Right now, they want peace but not quiet. So we must be afraid, be very afraid but not be afraid at all. We must go shopping and be happy but be scared enough to let the police do their brutal work, let the terrorists do their part of the game, let this whole thing trundle along while they set up the next step in this vast game to see who will inherit the earth!
We see the tension in their actions. They reveal and hide simultaneously. They must use courtiers like Murdoch, who they actually despise, doing his job, manipulating the news. You can bet, if he oversteps their boundries or says the wrong thing or whatever, he will, like some of his contemporaries, suddenly fall off his yaught or his jet will crash or his palace will burn down with him inside.
He knows this and is very careful to serve them well.
These rulers don't want us to panic about oil. This is why Bush called the only Representative in the House who finally put the words "Hubbert Oil Peak" into the Congressional Record, into the Oval Office and he sat there with a smirk and pretened to be surprised to hear all the data and information about the Hubbert Oil Peak and the poor Congressman, a smart man but a fool, thought he was giving Bush vital information that Bush didn't already know.
Geeze. You know, Bush has known about this the same number of years I have: 31 years. I lectured about this matter for years, back in the seventies. Then the media suddenly stopped talking to me when Reagan took over and only ABC has broken the silence.
Why did Bush pretend to be unaware of the most important issue wracking the oil industry? Well, readers of this blog know why. And this is why we all know there will be another "terrorist attack" on America. To unite us against some pathetic peasant community that happens to be sitting on some oil."
Wayne Madsen Report
Wayne Madsen Report
July 29, 2005 -- Ex-GOP Senator Warns Bush administration planning to fire Special Prosecutor Patrick Fitzgerald as US Attorney for Chicago. The Chicago Tribune is reporting today that former Republican Senator Peter Fitzgerald, who championed current CIA leak Special Prosecutor Patrick Fitzgerald for appointment as US Attorney for Chicago in Sept. 2001, is warning that because of the U.S. Attorney's high profile criminal investigations of former GOP Gov. George Ryan and Democratic Chicago Mayor Richard Daley, he may not be reappointed to his post when his four year term expires in late October. If Bush fails to nominate a replacement and Fitzgerald is not renominated, he will be able to serve as US Attorney until a replacement is named. It may not be coincidental that the Grand Jury investigating top White House officials for leaking the name of a covert CIA agent will also expire in October if it is not re-impaneled on a request by Special Prosecutor Fitzgerald. With the clock potentially running out for Patrick Fitzgerald, if there are indictments in the CIA leak, they will likely be issued within the next few months. Peter Fitzgerald, who is not related to the Special Prosecutor, believes that House Speaker Dennis Hastert, as the dean of the Illinois congressional delegation, will recommend to President Bush that Fitzgerald not be reappointed as U.S. Attorney. It is no secret that top Illinois Republicans, as well as the Daley political machine, are gunning for Patrick Fitzgerald. Daley has been a major supporter of Bush's foreign policy who joined the GOP in criticizing Illinois Democratic Senator Richard Durbin for his remarks about the interrogation tactics used on prisoners at Guantanamo Bay. It is doubtful Patrick Fitzgerald would be kept on as Special Prosecutor by Attorney General Alberto Gonzales if he is rejected by the White House for a second term as US Prosecutor -- a decision that would be seen as a loss in confidence in Fitzgerald by the Bush administration. The recent resignation of Patrick Fitzgerald's friend, career Justice Department prosecutor James Comey, as Deputy Attorney General -- and Fitzgerald's immediate supervisor -- is also a warning sign that the Bush administration is growing uncomfortable with the direction of Fitzgerald's investigation. Comey is to be replaced by Timothy E. Flanigan, a conservative GOP political hack and a Federalist Society colleague of Supreme Court nominee John G. Roberts. Flanigan, along with Roberts, was a member of the 2000 Florida GOP recount team. Flanigan was later the general counsel for the scandal-plagued Tyco International Ltd., which is conveniently headquartered in Bermuda as a contrivance to avoid paying U.S. corporate taxes. While at Tyco, Flanigan liaised with tainted GOP lobbyist Jack Abramoff and his Greenberg Traurig law firm.
July 29, 2005 -- Ex-GOP Senator Warns Bush administration planning to fire Special Prosecutor Patrick Fitzgerald as US Attorney for Chicago. The Chicago Tribune is reporting today that former Republican Senator Peter Fitzgerald, who championed current CIA leak Special Prosecutor Patrick Fitzgerald for appointment as US Attorney for Chicago in Sept. 2001, is warning that because of the U.S. Attorney's high profile criminal investigations of former GOP Gov. George Ryan and Democratic Chicago Mayor Richard Daley, he may not be reappointed to his post when his four year term expires in late October. If Bush fails to nominate a replacement and Fitzgerald is not renominated, he will be able to serve as US Attorney until a replacement is named. It may not be coincidental that the Grand Jury investigating top White House officials for leaking the name of a covert CIA agent will also expire in October if it is not re-impaneled on a request by Special Prosecutor Fitzgerald. With the clock potentially running out for Patrick Fitzgerald, if there are indictments in the CIA leak, they will likely be issued within the next few months. Peter Fitzgerald, who is not related to the Special Prosecutor, believes that House Speaker Dennis Hastert, as the dean of the Illinois congressional delegation, will recommend to President Bush that Fitzgerald not be reappointed as U.S. Attorney. It is no secret that top Illinois Republicans, as well as the Daley political machine, are gunning for Patrick Fitzgerald. Daley has been a major supporter of Bush's foreign policy who joined the GOP in criticizing Illinois Democratic Senator Richard Durbin for his remarks about the interrogation tactics used on prisoners at Guantanamo Bay. It is doubtful Patrick Fitzgerald would be kept on as Special Prosecutor by Attorney General Alberto Gonzales if he is rejected by the White House for a second term as US Prosecutor -- a decision that would be seen as a loss in confidence in Fitzgerald by the Bush administration. The recent resignation of Patrick Fitzgerald's friend, career Justice Department prosecutor James Comey, as Deputy Attorney General -- and Fitzgerald's immediate supervisor -- is also a warning sign that the Bush administration is growing uncomfortable with the direction of Fitzgerald's investigation. Comey is to be replaced by Timothy E. Flanigan, a conservative GOP political hack and a Federalist Society colleague of Supreme Court nominee John G. Roberts. Flanigan, along with Roberts, was a member of the 2000 Florida GOP recount team. Flanigan was later the general counsel for the scandal-plagued Tyco International Ltd., which is conveniently headquartered in Bermuda as a contrivance to avoid paying U.S. corporate taxes. While at Tyco, Flanigan liaised with tainted GOP lobbyist Jack Abramoff and his Greenberg Traurig law firm.
DIPLOMATIC CABLES
DIPLOMATIC CABLES
DIPLOMATIC CABLES 07/30/2005
calipari1.jpg (5297 bytes)
Did Calipari know too much about "third level" control of terrorist groups?
nejad.jpg (2979 bytes)
Ahmadinejad did not wear a beard in 1979.
Cambone.jpg (3528 bytes)
Pentagon Intelligence Chief Stephen Cambone. Is he running a vigilante team from Pentagon that's masquerading as FBI and CIA agents?
airport.jpg (2390 bytes)
A number of US military-contractor incidents have taken place in and around Baghdad International Airport.
WASHINGTON, DC AND TASHKENT -- July 30, 2005 -- As first reported here on July 8, relations between Washington and Tashkent finally boiled over after evidence that Pentagon special operations teams were involved in the Islamist revolt against President Islam Karimov's government in the town of Andijan on May 17. On July 29, Tashkent formally evicted the United States from its airbase at Karshi-Khanabad, also known as "K2." The Pentagon was given 180 days to evacuate all personnel, aircraft, and equipment from the base, which had been used by the United States since the Afghan war broke out following 911. The State Department was apparently blindsided by the abrupt Uzbek decision. It planned to send a diplomat to Tashkent on August 2 to negotiate the base's future. However, Defense Secretary Donald Rumsfeld had already decided to scrap K2 after he secured continued basing rights in Kyrgyzstan and Tajikistan. The Uzbek media has been abuzz with revelations that Pentagon special operations teams secretly met in Afghanistan with Tohir Yoldashev and members of his Islamic Movement of Uzbekistan (IMU), a group the U.S. State Department considers a terrorist organization allied to "Al Qaeda." The meetings were reported to have occurred before and after the Andijan revolt, which was blamed on IMU forces. The US-IMU meetings in Afghanistan were also referenced in an article in Asia Times by India's former ambassador to Uzbekistan and Turkey, M. K. Bhadrakumar.
The Uzbek government obviously believes the Pentagon has been dealing with terrorist groups and decided to deny the Americans a base from which they might be using to foment Islamist terrorist operations in Uzbekistan and in surrounding countries.
DIPLOMATIC CABLES 07/30/2005
calipari1.jpg (5297 bytes)
Did Calipari know too much about "third level" control of terrorist groups?
nejad.jpg (2979 bytes)
Ahmadinejad did not wear a beard in 1979.
Cambone.jpg (3528 bytes)
Pentagon Intelligence Chief Stephen Cambone. Is he running a vigilante team from Pentagon that's masquerading as FBI and CIA agents?
airport.jpg (2390 bytes)
A number of US military-contractor incidents have taken place in and around Baghdad International Airport.
WASHINGTON, DC AND TASHKENT -- July 30, 2005 -- As first reported here on July 8, relations between Washington and Tashkent finally boiled over after evidence that Pentagon special operations teams were involved in the Islamist revolt against President Islam Karimov's government in the town of Andijan on May 17. On July 29, Tashkent formally evicted the United States from its airbase at Karshi-Khanabad, also known as "K2." The Pentagon was given 180 days to evacuate all personnel, aircraft, and equipment from the base, which had been used by the United States since the Afghan war broke out following 911. The State Department was apparently blindsided by the abrupt Uzbek decision. It planned to send a diplomat to Tashkent on August 2 to negotiate the base's future. However, Defense Secretary Donald Rumsfeld had already decided to scrap K2 after he secured continued basing rights in Kyrgyzstan and Tajikistan. The Uzbek media has been abuzz with revelations that Pentagon special operations teams secretly met in Afghanistan with Tohir Yoldashev and members of his Islamic Movement of Uzbekistan (IMU), a group the U.S. State Department considers a terrorist organization allied to "Al Qaeda." The meetings were reported to have occurred before and after the Andijan revolt, which was blamed on IMU forces. The US-IMU meetings in Afghanistan were also referenced in an article in Asia Times by India's former ambassador to Uzbekistan and Turkey, M. K. Bhadrakumar.
The Uzbek government obviously believes the Pentagon has been dealing with terrorist groups and decided to deny the Americans a base from which they might be using to foment Islamist terrorist operations in Uzbekistan and in surrounding countries.
Saturday, July 30, 2005
CON: Western moral weakness has emboldened Islamic terror
CON: Western moral weakness has emboldened Islamic terror
BG: Wow, what trash here in the local Gannett newspaper!
BG: Wow, what trash here in the local Gannett newspaper!
Outward Bound? - Newsweek World News - MSNBC.com
Outward Bound? - Newsweek World News - MSNBC.com
BG: That's it. We just need to send Maxwell Smart out in the field to monitor all team building exercises. Maybe he can connect a bluetooth earpiece to his shoe phone.
BG: That's it. We just need to send Maxwell Smart out in the field to monitor all team building exercises. Maybe he can connect a bluetooth earpiece to his shoe phone.
Judge rules against parts of Patriot Act - Terrorism & Security - MSNBC.com
Judge rules against parts of Patriot Act - Terrorism & Security - MSNBC.com
BG: What a crazy Judge! Doesn't he realise that we are living in post 9/11 world. Congress studied and debated these issues thoroughly and they knew that anything less will simply let the terrorist destroy us.
What, you say: There was almost no debate. Oh, well, that's ok. It's called the Patriot Act, and how could anything with such a beautiful name not be there to protect us. We need protection from those hateful murderous extremist Muslims... they hate our freedom. So we are going to show them... we won't let THEM take away our freedom. We take away our OWN freedom... that 'ill show 'em.
BG: What a crazy Judge! Doesn't he realise that we are living in post 9/11 world. Congress studied and debated these issues thoroughly and they knew that anything less will simply let the terrorist destroy us.
What, you say: There was almost no debate. Oh, well, that's ok. It's called the Patriot Act, and how could anything with such a beautiful name not be there to protect us. We need protection from those hateful murderous extremist Muslims... they hate our freedom. So we are going to show them... we won't let THEM take away our freedom. We take away our OWN freedom... that 'ill show 'em.
Shot to Death - Newsweek The War on Iraq - MSNBC.com
Shot to Death - Newsweek The War on Iraq - MSNBC.com
BG: All good Americans know we are just spreading Democracy, and any atrocities that we commit could not be nearly as bad as the terrorists' actions.
BG: All good Americans know we are just spreading Democracy, and any atrocities that we commit could not be nearly as bad as the terrorists' actions.
Suburban Guerrilla » Blog Archive » Brazen (Cafta)
Suburban Guerrilla » Blog Archive » Brazen"The thing that really alarms me about all this is the utter brazeness with which the loot is being divvied up now."
Suburban Guerrilla » Blog Archive » Personal Responsibility
Suburban Guerrilla » Blog Archive » Personal Responsibility"Federal prosecutors have declined to press charges of impersonating a Secret Service agent against a White House volunteer who forcibly ousted three people from a speech by President George W. Bush in Denver on March 21. The announcement was made without explanation Friday in a letter from the Secret Service to Colorado Sen. Ken Salazar and Reps. Mark Udall and Diana DeGette, all Democrats who had asked for the agency to investigate the incident."
Salon.com Books | What Kevin Trudeau doesn't want you to know
Salon.com Books | What Kevin Trudeau doesn't want you to knowWhat Kevin Trudeau doesn't want you to know about
The author of the bestselling "Natural Cures 'They' Don't Want You to Know About" claims to be a consumer advocate in the Ralph Nader mold. But the infomercial king just wants your cash.
- - - - - - - - - - - -
By Christopher Dreher
printe-mail
July 26, 2005 | Many a late-night channel surfer has been numbed to sleep by endless infomercials hawking ab machines, penis enlargers, psychic readings and baldness cures. But how about a 30-minute faux talk show featuring a slick "expert author" who promises natural cures for cancer, diabetes and chronic fatigue syndrome and who claims that the FDA, drug companies and food industry have withheld such cures from the public in order to keep making bigger and bigger profits?
Step right up folks, and tune in to the paranoid world of master huckster Kevin Trudeau, whose book "Natural Cures 'They' Don't Want You to Know About" climbed to the top spot on the New York Times bestseller list for advice titles last weekend. The Federal Trade Commission virtually banned Trudeau from the airwaves last year in an attempt to "shut down an infomercial empire that has misled American consumers for years." But by shifting his business model from selling supposed cure-all products to peddling books, which are protected by the First Amendment, Trudeau has been able to slip past federal regulators and continue to sell snake oil to the masses -- first through his infomercial and now via mainstream book retailers like Amazon.com and Barnes & Noble.
Reno R. Rollé, an executive consultant who handles U.S. retail and international distribution for "Natural Cures," says the book has sold nearly 3 million copies since the infomercial debuted in September 2004, and he sees no end in sight to its success. "No one knows where this thing is going to max out. We're just printing as many books as we can," Rollé says. "We're poised to make history here. What we're doing could revolutionize the book publishing industry."
Even before hitting the bestseller list, Trudeau, who is in his early 40s, had built a billion-dollar empire as a prolific infomercialteer, selling various health and self-improvement products under the cover of night. This despite a two-year stint in federal prison in the early '90s after pleading guilty to credit card fraud, and a 1996 tangle with the Illinois attorney general, who accused him of running a pyramid scheme while working for a health-products company called Nutrition for Life. Trudeau and a co-defendant settled that case, paying $185,000 to Illinois and seven other states; during that time, the U.S. Postal Service and Securities and Exchange Commission also investigated his business dealings.
A close look at Trudeau's later run-in with the FTC, in 1998, during which he and seven cohorts were accused of making "false or unsubstantiated" claims in advertisements on radio and television infomercials, sheds much needed light on his character and says a lot about how seriously (or not) we should take "Natural Cures." Ads for the "Sable Hair Farming System," Trudeau's own "Mega Memory System," "Doctor Callahan's Addiction Breaking System," "Action Reading," "Eden's Secret Nature's Purifying Product" and "Howard Berg's Mega Reading" all came under scrutiny they could not withstand.
"We're going to be sharing Dr. Callahan's revolutionary breakthrough that he discovered while studying quantum physics," the addiction infomercial went, before claiming that the system cured compulsive eating, as well as alcohol, cocaine and heroin addiction, and led to weight loss without dieting or exercise. "This technique will take 60 seconds to apply and works virtually 100 percent of the time," the FTC noted as another claim. It said that the "videotape sold in the infomercial showed Dr. Callahan demonstrating his technique -- a series of gestures, including tapping the face, chest and hand; rolling the eyes; and humming, which, if mimicked, were the supposed addiction cure." The claims were false, according to the FTC.
Another Trudeau product, "Howard Berg's Mega Reading," offered a home study program guaranteed to boost reading speed and comprehension 10 times over. "I have a letter here from a girl who has brain damage," Berg confided in another infomercial. "She was in a car accident and half her brain stopped functioning. It was electrically dead." According to the FTC, "he then claimed that after using his system for a brief period -- as long as a coffee break -- her reading speed increased from three to 600 words per minute..." Not surprisingly, the FTC deemed the Berg program bogus as well.
And Trudeau's own "Mega Memory System," which asserted that everyone has an innate photographic memory that could be tapped into with his help, was unmasked too. To show how fraudulent the system was, the FTC cited snippets of the infomercial, such as: "Kevin Trudeau's breakthrough techniques were developed while working with blind and mentally handicapped students. Their recall ability increased from 15% to 90% in just 5 days," as well as the infomercial's claim that the system was "guaranteed to work for you."
In the end, Trudeau settled the case; he was fined $500,000 in consumer redress and warned against making false product claims in the future. But this didn't deter him. In 2003, the FTC charged Trudeau once more, this time citing another product, Coral Calcium Supreme. The FTC argued that claims made in Trudeau's infomercial by Dr. Robert "Bob" Barefoot that calcium derived from coral reefs near Okinawa, Japan, could treat or cure cancer and other ills -- such as multiple sclerosis and heart disease -- went far beyond existing scientific evidence concerning the health benefits of calcium. Trudeau settled that case as well. But this time, in addition to being fined $2 million, he was also banned from "appearing in, producing, or disseminating future infomercials that advertise any type of product, service, or program to the public" forever.
Afterward, Trudeau loudly complained that the FTC was censoring him and started a Web site called The Whistleblower, on which he tries to fashion himself as a new Ralph Nader -- a selfless consumer advocate opposing powerful institutions and defending regular folk. But Trudeau's claims of persecution and martyrdom are hard to swallow for many. "He wasn't censored -- that's just total fantasy," says Dr. Stephen Barrett, a health-fraud expert who runs a network of watchdog Web sites, including Quackwatch. "What's happened is that he's just not allowed to sell products with false claims. That's the only censorship going on."
"Trudeau is the undisputed king of false infomercial advertising," he continues. Barrett's alarm over Trudeau's tactics heightened with the coral calcium infomercial. "It was just one lie after another, all orchestrated by Trudeau," Barrett says. He isn't any more impressed by Trudeau's current infomercial for the bestselling "Natural Cures 'They' Don't Want You to Know About."
The book, which Trudeau self-published, is a paranoid mixture of self-evident and widely known health facts with very few, if any, natural cures. It is almost amusingly campy -- except that the information is so odd, and alarmist. "Natural Cures" is poorly sourced and peppered with jaw-dropping absurdities, such as "The sun does not cause cancer. Sun block has been shown to cause cancer" or "All over-the-counter nonprescription drugs and prescription drugs CAUSE illness and disease." Or, this tribute to logic and language: "If you read the labels of everything you put in your mouth, you would see the name [sic] of various chemicals. All the chemicals listed are dangerous man-made chemicals. They are poisons. If you were to take any of those chemicals and ingest a large amount at one time, you would probably die. Therefore they are in fact poisons."
His prose style mimics the gibberish favored by online spam advertisements, and he frequently uses SCREAM CAPS to emphasize OBVIOUS POINTS. At one point, Trudeau implies that he was an undercover government agent and that, because of his inside knowledge, the government and powerful corporations are out to get him -- though he doesn't share what any of his highly prized knowledge is. And always lurking somewhere is the nefarious "They" of the book's title -- the FDA and the FTC, who are in cahoots with the drug companies, which hold back the real natural cures because they won't make any money if you're healthy.
On every page, he stokes the paranoia and anger generated by recent high-profile corporate and government scandals, as well as the ire against the health insurance and pharmaceutical industries. But don't worry, not only will his book save you, but you can also go to his Web site, NaturalCures.com, for more information and for the "real cures," all for a lifetime membership of $499 or a monthly fee of just $9.95. In essence, the infomercial sells the book, which sells the Web site --which nets Trudeau tons of money.
But there's nothing strictly illegal about Trudeau and "Natural Cures." Heather Hippsley, assistant director for the division of advertising practices at the FTC, who supervised the commission's case against Trudeau, explains: "Books are fully protected speech. He can author a book and voice his opinions ... The line is: Informational materials, OK. Products and services, banned."
Peer-review systems -- like the one in place on Amazon.com -- do their best work in warning potential buyers of bad or faulty products. On the Amazon site, over 500 people have weighed in on "Natural Cures" so far. Yet, although reviews have been almost overwhelmingly negative -- in Amazon's "star rating" scheme, the book is averaging a two -- sales haven't slowed. Despite headlines like "'Scams they don't want you to know about"; "Trudeau is worse than the drug companies!"; "Left feeling totally duped"; "Natural Cures he Contiunous [sic] Not to Tell U About"; and "The Book Just Simply Sucks," "Natural Cures" hovers at the top of the Amazon bestseller list week after week.
Indeed, all the negative Amazon reviews in the world probably won't keep people from checking out "Natural Cures." "What's driving sales is not people buying the book but people buying the infomercial," says Sam Catanese, president and CEO of Infomercial Monitoring Service, which tracks the direct-response television marketing industry. In fact, according to Catanese's data, "Natural Cures" was recently the most-run infomercial on television -- 139 times in one week. (The runner-up was a distant second, appearing 96 times.)
As for the television broadcasters' responsibilities in this issue, they've turned a blind eye to Trudeau and his type. "[The Federal Communications Commission] has never been inclined to take anyone's licenses away because the industry they nominally regulate actually regulates them," says Todd Gitlin, a professor of journalism and sociology at Columbia University. "The industry is too powerful to contend with, and regulation is largely farcical, except when there's political teeth biting, as in the case of Janet Jackson."
It was Reno Rollé who initially urged Trudeau to combine his extensive experience in infomercials with the book business. "I suggested he focus less on hard products, ingestibles, and more on information and newsletters," he says. "That way he could find a safe harbor under First Amendment protections." They teamed up to see if, and how, it would work. "No one knew how a book would behave," he says. "Initially we treated the book as just a product that shouldn't behave differently than a stomach exerciser or kitchen utensils." It's a strategy that paid off handsomely.
"The infomercial business is very standardized," Rollé continues. "You put the product on TV first to create awareness and sell a large number of 'units.' Then, after a period of time, you pull trigger and head out to retail." And once a product hits retail, as "Natural Cures" did just four weeks ago, Rollé says, the industry standard is to sell two to 10 times as many "units" as were sold on TV.
Although Rollé could not give figures about the amount of advertising time being purchased for "Natural Cures," one source in the direct-response industry who asked not to be named estimated that Trudeau is spending a million dollars a week on national cable and could also be spending another half a million on broadcast channels. The source suggested that Trudeau's return from that investment would be about $2 million to $4 million a week. "He's got the formula down and he knows how to trick people," says the source. "And he's got enough money to do it. The FTC can't stop him because the amount they fine him is nothing compared to what he takes in."
Besides reader complaints on Amazon, there's other evidence that buyers of "Natural Cures" are feeling ripped off. Tim Young, an Alabama-based publisher of community maps and local directories, has had trouble for the last four months because Trudeau's marketing company that "publishes" "Natural Cures" chose the same name as his business, Alliance Publishing Group. Young has received hundreds and hundreds of calls about the book from booksellers, distributors and agents -- but mostly from angry readers. "I don't even answer my phone anymore if I don't recognize the number," Young says. "I'm getting all this e-mail from people who are pissed off because they bought the book for cures and there's no real info in the book and they have to go to a Web site and pay money to learn anything."
Trudeau isn't hoping to cash in on only one book, either. A few months before "Natural Cures" was released for retail sale, Trudeau contacted publishing giant HarperCollins about an early-'90s version of his infomercial spin-off "Mega Memory" book, which was on their backlist. HarperCollins has repackaged the book to resemble Trudeau's current bestseller and it will be re-released in mid-August, when "Natural Cures" will certainly still be hot. HarperCollins has also slapped "As Seen on TV!" and "By the bestselling author of Natural Cures They Don't Want You To Know About" prominently on the book's cover.
The FTC's Hippsley told Salon that while her agency will continue to keep a careful eye on Trudeau's publishing activities, the Constitution does offer him protection. "He can put that book out there, and if consumers choose to purchase it, that's lawful. Unfortunately, there are individuals out there whose career is to do consumer frauds."
But some First Amendment experts point out that there are limits. "Nobody has a right to engage in fraud, even when the fraud takes the form of speech," says Richard H. Fallon, a professor of constitutional law at Harvard Law School. "What, if any, laws does someone break when [engaging] in false or misleading speech? Generally none, because the First Amendment wouldn't allow punishment for [that]. But one of the exceptions is that false and misleading speech can be prohibited or prevented when that speech is closely tied to commercial activity," he says.
Meanwhile, Trudeau recently filed a lawsuit himself -- against the FTC. In it, he maintains that its September 2004 press release announcing his ban from infomercials contained false and misleading information, implying that Trudeau was banned from all infomercials and didn't distinguish his literary allowances.
Trudeau continues to spin his career as a struggle against the censorship of a vengeful FTC and the tyranny of legal groups that won't let him lie in commercials or bilk consumers. But now, Trudeau is shooting even higher than emulating Ralph Nader. He recently told BrandWeek, "Rosa Parks and Cesar Chavez and Gandhi and Martin Luther King" are the figures he looks to for inspiration. We can only hope he has less success than those civil rights heroes.
- - - - - - - - - - - -
About the writer
Christopher Dreher is a writer living in Plymouth, Massachusetts.
The author of the bestselling "Natural Cures 'They' Don't Want You to Know About" claims to be a consumer advocate in the Ralph Nader mold. But the infomercial king just wants your cash.
- - - - - - - - - - - -
By Christopher Dreher
printe-mail
July 26, 2005 | Many a late-night channel surfer has been numbed to sleep by endless infomercials hawking ab machines, penis enlargers, psychic readings and baldness cures. But how about a 30-minute faux talk show featuring a slick "expert author" who promises natural cures for cancer, diabetes and chronic fatigue syndrome and who claims that the FDA, drug companies and food industry have withheld such cures from the public in order to keep making bigger and bigger profits?
Step right up folks, and tune in to the paranoid world of master huckster Kevin Trudeau, whose book "Natural Cures 'They' Don't Want You to Know About" climbed to the top spot on the New York Times bestseller list for advice titles last weekend. The Federal Trade Commission virtually banned Trudeau from the airwaves last year in an attempt to "shut down an infomercial empire that has misled American consumers for years." But by shifting his business model from selling supposed cure-all products to peddling books, which are protected by the First Amendment, Trudeau has been able to slip past federal regulators and continue to sell snake oil to the masses -- first through his infomercial and now via mainstream book retailers like Amazon.com and Barnes & Noble.
Reno R. Rollé, an executive consultant who handles U.S. retail and international distribution for "Natural Cures," says the book has sold nearly 3 million copies since the infomercial debuted in September 2004, and he sees no end in sight to its success. "No one knows where this thing is going to max out. We're just printing as many books as we can," Rollé says. "We're poised to make history here. What we're doing could revolutionize the book publishing industry."
Even before hitting the bestseller list, Trudeau, who is in his early 40s, had built a billion-dollar empire as a prolific infomercialteer, selling various health and self-improvement products under the cover of night. This despite a two-year stint in federal prison in the early '90s after pleading guilty to credit card fraud, and a 1996 tangle with the Illinois attorney general, who accused him of running a pyramid scheme while working for a health-products company called Nutrition for Life. Trudeau and a co-defendant settled that case, paying $185,000 to Illinois and seven other states; during that time, the U.S. Postal Service and Securities and Exchange Commission also investigated his business dealings.
A close look at Trudeau's later run-in with the FTC, in 1998, during which he and seven cohorts were accused of making "false or unsubstantiated" claims in advertisements on radio and television infomercials, sheds much needed light on his character and says a lot about how seriously (or not) we should take "Natural Cures." Ads for the "Sable Hair Farming System," Trudeau's own "Mega Memory System," "Doctor Callahan's Addiction Breaking System," "Action Reading," "Eden's Secret Nature's Purifying Product" and "Howard Berg's Mega Reading" all came under scrutiny they could not withstand.
"We're going to be sharing Dr. Callahan's revolutionary breakthrough that he discovered while studying quantum physics," the addiction infomercial went, before claiming that the system cured compulsive eating, as well as alcohol, cocaine and heroin addiction, and led to weight loss without dieting or exercise. "This technique will take 60 seconds to apply and works virtually 100 percent of the time," the FTC noted as another claim. It said that the "videotape sold in the infomercial showed Dr. Callahan demonstrating his technique -- a series of gestures, including tapping the face, chest and hand; rolling the eyes; and humming, which, if mimicked, were the supposed addiction cure." The claims were false, according to the FTC.
Another Trudeau product, "Howard Berg's Mega Reading," offered a home study program guaranteed to boost reading speed and comprehension 10 times over. "I have a letter here from a girl who has brain damage," Berg confided in another infomercial. "She was in a car accident and half her brain stopped functioning. It was electrically dead." According to the FTC, "he then claimed that after using his system for a brief period -- as long as a coffee break -- her reading speed increased from three to 600 words per minute..." Not surprisingly, the FTC deemed the Berg program bogus as well.
And Trudeau's own "Mega Memory System," which asserted that everyone has an innate photographic memory that could be tapped into with his help, was unmasked too. To show how fraudulent the system was, the FTC cited snippets of the infomercial, such as: "Kevin Trudeau's breakthrough techniques were developed while working with blind and mentally handicapped students. Their recall ability increased from 15% to 90% in just 5 days," as well as the infomercial's claim that the system was "guaranteed to work for you."
In the end, Trudeau settled the case; he was fined $500,000 in consumer redress and warned against making false product claims in the future. But this didn't deter him. In 2003, the FTC charged Trudeau once more, this time citing another product, Coral Calcium Supreme. The FTC argued that claims made in Trudeau's infomercial by Dr. Robert "Bob" Barefoot that calcium derived from coral reefs near Okinawa, Japan, could treat or cure cancer and other ills -- such as multiple sclerosis and heart disease -- went far beyond existing scientific evidence concerning the health benefits of calcium. Trudeau settled that case as well. But this time, in addition to being fined $2 million, he was also banned from "appearing in, producing, or disseminating future infomercials that advertise any type of product, service, or program to the public" forever.
Afterward, Trudeau loudly complained that the FTC was censoring him and started a Web site called The Whistleblower, on which he tries to fashion himself as a new Ralph Nader -- a selfless consumer advocate opposing powerful institutions and defending regular folk. But Trudeau's claims of persecution and martyrdom are hard to swallow for many. "He wasn't censored -- that's just total fantasy," says Dr. Stephen Barrett, a health-fraud expert who runs a network of watchdog Web sites, including Quackwatch. "What's happened is that he's just not allowed to sell products with false claims. That's the only censorship going on."
"Trudeau is the undisputed king of false infomercial advertising," he continues. Barrett's alarm over Trudeau's tactics heightened with the coral calcium infomercial. "It was just one lie after another, all orchestrated by Trudeau," Barrett says. He isn't any more impressed by Trudeau's current infomercial for the bestselling "Natural Cures 'They' Don't Want You to Know About."
The book, which Trudeau self-published, is a paranoid mixture of self-evident and widely known health facts with very few, if any, natural cures. It is almost amusingly campy -- except that the information is so odd, and alarmist. "Natural Cures" is poorly sourced and peppered with jaw-dropping absurdities, such as "The sun does not cause cancer. Sun block has been shown to cause cancer" or "All over-the-counter nonprescription drugs and prescription drugs CAUSE illness and disease." Or, this tribute to logic and language: "If you read the labels of everything you put in your mouth, you would see the name [sic] of various chemicals. All the chemicals listed are dangerous man-made chemicals. They are poisons. If you were to take any of those chemicals and ingest a large amount at one time, you would probably die. Therefore they are in fact poisons."
His prose style mimics the gibberish favored by online spam advertisements, and he frequently uses SCREAM CAPS to emphasize OBVIOUS POINTS. At one point, Trudeau implies that he was an undercover government agent and that, because of his inside knowledge, the government and powerful corporations are out to get him -- though he doesn't share what any of his highly prized knowledge is. And always lurking somewhere is the nefarious "They" of the book's title -- the FDA and the FTC, who are in cahoots with the drug companies, which hold back the real natural cures because they won't make any money if you're healthy.
On every page, he stokes the paranoia and anger generated by recent high-profile corporate and government scandals, as well as the ire against the health insurance and pharmaceutical industries. But don't worry, not only will his book save you, but you can also go to his Web site, NaturalCures.com, for more information and for the "real cures," all for a lifetime membership of $499 or a monthly fee of just $9.95. In essence, the infomercial sells the book, which sells the Web site --which nets Trudeau tons of money.
But there's nothing strictly illegal about Trudeau and "Natural Cures." Heather Hippsley, assistant director for the division of advertising practices at the FTC, who supervised the commission's case against Trudeau, explains: "Books are fully protected speech. He can author a book and voice his opinions ... The line is: Informational materials, OK. Products and services, banned."
Peer-review systems -- like the one in place on Amazon.com -- do their best work in warning potential buyers of bad or faulty products. On the Amazon site, over 500 people have weighed in on "Natural Cures" so far. Yet, although reviews have been almost overwhelmingly negative -- in Amazon's "star rating" scheme, the book is averaging a two -- sales haven't slowed. Despite headlines like "'Scams they don't want you to know about"; "Trudeau is worse than the drug companies!"; "Left feeling totally duped"; "Natural Cures he Contiunous [sic] Not to Tell U About"; and "The Book Just Simply Sucks," "Natural Cures" hovers at the top of the Amazon bestseller list week after week.
Indeed, all the negative Amazon reviews in the world probably won't keep people from checking out "Natural Cures." "What's driving sales is not people buying the book but people buying the infomercial," says Sam Catanese, president and CEO of Infomercial Monitoring Service, which tracks the direct-response television marketing industry. In fact, according to Catanese's data, "Natural Cures" was recently the most-run infomercial on television -- 139 times in one week. (The runner-up was a distant second, appearing 96 times.)
As for the television broadcasters' responsibilities in this issue, they've turned a blind eye to Trudeau and his type. "[The Federal Communications Commission] has never been inclined to take anyone's licenses away because the industry they nominally regulate actually regulates them," says Todd Gitlin, a professor of journalism and sociology at Columbia University. "The industry is too powerful to contend with, and regulation is largely farcical, except when there's political teeth biting, as in the case of Janet Jackson."
It was Reno Rollé who initially urged Trudeau to combine his extensive experience in infomercials with the book business. "I suggested he focus less on hard products, ingestibles, and more on information and newsletters," he says. "That way he could find a safe harbor under First Amendment protections." They teamed up to see if, and how, it would work. "No one knew how a book would behave," he says. "Initially we treated the book as just a product that shouldn't behave differently than a stomach exerciser or kitchen utensils." It's a strategy that paid off handsomely.
"The infomercial business is very standardized," Rollé continues. "You put the product on TV first to create awareness and sell a large number of 'units.' Then, after a period of time, you pull trigger and head out to retail." And once a product hits retail, as "Natural Cures" did just four weeks ago, Rollé says, the industry standard is to sell two to 10 times as many "units" as were sold on TV.
Although Rollé could not give figures about the amount of advertising time being purchased for "Natural Cures," one source in the direct-response industry who asked not to be named estimated that Trudeau is spending a million dollars a week on national cable and could also be spending another half a million on broadcast channels. The source suggested that Trudeau's return from that investment would be about $2 million to $4 million a week. "He's got the formula down and he knows how to trick people," says the source. "And he's got enough money to do it. The FTC can't stop him because the amount they fine him is nothing compared to what he takes in."
Besides reader complaints on Amazon, there's other evidence that buyers of "Natural Cures" are feeling ripped off. Tim Young, an Alabama-based publisher of community maps and local directories, has had trouble for the last four months because Trudeau's marketing company that "publishes" "Natural Cures" chose the same name as his business, Alliance Publishing Group. Young has received hundreds and hundreds of calls about the book from booksellers, distributors and agents -- but mostly from angry readers. "I don't even answer my phone anymore if I don't recognize the number," Young says. "I'm getting all this e-mail from people who are pissed off because they bought the book for cures and there's no real info in the book and they have to go to a Web site and pay money to learn anything."
Trudeau isn't hoping to cash in on only one book, either. A few months before "Natural Cures" was released for retail sale, Trudeau contacted publishing giant HarperCollins about an early-'90s version of his infomercial spin-off "Mega Memory" book, which was on their backlist. HarperCollins has repackaged the book to resemble Trudeau's current bestseller and it will be re-released in mid-August, when "Natural Cures" will certainly still be hot. HarperCollins has also slapped "As Seen on TV!" and "By the bestselling author of Natural Cures They Don't Want You To Know About" prominently on the book's cover.
The FTC's Hippsley told Salon that while her agency will continue to keep a careful eye on Trudeau's publishing activities, the Constitution does offer him protection. "He can put that book out there, and if consumers choose to purchase it, that's lawful. Unfortunately, there are individuals out there whose career is to do consumer frauds."
But some First Amendment experts point out that there are limits. "Nobody has a right to engage in fraud, even when the fraud takes the form of speech," says Richard H. Fallon, a professor of constitutional law at Harvard Law School. "What, if any, laws does someone break when [engaging] in false or misleading speech? Generally none, because the First Amendment wouldn't allow punishment for [that]. But one of the exceptions is that false and misleading speech can be prohibited or prevented when that speech is closely tied to commercial activity," he says.
Meanwhile, Trudeau recently filed a lawsuit himself -- against the FTC. In it, he maintains that its September 2004 press release announcing his ban from infomercials contained false and misleading information, implying that Trudeau was banned from all infomercials and didn't distinguish his literary allowances.
Trudeau continues to spin his career as a struggle against the censorship of a vengeful FTC and the tyranny of legal groups that won't let him lie in commercials or bilk consumers. But now, Trudeau is shooting even higher than emulating Ralph Nader. He recently told BrandWeek, "Rosa Parks and Cesar Chavez and Gandhi and Martin Luther King" are the figures he looks to for inspiration. We can only hope he has less success than those civil rights heroes.
- - - - - - - - - - - -
About the writer
Christopher Dreher is a writer living in Plymouth, Massachusetts.
Sirotablog: Will Labor Be a Glutton for Punishment, Or Finally Punish the Gluttons?
Sirotablog: Will Labor Be a Glutton for Punishment, Or Finally Punish the Gluttons?
"The Kansas City Star has a fascinating article exploring why Kansas Democratic Rep. Dennis Moore sold out his party and America's middle class by being one of the 15 Democrats who cast the deciding vote for the Central American Free Trade Agreement (CAFTA)."
"The Kansas City Star has a fascinating article exploring why Kansas Democratic Rep. Dennis Moore sold out his party and America's middle class by being one of the 15 Democrats who cast the deciding vote for the Central American Free Trade Agreement (CAFTA)."
The Nation | Blog | The Daily Outrage | Outrageous Outtakes | Ari Berman
The Nation | Blog | The Daily Outrage | Outrageous Outtakes | Ari Berman"** Shortly after 9/11, President Bush issued an executive order restricting classified intelligence to 8 members of Congress in the House and Senate, effectively cutting 96 senators out of the loop. His reason for suddenly revoking the security clearances? "We can't have leaks of classified information," Bush said. "It's not in our nation's interest." If only the same standards applied to Scooter Libby and Karl Rove."
danieldrezner.com :: Daniel W. Drezner :: Quote of the day
danieldrezner.com :: Daniel W. Drezner :: Quote of the day
Quote of the day
Overheard at a Cato Institute talk I attended:
What have we gotten from Republicans controlling all the branches of government? A bloated entitlement state that eats its young, and a lot of buildings named after Ronald Reagan.
Quote of the day
Overheard at a Cato Institute talk I attended:
What have we gotten from Republicans controlling all the branches of government? A bloated entitlement state that eats its young, and a lot of buildings named after Ronald Reagan.
Culture of Life Media News: DARK MAGIC
Culture of Life Media News: DARK MAGIC
"Today, the BBC has an article about the psychology of magic. Understanding this is important if one wants to understand how the real world works and why people are so easy to fool."
"Today, the BBC has an article about the psychology of magic. Understanding this is important if one wants to understand how the real world works and why people are so easy to fool."
Friday, July 29, 2005
Christopher Bradley: Tony Blair Won't Give an Inch
Christopher Bradley: Tony Blair Won't Give an Inch
"But the invasion of Iraq was justified by the New York bombings? "
"But the invasion of Iraq was justified by the New York bombings? "
Council Task Force [CFR] Urges United States to Put Nation-building on Par with War-fighting
"A dramatic military victory has been overshadowed by chaos and bloodshed in the streets of Baghdad, difficulty in establishing security or providing essential services, and a deadly insurgency."
Outward Bound? - Newsweek World News - MSNBC.com
Outward Bound? - Newsweek World News - MSNBC.com
BG: Is there no limit to the nonsense that MSM will publish rather than speak the truth?
BG: Is there no limit to the nonsense that MSM will publish rather than speak the truth?
Should John Roberts be confirmed by the Senate for the Supreme Court? - Newsweek National News - MSNBC.com#survey#survey#survey
Should John Roberts be confirmed by the Senate for the Supreme Court? - Newsweek National News - MSNBC.com#survey#survey#survey
BG: Pretty much what I expected. Damn Repubs.
BG: Pretty much what I expected. Damn Repubs.
Thursday, July 28, 2005
Postman Patel: Scotland Yard man promoted
Postman Patel: Scotland Yard man promoted
BG: You've got to see the picture to appreciate the headline.
BG: You've got to see the picture to appreciate the headline.
Harry Shearer has a fun video of bow tie boy.
Eschaton: "Harry Shearer has a fun video of bow tie boy."
BELLACIAO - Christians against Bush : spreading the truth about September 11th - Collective Bellaciao
BELLACIAO - Christians against Bush : spreading the truth about September 11th - Collective Bellaciao: "Christians against Bush : spreading the truth about September 11th
1 comment(s).
Christians spreading the truth about September 11th
It was an inside job, and allowed to happen as a pretext to get the people behind the war.
(San Diego, CA) A book titled, 'The Resistance Manifesto' (ISBN: 0967346630) has just been published from a world wide network of Christians exposing the September 11th inside job, government prior knowledge, and the Bush family’s involvement in the attacks. Bold statements, backed by declassified documents, memos, and mainstream news reports, all of which paint a dark picture about what really happened that tragic morning.
For those people who don’t know, the terrorist attacks on September 11th were not an ‘intelligence failure’ as the official story states. The attacks were not only allowed to happen as a pretext, or a reason to get the population behind the war, but the hijackers were assets of the CIA, just like Osama Bin Laden. President Bush signed Presidential Decision Directive W199i, pulling FBI agents off of the suspected terrorists, ensuring they could continue their work, and the treason gets worse.
Despite popular belief, the CIA had run ‘drills’ of jets being hijacked and being used as weapons and the envisioned targets were the World Trade Center and the Pentagon. The anthrax which was sent through the mail following the suicide attacks was also an inside job perpetrated to create even more fear, ensuring the Patriot Act would pass and to get the American people to completely submit to the plans of the New World Order.
Aside from a pretext to the war on terror and the war in Iraq, the events have since been used to instill a sense of fear in the American people, and are being used to create a Police State in America, circumventing the constitution, and using RFIDs, VeriChip, and security cameras to keep track of"
1 comment(s).
Christians spreading the truth about September 11th
It was an inside job, and allowed to happen as a pretext to get the people behind the war.
(San Diego, CA) A book titled, 'The Resistance Manifesto' (ISBN: 0967346630) has just been published from a world wide network of Christians exposing the September 11th inside job, government prior knowledge, and the Bush family’s involvement in the attacks. Bold statements, backed by declassified documents, memos, and mainstream news reports, all of which paint a dark picture about what really happened that tragic morning.
For those people who don’t know, the terrorist attacks on September 11th were not an ‘intelligence failure’ as the official story states. The attacks were not only allowed to happen as a pretext, or a reason to get the population behind the war, but the hijackers were assets of the CIA, just like Osama Bin Laden. President Bush signed Presidential Decision Directive W199i, pulling FBI agents off of the suspected terrorists, ensuring they could continue their work, and the treason gets worse.
Despite popular belief, the CIA had run ‘drills’ of jets being hijacked and being used as weapons and the envisioned targets were the World Trade Center and the Pentagon. The anthrax which was sent through the mail following the suicide attacks was also an inside job perpetrated to create even more fear, ensuring the Patriot Act would pass and to get the American people to completely submit to the plans of the New World Order.
Aside from a pretext to the war on terror and the war in Iraq, the events have since been used to instill a sense of fear in the American people, and are being used to create a Police State in America, circumventing the constitution, and using RFIDs, VeriChip, and security cameras to keep track of"
Egypt Had Warning Before Deadly Attack - Yahoo! News
Egypt Had Warning Before Deadly Attack - Yahoo! News
BG: No point other than background in posting this.
BG: No point other than background in posting this.
Salon.com News | The victim and the killer - NP
Salon.com News | The victim and the killer - NP: "The victim and the killer
Yasser Salihee was an Iraqi journalist. Joe was an American sniper. On June 24, 2005, fate brought them together on a Baghdad street."
Yasser Salihee was an Iraqi journalist. Joe was an American sniper. On June 24, 2005, fate brought them together on a Baghdad street."
Guardian Unlimited | The Guardian | Brazilian did not wear bulky jacket
Guardian Unlimited | The Guardian | Brazilian did not wear bulky jacket
BG: This is about the "suspect" who was shot 8 times: 7 in the head, and 1 in the shoulder.
BG: This is about the "suspect" who was shot 8 times: 7 in the head, and 1 in the shoulder.
Bush Ignored US Military's Opposition To Torture
AMERICAblog: Because a great nation deserves the truth
Bush Ignored US Military's Opposition To Torture
Technorati Tag: PBU30 Abu Graibe
Bush Ignored US Military's Opposition To Torture
Technorati Tag: PBU30 Abu Graibe
WagNews: Ops in Disarray Over London Bombs Probe
WagNews: Ops in Disarray Over London Bombs Probe
BG: Whatreallyhappened.com just destroyed their credibility!
BG: Whatreallyhappened.com just destroyed their credibility!
The Price of an Ambassadorship - Newsweek Politics - MSNBC.com
The Price of an Ambassadorship - Newsweek Politics - MSNBC.com
BG: Of course, the average American will never read this news story, and has no idea how bad the Administration is.
BG: Of course, the average American will never read this news story, and has no idea how bad the Administration is.
Open Source � Blog Archive � Abu Ghraib, take two
Open Source � Blog Archive � Abu Ghraib, take two
BG: I was hoping this broadcast would be a good forum for PBU, and anti-war causes in general. It was mostly a white wash with incorrect statements that seemed to soften the seriousness of corruption from the top.
PBU30
BG: I was hoping this broadcast would be a good forum for PBU, and anti-war causes in general. It was mostly a white wash with incorrect statements that seemed to soften the seriousness of corruption from the top.
PBU30
Moral relativity in the age of terror - Scarborough Country - MSNBC.com
Moral relativity in the age of terror - Scarborough Country - MSNBC.comAnd yet Amnesty is so blinded of their hatred of America and its president that they can no longer tell right from wrong.
BG: What a surprise. I think Scarborough is expressing a completely dense thought again.
BG: What a surprise. I think Scarborough is expressing a completely dense thought again.
Bomb Probe - Newsweek National News - MSNBC.com
Bomb Probe - Newsweek National News - MSNBC.com
BG: What shouldn't Blair want a 7/7 Cover-Up Commission. Perhaps they can't find 10 shills and an Insider like Zelikow?
BG: What shouldn't Blair want a 7/7 Cover-Up Commission. Perhaps they can't find 10 shills and an Insider like Zelikow?
xymphora: The more they tell us, the less we know
xymphora: The more they tell us, the less we know: "The more they tell us, the less we know"
Wednesday, July 27, 2005
Army Probes Guard Unit
Army Probes Guard Unit: "A company of the California Army National Guard has been put on restricted duty and its battalion plunged into disarray amid allegations that battalion members mistreated detainees in Iraq and extorted shopkeepers, according to military officials and members of the unit."
Just when you thought CAFTA was dead, here comes Tom DeLay to get the deal done.
TAPPED: July 2005 Archives: "Just when you thought CAFTA was dead, here comes Tom DeLay to get the deal done. "
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