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Monday, October 09, 2006

Sen. Macaca: Better to be an idiot than crooked
Posted by Jill | 9:40 AM
Sorry no blogging yesterday, but I was on the road for 10 hours driving to NC for a family visit. I actually enjoy these drives. I had 146 tracks loaded onto the MP3 player (with 18MB still free, whee!), so it was 10 hours of odd segues among Green Day, Elvis Costello, Bob Marley, the Allman Bros. Band, the Avenue Q soundtrack, Bob Wilber and Kenny Davern, and that's only because i ran out of time to rip more before leaving. So aside from the yellowjackets that decided to take up residence in my car during a gasoline stop, it was a pretty enjoyable trip. But a day away from being online means you miss a lot of interesting news, including Senator George "Macaca" Allen deciding that he'd rather look like a moron than admit to being a crook:

For the past five years, Sen. George Allen (news, bio, voting record), has failed to tell Congress about stock options he got for his work as a director of a high-tech company. The Virginia Republican also asked the Army to help another business that gave him similar options.

Congressional rules require senators to disclose to the Senate all deferred compensation, such as stock options. The rules also urge senators to avoid taking any official action that could benefit them financially or appear to do so.

Those requirements exist so the public can police lawmakers for possible conflicts of interest, especially involving companies with government business that lawmakers can influence.

Allen's stock options date to the period from January 1998 to January 2001 when Allen was between political jobs and had plunged into the corporate world.

An Associated Press review of Allen's financial dealings from that era found that the senator:

_Did not have to look far to find corporate suitors, joining three Virginia high-tech companies he assisted as governor. Allen served on boards of directors for Xybernaut and Commonwealth Biotechnologies and advised a third company called Com-Net Ericsson, all government contractors.

_Twice failed to promptly alert the Securities and Exchange Commission of insider stock transactions as a Xybernaut and Commonwealth director. The SEC requires timely notification and can fine those who file late.

_Kept stock options provided to him for serving as a director of Xybernaut and Commonwealth, but steered other compensation from his board service to his law firm.

[snip]

Allen's office said he did not report his Commonwealth options on his past five Senate disclosure reports because their purchase price was higher than the current market value. Allen viewed them as worthless and believed in "good faith" he did not have to report them, aides said.

Allen disclosed the options once — on an amendment to his 2000 ethics report filed three months after the normal filing period ended. He excluded the options from subsequent reports.

When AP showed Allen's lawyer the Senate ethics manual requirement that such options must be reported each year regardless of value, the lawyer said he was unfamiliar with that provision. Allen has now asked the Senate ethics committee for an opinion on whether he should have disclosed them.

"While we continue to believe that we have disclosed more than is required, we will abide by the formal ruling of the committee," Allen spokesman John Reid said.

The disclosure requirements exist so the public can watch for potential conflicts of interest, and Allen had an obligation to report his Commonwealth stock options to Congress, two ethics experts said.

"As an ethical matter, it's irrelevant whether the exercise price of those stock options is above or below the current market price of the stock," said Kathleen Clark, a Washington University of St. Louis law professor, former prosecutor and former Democratic congressional aide.

"If he owns stock options, he does have such a financial stake, whether the exercise price is above or below current market value."


It's always amazing when companies hire guys like Allen supposedly for their expertise, and yet despite all the accountants and lawyers these guys know, they are always so completely ignorant of the laws and requirements of their compensation.
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