Hewlett-Packard Co named former eBay Inc Chief Executive Meg Whitman its president and CEO, replacing the harshly criticized Leo Apotheker in a bid to restore investor confidence in the iconic Silicon Valley company.

The decision was made without a formal CEO search and piled renewed criticism on the board, which investors have blamed -- at least in part -- for the storied company's recent missteps.

Chairman Ray Lane, who becomes Executive Chairman with a mandate to help Whitman run a sprawling $120 billion empire with over 300,000 employees, tried to assure disillusioned investors by saying HP is making a fresh start with a new CEO and -- crucially -- a virtually revamped board of directors.

Lane vowed that the days of board dysfunction -- the wire-tapping scandal, the firing of Mark Hurd after a sexual harassment probe, and the hiring of Apotheker -- were over.

The board works well together, he said.

"It's amazing how they challenge the management team, challenge each other," Lane said in an interview. "They are smart, they bring great insight to the table and I think we make good decisions."

Analysts had speculated that Apotheker's departure might presage a backtracking on major decisions taken during his 11-month term and announced -- back to back in haphazard fashion -- on August 18. But HP reassured investors on a conference call the board will not reverse course.

"I don't think we ought to be going back in history. This board did not select Leo. This is not the board that was around for pretexting," Lane said, referring to the scandal in which HP hired investigators who impersonated its board members and journalists to obtain their phone records.

"This is not the board that fired Mark Hurd," he noted. "We are embarrassed about the communications of decisions that could have been done much better. But we carefully considered the decisions made. It is our operating execution that needs to improve."

Whitman, an Internet retail expert with a mixed track record, is not an obvious choice to revive HP, analysts said. The failed California gubernatorial candidate transformed eBay from a few dozen employees in 1998 into a global Internet retail powerhouse, but the final years of her reign were marked by sputtering growth, intensifying Wall Street criticism and a string of unwise acquisitions, including of Skype.

She has been an HP director about eight months. While her elevation surprised many with its seeming hastiness -- for the second time, internal candidates such as enterprise chief David Donatelli were passed over -- Apotheker's ejection had been a matter of time.

He becomes the third straight HP CEO shown the door.

Labels: corporate assholes, Cronyism, incompetence, Teh Stoopid

What’s happening in Wisconsin is, instead, a power grab — an attempt to exploit the fiscal crisis to destroy the last major counterweight to the political power of corporations and the wealthy. And the power grab goes beyond union-busting. The bill in question is 144 pages long, and there are some extraordinary things hidden deep inside.

For example, the bill includes language that would allow officials appointed by the governor to make sweeping cuts in health coverage for low-income families without having to go through the normal legislative process.

And then there’s this: “Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).”

What’s that about? The state of Wisconsin owns a number of plants supplying heating, cooling, and electricity to state-run facilities (like the University of Wisconsin). The language in the budget bill would, in effect, let the governor privatize any or all of these facilities at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be “considered to be in the public interest.”

If this sounds to you like a perfect setup for cronyism and profiteering — remember those missing billions in Iraq? — you’re not alone. Indeed, there are enough suspicious minds out there that Koch Industries, owned by the billionaire brothers who are playing such a large role in Mr. Walker’s anti-union push, felt compelled to issue a denial that it’s interested in purchasing any of those power plants. Are you reassured?

Labels: corporatism, Cronyism, government for sale, Greedy Republican Bastards, Paul Krugman, Wisconsin 2011

KBR Inc. was selected for a no-bid contract worth as much as $568 million through 2011 for military support services in Iraq, the Army said.

The Army announced its decision yesterday only hours after the Justice Department said it will pursue a lawsuit accusing the Houston-based company of taking kickbacks from two subcontractors on Iraq-related work. The Army also awarded the work to KBR over objections from members of Congress, who have pushed the Pentagon to seek bids for further logistics contracts.

The Justice Department said the government will join a suit filed by whistleblowers alleging that two freight-forwarding firms gave KBR transportation department employees kickbacks in the form of meals, drinks, sports tickets and golf outings.

“Defense contractors cannot take advantage of the ongoing war effort by accepting unlawful kickbacks,” Assistant Attorney General Tony West said in a statement.

KBR, the Army’s largest contractor in Iraq, will review the litigation when it is received and “will continue to cooperate with the government,” company spokeswoman Heather Browne said in an e-mail. “Gifts of dinners, baseball tickets and similar items would violate KBR policies and KBR was not aware of these violations.”

KBR will continue to provide services in Iraq such as housing, meals, laundry, showers, water purification and bathroom cleaning under the new order, which was placed under a military contract KBR won in late 2001, shortly after the U.S. invaded Afghanistan.

Labels: corruption, Cronyism, KBR

Saudi Arabian prince Alwaleed bin Talal has come to the rescue of Citigroup with a much-needed cash injection today.

The surprise turnaround ended a two-year selloff that has wiped more than $200bn (£135bn) from the bank's market value.

The Saudi prince will increase his stake from about 4 to 5% in the coming days.

The move initially filled investors with confidence and sparked a buying spree before the bell. The shares surged 25 cents to $6.65, but then fell back to tumble by another 17.5%. Yesterday, they fell more than 22% in a single session while the stock is down more than 90% since 2006.

Based on Wednesday evening's closing price, the prince plans to invest about $349m of his fortune in Citigroup shares.

In a statement released at 9am in New York, Talal said he believed Citi's shares were "dramatically undervalued" and expressed "full and complete support to Citi management" including the embattled chief executive, Vikram Pandit.

He said the New York-based bank was "taking all the necessary steps to position the company to withstand the challenges facing the banking industry and the global economy".

Talal said he was "fully confident that Citigroup's universal banking model and global franchise will make it a long-term winner in the financial services industry".

In the short term, the latest effort to steady Citigroup has removed the risk that a sudden failure of the giant bank would send losses cascading through the financial industry.

But longer term, the new bailout could haunt regulators and taxpayers. The move ultimately may encourage banks to take more risks in the belief that the government will step in if they run into trouble.

With a recession looming, if not here already, banks big and small are bracing for more loans to sour, particularly those related to commercial real estate, autos and credit cards. Many are making fewer loans, even though the industry has received nearly $300 billion from the government.

Before long, anxious investors may start wondering which banks will be vulnerable next. If confidence fades, other big lenders will probably seek deals like Citigroup’s, in which the government has pledged to pick up potentially $290 billion in additional losses. Regulators drafted the plan with an eye to using it as a template for future bailouts.

There are other worries for Citigroup’s big rivals. Almost overnight, Citigroup went from being the sick man of the industry to an institution with an edge over its competitors. The government is guaranteeing $250 billion of risky assets and pumping an additional $20 billion into the bank.

With the government behind it, Citigroup may now be able to borrow money in the capital markets at lower interest rates than its peers.

“Citi has a decided advantage over them because of the loss-sharing agreement,” said John Kanas, the former chief executive of North Fork Bank of Long Island. While banks may hold out for now, it may be only a matter of time before they too line up, several analysts said.

Labels: bank failures, Bush Administration, Cronyism, House of Saud

The White House has increased its estimate for next year's deficit to nearly $490 billion, a record figure that will saddle the next president with deepening budget problems in his first year in office, a report due out today shows.

The projected deficit for the fiscal year that begins Oct. 1 is being driven higher by the continuing economic slowdown and larger than anticipated costs of the two-year, $168 billion fiscal stimulus package passed by Congress, said two senior administration officials with direct knowledge of the report.

Labels: Cronyism, government waste, incompetence, Republicans

The inspector general of the Department of Education has said he will examine whether federal money was inappropriately used by three states to buy educational products from a company owned by Neil Bush, the president’s brother.

John P. Higgins Jr., the inspector general, said he would review the matter after a group, Citizens for Responsibility and Ethics in Washington, detailed at least $1 million in spending from the No Child Left Behind program by school districts in Texas, Florida and Nevada to buy products made by Mr. Bush’s company, Ignite Learning of Austin, Tex. Mr. Higgins stated his plans in a letter to the group sent last week.

Members of the group and other critics in Texas contend that school districts are buying Ignite’s signature product, the Curriculum on Wheels, because of political considerations. The product, they said, does not meet standards for financing under the No Child Left Behind Act, which allocates federal money to help students raise their achievement levels, particularly in elementary school reading.

Ignite, founded by Neil Bush in 1999, includes as investors his parents, former President George H. W. Bush and his wife, Barbara. Company officials say that about 100 school districts use the Curriculum on Wheels, known as the Cow, which is a portable classroom with software to teach middle-school social studies, science and math. The units cost about $3,800 each and require about $1,000 a year in maintenance.

Labels: Bush family, Cronyism, greed, Neil Bush

Here's a brief description of Operation Diamondback:

Randy Glass is a con artist turned government informant participating in a sting called Operation Diamondback. [Palm Beach Post, 9/29/01] He discusses an illegal weapons deal with an Egyptian American named Mohamed el Amir. In wiretapped conversations, Mohamed discusses the need to get false papers to disguise a shipment of illegal weapons. His brother, Dr. Magdy el Amir, has been a wealthy neurologist in Jersey City for the past twenty years. Two other weapons dealers later convicted in a sting operation involving Glass also lived in Jersey City, and both el Amirs admit knowing one of them, Diaa Mohsen. Mohsen has been paid at least once by Dr. el Amir.

In 1998, Congressman Ben Gilman was given a foreign intelligence report suggesting that Dr. el Amir owns an HMO that is secretly funded by bin Laden, and that money is being skimmed from the HMO to fund terrorist activities. The state of New Jersey later buys the HMO and determines that $15 million were unaccounted for and much of that has been diverted into hard-to-trace offshore bank accounts. However, investigators working with Glass are never given the report about Dr. el Amir. Both el Amirs have not been charged with any crime. Mohamed now lives in Egypt and Magdy continues to practice medicine in New Jersey. Glass's sting, which began in late 1998, will uncover many interesting leads before ending in June 2001 (see also July 14, 1999, Early August 2001 and August 2, 2002). [MSNBC 8/2/02]

In looking at this whole scenario, what I wanted to dig into was Mr. Chertoff's depth of involvement with Magdy Elamir, as his attorney -- a "follow the money" approach, if you will. Here's where the story of Chertoff's involvement starts: Medical Economics magazine, Oct. 25, 1999:

The HMO Graveyard: Why was this doctor allowed to start a health plan?

In September 1995, the state of New Jersey was looking for HMOs to participate in its new mandatory Medicaid managed care program. Neurologist Magdy Elamir, who only the month before had been granted a state license to operate an HMO, was eager to take part. Initially approved to serve a single county, Elamir's HMO--American Preferred Provider Plan--was soon allowed into 13 counties and covered 42,000 Medicaid recipients.

Yet, barely three years after enrolling its first patient, APPP lay in financial ruins, its network doctors and hospitals were saddled with millions of dollars in unpaid claims, and its founder had retained the services of Michael Chertoff, a well-known criminal defense attorney. (Elamir, who declined to be interviewed for this story, continues to live and practice in New Jersey. Neither his lawyer nor the state would confirm or deny that the doctor is the subject of a criminal investigation.)...

Given that Chertoff was representing Dr. Elamir in financial legal proceedings related to the HMO, wouldn't it make sense that Chertoff and his firm would have had unfettered access to Elamir's books, particularly with the accusation by the State of NJ that $15 million was unaccounted for in "offshore banking"? Sure - and in fact, a story in The Record (Bergen County, NJ), dated 12/18/98 ¹, reported that during a hearing on the failing HMO before a NJ Superior Court Judge...

...Chertoff presented a thick document from Elamir's accountant, Mohamed Hanafy, offering explanations for the money transfers from [the HMO] to other Elamir-controlled corporations.

Neither the NJ Deputy Attorney General or the judge were satisfied with the accounting - and it turns out that indeed, Elamir had been cooking the books. On June 20th, 2000 The Record ran another article² on Dr. Elamir being sued by the state over misappropriation of money from the failed HMO. In light of the Operation Diamondback story above, perhaps this paragraph takes on a bit more significance:

The state says it traced a good deal of the money transfers to the 17 affiliates, including medical imaging centers in Paterson, Passaic, Irvington, and Summit. But at least $ 5.7 million went "to unknown parties... by means of wire transfers to bank accounts where the beneficial owner of the account is unknown," the complaint says.

In other words, an offshore account for which no U.S. government agent could obtain information. And again in this article, Michael Chertoff is cited as Elamir's attorney.

Admittedly, this whole tale begins to take on strange proportions, particularly in light of the fact that one of the supposed defining qualities which Mr. Chertoff brings to the table is his apparent post-9/11 conversion in shutting down bin-Laden's financing network. Chertoff was the Bush administration's front man for Title III of the USA PATRIOT Act (also known as the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001). On January 29, 2002 Chertoff testified before the Senate Banking Committee:

Accordingly, preventing future terrorist attacks and bringing terrorists to justice is now the top priority of the Department of Justice. Law enforcement is currently engaged in a cooperative effort to identify, disrupt and dismantle terrorist networks. Terrorism requires financing, and terrorists rely on the flow of funds across international borders. To conceal their identities and their unlawful purpose, terrorists exploit weaknesses in domestic and international financial systems. As this Committee well knows, therefore, curtailing terrorism requires a systemic approach to investigating the financial links to the terrorist organizations.

Apparently, then-U.S. DOJ Assistant Attorney General Chertoff experienced a convenient lapse of memory - he had represented a client with direct (and admitted) links to potential terrorist networks. Not only that, given the nature of the proceedings against Dr. Elamir, the representation over the course of least a two year period had to have happened with full knowledge of the financial dealings of his client.

It's difficult to say where this story leads from here. There's a lot of coincidence that leaves room for investigation into the details of Mr. Chertoff's working on at least the fringes of a terrorist network. And maybe that's where the story of his nomination should lead.

Clay Johnson is the Deputy Director for Management at the Office of Management and Budget. The Deputy Director for Management provides government-wide leadership to Executive Branch agencies to improve agency and program performance. Prior to this he was the Assistant to the President for Presidential Personnel, responsible for the organization that identifies and recruits approximately 4000 senior officials, middle management personnel and part-time board and commission members.

From 1995 to 2000, Mr. Johnson worked with Governor George W. Bush in Austin, first as his Appointments Director, then as his Chief of Staff, and then as the Executive Director of the Bush-Cheney Transition.

Mr. Johnson has been the Chief Operating Officer for the Dallas Museum of Art and the President of the Horchow and Neiman Marcus Mail Order companies. He also has worked for Citicorp, Wilson Sporting Goods and Frito Lay.

He was a classmate of President George W. Bush at Phillips Academy, roommate and Delta Kappa Epsilon fraternity brother at Yale University,

Labels: Bush Administration, Cronyism

Attorney General Alberto R. Gonzales, whose tenure has been marred by controversy and accusations of perjury before Congress, has resigned. A senior administration official said he would announce the decision later this morning in Washington.

Mr. Gonzales, who had rebuffed calls for his resignation, submitted his to President Bush by telephone on Friday, the official said. His decision was not immediately announced, the official added, until after the president invited him and his wife to lunch at his ranch near here.

Mr. Bush has not yet chosen a replacement but will not leave the position open long, the official said, speaking on condition of anonymity because the Attorney General's resignation had not yet been made public.

Labels: Alberto Gonzales, Bush Administration, Cronyism, incompetence, Michael Chertoff

A senior lobbyist at the National Association of Manufacturers nominated by President Bush to lead the Consumer Product Safety Commission will receive a $150,000 departing payment from the association when he takes his new government job, which involves enforcing consumer laws against members of the association.

The lobbyist, Michael E. Baroody, wrote recently to the commission’s general counsel that the severance was an “extraordinary payment” under a federal ethics rule, requiring him to remove himself from agency matters involving the association for two years. Under the rule, a payment is “extraordinary” if an employer grants it after learning that the employee is being considered for a government position and it is not part of an established compensation or benefits program.

Mr. Baroody said in the letter that the payment would not prevent him from considering matters involving individual companies that are members of the manufacturers’ association, many of whom are defendants in agency proceedings over defective products or have other business before the commission. Nor would it preclude him from involvement with smaller trade groups like those representing makers of home appliances and children’s products that have alliances with the association.

As chairman of the commission, Mr. Baroody’s salary would be $154,600. With the severance payment and an additional lump sum of $44,571 for unused leave time, Mr. Baroody would receive $349,171 this year. That amount, which excludes Mr. Baroody’s pension and retirement payments, nearly matches the $344,607 salary that Mr. Baroody earned as the second-highest-paid executive at the association last year.

The nomination of Mr. Baroody, executive vice president at the association, has provoked heavy criticism from Democrats and consumer groups. He is the latest in a line of industry officials and lobbyists to be given senior jobs by Mr. Bush at federal safety agencies that oversee matters like workplace and mine safety and transportation as the administration has sought to roll back hundreds of regulations that businesses viewed as excessive.

As a major trade organization for the largest companies in the country, the National Association of Manufacturers often has issues before the Consumer Product Safety Commission. It recently prevailed on the agency, for instance, to relax the requirements for when companies must notify the agency about defective products. The White House, Mr. Baroody and the commission would not make available the letter that Mr. Baroody wrote describing the $150,000 payment. A copy was provided by a Democratic Congressional aide who found it in Mr. Baroody’s nomination file in the Senate.

A spokeswoman for the White House, Emily Lawrimore, said the administration was satisfied that Mr. Baroody “has taken the steps necessary to avoid any conflict of interest in the event he is confirmed.”

Labels: corporatism, corruption, Cronyism, greed

Consumers face little risk from eating pork, chicken and eggs from farm animals that ate feed mixed with pet food scraps contaminated by an industrial chemical, government scientists said Monday.

Mixing in material contaminated at low levels diluted it such that humans who eat the animals won’t be harmed, the scientists said.

“We literally found that the dilution is so minute, in fact in some cases you can’t even test and find melamine any more in that product,” Agriculture Secretary Mike Johanns said in Chicago, speaking to the Organic Trade Association.

The government also recommended lifting holds placed on some pigs and chickens after their feed tested negative for the chemical, melamine, and related compounds. Those animals may be slaughtered and enter the food supply, the Agriculture Department and Food and Drug Administration said.

Other animals, including some that ate feed that has tested positive for contamination, are likely to be held for another week pending completion of an assessment of the overall risk of the chemicals to animal health.

Melamine, used to make plastics, and the related compounds contaminated pet food that either sickened or killed an unknown number of dogs and cats. Scraps left over from the manufacture of that dog and cat food was sold for use in animal feed before the pet food was known to be tainted and recalled from store shelves.

Labels: corporatism, Cronyism, greed, tainted pet food scandal

Deputy Secretary of State Randall L. Tobias submitted his resignation Friday, one day after confirming to ABC News that he had been a customer of a Washington, D.C. escort service whose owner has been charged by federal prosecutors with running a prostitution operation.

Tobias, 65, director of U.S. Foreign Assistance and administrator of the U.S. Agency for International Development (USAID), had previously served as the ambassador for the President's Emergency Fund for AIDS Relief.

A State Department press release late Friday afternoon said only he was leaving for "personal reasons."

On Thursday, Tobias told ABC News he had several times called the "Pamela Martin and Associates" escort service "to have gals come over to the condo to give me a massage." Tobias, who is married, said there had been "no sex," and that recently he had been using another service "with Central Americans" to provide massages.

I had been in the pharmaceutical business for some years, and so I was certainly aware of the disease here in the United States, but I really didn't understand the impact globally, nor did I understand the changing nature of the population that it is affecting. So it's mostly happened since I've been in this job.

Well, the heart of our prevention programs is what's known as ABC: abstinence, be faithful, and the correct and consistent use of condoms when appropriate. This is not an American invention; this is something that President [Yoweri] Museveni in Uganda figured out over time when he recognized that there was an enormous problem in Uganda.

And it's also not "ABC: Take your pick." It's abstinence really focused heavily on young people and getting them to understand that the best way to keep from getting infected is to be abstinent and not engage in sexual activity until they are old enough and mature enough and get into a committed relationship, such as a marriage. B is being faithful within that committed relationship. And A and B, those two things together clearly had a huge impact in bringing the infection rates down in Uganda.

C recognizes the fact that there are individuals in high-risk circumstances who either by choice or by coercion are going to find themselves unable to follow A and B, and therefore they need to have access to condoms, and they need to understand the correct and consistent use of condoms. I think more and more of the experts, the people who really understand the prevention requirements with HIV/AIDS, have come to endorse ABC in a very balanced way as the appropriate prevention centerpiece.

But I would also add that as important as ABC is, the fact is that this is a disease where 50 percent of the people infected in the world are women. When I cite those numbers to people here in the United States, I find most people are astonished. They just have no idea about that. In some countries in Africa, it's well above 50 percent that are women and girls. In many cases this is driven by cultural factors, where young girls are having sex with older men and [are] coerced to do that, where women aren't regarded as equal citizens with men. So there are lots of things that need to be done addressing those kinds of cultural issues also.

Labels: Cronyism, hypocrisy