Threats

Today marks a starting milestone in 2012 election calendar

From Fresno Bee:

Today marks a significant — but little known — milestone in California’s 2012 election season.

It is the first day that so-called “signatures in lieu” petitions are available for politicians and political hopefuls. This date always falls 158 days before the primary election.

“This is kind of like the first gun going off officially,” Fresno County Clerk Victor Salazar said.

Four candidates came in today to pull the petitions. Among them were Susan Good, who is seeking termed-out Fresno City Council Member Larry Westerlund’s seat and incumbent Fresno County Supervisor Debbie Poochigian.

(Read Full Article)

 

Calif. flood plan calls for up to $17B in repairs

From The Sacramento Bee:

California water officials recommended a historic investment in the state’s aging flood control system Friday, saying more than half of the state’s levees do not meet standards and the system needs up to $17 billion in repairs and investment.

The Department of Water Resources’ release of the first statewide flood plan follows a call by Gov. Jerry Brown to refocus state efforts on preparing for the effects of a warming climate as floods from a faster-melting snowpack already place increased strain on the state’s aging levees.

Officials and experts say the state’s flood control system – a piece-meal collection of 14,000 levees and other infrastructure built along the Sacramento and San Joaquin rivers by farmers and local governments over the last 150 years – is no longer adequate.

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Photo courtesy of Aquafornia, flickr

Redevelopment decision could change how business is done in Industry

From San Gabriel Valley Tribune:

Thursday’s California Supreme Court decision allowing state to wipe out redevelopment agencies could have a $250 million impact on the San Gabriel Valley’s least populous city.

For years, Industry, population 219, has used its redevelopment agency to buy property all over the city. The Industry Urban-Development Agency had $257 million in equity at the end of fiscal year 2009-2010, which is the most recent year with complete financial records at the State Controller’s Office.

That same year the city raked in $95 million in tax increment funds.

Industry currently has at least eight redevelopment agency deals in the works, including several to help food companies expand, said Mayor Dave Perez.

(Read Full Article)

Ruling clears way for fraud suit against former CalPERS official

From LA Times:

Reporting from Sacramento— A federal judge has approved a plan to liquidate the estate of Alfred J.R. Villalobos, former board member of the California Public Employees’ Retirement System, the state’s biggest public pension fund.

The action by a U.S. Bankruptcy Court judge in Reno, Nev., ended an 18-month bankruptcy proceeding and cleared the way for the state to pursue a fraud lawsuit against Villalobos, who the state alleges plied pension fund officials with luxury trips and gifts to influence investment decisions.

(Read Full Article)

 

For-profit college VP named to student aid panel

From Contra Costa Times:

Gov. Jerry Brown this week named an East Bay woman to the California Student Aid Commission, but an article I read recently makes me wonder whether he’s appointed a fox to guard the henhouse.

Brown appointed Terri Bishop, 58, of Lafayette, to the California Student Aid Commission, the stated mission of which is “making education beyond high school financially accessible to all Californians. The appointment requires Senate confirmation and the compensation is $100 per diem. Bishop is a Democrat.

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Judge blocks California budget cut to hospitals for Medi-Cal

From The Sacramento Bee:

A federal judge has blocked a California state budget cut that would have affected rural patients, the latest indication that courts will have the last word on Medi-Cal reductions.

Gov. Jerry Brown and lawmakers cut reimbursement rates to a variety of Medi-Cal providers by 10 percent to save $623 million in their June budget. Physicians, pharmacists and hospitals, among others, have argued that the cut to California’s already low payment rates would discourage providers from accepting Medi-Cal patients and reduce access.

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Photo courtesy of RambergMediaImages, flickr

Tracing the L.A. Coliseum’s fiscal decay

From LA Times:

Month after month, the financial forecasts for the Los Angeles Memorial Coliseum seemed as sunny as could be.

General Manager Patrick Lynch would tell his bosses on the Coliseum Commission that the box office from rave concerts was brisk and a lucrative deal for naming rights to the stadium could be just around the corner, records show.

For the most part, the nine-member commission took the affable Lynch at his word. And why not? As L.A. County Supervisor Don Knabe, who sits on the panel, said: “We were making money.”

Despite Lynch’s assurances, there was a different reality: The Coliseum had become mired in conflicts of interest, spending irregularities and loose accounting that eroded its fiscal foundation and had all but bankrupted its future as one of the nation’s most-storied public landmarks.

(Read Full Article)

Photo courtesy of Rafael Amado Deras, flickr

How Lowell Can You Go?

This past August, Lowell Milken gave a $10 million donation to his alma mater, UCLA Law School.

Only to find the donation under fire because a law school professor, specializing in legal morality (an oxymoron if there ever were one), claimed that the money was tainted and therefore should not be accepted.

Eventually, UCLA Law School was able to accept the gift.  But why would a law school professor be up in arms about her school receiving $10 million?  Step with me into my time machine, and let’s return to the early 1980s in America.

Back then, any company in the country could borrow money from Wall Street…as long as that company was a blue-chip, gently aging Fortune 500, like AT&T, Coca-Cola, or Procter & Gamble, the kind of companies your grandmother would invest in.

If you were an up-and-coming company and you needed to borrow money to grow, to create jobs, to build an entire new industry, sorry.  Wall Street had nothing for you.

Enter Michael Milken, a Wall Street bond trader so immersed in his work that he wore a miner’s helmet on the train into the city each morning so he could read documents and prepare for the day.  Milken made a startling realization:  if you offered a higher interest rate on bonds for growing companies that weren’t yet Fortune 500-sized, those companies could now get funding.

Not only that, but those higher-risk, higher-yield bonds would actually make more money for the issuers than the bonds that Wall Street traditionally issued on behalf of the blue chip companies.

Milken’s firm, Drexel Burnham Lambert, quickly created–and then dominated–the market for higher-risk corporate bonds.   Entire new industries could get funding.  Investors had a new way to invest.  And Drexel, and Milken, made a fortune practically overnight.

His higher risk bonds by then had become known as “junk bonds,” a derogatory appelation stuck on them by Milken’s jealous competitors, who couldn’t compete with Drexel in this newly created, and highly lucrative, market.

Enter the bad guy.  An aggressive federal prosecutor realized he could make a name for himself by prosecuting “crime in the suites” — white collar crime, or dark deeds committed by wealthy people in the name of becoming wealthier still.  This prosecutor actually had three Kidder, Peabody employees walked off their trading floor in handcuffs, in full view of their colleagues, because one of them had received a cryptic message:  “Your bunny has a good nose.”

The message, the prosecutor decided, meant that the three men were engaged in insider trading.  A jury later disagreed and acquitted them, and the reputations of the three men were destroyed forever, but that meant nothing to the prosecutor, who by now was well known in New York.

His name?  Rudy Guiliani.

Giuilani saw that even if you couldn’t convict someone, you could get a ton of publicity just by going after a wealthy, successful Wall Street type.  So he set his sights on Michael Milken.

Milken was accused of a crime called “stock parking,” which no one — not Giuliani, not the judge in the trial, Kimba Wood, could have told you what it meant.  But the twelve mostly working class New Yorkers grasped one key fact:  Michael Milken was guilty of being rich as hell.

So they convicted him of “stock parking,” whatever that might be, and Milken went to jail.

If he hadn’t agreed to go to jail, the prosecutors would have come after his brother Lowell. So Michael surrendered his freedom, faced with the threat that his brother would be tried as well.

For a non-crime, just like Michael.

Guiliani rode his fame in the Milken case to become Mayor of New York, where he washed his sins in the aftermath of 9/11, his pain-stricken face topped by a Yankees cap on national television during the 2001 World Series.  In fact, Guiliani nearly rode 9/11 all the way to the White House.

And the Milkens?  After Michael served his time, he and his brother Lowell became two of the most generous philanthropists in American history.

Millions of Americans owed their jobs to the bonds Drexel had invented.  Entire industries cropped up because Milken had figured out a way to get them funded.  And then Lowell Milken gave $10 million to UCLA Law School, and Professor Lynn Stout had the temerity to say that the money was tainted and that the law school’s reputation for morality was on the line.

Please.

Winston Churchill once said that the best way to make history was to write it.

An even better way to make history is to rewrite it.

If Professor Stout can explain the crime of “stock parking” and show the world how Milken’s actions at Drexel constituted a violation of that law, then she deserves to be a professor of legal morality at UCLA.

And if not…

(New York Times Bestselling Author Michael Levin runs www.BusinessGhost.com, America’s leading provider of ghostwritten books.)

Michael Dukakis to campaign for Brad Sherman against Howard Berman in Los Angeles Congressional District

Michael Dukakis, the liberal former Governor of Massachusetts who gave convicted first-degree murderer Willie Horton a prison furlough during which Horton raped a woman in Maryland, and the candidate for President in 1988 who blew his chances to beat George H.W. Bush by infamously campaigning from the turret of an M1 Abrams tank, will be a “featured guest” at a fundraiser for Congressman Brad Sherman (D-Ca.) in Studio City on January 19.  Because of redistricting the two incumbent Congressmen, Sherman and Howard Berman, must face off against each other for one to stay in Congress.  The race promises to be a very intense one, as under California’s new “open primary” system where the two top vote getters run against each other in the November general election, rather than the top nominees of political parties, this is a race where two incumbent Democrats may actually have to run against each other twice in 2012, once in the primary and again in the general elections.  Berman and Sherman have similar views and a similar voting record on most issues and their battle is symptomatic of the failure of the new “open primary” system to offer a competition of ideas for voters as opposed to limited choice between political personalities, which simply invites more negative campaigning, something voters repeatedly tell pollsters they dislike in election campaigns.