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Vodaphone 'bowed to pressure to shut down network'
British companies are flying out staff and halting operations as the civil disorder escalates in Egypt but they have also found themselves under verbal attack for being too close to the government of president Hosni Mubarak.
BP has also been accused of working "hand in glove with dictatorship" while Vodafone is under fire for bowing to presidential pressure to shut the mobile telephone network down ...
BP has been criticised by the non-governmental organisation Platform, which claims the oil company had with other British and American oil companies "worked hand in glove with dictatorship."
The environmental and social justice group also said Hesham Mekawi, the BP Egypt chairman, has praised "the stability of the country" and claimed BP had allowed the American Chamber of Commerce in Cairo - of which it is a member - to put pressure on US Congress not to support a recent motion calling on Mubarak to hold fair elections and respect human rights ...
Guardian 04 Feb 2011
Blunders Abounded Before Gulf Spill, Panel Says
... BP, Transocean and Halliburton, and several subcontractors working for them — took a series of hazardous and time-saving steps without adequate consideration of the risks involved, the commission reports ...
The panel also found that company officials had failed to consult with one another on critical decisions and that senior management had paid insufficient attention to the troubled well, which was being drilled a mile under the gulf’s surface.
The commission warned that without major changes, another such accident was likely.
“The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again,” it concluded.
“Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur.” ...
Offshore oil exploration is by nature risky, the commission concluded.
“Notwithstanding these inherent risks, the accident of April 20 was avoidable,” the panel wrote.
“It resulted from clear mistakes made in the first instance by BP, Halliburton and Transocean, and by government officials who, relying too much on industry’s assertions of the safety of their operations, failed to create and apply a program of regulatory oversight that would have properly minimized the risk of deepwater drilling.”
NYT 06 Jan 2011
Deepwater Horizon Eating the Future Is the coalition eco-friendly Peak OilPanel urges major reforms
Presidential Panel
BP cost-cutting blamed for 'avoidable' Deepwater Horizon oil spill
Oil companies 'cut and paste' North Sea disaster plans
Oil Spills
The failure's the same on the trains, the buses and the planes
There are two major problems with the transport industry.
One is having quarterly results fixated private companies providing essential services that usually require long-term strategic thinking and lots of investment.
That's not easy to fix given that it requires action from politicians with both vision and a degree of common sense (good luck).
The other problem – and it applies to the railways, the airlines and airports, and even bus and coach operators – is that those companies treat their customers not as valued commodities, but as an inconvenience.
The most egregious example of this is the way passengers have been kept on planes and warned that they will be arrested under terrorism laws if they attempt to disembark.
Cue the cries of "it's the airlines fault" "it's the airport's fault". But there are plenty of others.
How about the rail operating companies that, on busy commuter routes, cut the number of carriages on trains where passengers are already jammed in like sardines.
Or the bus companies which shrug their shoulders when their drivers treat people with small children and prams with a quite astonishing level of rudeness.
All of these examples – and there are many others – stem from the same root cause.
That is, a complete lack of any incentive to do better ...
Independent 23 Dec 2010 Corporate Public 'Services' Economic DemocracyAirlines 'ignoring passenger rights'
Ernst & Young 'sat by silently' as Lehman Brothers tried to hide financial troubles, lawsuit alleges
E&Y, one of the world's "Big Four" accounting firms, is alleged to have approved of Lehman's increasingly frequent use of a device known as Repo 105 that allowed the bank to sell troubled loans before it released results and then buy them back afterwards.
"These Repo 105 transactions had no independent business purpose and were designed solely to enable Lehman to manage the company's financial balance sheet 'metrics'," the 32-page suit alleges ...
According to the suit, E&Y made more than $150m (£96m) in fees auditing Lehman's books between 2001 and the 2008.
The suit goes on to allege that the E&Y auditors working on Lehman failed to act on concerns about the use of Repo 105 raised by Matthew Lee, then a senior vice- president at the bank ...
Telegraph 22 Dec 2010 What caused the credit crunch?Repo 105
Why we should nationalise our airports
The failure of BAA to deal with recent snowfalls has exposed the price we pay for having our infrastructure in private ownership ...
Even before this week's events, our privatised airports, with their shortage of public seating, their lack of reasonably priced food and drink outlets, and their depressing, unfriendly atmosphere, were an international disgrace.
But their spectacular failure to adequately deal with recent snowfalls has surely exposed to all but the most fanatical free marketeers, the enormous price we pay for having our infrastructure in private ownership.
Writing in the Guardian in 2007, the designer Sir Terence Conran told a story that illustrates perfectly the difference between the ethos of a publicly owned infrastructure company and a privately owned one.
Conran revealed that when he was working on the design of the state-owned Heathrow Terminal 1 and the North Terminal of Gatwick airport in the 1960s, he was pressed to make sure that he provided "lots of seating" for the public.
Conran contrasted the concern the state-owned airports authority in the 1960s showed for the comfort of the travelling public, to the much more commercial attitude of BAA today, where "every square inch must be turned over to retail space".
Unlike its state-owned predecessor, the privately owned BAA is seemingly guided by just one concern: maximising profits for its Spanish-owned parent company, Ferrovial ...
Guardian 21 Dec 2010 Branch Office Britain Corporate Public 'Services'Airport chaos shows what happens when you privatise monopolies
Judge 'astonished' by corruption denials as he fines BAE £500,000
Today's prosecution centred on a relatively small accounting offence admitted by BAE in relation to one contract in one country – a £28m radar deal in Tanzania in 2002.
Corruption allegations have swirled around the overpriced radar deal since it was signed in 2001, with former Labour minister Clare Short saying: "It was always obvious that this useless project was corrupt." ...
The court heard how BAE had hired the Tanzanian middleman, Sailesh Vithlani, to secure the radar contract and gave him $12.4m (£8m) over five years – a third of the contract's value ...
The judge fined BAE £500,000 for concealing the payments to Vithlani "from the auditors and ultimately the public". He added that there was "moral pressure" on him to keep the fine low, as BAE had agreed in the plea bargain to pay £30m in corporate reparations and fines.
The arms company had said that any fine would be subtracted from that total, with the "balance paid as an ex gratia payment for the benefit of the people of Tanzania".
A sum of £29.5m was now due to be paid to the Tanzanian people – "the victims of this way of obtaining business", said the judge.
BAE will pay £225,000 for the SFO's legal costs in bringing the prosecution, although the financially-strapped agency had asked for £750,000 ...
Guardian 21 Dec 2010 BAeBAE Systems fined for Tanzania radar sale: reaction
CAAT
The Corner House
Britain's high street chains are named by sweatshop probe
Some of the biggest names on the British high street use Indian sweatshops which pay poverty wages and break labour laws to keep costs to a bare minimum ...
Marks & Spencer, Next, Monsoon, Debenhams, Dorothy Perkins and Miss Selfridge are all named as having used factories which exploit their workers.
The allegations – levelled in a report by anti-poverty campaigners War on Want and Labour Behind the Label – will come as a particular embarrassment to M&S, which is running a glitzy, multi-million pound TV advertising campaign under the slogan "Don't put a foot wrong this Christmas".
It is the second time this year the company has faced sweatshop allegations.
Some workers reported they were paid less than £60 a month while, in one factory, being regularly forced to work until 2am to produce clothes for British shoppers.
Workers in another factory in Gurgaon, on the outskirts of the Indian capital Delhi, say it is not unusual for them to have to work an extra 140 hours a month for half the overtime rate they should receive ...
Observer 12 Dec 2010
Pfizer 'used dirty tricks to avoid clinical trial payout'
Cables say drug giant hired investigators to find evidence of corruption on Nigerian attorney general to persuade him to drop legal action ...
While many thousands fell ill during the Kano epidemic, Pfizer's doctors treated 200 children, half with Trovan and half with the best meningitis drug used in the US at the time, ceftriaxone.
Five children died on Trovan and six on ceftriaxone, which for the company was a good result.
But later it was claimed Pfizer did not have proper consent from parents to use an experimental drug on their children and there were questions over the documentation of the trial.
Trovan was licensed for adults in Europe, but later withdrawn because of fears of liver toxicity ...
Guardian 09 Dec 2010Nigeria to sue Pfizer over 'fatal' children's drug tests
Terrorism, Pfizer Style
Drugs giant faces criminal charges over clinical trial
Pfizer CEO Hank McKinnell
Pfizer Inc in the McSpotlight
Shell's grip on Nigerian state revealed
US embassy cables reveal top executive's claims that company 'knows everything' about key decisions in government ministries
The company's top executive in Nigeria told US diplomats that Shell had seconded employees to every relevant department and so knew "everything that was being done in those ministries". She boasted that the Nigerian government had "forgotten" about the extent of Shell's infiltration and were unaware of how much the company knew about its deliberations.
The cache of secret dispatches from Washington's embassies in Africa also revealed that the Anglo-Dutch oil firm swapped intelligence with the US, in one case providing US diplomats with the names of Nigerian politicians it suspected of supporting militant activity, and requesting information from the US on whether the militants had acquired anti-aircraft missiles ...
Campaigners tonight said the revelation about Shell in Nigeria demonstrated the tangled links between the oil firm and politicians in the country where, despite billions of dollars in oil revenue, 70% of people live below the poverty line ...
Guardian 08 Dec 2010Shell must clean up its act in Nigeria
Business & Human Rights_Nigeria
Conflict in the Niger Delta
DigiActive
Environmental issues in the Niger Delta
HRW
Nigeria
Nigeria Solidarity
Remember Ken Saro-Wiwa
Shell in Nigeria
Shell Nigeria
Guardian: Nigeria
Licensing deal threatens cheap pharmaceuticals
... the EU is preparing for trade talks with India in Brussels next week.
Among the reams of small print are several clauses that seek to protect the intellectual property rights and commercial interests of European pharmaceuticals giants.
If the deal is agreed, it would create a new patent-like barrier which threatens the flow of cheap, life-saving medicines to children like Stella.
The clause causing most concern is "data exclusivity", which would effectively block Indian producers from registering copies of foreign drugs, including those not protected by the existing patents system.
This would mean delays of up to 10 years in delivery of generic versions of new, improved medicines and up to 15 years in the case of paediatric versions of the same drugs.
Médecins Sans Frontières (MSF), which treats hundreds of thousands of patients in the developing world, is campaigning against the changes and demanding talks with the EU.
"It is a case where profits are coming before lives," said Dr Unni Karunakara, the MSF president.
"We are talking about real lives. They may be hidden away in remote areas but they are real.
"There are millions of lives depending on these cheap drugs, so we're saying hands off our medicines."
He warns that "data exclusivity", and clauses that could see safe generics seized and destroyed as counterfeits at EU ports, will "criminalise" vital medicines and drive up costs for Indian manufacturers.
Those costs would then drastically hit the ability of doctors in poor countries to offer free treatment ...
Independent 01 Dec 2010Small print that could cost millions of lives
Drug companies 'exploiting rules to make exorbitant profits from NHS
'Consultants and patients' group publish open letter calling for inquiry into firms' alleged repackaging of drugs for rare diseases ...
They tell David Cameron that, far from inventing new drugs, companies are in effect repackaging them to get a licence, enabling them to hike the price hugely.
Legislation was brought in by the EU to encourage companies to devise and seek licenced for new drugs for what are called "orphan" diseases – those for which there is not a huge market because they are relatively rare.
But the letter's signatories say the change in the rules has had unintended consequences.
They cite a drug which has been used for the last 20 years to treat two rare muscle diseases.
Although it did not have a licence for that use, doctors could prescribe it – and did – on their own authority.
It used to cost around £800 to £1,000 per patient per year.
But the manufacturer, BioMarin, sought a licence to supply throughout Europe what it says is a more stable and reliable version of the drug, which it calls Firdapse.
It charges £40,000 to £70,000 per patient per year – up to a 70-fold increase.
The doctors say there was no need for a new version and no justification for a more expensive one ...
Guardian 17 Nov 2010 Corporate Public Services NHSBritish drugs profiteers cheating NHS
Hospitals are forced to use unlicensed medicines to save millions
Vital Drugs Made Too Expensive By EU Rules
'Big Pharma'
In its response to the Financial Services Authority's consultation paper, the Council of Mortgage Lenders condemned the "flawed" approach of the watchdog.Lenders call for mortgage rules rethink
Translated: "Please can we start the next housing bubble?"
It said the FSA had failed to take into account the correction in house prices that had already occurred, the impact of the new requirements on companies' capital and liquidity levels, and consumer behaviour ...
Last month, the CML produced an earlier study which warned that about half of the 8 million mortgages approved in the past five years would have been banned under the tougher affordability rules proposed by the FSA.
Alongside an update for the period from 1 July to 15 November, Mike Farley, the chief executive of Persimmon, added his support to the CML's concerns, saying the mortgage market had already "self-regulated" itself ...
Persimmon said that current trading was in line with expectations and reaffirmed that it expected to double its operating margin to about 8 per cent for the year to 31 December.
The company added that it was on track to complete about 9,400 homes during the period, 5 per cent more than it did in the same months last year.lettusIndependent 16 Nov 2010 Ponzi Housing Market"Last month, the CML produced an earlier study which warned that about half of the 8 million mortgages approved in the past five years would have been banned under the tougher affordability rules proposed by the FSA."I don't know why the word "warned" is used.
This seems to me to mean that the CML (Council of Mortgage Lenders) agrees that if these tougher rules had been in place previously, then the financial crash would not have happened.
If these tough rules had been in place previously, then house prices would have been rising at a modest rate.
Instead of that, with lax rules, they boomed to an unsustainable level and so we now have a very painful period of adjustment to get them back to the equivalent of what they would have been if tougher rules had been in place all along.
The deputy prime minister, writing in the Guardian, claims universal credit system will remove artificial disincentives to work ...Nick Clegg says benefit reform will cut jobless households by 300,000
onlyanorthernsongGuardian 09 Nov 2010
9 November 2010 11:03PM
Some 300,000 households are likely to be moved into work
This will presumably be the kind of work highlighted by Despatches last night then Mr. Clegg?
Jobs created by suppliers, to Tax avoiders like your mate Sir Phillip Green, a man drafted in by Cameron to help him make cuts?
UK workers stitching garments for British Home Stores under Sweatshop conditions.
Half the legal minimum wage
Cramped and over-heated conditions
Unsanitary toilets
Blocked fire exits
Meanwhile Cameron is paying a friend £35k from the public purse to follow him around and record his glorious reign.
We’re all in this together? I think not you fraud.Fashion's Dirty Secret
Cable rows with bank bosses during China mission
Business secretary Vince Cable today appeared to undermine efforts to promote British companies in China after he became embroiled in a row with UK bank chiefs on a trade mission to Beijing.
Cable dismissed concerns voiced by the bosses of Royal Bank of Scotland and Standard Chartered that a crackdown on bonuses could trigger an exodus of talented staff to Asia.
Cable said warnings that banks may quit London were "a familiar negotiating technique" and should be set against the interests of taxpayers to make them safe ...
Guardian 09 Nov 2010 Bonus Culture
The commission, which Compass stressed would be independent, will focus on top pay in the private sector and comes after research by Incomes Data Services that found the pay of boardroom bosses rose 55% in a year.Investigation launched into soaring executive pay
The average chief executive of a FTSE 100 company was paid a total of more than £4m.
[Deborah] Hargreaves said: "Pay at the top is one of the most pressing debates of the day. The forthcoming spending cuts will shift the public's focus even more onto the question of fairness and the gap between high and low pay."
The commission begins its analysis amid estimates that Barclays Capital has set aside another £1.5bn to pay its 25,000 staff on top of the £3bn pay and bonus pot that had been amassed half way through the year ...
Guardian 09 nov 2010 Wealth LogRoyal Bank of Scotland's bonus pot
FTSE 100 bosses criticised as boardroom pay leaps by 55%
Cable puts pay and takeovers at centre of City review
Compass calls on government to regulate high pay
Sir David Walker
Water staff told 'keep quiet' over Camelford poisoning
Staff from a company involved in the UK's worst mass water poisoning were told to keep quiet about what had happened, an inquest has been told.
Twenty tonnes of aluminium sulphate were accidentally added to the water supply in Camelford, Cornwall, in 1988.
A former manager at the South West Water Authority said senior managers did not want the public knowing what had gone wrong that July ...
The hearing in Taunton, Somerset, is looking into the death of Carole Cross, who died in 1994.
About 20,000 homes were affected when a relief delivery driver from Bristol mistakenly added aluminium sulphate to the wrong tank at the Lowermoor treatment plant ...
Mr Lewis ... the manager for the Fowey district ... said he had been given "specific instructions" by Leslie Nicks, the head of operations ..."Basically don't tell anybody what we suspected until we got the driver down to confirm where he had delivered [the aluminium sulphate]," he told the inquest.Mr Lewis became the only member of staff to lose his job over the Camelford incident.
"I became the 100% scapegoat for it... for what I regard as political circumstances," he told the inquest.
Mrs Cross, 59, died in 1994 in Taunton after suffering from a brain disease ...
Large amounts of aluminium were found in her brain after her death.
BBC NEWS 02 Nov 2010 Moral IndifferenceCamelford poisoning
Camelford water pollution incident
Coalition launches small business growth plan as PM's advisers clash
• Vince Cable finds a further £200m for Enterprise Capital Funds
• Small businesses to be awarded 25% of government contracts ...
David Cameron's new adviser on small businesses set himself on a potential collision course with the coalition by criticising a key recommendation by Sir Philip Green, the retail tycoon hired by the prime minister to suggest ways to cut Whitehall waste.
Lord Young ... used the launch of the coalition's initiatives on small business to set out his concern about Green's proposal to extend the government's payment period to small businesses from five to 31 days ...
The breakfast summit in Westminster ... came as one of the government's biggest suppliers – Serco – was forced to apologise for trying to extract cash from its small business clients.
There was also speculation that the government (is) preparing to break its own pledge to impose new lending targets on banks to encourage credit to flow to small businesses after its response to its paper on "financing business growth" failed to mention such commitments from banks.
Serco, which runs prisons, schools and ports for the government, had infuriated the government by demanding a 2.5% cash rebate from its suppliers so it could meet the coalition's target to make £800m savings on public sector procurement projects this year.
Its shares were the biggest fallers in the FTSE 100 after it issued an apology following a letter to 193 of its suppliers demanding the cash rebate ...
Guardian 01 Nov 2010
BP shares jump after investigator points finger at Halliburton over Gulf well cement
In a letter, the lead investigator for the presidential commission on the oil spill, Fred Bartlit, said the cement mixture used on the well did not meet industry standards, and failed three out of four laboratory tests before the explosion on 20 April.
Halliburton, which was hired by BP to cement the well, learned of those failures in February, and informed BP on 8 March.
But both firms chose to go ahead with the nitrogen foam cement mixture that was supposed to secure the bottom of the well.
"Halliburton (and perhaps BP) should have considered redesigning the foam slurry," the letter said ...
Guardian 29 Oct 2010 Deepwater Horizon Moral Indifference LogTests warned of cement troubles before BP blowout
Halliburton
The pension scandal behind the corporate burqa ...
David Cameron says that the coalition government wants every company to provide a pension scheme for employees; that way we will all be compelled to save wisely for our futures.
But is entrusting our savings to private corporations sensible? Thousands of former milkmen would certainly say no ...
Uniq is a company hardly anyone has heard of but it is the rump of a former FTSE 100 giant, Unigate ...
But conglomerates went out of fashion and Unigate was dismembered. Dairy Crest bought much of the milk and cheese business. Cow & Gate became part of Danone. The transport business, Wincanton, was floated on the stock exchange.
What was left was a company of 2,200 people re-named Uniq and dedicated primarily to making sandwiches for M&S.
What was also left was a massive pension liability ...
A company of 2,200 was expected to fund the pensions of 21,000 people, milkmen and others who had loyally served the Unigate conglomerate and expected to have reasonable pensions to carry them into retirement.
Those expectations have been dashed ...
The companies who were able to buy Unigate's assets without taking on the accompanying pension liabilities have done very well.
That points up an underlying moral issue in the Uniq case.
The pensioners will lose their benefits even though the money is there to provide them.
Danone is a major French multinational. Dairy Crest and Wincanton are FTSE 250 companies.
They could afford to pay for the milkmen's pensions but they have legally binding contracts that say they don't have to – contracts that the pensioners were not party to ...
openDemocracy 28 October 2010 Economic Democracy
UK boardroom pays leaps 55% in a year
Incomes Data Services said bonuses paid to directors of FTSE 100 companies increased by 34%, while basic pay rose by 3.6%.
The amount of money waiting to be disgorged from long-term incentive schemes soared by 73%, to a total of £259m, and share option gains leapt by 90%.
The FTSE 100 rose by less than a fifth over the same period.
Steve Tatton of IDS said the report suggested that companies returned to "business as usual" once the recession ended.
"It seems the days of earnings restraint were short-lived. It is as though the recession never happened," Tatton warned ...
Guardian 28 Oct 2010 Wealth Log
'Bonus buyouts' signal return of banks' confidence – and wealth
Headhunter reports sharp rise in poaching of star employees by buying out multi-year bonus packages upfront ...
Jonathan Nicholson, managing director at Astbury Marsden, said:
"Banks are now prepared to buy out 100% of a potential employee's shares or options they have locked up with their current employer."
Four-fifths of new recruitments now involve such bonus buyouts, compared with one in five a year ago.
A fifth of these bonuses are bought out by paying the new employee cash upfront, with the rest in the form of new employee shares and share options.
Astbury Marsden said that bonus buyouts have accelerated in the last month as banks try to poach their rivals' best earners before Christmas, when fewer people change jobs.
Deutsche Bank, which reported third quarter results today, said it had set aside €4.6bn (£4bn) in bonus pool for its corporate and investment bank over the first nine months, amounting to €285,000 per employee.
Nicholson added: "Banks and fund managers are confident about next year and they still want to add to their teams. Within reason, they are willing to pay for the talent.
"A successful trader or banker will now no longer move unless their entire share bonus scheme is bought out.
"A year ago they would have been more flexible – now they don't want to forgo a penny." ...
Guardian 27 Oct 2010 Banking Commission Fractional Reserve Banking Wealth Log
True cost of cheap pineapples in UK supermarkets
UK supermarket price wars are wrecking lives in the developing world, according to a new campaign launched tomorrow by Consumers International ...
[Its] findings include evidence that:
• The constant use of agrochemicals has led to contamination of drinking-water supplies to communities around the plantations. One group of villages, bordering plantations that either supply or are owned by Del Monte, has been forced to collect water from tankers for more than three years.
• Repeated chemical accidents have inflicted serious damage on the local environment. In June this year, a fire at a chemical dump used by the multinational trader Dole caused a toxic cocktail to spill into the nearby river. Fish and other wildlife including crocodiles were killed along miles of waterways. The pesticide involved is sprayed by Dole on its bananas. Dole told us that it was co-operating with the authorities investigating the accident.
• Workers reported suffering serious health problems from exposure to the chemicals used on pineapple plantations, including in some cases accidental chemical poisoning on Del Monte and Grupo Acon farms. Grupo Acon supplies Tesco, Asda, Dole and Fyffes.
• Price cuts in European supermarkets have led to wages being drastically cut by Grupo Acon, workers said.
• Efforts to join independent trade unions to improve conditions are said to have been met with repression and mass sackings on Del Monte and Grupo Acon plantations.
Guardian 01 Oct 2010 Moral Indifference LogThe truth about supermarket pineapple
Primark shred policy 'worrying'
The Association of Charity Shops estimates that about £120m is raised each year by organisations selling donated goods.
Chief executive Warren Alexander said its own recent study suggested that Primark was not the only firm which chose to destroy goods rather than donate them but that there was a mixed picture.
"Shops could certainly sell that stock and get a good profit for it so it's a shame that it does not always happen," he said.
He also pointed to the environmental impact of destroying clothes - from the wasted resources in making them to those ending up in landfill ...
Earlier this year, there was criticism in the US after bags of clothing were found abandoned outside New York branches of stores including H&M and Wal-Mart.
Items had been slashed or deliberately damaged to make them unusable.
BBC NEWS 13 Sept 2010 Eating the Future Moral Indiffrence Log
Big Four auditors under fire over consultancies
• PricewaterhouseCoopers says consulting arm earned £515m
• Investor groups concerned over conflict of interest issues ...
... the corporate governance group Pirc said it was concerned that consultancy services sold to audit clients was a persistent problem that regulators had failed to resolve.
It argued auditors could balk at criticising a client if a negative opinion would mean the firm losing millions of pounds of consultancy work.
It said the potential conflict of interest could result in accounting errors and fraud going undetected or covered up.
The Financial Reporting Council, which oversees the audit industry, embarked on a review of potential conflicts of interest this year.
Stephen Haddrill, chief executive of the FRC, told an audience of accountants:
"Just when audit is needed more, the impression is growing that it is delivering less."
The Treasury select committee called on the FRC to review the role of audits and check potential conflicts of interest in its final report on the banking crisis.
Several members of the committee were openly critical of bank auditors for failing to warn of potential dangers ...
Guardian 06 Sept 2010Regulators
Enron
Defiant Dick Fuld blames false rumours and the Fed ...
In the seven years between 2000 and 2007, Fuld was paid more than $310m and his uncompromising attitude made him, in the eyes of Wall Street's critics, one of the poster boys for the banking industry's excesses.
A 2,200-page report compiled by a court-appointed bankruptcy examiner in March found that Lehman had used a contentious accounting technique known as "repo 105" to understate its liabilities to the tune of $50bn.
Along with his wife, Kathleen, Fuld has exhibited a modest belt-tightening.
In the wake of Lehman's failure, the couple auctioned off a $20m personal collection of 16 abstract drawings including art by Willem de Kooning and Barnett Newman.
But he and his wife still own a nine-bedroom mansion in the wealthy New York commuter town of Greenwich, Connecticut, and they have a beachside retreat on Jupiter Island, Florida.
Guardian 01 Sept 2010Dick Fuld blames the Fed ...
One is left with the hard fact that Fuld could have done more to assist Lehman.
Bear Stearns was rescued six months earlier by JP Morgan Chase.
That ought to have been a cue for Lehman, as only the fourth-largest US investment bank, to seek its own saviour.
The desperate scramble for a white knight came too late.
To some degree, all the US investment banks were guilty of playing chicken with the Fed, believing that a big collapse would not be allowed to happen.
But Lehman had more to lose than most, as Fuld should have appreciated.
Guardian 01 Sept 2010US financial crisis panel grills Lehman boss Dick Fuld
George999x 1 Sep 2010, 6:55PMGuardian 01 Sept 2010
Yves Smith, a former financier, deals with Dick Fauld in her excellent blog:
"The English language needs a new word to describe the nature and degree of disconnectedness from reality represented by Dick Fuld. He occupies a weird funhouse realm in which he did no wrong, those mean people in DC and the evil shorts brought down a viable enterprise. Remember, this is the man who certified financial statements goosed up to the tune of $50 billion via Repo 105, a ruse that ought to have been an accounting fraud but wasn’t, says he never heard of it, yet considers himself sufficiently well informed about what was happening at his former firm to be a qualified judge of whether it could have survived."
slowfood 1 Sep 2010, 6:58PM
If he had been British, then we would have given him a knighthood, just like our own banksters. Pip Pip
Fractional Reserve Banking Is capitalism the only game in town? Moral Indifference LogRichard Fuld
Burning Down His House
Ex-Lehman chief Dick Fuld sells $13m home to wife for $100
Lehman CEO Fuld Blames Everyone But Not Himself
Letting Dick Fuld off the hook
Repo 105
Vedanta stripped of safety awards
Mining group Vedanta Resources has been stripped of international safety awards amid concerns that it won without declaring that a chimney collapse at one of its sites had killed at least 40 workers last September – one of the worst industrial tragedies in India's recent history.
Last month, Vedanta's chairman, Anil Agarwal, had told a shareholder meeting in London that the episode at Korba was an "unfortunate accident".
Despite three officials from a Vedanta subsidiary being charged last November in India with what police described as "culpable homicide not amounting to murder", Agarwal told the meeting:
"Investigations have revealed that [the incident] was caused by severe thunderstorms and lightning." ...
Observer 29 Aug 2010 Moral Indifference
BP oil leak victims face strings on $20bn spill fund
Victims of the Gulf of Mexico oil spill will waive their right to sue BP staff and the energy major if they take money from the official $20bn (£13bn) compensation fund ...
Thousands of people have joined in class-action lawsuits claiming loss of earnings related to the BP oil spill.
However, they will be faced with a tough choice of receiving immediate money from the compensation fund or putting themselves through a lengthy legal process in the hope of extracting more.
The developments come the day after new claims that a huge cloud of oil is still lurking under the surface of the Gulf of Mexico's waters ...
Experts from Woods Hole Oceanographic Institution in Massachusetts said they have found a 22-mile "mist" of oil that is not degrading very fast ...
Thad Allen, the incident commander working for the US government, said there would now be tests to see "how clean is clean" along the coastline ...
Telegraph 20 Aug 2010 Deepwater Horizon
Judge criticises US over 'soft' fine for Barclays Bank
Washington court criticises 'sweetheart deal' and $298m fine for bank that flouted international sanctions ...
... in the latest of several shows of judicial scepticism towards hasty settlements of Wall Street misdemeanours, Sullivan described the agreement as "an accommodation to a foreign bank" and pointed out that the average American caught robbing a bank is not given a deferred prosecution deal or an opportunity to refund the proceeds from crime.
Prosecutors say Barclays staff stripped identifying names from payment information in a deliberate ruse to defy US sanctions against repressive regimes, including countries accused of being state sponsors of terrorism.
Court documents say much of the subterfuge took place at a payment centre in Poole, Dorset, where an "interdiction filter" was installed to spot mentions of countries covered by sanctions. Once spotted, the wording on payments was changed to blur the source or direction of funds.
Among the challenged transactions are 46 fund transfers worth $490,000 involving Burma, 61 transactions worth $6.71m concerning Cuba, three payments amounting to $60,000 involving Iran and 1,175 transfers of $105m benefiting individuals or government entities in Sudan ...
Guardian 18 Aug 2010 Fractional Reserve BankingBarclays
Anger over losses of £529m at AA and Saga owned by private equity groups
• Private equity owners amassed debts of £6.4bn
• Pension fund deficit grows as average salaries fall ...
Union leaders have attacked the private equity bosses behind the AA and Saga after annual accounts revealed that the highly indebted businesses recorded a combined loss of £529m while at the same time squeezing workers' salaries and pension benefits.
Although the businesses made an operating profit, it was wiped out by interest payments of £705m on debt – much of which was piled on to the group's books when it was refinanced by a trio of private equity firms three years ago.
The GMB union's national officer, Paul Maloney, said: "Private equity always wants to pay no one but themselves. And it's the workforce here that suffers." ...
Guardian 15 Aug 2010 Pawns or Players?Damon Buffini
Mergers and Acquisitions
Private Equity
Gap, Next and M&S in new sweatshop scandal
Indian workers are paid just 25p an hour and forced to work overtime in factories used by some of Britain's best-known high street stores ...
The Observer investigation found the factories were using workers hired through middlemen who paid them as little as 25p an hour, in the case of Gap and Next, and 26p an hour for M&S.
Workers at the factory used by Gap and Next said they had been required to put in up to eight hours a day in overtime, for which they claim to have been paid at half the legal minimum rate required by the ETI and Indian law.
Some workers at the same factory said they had to work seven days a week, a practice condemned by their union as "slave labour" ...
Jawal Hussain, 24, who works in the House of Pearl factory, said that in June he worked 133 hours overtime on top of his normal eight-hour shifts, all at the basic single rate of pay.
He pocketed a total of 6,100 rupees [£83].
He and many of his fellow workers are hired through a contractor, which is responsible for paying them.
"There were two or three people who objected to the overtime and they were beaten up and now they have left the company," he said ...
Observer 08 Aug 2010 Global Labour Market Is capitalism the only game in town?
Oil Rig’s Owner Had Safety Issue at Three Other Wells
In response to “a series of serious accidents and near-hits within the global organization,” Transocean ... commissioned the risk management company Lloyd’s Register to investigate its Houston headquarters and three other gulf rigs besides the Deepwater Horizon to assess its safety culture.
The confidential internal reports, obtained by The New York Times, offer an unusually candid view of safety and maintenance concerns within the world’s largest offshore drilling company ...
Transocean has 14 rigs now operating in the Gulf of Mexico, and 139 worldwide, and these documents raise concerns about locations beyond Deepwater Horizon, especially the three additional gulf rigs that were recently investigated ...
The new documents ... indicate that there were problems with the Deepwater Horizon’s ballast system that was responsible for keeping the rig afloat and stable.
If the rig had not sunk, the leak might not have occurred. Federal investigators have questioned whether deferred maintenance and other factors had played a role in the sinking of the rig ...
A lack of hands-on experience for workers and managers has contributed to safety concerns at the company, and a stifling bureaucracy imposed by onshore management has led to widespread resentment among rig workers, the investigators found.
Nearly 40 percent of workers interviewed on the four rigs said that past problems were typically investigated by company officials strictly to attribute blame ...
A ... worker on Transocean’s Marianas rig said that the safety manual seemed to be “written for the courtroom, not the oil field.” ...
NYT 04 Aug 2010 Deepwater HorizonIn Gulf, Good News Is Taken With Grain of Salt
Executives deserve high rewards when their activities and innovations benefit society, but lavish payments are distasteful when they leave a trail of unemployment and traumatised families in their wake. The contrast between Adams's circumstances and those of the redundant steelworkers does not need spelling out.Corus redundancies a stark contrast to Adams payout
In a concurrent article, Ruth Sutherland raises the issue of theObserver 01 Aug 2010 Wealth Log
" ... the mainstream Anglo-Saxon male template ... "
within not only the MPC but economics in general.
The current economic template is oriented towards market norms and needs rebalancing to give more weight to social norms.
I know generalities are very dangerous, but since women tend to more social than men - Margaret Thatcher excepted - the importance of this rebalancing cannot be over-stated.
The current model of the corporation is solely market-norms oriented, as this report once again demonstrates.
The loss of a thousand jobs gives rise to a collective shrug of the corporate shoulders: "it's not our problem".
The financial costs pass to the state, which may not take into account of the social costs - family breakdown, mental illness, impact on children - I am sure you can add to the baleful list.
But no one in power questions the line of travel, because market norms are the only show in town, and 'the show' is in the interests of politicians of all parties.Outgoing Corus boss paid £2m last year
A good woman economist is hard to find
Oil industry safety record blown open
National Wildlife Federation says catalogue of oil industry accidents proves BP disaster in Gulf of Mexico is not a one-off ...
In a further grim reminder, the American midwest was in the throes of its own environmental disaster today, with a ruptured pipeline gushing gallons of oil into Michigan's Kalamazoo River.
Enbridge Energy, which is Canadian-owned but based in Houston, said the spill may have reached 1m gallons. Federal government officials in Washington and the state of Michigan were struggling to stop the oil from reaching the Great Lakes ...
The report from the National Wildlife Federation drew on records from the Minerals Management Service, which regulates offshore drilling, and the Environmental Protection Agency, to come up with a figure of 1,440 offshore leaks, blowouts, and other accidents were reported between 2001-2007.
In addition to environmental damage, these caused 41 deaths and 302 injuries.
The safety record for onshore activities was even more dismal.
Some 2,554 pipeline accidents occurred between 2001 and 2007, killing 161 people and injuring 576 ...
Guardian 29 July 2010 Eating the Future Peak OilAssault on America
Cairn Energy's Arctic oil drilling plan condemned
BP makes record loss as Tony Hayward quits
BP has reported one of the largest losses in British corporate history because of the cost of the catastrophic oil spill in the Gulf of Mexico and confirmed this morning that embattled chief executive Tony Hayward is leaving the company.
In its second-quarter results the company has set aside $32.2bn (£20.7bn) to meet the cost of the clean-up, far higher than the City had expected and plunging the company into a $17bn loss, compared with a profit last year of $3.1bn.
To pay for the mounting costs of the spill created by the explosion on the Deepwater Horizon rig on 20 April, BP plans to sell $30bn worth of assets – predominantly oil and gas fields – over the next 18 months.
Hayward will receive a £1m payoff and a pension expected to be worth about half a million pounds a year.
He will be replaced by an American, Bob Dudley, a BP veteran who is currently overseeing the clean-up of the oil spill.
Hayward, who will quit his post as chief executive in October and leave the board the following month, will become a non-executive director of the firm's Russian joint venture TNK-BP ...
Hayward ... is leaving after almost 30 years with BP.
The company said that under the terms of his contract he will receive a year's salary in lieu of notice, amounting to £1.045m.
He will also leave with a pension pot worth over £10m ...
Guardian 27 July 2010 Wealth LogBP was 'a model of corporate social responsibility'
Deepwater Horizon alarms were switched off 'to help workers sleep'
Alarms and safety mechanisms on gulf disaster oil rig were disabled, chief technician at Transocean reveals ...
Mike Williams, who was in charge of maintaining the rig's electronic systems, was giving evidence to the federal panel in New Orleans that is investigating the cause of the disaster on 20 April, which killed 11 people.
Williams told the hearing today that no alarms went off on the day of the explosion because they had been "inhibited".
Sensors monitoring conditions on the rig and in the Macondo oil well beneath it were still working, but the computer had been instructed not to trigger any alarms in case of adverse readings.
Both visual and sound alarms should have gone off in the case of sensors detecting fire or dangerous levels of combustible or toxic gases.
The evidence of deliberate dilution of the rig's safety mechanisms is likely to have wide ramifications for BP and Transocean, the world's largest offshore drilling company.
It switches the spotlight of blame away from BP and towards the subcontractor which took the decisions ...
Williams said he discovered that the physical alarm system had been disabled a full year before the disaster.
When he asked why, he said he was told that the view from even the most senior Transocean official on the rig had been that "they did not want people woken up at three o'clock in the morning due to false alarms" ...
Guardian 23 July 2010 Deepwater Horizon
BP admits it 'Photoshopped' official images
For the second time in two days, the company was identified to have doctored images posted on its official website that were supposed to show how it was responding to the oil crisis in America.
In the latest image, a photo taken inside a company helicopter appeared to show it flying off the coast near the damaged Bluewater Deepwater Horizon.
But it was later shown to be faked after internet bloggers identified several problems with the poorly produced image that contradicted the appearance that it was flying.
Among the problems identified included part of a control tower appearing in the top of the top right of the picture, different shades of colours, its pilot holding a pre-flight checklist and its control gauges showing the helicopter’s door and ramp open and its parking brake engaged ...
Telegraph 22 July 2010 Deepwater Horizon
BP accused of ignoring internal report of Deepwater leak
... while the capping of the well may be going well, developments onshore continued to prove what an enormous task BP faces in trying to repair its public image.
In Louisiana an investigative hearing into the leak heard testimony from a BP official who said the firm had ignored warnings ahead of the disaster.
Ronald Sepulvado, a BP well site leader, said he had reported a leak on a critical safety device at the rig to more senior company officials, but it seemed his warnings had not been passed on to the government regulating body, the Minerals Management Service.
"I assumed everything was OK, because I reported it to the team leader and he should have reported it to the MMS," he told the hearing.
The leak was on a control pod connected to the blowout preventer on the rig, whose failure proved critical in causing the disaster ...
Guardian 20 July 2010 Deepwater HorizonBP Oil Spills
Oil Spills
• Commodity speculators push cocoa to 33-year highHedge funds accused of gambling with lives of the poorest as food prices soar
• Bets 'risk the most vulnerable in the world starving'
The WDM's Great Hunger Lottery report says "risky and secretive" financial bets on food prices have exacerbated the effect of poor harvests in recent years. It argues that volatility in food prices has made it harder for producers to plan what to grow, pushed up prices for British consumers and in poorer countries risks sparking civil unrest, like the food riots seen in Mexico and Haiti in 2008.
Deborah Doane, WDM director, said: "Investment banks, like Goldman Sachs, are making huge profits by gambling on the price of everyday foods. But this is leaving people in the UK out of pocket, and risks the poorest people in the world starving.
"Nobody benefits from this kind of reckless gambling except a few City wheeler-dealers. British consumers suffer because it pushes up inflation, because of unpredictable oil and raw material prices, and the world's poorest people suffer because basic foods become unaffordable."
Guardian 19 July 2010Take the highest stakes, riskiest economic behaviour ever devised, and marry it to the most fundamental basic need of humankind, and you have the subject of this report.Food Speculation
Executive Summary
Over the past decade, the world’s most powerful financial institutions have developed ever more elaborate ways to package, re-package and trade a range of financial contracts known as derivatives.
A derivative is not based on an exchange of tangible assets such as goods or money, but rather is a financial contract with a value linked to the expected future price movements of the underlying asset.
Derivative contracts are traded on a growing number of underlying assets, from share prices, to mortgages, bonds, commodity prices, foreign exchange rates, and even index of prices.
Derivatives trading has been one of the most lucrative parts of the financial industry, but it is the increasingly complex, opaque and disconnected nature of these and similar products that ultimately triggered the collapse of the banks and the worst financial crisis in human history.
Of course, the financial crisis has been an economic disaster of seismic proportions for millions around the world, plunging many countries into recession causing millions to be thrown out of work, soaring public debts and cuts in vital public services.
But while betting on the value of sub-prime mortgages or foreign currency values undoubtedly leads to disastrous consequences, there is another area where the speculative behaviour of the world’s largest banks and hedge funds represents a threat to the very survival of people: food commodities.
In The great hunger lottery, World Development Movement has compiled extensive evidence establishing the role of food commodity derivatives in destabilising and driving up food prices around the world.
This in turn, has led to food prices becoming unaffordable for low-income families around the world, particularly in developing countries highly reliant on food imports.
Nowhere was this more clearly seen than during the astonishing surge in staple food prices over the course of 2007-2008, when millions went hungry and food riots swept major cities around the world.
The great hunger lottery shows how this alarming episode was fueled by the behaviour of financial speculators, and describes the terrible immediate impacts on vulnerable families around the world, as well as the long term damage to the fight against global poverty.
In the report we describe how the current situation came to pass, the risks of another speculation induced food crisis, and what specifically can be done by policymakers here in the UK as well as in the US and EU to tackle the problem.
But at its heart, The great hunger lottery carries a very straightforward message: allowing gambling on hunger in financial markets is dangerous, immoral and indefensible.
And it needs to be stopped before any more people suffer to satisfy the greed of the banks.
WDM: Full Report .pdf July 2010
Economic Democracy Fractional Reserve Banking 'Golden Sacks' Wealth LogWDM
Speculators Rediscover Agricultural Commodities
Goldman Sachs
Goldman Sachs: Annual Report .pdf
Goldman Sachs last night agreed to pay $550m (£356m) to settle the fraud charges that rocked the Wall Street giant, and admitted it had misled investors in one of the multi-billion dollar mortgage deals at the heart of the credit crisis.Goldman to pay $550m to settle SEC fraud case
Petty cash!
The penalty was the largest ever extracted by the Securities and Exchange Commission, Wall Street's regulator, but the sum was lower than some in the industry had feared, and Goldman shares surged on the news ...
No Goldman executives will lose their jobs as part of the settlement, and Lloyd Blankfein, the company's embattled chief executive, stays in place ...
The payment – which will be split $300m to the US government, $250m to compensate Abacus investors – is small compared with Goldman's profits.
The company earned $13.4bn in 2009, and $3.3bn in just the first three months of this year.
Independent 16 July 2010 'Doing God's Work'
Safety breaches by five firms including Total were responsible for blast that injured 43 and damaged homes and businesses ...Buncefield companies fined £5.35m for oil depot blaze
Peanuts!
... the total bill for the five companies comes to £9.43m.
The fines are another blow to the reputation of the oil industry, hours after BP finally managed to cap its leaking well in the Gulf of Mexico.
But they are tiny in comparison to the profits made by oil companies such as Total, which had a net income of £1.94bn in the first three months of this year ...
... Mike Penning, Conservative MP for Hemel Hempstead, warned that today's fines were "loose change" to major oil companies.
"Legal justice might be done but not natural justice for a local community which is still fighting to win civil compensation claims," he said.
Guardian 16 July 2010 Corporate State BritainCommunity struggles to rise from ashes of Buncefield fire
Will they be made to pay?
He is opening the oceans off the Shetland Islands to deep-sea drilling, and promising Big Oil tax breaks to drill, baby, drill ...Now Cameron jilts the environment
Cameron's 'ethical' friends revealed
Cameron has put the man (Lord Browne) most to blame for the worst environmental disaster in living memory in charge of his cuts agenda, and appointed a man (David Rowland) who has faced accusations of wriggling out of cleaning up an environmental atrocity to run his party's finances ...
He commissioned another oil man, Tim Eggar, to go and ask the world's oil companies what they want from his government ...
But we know oil companies received big tax cuts in the Budget, and the Government's subsequent energy policy paper says life needs to be made "simpler [and] clearer" for oil companies to drill in British waters.
Even though it is our addiction to oil that is causing and worsening global warming, the paper says:
"We need policies designed for hunting [oil]... We need policies that offer the right incentives to explore for and extract the remaining reserves of oil and gas, and to keep existing fields open for as long as possible." ...
Independent 16 July 2010 David Cameron Eating the FutureWhy the former BP boss's new government job is beyond parody
How the Sun King sank BP
Ex-Bunker Hill exec enters British politics
The dirty past of the former tax exile who’s the new Tory Treasurer
Tim Eggar, former Energy Minister
Caring for one's country
Senate may investigate BP's role in release of Megrahi
The Secretary of State said she had received a letter from four Democrat senators alleging that BP put pressure on the Scottish government to release Libyan Abdel Basset al-Megrahi to help the company's efforts to win drilling licences put up for tender by Tripoli.
Megrahi was released in August last year after doctors in Scotland said he was suffering from developed prostate cancer and had just three months to live.
Reports from Libya suggest that his health has improved, and it is thought that he could now live for another decade.
"It is shocking to even contemplate that BP is profiting from the release of a terrorist with the blood of 189 Americans on his hands," one of the senators, Frank Lautenberg, wrote in a letter to the Senate Foreign Relations Committee ...
BP is expected to start drilling for oil in the Gulf of Sidra off Libya within the next two weeks after being granted concession rights in 2007.
Independent 15 July 2010 Deepwater HorizonBP oil spill cap ready for testing
US moves to block new BP oil leases
Adam Crozier's appointment early this year as chief executive of Coronation Street broadcaster ITV on a stonking contract that could see him earn more than £14million over the next five years left investors underwhelmed.Investors switch off ITV's Crozier
They obviously remembered his dire performance when head of the Football Association and the Royal Mail.
He has made enemies in-house after ordering 150 of his most senior staff to undergo ability and aptitude tests, but his big test as far as the City is concerned is just around the corner ...
Daily Mail 28 Jan 2010The cheque's in the post: £2m bonus for departing Crozier
ITV could reward Adam Crozier with £14m pay and bonus package
From alpha mail to broadcasting mogul
Royal Mail rewarding Adam Crozier's 'failure'
Crozier's £100,000 pay rise... and his bonus is the same again
Adam on leave
Executive pay rises while shareholder earnings fall
The pay packages enjoyed by Britain's top directors are increasingly out of step with the actual performance of their companies, a report claims today.
Chief executives of FTSE 100 companies have seen their remuneration rise by 5% to an average of £3.1m since 2008, while earnings per share fell by 1% over the same period, according to the Total Remuneration 2010 survey by pay consultants MM&K and corporate governance group Manifest.
Over the past 10 years chief executive remuneration has quadrupled while share prices have declined, suggesting little or no link between rewards, performance and shareholder value, according to MM&K and Manifest.
The report said there had been a shift towards increasingly expensive, short term reward strategies, such as annual bonuses.
"This mirrors the approach that caused so many problems in the banking sector," it said. "Furthermore, as most remuneration strategies now involve the use of long term incentive plans, reward horizons have shortened to only three years. A decade ago, when share options were the favoured incentive, the horizon average was seven to ten years."iaoutflsGuardian 05 July 2010
5 Jul 2010, 8:31AM
There is a wider issue here which is that the major institutional shareholders (pension funds, etc) have been asleep on the job, not wanting any negative profile because they are more interested in getting new customers and money in.
The result is they have been failing to challenge management not just on pay but also proper stewardship of businesses versus a short term approach...look at the suggestions BP has been cutting corners on safety, the Pru's fortunately failed attempt to massively overpay for a huge acquisition, several misguided forays and over expansion by the banks ...
... it seems to me there is a strong argument for creating a framework that financially encourages long term ownership from the major institutions...even a 1% benefit in tax provided they held shares for a suitably long average period would obligate them to review the current churn approach where they actually hold shares for less time on average than private investors ...
Another obvious action is to make voting at AGMs compulsory for these institutions. this could easily be monitored via the FSA or its replacement.
The current system of non-binding votes on pay after the event is ludicrous ...
Former QinetiQ boss gets £1.1m golden goodbye
Graham Love, the former chief executive of QinetiQ, has received £1.1m in golden goodbye, performance payouts and consultancy fees despite being blamed by his successor for a financial crisis at the embattled defence technology group and presiding over an "insufficiently commercial" culture.
The cash and shares payouts came on top of salary and benefits of £430,000 Love earned in the seven months before his resignation last October, according to QinetiQ's annual report out today.
His pay has proved a constant source of controversy ever since the group's stock market flotation four years ago. He was awarded shares worth £21m when it joined the market, cashing in £6m a year later to fund a divorce. He is thought to retain about 5m shares, worth almost £6m.
Love's successor Leo Quinn, who received a golden hello of £600,000, last month suspended the dividend for 12 months, warning investors to expect two years of falling revenue and the 13,000 staff to prepare for job cuts of 10% ...
Guardian 25 June 2010Treasury raises £257m in Qinetiq share sale
'Excessive' rewards for Qinetiq chiefs
MPs cry foul on MoD PFI
Qinetiq consortium wins bulk of £16bn MoD contract
Greed of the highest order
Inquiry launched into QinetiQ profiting
Qinetiq's £1bn flotation 'will sell taxpayer short'
Anger as £1.3bn float of Qinetiq gets away
Geeks With Guns
Ernst & Young faces inquiry over Lehman audit
The investigation follows an allegation in March by a US court-appointed examiner that E&Y – one of the world's "big four" accountancy firms – approved accountancy tactics that allowed the failed investment bank to hide $50bn (£33.7bn) of debt off its books ...
UK law firm Linklaters was also described as aiding the transfer of funds because it had said that the transactions were legal under English law. It denied any wrong-doing ...
"The E&Y fiasco is just the tip of the iceberg, of [problems caused by] the close relationship between the audit firm and its clients," Sikka said. "E&Y were aware of 'repo 105' – and auditors are more powerful than the police – they can examine anything, interview anybody without a court order; they already have the statutory right."
Accountancy firms, however, "are reliant on clients because of the fees; that influences what they are willing to do and say publicly, and all too often, bad news is buried," Sikka said.
The involvement of audit firms in big accounting scandals such as WorldCom and Enron, which put Arthur Andersen out of business, shows that "audit firms, simply can't deliver".
Because banks have a key role in the economy, they should be audited on a daily basis by the central bank or an official regulator, he said.
Guardian 16 June 2010 The Repo men ...The Repo men must be stopped
The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe ...U.S. Identifies Vast Riches of Minerals in Afghanistan
"Afganistan ... has little or no history of environmental protection ... "
Welcome to the world of Bhopal and Deepwater Horizon, guys!
An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and BlackBerrys ...
The corruption that is already rampant in the Karzai government could also be amplified by the new wealth, particularly if a handful of well-connected oligarchs, some with personal ties to the president, gain control of the resources. Just last year, Afghanistan’s minister of mines was accused by American officials of accepting a $30 million bribe to award China the rights to develop its copper mine ...
Endless fights could erupt between the central government in Kabul and provincial and tribal leaders in mineral-rich districts.
Afghanistan has a national mining law, written with the help of advisers from the World Bank ...
At the same time, American officials fear resource-hungry China will try to dominate the development of Afghanistan’s mineral wealth ...
Another complication is that because Afghanistan has never had much heavy industry before, it has little or no history of environmental protection ...
NYT 13 June 2010 Afghanistan Eating the Future War on Terror Log
Many find it hard to sympathise with Hayward, especially after gaffes such as saying he would like to have his life back. Similarly, few will shed tears over the blame poured on errant bank bosses.Superheroes and supervillains – why the cult of the CEO blinds us to reality
In which blogger needbeer gets to the heart of the matter
But according to Professor Julie Froud of Manchester Business School, this personal approach blinds us to deeper issues:
"President Obama is coming down very hard on Tony Hayward when he should also be looking at the whole issue of our energy use, which is of course much harder to address," she says.
"It is the same with the Treasury Select Committee hearings with the bankers, or the hearings in the US. It is justified to hold individuals to account, but it doesn't address the deeper problems in banking. The reality is that, in large organisations, success or failure just does not hang on any one individual."needbeerObserver 13 June 2010 'Greed is Good'
13 Jun 2010, 5:48PM"...businessmen are idolised out of proportion to their real achievements;"Affirmative. This is self-evident. "on the other, they are disproportionately blamed for the failures of the companies they lead."
Now this requires some examples and there are a few. However the handful of CEOs that have been vilified for the most part have also been handsomely rewarded for their perceived failings, with golden parachutes and such.
The problem as I see lies not in the individuals who lead the corporations for they were merely playing the game, and rather successfully judging from their positions.
No the problem lies in the rules of the game itself, the rules that define what a corporation is, its responsibilities, its liabilities, how it conduct itself, how it may continue to exist, etc.
It is time to re-examine the concept of incorporation and limited liability and decide if this arrangement is in the best interest of society generally.
JH Kunstler recently summed up the nature of the corporation nicely:
"...the fundamental character of corporations is sociopathic, insofar as their only express allegiance is to their shareholders, meaning they are devoid of any sense of the public interest..."
now if one agrees with these thoughts, then one must ask why are we continuing to grant corporations so much power and control over our lives and our governments?Judge ... had shares in the oil industry
$20bn compensation and no BP dividends
BP credit rating slashed
Marks & Spencer chief's pay more than doubles to £4.3m
Sir Stuart Rose, who steps down as chief executive at the end of next month, rewarded with 140% increase in salary and bonuses despite lacklustre performance of group ...
The scale of the boardroom payouts is likely to further inflame M&S shareholders, some of whom have already made it known that they intend to vote against the M&S pay report in protest at the package handed to Marc Bolland, who will take over from Rose next month. Bolland could earn up to £15m in his first year, with £4.9m guaranteed, regardless of performance.
Over the past two years M&S's relationship with its shareholders has deteriorated, as the retailer has failed to comply with corporate governance guidelines and tested investors' patience with generous incentive schemes. Rose is due to hand control of the retail empire to Bolland at the end of July. At that point he will become part-time chairman, with a salary of £875,000 – making him the highest paid non-executive chairman of a FTSE 100 company. He is due to leave by the end of March next year.
In the annual report, remuneration committee chairman Steven Holliday, chief executive of National Grid, said Bolland's pay was designed to "attract and retain leaders who are focused and encouraged to deliver business priorities within a framework that is aligned with the interests of the company's shareholders".
Guardian 10 June 2010 Wealth Log
Gulf coast communities face loss of 46,000 jobs thanks to moratorium pending BP inquiry ...Anger over Obama block on Gulf of Mexico oil drilling after BP disaster
Time to find something else to go in the gas tank: like clean electricity and/or hydrogen
A decision by Barack Obama to slap a block on deepwater exploration in the Gulf of Mexico has angered the energy industry and crisis-hit communities that rely on rigs for lucrative jobs.
In a move barely noticed by the public ... the White House ordered a six-month moratorium on deepwater drilling, pending new safety standards that will be drawn up by a special presidential commission charged with scrutinising the causes of the worst slick ever to blight America's oceans.
The move was applauded by environmentalists ... the Sierra Club, said the disaster was a wake-up call: "It's time to take offshore drilling off the table for good."
But the move comes at a cost. It will mean a halt to work on 33 drilling platforms, jeopardising as many as 46,000 jobs on land and sea, according to industry figures.
Those rigs, leased by oil companies at a typical cost of $500,000 a day (£340,000), are likely to be loaded onto ships and taken elsewhere – possibly to Brazil, India or the west coast of Africa, where wells are waiting to be drilled ...ikesolemGuardian 09 June 2010 Deepwater Horizon Peak Oil
9 Jun 2010, 5:37PM
A renewable energy industry would more than replace all those jobs - and what about the thousands of tourism and fishing related jobs that have been lost as the result of the spill?
For example: offshore wind turbines, algal biofuel production and refining, solar panel manufacturing and installation - all largely pollution-free, especially relative to deepwater blowouts.
The pay is similar, the work is less dangerous, and there is no risk of destroying the tourism and fishing industry - so don't listen to the lobbyists for fossil fuels who tell you there is no other alternative.$20bn compensation and no BP dividends
BP faces $34bn in fines
Experts double estimate of BP oil spill size
Slow-motion tragedy unfolds for marine life
Oil-affected wildlife
Obama orders six-month freeze on offshore drilling
Seven convicted over 1984 Bhopal gas disaster
Former employees of Union Carbide India Ltd guilty of causing death by negligence over disaster that killed at least 15,000 ...
An Indian court today convicted seven former senior employees of Union Carbide's Indian subsidiary of causing "death by negligence" over their part in the Bhopal gas tragedy in which an estimated 15,000 people died more than 25 years ago.
The subsidiary company, Union Carbide India Ltd, which no longer exists, was convicted of the same charge.
The former employees, many now in their 70s, face up to two years in prison. The judge has not yet announced sentences.
Large groups of survivors and relatives, along with rights activists, gathered in Bhopal, Madhya Pradesh, in central India. They said the verdict was too little, too late.
On 3 December 1984, about 40 tonnes of deadly methyl isocyanate gas leaked from a pesticide plant run by Union Carbide into the air in Bhopal, killing about 4,000 people.
The lingering effects of the poison increased the death toll to about 15,000 over the next few years, according to government estimates.
Local activists insist the actual toll is almost twice as high, and say the company and government have failed to clean up toxic chemicals at the plant, which closed after the incident ...
Union Carbide was bought by the Dow Chemical Co in 2001.
Dow says the legal case was resolved in 1989 when Union Carbide settled with the Indian government for $470m (£326m), and that all responsibility for the factory now rested with the government of the state of Madhya Pradesh, which owns the site.
Guardian 07 June 2010 A Violent Aggressive CultureBhopal gas leak convictions not enough
Bhopal's secret disaster
Bhopal disaster
Bhopal
The World Cup kaleidoscope
Philippe: What is the World Cup really about? Money, pure and simple. This is a beanfest for global corporations.
The statistics on sponsorship, advertising, and merchandising are staggering.
The top fifteen sponsors – McDonalds, Budweiser, NTT, Gillette, the usual suspects – will pay FIFA, the world governing body, £375 million to display their images at the tournament.
Adidas is paying ten teams around £60 million to wear their products. And the money is not just decoration – it has colonised the very soul of the game.
Brazil is a franchise of Nike.
When injuries to key players are discussed – Ronaldo in 1998, Zidane in 2002 – the sponsors are in the wings, pulling the strings.
It used to be a game. It’s now a global business ...
openDemocracy June 2010The World Cup kaleidoscope
Homeless South Africans getting moved out of major cities ahead of 2010 World Cup
Tackle poverty in South Africa
London ... Olympic spirit ... kicking out the Gypsies
BP hives off 'toxic' Gulf spill operation
Responsibility for the leaking well and the clean-up strategy will placed in the hands of Bob Dudley, one of the company's most able directors.
Dudley, a US citizen, has been looking for a suitable role in the company since he was thrown out of Moscow in a battle with the Russian shareholders of the TNK-BP joint venture in the middle of 2008.
Hayward said the clean-up business would be run separately by Dudley with his own staff but the finances and budget would come from the main BP group.
The BP chief executive said the purpose of the split was to allow Dudley to concentrate on the Gulf problem while he and other directors were not distracted from keeping the main business on track ...
Guardian 04 June 2010 Deepwater Horizon$20bn compensation and no BP dividends
Obama: BP chief would be fired if he was working for me
BP will pay 'many billions of dollars in fines' for oil spill
BP's Deepwater Horizon costs hit $1.25bn
It Was Unclear Who Was in Charge of Rig
BP fails to rule out cut in dividend
BP chief executive apologises for Gulf oil spill
Another Torrent BP Works to Stem: Its C.E.O.
BP, already bedeviled by an out-of-control well spewing millions of gallons of oil into the Gulf of Mexico, now finds itself with one more problem: Tony Hayward, its gaffe-prone chief executive ...
Mr. Hayward, 53, ascended to the top job when his predecessor, John Browne, resigned after a personal scandal and a series of major accidents. Mr. Hayward promised to refocus the company culture on safety ...
The company has enlisted the help of the Brunswick Group, a public relations and crisis management firm, to deal with the accident.
It has dedicated the home page of its Web site, BP.com, to the crisis and taken out full-page advertisements in major newspapers.
BP has also hired a new head of media relations in the United States, Anne Womack Kolton, who worked at Brunswick and is a former aide to Vice President Dick Cheney and Energy Department spokeswoman ...
NYT 03 June 2010 Deepwater HorizonPlan for Relief Wells Spurs Hope Amid Caution
An investigation by the British Medical Journal and the Bureau of Investigative Journalism, the not-for-profit reporting unit, shows that WHO guidance issued in 2004 was authored by three scientists who had previously received payment for other work from Roche, which makes Tamiflu, and GlaxoSmithKline (GSK), manufacturer of Relenza ...Report condemns swine flu experts' ties to big pharma
WHO in grip of Big Pharma
The UK, which warned that 65,000 could die as a result of the virus, spent an estimated £1bn stockpiling drugs and vaccines; officials are now attempting to unpick expensive drug contracts.
The cabinet office has launched an inquiry into the cost to the taxpayer of the panic-buying of drugs.
Today, the Council of Europe, produces a damning report into how a lack of openness around "decision making" has bedevilled planning for pandemics.
"The tentacles of drug company influence are in all levels in the decision-making process," said Paul Flynn, the Labour MP who sits on the council's health committee. "It must be right that the WHO is transparent because there has been distortion of priorities of public health services all over Europe, waste of huge sums of public money and provocation of unjustified fear."
Although the experts consulted made no secret of industry ties in other settings, declaring them in research papers and at universities, the WHO itself did not publicly disclose any of these in its seminal 2004 guidance.
In its note, the WHO advised: "Countries that are considering the use of antivirals as part of their pandemic response will need to stockpile in advance." ...
Guardian 04 June 2010 Corporate State Britain
BP to go ahead with $10bn shareholder payout
Tony Hayward to defy calls from politicians to cancel dividend until Deepwater Horizon oil spill is resolved ...
Guardian 03 June 2010
Hayward told the Financial Times it was "entirely fair" to criticise BP for not being better equipped to fight a leak 5,000 feet below the surface.BP lacked the right tools to deal with crisis
It's the dividend, folks. Nothing else matters!
He said the oil giant needed to develop new techniques for such crises, rather than using decades-old methods.
"What is undoubtedly true is that we did not have the tools you would want in your toolkit," said Hayward in an interview with the FT.
His comments came as US politicians demanded that BP should suspend dividend payments to shareholders while it battles the oil spill in the Gulf of Mexico.
In an open letter to Hayward – who recently told the Guardian his job was on the line – Democratic senators Charles Schumer and Ron Wyden said it would be wrong for BP to pay investors a dividend until it knows the full cost of the disaster ...
Shares in BP rose by over 4% this morning to 448p, indicating that traders remain confident that the the annual dividend will be paid ...
Guardian 03 June 2010 Corporate Sociopathy Log Deepwater HorizonWill Deepwater sink the 101-year-old BP?
Delays in sealing oil pipe fan doubts over BP's survival
The previous chief executive of BP, Lord Browne of Madingley, revealed in a recent autobiography entitled Beyond Business that he took BP to the brink of a merger with Shell six years ago only to be thwarted at the last minute by opposition from a handful of his own board members. "We missed the boat. We estimated that a merger could create synergies of around $9bn a year in three to five years' time."
But there were also reports that Hayward had held similar discussions in 2007 when BP's share price had been weakened by the Texas City refinery fire, in which 15 workers died. The plunging value of BP is a blow to British pension funds as it is estimated to provide £1 in every £7 paid in dividends by FTSE-100 companies.
BP is also a big provider of revenue to the exchequer. It said last night that it paid $6.3bn in global corporate income tax, of which $1.1bn (£690m) was in the UK. BP expects to pay about $4bn in 2009 in production taxes globally, of which £130m would be in Britain.
Duncan Exley, of lobby organisation FairPensions, cautioned investors: "Social and corporate governance issues have a history of precipitating crises which damage our economy and our investments."
Guardian 02 June 2010 Deepwater Horizon
Moody’s staff pressured to give high ratings
Ratings analysts were bullied by their bosses into giving top scores to risky mortgage products, executives from Moody’s Investors Service told a US government inquiry into the financial crisis.
Speaking at a hearing in New York of the Financial Crisis Inquiry Commission, the analysts described a culture of fear at the ratings agency, which has been accused of helping to fuel the financial crisis by putting triple-A ratings on mortgage products that did not deserve them.
Eric Kolchinsky, a former managing director at Moody’s US derivatives business, told the hearing that Moody’s bosses, desperate to increase the company’s market share, forced analysts to rate a huge volume of mortgage-related products even if they did not have sufficient time to analyse them properly.
“It was very clear to me that my future at the firm and my compensation would be based on the market share,” he said ...
Times 03 June 2010Wall Street bullied us
EU plans regulator for rating agencies
Buffett bats off criticism of Moody’s
Buffett: 'it's easy to be wise after the event'
Rating agencies
Back to Blog
LSE chief attacks short-selling ban as 'misguided' and 'counterproductive'
The chief executive of the London Stock Exchange has launched a stinging attack on the German government's unilateral decision to ban so-called "naked" short-selling in some financial stocks and bonds.
In an interview with an Italian newspaper, Xavier Rolet described the ban as a "mistaken decision that risks having an effect which is the opposite of what is desired".
He continued: "I would, in fact, suggest to eliminate the ban. And then to construct market infrastructure that helps investors. Markets are global: you can't think of acting unilaterally because it would be counterproductive." ...
Independent 31 May 2010 Blog Economic Democracy Fractional Reserve Banking
BP oil rig registration raised in Congress
Political ripples from the Deepwater Horizon oil disaster have travelled as far as the north Pacific, where authorities of the remote Marshall Islands have been found to be the ones technically responsible for scrutinising safety standards on the doomed BP rig.
The rig, which was owned by Transocean, but under lease to BP when it exploded and sank on 20 April, is regarded as an ocean-going vessel in legal terms.
In common with 34 other Transocean oil rigs, Deepwater Horizon was registered under the flag of convenience of the Marshall Islands ... (which) ... means the Marshall Islands' shipping registry was responsible for ensuring compliance with quality standards for construction, equipment and operation on the rig ... (it) ... is also obliged to investigate any accidents that occur on its maritime vessels, including the loss of the Deepwater Horizon ...
Questions have been raised in the US Congress about why Transocean registers its rigs in a country 7,000 miles from Washington with a gross domestic product of $133m – 700 times less than BP's market capitalisation ...
Guardian 30 May 2010 Deepwater HorizonBillions more wiped from BP's value as shares plunge
BP to promise $10bn payday
How much worse can it get for BP?
Deep Underwater, Oil Threatens Reefs
A Waiting Game for Fishermen
BP's management faces an immense challenge
Rising Cleanup Costs and Numerous Lawsuits Rattle BP’s Investors
BP's clumsy response to oil spill
US reveals criminal probe over BP spill
BP oil rig registration raised in Congress
As the investigation into the BP oil rig explosion accelerates, new information has been surfacing in congressional hearings in Washington pointing to possible problems with the casings that were put around the bore hole in the sea bed and the cementing that is critical to sealing it up.What was Halliburton's role in US oil spill?
Honour among thieves?
Halliburton did the cementing at the well, under contract to BP. It was to inject the cement to seal the casing in the bore hole to make any seepage of gas and oil impossible, and insert the cement plug that would have allowed BP to return at a later date to begin production.
Last August, Halliburton was involved in the cementing of a well in the Timor Sea off the coast of Australia that similarly blew out, sending thousands of gallons into the ocean ...
The notion that blame for the blast could eventually be put on Halliburton might be tempting for BP. Indeed, at early hearings, BP seemed to point fingers both at Halliburton and at Transocean ... prompting a rebuke from President Obama.
From the start, Halliburton's lawyers have insisted that its men on the rig were simply following specifications and instructions from BP ...
Transocean has made a similar case that as the owner of the lease on the well, BP must be ultimately responsible.
Independent 30 May 2010 Deepwater HorizonDocuments Show Early Worries About Safety of Rig
Oil spill creates huge undersea 'dead zones'
BP Used Riskier Method to Seal Oil Well Before Blast
Several days before the explosion on the Deepwater Horizon oil rig, BP officials chose, partly for financial reasons, to use a type of casing for the well that the company knew was the riskier of two options, according to a BP document.
The concern with the method BP chose, the document said, was that if the cement around the casing pipe did not seal properly, gases could leak all the way to the wellhead, where only a single seal would serve as a barrier.
Using a different type of casing would have provided two barriers, according to the document, which was provided to The New York Times by a Congressional investigator.
Workers from the rig and company officials have said that hours before the explosion, gases were leaking through the cement, which had been set in place by the oil services contractor, Halliburton.
Investigators have said these leaks were the likely cause of the explosion ...
NYT 26 May 2010Panel Suggests Signs of Trouble Before Rig Explosion
Washington and BP -- 'Like a Junkie Controlling His Dealer'
Despite Moratorium, Drilling Projects Move Ahead
Agency Orders Use of a Less Toxic Chemical in Gulf
Kraft rebuked for broken pledge on Cadbury factory
US food group Kraft censured by Takeover Panel for going back on promise to keep Cadbury's Somerdale factory open
Guardian 26 May 2010Lazard man in Kraft spotlight is right to exit
Total cost of new regulations reached £90bn under Labour
The give-away here is our old friend the working-time directive, that bete-noir of Davos Man, who would like to put everyone on 'agency' working terms, and to hell with the Miniscule Wage.The total cost to businesses of regulations introduced by the Government last year was £1bn, consisting of 40 restrictions.
Among the most costly of these laws is the EU Light Duty Vehicle Emissions Standards, which has a recurring annual cost to business of £1.48bn.
But the most costly of all the laws since 1998 are Working Time Regulations, which have cost businesses a cumulative £17.8bn, and a 2000 EU pollution directive, which cost £10.4bn ...
Telegraph 24 May 2010Red tape costs businesses £77 billion over last decade
Deepwater Horizon survivor describes horrors of blast and escape from rig
These things Stephen Davis cannot banish from his memory from that night of chaos aboard the Deepwater Horizon: the sensation of being flung into a wall by a powerful explosion, the desperate, muddy scramble on a deck lit only by the reflections from a huge pillar of flame; the look in men's eyes before they jumped 18 metres into the water ...
For Davis, the events of that night, when the rig exploded killing 11 of the 126 crew, was only the beginning of his ordeal.
He says he and other survivors were to spend the next 40 hours in isolation – barred from phoning their families – while his lawyers believe Transocean, the owners of the rig, readied its legal defences. Seventeen crew members were seriously injured in the incident ...LostintheUSGuardian 20 May 2010 Eating the Future
20 May 2010, 9:55PM
You folks have heard of the Gulf Stream, right? As soon as those submerged and floating oil masses round up the Atlantic coastline of Florida, they will be drawn into the Gulf Stream.
And where does the Gulf Stream end up?
The UK.
Most of the world's oil skimming equipment should be in the Gulf of Mexico right now.
One of my relatives retired from the engineering petroleum field and used to work for BP. He said BP is clearly to blame.
Here is an excerpt from today's New Orleans Times-Picayune:
"BP hired a top oilfield service company to test the strength of cement linings on the Deepwater Horizon's well, but sent the firm's workers home 11 hours before the rig exploded April 20 without performing a final check that a top cementing company executive called "the only test that can really determine the actual effectiveness" of the well's seal.
A spokesman for the testing firm, Schlumberger, said BP had a Schlumberger team and equipment for sending acoustic testing lines down the well "on standby" from April 18 to April 20. But BP never asked the Schlumberger crew to perform the acoustic test and sent its members back to Louisiana on a regularly scheduled helicopter flight at 11 a.m., Schlumberger spokesman Stephen T. Harris said.
At a few minutes before 10 p.m., a belch of natural gas shot out of the well, up a riser pipe to the rig above, igniting massive explosions, killing 11 crewmembers and sending millions of gallons of crude oil into the Gulf. The rig's owner, Transocean, blames failed cement seals, installed by Halliburton, for the disastrous blowout."
No mystery here, folks. BP made the decision not to conduct the time-consuming final acoustic test. And Halliburton was using an experimental cement for the cement seal.
Clients Worried About Goldman’s Dueling Goals
As the housing crisis mounted in early 2007, Goldman Sachs was busy selling risky, mortgage-related securities issued by its longtime client, Washington Mutual, a major bank based in Seattle.
Although Goldman had decided months earlier that the mortgage market was headed for a fall, it continued to sell the WaMu securities to investors. While Goldman put its imprimatur on that offering, traders in the same Goldman unit were not so sanguine about WaMu’s prospects: they were betting that the value of WaMu’s stock and other securities would decline.
Goldman’s wager against its customer’s stock — a position known as a “short” — was large enough that it would have generated at least $10 million in profits if WaMu collapsed, according to documents recently released by Congress. And by mid-May, Goldman’s bet against other WaMu securities had made Goldman $2.5 million, the documents show.
WaMu eventually did collapse under the weight of souring mortgage loans; federal regulators seized it in September 2008, making it the biggest bank failure in American history.
Goldman’s bets against WaMu, wagers that took place even as it helped WaMu feed a housing frenzy that Goldman had already lost faith in, are examples of conflicting roles that trouble its critics and some former clients ...
NYT 18 May 2010 Goldman Sachs
The long-term risk is in the potential for harsher industry-wide regulations, both in the US and other oil-producing nations ...Oil is sinking amid 'oceans of public debt'
The Torygraph is concerned lest the Gulf oil spill should lead to 'tighter regulation'
For example, the intense focus on the quality of the sunken rig’s safety valve – its blowout preventer – makes it likely that a more expensive remote activation button will become compulsory at a cost of $500,000 (£343,000) per well.
In addition to extra safety devices, there is expected to be more paperwork plus higher insurance premiums.
There is also the prospect of pecuniary punishment from President Obama’s team, which has grown increasingly frustrated with BP’s inability to stop the leak.
In return for the bad publicity, it could well end the industry’s $36.5bn in tax breaks and hand subsidies over to eco-friendly wind or biofuel projects.
Edward Morse, an analyst at Credit Suisse, has estimated that a tightening of regulations will “potentially raise the cost of finding and developing a barrel of oil in deep water by 10pc to 15pc, or $5 to $10 a barrel. We don’t expect anything to impede drilling entirely, just delay it and potentially raise costs.” ...
Telegraph 16 May 2010Danger for Florida
BP insists oil spill impact 'very modest'
Bankers plot guaranteed bonuses to beat budget tax
The City is lining up to defend itself from any further attack on pay, which bankers argue will kill London’s ability to compete as a global financial centre.
Senior bankers at a number of the City’s biggest institutions have started to work on plans to get round any new taxes.
If they offer legally-binding guarantees on bonuses before the new measures are announced the payments are likely to escape censure, the bankers believe ...
Times 16 May 2010We need Roubini's brains if we want banking reform
Working out what our bank system should look like, and whether it should be split between narrow and casino banks, is so complex that we need brains like Roubini's to help see more clearly.
Reformers will also need to have pretty robust arguments because any attempts here and in the US to break up the banks will bring down the wrath of the most powerful vested interests in the world, who will fight tooth and nail to defend their privileges and their bonuses.
As his book warns, a return to some sort of Glass-Steagall structure doesn't go far enough.
He's right when he recommends breaking up the Too Big To Fail banks – Bank of America, UBS, RBS, JP Morgan, Barclays, Goldman Sachs and BNP Paribas for starters – with antitrust laws, just as the US did with the oil titans and AT&T.
That's why our new commission must look at whether the big investment banks are an oligopoly.
We need to know how the banks make so much money – whether from cartels that set underwriting fees or from colluding on advisory charges.
Indeed some critics even ask whether many trading profits are ficticious ...
... breaking up the banks will only work if there is global agreement, as John Kay, the champion of narrow banking, says, there are only one and a half countries which matter – the US and the UK ...
Independent 16 May 2010 FRBFiat Currency
No way back to status quo Cable tells banks
Bankers' earnings surge towards pre-crash levels
Pay and bonuses totalled £20.5bn in four months to April, compared with £24bn at height of boom in 2007 ...
The steep rise in earnings is likely to put pressure on the coalition government to impose a clampdown on City pay practices, which the Liberal Democrats in particular attacked while in opposition.
Guardian analysis of data from the Office for National Statistics shows that bankers were paid £8.5bn in bonuses in the four months to April, compared with £7bn during the same period last year.
There was also a jump in pay across the industry of £1bn to £12bn as bankers shifted some of their earnings away from bonuses to avoid the former Labour government's bonus tax ...
Guardian 13 May 2010 Fractional Reserve Banking Economic Democracy Wealth Log
Sweatshop girl
As part of a series assessing whether Bangladesh is on track to meet the UN Millennium Development Goals (MDGs) by 2015, the BBC's Alastair Lawson visits a safety pin factory in the capital, Dhaka, which employs children.
The electricity supply in the sweatshop in the crowded part of old Dhaka where Asma, 10, makes safety pins for a living is so dangerous that the foreman can only turn on the lights using a broomstick.
"If I use my hands I may get an electric shock," he explains.
Asma is one of about 10 workers in the dingy factory - in the heart of the crowded and maze-like alleyways of this part of the city - who are under 14 ...
Asma usually arrives at work at eight in the morning and leaves at eight in the evening. She often works six days a week and is paid about $2 a day ...
Asma explains that as one of six children in her family she and her siblings have no choice but to work. Her father is a bicycle rickshaw puller and does not earn enough money to feed his family ...
BBC NEWS 10 May 2010 WEF DavosMeeting Millennium Development Goals
Dow Jones insanity shows the need to regulate the murky world of dark pools
We don't know all the causes yet of Thursday's bout of insanity on the Dow Jones Industrial Average, but this much is clear: regulators have lost control of the equity market ... big buyers can go hunting for sellers (and vice versa) without having to reveal their hand.
It makes a mockery of the claim that published stock prices reflect the balance of supply and demand at any given moment.
It is because of the sheer lack of transparency that these off-exchange trading platforms are called "dark pools". There are more than three dozen alternative trading pools in the US now ...
The traders themselves long ago stopped being actual humans. More than half of all share trades in the US are now done by computer programmes, and the proportion is rising exponentially.
These black-box programmes are designed to trade at very high frequency, using impenetrable mathematical models to spot supposed trading patterns and eke out tiny profits, multiple times a second ...
The SEC recently – belatedly – began (the) review of high-frequency trading and dark pools.
It is difficult to be optimistic that it will get its head round all these issues.
This is the same SEC that couldn't catch Bernard Madoff when he was using an archaic computer to fabricate thousands of trades ...
Independent 08 May 2010 Economic Democracy Fractional Reserve BankingOrigin of Wall Street’s Plunge Continues to Elude Officials
Oil spill puts survival of BP at stake
As a high-stakes operation to shut off a blown-out oil well unfolded on the seabed and a 130-mile wide slick menaced the coastline of four US states, a top US official was warning that the survival of BP as a company was under threat ...
The leak, which is spewing more than 200,000 gallons a day — or 2.5 million gallons since the blowout two weeks ago — has overtaken the 1989 Exxon Valdez tanker disaster in terms of volume ...
The disaster has not daunted big oil. Shell urged an appeals court in Oregon to allow it to drill in the Arctic, countering a challenge by environmentalists.
The Louisiana Oil and Gas Association admitted that while it expects to be hit with tighter safety regulations, the industry must stand firm.
“We don’t stop because we’ve run up against the wall,” Don Briggs, its president, said. “There are 250 million vehicles in this country and 96 per cent of them run on oil.”
Times 08 May 2010BP insists oil spill impact 'very modest'
Obama: No more cosying up to oil industry
An Exxon Valdez every four days
Tread carefully, Mr Obama. You need big oil
Goldman Sachs boss faces an ambush at the AGM
In the absence of economic democracy, CEO's like Lloyd "I'm doing God's work" Blankfein can put two fingers up to "shareholder proposals" safe in the knowledge that fellow corporate investors will remain on side, on the understanding that the new "business standards committee" is empty corporate spin. This, after all, is the firm that worked both for the Greek government, and against it. All in the interests of corporate profit.He once joked that Goldman Sachs was “doing God’s work”, but yesterday Lloyd Blankfein came face-to-face with the Lord’s representatives on Earth.
A stream of Christian shareholders held him to account at the bank’s annual meeting in Manhattan, exhorting him to work “for the many, not just the few” ...
In hopes of deflecting further criticism from shareholders and the wider world, which he knew would be watching the meeting closely, Mr Blankfein said that Goldman would create a new business standards’ committee to conduct a comprehensive review of business practices at the firm and come up with recommendations to the board ...
Mr Blankfein looked remarkably more relaxed throughout than he did during his recent grilling by the US Senate.
He responded politely but rejected all shareholder proposals.
By the end, he looked unbowed, but relieved all the same that he had successfully got through another day in the spotlight at the Goldman Sachs circus.
Times 08 May 2010 Economic Democracy Goldman Sachs
... it does worry me when no less an authority than Dr Tom Pickerell, director of the Shellfish Association of Great Britain, says he is concerned that the chance of eating a bad oyster may be rising — although I must emphasise that the risk is still vanishingly low.Water companies sit silent in a pool of dirty secrets
Things can only get worse
What is worrying his members is the norovirus, or winter vomiting bug.
This virus was identified as being responsible for the outbreak of food poisoning that affected 529 people last year at the Fat Duck, Heston Blumenthal’s restaurant in Bray, Berkshire, regularly named as one of the best in the world.
The norovirus is found in human sewage. It happens to have been found in the beds in the Colne estuary run by the Colchester Oyster Fishery, which supplied the Fat Duck ...
The question that concerns Graham Larkin, operations director of the fishery, which also supplies the Ritz, Le Gavroche and Gordon Ramsay’s restaurants, is how sewage was allowed into some of the most famous oyster beds in the world.
You might think this was the kind of thing that kept the Environment Agency and the local water company awake at night.
Think again ...
Times 02 May 2010
Troubled Waters
BP’s hapless and obfuscatory response to the spill casts a pall on two reputations. The first is the company’s.
BP depicts itself as a force for clean energy and a greener world, yet it has produced an emerging environmental catastrophe whose effects it underestimated and whose dangers it failed to communicate.
The second is that of Tony Hayward, BP’s chief executive.
To his credit, Mr Hayward immediately grasped the potential catastrophe in the Gulf of Mexico. He flew promptly to Houston, he summoned a huge containment operation and, rather than engage in an effort to lay the blame on Transocean, which was running the Deepwater Horizon operation, he squarely assumed BP’s responsibility for the disaster.
Yet faced with a human tragedy and ecological disaster, he has appeared dilatory and ineffectual. Eleven people died in the initial explosion on the rig, huge stretches of American coastline and marshland are threatened, and marine life is at risk.
Mr Hayward has been co-ordinating the company’s containment operation. In that task he has been neither effective nor visible.
BP initially estimated the leak of crude oil from the damaged rig amounted to 1,000 barrels a day. It took nine days for the company to admit that this was a serious underestimate, and that the true figure was five times that amount ...
Times 02 May 2010 Peak OilDeepwater Horizon oil spill sparks calls for ... drilling ban
BP profits jump after oil price rise
BP profits jump after oil price rise
"We still need oil and gas" Manouchehr Takin tells The Guardian. And there's the problem: as demand expands, the need to replace these two finite resources with sustainable substitutes becomes more imperative. Instead, the search is directed at finding gas and oil reserves in "more hostile and challenging environments", probably because no current form of 'renewables' will replace the multiplicity of jobs which gas and oil perform.BP has smashed City forecasts with a 135% jump in profits, thanks to rising oil prices.
The energy giant reported profits of $5.6bn (£3.6bn) in the first three months of 2010, up from $2.4bn a year ago ...
Guardian 27 Apr 2010Deepwater Horizon disaster reflects the increasing danger in extracting reserves from more and more hostile environments ...Oil rig sinking puts 'bad boy' industry in spotlight again
The Gulf of Mexico accident has once again focused attention on the industry's safety record as oil companies drill ever deeper and in more hostile and challenging environments.
Although figures for global safety show improvement in recent years, the data masks some worrying trends.
In 2008, the most recent data available from the International Association of Oil and Gas Producers (OGP), the injury rate for workers involved in exploring for oil and gas was one-third higher than the average for the previous five years; in Africa this rate was four times higher.
With companies pushing the boundaries of exploration to regions such as northern Siberia, it is no surprise that fatality rates are on the rise.
Exploration is particularly risky because it often involves drilling in areas which have not been mapped, so little is known about the geology and about any hydrocarbons lying beneath the seabed.
... Manouchehr Takin of the Centre for Global Energy Studies said:
"Perhaps I'm biased. But accidents like this one will amplify the image of the industry as a bad boy. That is unfair, I think. We still need oil and gas."
Guardian 26 Apr 2010 Peak Oil LogThey wait for oil. But the sea brings death instead
Schwarzenegger turns against oil drilling
Deepwater Horizon oil rig explosion
Natural gas reserves
Goldman trader’s email slur
In a series of damaging emails released yesterday, Tourre also compared the products to a “Frankenstein” monster that had “turned against his own inventor”.
Other emails that emerged yesterday showed Lloyd Blankfein, Goldman’s chief executive, boasting about the money the bank made from the housing market collapse.
“Of course we didn’t dodge the mortgage mess,” Blankfein wrote in November 2007. “We lost money, then made more than we lost because of shorts (bets against housing).” ...
Meanwhile, it has emerged that five senior directors of Goldman Sachs, including Michael Sherwood, the co-head of its London office, sold shares in the bank after the SEC first warned that it may take action over the fraud claims. The watchdog issued a “Wells” notice, an official warning, in July last year.
The executives sold shares worth $65.4m between October 2009 and last February. Goldman’s shares dropped almost 13% after the SEC claim was filed in court 10 days ago ...
Royal Bank of Scotland has been ordered to hand over thousands of emails and documents to the SEC as part of an investigation into its sub-prime mortgage business in America.
RBS, which is 84% owned by taxpayers, yesterday confirmed that it had been under investigation for more than two years.
RBS, through its Greenwich Capital subsidiary in the US, controlled about 6.2% of the market for collateralised debt obligations ...
Times 25 Apr 2010 Fractional Reserve BankingGoldman Cited ‘Serious’ Profit on Mortgages
Goldman Sachs
Fabrice Tourre defends his 'Frankenstein products'
US banks pouring millions into bid to kill Barack Obama's finance reform bill
Invasion of the booty snatchers: how greed is spreading out from the City
"People are just the new domesticated livestock to be exploited"Blogger Halo572 has it right. It used to be said of the army that the squaddies were considered to be Class C stores: easily replaced. This is the, er, 'thinking' behind the mechanistic modelling of human beings to accept the grotesque disparities in wealth which, according to Lord Griffiths - vice-chairman of Goldman Sachs - is an essential pre-requisite to, er, "greater prosperity for all". Goldman Sachs is no stranger to the hubris that comes with globalised wealth, it's CEO having previously informed us that he and his colleagues are "doing God's work". Milton Friedman has, presumably, had a word with the Almighty since moving over to hobnob with Adam Smith, and all that Sermon on the Mount stuff has been quietly abandoned.Richard Lambert, the director general of the CBI, recently warned the small corporate elite being paid enormous sums that they seemed to "occupy a different galaxy from the rest of the community" and risked being treated like beings from another planet.
His words appear to have had little effect.
This year's season of annual meetings is shaping up to be a stormy one as executives defy the credit crunch with enormous rewards packages ...
Roger Bootle of Capital Economics says: "The pay culture of the City has affected expectations elsewhere. The whole climate is relevant here, because bad pay practices drive out the good ... Executive pay reflects a deeper underlying failure revealed by the banking crisis. The whole system of boards and non-executives has been a major failure. And scrutiny by shareholders hasn't worked." ...
In the decade to 2009, the average FTSE 100 chief executive has seen his rewards jump 125%, while the heads of smaller quoted firms have seen their pay increase by 80%, according to remuneration specialists.
This contrasts markedly with the experience of the rest of the population.
As Lambert pointed out, in 2000 the average chief executive earned 47 times as much as an average employee, but that ratio has now swelled to 81 times.
Figures from the Institute for Fiscal Studies show that, in the past decade, real income growth in almost all households was under 1% ...
Observer 18 Apr 2010 InequalityGoldman Sachs finds $5bn for pay and bonuses amid fraud investigation
Bananas*!
Might of the multinational fails to stop campaigning film-maker
When international food company Dole brought a lawsuit against a small-budget documentary featuring Nicaraguan banana plantation workers who alleged they had been left infertile by a banned pesticide, it appeared as if the film-maker would be beaten ...
The company's efforts to silence [Swedish director, Fredrik] Gertten first began when the film was selected to take part in the Los Angeles Film Festival in May last year. Dole sent out warning letters both to film-makers and sponsors of the film festival who subsequently withdrew the documentary from the competition, although it was still screened – to a full house ...
Mr Gertten has been focusing on getting the film shown around the world.
It was met by acclaim when it was screened at the Berlin Film Festival this year, and now it has reached London.
Yesterday, the director said: "It is a huge victory to screen at the ICA since there was a moment when we didn't know if the film ever would be seen. Dole was never my target. I wanted to make a film on the big back-story of 100 years of banana shipping from the South to the North. I had worked in Nicaragua for 35 years and I knew all about the banana marches." ...
Independent 17 Apr 2010 Corporate MediaBananas! The Shocking Film Dole Doesn't Want You To See
Chiquitas Children
Corporate Death Squads Come Back to Haunt U.S. Companies
PeaceWork
Goldman may owe British taxpayers $841m
British taxpayers have a direct material interest in the outcome of the fraud case brought against Goldman Sachs by the US financial watchdog, the Securities and Exchange Commission ...
... the material fact to dwell on for now is that on 7 August 2008, just before Royal Bank was semi-nationalised, it paid out $841m to Goldman Sachs to settle a claim on credit insurance provided by ABN, the Dutch bank which Royal Bank had acquired (or to be more precise, it had bought a big bad chunk of ABN in the autumn of 2007).
Goldman then passed this $841m to the ultimate beneficiary of the insurance contract, the giant US hedge fund, Paulson & Co.
Now the SEC claims that the insurance contract would never have been written, and therefore the loss would never have fallen on RBS, if Goldman had told the truth about certain financially important elements of the investment product that was being insured ...
Robert Peston 16 Apr 2010Securities and exchange commission charges Goldman Sachs with conflict of interest in sub-prime mortgage asset sales ...Goldman Sachs charged with $1bn fraud over toxic sub-prime securities
The SEC's accusations are levelled against the firm as a whole and against a French employee, Fabrice Tourre, 31, who is now an executive director in Goldman's London office.
The allegations revolve around a collateralised debt obligation called Abacus 2007-AC1 that was created by Goldman three years ago and proved a spectacularly poor investment for clients. Within nine months, 99% of the mortgages in the package had been downgraded and investors lost more than $1bn. Paulson, in contrast, made a profit of about the same amount.
Robert Khuzami, director of the SEC's enforcement division, said: "The product was new and complex but the deception and conflicts are old and simple. Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio." ...
Guardian 16 Apr 2010Eager to increase his bets against subprime mortgages, the investor, John A. Paulson, canvassed firm after firm, looking for new ways to profit from home loans that he was sure would go sour.Investor Who Made Billions Is Not Target of Suit
Only a few investment banks agreed to help him. One was Deutsche Bank. The other was the mighty Goldman Sachs.
Mr. Paulson struck gold. His prescience made him billions and transformed him from a relative nobody into something of a celebrity on Wall Street and in Washington.
But now his brassy bets have thrust Mr. Paulson into an uncomfortable spotlight. On Friday, the Securities and Exchange Commission filed a civil fraud lawsuit against Goldman for neglecting to tell its customers that mortgage investments they were buying consisted of pools of dubious loans that Mr. Paulson had selected because they were highly likely to fail ...
NYT 16 Apr 2010 Fractional Reserve BankingGoldman Sachs banker stripped of licence
Jeremy Warner on Goldman Sachs
Darling resists calls to ban Goldman from Treasury
Goldman Sachs set for bumper $3.8bn profits
Goldman to pay Tourre bonus despite fraud charge
Goldman Sachs implicated in shorting Lehman shares
Goldman doesn't get it
Goldman under fire on all sides
What really scares Goldman Sachs
The bank that thought it ruled the world
Goldman Sachs: a history of controversy
Top Leaders at Goldman Had a Role in Mortgage Unit
Goldman Sachs prosecution threatens to open the floodgates on Wall Street
Brown and Merkel attack Goldman Sachs
Goldman Sachs finds $5bn for pay and bonuses amid fraud investigation
For Goldman, a Bet’s Stakes Keep Growing
US regulators suspected Stanford in 1997
RBS lost £545m in alleged Goldman fraud
Goldman charge sends FTSE sliding
S.E.C. Accuses Goldman of Fraud in Housing Deal
Bankers are doing "God's work"
Public must learn to 'tolerate the inequality' of bonuses
Goldman Sachs
The boss of Xstrata, Mick Davis, banked almost £29m for 2009, providing a potential embarrassment for the Conservatives as he is a high profile supporter of their campaign against the government's proposed increase in national insurance ...Bosses stir up executive pay row with mega salary packages
Meanwhile Matt Emmens, chairman of Shire Pharmaceuticals, the drugs group that abandoned the UK two years ago and moved its headquarters to Ireland for tax purposes, made £10.5m despite only being a non-executive director.
News of the bumper payouts comes hard on the heels of details of the salary and bonus awarded last year to the boss of Reckitt Benckiser, owner of Cillit Bang kitchen cleaner.
The publicity-shy Dutchman Bart Becht smashed all previous payout records by collecting more than £90m in cash and shares in one year, the equivalent of £2.85 every second.
That payout followed his collection of £36.8m in 2008 when he topped the Guardian's annual pay survey of FTSE 100 bosses.
Since 2005 he has collected more than £200m.
It also comes after the CBI director general, Richard Lambert, warned that bosses risked being regarded as "aliens" living in "a different galaxy from the rest of the community" because of the fast-widening gap between average pay and boardroom handouts.
"For the first time in history it has become possible for a manager – as opposed to an owner – of a large public company to become seriously rich," he told a business audience last month ...
Guardian 11 Apr 2010 InequalityExecutive pay and bonuses
QinetiQ's plans to slash redundancy payouts 'sour' relations with union
Looking for the difference between New Labour, and Thatcherite Tories? You won't find it here!
Unions are threatening legal action over plans by former government defence research group QinetiQ to slash redundancy payouts to workers.
Workers fear that up to 1,000 of its 6,500 UK-based employees could lose their jobs as part of a restructuring that will be announced next month when the company reports its full-year results.
Staff who joined QinetiQ before 2001 are entitled to a generous settlement if they are made redundant: eight weeks' pay per year of service, capped at 160 weeks' pay.
These public sector-type benefits reflect the fact that the company, which has been hit by the squeeze in military spending in the UK and US, used to be run by the government and that about half of its workers are former civil servants.
The company's new chief executive, Leo Quinn, wants to cut this payout to the statutory minimum – a maximum of 30 weeks' pay for older workers – later this year. He also wants to cut the notice period of six months for compulsory redundancy, along with other staff terms and conditions.
The management consulting firm McKinsey has been carrying out an external review of the business and is expected to report soon ...Guardian 06 April 2010 'Greed is Good, Greed Works'MPs slate Qinetiq privatisation
Committee chairman Edward Leigh said ... MoD conducted the 2003 deal "like an innocent at a table of cardsharps, with the taxpayer the fall guy losing out on nearly £100m" ...
BBC NEWS 10 June 2008Qinetiq deal 'cost UK taxpayers'
Qinetiq's 10 most senior managers gained £107.5m after the move, a return of 19,990% for their total £540,000 investment in shares, a return labelled "excessive" by the NAO.
Qinetiq's two most senior executives, chairman Sir John Chisholm and chief executive Graham Love, made spectacular gains.
Sir John invested £129,000 in the company and now has shares worth £23m. Graham Love turned £106,000 into £20m.
Qinetiq's bosses were allowed to negotiate the terms of the incentive scheme with Carlyle while the private equity firm was bidding for the business, the NAO added.
Conservative MP Edward Leigh, chairman of the Commons Public Accounts Committee, said the taxpayer had been "short-changed" and that top Qinetiq managers had "won the jackpot" ...
BBC NEWS 23 Nov 2007;NAO report attacks QinetiQ float deals
Greed of the highest order
The Conservative party has joined forces with the main employers group, the CBI, in an attempt to dilute a new bribery bill that was meant to clean up corporate corruption in the wake of the BAE scandal.Conservatives attempt to water down bribery bill under CBI pressure
More than 20 amendments have been put down by the Tories following pressure from the CBI against proposed legislation from the Ministry of Justice that had previously received cross-party support.
Campaign group Transparency International said it was "extremely concerned" that there was a deliberate attempt to derail future new laws that were vital to re-establish the international credibility of the British business community.
It said: "The bill represents the best possible consensus that can be attained among a wide range of stakeholders on a modern, effective legal framework to prosecute bribery and make the UK compliant with the 1997 OECD anti-bribery convention." ...
Britain has slipped to 17th place in the annual corruption perceptions index compiled by Transparency International and now trails Japan, Hong Kong and Austria ...
Guardian 05 April 2010 David CameronCBI and Tories play games with bribery bill
His remuneration included a base salary of £1.1m and a reduced cash bonus of £1.6m. The largest part of the remainder of the package came from Mr Chapman's exercising £15.5m of share options in September ...Gas chief pockets £28m after 26 per cent dip in profits
Independent 05 April 2010 Inequality
The US bank BB&T has agreed to make a payment of $890m (£580m) to cover taxes, penalties and interest on an offshore tax avoidance scheme said to have been set up with the help of Barclays ...US bank BB&T pays $890m to authorities over tax avoidance scheme linked to Barclays advisers
The deal, which ran between 2002 and 2007, has been challenged by the US tax authorities.
Sources in Britain told the Guardian that the tax investigation, revealed in BB&T's annual US filing of accounts, relates to an offshore structure set up with the help of Structured Capital Markets (SCM), Barclays' tax avoidance unit in London.
Last year the Guardian published leaked Barclays documents on its website detailing dozens of offshore tax avoidance schemes set up by SCM. One of the documents, Project Knight, contained details of new billion-dollar schemes and also of an offshore tax avoidance transaction with BB&T between 2002 and 2007, called Stars.
The Stars deal involved a loan from BB&T of $1.5bn being routed through a complicated series of offshore vehicles, for which the US bank received a "pre-tax enhancement" of £53.5m per year. The Guardian was forced by an injunction won by Barclays to remove the documents from its website, but remains free to discuss their contents.
Guardian 02 Apr 2010 Fractional Reserve BankingTax Avoidance
Campaigners may decide to pursue an appeal, while Lord Justice Thomas frowns on 'low' fines ...Serious Fraud Office backs £30m BAE plea bargain despite opposition
Richard Alderman, head of the Serious Fraud Office, plans to press ahead with a controversial £30m plea bargain with the arms company BAE, legal sources say, despite criticism of such deals from a senior judge and anti-corruption campaigners.
Alderman's recent campaign against companies alleged to practise bribery overseas is throwing up novel legal problems.
Two protesting groups took his BAE deal to court, saying it was too soft, but a judge ruled against them. The Cornerhouse and the Campaign Against Arms Trade will decide whether to pursue an appeal after Easter. If their legal challenge is dropped, the way will then be clear for the deal thrashed out with BAE's lawyers to go ahead.
But the arms giant may end up facing the prospect of a bigger fine. Lord Justice Thomas gave a landmark ruling earlier this month in another corruption case, involving the chemical firm Innospec, that the agreed fine was too low, and such corporate crime should be treated more seriously ...
Guardian 01 April 2010 BAE Systems
A worried accounting executive at Lehman Brothers, who raised the alarm about what he saw as dubious number-crunching at the doomed Wall Street bank, lost his job barely a month after alerting the auditor Ernst & Young, his lawyer claimed yesterday, in a case prompting calls for tighter protection for corporate whistleblowers.Lehman whistleblower lost his job weeks after raising alarm
Matthew Lee, a senior vice-president in Lehman's finance division, outlined six allegations of unethical accounting in a memo sent on 16 May 2008 to Lehman's senior managers, who asked Ernst & Young to investigate. In discussions with partners at Ernst & Young, he highlighted controversial "repo 105" transactions that artificially boosted Lehman's balance sheet by $50bn (£33bn).
But the London-based accounting firm took "virtually no action", according to an official report into Lehman's demise and Lee's lawyer, Erwin Shustak, said his client lost his job in late June 2008, officially as part of a broader downsizing.
Shustak told the Wall Street Journal: "It was just easier to shut him up and let him go." ...
Guardian 16 Mar 2010 FRB LogCorporate governance
Britain's financial centre faced fresh embarrassment yesterday after it emerged that London played a crucial role in Lehman Brothers concealing debts of up to $50.4bn (£33.2bn) in the run-up to its collapse.London link to $50bn Lehman cover-up
The failed investment bank approached a London law firm over plans to use a controversial accounting trick – known internally as "Repo 105" – to temporarily conceal the liabilities ...
The bank used the Repo 105 tactic in the run-up to the end of its three-month financial reporting periods to help cushion the blow of huge losses in the first half of 2008 and suggest its financial health was far more robust than it was.
Linklaters – which drafted a document which stated that the technique was legal under UK law – was only approached after Lehman was unable to find an American law firm to say that the Repo 105 transactions could be carried out in the US.
A 2,200-page report into the collapse of the 58-year-old institution, by US legal examiner Anton Valukas, stated all subsequent trading was "under the aegis of an opinion letter" written by the Linklaters law firm.
It meant that a string of trades which masked the firm's parlous state from regulators and investors had to go through London ...
Auditor Ernst & Young, the report found, was aware of the company's status but failed to question it ...
Independent 13 Mar 2010 Fractional Reserve Banking LogAuditors face inquiry call after Lehman revelations
Lehman’s $50 billion conjuring trick
'Lehman painted a misleading picture of its condition'
Supermarket suppliers under fire as one-fifth of workers interviewed for inquiry report being pushed or hit ...Violence and abuse rife in food factories
The Equality and Human Rights Commission (EHRC) said it has uncovered significant evidence of abuse among producers supplying Britain's big supermarkets ...
The inquiry includes reports from meat factory workers who say they have had frozen burgers thrown at them by line managers, and accounts of pregnant women being forced to stand for long periods or perform heavy lifting under threat of the sack.
It also contained reports from women with heavy periods and people with bladder problems on production lines being denied toilet breaks and forced to endure the humiliation of bleeding and urinating on themselves.
One-fifth of workers interviewed, from across England and Wales, reported being pushed, kicked or having things thrown at them, while a third had experienced or witnessed verbal abuse ...
Neil Kinghan, the EHRC director general, said: "We have heard stories of workers subjected to bullying, violence and being humiliated and degraded by being denied toilet breaks. Some workers feel they have little choice but to put up with these conditions out of economic necessity. Others lack the language skills to understand and assert their rights ... " ...
Guardian 13 Mar 2010 Agency Workers Social DarwinismEHRC food factories report
British diplomats will today begin the final stage of a desperate rearguard action against new European legislation that London-based hedge funds and private equity firms warn could drive them out of business.Britain in final push to tone down EU hedge fund rules
While Britain has been fighting for some time for a significant watering down of the reforms proposed by the Alternative Investment Fund Management (AIFM) directive, time is running out to secure concessions on behalf of the City, where much of Europe's hedge fund and private equity sector is based.
A source close to the talks warned "the UK is not going to get everything it wants" ...
Independent 08 Mar 2010
Political pressure is mounting to make businesses pay for the damage they cause to the environment, and the latest UN study assessing the impact of the world's biggest companies is almost certainly the first stage in a concerted campaign to calculate how much damage is caused, what it is worth and ultimately how it can be stopped ...Time to clean up: UN study reveals environmental cost of world trade
Amid growing momentum for more limits on operations, taxes and fines, investor groups such as the US-based Ceres, which represents more than 80 funds managing more than $8tn (£5tn) of assets, are lobbying hard for companies to monitor, report and reduce their impact before they are forced to by legislation. So far, however, reporting is patchy and hard to compare ...
By far the most "damaging" were the utilities, where the $400bn total "cost" was dominated by carbon dioxide and other greenhouse gases blamed for global warming, nuclear waste, acid rain and smog precursors, and metal pollution in water ...
At a lecture last week, (UN special adviser Pavan) Sukhdev told his audience a story related to him by a fisherman he met last year in West Africa. The fisherman explained that foreign trawlers had fished until the North Atlantic was nearly empty. Then the big ships and their machinery had moved south in search of fuller nets, into the coastal waters near his village. The result was that the water where the fisherman once caught food for his family and to sell in the local market now also has too few fish ...
Guardian 19 Feb 2010Corporate social responsibility
An alumina refinery operated by a subsidiary of UK-based FTSE 100 company Vedanta Resources in Orissa, India, is causing air and water pollution that threatens the health of local people and their access to water, says a new report from Amnesty International today (Tuesday 9 February).UK-based company devastating communities in India
“We used to bathe in the river but now I am scared of taking my children there. Both my sons have had rashes and blisters.” a local woman told Amnesty International.
The organisation recorded many similar accounts from people living around the Lanjigarh refinery.
Imminent plans for a six-fold expansion of the refinery will compound these problems.
A government regulatory authority, the Orissa State Pollution Control Board, has documented air and water pollution from the refinery yet there has been no health monitoring.
Information on the extent of pollution and its possible effects has not been shared with local communities ...
Amnesty 09 Feb 2010Action Aid
Survival
Guardian
Wikipedia
BBC NEWS
Ecologist
Where previously these companies have thought of themselves as laboratories for world-changing drugs, there seems to be an emerging view that their core competence is, in fact, their aggressive – and always controversial – ability to market their drugs to doctors and (in the US) patients.Big Pharma ignores R&D at its peril
Announcements by Pfizer and GlaxoSmithKline, the two industry goliaths, this week, and AstraZeneca earlier, have put concerns about return on investment in R&D front and centre.
AstraZeneca responded with 8,000 job cuts, Pfizer promised to lop 25 per cent from its research budget ...
Sensing the wind in their favour, revolutionaries on Wall Street and in consulting argue that shareholders will be best served by Big Pharma ending all early-stage drug research entirely.
Cheaper, they say, to license in new compounds from smaller biotech-style companies, or from academia, after they have already shown promise.
Drug research is a game of trial and error. Analysts at Morgan Stanley, who have been pushing a Pharma 2.0 model based on in-licensing, reckon the return on investment on licensed products is three times higher than on in-house research, at least in the current economic conditions.
Yes, the big drug companies will have to pay out more in royalties to the drugs' inventors, but the cost savings more than make up for that ...
Independent 06 Feb 2010Big Pharma Digs In
Big Pharma inside the WHO
Big Pharma inside WHO III: EU Probes False Pandemic
Pharma's big ad budget
Swine flu labelled a conspiracy
Swine Flu Fraud—Official Questioning Now Starts
WHO Advisor Secretly Pads Pockets with Big Pharma Money
ITV's new chief executive, Adam Crozier, could walk away from his old job at the head of Royal Mail with £2m in bonuses. The broadcaster appointed Crozier, who has no television experience and is the second highest-paid public sector worker, to the top role after a long and occasionally tortuous 10-month search.The cheque's in the post: £2m bonus for departing Crozier
Crozier will be rewarded from a three-year bonus scheme based on efficiency targets at the postal operator, which has recently been hit by a series of national strikes over mounting workloads.
Archie Norman, ITV's chairman, said Crozier, who is the former head of the Football Association, had the "steely resolve we need at ITV", which was looking for a "great leader" ...
Guardian 28 Jan 2010Investors switch off ITV's Crozier
ITV could reward Adam Crozier with £14m pay and bonus package
From alpha mail to broadcasting mogul
Royal Mail rewarding Adam Crozier's 'failure'
Crozier's £100,000 pay rise... and his bonus is the same again
Adam on leave
Barclays' president, Bob Diamond, warned today that Barack Obama's plans to limit the size of banks would hit jobs, growth and global trade.Bob Diamond attacks Obama's banking plans
Speaking on the opening day of the World Economic Forum in Davos, Diamond said the growth in "large, integrated, universal banks" had been a response to market forces in the post-communist world.
"They [the big banks] fulfilled an important function in helping governments and corporates to transfer risk, particularly across borders," Diamond added.
"Did banks get big because they wanted to or were they following their clients, their customers and the markets? Was it for an economic purpose?"
Finding a way of preventing a re-run of the 2007 financial crisis is a key theme of this year's Davos forum and has been given added impetus by last week's White House announcement that the US would put restrictions on the size and the activities of Wall Street banks.
Diamond said there had been the failure of a "couple of banks" caused by poor regulation and ineffective management, particularly around management of risk ...
Guardian 27 Jan 2010Bank of England backs Obama's banking reforms
Wall Street's $26m lobbyists gear up to fight Obama banks reform
Obama pushes new bank regulation
President Obama's banking speech
Investment bankers, lawyers, accountants and PR advisers racked up fees at a rate of more than £2m a day during the acrimonious £12bn battle for control of Cadbury in the latest sign that it is business as usual in the City ...£2m a day cost of Cadbury deal – plus £12m for the boss
Bonanza for banks and lawyers involved in deal as company warns of job cuts
The robust defence mounted by Stitzer and Carr, makes job offers from Kraft's boss, Irene Rosenfeld, unlikely. If Stitzer leaves, he will be entitled to a bumper payoff comprising a year's salary, in his case £985,000, a bonus worth almost £2m and the right to cash in cheap and free shares worth £8.6m.
He also owns a personal stake in the company worth £5.5m, according to its most recent annual report. After more than 25 years at the firm, 56-year-old Stitzer is also sitting on a £15m pension pot that promises to pay out £1.5m a year when he retires.
The demise of Cadbury as a flag carrier for corporate Britain prompted fears that thousands of jobs are now at risk. Cadbury ... employs 6,000 people in the UK, and unions are worried that jobs will be lost as Kraft wants to cut annual running costs by $675m (£413m) after the takeover, which is being funded with £7bn of debt.
Unite national officer Jennie Formby said ... "This is a leveraged bid and Kraft will eventually have to repay the debt, meaning a great deal of uncertainty for the workforce in the UK and Ireland." ...
Guardian 20 Jan 2010The sad lesson of Cadbury is the City still holds the whip
Mergers and acquisitions
Private Equity
A film released this week in Britain recounts the 16-year battle by Ecuadorians for damages against Chevron for oil pollution.Who will pay for Amazon's 'Chernobyl'?
It's barely eight in the morning and already the dusty oil town of Lago Agrio, on the fringes of the Ecuadorian Amazon, is sweltering.
Its name means "sour lake" in Spanish, after the hometown of Texan oil company Texaco – a fitting name for an area of once-pristine rainforest that has been decimated in the pursuit of oil.
So severe is the environmental damage here that experts have called it an "Amazon Chernobyl" ...
Crude ... began when Steve Donziger, a lawyer acting for the Ecuadorians, arrived at the film-maker's office.
"The story the lawyer told me was indeed shocking," said Berlinger.
In the words of the film's producers, the claim was "that from the mid-1960s until the early 1990s, Texaco (now Chevron) dumped 18 billion gallons of toxic waste and formation water directly into streams, rivers, and the jungle floor; that nearly 18 millions of crude oil was spilled and leaked from pipelines, that more than 235 billion cubic feet of natural gas was burned into the atmosphere, and that nearly 1,000 unlined toxic waste pits were built throughout the region." ...
Independent 10 Jan 2010Crude
The Real Price of Oil
Chevron Corporation
If there is one single force responsible for the regrettable soaring of boardroom pay over the past two decades, it is the insidious rise and rise of the remuneration consultant ...Put paid to pay consultants
Now no blue-chip company would dream of creating a chief executive’s pay packet without drafting in consultants, usually two or three different firms for different elements of the package ...
All burble on dutifully about the importance of aligning the long-term interests of shareholders with those of management.
All insist their complex systems of targets, benchmarks, hurdles and option formulae achieve this.
Yet long-run share returns have for years moved in precisely the opposite direction to top pay. Packages of £1 million, £2 million and £3 million are now common: the average FTSE 100 chief executive earns 128 times as much as his average employee; the ratio a decade ago was 47 times.
Meanwhile, long-run share returns have collapsed and are at their lowest for two decades.
Something isn’t working. The problem is that these consultants are usually hired — directly or indirectly — by the very people whose pay they are helping to set. The incentive to structure overgenerous schemes is obvious: that way you get hired again and also win mandates from other executives who would like to be similarly rewarded ...
Times 09 Jan 2010 Wealth Log
Nortel and Ernst & Young abuse of workers rights is wrong
On Monday 30 March 2009, 228 employees at Nortel plants in Monkstown in Newtownabbey, Maidenhead and Harlow were called to a meeting and summarily dismissed without notice or redundancy pay.
The redundancy treatment of Nortel staff employed in Northern Ireland has been described by the SDLP’s Alasdair McDonnell as a betrayal of massive proportions.
“There are fundamental questions that need to be asked and answered about the actions of both Nortel and Ernest & Young in their treatment of these dismissed employees and that is why we called this meeting today.
“We want to know why, despite repeated public assurances given by Ernst and Young when Nortel went into administration in January that it would be “business as usual”, promises that contracts would be honoured have been broken.
“We want to know why Ernest & Young clearly failed to comply with the required minimum consultation period of 90 days with employees.
“And we want to know why Ernest & Young agreed to pay a £15.5m bonus package for Nortel Executives on 20th March and then took a decision 10 days later to make 228 employees redundant at no notice with no redundancy pay”.
ipetitions.comShame on You Nortel
Private equity firms are increasingly saddling companies with debt to pay themselves hefty bonuses, according to an industry-sponsored study.Private equity firms using company debt to enrich themselves
A group of 47 private equity-owned businesses – including United Biscuits, sports chain Fitness First and casino operator Gala Coral – now have an accumulated debt of £71bn, up £13bn from their combined debt before they were taken over, said a report by BVCA, the British Private Equity and Venture Capital Association.
Of that £13bn, new owners directed £11bn towards acquisitions and capital expenditure programmes while £2bn went to pay shareholders of the private equity funds through measures such as special dividends.
Apart from the private equity companies themselves, fund investors also include pension schemes and other institutional shareholders.
Paying cash dividends out of debt – instead of profits – has been widely criticised by ratings agencies, which warned about the high levels of debt used by private equity firms at the peak of the credit bonanza.
"Using debt to pay dividends to shareholders in an excessive manner will ultimately damage the company when the cycle turns," said Pablo Mazzini, senior director at the Leverage Finance unit at Fitch Ratings in London.
Many private equity firms raised debt by convincing lenders that profits were rising when the growth was mostly attributable to general economic conditions.
Some buyout businesses are now suffering as they cannot sustain their high debt.
The study said that the quality of debt also falls after a private equity buyout.
The highest-ranked "A" debt accounted for 65% of total debt before a buyout, but only 54% after.
Lower quality debt is more expensive for the company as investors demand higher interest in exchange for the risk of ranking below senior creditors for repayment if a company goes bust.
According to the report, private equity companies are better at generating pre-tax profits than other firms, although they lag far behind in terms of job creation: while employment grew at 0.1% at private-equity-owned businesses, it increased 5.2% at other firms.
Average company revenues rose by 9.6%, more than the 9.1% growth among private-equity-owned firms, but earnings before interest, taxes, depreciation and amortisation rose by 11% at private equity-owned companies, compared with a fall of 0.7% for other firms.
Guardian 10 Dec 2009
City bankers 'regularly offer prostitutes to clients'
City bankers entertain clients and try to generate business by offering trips to brothels, MPs heard today.
Kat Banyard of gender-equality pressure group the Fawcett Society told a Treasury select committee hearing into women's role in the City of London that there was a growing trend in the City to use prostitution to entertain clients.
"We took extensive evidence from individual women who said it was becoming frequent for meetings to be held in lap dance clubs, and I also had women speak to me and say that prostitution was being used in client deals or in ways to generate business – and that all of this culture created a very hostile environment, as you would expect, for female employees of those firms," she said.
One former City worker who gave evidence to the Fawcett Society said that while working for a top international investment bank in the City, she witnessed a senior manager looking for a brothel to entertain some Russian clients.
"I was out drinking with some guys in my team when a very senior guy came over," she said. "He asked if anyone knew of a good brothel in Edinburgh. He said he had some Russian clients coming over and he wanted them to sign a multimillion-pound deal." ...
Former Bank of England policymaker Charles Goodhart, who is now professor emeritus of banking and finance at the London School of Economics, told the committee that the worst financial crisis since the second world war could have been prevented if more women were on the boards of major companies. "Women tend to be more cautious and have a longer term outlook. I think that men can be more aggressive and prepared to take larger risks," he said. "There would have been less likelihood of the financial crisis if we had a larger number of female chief executives in the financial sector."
He said that there were "remarkably few" female chief executives in the financial sector and that it is "a great pity".
"I think that the longer term and cautious tendency that women have and less of the alpha male would be beneficial."
Nichola Pease, who runs the fund manager JO Hambro, told the committee that equality legislation in Britain was preventing women from getting the top jobs in the City. She said that many firms were scared of hiring women because penalties for successful sex discrimination claims were unlimited. Another factor that put companies off employing women was that women in the UK could take up to 52 weeks of maternity leave, compared with just 12 weeks in the US.
"A year's maternity leave is too long, and sex discrimination claims that run into 10s of millions of pounds are ridiculous," she told the committee.
Guardian 14 October 2009Rescued bank's traders scoop £1.8bn bonuses
Goldman Sachs on track to pay out record $22bn as profits jump to $3.19bn
A year after the crunch, it's boom time again for bankers
Goldman Sachs poised to inflame row on bankers' pay
JPMorgan heralds return to bumper bonuses
Building companies fined £129.5m
Some of the UK's leading building companies have been handed big fines by the Office of Fair Trading (OFT) for rigging bids for contracts.
The OFT has fined a total of 103 firms £129.5m for colluding with competitors on building contracts.
It said the firms colluded among themselves during the bidding process, leading to customers, such as local authorities, having to pay too much.
The ruling comes at the end of a five-year investigation by the OFT ...
BBC NEWS 22 September 2009
How UK oil company Trafigura tried to cover up African pollution disaster
The British oil trader Trafigura has offered to pay out in a historic damages claim from 31,000 Africans injured by the dumping of toxic waste in one of the worst pollution disasters in recent history, the Guardian can reveal.
The compensation deal for the victims of toxic oil waste dumping in west Africa – likely to be confirmed imminently – means the full extent of attempts to cover up what really happened can be spelled out for the first time.
The truth is laid bare in Trafigura's hitherto secret documents, published by the Guardian today.
The company's internal emails show the true nature of the toxic waste dumped around Abidjan, the capital of Ivory Coast. Trafigura had publicly claimed the waste was harmless.
The exposure of the company files has contributed to Trafigura's climbdown after three years of bitterly contested legal battles. We are publishing them online today.
Martyn Day is a senior partner at the British law firm Leigh Day, which has brought one of the biggest group actions in legal history, seeking damages of £100m.
He said today in Abidjan, where he has been negotiating the settlement: "The claimants are very pleased." ...
Guardian 16 September 2009Firm agrees Ivorian waste payouts
Secret Trafigura report
Trafigura offers £1,000 each to toxic dumping victims
Ivory Coast deal is 'not enough'
Trafigura knew of waste dangers
The Trafigura files
Amnesty attacks oil industry
More
Big men, bankers and the stench of corruption
Frederick Chiluba is a sharp dresser. The one-time bus conductor who rose to become President of Zambia has a fondness for expensive designer suits, his monogrammed shirts set off by matching silk ties and handkerchiefs. While the majority of his fellow countrymen struggled to survive on less than a dollar a day, he would think nothing of jetting off to Geneva and dropping £300,000 in his favourite clothes shop ...
The post-colonial history of Africa is pockmarked by corruption. According to the United Nations, political and business leaders steal more than £90bn a year, much of it siphoned into Western bank accounts, businesses and properties. When President Sani Abacha of Nigeria died, he had stashed at least £2.5bn into banks dotted around the globe.
A sizeable chunk was found in 23 banks in London. The names of the institutions involved read like a roll-call of blue-chips, including Barclays, Merrill Lynch, National Westminster and Royal Bank of Scotland ...
When occasionally the lid is lifted on these dealings, the stench is overpowering.
Five years ago Riggs Bank, a venerable American institution that once employed Abraham Lincoln, collapsed after a Senate probe uncovered its relaxed approach to funds held there by the likes of President Obiang and General Pinochet. The inquiry even turned up an obsequious letter from a bank official to Obiang, perhaps the vilest despot in Africa, which "thanked the president for his establishment of several bank accounts, and encouraged a working relationship to help establish and secure the stable reign of his country".
Our public officials are little better.
When the newly elected government of Nigeria tried to get back the money looted by Abacha, the British government hindered its recovery. (The Swiss went even further, attempting to hold on to the money despite court rulings insisting on its repatriation).
Earlier this year, the Serious Fraud Office suspended a belated investigation into the Anglo-Leasing heist, blaming lack of help from the Kenyan authorities. And most shamefully of all, when our man in Nairobi publicly condemned this huge fraud, he ran into heavy flak in Whitehall.
If we are serious about fighting poverty, we need to do much more ...
Independent 18 August 2009'Shopaholic' ex-president of Zambia cleared of corruption
Vulture fund swoops on Congo over $100m debt
The government of the war-torn Democratic Republic of Congo is racking up fines of $20,000 a week in a case brought by a New York-based vulture fund over a debt incurred from Tito's Yugoslavia in the 1980s. ...
A Washington Court handed down a penalty against the DRC in March, starting at $5,000 a week and eventually rising to $80,000, for failing to comply with a demand to provide detailed information about all its assets throughout the world.
The fine is the latest twist in the long-running effort by investment fund FG Hemisphere to collect a debt first incurred 20 years ago, when the notorious dictator Mobutu Sese Seko was in power in the DRC. The debt now amounts to $100m, including interest and penalties.
Lawyers for the African country have lodged an objection to the penalty, on the grounds that the district court has no jurisdiction over a sovereign state; but Stephen Cundra, of law firm Roetzel and Andress, who is representing the DRC, said no ruling has so far been handed down on whether the fine must stand.
"Eight million people have died in the Congo for lack of healthcare... and the last thing they can do is find $100m for a vulture fund," Cundra said.
As well as a series of moves to take control of the DRC's assets in Washington, the fund has also taken action in Hong Kong and South Africa ...
At least 54 companies are known to have taken legal action against 12 of the world's poorest countries in recent years, for claims amounting to over $1.8bn (£1.2bn).
Observer 09 August 2009
Mineral firms 'fuel Congo unrest'
Western mineral firms are fuelling violence in the Democratic Republic of Congo by failing to check where their raw materials come from, activists say.
Global Witness says companies sourcing minerals used in electronic gadgets are buying them from traders who finance rebel and government troops.
It calls for the UK-based Amalgamated Metal Corporation (AMC) and others to have assets frozen over the issue ...
"Global Witness is calling on the UK government to request that the UN Sanctions Committee add the UK-based entities of AMC and their directors to the list of companies and individuals against whom sanctions should be imposed," the group said.
It quoted a UN resolution as saying that anyone supporting illegal Congolese armed groups through illicit trade of natural resources should be subjected to sanctions including travel restrictions and an assets freeze ...
BBC NEWS 21 July 2009Q&A: DR Congo conflict
Global Witness
Inquiry into private firm's cash lure for jobseekers
Ministers launched an urgent inquiry last night after investigations by the Observer revealed that a private company being paid by the government to find jobs for the unemployed had offered £100 cash gifts to sign up people who had already found work.
The inquiry into Triage Central, a major Scottish employment company, came amid a chorus of demands from senior politicians for the police to examine mounting evidence of malpractice at the heart of the government's welfare policy.
The Department for Work and Pensions said last night it was "extremely concerned" about the way Triage Central - a key player in its Pathways to Work policy which aims to get claimants off incapacity benefit - had tried to enlist people who already had jobs onto its books. The revelation will prompt suspicions that companies are claiming government success fees for getting people into work, when in fact they have played no such role ...
The Observer revealed last week how staff of at least two private recruitment companies had deliberately inflated the number of people they had got back to work, apparently to maximise their "success rates". Further cases have since come to light but so far investigations have only been carried out by the DWP and the companies themselves ...
Pathways to Work was billed as a bold attempt to tackle the biggest challenge in welfare reform - helping move up to 2.6m incapacity benefit claimants into work. It was running 73% short of its target in January this year, according to official figures.
Overall, the private sector-led programmes had delivered 60% of the expected number of jobs in the six months to September 2008, while using 98% of the expected expenditure ...
Observer 05 July 2009
Tesco chief takes flak from both unions and investors at fiery AGM
Tesco came under fire from both investors and union leaders at a fiery annual general meeting in Glasgow today, with changes to the retailer's share option scheme attracting one of the biggest protest votes the City has seen.
Investors have become increasingly militant since it became clear the City "bonus culture" was partly to blame for the financial crisis, with the current AGM season filled with challenges over executive pay.
Tesco's desire to extend the period during which leaving or retiring executives can exercise their share options from one to three years met with only narrow approval, with 45% of its shareholders either rejecting or abstaining over the plan. In City terms, anything over 10% against is considered significant, even if that disapproval is registered as an abstention.
A resolution requisitioned by Unite, Britain's largest union, demanding better conditions for agency workers in the meat factories that supply Tesco, also won considerable backing, with 18% of shareholders showing their support. Within that figure, 11% of shareholders voted in its favour – more than double Unite's expectations – while a further 7% abstained, which the union also counted as its own. The special resolution required a 75% vote in its favour to be carried ...
Guardian 03 July 2009
Tesco 'breaking promise' to South African fruit pickers
Anti-poverty campaigners have accused Tesco of breaking a pledge to improve the pay and working conditions of South African fruit pickers who have helped the retail giant to record annual profits of more than £3bn.
Three years ago the company agreed to look at the plight of the workers – predominantly women – who are at the bottom of Tesco's lengthy but highly profitable fruit supply chain, after embarrassing scrutiny of its overseas labour practices.
But interviews by the Guardian with female workers on Tesco supplier farms near Cape Town reveal they are still only being paid South Africa's "minimum" rather than a "living" wage – which they complain leaves them barely enough to feed and clothe their children. Those interviewed are receiving just 1,231 rand, equivalent to £97.90, per month.
Under the UK's Ethical Trading Initiative, which Tesco is signed up to, the supermarket agreed to ensure that "living wages are paid" and "wages should always be enough to meet basic needs and to provide some discretionary income".
Simon McRae, senior campaigns officer at the anti-poverty charity War on Want, said: "For years Tesco has promised that its suppliers' workers will earn a living wage. But while Tesco is breaking records with £3bn profits, workers picking its fruit are worse off amid inflation on far less than a living wage. Now the British government must act to stop this abuse." ...
Guardian 16 May 2009Tesco rocked by shareholders' revolt
Tesco
Ethical business
Sourcewatch
Trafigura: Ivory Coast toxic waste
Tonight, two years after Newsnight began investigating the toxic waste scandal in Ivory Coast, we can finally tell you just what it was that tipped on the streets and in the waterways of Abidjan, its biggest city. Tens of thousands of people fell sick and 16 died in the aftermath of the dumping.
The company which owned the waste, a giant oil trading operation called Trafigura, has always denied any wrongdoing, assuring this programme that its waste was "smelly...not dangerous." But we have seen an official analysis into the waste carried out by the authorities in Amsterdam where Trafigura had first tried to offload the waste.
The analysis lists a chemical cocktail that is most certainly dangerous. We consulted an independent toxicologist who told us if the stuff had been tipped in London, millions would be sick and the smell would be detectable as far as the M25 ring.
Trafigura is being prosecuted in Amsterdam. Court action is also starting in London, where 30,000 Abidjanis are suing the company for damages. We will bring you the latest on this story, from Abidjan and Amsterdam.
We can also reveal allegations of witness nobbling, some of the key claimants say attempts were made to get them to change their statements ...
BBC Newsnight 13 May 2009Dirty tricks and toxic waste in Ivory Coast
'Dirty tricks' over toxic waste
People would fall sick for miles around
Company defends toxic dumping claims
Ivory Coast toxic waste claims
Greenpeace condemns ... deal
Ivory Coast gets £100m
Ivory Coast waste 'was not toxic'
Monsanto and industrial agriculture's darkening shadow over our food
OpEdNews 14 January 2009FOOD SAFETY REGULATIONS -
OpEdNews 08 January 2009
the intended QUICKSAND now taking under all sustainable agricultureAg Secretary Tom Vilsack: Too much Monsanto in the Mix?
OpEdNews 17 December 2008The SCAM behind NAIS
OpEdNews 30 November 2008Stop the NAIS
LewRockwell.com 30 May 2006Henry Kissinger's 1974 Plan for Food Control Genocide
Schiller Institute 08 December 1995
Primark in storm over conditions at UK supplier
Britain's high street fashion giant Primark was at the centre of a storm last night over allegations that illegal immigrants paid just over half the minimum wage had been employed to make fashionable knitwear for one of the firm's bestselling ranges ...
The workers, caught by an undercover journalist on a hidden camera, were allegedly being paid £3 an hour - just over half the minimum wage of £5.73 - for 12-hour days, seven days a week. Many of the garments made by the Pakistanis, Afghans and Indians over the past five months had ended up two miles away in one of the retail giant's largest and most profitable stores in Manchester's bustling Market Street ...
Employees at both TNS and Fashion Waves were caught on film admitting their illegal status in the UK. One Pakistani working on a Primark order tells how his visa had run out eight years ago, yet he had remained in Britain working under the radar of the authorities.
Working conditions inside both TNS and Fashion Waves were also exposed as cramped and cold, in breach of health and safety regulations.
Most dramatically, the undercover journalist working at both units captures cash-in-hand payments being made to her for gruelling hours. The money, apparently paid without the knowledge of the taxman, amounts to about £3.50 an hour, £2.20 less than the minimum wage.
TNS Knitwear denies the allegations, and there was no comment from Fashion Waves ...
The Observer 11 January 2009
Shell’s Game
I asked Mr van der Veer a simple question - fifteen times ... “What is the value of your annual investments in renewable energy?”. He waffled, changed the subject, admitted that he knew the figure, then flatly refused to reveal it. Nor could he give me a convincing explanation of why he wouldn’t tell me, claiming only that “those figures are misused and people say it is too small” and it “is not the right message to give to the people”.
It strikes me that there is only one likely reason for these evasions: that Shell’s spending on renewables has fallen sharply from the figure it announced in 2000. It’s a fair guess that the current investment would look microscopic by comparison to its spending on the Canadian tar sands, and would make a mockery of its new round of advertising. I challenge Shell - for the 16th time - to prove me wrong ...
Monbiot.com 06 January 2009
The cursed children of Bhopal
She has no proof. She cannot know for sure. But when Niello Far's daughter was born deaf, she immediately suspected what might have been the cause. "Everybody believes it was the gas. Others have told me it is because of the gas," said the young mother, making sign language to her four-year-old, Zoba. "The doctor has told me that it may be, that it might be the gas."
When people in Bhopal talk of the gas they are referring to the 40 tonnes of toxic chemicals that poured into the sky from an insecticide factory in the early hours of 3 December 1984, wreaking deadly havoc.
Up to 8,000 people died in the immediate aftermath, perhaps two and half times that in the subsequent months. But now, almost a quarter-century after the world's worst industrial accident, campaigners are fighting to help a "second generation" of suffering Bhopalis who they say are victims of contaminated water and political and corporate neglect. ...
The Independent 19 October 2008
International Campaign for Justice in Bhopal
What happened in Bhopal Wikipedia
Rent back deals 'need firm rules'
Tighter regulation is needed of firms offering sale and rent back deals to struggling homeowners, according to the Office of Fair Trading (OFT).
Under these deals, people struggling to pay their mortgage sell their home at a discount to firms who let them stay on in the property as tenants.
But an OFT report found that this was not the best option for some, and others were quickly evicted.
It wants the estimated 1,000-plus firms involved to be more transparent.
An unknown number of amateur landlords are also involved in the relatively new industry.
The OFT said that about 50,000 transactions of this kind have already taken place ...
BBC NEWS 14 October 2008
Starbucks 'wastes 23 million litres of water each day'
The bizarre policy, which is aimed at preventing germs developing in the taps in its 10,000 stores worldwide, has outraged environmental groups.
Every Starbucks branch has a cold tap behind the counter providing water for a sink called a "dipper well" used for washing spoons and utensils and the staff are banned from turning the water off under "health and safety rules", an investigation claims.
In a letter to a customer who complained about the waste, a Starbucks executive revealed that a constant flow stops breeding in the taps.
It means that 23.4 million litres of water - enough to fill an Olympic swimming pool every 83 minutes or sustain the population of drought-hit Namibia - is wasted every day.
In the UK alone, where there are 698 branches open for 13 hours a day, it counts for around 1.63 million litres of water wasted. ...
Telegraph 06 October 2008 Global Water
Sulston argues for open medicine
" ... current systems place the needs of shareholders ahead of the needs of patients ... "
A Nobel Prize-winning scientist has hit out at what he terms the "moral corruption" of the medical industry.
Britain's Sir John Sulston says that profits are taking precedence over the needs of patients, particularly in the developing world.
He was speaking at the launch of a new research institute into science, ethics and innovation.
Sir John shared the 2002 Nobel Prize for medicine for his work on the genetics controlling cell division.
He is well known for his commitment to public medicine and his opposition to the privatisation of scientific information.
Eight years ago he led the fight to keep the data being derived from the Human Genome Project open and free to any scientist who wanted to use it.
He says there is now great concern among researchers about private companies patenting genes and genetic tests. He is also concerned about the misuse of information, and what he terms "disease mongering".
He is taking these concerns over the direction that science and medicine are going in, onto a broader stage.
Sir John is to be the chairman of a new UK-based institute that will research the ethical questions raised by science and innovation.
He wants the group to try to provide ground rules and guidance on issues such as the patenting of genes, and how people in developing countries have fair access to medicines.
Sir John believes that our current systems place the needs of shareholders ahead of the needs of patients. ...
BBC NEWS 04 July 2008Medical chief's bonus 'an insult'
Kickbacks, cartels and chatrooms
Drugs giant faces criminal charges over clinical trial
Call to prosecute BT for ad trial
BT should face prosecution for its "illegal" trials of a controversial ad-serving technology, a leading computer security researcher has said.
Dr Richard Clayton at the University of Cambridge made his comments after reviewing a leaked BT internal report.
The document reveals details of a 2006 BT trial with the Phorm system, which matches adverts to users' web habits.
"It's against the law of the land," he told BBC News. "We must now expect to see a prosecution." ...
BBC NEWS 05 June 2008 More ...
UFCW Launches Campaign in Britain Against “The Two Faces of Tesco”
One of America’s biggest unions, the 1.3 million-strong United Food and Commercial Workers union, today launched a UK campaign to expose “The Two Faces of Tesco."
At a Westminster press launch chaired by Jon Cruddas MP, the union said that it is stepping up a campaign already begun in the United States to shame Tesco to talks on union recognition and employee pay and benefits.
The UFCW seeks to represent some of the lowest-paid and least secure retail workers in the USA, more than half of whom are women, and has been seeking talks with Tesco for two years since the world’s third-largest retailer announced its entry into the US grocery market. All attempts have so far fallen on deaf ears, and Tesco launched its chain of Fresh & Easy supermarkets in 2007 as non-union stores.
UFCW says that it is seeking the chance for dialogue, to build the same constructive partnership that Tesco enjoys in the UK with the shop workers’ union Usdaw, but Tesco refuses to meet. ...
UFCW 04 June 2008 Tesco's US operations under fire
Northern Rock CEO Sold Millions in Shares Before Collapse
Adam Applegarth did pretty well out of Northern Rock shares in the year before it collapsed. He has trousered many millions over the years, allowing him to enjoy an Aston Martin with a Ferrari for his missus parked in the driveway of his mansion. His confidence in his bank's business model long term is demonstrated by his selling of £1.5 m of shares in two days. (25 Jan 2006 sold 52,253 at 957p for £500,061.21 and the next day he sold another 111,426 at 957p for £1,066,346.82).
His faith in the business was shown by his purchase last April of just 262 shares worth a little under £3,000. Not a lot of faith in the business from the boss was there?
Enron's crooks were massive financial supporters of the Republican party. Northern Rock gave half-a-million to Labour's favourite think-tank, the IPPR. It also employed Gordon's personal pollster, Deborah Mattinson, as an adviser. Of all the pollsters to seek advice from, why her? Why give money to that think-tank? Nowadays it is very rare for publicly quoted companies to make politically partisan donations.
Guido Fawkes 18 November 2007The £63,000-a-month cricketer
Former Rock chief in line for £760,000
Northern Rock will make losses until 2011
Revealed: massive hole in Northern Rock's assets
Northern Rock boss sold £2.6m of shares
while urging employees to keep buying