The Scarlet A — Arizona

I have lived in Arizona since 1976, a choice of residence that finds tongues clicking about me around the country.  Before giving a speech last week, a potential attendee queried the sponsor, Where is she from again? He responded, Arizona.  And the comeback was,Arizona?!  I’m not coming to hear anyone from Arizona speak.

Los Angeles will no longer do business with Arizona.  The NBA is considering yanking the All-Star game.  Highland High School will not let its young students to journey to Sodom and Yuma, aka Arizona, for a tournament.  Even the poor company that produces the Arizona brand of ice tea has been boycotted.  Little matter to the judgmental that the company is located on Long Island, NY.

How fascinating to witness the moral judgment of those who condemned the hypocritical and privacy-violating Puritanical shunning of Hester Prynne.  Long have they invoked Hawthorne on the dangers of moralizing.  Yet, now they stand, pointing, scorning, and boycotting the state of Arizona because, well, the folks in Arizona are scandalous heathens. 

As a refresher for those who have been sleeping since mid-April, wicked Arizona passed a law designed to do something about border traffic that brings a slew of drugs, kidnappers, coyotes (the transporting, not the howling kind), and cruelly abandoned-to-die illegal immigrants to our ranchers and doorsteps. The bill is not anti-immigrant; it is anti-crime.  The bill is a telegram to Washington,DC, STOP, we have a problem – STOP.

Media characterizations of the legislation have brought incorrect conclusions and emotional outbursts, which have led to boycotts.  We Arizonans have been banished from the kingdom, branded with the red “A” of sin.

Such harsh judgments are rarely just.  Arizona has long been a thoughtful state — one that has opened the door for new faces for the national scene, new ways of doing things, and new ideas that are head-turners.  Before passing judgment and boycotting, or vice versa, consider the following:

Arizona is the state that brought all of you the Miranda warnings.  (Note:  the case involved a murderer, not terrorists (not that the terms are not interchangeable, but we risk another boycott if we touch upon terrorists and Miranda warnings). Miranda v. Arizona, 384 U.S. 436 (1966).

Following up on our criminal justice standards, we also brought you Arizona v. Gant, 129 S.Ct. 1710 (2009), a case that restricted searches of your vehicles when you are stop.  We can be a most anti-law enforcement state when push comes to shove or police officers come to your car.

Arizona gave the nation Barry Goldwater.  In your heart, you came to know he was right.  When he passed away, this Arizona icon who had been ridiculed in his early day was lionized by the nation.

Arizona is the state that gave you your first U.S. Supreme Court judge, Sandra Day O’Connor.

Admittedly, Arizona is the state that brought lawyer advertising to billboards, phone-book covers, and  commercial breaks on  “Little House on the Prairie” reruns.  Bates v. Arizona State Bar, 429 U.S. 813 (1976).

We brought you the McCain in McCain-Feingold. 

We gave you Janet Napolitano, our former governor and your feckless “the system worked” Secretary of Homeland Security.

These last three examples actually would be sufficient moral foundation for a boycott, but I digress.  The list of what Arizona has brought your way is instructive.  Arizona is a bit of a wild card state.  The people are cutting-edge and streaked with independence. You may not agree with everything Arizona has brought your way, but you can trust that a great deal of thought, worry, and process went into our game-changers. A few questions, some discussions, and data requests are in order.  But these boycotts, these scarlet letters are condemnation without the due process of law we here in Arizona have worked so hard to preserve for all of you.  Before you judge and boycott, think more deeply about the state, its citizens, and what was in their hearts when they passed the legislation, not that red letter you have placed on the surface.

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The “Slam Dunk”/”Quick Hit” Culture at the SEC

If you thought that “The Seven Signs”  applied to only for-profit entities, you would be wrong.  Numbers pressure is everywhere, even in government and even if meeting the numbers is self-destructive.  If the just-released Office of Inspector General’s report is any indication, employee stats may have been the root cause for the SEC in Fort Worth, Texas passing (four times) on bringing enforcement action against Stanford Securities because it was not a “quick hit” for their success-rate stats.  Continue reading

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Goldman Sachs and “Casino Capitalism”

The SEC complaint against Goldman is a stunner.  Stunning because Goldman had a 31-year-old flying about as close to the treetops as one can get without crashing.  Or maybe Fabrice Tourre has indeed crashed now.  If the SEC is right, Goldman’s Tourre put together a deal of CDOs with the mortgage pool handpicked by John Paulson, a guy who planned to position himself short on the securities Goldman would sell to its clients.  Needless to say, the SEC complaint shows that Paulson chose dogs.  But Fabrice was savvy enough to have a third party, ACA Management, actually structure the deal.  The funny part is Continue reading

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Enough with the SPEs!

Enron managed to fool most of the people for a long time with its SPEs.  If you thought we were done with these beasts following changes in the accounting rules, well, think again.  The report on Lehman tells us the company was using SPEs that it controlled in order to shift bad investments off its books.  Oh, Lehman disclosed the shifts.  What it did not disclose was that it controlled the firms to whom it was doing the shifting.  There is always a loophole.  But, honor should keep us from using them.  The ethical issue here is leaving a false impression.  And Lehman, using SPEs, did so — indeed, all the way to bankruptcy.  Just like Enron.  Enough!

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“I am just like 99% of my friends in France, who say on their rèsumè they can speak fluent English. In reality, they can’t even count up to three.”

Greg Akcelrod, the French soccer player who, through an exaggerated rèsumè quite nearly climbed to the top of Euro soccer.  Mr. Akcelrod has apologized “if I lied a little bit on my CV,” but rationalizes that he never took a single euro from anyone.  That’s the second rationalization — the first is that 99% rèsumè fraud.  The French have us beat on that — only 50% of us here in the states have the good sense to lie on our rèsumès.

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“I’m just amazed . . . if the kind of decisions that ran the company in the ground were above the $45 million mark, which was your pay grade.”

Bill  Thomas, vice chair of the Financial Crisis Inquiry Commission, to Robert J. Levin, former chief business officer of Fannie Mae, who said the decision to stop investing in low-income housing was above his pay grade.

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The Stunning Contrast at the Masters: A Good Guy Finishes First

A man who has struggled through a period of stress and strain with his family won the Masters at Augusta National.  The pseudo family guy/super star, with a secret “other” life that has been enough  to make John Edwards blush, finished fourth.  Phil Mickelson’s wife, Amy, has been struggling with cancer Continue reading

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Ultra Vires and the FCC

In Comcast Corp. v. FCC, 2010 WL 1286658 (C.A.D.C.), the appellate court ruled that there was no statutory authority for the FCC to take over the Internet, a ruling that thwarted the plans of many to achieve “net neutrality.”  The FCC will not be annexing the Internet and all thanks to administrative law and the requirement that agencies base their actions within their enabling statutes.

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Thomas J. Petters Gets 50 Years for a Ponzi: The Seven Signs Show Up Again

Minnesota businessman, Thomas J. Petters, was sentenced to 50 years for his $3.7-billion Ponzi scheme that claimed to be selling appliances to Costco.  What a ride he had!  He purchased Polaroid, Sun Country Airlines, and part of Fingerhut Cos.  He drove a Bentley and several Mercedes.  He owned several multimillion-dollar homes and he bilked a religious charity of the $28-million it invested with him.  Run a quick profile:  iconic leader, high returns, non-stop acquisitions, philanthropic commitment, sycophantic direct reports.  Oh, those seven signs were there once again.  And the end result is the same:  financial collapse for the company as well as its investors.  The Seven Signs is available on amazon.com.

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“You were not a garden-variety board member.”

Phil Angelides, chairman of the Financial Crisis Inquiry Commission, to Robert Rubin, former Chairman of the Board of Citigroup and former U.S. Treasury Secretary.  Indeed, Mr. Angelides, there should no such thing as a garden-variety board member.  That there were such complacent and complicit souls at that level was and is part of the problem.

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The Little Diplomat Who Smoked

A 27-year-old Qatari embassy worker decided to light up in the bathroom on a United Airlines flight from DC to Denver.  The nicotine fiend, upon being caught, had the good sense to make a joke about being a shoe bomber.  If we schlubs had behaved similarly, we would be somewhere in Gitmo with not even Eric Holder giving a hoot.  However, diplomatic immunity allowed the young man to walk.  Sometimes the law does not come close to ethics or personal responsibility.  The embassy responded, “He was certainly not engaged in any threatening activity.”  Yes, but how did the poor folks aboard the flight know that?

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“Any kid can get swept up in a clique or mob mentality. It breaks my heart.”

Phoebe Prince, an Irish immigrant attending South Hadley High School in Massachusetts, committed suicide on January 14, 2010 after a lengthy period of bullying by a clique of five popular students.   The five students are under indictment.  The community is torn apart.  The quote comes from a parent.  The outrage comes from the Barometer. Being caught up in a clique means wearing a Lance Armstrong “LIVE STRONG” yellow bracelet.  Succumbing to Continue reading

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“On Wall Street, trust is for suckers.”

MD Sass has a formula for investment that sprang from the ashes of the great salad oil scandal of 1963.  Mixed metaphors aside, Martin Sass was fooled by a New Jersey company that was storing vats full of water, not the soybean oil in which his firm was heavily invested.  But, cash, unlike revenues, is tough to fake.  So, Sass uses the following formula to evaluate companies: Continue reading

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The bank officer who found the perfect place for a party

The owners had walked away.  Facing a mortgage in excess of their home’s value, they just left and the bank was stuck with the home.  The bank was paying for its upkeep.  The economy being what it is, the bank could not sell the home.  Enter a bank VP who was having a party for friends and relatives.  Continue reading

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