Inspector Generals and Auditors

What do Enron, Healthsouth, Adelphia and Tyco have in common? All were found guilty of fraudulent activities. And, each were misled by CEOs and even CFOs. The names Kenneth Lay and Richard Skilling of Enron (accounting and tax fraud), Richard Scrushy of HealthSouth (accounting fraud), John and Tim Rigas of Adelphia (fraud, corruption and theft) and Dennis Kozlowski and Mark Switz of Tyco (massive theft) will not be remembered in a good light. The Enron scandal even brought down one of the largest accounting firms, Arthur Andersen.

Because of their activities, the SEC passed a rule stating that the Board of Directors’ Audit Committee must be given greater authority and independence. In short, the Audit Committee must be independent of the Executive Committee and cannot include the President or Treasurer. It also must:

– Not include anyone employed by the organization or the audit firm
– Have at least one “ financial expert ” who is familiar with the audit process
– Avoid conflicts of interest.

In the federal government, the Inspector General’s office imbedded in each of the departments of the Executive branch serves like an auditor. The equivalent Board oversight is the Congress of the United States, not the president. It is a very important role that keeps America running like a democracy and not an autocracy. When this oversight is compromised, America’s democracy is diminished.

I raise this now as the president of the United States seems to be at war with the Inspector Generals in the Executive branch. Friday night, the president sent a letter that he was firing Michael Atkinson who did his job and reported to Congress the veracity of a whistleblower complaint. To Atkinson’s credit, he publicly defended his role and encouraged whistleblowers to still come forward.

This week, the Glenn Fine, the appointed IG overseeing the $2.2 trillion coronavirus stimulus fund, was removed and will be replaced by a Trump appointee. Fine was well regarded in this role coming out of the Department of Defense. Something seems fishy here.

If that were not enough, the president was critical of a US Department of Health and Human Services IG report led by Christi Grimm. The report was critical of the hospital preparedness for the coronavirus, which is not a surprise, since hospitals and governors are begging for help.

What does all of this mean? Why is the president at war with the Inspector General’s office? Is he hiding something? Are they saying things that run counter to his own storytelling which is well-known to be less than truthful? If this were a publicly traded company, these actions would raise a red flag with the Audit Committee. They should do the same with Congressional oversight.

In short, the US is not a kingdom. It is not an autocracy. The president has never reported to anyone before his swearing in, except for his father. He is highly accustomed to not being questioned. In fact, he does not like being questioned, which is apparent on a daily basis. Yet, he must answer to Congress. I urge Congress to do their job. They must represent Americans, not a political party.

What I care about – a note received

I shared that my local newspaper published my letter to the editor whose theme was “Listen to the truthtellers.” I included the letter in a recent post. Today, I received a very gracious letter from someone I do not know thanking me for my letter and “taking a stand and for expressing my views publicly.”

Attached to the letter was a summary prepared by John Pavlovitz (see link below) entitled “What I care about.” I thought I would share that summary below:

“I care that families are being separated.
I care that medical bills are bankrupting people.
I care that we’re drowning in guns and daily shootings.
I care that we’re talking about an asinine multi-billion border wall that won’t solve a crisis, even if there were one – and there isn’t one.
I care that our climate is changing and our planet is warming and our environment being degraded ad we have politicians who see science as an adversary.
I care that this Administration solicited and welcomed foreign interference in a Presidential election.
I care that voter suppression and gerrymandering are making it almost impossible for poor people and people of color to be heard and represented.
I care that racists march without hoods now, that elementary school teachers dress up like border walls, that wrestling coaches cut off a man’s dreadlocks in public.
I care that our President is mentally unfit to lead, and that he is buffeted by a group of professional enablers who know he is unfit and defend him anyway.
I care that every single day brings new legislative attacks on people who are already pushed to the brink.
I care that we have accused predators in the White House and on the Supreme Court.
I care that Muslims are caricatured into terrorists, migrants into advancing hordes, and LGBTQ people into imminent threats, by our elected leaders.
I care about families and sick people and underpaid teachers and hungry kids and unpaid Federal workers and transgendered teenagers – and the millions of beautiful, vibrant, disparate human beings who are daily endangered by the leadership of this country.

That’s what I care about.”

This list boils down many concerns to one piece of paper. It is worth the read and reaction. Let me know your thoughts.

Note: At the bottom of the summary is a quote from Neil Carter, “Why are we voting into office men who don’t even accept basic principles of biology, geology, immunology, and astronomy, and who believe we don’t have to preserve our planet’s natural resources.”

The weblink to Pavlovitz’s blog is as follows:

https://johnpavlovitz.com/

Trumbo – a great movie about a dark time in America

Earlier in the week, I was watching the excellent movie called “Trumbo” about the black-listed screenwriter Dalton Trumbo starring Bryan Cranston and an excellent cast such as Helen Mirren, Diane Lane, Elle Fanning and John Goodman to name a few. I missed it the first time around in 2015 when it was released.

The movie was written by John McNamara and Bruce Cook, on whose book the movie is based. It was directed by Jay Roach. Trumbo was one of the Hollywood Ten who were blacklisted early on for alleged communist activities. He spent time in jail for being in Contempt of Congress for refusing to name names. Trumbo would go on to ghost write two Oscar winning screenplays for “Roman Holiday” and “The Brave One.” He would perpetuate an underground screenwriting group and eventually, Kirk Douglas and director Otto Preminger, would let him sign his name to the movies in 1960 with “Spartacus” and “Exodus.”

I was reminded of the House Un-American Activities Committee, which began in 1947 and was in exisentence until 1975, that started these investigations leading to Sen. Joseph McCarthy’s communist witch hunt efforts. It should be noted that 1975 is the year following Richard Nixon’s resignation. Nixon was a key ally of Sen. McCarthy. It should be noted Nixon kept an enemies list due to his paraonoia. Nixon did some good things, but he turned out to be a crook.

What is interesting is McCarthy’s attorney through this dark period was Roy Cohn. Cohn later became a mentor to a young real estate developer in New York named Donald J. Trump. Trump’s biographers wrote that Cohn told Trump to never apologize and sue everyone. Trump has followed these mandates for his entire career.

Bringing this full circle. Trump is the most corrupt and deceitful president in my lifetime, including Nixon. But, both me were influenced by Sen. McCarthy who led this dark period in American history who made up things to support his claims. It should be noted that both Nixon and Trump blame the press for not sufficiently kowtowing to them. As the Sec. of the Army asked famously of McCarthy, “have you no sense of decency, sir?” The same could be asked of the current US president.

So, we must protect America against those who wave the flag and tell people it does not stand for the things that it does.

Debt, risk and lies

The following is a comment I posted on our friend Jill’s blogpost where she has penned an excellent letter firing the president. See below for a link. There is good back and forth between two of her followers, which is good for its content and civility, the way it should be. Since the debt came up as one issue, as a failing of many presidents including Obama, I used that as one example. These are the views of this independent voter who has been a member of both parties and defines himself as fiscally conservative and socially progressive.

Just taking the debt as one issue, while Obama will be remembered as a pretty good president, to me a key failure was to put on the shelf the Simpson-Bowles Deficit Reduction Act. Dems and Reps did not like it as for every $1 of tax increases it asked for $2 of spending cuts. Obama should have said, let’s start with this and make changes. What both parties fail to understand is we need both spending cuts and tax increases to solve the debt – the math will not otherwise work.

That was when the debt was about half of what it is now. I find the Freedom Caucus who got elected on reducing the debt the height of hypocrisy when they voted for a tax law change in December 2017 that increased the debt by $1.5 trillion – we did not need that, so now when we spend $2 trillion because of COVID-19, we have to go deeper into the well to borrow money.

On top of the many reasons not to vote for Trump (climate, environment, corruption, chaos, lying, global leadership retrenchment, et al), his cavalier short term financial focus to prop up a long running pretty good economy to be a little better for a little while was indicative of why he had six corporate bankruptcies and other failed investments. Even on the COVID-19, his primary focus has been his image, first, the stock market second (his proxy for the economy) then the people, third. This is not a recipe for good decisions and is one reason for his inconsistency.

But, at the heart of all of this, is I do not believe a word the president says and that makes me sad. All presidents lie to some extent, but this one is the most corrupt and deceitful president in my lifetime including Richard Nixon and he was a crook.

But, before we burn the government down, please read Michael Lewis’ “The Fifth Risk,” which reveals the true risk heightened by this “chaotic and incompetent” president’s White House (per conservative pundit David Brooks) and that is the gutting and hamstringing of people who know what they are doing to serve us. Could they be more efficient, always? But, for the very large part, they are dedicated public servants trying to do a good job. Lewis based his book on the required briefing materials prepared by the outgoing administration that went largely unread and not even picked up when briefings went unattended by incoming (or not even appointed) Trump people.

YOU’RE FIRED!!!

Listen to the truthtellers – sample letter to editor

Misinformation and disinformation abound with COVID-19. The line we must use when we see incredulous Facebook posts or hear fabricated conspiracy theories (like Bill Gates concocted COVID-19 to make money), or the simple echoing of misinformation by the president, is “I would encourage you to listen to the truthtellers.” When asked, you can mention the doctors and scientists. If asked to elaborate further, you can say “Listen to the people not patting themselves on the back telling what a great job they are doing.”

Poor (or not so poor) Richard’s Almanac

One of my two North Carolina Senators is Richard Burr. While I do not agree with everything he opines, this independent voter has voted for him on occasion and against him as well. Yet, he has always seemed to be one of the more reasonable Republicans and Senators in office. I have actually even met him twice, once at a meeting about the state’s homeless population and once at my boss’ request to brief him on employer health care issues when he first ran as a Congressman.

So, this makes it even more troubling that he has been alleged of insider trading on stocks to pocket the upside gain on hospitality stocks when he had knowledge those stocks would suffer as the coronavirus became more known. He and Kelly Loeffler, the new Senator from Georgia, have been accused of such. From a Reason.com article called “Senators Richard Burr, Kelly Loeffler accused of coronavirus motivated insider trading” (see link below):

“Plague trading? Privately, Sen. Richard Burr (R–N.C.) warned constituents weeks ago that coronavirus was “akin to the 1918 pandemic,” NPR reports. Publicly, he towed President Donald Trump’s line that the new disease would not be a big deal.

Worse still, ProPublica reports that Burr sold off between $600,000 and $1.7 million in stocks on February 13, suggesting that he used his private knowledge about the coming economic impact of the pandemic to prevent personal financial losses. Burr chairs the Senate Intelligence Committee and is a member of the Health Committee. At the time he sold the stocks—a significant proportion of his wealth—he was being briefed regularly on COVID-19.

It was the largest single-day stock trade for Burr in 14 months.”

Insider trading is a crime for “named executives” according to the Securities Exchange Commission (SEC). Note Burr is not a named executive of these companies. Yet, it is also in violation of the STOCK (Stop Trading on Congressional Knowledge) passed in 2012, which Burr ironically voted against. This act was passed after “60 Minutes” did a report that noted former Congress members were leaving office much wealthier than when they arrived due to insider knowledge. This is where Burr’s action may lead to trouble for him.

People may not recall the Enron scandal which hit the fan in the early 2000s. This is where Enron executives had over 40 fraudulent schemes to hide losses and artificially prop up earnings for stock appreciation and bonus determination. What is also infuriating, the CEO told employees to keep buying and not divest Enron stock, even when he knew the price was artificially propped up. He and his CFO went to jail for securities fraud. Senator Burr was telling people the president’s party-line of not to panic about the coronavirus and this will blow over, when he had been briefed as chair of the Senate Foreign Relations and Intelligence Committee to the contrary.

He argues that he was selling based on public knowledge, but the above paragraph reveals concerns. Right now, a shareholder of Wyndham Resorts, one of the stocks, is suing the Senator for insider trading. I am certain other shareholders will be asked to join the lawsuit to make it a class action. They will have standing, meaning they lost value, while Burr sold and pocketed gain on the advance knowledge.

A recent poll in The Charlotte Observer, cited 50% of all NC voters and 31% of GOP NC voters want Burr to resign. Even Fox News talk show host Tucker Carlson has asked for his resignation. This is why it is critical that elected officials must be divorced from the handling of their investments, either placing them in blind trust or selling them. It should be noted NC Congressman Robert Pittenger resigned his position two years ago due to his unethically remaining involved in the management of his business when he said he was not.

Senator Burr, I recognize this an alleged crime, but the optics look very poor. I know you asked for an investigation, which sounds good, but if it is done correctly, it may not come out in your favor. Even if it does, the shareholder lawsuit will be even more invasive. I do not see you escaping hard scrutiny. It is sad that you will likely be remembered more for this, than other more reasonable efforts you have made. I know you have announced last year you won’t be running again in 2022, but you may be forced to reconsider this.

Sens. Richard Burr, Kelly Loeffler Accused of Coronavirus-Motivated Insider Trading

A fool’s errand

The president of the United States said yesterday that reporters are trying to get the coronavirus so that they can infect him. In a long list of bizarre, blatant and mere exaggerated lies, this comment may be his most idiotic. Mind you, there is a lot of competition for the prize as most idiotic. But, to think someone would endanger themselves and their family to get the president sick is just beyond reason.

The fact the president is untruthful is not news. Even Tucker Carlson admitted to such on his Fox News program last fall. Why that is not more of a problem to Carlson is beyond me? Lately, I have been using the following phrase to define how we should react to the president’s persistent untruthfulness. “Taking the president at his word is a fool’s errand.”

When Trump supporters tell me I just don’t like the president, the truthful response is I do not like that I cannot trust the president of the United States. But, I am not alone. In a poll of Europeans several weeks ago, 64% said they do not trust the president of the United States. Even more alarming is they trust Vladimir Putin and Xi Jingpeng more.

The president should not lie in everyday matters. Senator Bernie Sanders rightfully calls him a “pathological liar.” Trump’s former National Economic Advisor Gary Cohn called him a “prodigious liar.” John Dowd, an attorney working on the Mueller investigation on behalf of Trump called him a “f**king liar.” And, the list goes on, but I often use Thomas Wells, an attorney for Trump, who wrote in 2016, “Donald Trump lies everyday, even about things of no consequence.” The only thing Wells got wrong is the frequency is higher. He lies several times a day.

Yet, in times of crisis, we must look to the president for telling us what is going on. But, we cannot with this person. He protects his image or the perception over the truth. He simply cannot be accountable or own the truth. He said earlier this week it is the media that is causing the stock market to fall. Per the president, it has nothing to do with the coronavirus unpreparedness and impact it is having on people doing things. And, it has nothing to with Saudi Arabia and Russia causing an oil glut or the general softening of the growth in the global economy.

As I have said to others, I no longer watch the president as it is unsettling to count the lies in real time. I prefer to read them and judge for myself. I start from the bottom not believing a word he says or tweets. Then, I go from there. To me, it is sad to feel that way about the president. Other presidents have lied, but not with the frequency and volume that the incumbent does.

-George W. Bush told us there were weapons of mass destruction as reason for invading Iraq. That was a lie.
-Bill Clinton said he did not have sexual relations with that woman. That was a lie.
-Barack Obama said if you like your plan, you can keep your plan. That was a lie.
-Ronald Reagan told us he did not sell arms to Iran to fund the Contras in Nicaragua. That was a lie.
-George HW Bush said read my lips, no new taxes. That turned out to be a lie.
-Richard Nixon said I am not a crook. That was a lie.

Yet, while I can likely note a few others by the above, I can easily name a half dozen lies the incumbent has said in about five minutes. Given more time, I can think of a few dozen. Googling would list a host more.

So, to the Trump fan who said he is just rough around the edges, or to the one in the commercial who said you can trust Donald Trump, please note the following. Trump is more than rough around the edges. And, the US is less trustworthy because our president cannot be trusted. So, my strong advice to people is “taking the president at his word is a fool’s errand.”