When Countrywide Financial’s Angelo Mozilo told a Congressional committee in 2007 that there was a lot of fraud in the subprime business, we thought at the time it might be a prophetic statement. The Securities and Exchange Commission apparently agrees, as this week it laid civil charges of securities fraud against the company’s former CEO. What we sometime ago dubbed as Mr. Mozilo’s miraculously timed stock sales, the SEC thinks could be insider trading.
In 2006, Mr. Mozilo was among America’s ten highest paid CEOs, with a paycheck that topped $142 million. Between 1999 and 2008, he pocketed some $400 million in total compensation. It will be interesting to see whether this was one of those cases where the compensation was fully justified–as Countrywide’s board always maintained during this period–and an example of aligning the interests of CEOs with those of investors, or whether it was, instead, nothing more than reward founded on sands of subprime fraud and another example of CEO pay being aligned with CEO greed.
It is not just an American icon that has foundered, but an age that has too long emphasized the wrong values, and sometimes no values at all.
And so the unthinkable has finally happened. The company that was once the marvel of the world, its largest industrial corporation and the first stock listed on the NYSE, has become the biggest industrial bankruptcy in history. Its shares, long the most coveted among blue chip portfolios, have seen their value slide into the pennies and are about to be removed from the fabled Dow 30 index. It is a business equivalent both as dramatic and unthinkable as the sacking of ancient Rome (by the Vandal King Geiseric in 455 AD) or the sinking of the Titanic (1912). Perhaps things will someday turn around for the once mighty automaker. But, for now, General Motors is just another company making its way through the court of losing enterprises. Whatever happens, the symbol GM will never mean the same when measured by industrial size, labor force or customer trust. (more…)
Too many posts to handle? If you missed out on a great post from last month, here’s a quick digest of the top posts that you may want to check out:
- Black to be Heard
Posted on Monday, May 18th, 2009 in Conrad Black – Comments: (0)
The American justice system, which Conrad M. Black disparaged before, during and after his conviction on fraud and obstruction of justice charges in 2007, has taken a surprising turn today -surprising to Mr. Black, especially. The U.S. Supreme Court announced this morning that it will hear his appeal.A few years ago, there were not many who would have refused to listen to whatever Mr.
- Jack Kemp | 1935 – 2009
Posted on Sunday, May 3rd, 2009 in Passings – Comments: (0)
He was a man of principle, but not to the extent of forgetting that others have principles too. He was a politician, but always showed he understood life outside Washington and among those who still have to struggle to get by. And when he grabbed the ball in politics, just as he did when he was the quarterback for the Buffalo Bills, he did it with style, grace and civility.
- The Trajectory of Nuclear Madness
Posted on Monday, May 25th, 2009 in Hot Issues – Comments: (0)
The tendency of politicians to exaggerate the prospects of success, to flee the taking of tough stands, and to downplay the dangers of the dark clouds into which they insist upon steering is as much with us today as it was a century ago.North Korea’s testing of a nuclear bomb, the second in just over two years, and its companion firing of a test missile, illustrates with convincing evidence just show how inept the West has been in the handling of the nuclear genie.
- The Trout in Time’s Milk
Posted on Monday, May 4th, 2009 in Conrad Black – Comments: (0)
Emerson once observed that “Some circumstantial evidence is very strong, as when you find a trout in the milk.” Some details in reporting are a tad too crucial to leave out, as when the author of an opinion piece is penning the missive from a federal prison because of two little character defects called fraud and obstruction of justice. This is what occurred in Time’s online edition, which ran a piece by Conrad Black, known widely as Lord Black of Crossharbour, formerly of the Bridle Path in Toronto, Palm Beach, and London, but more recently as inmate number 18330-424 of the Coleman Correction Facility in Florida, and a regular subject of commentary on these pages.
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The tendency of politicians to exaggerate the prospects of success, to flee the taking of tough stands, and to downplay the dangers of the dark clouds into which they insist upon steering is as much with us today as it was a century ago.
North Korea’s testing of a nuclear bomb, the second in just over two years, and its companion firing of a test missile, illustrates with convincing evidence just show how inept the West has been in the handling of the nuclear genie. More evidence was hardly needed, however. When it comes to nuclear proliferation, the pattern is entirely predictable. Worries are expressed that some power is trying to obtain material to make a nuclear device. Alarms are next sounded that they are in the process of making it. Much debate ensues as to whether that is possible or how far away it could be. Then, one day, the world awakens to discover that a country has just tested its first atomic bomb, much sooner, of course, than the experts predicted. So it was with India and Pakistan and China. It has been the same with North Korea. And it will soon be that way in another global flashpoint. If you were bothered by the reports about North Korea today, just substitute that country’s name with Iran and you will have some idea about the insanity that has taken the world’s leaders into its grip and the terror to which we will in all likelihood, at some other dawn, awaken.
When North Korea agreed two years ago to abandon its nuclear program for hundreds of millions in cash, there was a sense of relief in many quarters, along with wonderment over the negotiating skills of the United States. A greater degree of skepticism would have been appropriate. Psychopaths, as we called them here in 2006, are in charge in Pyongyang, but they are clever psychopaths. Now they have the money and the bomb. And a lot more leverage to demand greater concessions.
For their part, the governance systems of the civilized world seem hopelessly ill-equipped to deal with the madness that consumes Asia’s frozen north or is daily evident in Iran’s dash to acquire the bomb. Western governments never seem to have a fully accurate intelligence picture. They always overrate their successes and underrate how short-lived they will be. They play into the opposite side’s game of dragging things out, which typically inures to the advantage of rogue states and ill-intended minds. When it comes to dealing with Iran or North Korea-or China, for that matter, which enjoys playing both sides in the conflict between North Korea and the West and arguably has more influence on that miscreant state than any other country-there are always many more Neville Chamberlains in the room, willing to appease and to assuage, than there are Winston Churchills. Few, even today, can match Churchill’s uncommon prescience in anticipating the rise of global troublemakers or his exceptional grasp that strength and determination are the only language that tyrants fully comprehend.
None of the foregoing is to suggest that the North Korean issue is easily solved. But the task of tackling it needs to be guided by a better understanding of history than has been demonstrated to date.
Twice in the span of slightly more than a generation, beginning with the run-up to World War I in the early 1900s and then during the rise of Nazism in the 1930s leading to World War II, the West and its leaders were essentially in denial over the storms of global belligerence and intolerance that were swirling around them. They turned a blind eye to the early years of the century’s most infamous holocaust. The iron curtain of Communism prompted little outrage as it made its slow descent over Eastern Europe. More recently, world leaders slumbered as the atrocities in Bosnia and Darfur occurred and intervention was long overdue. In all of these events, where the fateful overtures of disaster and decisiveness competed on the world’s stage for the affections of leaders and public opinion, and strong action could have averted larger calamities, those in command professed that they had the answers. But the endings were rarely as advertised. The tendency of politicians to exaggerate the prospects of success, to flee the taking of tough stands, and to downplay the dangers of the dark clouds into which they insist upon steering is as much with us today as it was a century ago.
We cannot know the future, as Churchill was apt to remind, but we can be certain, as the seismic jolt from North Korea illustrates today, that the same short-sighted approach taken by the guardians of freedom and democracy will continue to produce the same shocking horrors that ultimately prove more costly than anyone ever imagined. Imagination is an infrequent companion among leaders of any era and rarely marches along side their more fleeting attributes, which is why the ability to envision the unthinkable, for good and for ill, has always been a defining attribute of transformative figures like Churchill, Gandhi, King and Jefferson. It will take much more than we have seen so far to alter history’s frequently recurring trajectory of madness and push would-be nuclear despots as far away from the trigger of obliteration as humanly possible.
The American justice system, which Conrad M. Black disparaged before, during and after his conviction on fraud and obstruction of justice charges in 2007, has taken a surprising turn today -surprising to Mr. Black, especially. The U.S. Supreme Court announced this morning that it will hear his appeal.
A few years ago, there were not many who would have refused to listen to whatever Mr. Black wanted to say. He was courted, honored, praised and saluted throughout North America and Europe by presidents, prime ministers and princes. Now, the only people who matter are the nine justices of the top court of the land. This is not the best time, still, for Mr. Black, who remains in prison, and some of his friends, who have their own travails with various forms of the legal system.
Garth Drabinsky was found guilty of fraud in a Toronto court earlier this year. Former Canadian prime minister Brian Mulroney is even now at the center of a commission of inquiry looking into the circumstances which saw his receiving envelopes of cash, beginning just after he retired from office, from a shady arms dealer who is wanted by the German government. Conrad Black served on the board of Livent, the company founded by Mr. Drabinsky, who was a close friend. Brian Mulroney elevated Conrad Black to membership in Canada’s privy council, a rare honor for those who do not hold public office. Conrad Black was a long-time friend of Mr. Mulroney and a major financial backer of the Conservative party under his leadership. All of these men are members the Order of Canada and were trained in the law.
Mr. Black has frequently opined on the failings of the U.S. justice system. But as he now begins to set his gaze upon the only remaining nine citizens of planet Earth who hold the key to his future in their hands, one can soon expect to hear that institution trumpeted, in true Blackarian form, as the Founders’ purest and most noble of creations. It’s not entirely a virtueless view, and it is a marked improvement from his lordship’s previous line about the prosecutors with toilet seats around their necks.
