Tidbits on June 27, 2005
Bob Jensen at Trinity University
Fraud Updates ---
For earlier editions of New Bookmarks go to
Archives of Tidbits: Tidbits Directory ---
Click here to search Bob Jensen's web site if you have key words to enter ---
For example if you want to know what Jensen documents have the term "Enron"
enter the phrase Jensen AND Enron. Another search engine that covers Trinity and
other universities is at
Bob Jensen's home page is
Security threats and hoaxes ---
Radio Memories ---
Train of Life
(Willie Nelson and Patsy Cline)
CIA: The World Factbook 2005
Bob Jensen's bookmarks for economic statistics are at
Bob Jensen's bookmarks for encyclopedias etc. are at
On June 26, 2005, Time Magazine announced an extensive
cover feature on Abraham Lincoln ---
The U.S. Social Security System may be insolvent in less than
The recent annual report issued by the Social Security
Board of Trustees demonstrates with undeniable clarity that Social Security
faces a looming financial crisis. Worse still, the report shows Social
Security's lurch toward insolvency has accelerated. In just a little more than a
decade, Social Security will begin to run a deficit, the study shows. Deficits
will continue and amplify every year well beyond the turn of the next century.
Despite early protestations from many on Capitol Hill that "there is no crisis,"
few serious observers of the current state of Social Security hold out hope the
system can survive as presently constructed.
Thomas R. Saving, "Social Security Insolvency Accelerating: Study
Says Crisis is much closer than previously believed," Heartland Institute, July
1, 2005 ---
International Freedom Center ---
Video Guide To Securing Your Computer
wanted to call attention to a new resource
on washingtonpost.com for people who need a
little help getting started in securing
their computers. We produced a
series of "screencasts" or video guides
demonstrating some of
the basic steps users need to take to stay
safe online, including brief primers on
choosing and using firewall and anti-virus
software, downloading and installing the
latest Microsoft Windows patches, and taking
advantage of free anti-spyware tools.
These videos are by
no means definitive guides, but I hope they
will be of some use to those who find
themselves completely intimidated by
Brian Krebs, "ideo Guide To Securing
Your Computer," The Washington Post
Bob Jensen's threads on computing and networking security are
RealNetworks Patch Fixes
Four Critical Bugs
the company that
makes the RealOne and
players (and runs the Rhapsody
music service), has issued a set of patches
to fix at least
four serious security problems
in its various
products. Updates are available for
versions of the company's software running
on Windows, Mac and Linux. To find out which
versions need patching, check out the above
link. Instructions for finding out which
version you are running and how to download
the patches are available at that link as
Brian Krebs, "RealNetworks Patch Fixes Four
Critical Bugs," The Washington Post
Bob Jensen's threads on computing and networking security are
Don't fall for this Citibank phishing trip
2005 message from Andrew Priest
It is a phishing scam email. Get them most days.
Sometimes I am amazed at the number of banks I have accounts with :-) The
link in this one takes you to
http://snipurl.com/CitiScam which is a poor
attempt at looking like the CTI website.
The actual CTI website is at
Note the warning in the yellow box.
Bob Jensen's threads on computing and networking security are
Do Capital One and J.C. Penney companies have any ethics?
Unwanted software slithered into Patti McMann's
home computer over the Internet and unleashed an annoying barrage of pop-up ads
that sometimes flashed on her screen faster than she could close them. Annoying,
for sure. But the last straw came a year ago when the pop-ups began plugging
such household names as J.C. Penney Co. and Capital One Financial Corp.,
companies McMann expected to know better. Didn't they realize that trying to
reach people through spyware and its ad-delivering subset, called adware, would
only alienate them?
Michael Gormley, "Major Advertisers Caught in Spyware Net," Associated Press,
June 24, 2005 ---
Jensen Comment: My wife got suspicious of several magazine subscription
renewal charges from J.C. Penney, because she's never subscribed to any
magazines via J.C. Penney. When the magazines arrived she had been
throwing them out for over a year along with other junk mail. J.C. Penney
willingly credited her for the previous year's undetected subscription charge.
But what was telling to me is that it appears J.C. Penney actually has a
department set up to refund these charges if customers get suspicious.
Those that do not notice these unwanted billings probably go on paying year
after year even though they never ordered these magazine subscriptions.
Where are the corporate ethics?
You can read more about the serious J.C. Penney insurance
Advice for workers who get a poor performance evaluation
report from their supervisors ---
First Aid Myths: Ignore These Summer 'Cures' ---
Microsoft's RSS Move
You know a technology has moneymaking potential when
Microsoft finally jumps in. Known for beating rivals with their own inventions,
Gates & Co. have decided its time to make a move on RSS, the hot technology
among geeks for distributing text, audio and video over the Internet. I say
geeks, because readers, the desktop software that aggregates content published
via RSS, or really simple syndication, hasn't made it to the mainstream. Because
the average consumer doesn't know or care about RSS, it's the perfect time for
Microsoft to muscle in and pretend to offer something "new and exciting" to the
millions of consumers using Windows at home.
Editor's Note, Internet Week Newsletter, June 27, 2005
Bob Jensen's threads on RSS Rich Site Summary are under "RSS" at
The U.S. Supreme Court made a bad mistake on this one
"The question answered yesterday was: Can
government profit by seizing the property of people of modest means and giving
it to wealthy people who can pay more taxes than can be extracted from the
original owners? The court answered yes... During oral arguments in February,
Justice Antonin Scalia distilled the essence of New London's brazen claim: 'You
can take from A and give to B if B pays more taxes?... That is the logic of the
opinion written by Justice John Paul Stevens and joined by justices Anthony
Kennedy, David Souter, Ruth Bader Ginsburg and Stephen Breyer" -- Washington
Post columnist George Will, writing on yesterday's Supreme Court ruling
upholding a city's right to seize private property for the benefit of a private
Opinion Journal, June 24, 2005
Exams can be great motivators
Criticism of objective tests of knowledge includes the
oft-repeated claim that teachers "teach to" tests rather than teaching other,
presumably more mind-enriching, stuff. But the criticism only works if you
assume the self-discipline and information children learn while preparing for an
exam is worthless - and why should that be? In fact, exams can be great
motivators, encouraging students to absorb information and figure out how to
apply it at maximum efficiency. About the only information I retain from physics
and chemistry are the formulas I memorised for exams; I can still recite poetry
learned for exams.
Miranda Devine, "Scam shows worth of exams," Sydney Morning Herald, June
26, 2005 ---
Yahoo Shuts Many Chat Rooms As Minors Are Solicited for Sex
Yahoo Inc. shut down all its user-created chat rooms,
after a Houston television station reported that some were being used to solicit
minors for sex, and several companies withdrew advertising from Yahoo's site.
Jim Carlton and Chelsea Deweese, "Yahoo Shuts Many Chat Rooms As Minors Are
Solicited for Sex," The Wall Street Journal, June 24, 2005; Page B3
Does French 'Non' Hurt American Interests?
You report that the
French "non" vote is a blow to U.S. interests since the proposed European Union
constitution "was expected to strengthen a key U.S. foreign-policy ally and
sometime partner in efforts to combat global terrorism and nuclear proliferation
in countries such as Iran" ("A
French 'No' Reminds Europe of Many Woes,"
page one, May 31). Which ally was that? The proposed E.U. constitution aimed to
centralize European foreign policy, giving more power to such heroes of the
battle against terrorism as French President Jacques Chirac and German
Chancellor Gerhard Schroeder and helping stifle the voices of Britain, Poland,
Italy, the Czech Republic and our other actual allies. Given Mr. Chirac's
comment to the new members of the E.U. when they disagreed with France over the
liberation of Iraq that they weren't "well brought up" and should "shut up," it
seems hard to see the French "non" as a blow to American interests.
Andrew P. Morriss. Professor of Business Law & Regulation Case School of
Law Cleveland "Does French 'Non' Hurt American Interests?" The Wall Street
Journal, Non June 24, 2005; Page A13 ---
German proverb: "Whose bread I eat his song I sing."
"Auditors: Too Few to Fail," by Joseph Nocera, The New York Times,
June 25, 2005 ---
Yet the word now seems to be that the Justice
Department will probably not indict the firm (KPMG).
This is partly because KPMG has belatedly apologized, admitted the tax
shelters were "unlawful," and cut adrift its former rising stars (and tried
to shift the blame for the shelters to them). And it is working to come up
with a deal with prosecutors that, however painful, will fall short of the
But it's also because the government is afraid of
further shrinking the number of major accounting firms. Remember when people
used to say that the major money center banks were "too big to fail"-
meaning that if they ever got in real trouble the government would have to
somehow ensure their survival? It appears that with only four big accounting
firms left, down from eight 16 years ago, there are now "too few to fail."
How pathetic is that?
. . .
"What infuriates me about the accounting firms is
the enormous power they have," said Howard Shilit, president of the Center
for Financial Research and Analysis. "You just can't compel them to do
things they ought to do. And the fewer firms there are, the more
concentrated their power." To my mind, the biggest problem is the hardest to
change - that accounting firms are paid by the same managements they are
auditing. Nobody really thinks about changing this practice mainly because
it's been that way forever. But, "it's the elephant in the room," said Alice
Schroeder, a former staff member at the Financial Accounting Standards Board
who later became a Wall Street analyst. In the memorable phrase of Warren E.
Buffett's great friend and the vice chairman of Berkshire Hathaway, Charles
T. Munger - quoting a German proverb: "Whose bread I eat his song I sing."
June 26, 2005 reply from Denny Beresford
The author of this article has set up a "Forum" in
which readers are encouraged to report their reactions to the issue of so
few major accounting firms. It's at
www.nytimes.com/business/columns . There are some
very interesting comments already recorded - some of the suggestions might
actually make sense.
The forum link is at
June 27, 2005 reply from Bob Jensen
Some of the forum's replies are from nut cases.
But there are some good suggestions, particularly the suggestion about
pooling of audit fees. This would not eliminate the risk of a bad
audit, but it does take the fee negotiation risk out of the picture.
The mako59 reply from a PwC CPA is well written.
Bob Jensen's threads on the two faces of KPMG are at
Bob Jensen's threads on the future of auditing are at
From Columbia University Teachers College
The Institute conducts research and evaluations,
provides information services, and assists schools, community-based
organizations, and parent school leaders in program development and evaluation,
professional development, and parent education.
The Institute for Urban and Minority Education ---
From the Scout Report on June 23, 2005
The Physics Department at Mississippi State
University provides links to physics-related Java and Macromedia Shockwave
Player simulations that have been created around the world. The modules are
sorted into nine categories: measurements, math, mechanics, waves, electricity
and magnetism, thermodynamics, light and optics, modern physics, and astronomy.
The simulations are then further divided into subtopics so that users can easily
locate helpful items. This website offers a great way for students to quickly
obtain materials to assist in their physics studies.
Mississippi State University: Physics Simulations [Java, Macromedia Shockwave
Bob Jensen's bookmarks for science are at
The Power of Culture
Culture is an essential part of development
cooperation, and should be equated with food certainty, for example, health and
education. This assertion is the guideline for the event Beyond Diversity:
Moving towards MDG no. 9 being organised by Hivos in Amsterdam on 2 June 2005.
The event is being organised in recognition of the tenth birthday of the Hivos
The Power of Culture, June 2005 ---
The Dawn of a Legend
25 April 1915 is a date etched in Australia’s
history. Its anniversary is commemorated across the country each year as
. To many this is Australia’s most
important national day.In the morning of this day Australian troops
made a landing on a hostile shore along the
Gallipoli peninsula in Turkey. Some saw it as Australia’s “baptism of
fire” and “the birth of nationhood”.
The Dawn of a Legend ---
Association of Hispanic Arts
Love them versus "land" them
"And will you be able to pay the property taxes in sickness and in health?"
As house prices increase, so does the speed of
modern courtship. One in 10 adults would now consider buying with their
girlfriend or boyfriend within the first six months of dating, a survey by
Lloyds TSB discovered. More than three-quarters of the 1,885 adults questioned
said they would commit to a joint purchase within the first year of their
relationship. The age group most likely to put property over love was 25- to
34-year-olds. Six out of 10 said they would consider buying a property with
their partner to get into the housing market. And women were more likely to do
this than men.
Nina Goswami, "Good looks are important - but a new home comes first when
picking a boyfriend," Sunday Telegraph, June 26, 2005 ---
Viva le rent free
The concept of "egalité" may be enshrined in the French
constitution but, when it comes to free housing, some are proving more equal
than others. Staff at the chateau, who range from directors to gardeners and
maintenance workers, are housed in 200 coveted "grace-and-favour" apartments,
which are considered the ultimate "job perk". Almost 200,000 politicians, civil
servants and public sector workers benefit from free or low-rent accommodation
in France. The perk is estimated to cost French taxpayers more than a billion
euros a year and millions more in undeclared taxes, and it has become the focus
of increasing public outrage about the squandering of state money. State
prosecutors who have investigated the perk, which dates back to the 1940s,
estimate that although its property portfolio could earn the state about €1.4
billion a year, rental income only totals €30 million (£19 million).
Kim Willsher, "French bureaucrats refuse to give up lavish free homes as economy
wilts," Sunday Telegraph, June 26, 2005 ---
The Consumer Price Index (CPI) isn't what it used to be
The answer has to do with the occasionally strange way
the government produces the numbers that define our economic life - numbers on
which vast sums are wagered every day. Until 1983, the bureau measured housing
inflation by looking at what it cost to buy and own homes, considering factors
like house prices, mortgage interest costs and property taxes. But given the
shifts in interest rates and housing prices, those measures could show big
bounces from month to month. Besides, homes are a strange hybrid of a consumable
good and a long-term investment. As part of a long-running evaluation, the
bureau wanted to "separate out the investment component from the consumption
component" of the housing market, said Patrick C. Jackman, an economist at the
Daniel Gross, "How Home Prices Can Be Hot but Inflation Cool," The New York
Times, June 26, 2005 ---
Gangs: A Threat to National Security
The seed network already exists to facilitate this
organization. Gangs increasingly have international roots. Called "supergangs"
by law enforcement officials, these gangs often rely on the network of
associates outside the United States (often from their home country) for drugs
and money laundering. The El Salvadorian gang Mara Salvatrucha — or MS-13 — has
over 80,000 members in Central America and a rapidly rising presence in the
United States. This makes our porous Southern border an easy target not only for
drug smuggling, but human smuggling. Last year, the border patrol caught 1.2
million people trying to enter the United States. Many think they missed as much
as four times that many, and international gangs have found human trafficking to
be a potent source for income. Fees for illegal entry can reach as high as
$40,000, depending on the nationality of the person being brought into the
Newt Gingrich, "Gangs: A Threat to National Security," Fox News, June 26,
Snopes reports the following on the fabric fresher called
Classifying as "True" or "False" items which enumerate the many wonderful
uses to which a particular household product can be put is always
problematic, for a couple of reasons: Many household products will do at
least a passable job in a variety of uses other than the ones for which they
are primarily intended, so such claims are hardly remarkable or unique.
Products designed for particular uses are generally
more effective at those tasks than other products put to non-intended uses.
(That is, bug spray might clean glass just fine, but plain old window
cleaner is better, cheaper, and safer for that purpose.) Many of the uses
for Bounce brand fabric softener sheets listed above can be found on the
Bounce web site and have to do with odor elimination. This is hardly
surprising since Bounce is a scented fabric softener sheet, and just about
any scented product can be used (with varying degrees of effectiveness) to
mask ordinary household smells.
Nonetheless, one of our more intrepid readers
tested most of the uses for Bounce listed above and reported the following
Get rid of ants: It will chase ants away when
you lay a sheet near them.
Totally did not work. My kitchen is right
next to the back stoop, and we get a lot of ants around summer time. I must
have stuffed every nook and cranny of my kitchen with Bounce sheets, but the
suckers just crawled all over them and into the kitchen anyway. Orange
Clean, I found, worked like a charm to not only safely disinfect my kitchen,
but create a veritable ant Jonestown.
Musty book smells: It takes the odor out of
books and photo albums that don't get opened too often.
Well, kinda. I have an old Bible that we don't open because it's so fragile.
I stuck a couple of sheets in there and a few weeks later they smelled like
. . . flowery Bible pages. I guess if a big household problem for you is a
book smelling too "booky," then Bounce may be your solution. For me, it
still smelled like a book, and I still didn't care that much.
Repels mosquitoes: Tie a sheet of Bounce through
a belt loop when outdoors during mosquito season.
Another totally didn't work. I went to Florida on vacation, and spent a lot
of time horseback riding. I dislike mosquito bites, and that whole West Nile
thing was going on, so I had a Bounce sheet tied around every belt loop. It
looked kind of funky and cool, but didn't repel a mosquito worth a darn. My
knees were COVERED in bumps. I'm thinking maybe the stupid sheets ATTRACTED
the little bugs. Stupid Bounce.
Eliminates static electricity from your
Since Bounce is designed to help eliminate static cling, wipe your
television screen with a used sheet of Bounce to keep dust from resettling.
Worked! I was so shocked. Then I remembered — a paper towel will do the same
thing. On a test between two TVs in my home, the Bounce actually did about
the same as plain old Windex on a paper towel.
Dissolve soap scum from shower doors. Clean with
a sheet of Bounce.
I don't have shower doors, but I did try it on my shower curtain. The
scrubby feeling on the Bounce sheet actually helped in the scrubbing of some
soap residue, but I wouldn't trade in my S.O.S. pad for it.
Freshen the air in your home. Place an
individual sheet of Bounce in a drawer or hang in the closet.
I have a chest of drawers that constantly makes my clothes smell like
lumber. I tried this and it worked like a charm. My clothes not only stopped
smelling like the Keith Brown, but if I put a sheet between individual pairs
of nylons, they wouldn't stick together or get all tangled up. This is
Prevent thread from tangling. Run a threaded
needle through a sheet of Bounce before beginning to sew.
I couldn't tell you, I can't sew anything without a machine, and I could
tangle anything. This is tough to test — how do you tell human error from
just natural thread tangling?
Prevent musty suitcases. Place an individual
sheet of Bounce inside empty luggage before storing.
Same thing with the musty books. I never noticed my suitcases smelling
like anything. They did smell a little flowery, but nothing to write home
Freshen the air in your car. Place a sheet of
Bounce under the front seat.
That poor Bounce sheet got so smashed, stomped, spilled on and generally
abused sitting on the floor beneath the seat that no fresh scent happened. I
did stick one in the glove compartment, but it just kept getting in the way
of my glove compartment stuff, and for what? A flowery smell? Buy a little
pine tree and get over it.
Clean baked-on foods from a cooking pan. Put a
sheet in a pan, fill with water, let sit overnight, and sponge clean. The
anti static agent apparently weakens the bond between the food and the pan
while the fabric softening agents soften the baked-on food.
Totally did not work at all. Not only did I not feel completely
comfortable washing things I eat off of with laundry stuff, but I did a
side-by-side test. Two casseroles. One bounce sheet, one plain water. Water
did the same as a Bounce sheet; that is, helped unstick the glued-on food,
and so I'd say that the H2O weakened the bond between the food and the pan,
not the Bounce.
Eliminate odors in wastebaskets. Place a sheet
of Bounce at the bottom of the wastebasket.
Right. This made me feel like I was just throwing stuff away. I used it
in the bathroom, and it kind of worked, but no better or worse than the
aerosol can I keep in there and occasionally spritz in the trash.
Collect cat hair. Rubbing the area with a sheet
of Bounce will magnetically attract all the loose hairs.
No, it won't. I tried on my couch, and it just pushed them around. A
lint roller works wonders, though.
Eliminate static electricity from venetian
blinds. Wipe the blinds with a sheet of Bounce to prevent dust from
See the bit about the TV.
Wipe up sawdust from drilling or sand papering.
A used sheet of Bounce will collect sawdust like a tack cloth.
Did not test.
Eliminate odors in dirty laundry. Place an
individual sheet of Bounce at the bottom of a laundry bag or hamper.
This didn't work well for me. Five people keep all our dirty laundry
centrally located in a big box in the laundry room. A few Bounce sheets
mixed in did little to detox that area. However, I will say, for a small
hamper it may just work.
Deodorize shoes or sneakers. Place a sheet of
Bounce in your shoes or sneakers overnight so they will smell better in the
I am a Birkenstocks girl, and if you are in your bare feet in the same
shoes everyday, they get to SMELL. I stuck a couple of Bounce sheets in my
sandals, wrapped them in a plastic bag and waited overnight. Worked like a
charm. Now, after a particularly hard day, I do the Bounce wrap treatment.
Forwarded by Betty Carper
Charles Schultz Philosophy
The following is the philosophy of the late Charles Schultz, the creator of
the "Peanuts" comic strip. You don't have to actually answer the questions. Just
read the e-mail straight through, and you'll get the point.
1. Name the five wealthiest people in the world.
2. Name the last five Heisman trophy winners.
3. Name the last five winners of the Miss America.
4. Name ten people who have won the Nobel or Pulitzer Prize.
5. Name the last half dozen Academy Award winner for best actor and actress.
6. Name the last decade's worth of World Series winners.
How did you do?
The point is, none of us remember the headliners of yesterday. These are no
second-rate achievers. They are the best in their fields. But the applause dies.
Awards tarnish. Acheivements are forgotten. Accolades and certificates are
buried with their owners.
Here's another quiz. See how you do on this one:
1. List a few teachers who aided your journey through school.
2. Name three friends who have helped you through a difficult time.
3. Name five people who have taught you something worthwhile.
4. Think of a few people who have made you feel appreciated and special.
5. Think of five people you enjoy spending time with.
The lesson: The people who make a difference in your life are not the ones
with the most credentials, the most money, or the most awards. They are the ones
"Don't worry about the world coming to an end today. It's already tomorrow in
Australia." (Charles Schultz)
Forwarded by Dick Haar
Jacob, age 92, and Rebecca, age 89, living in Florida, are all excited about
their decision to get married. They go for a stroll to discuss the wedding, and
on the way they pass a drugstore. Jacob suggests they go in.
Jacob addresses the man behind the counter: "Are you the owner?"
The pharmacist answers, "Yes."
Jacob: "We're about to get married. Do you sell heart medication?"
Pharmacist: "Of course we do."
Jacob: "How about medicine for circulation?"
Pharmacist: "All kinds."
Jacob: "Medicine for rheumatism and scoliosis?"
Jacob: "How about Viagra?"
Pharmacist: "Of course."
Jacob: "Medicine for memory problems, arthritis, jaundice?"
Pharmacist: "Yes, a large variety. The works."
Jacob: "What about vitamins, sleeping pills, Geritol, antidotes for
Jacob: "You sell wheelchairs and walkers?"
Pharmacist: "All speeds and sizes."
Jacob: "Could we use this store as our Bridal Registry."
Forwarded by Dick Haar
A man owned a small farm in Iowa. The Iowa Wage & Hour Department claimed he
was not paying proper wages to his help and sent an agent out to interview him.
"I need a list of your employees and how much you pay them," demanded the
"Well, there's my hired hand who's been with me for 3 years. I pay him $600 a
week plus free room and board. The cook has been here for 18 months, and I pay
her $500 a month plus room and board. Then there's the half-wit that works here
about 18 hours a day. He makes $10 a week and I buy him a bottle of bourbon
every week," replied the farmer.
"That's the guy I want to talk to; the half-wit," says the agent.
"That would be me," the farmer answered
Debbie Bowling added the following Tidbits (Thank you Debbie)
JUNE 20 TIDBITS
Scientists find early signs of Alzheimer's
Subtle change in a memory-making brain region seems to predict who will get
Alzheimer's disease nine years before symptoms appear, scientists reported
The finding is part of a wave of research aimed at
early detection of the deadly dementia -- and one day perhaps even preventing
Researchers scanned the brains of middle-aged and
older people while they were still healthy. They discovered that lower energy
usage in a part of the brain called the hippocampus correctly signaled who would
get Alzheimer's or a related memory impairment 85 percent of the time.
"We found the earliest predictor," said the lead
researcher, Lisa Mosconi of New York University School of Medicine. "The
hippocampus seems to be the very first region to be affected."
But it is too soon to offer Alzheimer's-predicting
PET scans. The discovery must be confirmed. Also, there are serious ethical
questions about how soon people should know that Alzheimer's is approaching when
nothing yet can be done to forestall the disease....continued in article.
Copyright 2005 The
Associated Press, "Scientists find early signs of
Alzheimer's," CNN.com, June 20, 2005,
Crackdown Puts Corporations,
Executives in New Legal Peril
More Than Ever,
Businesses Face Risk of Prosecution; Post-Enron, a Changed View...Companies
Rush to Cooperate
Businesspeople and corporations are at
greater risk of criminal liability than ever before.
A wave of corporate fraud starting
with the 2001 collapse of Enron Corp. has led to potent new weapons for
prosecutors such as stiffer financial penalties and prison terms. The Securities
and Exchange Commission has more money and manpower to pursue civil-fraud cases.
Once rare, the threat of criminal
indictment of corporations themselves has become more common as the Justice
Department employs what are known as deferred-prosecution agreements. A list of
blue-chip American companies have submitted to these pacts, including
American International Group
Monsanto Co. and
Time Warner Inc. Under
the arrangements, the government charges the company with criminal behavior but
puts the prosecution on hold in exchange for a promise of reform. At an
agreed-upon date, the potential charges expire. Since 2003, there have been at
least eight such pacts.
Business wrongdoing, and the
government's response, comes in waves. But this crackdown has gone further than
any in the past. It has fundamentally changed the terms of engagement between
the authorities and their corporate quarry....continued in article.
DEBORAH SOLOMON and
ANNE MARIE SQUEO, "Crackdown
Puts Corporations, Executives in New Legal Peril," The Wall Street
June 20, 2005; Page A1,
Google Plans Online-Payment
Google Inc. this year plans to offer an
electronic-payment service that could help the Internet-search company diversify
its revenue and may put it in competition with eBay Inc.'s PayPal unit,
according to people familiar with the matter. Exact details of the search company's
planned service aren't known. But the people familiar with the matter say it
could have similarities with PayPal, which allows consumers to pay for purchases
by funding electronic-payment accounts from their credit cards or checking
accounts. Some consumers like PayPal for the
security it offers, since it allows them to share their banking or credit-card
numbers only with PayPal without having to divulge the information to merchants.
Officials of Google and PayPal declined to comment....continued in article.
KEVIN J. DELANEY and MYLENE MANGALINDAN,
"Google Plans Online-Payment Service," The Wall
June 20, 2005; Page B4,
Billy Jack Is Ready to Fight the Good Fight Again
It has been more than 30 years, but Billy Jack is still
plenty ticked off.
Back then, it was bigotry against Native Americans,
trouble with the nuclear power industry and big bad government that made this
screen hero explode in karate-fueled rage. At the time, the unlikely combination
of rugged-loner heroics - all in defense of society's downtrodden and forgotten
- and rough-edged filmmaking sparked a pop culture and box-office phenomenon.
Now the man who created and personified Billy Jack,
Tom Laughlin - the writer, director, producer and actor - is determined to take
on the establishment again, and his concerns are not so terribly different. Mr.
Laughlin (and therefore Billy Jack) is angry about the war in Iraq and about the
influence of big business in politics. And he still has a thing for the nuclear
power industry....So Mr. Laughlin and Ms. Taylor are planning to bring their
characters back to the big screen with a new $12 million sequel, raising money
from individuals just as they did to make their films three decades ago.
In this new film, they say, they will take on social
scourges like drugs, and power players like the religious right. They say they
will also outline a way to end the current war and launch a political campaign
for a third-party presidential candidate....continued in article.
"Billy Jack Is Ready to Fight the Good Fight Again," The New York Times, June 20, 2005,
Firms' Auditor Choices Dwindle
The reduction in
the number of top-tier accounting firms, to the Big Four from five earlier this
decade, is making it difficult for many large companies to change auditors, and
the problem would expand if the Justice Department indicts KPMG LLP for selling
allegedly abusive tax shelters, interviews with company executives and surveys
Intel Corp. is one of the many big
companies now bumping up against the limitations. After using Ernst & Young LLP
as its auditor for more than three decades, the semiconductor maker considered
switching recently for a fresh look at its financials. But it stuck with Ernst
after receiving proposals from the other Big Four firms: Deloitte & Touche LLP,
KPMG and PricewaterhouseCoopers LLP. That is because federal regulations bar the
three other firms from serving as Intel's independent auditor unless they give
up valuation, computer-software and other work they do for Intel.
"Because there are only a limited
number of large multinational audit firms that do the kind of work that we need,
if we were to switch audit firms, all sorts of dominos would fall," said Cary
Klafter, corporate secretary at Intel....continued in article.
DIYA GULLAPALLI, "Firms'
Auditor Choices Dwindle," The Wall Street Journal,
June 21, 2005; Page C1,
Credit-Card Breach Tests Banking
month after it was discovered that a hacker broke into the computer network of a
company that processes card transactions for merchants, the breach now is
testing the banking industry's defenses against card fraud -- and the public's
patience for the secretive way it deals with the issue.
The nation's banking industry already
is paying the price for more than 40 million credit and debit cards that may be
exposed to fraudsters. That is because the burden of detecting fraudulent
transactions -- and the costs associated with them -- lies largely with the
financial institutions that issue those cards.
So far, no banks have indicated that
they plan to broadly cancel accounts, reissue cards to customers or alert all
cardholders whose accounts may be vulnerable -- in part because of the high cost
of doing so. Instead, the financial institutions are bolstering internal
fraud-monitoring programs and placing red flags on accounts that have been
identified as being most exposed.
Several large card-issuing banks said
they haven't yet seen any indications of widespread fraudulent activity tied to
the latest in a string of computer security breaches.
"We informed the banks of all the
accounts that are at risk, and which ones were accessed," MasterCard spokeswoman
Sharon Gamsin said. "The next step is the banks'. It's now in their hands."
MasterCard said Friday that an
unidentified person had broken into the computer network of CardSystems
Solutions Inc., an Atlanta-based company that processes credit-card transactions
for small- and midsize businesses. The intruder last month gained access to
names, account numbers and card codes that are commonly used to commit card
MasterCard International Inc. said
that more than 40 million cards branded by MasterCard, Visa USA Inc., American
Express Co. and Discover, a unit of Morgan Stanley, had been compromised. Of
those, MasterCard said 13.9 million of its cards had been exposed, with about
68,000 of those considered at a higher level of risk. Visa said 22 million cards
had been compromised in the incident, which is being investigated by the Federal
Bureau of Investigation.
Yesterday, the nation's banks were
scrambling to identify the accounts that may be at the highest level of risk
from the attack. Washington Mutual Inc. in Seattle, one of the nation's biggest
debit-card issuers, said it had closed some 1,400 accounts, reissued cards and
notified those customers by telephone after being advised by Visa that those
accounts were a "high risk" of fraud. Some of the accounts had already been
closed, after being flagged by customers for suspected fraudulent use, a bank
J.P. Morgan Chase & Co., the nation's
largest card-issuer, said it was continuing to collect information about the
accounts that may have been compromised in the hacking incident. "We're going
through this as quickly as we can to see what, if anything, has happened with
these accounts," a J.P. Morgan spokesman said.
Consumers aren't liable for
unauthorized purchases and traditional merchants also aren't responsible for
fraud if they adhere to card-authorization policies. That isn't the case for
online merchants, however, who typically bear the brunt for fraudulent card
The banks' strategy for dealing with
potential fraud has already unleashed an outcry from consumer advocates and
legislators who say they aren't doing enough to prevent fraud and disclose
information about such incidents to their customers. Indeed, rising consumer
concern about data-theft fraud threatens to clash with the policies of many
banks to keep quiet about what they do to monitor compromised accounts.
For example, Citigroup Inc., one of
the nation's largest card issuers, has said only that it takes "appropriate
actions" to detect and prevent fraud when informed of such breaches, and that it
notifies some customers it thinks may be at risk. Spokeswoman Janis Tarter
declined to discuss, for "security reasons," how Citigroup gauges whether
customers are at risk, or how many customers whose accounts had been compromised
in the latest breach had been informed.
Even getting a handle on how much
fraud results from such data theft is hard to do. Credit-card associations
report that overall fraud has been declining steadily for years, as better
systems are constructed for blocking fraudulent charges. Last year, credit-card
issuers lost $788.3 million to fraud, down from $882.5 million in 2003,
according to the Nilson Report, which tracks the credit-card industry. But Visa
and MasterCard don't break out the level of fraud due to data theft. And
card-issuing banks typically don't disclose losses due to credit-card fraud.
In the end, banks often conclude that
it is more expensive to replace compromised cards than to step up account
monitoring and absorb fraud losses when they occur. Visa estimates that when
breaches do happen, only 2% of the exposed cards end up with any fraudulent
charges on them.
And with the cost of issuing new cards
estimated at between $10 and $20 apiece, including customer service, it could be
cheaper for banks to leave such cards activated, says Julie Fergeson vice
president of eFunds Corp., which offers fraud-protection technology for
merchants. Other industry estimates put the cost of notifying customers by mail
of a potential security threat at as much as $2 a letter.
Washington lawyer Thomas Vartanian,
who advises financial institutions about credit-card fraud and identity theft,
contends that the string of recent disclosures of security breaches is partly a
function of the rise of online retailing, which has increased the flow of online
data for hackers to steal.
In addition, he said, financial
institutions and regulators are becoming more sensitive to disclosure
responsibilities. A California law that went into effect in 2003 mandates the
disclosure of security breaches if information such as Social Security numbers
or bank-account information is "acquired" by an unauthorized person, so long as
the disclosure doesn't compromise an investigation. In March, federal regulators
issued "guidance" to banks to notify customers about security breaches "that
could result in substantial harm or inconvenience to the customer."
ROBIN SIDEL and MITCHELL PACELLE, "Credit-Card
Breach Tests Banking Industry's Defenses," The Wall Street Journal,
June 21, 2005; Page C1,
Retirement Plans Get New
In response to a wave of lawsuits, a
growing number of companies are hiring outside consultants to oversee the
handling of company stock held in employee retirement plans.
These independent fiduciaries are
taking the place of company executives who have traditionally monitored the
company-stock component of those plans on behalf of the employees. In the
post-Enron Corp. era, companies are concerned about employees who may be loading
up on company stock in their retirement plans -- and who don't have the time or
skills necessary to keep tabs on the stock on their own.
A range of companies such as many of
the airlines and insurance firm Aon Corp. have moved to outside experts. Running
the retirement plans is a growing business for trust companies and others,
including U.S. Trust Corp., State Street Corp. and Fiduciary Counselors Inc.
U.S. Trust, for instance, today handles fiduciary duties for a dozen 401(k)
plans with combined assets of nearly $4 billion. Five years ago, the firm, a
unit of Charles Schwab Corp., had no 401(k) plans in its fiduciary-services
business....continued in article.
JEFF D. OPDYKE, "Retirement
Plans Get New Safeguards," The Wall Street Journal,
June 21, 2005; Page D1,
Dial-Up Internet Going the Way of Rotary Phones
For years, Michelle Phillips, a real estate agent
in Indianapolis, drove to her office at odd hours just to check her e-mail
messages and search Web sites on her company's high-speed Internet lines because
her dial-up connection at home was too slow.
"At home, I can do laundry, take a shower and wash
dishes while the computer is logging onto the Internet," she said with a laugh.
Now she can pocket the gas money. This month, she
signed up for a promotional offer from
introductory broadband service for $14.95 a month, or nearly $10 less than what
she paid for a dial-up account with AOL. To qualify, she had to sign a one-year
contract and have an SBC phone line.
Ms. Phillips is among the seven million Americans
expected to drop their slow Internet connections this year for high-speed lines,
which are as much as 100 times as fast and are always on. As recently as six
months ago, a majority of Americans were using dial-up connections at home. In
the first quarter of this year, broadband connections for the first time
SBC's deep discount - $5 below its lowest previous
offer, and among the cheapest on the market - is just the latest strategy in the
broadband wars....continued in article.
"Dial-Up Internet Going the Way of Rotary
Phones," The New York Times, June 21, 2005,
TIDBITS JUNE 23
NYSE to Pursue Growth Options
The Big Board plans to consider expanding
into international markets, options and other derivatives to compete in an
increasingly competitive and consolidating industry, Chief Executive Officer
John Thain said.
The New York Stock Exchange chief's
comments, in an interview with The Wall Street Journal, reflect a new global
reality for the markets where securities are traded. Technological advances that
have made electronic trading more reliable and efficient are fueling a shakeout,
as increasingly sophisticated customers demand quicker and less expensive trades
on a wide variety of securities going far beyond stocks and as regulators
scrutinize what brokerage houses charge investors.
That means the real estate that
exchanges traditionally have provided traders who oversee the buying and selling
of securities has become less important than spending on reliable, fast
technology that can match buyers and sellers without human intervention....continued
AARON LUCCHETTI and DAVID REILLY, "NYSE to
Pursue Growth Options Beyond Stocks,"
The Wall Street Journal,
June 23, 2005; Page C1,
Donating Stock to a Charity
ASK PERSONAL JOURNAL
I want to donate shares of stock that I've accumulated over 30 years. How do I
give only the shares I bought 30 years ago, which have a much lower cost basis
than those acquired more recently?
Thomas Borst, Levittown, N.Y.
A: When you give stock that has
been held long term, you can get a tax deduction for the fair market value of
the stock -- plus avoid paying the capital gains if you had sold the stock. If
you have the certificates for the shares, all you have to do is transfer them to
the charity. If your stock records are kept electronically at a brokerage house,
check whether the firm has segregated the shares by cost basis and specify which
shares to donate. If the firm has "mushed all the shares together," it will be
tough to segregate the low-basis shares so your cost basis might instead be an
average over the 30 years, says New York lawyer Brit L. Geiger.
Rachel Emma Silverman, "Donating Stock to a
Charity," The Wall Street Journal,
June 23, 2005; Page D1,
A Dizzying Array of Options for Using the Web on Cellphones
As the market for cellular phone service matures, the
wireless industry is counting on creating and filling a new need: data services
that allow phones to receive e-mail, navigate the Web and download games, music
But many wireless data plans are a smorgasbord of
options that can leave customers bewildered.
"That is one of my biggest gripes with the wireless
carriers," said Peter Rojas, editor in chief of Engadget, a Web log devoted to
consumer electronics. "They are doing a really terrible job of communicating
wireless data to their subscribers."
While several wireless companies have simplified
their offerings, choosing the right plan means weighing several considerations:
the amount of data you plan to download, the speed of the network, the type of
phone you use, and the Web sites you plan to visit....continued in article.
SANDEEP JUNNARKAR, "A Dizzying Array of Options for Using the Web
on Cellphones," The New York Times," June 23, 2005,
Appliances Wipe Out Blackouts
If someday your TV stays on during a heat wave,
you may have your dryer and dishwasher to thank. The
Department of Energy is developing technologies to avert electrical grid
failures such as the blackout of August 2003, including household appliances
that temporarily reduce their power consumption. The devices switch off when
they detect a power disruption on the electricity grid. Energy officials say the
devices could save consumers billions of dollars by reducing the need to build
new power stations....continued in article.
John Gartner, "Appliances Wipe Out Blackouts,"
02:00 AM Jun. 22, 2005 PT,
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