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Tag: Angelo Mozilo
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IndyMac’s Michael Perry has the toughest job in America
To say IndyMac CEO Michael Perry is in a tough spot is an understatement. He might be on a mission impossible.
Hint: Click in map to explore connectionsStory continues below interactive map
MAP HINTS: Click expands a name. Control+Click centers map on a name. Solid lines are current relations. Dotted lines are former relations. For advanced tools choose Tools > Options from the menu at top. More help. Not seeing the maps? Please go here to check for the latest version of Java.Consider just a few of the recent headlines about his California-based company, caught in the mortgage meltdown:
“IndyMac Begins Dismantling Business”
“Analysts have zero hopes for IndyMac”
“IndyMac Bancorp shares dip; analyst sets $0 target”
Tom Petruno, a blogger for the Los Angeles Times, does find one saving grace. IndyMac is offering a yield “bonanza” on CDs as it tries to hang onto deposits.
This week, IndyMac said it was cutting its work force in half as it tries to salvage itself.
IndyMac started doing business in 1985 as a unit of Countrywide Financial, which was recently purchased by Bank of America. Former Countrywide CEO Angelo Mozilo recruited Perry to head IndyMac and said Perry was “like my son.”
As the mortgage mess initially unfolded, IndyMac tried to build market share by expanding while others in the troubled industry shrank. But that strategy failed.Through the past difficult year, the company’s board of directors has remained stable. Most of the directors of IndyMac Bancorp, including former pro football quarterback Pat Haden, are also directors of its banking unit, IndyMac Bank.
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Princeton, donors’ family battle over $880 million
In 1961, A&P supermarket heir Marie Robertson and her husband, Charles, gave $35 million in stock to Princeton University for its Woodrow Wilson School of Public and International Affairs.
Today, the gift is worth more than $880 million.
But the university and the descendants of the couple have spent millions in legal costs in a years-long fight over how the money should be used.
A New Jersey judge’s decision last week that the dispute should go to trial has drawn nervous attention from college administrations across the country. The New York Times has called it “one of the largest lawsuits ever filed exploring how closely colleges must adhere to the original intent of donors.”
The Robertsons’ children – Anne R. Meier, Katherine Ernst and William Robertson – maintain that the donation was meant to help prepare graduate students for careers in federal government, particularly in foreign and international affairs. They filed suit against the university in 2002, claiming that Princeton had failed to adhere to their parents’ instructions and had spent the money for other uses.
The suit also charges that Princeton took control of the foundation set up to administer the gift, and commingled its funds with the university endowment.
Princeton officials respond that the Robertson offspring are trying to overturn the structure set up by the original grant, and use the money for their own purposes.
Both the university and the Robertsons have launched web sites about the suit. And both sides say they expect to win at trial.
Regardless of the outcome, colleges are likely to pay much closer attention to the restrictions that often come with major gifts.
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America’s ruling families
We’ve come to expect political dynasties. They’re a fact of life in the U.S., perhaps even more than royal succession is in the modern UK.
The 2008 presidential campaign is the first since 1952 without a sitting president or vice president. An entire generation has grown up thinking the race for the White House requires the presence of a Bush or a Clinton.
Even beyond the obvious – the Bushes, Kennedys, Rockefellers, Roosevelts and Adamses – many American clans have passed the political baton from one generation to the next.
In recent decades, Hendrik Hertzberg writes in the New Yorker, the “dynastic dynamic” has accelerated.
The presidential field includes not only Hillary Rodham Clinton, wife of a former president, but Mitt Romney, son of a former governor of Michigan. Hertzberg notes that there are currently five U.S. senators whose fathers preceded them in the Senate. A prominent example in the House is Speaker Nancy Pelosi, whose father was a member of Congress and the mayor of Baltimore.
Such connections yield intriguing Muckety maps. One of our favorites was created by the marriage of Howard Baker and Nancy Kassebaum, which linked not only their separate Senate careers, but the legacy of Kassebaum’s father, former Kansas Gov. Alf Landon, and Baker’s former father-in-law, Sen. Everett Dirksen.
Political dynasties tend to overlap with the business and media spheres. (Think Maria Shriver.) After Louisiana Congressman Hale Boggs died in an airplane crash, he was succeeded by his wife, Lindy. One daughter, Barbara Boggs Sigmund, was mayor of Princeton, N.J., before dying of cancer. Another, Cokie Roberts, is a correspondent for ABC and NPR, and the wife of journalist Steven Roberts. A son, Thomas Hale Boggs Jr., is a powerful Washington lobbyist.
Offspring of the powerful can learn from their parents’ example and their parents’ mistakes. Or can they choose not to learn at all. Hertzberg’s column closes with an observation on George W. Bush:
“Bush’s failure to learn much of anything for the past six years suggests a deficit of character, not of experience; his unwillingness to employ his father’s skills and advice on behalf of the nation shows a disrespectful disregard for a dynast’s biggest advantage. He has given both freshness and family a bad name.”
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Kay Bailey Hutchison Protects Oil Interests
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Colbert Vote Skyrockets
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Focus is on Nyc Charter Schools
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The Real Dirty Sexy Money
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Cablevision’s James Dolan has string of losses
As the chairman of Madison Square Garden, the company that owns the hapless New York Knicks, James L. Dolan should have already known a lot about losing.
But Dolan, 51, who is also a blues/rock singer, has learned even more about embarrassing defeats during the last few weeks.
Already vilified in the New York press as a rich kid whose dad gave him the Knicks as a plaything, Dolan is now depicted as a boss who tolerates bad behavior and bad language in the office.
In addition, a Dolan family plan to make Cablevision Systems Corp. a private company has been rejected by shareholders.
Cablevision, a dominant player in the New York City area, owns Madison Square Garden, which, in turn, owns the Knicks, the MSG Network, hockey’s New York Rangers, the New York Liberty of the Womens National Basketball Association and Radio City Music Hall.
All in all, Dolan may be finding new wisdom in the first lines of one of his bands’ songs: “Who told you life would be easy? Who said you would smile every day?”
On Oct. 2, a federal jury in Manhattan found that Madison Square Garden and Knicks coach Isiah Thomas had sexually discriminated against one of its executives.
The verdict came after a trial that made the Knicks front office seem like a locker room where boys were, alas, boys.
The Garden was ordered to pay $8.6 million to the executive, Anucha Browne Sanders. The jury found that the company had created a hostile work environment and that it fired Browne Sanders in retaliation for her complaints about inappropriate language and advances.
The jury ordered Dolan, president and chief executive officer of Cablevision Systems, to pay Browne Sanders $3 million for the retaliatory firing.
His father, Charles F. Dolan, the founder of HBO, is Cablevision’s chairman and founder.
Several Dolan family members also serve on the company’s board. Among them is Lawrence Dolan, Charles’ brother and the owner of the Cleveland Indians.
On Wednesday, shareholders rejected a $10.6 billion bid by the Dolan family to take Cablevision private. The Dolans had offered $36.26 a share. Some major shareholders said the price was too low.
Charles and James Dolan, who have sometimes feuded, put the best face they could on the rejection, saying in a joint press release:
“We see today’s outcome as a vote of confidence in the prospects of Cablevision, its management team, its 20,000 employees and the industry’s future.”
James Dolan’s total compensation for 2006 was $8.71 million, Forbes magazine reported.
Some of his earnings, over $300,000, have gone to political candidates, mostly Democrats. This year he has given to the presidential campaign of Sen. Hillary Rodham Clinton of New York.
Dolan is also the lead singer and rhythm guitarist of JD & the Straight Shot.
According the band’s website, mixing business and music gives Dolan “a sense of balance in his life.”
The Rocky Mountain News in Denver described the band’s first album, as getting “grudgingly good reviews.”
The grudging praise sometimes comes from Knicks fans. The team has not had a winning season since 2000-2001, despite a high payroll.
After 2005-2006 losing season, the club found itself in a soap opera feud with its coach of one year, Larry Brown. The melodrama ended with the Knicks buying out Brown’s contract for $18.5 million.
Last season, the team won 33 games and lost 49, certainly enough to make Dolan sing the blues.
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The Inherent Muckety of Times Wedding Announcements
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Mays and McCombs, the original Radioheads
The radio business has been very good to Lowry Mays and Billie Joe “Red” McCombs.
In 1972, they formed the San Antonio Broadcasting Company to buy an FM station for $125,000.
Thirty-five years later, that company is called Clear Channel Communications and it owns more than 1,000 stations. Its shareholders recently approved a $19.5 billion private equity buyout that values Mays’ stock at more than $1.1 billion and McCombs’ shares at about $190 million. The deal is expected to close before the end of the year.
In early 2000, when Clear Channel shares hit $95, the founders’ stock would have been valued at more than twice as much as now.
Still, not a bad rate of return, especially when the founders’ families hold a significant stake in Live Nation, spun off from Clear Channel in 2005. Live Nation is trying to perform the same consolidation magic in the entertainment industry that Clear Channel did in radio.
Another affiliate, Clear Channel Outdoor, trades publicly, but most of its stock is held by Clear Channel.
In addition to making money, Clear Channel has made important connections.
Along with Mays, his two sons, Mark and Randall, and McCombs, current board members include former Oklahoma congressman J.C. Watts and Ted Strauss, a former senior managing director of Bear, Stearns & Co. Strauss’ brother, Robert, was a long-time adviser to presidents, Republican and Democrat. Ted Strauss’ late wife, Annette, was mayor of Dallas.
Former directors include Dallas billionaire Tom Hicks and Vernon Jordan, a presidential adviser to Bill Clinton.
Live Nation’s directors include movie producer Harvey Weinstein and Henry Cisneros, the former U.S. secretary of housing and urban development, and a former mayor of San Antonio.
In San Antonio, McCombs may be best known as a car dealer, but his business dealings range widely. He is a past owner of the Minnesota Vikings of the NFL and the San Antonio Spurs and Denver Nuggets of the NBA.
Both McCombs and Mays have top-ranked business schools named after them, the McCombs School of Business at the University of Texas at Austin and the Mays Business School at Texas A&M.
Clear Channel has been criticized for homogenizing radio across the country. Some of its controversies have involved Rush Limbaugh, Howard Stern, the Dixie Chicks and Madonna.
Critics link Lowry Mays’ conservative politics to company decisions, such as when some Clear Channel stations stopped playing Dixie Chicks songs after they criticized President Bush because of the Iraq war.
Clear Channel disputes that. “The radio company that banned the Dixie Chicks was Cumulus Media, not Clear Channel,” the company says in a “Know the Facts” section of its Web site. Some Clear Channel stations, in fact, increased their airplay of the Chicks, the company says.
Live Nation’s recent $120 million deal with Madonna certainly belies any notion of retribution against the Material Girl and her politics.
For Mays and McCombs, the original Radioheads, business seems to trump partisanship.
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Dui is a Death Sentence for Lost Cast Members
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Hearst needs a re-write on TV takeover
TV can be a goofy business, but this couldn’t be the script the boys in Hearst Tower had in mind when they offered $600 million a few weeks ago for the small piece of Hearst-Argyle Television they don’t already own.
A special committee of Hearst-Argyle directors advised against the deal last week, calling it “inadequate” and saying it is “not in the best interests” of stockholders, other than Hearst.
That’s the same argument made by nine class-action lawsuits filed against Hearst-Argyle and Hearst Corp. since the buyout offer was made Aug. 24.
The stock market certainly agrees. Hearst’s tender offer is $23.50 a share for the nearly 27 percent of Hearst-Argyle shares held by others. The stock closed Friday at about $26.
Privately held Hearst Corp., founded by legendary newspaperman William Randolph Hearst, is one of the nation’s largest media companies. Based in New York City, it owns newspapers (including the San Francisco Chronicle and Houston Chronicle), magazines (Cosmopolitan, Esquire, O), interactive media and 20 percent of ESPN.
Hearst-Argyle owns 26 TV stations in markets reaching about 18 percent of the nation’s households. Stock analysts say the company should benefit by record spending on political advertising and by new retransmission agreements for its standard and high definition TV signals. Some analysts value Hearst-Argyle stock at $28-$32 a share.
Hearst-Argyle detailed the takeover saga, including information on the lawsuits, in a long filing with the SEC last week. The filing said:
In April 2006, at Hearst’s request, Hearst-Argyle executives first prepared a takeover scenario. At the time, the stock was trading at $23.23. The project was put on hold.
Independent Hearst-Argyle directors David Pulver and Caroline Williams are each being paid $150,000, plus expenses, to be the sole members of the special committee considering the offer. The committee met 19 times.
The special committee believes 2008 could be stronger financially than the company forecasts.
Pulver, Williams and director Bob Marbut do not intend to tender their shares to Hearst Corp.
Directors Frank Bennack Jr., John Conomikes, Victor Ganzi, George Hearst Jr., William Randolph Hearst III and Gilbert Maurer do intend to tender their Hearst-Argyle shares. Each is also a director of Hearst Corp. Ganzi is Hearst Corp.’s CEO; Bennack is its vice chairman.
One name conspicuously absent from the lawsuits is that of Florida investor Bruce Sherman. As of April, his Private Capital Management owned 8.4 million Hearst-Argyle shares. Sherman is the investor who put newspaper publisher Knight-Ridder in play, leading eventually to the sale to McClatchy.
Some of the lawsuits question the independence of Pulver and Williams. Both have been directors of Hearst-Argyle and its predecessor since 1994 and are included in the company’s medical insurance plan.
Pulver runs an investment company and is chairman of Colby College’s investment committee. He received $145,461 in compensation from Hearst-Argyle last year.
Williams, who works with the Nathan Cummings Foundation, received $140,961 in compensation from Hearst-Argyle last year. One lawsuit said the Cummings Foundation works frequently with the William Randolph Hearst Foundations.
Some of those filing the lawsuits worry that Hearst is holding so many cards that it could still force the transaction, leaving those who didn’t go along with illiquid shares.
As they say on TV, stay tuned.
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Legality of Hunt Oil deal “uncertain”
Hunt Oil’s controversial production-sharing deal with Kurdistan is “legally uncertain” and has “needlessly … Baghdad told The New York Times.
Dallas-based Hunt Oil is run by Ray Hunt, a close friend and advisor of president Bush.
Speaking anonymously, the official told The Times that the State Department advised Hunt before the… American and international oil companies.
On the web
Official Calls Kurd Oil Deal at Odds With Baghdad – New York TimesRelated stories on Muckety
Why Ray Hunt is so powerful -
Burkle’s new pied-a-terre
Billionaire Ron Burkle has a new crash pad in New York, complete with a heated swimming pool and a panic room.
Burkle, one of former President Bill Clinton’s best friends, has purchased a swank Manhattan apartment for a whopping $17.5 million, plus nearly $100,000 a year in maintenance fees. Burkle already owns the lavish Green Acres estate in Beverly Hills, where frequent Democratic fundraisers are held.
The three-level apartment with 5 bedrooms and 5.5 bathrooms doesn’t have a doorman and is situated in a fairly uninteresting part of lower Manhattan.
But, according to the Real Estalker, the 11,000-square-foot “behemoth has ridiculously high ceilings, 50+ windows, walls of glass, a panic room behind the library bookcases, and a carpet of green grass and a small forest on the eastern terrace. But by far the most remarkable and notable feature of the aerie is the heated swimming pool that hangs over the city with 360 degree views as far as the eye can see.”
The apartment is said to be exquisitely detailed with massive Danish Tudor wood-burning fireplace, two separate sound systems controlled from every room with speakers throughout. Perfect for more Democratic fundraisers.
Burkle is best known as Clinton’s pal and as a major donor to the Democratic party. He earned his fortune buying and selling grocery chains; Forbes magazine calculates that he has been involved in 17 major business deals worth $15 billion – 11 of which involved grocery stores. He recently expressed interest in buying the Tribune Company, or the Los Angeles Times, but was beat out by real estate magnate Sam Zell.
Venture capitalist Jonathan Leitersdorf reportedly purchased the entire building at 700 Broadway for about $2.5 million before gutting it and renovating. Burkle’s new home was first put on the market in 2002 for $27,500,000, but was reduced to its final asking price of $18,750,000. Burkle apparently cut the price even more.
On the web: Ron Burkle’s Swimming Pool in the Sky – Real Estalker
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Senate reviews Google-DoubleClick deal
Execs from Google and Microsoft are scheduled to appear before the Senate today to argue the merits of Google’s proposed acquisition of DoubleClick.
Google announced the $3.1 billion deal in April, but the plan requires approval of the Federal Trade Commission and regulators abroad.
As CNet notes today, this will be the first time that Congress has scrutinized the Internet behemoth. Microsoft, with years of experience in arguing antitrust issues, has mobilized a legion of lobbyists to block the deal, saying it would create an online advertising monopoly.
Consumer privacy groups have also raised concerns. Marc Rotenberg, executive director of the Electronic Privacy Information Center, is scheduled to testify today as well. His group says the deal would give Google too much information about web users.
Google is expected to argue that it respects users’ privacy, and that its current business focuses on text-based advertising, while DoubleClick specializes in banners.
In his prepared testimony, released before the hearing, Google Senior VP David Drummond says Google and DoubleClick offer complementary services. “DoubleClick is to Google what FedEx or UPS is to Amazon.com,” he said.
Those of us who have been running Google AdSense banners for ages find this argument a bit puzzling.
On the web:
Microsoft, Google square off in Washington – CNetRelated stories on Muckety:
Advantage Microsoft in flap with Google? -
Times concedes error with Moveon.org ad
The New York Times is backing down – somewhat – on a controversial ad placed by the liberal advocacy group MoveOn.org that infuriated conservatives.
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Under the headline “General Petraeus or General Betray Us?” the full-page ad contended that the American commander in Iraq was “constantly at war with the facts” in giving upbeat assessments of progress and refusing to acknowledge that Iraq is “mired in an unwinnable religious civil war … Today, before Congress and before the American people, General Petraeus is likely to become General Betray Us.”
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But on Sunday, the New York Times admitted it “made a mistake” by charging MoveOn a discount rate to run the ad. Some conservative groups had criticized the Times for playing favorites with MoveOn by charging the lower price.
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The lower rate of $64,575 is normally reserved for ads that can be placed at any time – a standby rate – but MoveOn had requested a specific date for the ad to run. The Times said it should have charged $142,083 for running the ad on that specific date, and that it would collect the difference from MoveOn.
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Did the Times violate its own ethics rules by running the ad in the first place?
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Yes, according to Clark Hoyt, the newspaper’s public editor. “The ad appears to fly in the face of an internal advertising acceptability policy that says: ‘We do not accept advertising that is gratuitously offensive on a personal nature,’ ” Hoyt wrote in the Times on Sunday.
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“Steph Jespersen, the executive who approved the ad, said that, while it was ‘rough,’ he regarded it as a comment on a public official’s performance of his official duties,” Hoyt added.
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The Times public editor wasn’t the only critic of the ad. Conservatives were outraged and flooded the Times with complaints. President Bush called the ad disgusting and Vice President Dick Cheney called it “an outrage,” and even the Democratic-controlled Senate overwhelmingly condemned the ad in a 72-25 vote.
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But even under this assault, MoveOn.org isn’t backing down. It was still promoting the “General Betray Us” ad on its home page Monday. “We are very happy that the Times has revealed this mistake for the first time, and while we believe that the $142,083 rate is exorbitant, we will pay it,” the group said in statement.
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On the web
\nBetraying Its Own Best Interests – New York Times
\nMoveon.org press release – PR Newswire -
Why Ray Hunt is So Powerful
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Send All Lawyer Jokes to Marc Andreessen
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Blackwater’s protective web
Blackwater USA, the State Department’s largest private security contractor, is under siege on several fronts.
Iraq’s state minister for national security affairs announced today that the firm would face criminal charges for the fatal shootings of Iraqi citizens. Blackwater, based in Moyock, N.C., is also under investigation on the home front.
But a tight web of political and business connections helps shield the company from the most formidable of attacks.
Erik Prince, the former Navy SEAL who founded Blackwater in 1996, is a major contributor to the GOP. Federal Election Commission records show that he has given more than $200,000 to Republican committees and candidates in the last decade.
His sister, Betsy DeVos, is the former chair of the Michigan Republican Party and wife of Amway co-founder Dick DeVos, unsuccessful candidate for governor.
Prince is also on the board of Christian Freedom International, a nonprofit whose aim is to help persecuted Christians around the world. Fellow board members include former Sen. Don Nickles and former Swiss ambassador Faith Whittlesey.
The group’s president, Jim Jacobson, was a policy analyst with the Reagan White House. Its vice chairman, Paul Behrends, was a partner in the once-powerful lobbyist firm, Alexander Strategy Group, which represented Blackwater. The group closed shop in January 2006, citing unfavorable publicity from its ties to Jack Abramoff.
Blackwater’s vice chairman, Cofer Black, is former director of counterterrorism for the CIA and also a top adviser to the Mitt Romney presidential campaign.
Officers of Blackwater’s parent company, Prince Group, include Joseph Schmitz, former inspector general of the Defense Department and the son of a congressman. (An irrelevant but interesting connection here: Schmitz’s sister is Mary Kay LeTourneau, the former school teacher who was prosecuted and imprisoned for having sex with an underaged student. The two were married after her release in 2004.)
Blackwater resumed guarding American diplomatic convoys in Iraq on Friday, after Iraqi officials backed away from plans to expel the company. The Iraq ministry said Blackwater guards had fired on a Baghdad square without provocation, killing 11 people.
Secretary of State Condoleezza Rice has ordered a review of security practices in the wake of the shootings. Federal prosecutors also are investigating whether company employees illegally smuggled weapons into Iraq.
On the web:
Iraq Probe of U.S. Security Firm Grows – Washington Post