Deregulation Any One?

There is a covert deregulation of the drug industry
that is well under way. The enormously powerful
drug lobby is surrepticiously deregulating the drug
industry from inside the FDA by changing the rules
for drug evaluation. There is one brave man in the
FDA who is standing up for the American people,
against great resistance, and telling the bitter truth -
Dr. David Graham. He says "We have a system
that is biased toward approving drugs almost
regardless of the safety risks(1)." This 'under
the table' deregulation has cost American lives
as well as money for illnesses that would not
have occurred.

- Let's look at the deregulation of the Energy Industry.

During the '90s Enron pushed the accounting envelope
to criminal levels in an effort to keep their stock
price rising. That is what most of the litigation is
about right now. They cooked the books to a
smoldering pile of ash with lies, deceit, criminal
accounting, conflicted analysts, evidence
shredding, and so on. The company filed for
bankruptcy in October of 2001 because the Wall
Street Ratings Firms began hearing of the corruption
and lowered Enron's bond rating over a period of
several months to where the company could no
longer borrow money, and it's stock became worth
pennies.

But a very interesting thing happened for Enron
just a year before this was revealed - deregulation
of the Energy Industry - (with the help of our
illustrious VP Dick Cheney). All during the
year of the collapse of Enron, the company
was making enormous profits (little reported).
This company had been grossing 2 to 3 Billion
dollars annually until deregulation when they
pocketed the $12 Billion surplus the state of
California had built up, AND put California
in $40 Billion of debt with their drummed
up energy crisis in the heat of the summer -
over $50 Billion from a single state. They
perpetrated these schemes in other states
and Canada as well, raking in over $100
Billion that somehow has been roundly
overlooked by the press. The 4,300 SPEs
(Special Purpose Entities - off shore partnerships
that were given a small amount of news coverage)
were filled with these illegal profits and remain
a mystery to the American Public(2).

A Fortune 500 article published in April, 2002
(six months after the bankruptcy filing) moved
Enron from the 6th to the 5th spot, estimating the
company would gross $138 Billion(3). That
was rather astonishing to me considering that
they were in BANKRUPTCY PROCEEDINGS!
And that is when the news coverage diminished
to next to nothing for some reason. The big news
seemed to be how much money the Execs were
paid in stock options and bonuses. Let me
assure you, the money that these guys have in
American bank accounts is just for their living
expenses and lawyers fees. They have billions
in the Caymans.

You see, deregulation was still in effect (it still
is to some extent) and Enron was still making
astronomical profits even AFTER the so-called
"collapse of the energy giant". They made enough
money in the short span of two years to pay off
all of their debt ($30 Billion), to buy back all of
their stock at the '98 price ($60 Billion) and
get out of bankruptcy proceedings.

But they didn't do that. No, they shoveled all
of that money into off-shore accounts in the
Cayman Islands where almost 600 of these
SPEs had one single post-office-box business
address(4). They (the Execs) chose to let
the company go belly up in order to confuse
the public while they all retired and let
Fastow and a few others take a slap on
the wrist (although several trials are soon
to begin).

The Cayman Island Government announced
in 2002 that it had changed it's banking
policy and would divulge information on
the off-shore accounts....."But no one has
asked".

Skilling said (rather conspicuously) three
times in less than five minutes during his
testimony to the Sub-Committee - "Enron
was disbursing cash". (I have the transcript)
He wasn't kidding! That was most likely the
only truth that came out of his mouth at that
hearing and why he still professes that he
did not lie.

The mainstream news continues to refer to
Enron as the "Bankrupt Energy Giant"
(dis-informing the public and keeping them
ignorant of the facts).

- Is Deregulation ever a good thing?

Let's look back at the deregulation of the
Banking Industry in the Eighties. There
was a need for reform due to the
skyrocketing interest rates of the time,
but what ensued was a $100 billion
(possibly more) rip-off by the likes of
Michael Milken and several dozen of
his band of corporate thieves. Fifty five
Federally Insured Savings and Loan
Institutions defaulted, and dozens of huge
corporations filed for bankruptcy. The
money lost by these corporations and
S&Ls was pocketed by Milken and his
crew while the tax-payer and investor
footed the bill.

Deregulation of the public airwaves is
still being sought - not by any citizens
groups - but by (you guesed it) large corporate
conglamorates. After having the rules
changed in the nineties they were back
for more. The public found it to hurt local
coverage, put people out of work, and
there was a huge negative response from
citizens that has so far stahled this latest
round.

Enron had been pushing for deregulation
for 5 years or more saying that the prices
will fall dramatically with increased
competition. They even produced TV
commercials shown in California to
get the public to back the scheme.....
which they eventually (and foolishly)
did. The deregulation of the Energy
Industry is quite vivid now with the taped
recording of an Enron Exec asking for
(and receiving) a bogus shut down of a
power plant in Nevada (and their subsequent
laughs). The day of the shut down, Enron
declared an "energy crisis" and raised prices
(in some places) 400% to the local Power
Companies who could not legally pass that
much of an increase on to the public. The
State of California went $40 billion in debt
during that first year of deregulation.

So, it is quite clear that deregulation of
industry will have horrendous side affects,
although the drug industry and criminals
have been prospering.

- White Collar Crime Punishments

I recently sat on a jury that had no option
but to convict a man on his third strike
against the State of California for car
theft, and he was put in prison for life
(against the jury members wishes). We
felt that the third strike law should be
applied to violent crimes only, but that
did not matter. The jury was there to find
guilt or innocence - not to determine the
punishment.

While our elected officials have condoned
diminishing government regulations, they
have been mute on updating of the criminal
code. The punishments for huge white
collar crime were put in place many decades
ago before anyone knew what a billion was.

Michael Milken was fined $200 million
dollars after stealing and cheating the
American public out of BILLIONS of
dollars. He spent 18 months in a minimum
security prison and was released to spend
his loot. "Milken's punishment for costing
the American taxpayers billions of dollars is
comically trivial" - a quote from Benjamin
Stein who wrote a book on Milken's carreer
in crime entitled "A License
to Steal".

During a more recent jury duty I was able to
ask the Judge (in the hallway) why the
sentencings for white collar crime are so lax
and out of date. He said it's up to the State and
Federal Legislatures to change punishments. I
said "Well, that explains it." Government
officials are finding it difficult to increase the
penalty for fraud and theft against people
like Kenny Boy who was a very generous
political donor to both parties.

When you realize that these white collar
criminals are ripping the public off to the
tune of BILLIONS of dollars, you see that
there is much reform that is needed in our
Criminal Justice System. In the case of the
drug industry, there are law suits being filed
by the families of their victims. One has to
wonder, though, if the court cases should not
be in Civil Court, rather in Criminal Court.
But with the drug industry being the most
powerful in Washington at this time, chances
are they won't.



I personally hope that protests will incorporate


the need to reform the Criminal Justice System


to make white collar crime penalties worse than


the gains, and stop the corporate deterioration


of the FDA. Any American citizen without


corporate ties will tell you that Dr. David Graham


needs to be placed in charge of the FDA.


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1 - www.newstarget.com/002551.html
2 - CBS News, Saturday Edition - Brian
Ross Reporting. The way the SPEs worked,
is that anyone with a 3% investment, could
get Enron to donate the other 97% to form a
partnership. "Typically, Enron deposited $100
million in cash and $800 million in stock to
these SPEs." Surely not all of the 4,300 SPEs
were used in this manner, but let's say just
1,000 were. Do the math. My speculation is
that many of these 4,300 "investors" are the
same bunch of corporate thieves that were
involved with Michael Milken in the Eighties -
Carl Ichan, Ivan Boesky, Carl Lindner, Victor
Posner, Saul Steinberg and several dozen others
that cost the American Taxpayer over $100 Billion
during the deregulation of the Banking Industry.

3 - This link is to the 2002 Fortune 500 article
where Enron in bumped from the 6th to the 5th
spot on their 500 list:
www.fortune.com/fortune/fortune500/articles/0,15114,373322,00.html

4 - ABC News, Feb. 15, 02