January 3rd, 2011
The U.S. Navy will temporarily relieve Capt. Owen Honors of his post pending investigation of the series of explicit videos he is said to have produced when he was second in command of the aircraft carrier USS Enterprise, sources tell ABC News.
Capt. Honors is under investigation for a series of raunchy videos in which he appeared from 2006 to 2007. The videos featured a series of skits that aimed to provide some humor during the long deployment at sea. At the time the videos were produced, the Enterprise was operating in support of the wars in Afghanistan and Iraq.
But the skits were clearly offensive to many people. A leaked version of one video, first reported by the Virginian-Pilot newspaper on Saturday, contained derogatory references to homosexuals and was filled with profanity. At one point in the video, Honors introduces a scene in which two female sailors pretend to wash each other in the shower by saying that "chicks in the shower" were his "favorite topic."
Calling the videos "inappropriate," a spokesman for the Navy's Fleet Force Command said in a statement that "the Navy does not endorse or condone these kinds of actions."
The debate over the videos raged on the Enterprise's Facebook page today, with many sailors and others coming to Capt. Honors' defense.
"I served on Enterprise for the last three years of my 21 year Navy Career. I would love to go to sea with a man like this that can lighten up a extremely stressful job," wrote one, Gordon Wilcox.
"We all looked forward to those videos from Honors while underway. We can not ruin a good mans career for the sake of petty political correctness," wrote another, Shaun Valentine.
"I too was on that deployment. Capt. Honors brought up our moral and provided well needed and appreciated comic relief. We were underway for long durations, supporting two theaters of war simultaneously, he brought many smiles to a worn out & tired crew. I can easily say that all of the crew, ship's company & air wing embarked, appreciated the videos," wrote Chief Petty Officer Andrew Hodyl.
January 3rd, 2011
President Obama is considering naming William Daley, a JPMorgan Chase & Co. executive and former U.S. Commerce secretary, to a high-level White House post, possibly as his chief of staff, people familiar with the matter said.
Such a move, which is still under discussion and which White House officials wouldn’t confirm, would bring a Washington veteran -- and someone with strong business ties -- into the administration as Obama enters the second half of his term. The president is faced with a Republican majority in the House of Representatives and is trying to accelerate the U.S. economic recovery while addressing the budget deficit.
Daley, 62, who typically responds to questions, didn’t return two messages seeking comment left on his cell phone yesterday or a phone call to his office and an e-mail sent to him today. White House officials declined to discuss the matter.
“I’m not going to comment on personnel speculation,” White House spokesman Robert Gibbs said in an e-mail.
As he remakes his staff at the midway point of his presidency, Obama also is seeking to address complaints from some executives that the Democratic administration is anti- business. Daley is JPMorgan’s Midwest chairman and the bank’s head of corporate responsibility.
Replacement for Summers
Among the pressing personnel decisions Obama must make is naming a successor to Lawrence Summers as head of the National Economic Council, which could come as early as this week. Gene Sperling, a counselor to Treasury Secretary Timothy Geithner, has emerged as the leading candidate for the post.
If selected, Sperling would be returning to the position he held for four years under President Bill Clinton, making him the longest-serving NEC director. While he doesn’t have strong ties to the business community or Summers’ standing as an economist, Sperling has played key roles crafting the administration’s economic policies, most recently in forging Obama’s compromise with Republican leaders to extend Bush-era income tax cuts.
If named as chief of staff, Daley would replace Pete Rouse, whom Obama selected to fill the role on an interim basis after Rahm Emanuel resigned Oct. 1 to pursue a bid for mayor of Chicago.
Rouse has indicated to administration officials that he is reluctant to serve in that job for the remainder of Obama’s presidency, according to a person familiar with the matter. Rouse also has signaled that he would stay as chief of staff if asked by the president, the person said, speaking on condition of anonymity because the discussions are private.
Rouse, who has worked for Obama since his days in the Senate, is conducting an internal review that covers personnel, policy and political strategy as the president contends with a new political landscape and gears up for his re-election bid less than two years from now. Obama is considering a number of staff changes. Senior adviser David Axelrod has said that he plans to leave in the coming months, and former campaign manager David Plouffe will join the administration.
During the 2008 presidential campaign, Daley served as an Obama economic adviser. After the election, he was a co-chairman of Obama’s transition team.
Daley, the younger brother of Chicago Mayor Richard M. Daley, was Commerce secretary during the second term of the Clinton administration, serving from January 1997 to June 2000. He was chairman of Vice President Al Gore’s unsuccessful presidential campaign in 2000.
After serving as president of SBC Communications for more than two years, he joined JPMorgan Chase in 2004.
While there, Daley has worked on some of the Midwest’s biggest takeovers. He advised Chicago’s Exelon Corp. on its unsuccessful 2004 proposal to buy Public Service Enterprise Group Inc. for $17.8 billion, and CBOT Holdings Inc., also based in Chicago, on its 2007 sale to CME Group Inc. for $11 billion, according to Corporate Control Alert, an industry newsletter.
Daley was a political mentor to Emanuel. The two worked together to get the union-opposed North American Free Trade Agreement passed in 1993. Emanuel was then a senior aide to Clinton, and Daley was a special counsel to the president.
The youngest of seven children born to longtime Chicago Mayor Richard J. Daley and Eleanor “Sis” Daley, William Daley is a member of Illinois’ most powerful political dynasty.
The administration has come under fire from the business community, including the U.S. Chamber of Commerce. The nation’s biggest business lobbying group opposed Obama’s health-care and financial-regulatory overhauls and committed $75 million to political ads in the midterm congressional elections, mainly directed against Democrats.
Still, Obama is generating more optimism among corporate executives after a series of actions and overtures, including a deal to extend tax cuts enacted in 2001 and 2003, efforts to boost exports such as a U.S.-South Korea free-trade agreement, and a loosening of controls on some technology sales.
Obama met with 20 company executives on Dec. 15 in Washington and said afterward that he made “good progress” toward establishing closer cooperation between government and business to accelerate the economic recovery. The president has said private companies are crucial to the U.S. climbing out of the worst recession since the Great Depression.
January 3rd, 2011
(CNN) -- The thousands of birds that fell from the sky just before midnight New Year's Eve in Arkansas likely died from massive trauma, according to a preliminary report released Monday.
The birds -- most of which were dead when they were found -- were red-winged blackbirds and starlings, and they were found within a one-mile area of Beebe, about 40 miles northeast of Little Rock, the Arkansas Game and Fish Commission said.
Keith Stephens, a spokesman for the commission, said the birds showed evidence of trauma in the breast tissue, with blood clots in the body cavity and a lot of internal bleeding. All major organs were normal.
He cited a preliminary report conducted by the Arkansas Livestock and Poultry Commission.
"Further tests will be done to rule out other causes, but the birds suffered from acute physical trauma leading to internal hemorrhage and death. There was no sign of any chronic or infectious disease," the report said, according to the game and fish commission.
As of Saturday, between 4,000 and 5,000 birds had been found dead, said Stephens.
Karen Rowe, an ornithologist for the game and fish commission, said the incident is not that unusual and is often caused by a lightning strike or high-altitude hail.
A strong storm system moved through the state earlier in the day Friday. Officials also speculated that fireworks shot by New Year's revelers in the area might have caused severe stress in the birds.
"It's completely indescribable how many birds were here. I've never been anything like it," said Melissa Weatherly, a Beebe resident.
Blackbirds do not normally fly at night and it was not immediately clear what caused the odd behavior. Loud noises were reported shortly before the birds began falling, according to the game and fish commission.
"The birds obviously hit something very hard and had hemorrhages," said Rowe.
"Initial examinations of a few of the dead birds showed trauma. Whether or not this trauma was from the force of hitting the ground when they fell or from something that contacted them in the air, we don't know," she said.
January 3rd, 2011
Goldman Sachs’s investment in Facebook once again raises the issue of whether the Securities and Exchange Commission will force the social networking company into an initial public offering. In particular, this issue arises because of the special purpose vehicle that Goldman plans to create in order to allow its clients to invest up to $1.5 billion in Facebook.
The reason lies on the technical shores of the federal securities laws. The Securities Exchange Act of 1934 sets forth certain requirements for companies to register their shares with the S.E.C.
Specifically, Section 12(g) requires that a company register its securities with the S.E.C. if it “has total assets exceeding $1,000,000 and a class of equity security … held of record by five hundred or more … persons…”
The S.E.C. by rule-making has raised the $1 million threshold to $10 million. But either way, Facebook certainly exceeds this asset threshold.
The issue comes with the 500-person requirement. This speaks only of shareholder-of-record ownership. Shares can be held “of record” or “beneficially,” but the rule is only set off based on the number of shareholders who hold shares “of record.”
The S.E.C. defines “of record” for these purposes to mean securities held “by each person who is identified as the owner of such securities on records of security holders maintained by or on behalf of the issuer.”
Record ownership is thus clear. It is the shareholders who are recorded as such on the books of the company that issued the securities.
But in the case of most public companies, shares for most investors are not usually held of record but beneficially. In such instances, the shares are held of record by a third party, usually a broker, on behalf of the shareholder. For example, if you buy shares through Charles Schwab, that discount brokerage firm will serve as the record owner and you will be the beneficial owner. The shares are held this way for administration ease. Otherwise, every share trade would have to be recorded on the company’s books. Instead, there is only one entry on the books of the company for all shares held by Charles Schwab for its clients.
In fact, most brokers actually use another entity known as Cede & Company, the nominee name of the Depository Trust Company, a large clearing house, for their record ownership of stock, and so there is only one entry for many brokers all of whom have thousands of beneficial owners they hold shares for.
The consequence is that companies with thousands of shareholders will often have fewer record holders.
We do not know the number of record holders of Facebook shares, but in the case of Facebook, this appears to be how Goldman is planning to get around the S.E.C.’s reporting rule. Goldman will form a special purpose investment vehicle for its super-wealthy clients to invest in Facebook.
Technically, there would then be only one shareholder of record here, the investment vehicle. However, the S.E.C. has anticipated this type of runaround. The S.E.C.’s definition of record holder also states that:
If the [company] knows or has reason to know that the form of holding securities of record is used primarily to circumvent the provisions of [the Securities Act], the beneficial owners of such securities shall be deemed to be the record owners thereof.
The underlying 500-person rule was set up back in the 1930s to ensure that investors in significant companies had sufficient information to make their investment decisions, with size here set by the number of shareholders. You can argue that sophisticated shareholders can fend for themselves and that this rule is not necessary, but nonetheless this is the rule. And in any event, there are smart, sophisticated investors and not-so-smart ones. This type of hot money activity being invested here may be exactly what the S.E.C. wants to pick up.
But whatever you might think of the rule itself, Goldman’s planned special purpose vehicle and any other vehicles formed certainly appear to be cutting it close. Legally, it appears the S.E.C. would have grounds to force Facebook to begin reporting its financial results publicly if indeed the Goldman vehicle puts Facebook over the 500-person threshold. Of course, the S.E.C. inquiry into private stock trades reported last week by DealBook may be an effort to force Facebook to do so, based on other such investment vehicles. The Goldman vehicle may be the kicker.
Finally, it is important to note that even if Facebook is deemed to exceed the 500-shareholder threshold, it would not be required to conduct an initial public offering. Rather, it would merely begin “reporting” to the S.E.C. This would mean it must start filing quarterly and annual reports with the S.E.C. along with other items. These reports would include Facebook’s audited financial information.
The company can still stay private even if it is forced to begin reporting to the S.E.C. However, in the case of Google, which faced with a similar choice several years ago, it chose to go public. Google decided that if it was going to have to release its nonpublic financial and other information to the S.E.C. and the public, it might as well get its bang for the buck and do it in connection with an I.P.O. Though not required to do so, Facebook would probably come to the same conclusion if the S.E.C. brings this reporting requirement to a head.
Facebook knows all of the above. However, if a company exceeds the 500-shareholder limit, then it is only required to start reporting within 120 days of the last day of its fiscal year it exceeded this amount. If Facebook has a fiscal year that coincides with the calendar, this would give the company until May 2012 before the requirement takes effect. So Goldman’s investment may be exactly in contemplation of such an event next year.
Steven M. Davidoff, writing as The Deal Professor, is a commentator for DealBook on the world of mergers and acquisitions.
January 3rd, 2011
msnbc.com staff and news service reports / 2011-01-03T23:16:35
DOVER, Delaware — Police in Delaware searched for clues Monday in the slaying of John Wheeler III, a veteran of Republican administrations who also helped led efforts to build the Vietnam Veterans Memorial wall in Washington.
The body of Wheeler, 66, was discovered on New Year's Eve as a garbage truck emptied its contents at the Cherry Island landfill. His death has been ruled a homicide.
Wheeler retired from the military in 1971 and lived in New Castle, Del. The former Army officer reportedly was last seen Dec. 28, riding an Amtrak train from Washington to Wilmington.
Police have determined that all the stops made Friday by the garbage truck before it arrived at the landfill involved large commercial disposal bins in Newark, several miles from Wheeler's home.
"He was just not the sort of person who would wind up in a landfill," said Bayard Marin, an attorney who was representing Wheeler in a dispute over a couple's plans to build a new home in the historic district of Old New Castle where Wheeler lived.
Wheeler, the son of a decorated Army officer, was a graduate of the U.S. Military Academy and a veteran of the Vietnam war. He was the first chairman of the Vietnam Veterans Memorial Fund, and led the multimillion-dollar fundraising effort to create the memorial on the National Mall.
Fund founder and president Jan Scruggs said Wheeler dedicated himself to ensuring that service members are given the respect they deserve.
"I know how passionate he was about honoring all who serve their nation, and especially those who made the ultimate sacrifice," Scruggs said in a statement released Monday.
Wheeler served in the administrations of Presidents Ronald Reagan and George H.W. Bush.
In addition to chairing the memorial fund, Wheeler also was the first chief executive of Mothers Against Drunk Driving.
From 2005 to 2009, he worked within the Secretary of the Air Force and then became a consultant for the Mitre Corporation, according to a biography at the website Second Line of Defense, where he contributed.
Mitre describes itself as a not-for-profit organization that manages R&D work for the Defense Department and other federal agencies.
Wheeler's military career included writing a manual on the effectiveness of biological and chemical weapons, which recommended that the United States not use biological weapons.
"He was a very humble kind of guy, actually," Marin said. "He was never the kind of person who would talk about all the wonderful things he did in his life."
In a forward for the book, "Reflections On The Wall: The Vietnam Veterans Memorial," Wheeler wrote that the beauty of the wall photos in the book comes from the black granite's reflective quality.
"Before construction of the Vietnam Veterans Memorial, those of us working on the project knew the wall would be shiny and reflective," he wrote. "But no one anticipated the sharp, true, and expansive mirror quality of the wall. The high polish of the black granite surface reflects blue sky, green trees, the Washington Monument, the Capitol Dome, the Lincoln Memorial, and the expressive faces of visitors who approach the Wall."