Could It Possibly Be A Good Show?

Readers of Ellisblog know that I have been, ah......uncharitable in my assessment of Media Geezer Louis Rukeyser. A reader says he's not bad:

Dear Mr. Ellis:

A while back I read your geezer alert on Mr. Rukesyer and though nothing of it as I hadn't watched him in ages. Last night, while waiting for Law and Order to come on, I turned him on flipping through the channels. And guess what? The show was good...really good! Don't get me wrong, he had plenty of corny jokes and bags under his eyes that are truly difficult to describe, and his questions were all on paper which he clumsily read (either he's nervous on his new show or he's become the business world's Ralph Kiner) but they were terrific questions regardless, his guests were long sighted and thoughtful and civil in a way I simply can't recall on any current news show. I enjoyed him and his guests outlook more than I ever had watching a CNBC show (which is little more than gossip at this point) and wonder why I haven't watched him all these years. He's the optimist opposite of Barron's Alan Ableson who genuinely dislikes to see investors do well.

I will now be a dedicated watcher, geezer be damned!

Dave H.

Lazy Susan

Lazy Susan deals work like this: Company A gives Company B a $100 million contract. Company B repays Company A $100 million after an insignificant amount of time for "services rendered." Both companies thus show a $100 million bounce in revenues, which can then be duly recorded in "revenue growth" statistics used to con investors into thinking that both Company A and Company B are "growing" rapidly.

Lazy Susan deals have been rampant in the telecommunications industry and are now popping up everywhere in the independent power production and trading business. Today's New York Times focuses on Reliant Resources, a large-ish independent power producer and trader. Reliant had to cancel a $500 million bond offering amid allegations that it had inflated revenue growth through the use of Lazy Susans. Two other major power independents, CMS Energy and Dynegy, are also being investigated by the SEC for possible Lazy Susan arrangements.

The issue of corporate dishonesty and malfeasance is not going away. The more we know, the worse it gets.

Banished

The New York Times has banished Andrew Sullivan from its pages, reports Andrew Sullivan. This should come as no surprise to anyone familiar with the Raines regime. The Rainesian management model resembles a kind of anti-network; in which an ever-smaller number of people are engaged in the guidance and definition of the enterprise. As the network narrows, the center (Raines and his management team) grows in importance. At its worst, this kind of management leads to the Sun God management system, in which The Great Leader is surrounded by adoring sycophants. Raines is a prime candidate to fall into this trap, since his ego needs greatly exceed his management skills.

The decision to ditch Sullivan is idiotic. Sullivan is a network unto himself. His inclusion on the NYT roster made the paper stronger, not weaker, because as a rule things that expand the network are positive and things that contract the network are negative. As the Blogosphere's most important voice, Sullivan was a uniquely important asset to The New York Times network. Tossing important assets overboard is the essence of bad management.

E*gregious

"E*Trade Chairman and Chief Executive Officer Christos Cotsakos Thursday received a Ph.D. in economics from the University of London. Angry investors say he should go back there for a lesson in corporate governance."

"Mr. Cotsakos last week became the highest-paid chief executive in the brokerage business, with a pay package valued at about $80 million, including a $15 million loan that has been forgiven, $15 million in company-paid taxes on the loan, $29 million in restricted stock and 1.87 million stock options."

"Mr. Cotsakos's pay is just the richest of the many goodies he gets at E*Trade. The online trading and discount brokerage firm also pays for security systems for his house and plane as well as his tuition and flights to London to finish that Ph.D."

-- From today's Wall Street Journal

It almost goes without saying that E*Trade is not making money. So, here's the deal: $80 million pay/perk package for Mr. Cotsakos, negative earnings and a collapsing share price for investors. How do you spell s-h-o-r-t?

Credit Where Credit Is Due

An emailing correspondent points out that Mr. Cotsakos's pay package was first reported in The San Jose Mercury News, five days ago. You can read their story here. I'm surprised The Wall Street Journal made no mention of this. They should have.

Texas

Bush media advisor Mark McKinnon's campaign contributions to Democratic candidates in Texas got everybody's hackles up at the White House and at the Republican National Committee. The West Wingers were especially pissed and made sure that Dan Balz knew it.

But Mark McKinnon is not the problem in Texas. The problem in Texas is that Democratic gubernatorial candidate Tony Sanchez is running roughly even with Governor Rick Perry (R) in general election trial heats and that Democratic US Senate candidate (and former Dallas Mayor) Ron Kirk, who supposedly can't win because he's black, is running not far behind the Republican nominee, state Attorney General John Cornyn. Kirk is getting strong support from the Dallas business community, which knows him well and likes him a lot. He's an easy guy to like, a fact that many GOP operatives don't fully appreciate.

Soon enough, there will be a poll published in one of the Texas newspapers that will show just how close these races are. And that, in turn, will draw national press attention to a possible double upset in the president's home state. (This is not all bad news for the White House, since it will make their fund-raising efforts for Perry and Cornyn easier).

Losing the gubernatorial seat is probably manageable, perception-wise, because Sanchez has been an outspoken Bush supporter in the past. But losing two in Texas is almost unthinkable and in the event would be deeply embarrassing. Watch that space.

Death Star

The "Death Star" strategy is described as permitting Enron to be
paid "for moving energy to relieve congestion without actually moving
any energy or relieving any congestion." --Washington Post, 5/8/02

The internal memos describing Enron's manipulation of the California power markets are astonishing and damning. And it now seems likely that all of the major energy trading companies that did business with the state of California engaged in similar conduct. So what we have before us -- Exhibit A, if you will -- is an entire industry sector doing deals outside the ethical envelope. Enron's lawyers helpfully point out that what was done was not illegal. And one suspects they said so without a trace of irony or regret.

These revelations from FERC, I suspect, will go a long way toward re-electing California Governor Gray Davis (D), who maintained all along that the state's power crisis was the result of corporate manipulation and malfeasance. There were a number of other factors that contributed to the California power crisis, but Mr. Davis now has the perfect scapegoat squarely in his cross-hairs. Pulling the trigger will be his pleasure. And rarely has a company so deserved to be blown to bits.

Kelly On the Case

One of the redundant features of this blog is the almost weekly item urging you to read Michael Kelly's column in The Washington Post. As soon as my nephew Bill Smith puts the finishing touches on the new site, we'll have a perma-link to Kelly's column so I won't have to keep repeating myself. In the meantime, click here.

Judi Miller Stays On The Case

Colonel Russ Howard has asked me to contribute a chapter on genomic warfare for an undergraduate textbook on terrorism. So I've been spending a fair amount of time talking to people who spend much of their time thinking about the most terrible things you can imagine. Straightforward chemical and biological warfare is terrifying enough. Genetically-altered pathogens are exponentially terrifying.

In the course of my research, I keep hearing that one nation -- just south of Florida -- has moved well along down the road to weaponized genetically-altered pathogens. That nation is Cuba. Judi Miller has a superb report on this very subject, which you can access by clicking here. Registration is required at The New York Times website.

How Much Do You Hate Power Point?

Yoga enthusiast Kurt Andersen emails a funny bit about President Lincoln's Gettysburg Address as a Power Point presentation. You can access it by clicking here. I remember getting this from another friend about six months ago, but back then I didn't have a blog, so my ability to rant about Power Point was limited.

I know senior executives at major American corporations who view Power Point presentations as all but disqualifying of work-seeking vendors. It's basically: use of the product equals you're an asshole. Harsh, but true enough.

The Media and The War

Given that America is either fighting or preparing to fight the War Against Terrorism on five continents, you might think that the major news organizations would be devoting the vast majority of their resources to covering the war effort. But they're not. It's become increasingly hard to find war news in the papers and news magazines and it has virtually disappeared from the television (or at least, the television I watch). I'm not talking about gasbags carrying on about Iraq. I'm talking about a war correspondent filing a story from greater Kurdistan about how the Kurds are preparing for the US-led invasion of Iraq.

There's still real reportage in The New York Times and The Washington Post, of course, but it's not comprehensive and it's often buried inside the paper. The war that is getting comprehensive coverage is the war in the Middle East where, not coincidentally, all of the major news organizations have Tel Aviv bureaus. In most cases, the major news organizations don't have bureaus in Central Asia. They don't have bureaus in Africa. They don't have bureaus in South America. They don't have bureaus in Southeast Asia. And they certainly don't have (non-temporary) bureaus in Islamabad or any of the former Soviet Republics.

Decades of downsizing and cutbacks have left most of the major news organizations with surprisingly limited reach; their ability to "cover" a story in places some distance away from their news hubs in London, New York, Washington, Tel Aviv and Tokyo/Hong Kong is constrained. And their ability to call on correspondents and producers who actually know something about, say, Central Asia, has been, to put it politely, diminished. They fired or "early retired" those kinds of people long ago.

Making matters worse is the advertising recession, which shows no sign of abating. The cost of covering warfare in Afghanistan is expensive in the best of times. The cost of covering war on five continents in an ad recession is prohibitive. Which is why most of the major news organizations have simply given up on comprehensive "War on Terror" coverage and have instead chosen to try to get by with a "targeted" commitment of manpower.

The upshot is that we (the news-consuming public) are under-informed about the scope and character of America's most ambitious military undertaking since World War II. It is a vital and noble enterprise. But it's a very expensive thing to cover, so we get Michael Skakel instead.

It's Why They Call Him Marvelous Marv

I promise this is the last MiniPutt item and it'll be back to regular blogspotting shortly. That said, there is big news. Marvin Bush has scored back-to-back 26s on the challenging but forgiving MiniPutt track. This is a record unlikely to be matched and so, until further notice and/or credible reports of a superior performance, Mr. Bush is declared MiniPutt Champion of the Blogosphere.