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That story really makes me want to throw up :(~
(Sept. 18) - Former Tyco International chief executive L. Dennis Kozlowski, who allegedly used company funds to buy a $15,000 umbrella stand and a $17,100 traveling toilette box, cannot make bail and could be sent to jail Thursday.
Kozlowski was indicted last week for massive fraud. His lawyers told Manhattan Supreme Court Judge Michael Obus Tuesday that Kozlowski is flat broke and cannot access bank accounts because they are frozen.
Earlier Tuesday, Tyco revealed it paid for a $6,000 shower curtain, a $2,200 wastebasket and many other expensive items for Kozlowski's New York City apartment.
Tyco accused Kozlowski of recklessly tapping company funds, including more than $1 million for his wife's birthday party in Sardinia last year. The event's planners called for gladiators and an ice sculpture of Michelangelo's David with vodka streaming from his penis into crystal glasses, according to Tyco's filing.
Other unauthorized expenses Kozlowski allegedly incurred include a $6,300 sewing basket, a $445 pin cushion, a $1,650 notebook and $5,960 for sheets.
At last week's arraignment, the judge released Kozlowski on a $100 million personal recognizance bond that was to be secured by $10 million in personal assets. Tyco's former chief financial officer, Mark Swartz, was released on a $50 million bond, secured by $5 million in personal funds.
Lawyers for Swartz also said he couldn't make bail.
Both men were ordered to come up with the necessary funds by Thursday or face time at Riker's Island, one of the nation's toughest jails. The island near LaGuardia Airport in the East River is the largest U.S. penal colony.
Kozlowski's lawyer Stephen Kaufman said Kozlowski's ex-wife had agreed to post her $10 million home in Greenwich, Connecticut, but lead prosecutor John Moscow objected, saying the house could be the result of the former CEO's alleged criminal actions.
Moscow said the defendants must come up with assets that were not gained from their alleged criminal conduct.
Prosecutors froze $600 million of Kozlowski assets "mostly cash and securities," Moscow said. That means the defendants cannot use this money as collateral toward their bail.
Tyco is in the process of seizing most, if not all of Kozlowski's assets, including a $17 million Fifth Avenue apartment, a $7 million Park Avenue apartment he turned over to his ex-wife, a $5 million Nantucket home and a $30 million compound in Boca Raton, Florida.
Details from the company's internal investigation, authored by a committee headed by attorney David Boies, were contained in a filing to the Securities and Exchange Commission.
The SEC alleges that Kozlowski, Swartz, and former general counsel Mark Belnick treated Tyco as their private bank, "taking out hundreds of millions of dollars of loans and compensation without ever telling investors."
Swartz's lawyer disagreed with the SEC's contentions.
"Mark Swartz never received a penny from Tyco that was not fully authorized," said his attorney, Charles Stillman. "Today's report does not change that fact."
Belnick, charged with falsifying business records to cover up $14 million in improper loans from Tyco, was released last week on an unsecured personal recognizance bond of $1 million.
In 2000, Kozlowski had Tyco authorize nearly $96 million in unapproved bonuses for 51 employees to offset relocation loans for employees moving to Florida.
"Forgiveness was offered to some people who never moved ... and people who did not even have a Tyco mortgage, Tyco said.
Patricia Prue, Tyco's senior vice president of human resources, questioned the program, but Kozlowski assured her the board had authorized the payments, Tyco said.
Kozlowski and Swartz allegedly received about $50 million as part of the program, which was purportedly paid out from the proceeds of Tyco's successful initial public offering of TyCom, its undersea fiber-optic cable network, documents show.
Only a few weeks after the Florida loans were improperly forgiven, Kozlowski introduced another unauthorized bonus program that cost Tyco more than $55 million, Tyco alleges. Sixteen executives, including Kozlowski and Swartz, participated, Tyco said.
HEADLINES
Body of Murdered 67-Year Old Israeli Man
Discovered Wednesday in Jerusalem
Palestinian Village of Al Azhariyeh
Man Was Shot in Head, His Body Burnt
Village Placed under Curfew for Terror Investigation
Killer of Wall Street Journalist Daniel Pearl
Among al Qaeda Extremists Captured in Karachi
With Sep.11 Organizer Binalshibh
He was Not among 5 Handed over to US
UN Security Council Convenes Tuesday Night
To Discuss Iraq’s Unconditional Consent to
Re-admit UN Arms Inspectors
White House: Iraqi Move Is Tactical,
Aimed at Dividing Security Council
US Will Stand by New UN Motion Guaranteeing
Enforcement of 16 Resolutions Violated by Baghdad -
Failing Which A Mandate for US Military Action
Signs US Will Intensify Military Heat on Iraq in Next 48 Hours
First Affirmation North Korea Has Nuclear Weapons
Comes from US Defense Secretary Monday
Two Koreas Sign Military Accord Tuesday in Seoul –
First Document Since Korea War Ended Five Decades Ago
DEBKAfile’s Military Sources:
US-UK Air Attack Sunday Demolishes Another
Iraqi Air Defense Command Center at Talil, 160 Miles
South of Baghdad, Also Scud Missiles and Aircraft for
Delivering Chemical-Biological Weapons
Raid Follows Strikes against Iraq’s Al Nukeib,
H-3, H-3 and Al-Baghdadi Airfields
Five Palestinian Schoolchildren Slightly Hurt in Bomb Explosion in
West Bank Yatta Village School Yard Tuesday
Second Device Safely Detonated
DEBKA file Intelligence Newsletter
On Lou Dobbs tonight on CNN a man from the SEC said executives and corporate officers should not get paid if they don't produce.
He also said the share holders have a right to know what their money is doing.
Sony set to plug broadband entertainment vision
Sony is set to unveil its latest range of gadgets at a major showcase in Japan on September 14.
Sony's Dream World 2002 event in Yokohama will emphases a move to link digital devices to Sony's entertainment content.
Sony President Kunitake Ando said: "The broadband revolution is now happening.
"Through Sony Music Entertainment and Sony Pictures Entertainment, we can drive demand for network content as well, and we are starting to make that happen now."
One new product on display will be a tuner that connects digital television sets to the internet by broadband.
CoCoon will be able to record 100 hours of video and automatically record programs under key single words.
Additional services will include email, internet downloads and links from mobile phones to start recording a show when away from home.
It is set to go on sale in Japan in November for about 130,000 yen (about £700) and planned sometime later for overseas markets.
Other innovations on show at a press preview included a flashlight-like device that allows you to project video images onto a wall, a dancing baby-sized robot and a videophone wristwatch.
Shortchanged by anything less than broadband
12.09.2002
By ROBIN McNEILL
A friend tells a childhood story in which she proudly announced achieving 95 per cent in a school maths exam. Her father's praise came in the form of the technically accurate, if disheartening, observation: "There's still room for improvement".
So it is with broadband telecommunications. Broadband service vendors enthusiastically proffer solutions that will service 85 per cent, 90 and even 95 per cent of the wider community. But a service offering anything less than 100 per cent coverage is just not good enough.
Why is this so? Largely because of the tension between network providers - the telcos - and network users, encapsulated in the question, "Who is the most important customer?".
For telcos, the answer is obvious - the first customers signing on to their networks are supremely important.
The first customers are those who first start paying off the network investment. Accordingly, telcos usually serve the valuable, easy-to-reach customers first.
The hardest, most expensive-to-serve customers are connected last.
Those who are too hard - or rather, too expensive - to service don't get connected. In an unregulated market, no one can blame telcos for that.
Things are different for customers and wannabe customers. Demand for services delivered over telecommunications networks differs from most other networks.
Let me explain. Telecommunications is intrinsically a two-way process. If the electricity lines company has to extend its network down the road to provide you with service, only you are going to benefit.
But should a telco extend its cable down the road to provide you with telephone service, you're not the only one to benefit, for billions of other inhabitants of this planet can now contact you.
All else being equal, for existing telecommunications network users the most important customer on the network is the last customer who has been connected. Each new customer on the network provides new opportunities to make and receive calls.
Customer calling opportunities provide a very good measure of a network size, capacity and utility as far as users are concerned.
Calling opportunities are determined by the combination of customers who can initiate calls and customers who can receive calls.
If 10 per cent of the population are connected to a network, just 1 per cent - 10 per cent times 10 per cent - of all potential call set-ups within the population can be established.
With 80 per cent of the population connected, still only 64 per cent of all possible call set-ups can be established.
Even when 95 per cent of the population are connected, this allows for only 90 per cent of the potential call set-ups. This leaves a lot of room for improvement.
How, then, can we ease the tension between the drivers for telco investment and the needs of users? The standard, if unimaginative, approach is to directly subsidise broadband network expansion. Project Probe (the Government's plan to bring broadband to schools and the regions) will likely do this, as do those communities underwriting Telecom New Zealand broadband projects.
But such subsidisation requires extraordinary care in its implementation. Poor targeting merely finances network investment that would have been undertaken anyway and accordingly serves only to bolster telco profits.
A more sustainable, long-term approach is required.
Last year Venture Southland commissioned a survey of 1000 Otago and Southland farmers. Three-quarters of them were unhappy with their telecommunications service and a third of them could not even establish a viable internet connection.
The data suggests that Telecom is not providing the 14.4kbps data-capable lines they are obliged to provide to 90 per cent of the population, or at least not in rural Southland.
The heavy hand of the Government, in whatever guise, could force Telecom to upgrade its network and thus give the farmers 14.4kbps capability. But frankly, who wants just 14.4kbps?
There is a neat solution to this dilemma. First, calculate how much it would cost Telecom to bring its network up to the 14.4kbps. The company could then undertake the work immediately.
Much better still, the Government could waive the 14.4kbps Universal Service Obligation on Telecom for consideration of the value of this upgrade work.
The freed-up money could then be set aside as a contestable regional fund to instead help committed network providers - including Telecom - introduce broadband in rural areas.
By tagging the money for remote network deployment, or at least to provide service to the remotest 10 to 15 per cent of the population, we should be confident that 100 per cent broadband coverage is achievable. That would be a credit pass to be proud of.
* Robin McNeill is principal of the telecommunications engineering and consulting firm McNeill & Associates, and can be contacted at r.mcneill@ieee.org
Broadband Communications in Southland
BT trials SDSL broadband in London
By Rene Millman [12-09-2002]
Full commercial service due next year
BT has finally detailed plans to roll out Symmetric Digital Subscriber Line (SDSL) broadband internet services as a trial in 20 exchanges at the end of the month.
The move comes ahead of a full commercial service which is expected to start from the middle of next year.
As revealed by vnunet.com in July, BT is to work with broadband service provider Bulldog Communications, one of its most ferocious critics, to run an SDSL trial in London from late autumn.
Richard Greco, chief executive at Bulldog, told vnunet.com at the time that his company had been in negotiations with BT for several months before an Oftel ruling forced BT to offer interconnections from its network to rivals'.
The initial trial will test two products running at 256Kbps and 2Mbps. Wholesale pricing for the two products will be £75 and £200 per month respectively.
SDSL differs from Asymmetric DSL as it uploads and downloads data at the same speeds simultaneously.
Industry analysts have argued that this means it can effectively compete with lucrative leased line business, although BT disagrees.
Rebecca Webster, head of broadband marketing at BT Wholesale, insisted that far from cannibalising BT's leased line business, the two technologies will be complementary to one another.
"We don't think that by introducing SDSL everyone will migrate from leased line to SDSL and market growth will stop in the leased line business," she said.
Webster admitted that there is a small overlap between the leased line and SDSL businesses, but maintained that they are "two very different product sets".
The trial will start with SDSL services delivered through 20 exchanges in London. In December BT Wholesale will extend the trial to up to 50 exchanges including locations in Manchester and Yorkshire.
The service will support multiple Time Division Multiplexing voice channels and IP data traffic concurrently over a single copper pair using Global Standard High-Bit-Rate DSL technology.
Easynet, Bulldog and Star Internet already offer SDSL services in the UK.
I was doing a search on Blue-82 "Daisy Cutter" and found this poem not too PC well, Im not too PC when it comes to this subject anyway <;)
"Daisy Cutter" is the name of a 15,000lb bomb being used in Afghanistan, which explodes at head height.
The Daisy Cutter
Daisy, Daisy
give me the head of John the Baptist
or another bearded fanatic
The Taliban favor the hirsute
but we are good Christian folk
and our chosen are smooth-chinned
Daisy, Daisy
immolate the hairy ones
cleanse their ethnic dust of
hens, terrorists and unseen wives
vaporize their souls, their
spleens, eyeballs, tongues and
tender parts
collect the charred bone fragments
for the charity of the Red Cross
for the Cross is our symbol
We may not get our man,
but by God,
Daisy,
we’ll get someone
Radiation Traces Detected in Hold Port Newark NJ
DEBKAfile sources: In First Such Incident,
Liberian Freighter “Palermo Senator” Was
Ordered out of Newark Port NJ Wednesday after Radiation Traces Detected in Hold
Ship Under German-Korean Ownership Reached US from
Far East Via European Ports
One Year after Its Horrendous Attack on America,
Al Qaeda’s Electronic Communications –
And Operational Plans - Remain Unfathomed
Read more in Excerpt from DEBKA-Net-Weekly below
Arafat Survives Showdown with Palestinian
Legislative Assembly, Prepares Fresh Anti-Israel
Terror Offensive to Support Saddam
Read DEBKAfile Special Analysis below
Israel Decides to Enclose Rachel’s Tomb in Palestinian Bethlehem
Within Jerusalem’s Security Perimeter
Jammu-Kashmir Law Minister Mushtaq Ahmed Lone
Is Gunned Down Wednesday by Suspected Islamic Extremists
While Election Campaigning in Village North of Srinagar
Where is Israel’s Opposition?
Read DEBKAfile’s Special Analysis below
To Subscribe to DEBKAfile Intelligence Newsletter,
DEBKA-Net-Weekly, Click HERE
http://www.debka.com/
Qwest Won’t Rule Out Bankruptcy
Qwest dances around the big bankruptcy question. Meanwhile, bundles and annuities are the guideposts to Qwest’s future, according to CEO Dick Notebaert. [Article ID: 3654]
Hughes’s DirecTV Still Struggling with Broadband
Hughes’ DirecTV is strategizing intently to push a long-time money-losing business into the black amid growing investor impatience with cash-eating businesses in general. Among parts of Hughes most likely to be sold or shut down as poor business bets are both of the company's broadband data services: the satellite-delivered DirecWay and the terrestrial DirecTV DSL service. [Article ID: 3655]
Other Broadband Developments
SA eyes international market for ITV tech, Amtrak to test high-speed on trains, NDS and Thirdspace tapped by Softbank Broadmedia, [Article ID: 3656]
http://www.broadband-daily.com/new_images/bbw_emailbanner_opt.jpg
BT Broadband Link with McAffee
Net 4 Nowt
Sep 12, 2002 0:25
Oftel tells BT to cut broadband link fees
Media Guardian
Sep 11, 2002 8:54
DSL cracks cable as Aust broadband choice
ZDNet
Sep 11, 2002 22:05
Philips and IBM form broadband partnership
CW360.com
Sep 11, 2002 8:48
Shortchanged by anything less than broadband
The New Zealand Herald
Sep 11, 2002 21:47
http://www.broadband-daily.com/newimages/clear.gif Wi-Fi goes broadband
ZDNet
Sep 11, 2002 12:28
IBM and Phillips join research project into secure broadband content delivery
Europemedia.net
Sep 11, 2002 13:32
Intel to offer journalists free Broadband Internet connectivity in World-First
AME Info
Sep 11, 2002 23:12
ISO broadband's 'killer application'
National Business Review
Sep 11, 2002 14:58
Businesses give broadband a wide berth
CNET
Sep 11, 2002 18:45
http://www.broadband-daily.com/subscribers/index.htm?article_id=3654
Would this apply to my in-laws?
The father worked for NJ bell since the late 60's he is retired now 18 years.
My in-laws received shares from the Bell CO's since then.
Or is it between November 29, 1999 and August 22, 2002 that only apply?
ShallowPockets
An artical with my wife's company,"Momenta Pharmaceuticals, formerly Mimeon", a good read.
Crane left Millennium this spring to start Momenta Pharmaceuticals, formerly Mimeon, a company that aims to improve existing drugs and develop new ones based on the science of sugars. 'There's no bigger compliment than having a strong alumni of people who build new companies,' Feinstein said. 'The fact that Levin hired so many superstars is a testament to him and to Millennium.'
http://www.boston.com/dailyglobe2/240/business/Forward_thinking+.shtml
Hey, my wife is writing patents for her biotech startup right this minute.
BT broadband hopefuls face long delay
By Ian Lynch [10-09-2002]
Registered ADSL customers must wait till next year
Only a handful of the 71,000 people who have registered an interest in ADSL as part of BT's registration scheme are likely to get high-speed internet access before Christmas.
Of the thousands of BT local telephone exchanges currently lacking broadband internet capabilities, just a few are set to be upgraded before the end of the year.
BT began its registration scheme in July. It required between 200 and 700 users to state in advance that they want broadband before it would agree to invest in their area.
The scheme covers 595 exchanges, with another 231 due to be added at a later date. But only five exchanges look likely to get broadband from the 71,000 registrations taken.
Of the lucky few, those around Todmorden in West Yorkshire will be celebrating as they have met the trigger level and BT is moving to the next stage of the conversion process.
Providing that three-quarters of those registered confirm their interest to their internet service provider within six weeks, the telco will begin the three-month conversion process to broadband.
Registrations at exchanges in Merthyr Tydfil, Inverness, Penn in Buckinghamshire, Bishop's Waltham in Hampshire and Irby on the Wirral are also close to meeting BT's demands. About 20 others are nearly half-way to reaching their trigger target.
"We expect that some of these will be on before Christmas," a BT spokesman told vnunet.com.
The telco argues that the threshold scheme is necessary because the conversion costs are too expensive for a nationwide programme.
But independent experts have said that BT actually requires as few as 50 customers per exchange in order to justify the investment.
David Cleevely, chairman at analyst organisation Analysys, and the government's chief independent advisor on broadband, commented that the levels showed that BT's "appetite for risk is rather small".
The BT spokesman insisted that the telco is keen to promote the roll-out, maintaining that 73 per cent of all internet users were already covered and that the figure would increase to around 85 per cent once all the trigger levels were met.
"We have just begun a nationwide advertising campaign and hope to see some big steps in registrations," he said.
Britain suffers by comparison with other developed countries in the roll-out of broadband internet.
With the failure of the local loop unbundling process and lack of cheap alternatives in the UK, the country is largely reliant on BT and the cable companies to install the necessary infrastructure.
BT has set a target of one million ADSL connections by summer 2003. Germany's Deutsche Telekom, in contrast, had signed up two million customers by December 2001.
Related articles
Broadband success rests on suppliers
http://www.infomaticsonline.co.uk /News/1134798 [04-09-2002]
BT fears rural broadband drop outs
http://www.infomaticsonline.co.uk /News/1133540 [15-07-2002]
Villagers lobby for broadband
http://www.infomaticsonline.co.uk /ITWeekopinion/1133179 [02-07-2002]
'Fifty users enough' for rural broadband
http://www.infomaticsonline.co.uk /News/1132287 [05-06-2002]
The eyes have it
http://www.infomaticsonline.co.uk /News/1127954 [03-01-2002]
BT's blueprint for rural broadband
http://www.infomaticsonline.co.uk /SMEadvisor/1127651 [12-12-2001]
Forums
Discuss 'BT broadband hopefuls face long delay' in the Communications forum
Who is this hot babe? lol I just happend to come across this web page.
http://dillonprecision.com/template/p.cfm?maj=44&min=0&dyn=1&
1200 posts are mikey's lol eom
If you are talking about the first part of the movie trailer music, you can rent the DVD of Queen of the Dammmed and hear it there also. I didn't check what the song was called tho.
I was told in work today one of our trains Q11608 killed a group of people in a pickup truck yesterday.
I was looking at the photo from the newspaper and it had engine # 233 with a truck crushed under it. I checked the computer and I didn't see it listed they must have swapped out the Locomotive consist for the accident investigation. The train will arrive about 8:00 am in our yard. Its a shocking and strange feeling when you are a part of it.
When I first heard of it, one of the guys said, " Did you hear about the train wreck? It was 116." I thought for a second, "Oh God I hope its not one of mine." And then thought, that's an inbound number. I send out outbound trains such as Q11310, Q42110. Q421 is the train # and the 10 is the day.
My Hart goes out to the families.
Stay away from the tracks and if you have to go near them look both ways!!!
The story in the OH news paper
http://libpub.dispatch.com/cgi-bin/documentv1?DBLIST=cd02&DOCNUM=39106&TERMV=274:5:405:5:553....
And some interesting technology on the Rail Road
http://w3.one.net/~kb8vrz/crdegraff.wav
The music in the first half of the Step into Liquid trailer is also in the move Queen of the Dammed, just released in video stores.
Step into Liquid could qualify for some of these Oscar awards IMHO
Achievement in visual effects
Achievement in sound editing
Achievement in sound
Best motion picture of the year
Achievement in music in connection with motion pictures (Original song)
Achievement in music in connection with motion pictures (Original score)
Achievement in film editing
Best documentary short subject
Best documentary feature
Achievement in directing
Achievement in cinematography
im getting tired lol I think Liquid is a house hold name lol
http://www.thezolder.nl/trailers/s4.htm
http://www.surfrockmusic.com/messages/297.html
http://forum.surfermag.com/ubb/Forum1/HTML/022705-4.html
http://www.marabout.org/index.php?limitResults=no
http://www.siliconinvestor.com/stocktalk/subject.gsp?subjectid=9418
and that is it. I left out a few,turned up in the stragest places.
http://www.greatwest.ca/ffwd/Issues/2002/0725/web.htm
http://dgsblog.net/2002_06_23_archive.php
http://www.prnewswire.com/cgi-bin/ind_display.pl?Account=FLM&Template=KTVB_FLM.menu
http://www.michaelwilliams.com/beverlycinema/bbs/displayMessage.cfm?messageID=1074
http://www.kacm.com/GLSA.html
http://www.alistair.com/blogfile/2002_07_01_blog_archive.shtml
http://www.turnerclassicmovies.com/NowPlaying/Monthly/0,3598,61%7C64%7C11347%7C11349,00.html
But not limited to...
http://www.surfnewquay.co.uk/
http://www.bbst.dk/
http://www.surfingvancouverisland.com/cgi-bin/ikonboard/topic.cgi?forum=2&topic=155
http://mcm.agoride.com/pages_mcm/article.Asp?idarticle=13886&id=2&idrubrique=70
http://www.mac4ever.de/movies/
http://www.starsbook.net/madflo/nm-web/
http://dmonix.net/zwo/
Dairyland Surf Classic — Aug. 31-Sept. 2
The city that's known for making bratwurst is making waves Labor Day weekend, when 100 to 150 of the world's best surfers hang ten on Lake Michigan in the annual East Coast Surfing Association Great Lakes championships. Sheboygan natives Larry "Longboard" Williams and his twin brother, Lee, 48, have surfed around the world for over 35 years, but to them there's no place like home. "Sheboygan is the Malibu of fresh-water surfing," said Larry in a phone interview. "It has 22 different breaks in five miles." Fall and winter is the best time for Great Lakes surfing because bad weather means cool waves. "We'll jump off an iceberg to go surfing," Lee said. The brothers were filmed in action last year for "Step Into Liquid," a $2-million documentary about the global surfing scene. "The Labor Day weekend is a gathering of the tribes," said Larry. The event includes a show of vintage and new boards, displays of colorful board graphics, and, of course, bratwursts.
http://travel.boston.com/columns/destinations/081802_destinations.html
Posts about Step into Liquid
Click this link
http://www.eastcoastsurf.com/forum/messageview.cfm?catid=3&threadid=560
This reminds me, where is o'll Circus pig?
where has my little piggy gone?
Can SIL win an Oscar?
I think we may be a nominee for some kind of Oscar for Sound, Footage, technology or documentary.
And that would be sooooooo Cool!
That's the problem with the markets today. If they were loyal shareholders, the market would be in a better condition. Greed and only looking out for #1 is today's market.
NVEI is what America was all about. Maybe there is hope for the markets and American values in the future.
Oh my!! I almost fell over when I clicked that link!
Its a reality now!
Whoooooooo Hoooooo!!!
One man's garbage is another man's island, is that how saying goes???
Why couldn't I think of this?? LOL
http://www.thesun.co.uk/article/0,,5-2002410050,00.html
Don't mess with this kitty...
http://www.canada.com/victoria/news/story.asp?id={01CC0FC3-9123-4D09-B8BA-F236DAF200B1}
Was this the cat that was terrorizing Granddaddy long??? LOL
Ill take the card with the pic of John Hashman in shackles in the courtroom :) lol
http://www.nextcard.com/picturecard.html;$sessionid$LXBTNHIAGR2QTQFICQGCM4Q?UTID=7368431389934537404...
G.E. Expenses for Ex-Chief Cited in Divorce Papers
By GERALDINE FABRIKANT
apers filed yesterday in the divorce of John F. Welch Jr., the former chief executive of General Electric, by his wife contend that G.E. covered enormous living costs for them while he led the company and will continue to do so for him for the rest of his life. The extent of these benefits has never been disclosed by the company.
General Electric has reported that Mr. Welch's total compensation, including bonus and salary, was $16.7 million in 2000, his last full year at the company before his retirement last September. It has also said that he will remain a consultant to the company on a retainer of $86,000 a year and will continue to have access to G.E. services and facilities.
But it did not disclose the value and the details of his perquisites as chief executive that will apparently continue through retirement. Along with access to corporate aircraft, mentioned previously in company footnotes, the documents filed by his wife, Jane, describe his use of a Manhattan apartment owned by G.E., floor-level seats to the New York Knicks, courtside seats at the U.S. Open, satellite TV at his four homes and all the costs associated with the New York apartment, from wine and food to laundry, toiletries and newspapers. The privileges, down to certain dining bills at the restaurant Jean Georges in the Manhattan apartment building where he lives, have continued even in retirement, the court papers indicate, without placing a value on them.
Acclaimed for his ability to deliver higher profits year after year at G.E., Mr. Welch was one of the nation's most admired chief executives, and his employment contract struck in 1996 reflected his company's impressive performance.
But people who specialize in corporate governance and compensation said yesterday that they were taken aback by the long list of benefits, though they had known about the corporate aircraft, for example.
Nell Minow, a governance expert and the editor of The Corporate Library, once described Mr. Welch's employment contract as a model because it did not appear to include a huge number of benefits. After being told about the filing, she said yesterday: "I would have thought that perks like this had to be disclosed, and they were not. There is really no justification to pay for any living or traveling expenses at that level, particularly now that he is in retirement."
Jonathan Macey, professor of law at Cornell University, said, "General Electric was probably not legally obligated to disclose the details" of his package.
Should the company have awarded him such benefits? "If you think he was leaving and they induced him to stay with these perks," then perhaps it was justified, Professor Macey said. "If it is handed to him by board cronies, then it is not justified. But it is harder to make the argument that this is illegal."
The G.E. proxy statement for 2001 states that the company will provide Mr. Welch, who remains a consultant to the company, with "continued lifetime access to company facilities and services comparable to those which are currently made available to him by the company."
The company provides few details about what those services are. The document did not list any personal use by Mr. Welch of corporate aircraft last year, though it did quantify aircraft use by other executives. There is no mention of sports tickets or restaurant meals or the G.E.-owned apartment on Central Park West, which the court documents value at about $80,000 a month.
According to the court papers, the subsidized benefits include a car and driver for the Welches, and the communications and computer equipment at the Manhattan apartment and at their homes in Connecticut, Massachusetts and Florida. G.E. pays for security personnel when the Welches travel abroad.
Mrs. Welch states that G.E. was paying for V.I.P seating at Wimbledon, a box at the Metropolitan Opera, a box at Red Sox games, a box at Yankee games, four country club fees, security services in all four homes and limousine services while traveling. Because of his relationship with G.E., Mr. Welch and his wife also got discounts on diamonds and jewelry settings.
Gary Sheffer, a General Electric spokesman, pointed last night to Mr. Welch's consulting agreement with G.E., which pays him at least $86,535 annually for his first 30 days of work, with a payment of $17,307 for every additional day.
The agreement, which has been widely disseminated, states that he gets lifetime access to G.E. services and facilities. "The technical stuff is basic business material that he needs as a consultant," Mr. Sheffer said.
Through an assistant, Mr. Welch declined to comment last night.
Mr. Sheffer said he could not confirm all the other expenses but that "a lot of it goes back to Jack's consulting agreement, which was signed in 1996, when the board asked him to stay on until he was 65 years old," he said.
"As part of that agreement, he got promised access to everything he had had as chief executive after he left," Mr. Sheffer said.
As to tickets to Wimbledon, he said, "we broadcast them," referring to television coverage by NBC, a unit of G.E. When his meals at Jean Georges are for personal reasons, he pays, Mr. Sheffer said, quoting Mr. Welch's assistant.
The general reference to G.E. services is misleading, Ms. Minow said. "It is appalling that one of the wealthiest men in America cannot write a check for his own Knicks tickets," she said. "It is appalling to me that Jack Welch's flowers are being paid for by retired firemen and teachers who are the G.E. shareholders and don't know this is going on.
"The reason that executive compensation and employment contracts are disclosed is so that investors know whether the interests of the executives are aligned with those of shareholders and whether the board is doing its job," she continued. "In this case, based on what was publicly available, it was impossible to tell that."
High living by chief executives on the company's payroll has become a sore point for shareholders as the stock market has plunged. One prominent example was the $17 million New York apartment that Vivendi Universal bought and made available to Jean Marie Messier, who was recently ousted as chief executive. Tyco shareholders recently learned that the company forgave a $19 million loan to its former chief executive, , L. Dennis Kozlowski, that was used to purchase a home in Florida.
General Electric's stock has been depressed amid concerns about the economy and about its financial transparency. Last month, its new chief executive, Jeffrey R. Immelt, said he would sell the apartment for his use that is in the same building as Mr. Welch's and valued it at $15.2 million.
Jane Beasley Welch filed the papers about the Welches living arrangements in Superior Court in Bridgeport, Conn., after the two failed to reach an amicable divorce settlement. William Zabel, the partner at the law firm of Shulte Roth & Zabel who is representing her, said that Mrs. Welch was seeking additional support because her husband had canceled their joint credit cards and had provided her with support of $35,000 a month, which she accepted under protest and said was far below their previous standard of living.
Mrs. Welch, who has been married to Mr. Welch for 13 years, oversaw their various properties and was involved in the living and financial arrangements, her lawyer said.
Suzy Wetlaufer left her job as editor of the Harvard Business Review in April after it was reported that she had begun a relationship with Mr. Welch. The Welches then separated, two years after the expiration of their prenuptial agreement, which provided some protection for his $900 million fortune.
Though Mrs. Welch describes $126,820 a month in costs incurred by the couple to maintain their lifestyle, the filing states that she is unable to quantify the value of most items covered by General Electric or how much Mr. Welch may contribute to those costs.
She provides an expert's assessment showing that the use of General Electric's Boeing 737 aircraft is valued at $291,869 a month, or about $3.5 million a year.
The other significant figure is the $7.5 million that she says General Electric paid in capital expenditures and furnishings for the couple's homes over the course of their marriage. (The Welches personally spent $32.5 million on those properties, the documents show.) At the time of the separation, the couple were building a home in Connecticut, and the filing states that several G.E. employees were on hand to assist in the design and installation of the security, telephone and other systems.
Mr. Welch's employment contract, as filed with the Securities and Exchange Commission, is a bit more expansive than the company's annual report or proxy statement. In retirement, Mr. Welch gets access to company "aircraft, cars, office, apartments and financial planning services" and he is to be reimbursed for "travel and living expenses incurred in providing services to the chief executive officer," it states. The benefits are "unconditional and irrevocable" even if Mr. Welch is incapacitated, the contract said.
Graef Crystal, who specializes in corporate pay, said he was shocked that the benefits were irrevocable.
"This is an indictment of G.E.'s board of directors," Mr. Crystal said. "This is the most appalling use of corporate assets. No one had any idea of the magnitude of what the company had been giving him." He said that either the board did not know about it or was not paying adequate attention.
Mr. Crystal said that Mr. Welch was paid exceedingly well and that he is a wealthy man whose stock alone is worth about $900 million. Mr. Crystal also said that Mr. Welch has a life insurance policy paid by the company and a pension plan that pays more than $9 million a year.
Mr. Zabel said it is unclear who paid the taxes on the benefits described in the court documents.
Mr. Crystal said he believed that the dollar value of the benefits should not be tax deductible to General Electric because there is no business purpose to those expenditures.
"If Mr. Welch bears the taxes, they should be deductible unless there is a direct business value to a particular event," Mr. Crystal said. "But if you look at his New York apartment, why would that cost be a business expense to either party?"
Mr. Crystal said that he would like to see greater disclosure of executives' perquisites. What passes for business spending is often a lifestyle enhancement, he said.
I think he's in it for the smell, Pew
Thanx BD!
New BT web site
http://www.btopenworld.com/bbhome
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