Vivendi’s Deals Could Have Threatened Water Supplies
From several recent stories in The Times, we discover that Vivendi Universal, the huge media and water management conglomerate from France, has been hiding investment losses, among other things, in off-balance-sheet accounts. Shades of Enron, Andersen and Global Crossing, to name a few.
What makes this particularly troubling is that this old French water management company is one of the largest operators of municipal water systems in the U.S. And once again, a huge corporation beholden to shareholders more than consumers was contracted with the delivery of a public utility and caught red-handed in another version of corporate three-card Monte.
Though California’s biggest cities have not privatized their water districts with Vivendi, this latest development makes one wonder what could have happened if it had been otherwise.
We were scammed by the electricity providers last year. Could we have been held hostage by another greedy corporation, paying out hundreds of millions in executive bonuses, over water “shortages”?
David Ohman
Irvine
Bonuses Not Always
Linked to Performance
Re: “Directors Determine CEO’s Worth,” June 2:
The situation is even more egregious.
Take the example of Bruce Karatz of KB Home. Karatz has been CEO of the company since the time of its initial public offering in 1986.
From January 1992 through December 2001, an investor in an S&P; index fund would have seen a $10,000 investment grow to a value of $33,710.
A conservative investor in a 10-year money market account would have seen the value of $10,000 grow to $19,672. The same investment in KB Home would be worth $19,353, less than the insured money market instrument.
Yet despite this mediocre performance throughout the ‘90s, during which time Karatz was consistently ranked among the top in executive pay packages, the KB Home board of directors felt obliged to offer a retention package or “signing bonus.”
Signing bonus for what? Why offer a 30-year veteran employee a retention package when his performance has been mediocre at best?
I thought the board’s responsibility was to do all it could to protect the interests of the shareholders and enhance shareholder value.
Richard Seigel
Los Angeles
*
Your stories on executive pay were great wake-up calls.
But performance reviews of officers and directors for their benefits package are not really addressed. We need to look at the benefits beyond executive pay.
Officers and directors are walking away with their benefits and no accountability.
Corporate benefits should not be like a free winning lottery ticket.
Thomas E. Allen
La Quinta, Calif.
Restating Analyst’s
Global Crossing Ties
I would like to address a number of the issues raised in “Analyst’s Global Crossing Ties Accentuate Concerns,” June 1.
Most important, Jack Grubman did not have an “unusually cozy relationship” with our company and was not involved in decision making. Grubman was a leading Wall Street analyst at one of the firms that advised Global Crossing on various transactions.
He had no authority at Global Crossing, and in only one case, the US West tender offer, did he advise the entire management team on the selling of stock. In that tender offer, our founder and chairman, Gary Winnick, and other members of management sold only half the number of shares they were entitled to sell in the offer so that all shareholders could benefit.
Grubman did not have a hand in the hiring of Robert Annunziata as chief executive of Global Crossing. Jack Scanlon, a former Global Crossing CEO, who now is CEO of Asia Global Crossing, actually recommended Annunziata to the company.
Your assertion that Grubman had a strong relationship with Winnick is overstated and misleading. While Winnick did speak with Grubman a number of times, it was not on a daily basis, and contrary to your article, Winnick has had a longer and closer working relationship with John Otto, a well-known and respected investment banker at Salomon Smith Barney.
We hope that this will set the record straight and correct any further misperceptions created by your article.
Lod Cook
Co-chairman
Global Crossing Ltd.
Los Angeles
*
Customers Need Choices
to Fix Energy Crisis
There will be no long-term resolution to the energy crisis until there is an excess supply of electricity from allowing energy traders to buy surplus power at low wholesale prices and resell it at higher retail prices and power generators are forced to compete with one another [“Scandal May Open New Doors in Energy,” James Flanigan, June 2].
Only when customers can choose from alternative suppliers--not alternative political regimes--and they are able to “game” the system by manipulating prices by conservation will we see a resolution of this ongoing problem.
Wayne Lusvardi
Pasadena
Pilots Shouldn’t Have
to Go Through Security
Cathy Carlson [“Pilots Not Above Security Screenings,” Letters, June 2] thinks that pilots should undergo the same screening as other passengers.
But the purpose of screening passengers is so they cannot use a weapon to take over an airliner and gain access to the cockpit. Or, once there, cannot force the pilot to do their bidding. The pilot is already in the cockpit and is already in control of the airplane.
Steve Shelton
Santa Ana
*
I am not a pilot, just a regular passenger who thinks having pilots remove shoes and not carry nail clippers is both silly and superficial.
If you want absolute guarantees of safety in flight, Ms. Carlson, take a bus instead.
Bob Fately
Van Nuys
State Taxpayers Can
Check on Refunds Too
“Taxpayers Can Check Refund Status Online” [May 29] notes that the Internal Revenue Service has “launched a Web-based service that allows consumers to check the status of their tax refund over the Internet.”
I am pleased to note that the California Franchise Tax Board also has this service for state income tax refunds. Since October 1999, taxpayers have been able to check the status of their California personal income tax returns online at www.ftb.ca.gov.
From the front page of the site, go to the center column, titled “Online Services,” and choose the second option, “Check Your Refund Status.”
John Chiang
Chairman,
Board of Equalization
Member, Franchise Tax Board
Los Angeles
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