Monthly Archive for January, 2010

San Diego Is A Union Town

January 30, 2010, by Seth Hettena. 0 Comments

Woe to the San Diego public official who dares cross the police unions.

Police unions are in the midst of contract negotiations with San Diego and surrounding communities.

The police union in La Mesa, a suburb east of San Diego, flexed its muscles when Mayor Art Madrid dared to point out that there isn’t a heck of a lot of crime (0 murders in 2009)  in the city of 57,000.

“Our employees aren’t getting shot at,” Madrid said during a City Council meeting.

Jeff Raybould, the city’s police union president, called that comment “slap in the face to every police officer in this fine city,” in a letter to Madrid that was obtained by The San Diego Union-Tribune

Came then the hammer:

“Contrary to what you might believe, we don’t spend all of our time scooping up inebriated public officials,” Raybould wrote.

That’s a nasty shot at Madrid, whom police found lying on the sidewalk in 2008.

And for the San Diego Police Officers Association a drop in crime is apparently bad news. The SD police union urged “restraint” this week over FBI crime statistics that show overall crime plunged by 18 percent. 

San Diego Mayor Jerry Sanders, a former police chief, has proposed $12 million in cuts — but no layoffs of sworn officers — for the SDPD, which is in the midst of contract negotiations with the city.

Issa Wants Those Fed Memos

January 29, 2010, by Seth Hettena. 0 Comments

Congressman Darryl Issa has been on the warpath lately over the Fed’s September 2008 bailout of AIG.

In a letter to Congressman Edolphus Towns, chairman of the Committee on Oversight and Government Reform, Issa requests a subpoena based on information from an anonymous whistleblower:

According to the whistleblower, the documents reveal troubling details of Fed Chairman Ben Bernanke’s personal involvement in the decision to bail out AIG. These documents date to September 15, 2008 and are identified by the following electronic labels: sb-aig-01000092 to sb-aig-010000125 and “Draft Memo on AIG.pdf.”

Issa’s staff tried to get the documents, but the Fed never returned their calls.

The documents have not been released, although Bernanke responded in writing to some questions from Issa.

As Ken Silverstein of Harper’s notes, how bad must things be when Issa holds the moral high ground?

The Embarrassing Case of Jesus Navarro (Updated)

January 29, 2010, by Seth Hettena. 0 Comments

(Note: I updated this post after a reader pointed out that the Border Patrol didn’t let Navarro go in 2007. What actually happened is even worse)

Now that a Mexican smuggler suspected in the murder of a U.S. Border Patrol agent is on his way to San Diego, maybe we can finally get some answers as to how and why the case went so horribly wrong.

The U.S. government’s bungling allowed the suspect, Jesus Albino Navarro-Montes, to get out of a Mexican jail. That part is well known, but what hasn’t gotten much attention is that U.S. officials let Navarro slip away not once, but twice.

Not long before the death of Border Patrol Agent Luis Aguilar, Navarro was caught by the Border Patrol with a half-ton of pot.

But he got away.

How?

According to a federal complaint, Navarro and his female passenger stole a Border Patrol vehicle and drove it back to Mexico.

This would laughable if the results weren’t so tragic.

A few months later, Navarro was allegedly behind the wheel of a Hummer H2 on Jan. 19, 2008 that illegally crossed the border near Yuma, Arizon.

Agent Aguilar, 32, was run over while trying to throw down a spike strip. The Hummer got away, but Navarro was arrested on January 28, 2008.

On June 18, 2008, he was released from jail by a Mexican judge.

Why?

The U.S. government never sought Navarro’s extradition. It never presented an arrest warrant. Without any evidence of a crime, Navarro had to be released.

“Although we had asked the U.S. government a couple of times before his release to help us deal with the matter so we could hold Mr. Navarro, we got nothing whatsoever,” embassy spokesman Ricardo Alday told a reporter for The Washington Times. “The U.S. response never came.”

Congress Brian Bilbray, a San Diego-area Republican, asked Attorney General Michael B. Mukasey and the White House for an explanation.

He got the brush off.

Disclosure would “inevitably compromise highly sensitive law enforcement investigative information,” Deputy Assistant Attorney General Keith B. Nelson wrote in a letter to Bilbray.

Navarro was re-captured near Zihuatanejo on Feb. 11, 2009 by Mexico’s Agencia Federal de Investigacion in an operation coordinated with the FBI and U.S. Marshal’s Service.

After Navarro’s re-arrest, authorities in San Diego unsealed a criminal complaint that showed that Border Patrol agents had captured Navarro on Sept. 23, 2007 following a chase east of San Diego.

(Click here to read the complaint and accompanying statement of facts.)

Border Patrol agents used a spike strip to successfully slow him down. Navarro ditched his pickup in the desert and fled on foot with an unidentified female passenger.

Border Patrol agents caught the pair and put them in their vehicle.

According to the statement of facts, “The female passenger was able to take control of the Border Patrol vehicle, and both the female passenger and NAVARRO-Montes absconded to Mexico in the Border Patrol.”

The agents were stuck in the desert with a Toyota pickup with three blown out tires and 979.7 pounds of marijuana inside.

CIA has authority to kill US citizens

January 27, 2010, by Seth Hettena. 0 Comments

Earlier this week I asked whether President Obama could order a lethal attack on former San Diego imam Anwar Awlaki.

The Washington Post’s Dana Priest has anwered that question today with a resounding yes:

After the Sept. 11 attacks, Bush gave the CIA, and later the military, authority to kill U.S. citizens abroad if strong evidence existed that an American was involved in organizing or carrying out terrorist actions against the United States or U.S. interests, military and intelligence officials said.

The evidence has to meet a certain, defined threshold. The person, for instance, has to pose “a continuing and imminent threat to U.S. persons and interests,” said one former intelligence official.

The Obama administration has adopted the same stance. If a U.S. citizen joins al-Qaeda, “it doesn’t really change anything from the standpoint of whether we can target them,” a senior administration official said. “They are then part of the enemy.”

Both the CIA and the JSOC maintain lists of individuals, called “High Value Targets” and “High Value Individuals,” whom they seek to kill or capture. The JSOC list includes three Americans, including Awlaki, whose name was added late last year. As of several months ago, the CIA list included three U.S. citizens, and an intelligence official said that Aulaqi’s name has now been added.

Awlaki corresponded with alleged Fort Hood shooter Maj. Nidal Hasan before the attack that killed 12 soldiers, and investigators believe he also met with accused “underwear bomber” Umar Farouk Abdulmutallab.

Ever since Awlaki’s December 2007 release from prison, U.S. counterterrorism officials have been warning us that he’s been involved in terrorism:

  • February 2008: “There is good reason to believe Anwar Awlaki has been involved in very serious terrorist activities since leaving the United States, including plotting attacks against America and our allies,” an anonymous U.S. counterterrorism official tells The Washington Post.
  • January 3, 2009: “Mr. Awlaki is a problem. He’s clearly a part of Al Qaida in Arabian Peninsula. He’s not just a cleric. He is in fact trying to instigate terrorism,” said John Brennan, deputy national security advisor for counterterrorism and homeland security.
  • January 20, 2009: The Senate Foreign Relations Committee reports “Although Awlaki has not yet been accused of a crime, U.S. intelligence and military officials consider him to be a direct threat to U.S. interests.”

(See my Awlaki timeline for more)

A reason that Awlaki hasn’t been blasted to smithereens already is due to the fact that he is a U.S. citizen, born in New Mexico while his father, a former Yemeni government minister, was there on a diplomatic posting.

Slate’s Glenn Greenwald notes that being accused of being a terrorist is not the same thing as actually being a terrorist.

Report: US Mulls Killing Former SD Imam

January 25, 2010, by Seth Hettena. 0 Comments

Can the president target an American citizen in a lethal attack?

White House lawyers are struggling with that question in the case of Anwar Awlaki, a former San Diego imam and SDSU graduate student, according to an ABC News report. 

The Senate Foreign Relations Committee noted last week that U.S. intelligence and military officials consider Anwar Awlaki, a former San Diego imam and U.S. citizen, to be “a direct threat to U.S. interests” although he has not yet been accused of a crime.

Awlaki corresponded with alleged Fort Hood shooter Maj. Nidal Hasan before the attack that killed 12 soldiers, and investigators believe he also met with accused “underwear bomber” Umar Farouk Abdulmutallab.

  • For more see my Awlaki timeline.

ABC’s Matthew Cole, Richard Esposito and Brian Ross are reporting:

According to the people who were briefed on the issue, American officials fear the possibility of criminal prosecution without approval in advance from the White House for a targeted strike against Awlaki.

The former imam at the Masjid al-Rabat al-Islami in San Diego was said to be in the Predator’s sights after the Fort Hood attack, but the strike wasn’t authorized because of questions over the citizenship of the New Mexico-born Awlaki.

President Reagan signed an an executive order in 1981 that forbid anyone employed by or acting on behalf of the U.S. government from engaging in or conspiring to engaging in assassination. That order remains in effect today.

However, we can kill those who are trying to kill us. After the Sept. 11 attacks, Congress gave the president the authority to use “all necessary and appropriate force” to prevent future acts of terrorism against the United States. The specifics are said to be set out in a secret presidential “finding” signed by President Bush after the attacks.

In 2002, a CIA drone attack in Yemen killed a carload of suspected terrorists, including the target of the operation, the top al-Qaida leader in the country. U.S. officials weren’t troubled that the strike killed Yemeni-American Kamal Derwish, a U.S. citizen. “No constitutional questions are raised here,” said National Security Adviser Condoleezza Rice.

Putting the bullseye on Awlaki and pulling the trigger would break new legal ground and raise fresh questions about the limits of presidential power.

At the very least, the U.S. government should make plainly clear what Awlaki has done to earn the wrath of a Hellfire missile. Meeting, corresponding and, odious as it may be, enouraging jihadists, doesn’t cut it.

Long slog for US Marines in Afghanistan

January 22, 2010, by Seth Hettena. 0 Comments

Afghan General Mahaiuddin Ghori visited Camp Pendleton and held a press conference today thanking Marines and their families.

Ghori commands the British-trained Afghan National Army’s 3rd Kandak, 205 Hero Corps (3/205) brigade in Afghanistan’s Helmand province — the world’s largest poppy growing region.

By April, Camp Pendleton units are expected to lead about 20,000 Marines serving in Helmand, and Ghori and his men are here to help the U.S. troops train them. Here they are at the Marine’s “combat town”

Ghori has been fighting for years. He was a former officer in the 1980s pro-Soviet Afghan army fighting the mujehadin. His 3/205 brigade fires Soviet D-30s, 122mm howitzers. Ghori himself trained at Moscow’s Frunze Academy.

Asked about President Barack Obama’s timeline for withdrawing American forces from Afghanistan starting around July 2011, Ghori said his army needs a longer partnership: “I’m hoping for more time in order to properly train our forces.”

How much time?

Last month, Ghori said he expected it would take 5-6 years for Afghan troops to take over the country’s security, and they would need to depend on foreigners for many years after. He said “a long time, 10-15 years are needed for mentoring in new equipment, new airplanes, education, pilots engineers and commanders..”

More on San Diego’s Relational Investors

January 15, 2010, by Seth Hettena. 0 Comments

A friend who works for a placement firm called me up to point out that I managed to malign the entire placement agent industry in my last post.

There are placement agents who register and disclose everything to regulators — only to see their reputations undermined by folks who don’t play by the same rules.

A company in Yorktown Heights, N.Y. called Tullig Inc. was paid nearly $17 million for helping San Diego’s Relational Investors LLC line up a big investment from CalPERS, the giant California pension fund.

What magic strings did Tullig pull on from Yorktown Heights? What’s the connection between Relational and Tullig?  And why is it so hard to get answers to these questions?

Neither Tullig nor its head, Donal J. Murphy is registered with the SEC or the industry’s own regulatory body, FINRA.

Neither is another of Murphy’s companies, DJ Murphy Associates Inc., described as a company that sells investment services to public pension funds in this 1998 story in The New York Times.

Murphy, a native of Queens, New York, spent two decades at Bankers Trust before branching out on his own in 1992. Relational hired him the following year, according to the Wall Street Journal.

In 2003, DJ Murphy Associates was fined $400 by the California Fair Political Practices Commission for failing to register as a major donor. (.pdf)

Mount Kisco, NY-based DJ Murphy wrote a check for $10,000 to Democrat Steve Westly’s campaign for California controller on Aug. 14, 2002.

The same day, Aug. 14, 2002, something called the E-Celerator Fund LLC wrote Westly a $12,500 check. E-Celerator is a little-known private fund that’s run by Whitworth and his partner, David Batchelder.

E-Celerator gave another $15,000 to Westly’s campaign on Dec. 6, 2002, more than a month after his close election victory.

Perhaps these contributions had something to do with the seat California’s controller automatically holds on CalPERS’ board.

On the CalPERS board, Westly took up the cause excessive executive compensation, which happened to be Whitworth’s signature issue as well, and the pension fund nominated Whitworth for a spot on the New York Stock Exchange.

Not bad for a guy from Winnemucca, Nevada who started out as an aide to hometown Sen. Paul Laxalt. Laxalt is now a $20,000-a-month lobbyist who worked for Whitworth on issues such as “Legislation/policies relating to the tax treatment of carried interest received by investment fund managers.”

This is in the same vein as the top CalPERS middleman ARVCO Financial Venture’s Al Villalobos, a former member of the pension fund’s board who grossed nearly $60 million in fees. Villalobos chose to incorporate in tax-free Nevada.

Middlemen, however, are stuck in the middle. The real money is with investment managers like Whitworth, who made $16 million in a single year, according to court documents filed by his ex-wife.

Whitworth owes his wealth in part to the corporate public disclosures that Relational’s team scours to find undervalued companies like Mattel and J.C. Penney. Relational then buys up a stake in the company and tries to turn things around.

Fair enough, but Whitworth is throwing his weight around the corporate boardroom courtesy of giant pension funds like CalPERS, which has put $1.5 billion in Relational to date.

If only Whitworth were as transparent as he expects corporate executives to be.

San Diego’s Relational Investors and CalPERS

January 14, 2010, by Seth Hettena. 2 Comments

CalPERS, the giant California state pension fund, is taking a close look at its investment with Ralph Whitworth, who heads Relational Investors, a shareholder activist firm based in San Diego.

A law firm hired by CalPERS is examining the nearly $17 million Relational paid an obscure middleman who helped secure business from the pension fund, The Wall Street Journal reports today.

Relational Investors is headed by Ralph V. Whitworth and David Batchelder, who met while working in the 1980s for Texas oilman and corporate raider T. Boone Pickens.

Relational buys up stakes in underperforming companies like Mattel and J.C. Penney for a turnaround directed by Whitworth.

CalPERS is Relational’s biggest investor. The pension fund has about $1.5 billion in Relational.

Huge fees are standard for middlemen who successfully line up investments from CalPERS, but Relational’s payment to Tullig Inc. stands out. No one earned more from a single client.

Tullig Inc. is an obscure New York firm headed by an obscure man named Donal Murphy. What he did to earn his rich paycheck is as clear as mud.

Essentially, these middlemen are lobbyists and operators. It’s a shady business — money buying more money — that is finally getting some attention following a massive kickback and bribery scheme at New York State’s public pension fund.

Whitworth is perhaps best known for paying Paul McCartney $1 million in 2003 to perform at his wife’s private birthday party at a restaurant Rancho Santa Fe. The couple filed for divorce less than a year later.

The Arrest of El Teo

January 14, 2010, by Seth Hettena. 0 Comments

In The Politics of Heroin, Alfred McCoy notes that we capture a drug lord only when he is no longer a drug lord.

So it is with news of the arrest of El Teo, a vicious Tijuana drug baron who is accused of having the bodies of his enemies beheaded or dissolved in caustic soda.

McCoy reminds us that a man like El Teo, or rather, the man authorities accuse him of being, can only be arrested when the drug traffic shifts, stripping him of the power, profits and protection he needs to stay in business. In other words, the arrest of El Teo was only possible because he was already irrelevant.

While the bloodbath in Tijuana attracts the attention, the Sinaloa carter and its leader, Joaquin El Chapo (“Shorty”) Guzman, quietly prospers, as The Economist noted this week:

Sinaloa, by contrast, has stuck to drugs and money laundering and is smarter and more sophisticated. It prefers anonymity to the ostentation of others (Mr Beltrán was undone by inviting a famous accordionist to play at a Christmas party). It eschews jobless teenagers, its rivals’ rank and file, in favour of graduates, infiltration and intelligence. Although all the gangs have penetrated local governments, only Sinaloa and the Beltráns have been discovered to have bribed senior officials. Officials complain that Sinaloa operatives receive warning of pending raids. Sceptics wonder whether success against other gangs comes from tip-offs from Sinaloa.

Forbes reckons that Guzman, who bribed his way out of prison in 2001, is now the 701st richest man in the world.

Forbes on Tom Gores and the U-T

January 11, 2010, by Seth Hettena. 0 Comments

From the Forbes 400 issue I picked up last week:

Gores has his hands full with the San Diego Union-Tribune, which he bought in May for an estimated $30 million, based on current industry multiples. Three days after the deal closed, Platinum laid off 192 people; 112 additional cuts came in August. Gores saw no other way: The newspaper (average daily circulation: 300,000) had less than $10 million in EBITDA [earnings before taxes, depreciation, amortization] on revenue of less than $255 million, down from $100 million on revenue of roughly $360 million in 2005. “The outlook was for an unprofitable 2009,” says a Platinum spokesman.

What makes Gores think he can revive a near-dead enterprise? He likes the market. San Diego is still relatively affluent and culturally conservative; few denizens read the Los Angeles Times. He also prizes the assets — a 500,000 square-foot headquarters and warehouse in Mission Valley, plus 50,000 square feet of offices in La Jolla, San Marcos and Carlsbad.

But, oh, the challenges. The U-T was perhaps the last paper in the U.S. that relied on cut-and-paste layouts; Platinum has spent several million dollars on new publication software. To replace the loss of national advertisers, especially retailers and real estate firms, and classifieds, the paper is refocusing on small businesses. Gores has also updated the Web site with more social media, blogs and podcasts. He has reinstated 401(k) matching and reversed pay cuts by the previous owners, the Copley family. He expects a slight operating profit this year.

Gores plans to buy more distressed media companies. Lately his name has surfaced among potential buyers of the Boston Globe and BusinessWeek. Platinum’s response: “Don’t believe everything you read in the papers.”

For those keeping score at home, Gores is No. 147 with a $2.2 billion fortune.