Monthly Archive for August, 2010

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Everyone loves an early inflation

August 5, 2010, by Seth Hettena. 0 Comments

Everyone loves an early inflation. The effects at the beginning of an inflation are all good. There is steepened money expansion, rising government spending, increased government budget deficits, booming stock markets, and spectacular general prosperity, all in the midst of temporarily stable prices. Everyone benefits, and no one pays. That is the early part of the cycle. In the later inflation, on the other hand, the effects are all bad. The government may steadily increase the money inflation in order to stave off the later effects, but the later effects patiently wait. In the terminal inflation, there is faltering prosperity, tightness of money, falling stock markets, rising taxes, still larger government deficits, and still roaring money expansion, now accompanied by soaring prices and ineffectiveness of all traditional remedies. Everyone pays and no one benefits. That is the full cycle of every inflation.

— Dying of Money: Lessons of the Great German and American Inflations, Jens O. Parsson, 1974

Relational Investors wants seats on Occidental’s board

August 3, 2010, by Seth Hettena. 2 Comments

CalSTRS’ pay czar Ralph Whitworth wants to unseat the Occidental Petroleum board that made CEO Ray Irani one of the highest paid executives in the nation.

Irani made $857 million over the past decade, according to a Wall Street Journal analysis.

So Whitworth, who heads San Diego’s Relational Investors LLC, is teaming up with the California Teachers retirement system to knock some heads at OXY, according to the Journal.

The New York Times’ DealBook obtained CalSTRS and Relational’s letter, which you can read here.

Relational and Calstrs Letter to Occidental Petroleum

Whitworth tells DealBook that he senses “a palpable level of disgust among investor base here.”

Really? Where is “here?” Are we talking Ralph’s posh Rancho Santa Fe neighborhood?

Yes, Irani is overpaid. But Occidental shares returned 873 percent over the past decade.

What about Oracle? CalSTRS has 6.7 million shares in Oracle, whose CEO Larry Ellison, is the No. 1 most overpaid executive at a publicly-traded firm in the US, if not the world.

Ellison earned $1.85 billion in compensation over the past decade (more than double Irani’s pay), while Oracle’s shares returned far less. Why not kick up a fuss on the Oracle board?

Or what about Barry Diller who actually lost money for shareholders over the past decade (including CalSTRS) while taking home $1.1 billion in compensation.

And how about Whitworth, the man who paid Paul McCartney $1 million to sing at his now ex-wife’s Rancho Santa Fe birthday party? How much does he make? He won’t tell us, and since he works for a private company, he doesn’t have to.

Well, what about the money Whitworth paid to middlemen like Tullig Inc. to land CalPERS as his biggest investor?

And how much has this “activist” style of investing generated for CalSTRS?

Far, far less than Occidental Petroleum did.

Who is Doug Edelman?

August 2, 2010, by Seth Hettena. 2 Comments
Billy: The Early Years, a Mina Corp. production

"Billy: The Early Years," a Rev. Billy Graham biopic produced by an employee of a secretive UK firm under congressional inquiry.

Doug Edelman is the Californian at the center of a congressional investigation into a $1.4 billion contract to supply aviation fuel at the U.S. air base in Kyrgyzstan, a critical hub for the war in Afghanistan.

Congress wants to know whether the sole-source, classified contracts awarded to Mina Corp., Ltd., and Red Star Enterprises Ltd., were really a vehicle for the U.S. government to deliver payoffs to the family of two corrupt former Kyrgyzstan presidents.

Edelman’s name first surfaced in May in London’s Daily Telegraph newspaper, which tracked Mina and Red Star to an address in London’s posh Mayfair district.

“Inside, Mina Corp and Red Star’s logos are clearly displayed,” Richard Orange wrote. “Senior staff include Chuck Squires, a former US defence attache, and Doug Edelman.”

Jeff Stein at The Washington Post’s SpyTalk blog describes Edelman as “a Californian with extensive business experience in Moscow and Central Asia.” Deirdre Tynan of Eurasianet.org and Paris-based Intelligence Online have dug deep into Edelman’s corporate affiliations. Edelman controls a network of a companies organised around an offshore financial consultancy, Aspen Wind Corporation, according to Intelligence Online. Aspen Wind Corp. registered in 2002 with New York State, listing principal executive offices in Nicosia, Cyprus.

No one seems to have yet connected the 58-year-old native of Stockton, California to the most interesting part of his biography: his role as one of the executive producers of a feature film on the life of evangelist Billy Graham.

Billy: The Early Years features Arnie Hammer, great-grandson of Armand Hammer, who led Occidental Petroleum in Los Angeles and forged close ties with the Soviet Union.

Doug Edelman’s name appears in the credits and virtually nowhere else, although there were some side benefits. One of his daughters is credited with a small role; another daughter performs a song on the film’s soundtrack.

Though a host of endorsements were offered on the film’s web page (www.billytheearlyyears.com), Franklin Graham, president of the Billy Graham Evangelistic Association, released a statement saying that BGEA “has not collaborated with nor does it endorse the movie, Billy: The Early Years.” The film, released in 2008, bombed at the box office, grossing less than $350,000, according to boxofficemojo.

Billy: The Early Years was financed by Solex Productions, which describes itself in press materials as a “sister company” of Mina Media.

Mina Media, with an address of 15 Agiou Pavlov Street, Nicosia, Cyprus, is a subsidiary of UK-based Mina Corp. Ltd. (Click here for Mina Media’s corporate records)

It owns and operates MTV Adria in Slovenia, which broadcasts in Macedonia, Slovenia, Croatia, Serbia, Montenegro and Bosnia and Herzegovina.  Mina Media’s Stephen MacSearraigh was a director of Mina Corp. He also served as publisher of Iraq Today, a defunct English-language newspaper financed by Mina Corp that was published in Baghdad after the U.S. invasion. (Mina Corp/Mina Media did not respond to a request for comment.)

Edelman isn’t the only Mina employee with a movie connection. MacSearraigh is credited as a consultant to the geopolitical thriller Syriana.