Kazakhstan Looks to Private Equity for Help With Its $93 Billion Cash Pile
KKR & Co. founder Henry Kravis, Blackstone Group LP Chairman Stephen Schwarzman and Carlyle Group co-founder David Rubenstein were among the guests when Kazakhstan President Nursultan Nazarbayev hosted a dinner in New York. Apart from the dining at the Four Seasons Hotel, there was access to a possible $93 billion on the table as Nazarbayev, who presides over Central Asia’s biggest energy exporter, seeks to boost returns on the country’s wealth funds. The $64 billion National Fund has struggled to achieve an average of 2 percent annually for the past five years. After President Nazarbayev, who spoke about investment opportunities in Kazakhstan and institutional reforms the nation embarked on this year, speakers from the U.S. including former Federal Reserve Chairman Ben Bernanke took the floor to talk about global geopolitical and economic challenges. As the price of oil flirts with an 11-year low and returns from commodities slump to levels last seen in 1999, new inflows into the $7.1 trillion of assets controlled by the world’s sovereign wealth funds from Kazakhstan to South Korea are in jeopardy. Norway’s $840 billion fund posted its biggest loss in four years in the second quarter as global markets were roiled by a selloff in Chinese stocks and the prospect of higher U.S. interest rates. “We are sitting on a huge pile of cash and not making real returns,” said Berik Otemurat, who organized the September dinner and who helps manage $800 million of the Kazakh Central Bank’s reserves as chief executive officer of National Investment Corp. “It’s especially urgent to address this, given the gloomy outlook for oil prices and reduced inflows into the National Fund.” More:
In Sweden, a Cash-Free Future Nears
STOCKHOLM — Parishioners text tithes to their churches. Homeless street vendors carry mobile credit-card readers. Even the Abba Museum, despite being a shrine to the 1970s pop group that wrote “Money, Money, Money,” considers cash so last-century that it does not accept bills and coins. Few places are tilting toward a cashless future as quickly as Sweden, which has become hooked on the convenience of paying by app and plastic. This tech-forward country, home to the music streaming service Spotify and the maker of the Candy Crush mobile games, has been lured by the innovations that make digital payments easier. It is also a practical matter, as many of the country’s banks no longer accept or dispense cash. At the Abba Museum, “we don’t want to be behind the times by taking cash while cash is dying out,” said Bjorn Ulvaeus, a former Abba member who has leveraged the band’s legacy into a sprawling business empire, including the museum. Not everyone is cheering. Sweden’s embrace of electronic payments has alarmed consumer organizations and critics who warn of a rising threat to privacy and increased vulnerability to sophisticated Internet crimes. Last year, the number of electronic fraud cases surged to 140,000, more than double the amount a decade ago, according to Sweden’s Ministry of Justice.
Exclusive – Islamic State ruling aims to settle who can have sex with female slaves
Islamic State theologians have issued an extremely detailed ruling on when “owners” of women enslaved by the extremist group can have sex with them, in an apparent bid to curb what they called violations in the treatment of captured females. The ruling or fatwa has the force of law and appears to go beyond the Islamic State’s previous known utterances on the subject, a leading Islamic State scholar said. It sheds new light on how the group is trying to reinterpret centuries-old teachings to justify the sexual slavery of women in the swaths of Syria and Iraq it controls. To read the fatwa click here: here The fatwa was among a huge trove of documents captured by U.S. Special Operations Forces during a raid targeting a top Islamic State official in Syria in May. Reuters has reviewed some of the documents, which have not been previously published. Among the religious rulings are bans on a father and son having sex with the same female slave; and the owner of a mother and daughter having sex with both. Joint owners of a female captive are similarly enjoined from intercourse because she is viewed as “part of a joint ownership.” The United Nations and human rights groups have accused the Islamic State of the systematic abduction and rape of thousands of women and girls as young as 12, especially members of the Yazidi minority in northern Iraq. Many have been given to fighters as a reward or sold as sex slaves. Far from trying to conceal the practice, Islamic State has boasted about it and established a department of “war spoils” to manage slavery. Reuters reported on the existence of the department on Monday. In an April report, Human Rights Watch interviewed 20 female escapees who recounted how Islamic State fighters separated young women and girls from men and boys and older women. They were moved “in an organized and methodical fashion to various places in Iraq and Syria.” They were then sold or given as gifts and repeatedly raped or subjected to sexual violence. More:
At Capital One, Easy Credit and Abundant Lawsuits
Several years ago, Capital One gave Oscar Parsons, 46, his first credit card. At the time, he didn’t need a loan. But he banked at a Capital One branch near his Bronx apartment, and when it was offered, he thought, “Why not?” Initially, he had little problem keeping up with the payments. But after a run of construction jobs came to an end, he fell behind and found himself ducking the bank’s collections calls, he said. Each time the company’s TV commercials popped up, asking, “What’s in your wallet?” Parsons thought: “It’s not enough to pay you back.” This year, Capital One provided Parsons with another first: his first lawsuit. For failing to pay his $1,800 debt, the company took him to court. Currently on public benefits and in a job training program, Parsons has nothing Capital One can take. But should Parsons find work, Capital One could use a court judgment to seize money from his bank account or take a portion of his wages. It was a hard lesson — one learned by hundreds of thousands of the bank’s cardholders. No lender sues more of its customers than Capital One, according to ProPublica’s review of state court data. Over the past year, ProPublica has sought to illuminate the scope of debt collection lawsuits, which, though they are often filed by public companies in public courts, are a largely hidden part of the nation’s financial life. The suits hit workers who earn below $40,000 a year the hardest and federal garnishment laws provide scant protection. Even workers near the minimum wage could have a quarter of their take-home pay taken or their bank accounts cleaned out. State laws typically offer little more protection. To identify which companies file the most collection suits, ProPublica obtained and analyzed court data from 11 states. In every state, Capital One stood out. During the years of the recession, particularly 2008 through 2010, when the number of credit card defaults surged, many banks filed more lawsuits. But Capital One dwarfed them all, reaching levels never matched by any company before or since, according to ProPublica’s review of data going back to 1996. By our estimate, the suits exceeded half a million per year nationally during those peak years. More:
2 Bankers Charged With Creating A.T.M. Cards to Steal From Accounts
The 15 JPMorgan Chase bank accounts had a few things in common: They had high balances, there was little activity on them and they belonged to elderly clients — indeed, at least eight were dead. And all 15 of the accounts got regular cash infusions, thanks to direct deposits from the Social Security Administration. That caught the eye of two private bankers who worked at a Bedford-Stuyvesant branch of JPMorgan Chase, Jonathan Francis and Dion Allison, according to an indictment filed this month in State Supreme Court in Brooklyn. Creating cards for automated teller machines and forged documents, the men and their accomplices withdrew about $400,000 from the accounts over two years, according to the indictment. The New York attorney general, Eric T. Schneiderman, warned in June that bank tellers and other employees have easy access to customer data, and had committed fraud using the data on multiple occasions. In this case, prosecutors for the Brooklyn district attorney’s office charged in an indictment, the bankers could not only gain access to but also issue A.T.M. cards for the 15 accounts, without the account holder’s consent. More:
Banks Finally Ready to Put Their Data to Use
Banks hold a tremendous amount of data about their customers, but 2016 could be a breakthrough year for putting it to work. The popularity of data analytics has been building for a few years now, but should regulatory costs begin to level off, observers predict that banks will invest heavily in software or services that help them use the data to make smarter business decisions. “There’s a greater appetite from banks to invest in analytics tools,” said Ed O’Brien, director of the banking channels practice at Mercator Advisory Group, who wrote in a recent research note that tech will be one of the biggest investment areas for banks in 2016 and beyond. “For the first time in a while, there’s a discretionary budget,” he said. “There’s not as much money going towards regulatory compliance as the last few years; some of that has freed up.” In some instances bankers are responding to their customers’ requests. For example, clients of State Street and other custody banks are said to be overwhelmed with the amount of data they can access and are turning to their banks for help. “Clients have a real need to turn data into information,” said Lou Maiuri, who heads State Street’s Global Exchange, a unit the bank created in 2010 dedicated to data and analytics. It has 700 employees. Maiuri said he is “pretty bullish” about the increased demand for data analytics tools in 2016. Risk management is one of the hottest areas for Maiuri’s group. Earlier this year, it formed a consortium with UC Berkeley and Stanford University on a new research center focused on applying advanced data-science techniques to manage and mitigate economic and financial risk. For more traditional lenders, data analytics are being adopted to improve the user experience. The tools help banks offer customers more personalized and customized services and products, O’Brien said. “There’s always been an interest from line-of-business heads [in analytics tools], but now we’re starting to see even more excitement,” added O’Brien. “Banks understand that in order to deliver an outstanding customer experience, they need to know more about their customers.” More:
T.S.A. Moves Closer to Rejecting Some State Driver’s Licenses for Travel
As soon as next year, a driver’s license may no longer be enough for airline passengers to clear security in some states, if the Department of Homeland Security has its way. Federal officials said they would soon determine whether Transportation Security Administration agents would start enforcing a 10-year-old law that requires states to comply with a set of federal standards when issuing driver’s licenses. The issue is quickly coming to a head, and the debate over identification and privacy has only intensified following the recent terrorist attacks in Paris and California. But some states have bitterly opposed these requirements out of privacy concerns, and more than a dozen have passed laws barring their motor vehicle departments from complying with the law, according to the National Conference of State Legislatures. The new standards require more stringent proof of identity and will eventually allow users’ information to be shared more easily in a national database. Privacy experts, civil liberty organizations and libertarian groups fear the law would create something like a national identification card. Federal and state officials have been arguing for years about the merits of the law, called the Real ID Act, which was enacted by Congress in 2005 following the recommendations of the 9/11 Commission. Its proponents argue that it is a necessary tool to reduce identity theft and fraud, and enhance the nation’s security. The federal government cannot force states to adopt these identification standards, but it can gain compliance in other ways. In October, it began requiring that visitors to military bases, nuclear plants and federal facilities produce a driver’s license from a state that complies with the law, or show another form of government identification, like a passport. But the biggest leverage the government has over the states is commercial air travel. The Department of Homeland Security said it would provide a schedule by the end of this year for when airport screeners would start accepting only driver’s licenses that complied with federal standards. It said that any announcement would come with a notice of 120 days before starting to enforce the law at airports. Passengers who do not have a compliant type of identification will have to produce another type of government-approved identification. More:
Pornographic email scandal roils Pennsylvania politics
PHILADELPHIA — Over the past 15 months, beleaguered Pennsylvania Attorney General Kathleen Kane has released a steady stream of messages retrieved from a state email server that show state officials and employees trading pornographic, racist and misogynistic messages. There are jokes about rape and sexual assault, photos mocking African Americans and other minorities, and insults leveled at people because of their weight, their sexual orientation or their religion. At least two state Supreme Court justices and numerous officials in the office of the attorney general have been caught in the scandal that has been dubbed “Porngate.” A small sampling: A photo of a pantsless woman on her knees performing oral sex on a man is captioned “Making your boss happy is your only job.” A picture of a white man fending off two African American men while carrying a bucket of fried chicken reads “BRAVERY At Its Finest.” The sender of the email that shows a group of men engaged in sex included this message to friends, “How friggin gay are you?” “When you see these emails . . . it’s just a swamp of misogyny, racism, homophobia and white privilege. It taints everybody, especially in the judicial branch,” said Bruce Ledewitz, associate dean of academic affairs and a law professor at Duquesne University School of Law. “Some of these things are really disgusting. You get the impression that every white male office holder in the state is a creep.” It’s a massive scandal, with a new twist each week, but it has produced little uproar among state residents. Still, those who do pay attention say this epic mess is a disaster for the state’s justice system. More:
‘All of This Because Somebody Got Hurt at Work’
LAS VEGAS — A scantily clad acrobat dangles from the ceiling, performing flips and splits as machines puff smoke and neon lights bathe the dance floor in turquoise and magenta. Dancers in lingerie gyrate on poles to the booming techno. Actors dressed as aliens pose for selfies with partygoers. There’s an open bar and waiters weave through the crowd passing out chocolate truffles. It’s the closing night of the National Workers’ Compensation and Disability Conference & Expo. The party at Light, a Cirque du Soleil-themed club at the Mandalay Bay Resort and Casino, capped off the workers’ comp industry’s biggest annual networking event. For three days in November, hundreds of vendors wooed insurers and employers with lavish after-hours parties, giveaways of designer handbags, photos with Olympic gymnast Kerri Strug, and free rides in orange Hummer limousines. A top manager for a major insurance company recalled standing amid the hoopla a few years back when a company CEO turned to her and marveled: “All of this because somebody got hurt at work.” Workers’ comp is supposed to be simple. If you’re injured on the job, your employer pays your medical bills and part of your wages while you recover. But over the past two decades, a cottage industry of middlemen has emerged, which some have dubbed the “workers’ comp industrial complex.” Even private equity firms have bought in, seeing profit opportunities in employers’ and insurers’ quest to contain spending. The middlemen offer an array of services, from managing claims to negotiating medical bills, all promising to reduce costs — although critics say some actually raise them, as well as the burden on those hurt on the job. It’s a world largely unknown to the injured workers that the firms ultimately serve, and often to the employers who spent an estimated $89 billion on workers’ comp in 2013. Over the past year, ProPublica and NPR have detailed how state after state has reduced the benefits historically granted to injured workers. As a result, some workers have been evicted from their homes, denied medical care and put in humiliating situations. While lawmakers have clamped down on payments to workers, doctors and lawyers, little scrutiny has been given to these “cost containment” firms — even though today they arguably have more influence on how injury benefits are handled than insurers and employers. Highlighting the bounty, there are now more than 150 workers’ comp conferences a year. There’s one for the American Society of Workers Comp Professionals, one for the Association of Workers’ Compensation Professionals and one for the Association of Workers’ Compensation Claims Professionals. At least 26 have golf tournaments. At the national workers’ comp and disability expo, vendors gave away Apple watches, bottles of bourbon, and a Vespa scooter. There were free massages and shoeshines, a superhero caricature artist, more than one mentalist, and a live alligator named Spike.
Hedge Funds Struggle With Steep Losses and High Expectations
When David Einhorn, the founder of Greenlight Capital, plays host to his investors at the American Museum of Natural History in January, his guests will sip cocktails and dine under a 94-foot blue whale in the Milstein Hall. William A. Ackman will hold court one week later, at the New York Public Library at Bryant Park, where investors in his Pershing Square Capital Management will mingle in the historic halls of marble, wood and gold. The lavish settings will be the same as in years past, but the circumstances will be strikingly different: Both billionaire hedge fund managers, and many of their peers, will be under pressure to explain to their investors how they lost so much money this year. As the final performance figures for the industry come in, one thing is clear: 2015 could not have ended soon enough for many managers and their investors. Hedge fund managers like Mr. Einhorn, Mr. Ackman and Larry Robbins have stunned investors with the depth of their losses — in the double digits for some of their investment portfolios through early December. More:
Special Report: Pentagon thwarts Obama’s effort to close Guantanamo
In September, U.S. State Department officials invited a foreign delegation to the Guantanamo Bay detention center to persuade the group to take detainee Tariq Ba Odah to their country. If they succeeded, the transfer would mark a small step toward realizing President Barack Obama’s goal of closing the prison before he leaves office. The foreign officials told the administration they would first need to review Ba Odah’s medical records, according to U.S. officials with knowledge of the episode. The Yemeni has been on a hunger strike for seven years, dropping to 74 pounds from 148, and the foreign officials wanted to make sure they could care for him. For the next six weeks, Pentagon officials declined to release the records, citing patient privacy concerns, according to the U.S. officials. The delegation, from a country administration officials declined to identify, canceled its visit. After the administration promised to deliver the records, the delegation traveled to Guantanamo and appeared set to take the prisoner off U.S. hands, the officials said. The Pentagon again withheld Ba Odah’s full medical file. Today, nearly 14 years since he was placed in the prison and five years since he was cleared for release by U.S. military, intelligence and diplomatic officials, Ba Odah remains in Guantanamo. In interviews with multiple current and former administration officials involved in the effort to close Guantanamo, Reuters found that the struggle over Ba Odah’s medical records was part of a pattern. Since Obama took office in 2009, these people said, Pentagon officials have been throwing up bureaucratic obstacles to thwart the president’s plan to close Guantanamo. Negotiating prisoner releases with the Pentagon was like “punching a pillow,” said James Dobbins, the State Department special representative to Afghanistan and Pakistan from 2013 to 2014. Defense Department officials “would come to a meeting, they would not make a counter-argument,” he said. “And then nothing would happen.” More:
The Wild Ideas You Missed While Donald Trump Was Talking
After five Republican debates, most Americans know about Donald Trump’s provocative beliefs, like his desires to end birthright citizenship, stop Muslim immigration and kill families of suspected terrorists. Much less attention has been paid to Carly Fiorina’s conclusion that the minimum wage is unconstitutional, Mike Huckabee’s pledge to defy Supreme Court rulings he deems incompatible with God’s law, Rick Santorum’s claim that Islam is not protected by the First Amendment or Chris Christie’s threat to shoot down Russian planes and launch cyberattacks on Chinese leaders. Those provocative beliefs, believe it or not, were also expressed during the five Republican debates. They were just overshadowed by the furor over Trump. It might be natural for an opposition party to sound bombastic during primary season, especially when its front-runner is blessed with a seemingly inexhaustible supply of bombast, but the debate transcripts read like a Democratic opposition researcher’s dream. The good news for Republicans, arguably, is that their rhetoric has been so consistently over-the-top that it has started to sound routine; academics call this “shifting the Overton window,” the range of what’s considered politically acceptable. I’ve watched all the debates as well as the undercards live, but when I reviewed the transcripts, I was amazed how many radical statements had slipped under my radar. Ted Cruz called for putting the United States back on the gold standard. Marco Rubio accused President Barack Obama of destroying the U.S. military. Huckabee said Bernie Madoff’s rip-offs weren’t as bad as what the government has done to people on Social Security and Medicare. Lindsey Graham said his administration would monitor all “Islamic websites,” not just jihadist ones. I had even forgotten Trump’s claim that vaccines caused autism in a 2-year-old girl he knew. Vaccines do not cause autism. Goldbuggery is crackpot economics. The U.S. military is still by far the strongest in the world. And what the government has done to people on Social Security and Medicare is give them pensions and health care. But none of those statements drew any pushback from the other Republican candidates, or, for that matter, the media moderators. Neither did Ben Carson’s assertion that if the United States had set a goal of oil independence within a decade, moderate Arab states would have “turned over Osama bin Laden and anybody else you wanted on a silver platter within two weeks,” which is wackadoodle on multiple levels.
Netflix Just Invented Socks That Pause Your Show If You Fall Asleep
Netflix may have revolutionized how we watch TV, but it’s not stopping there. Working again with Pittsburgh-based agency Deeplocal, the streaming company just released another do-it-yourself invention. This time, it’s a pair of socks that detect when you’ve fallen asleep and pause your program so you don’t miss out. How do they work? Allow Netflix to explain: We’ve based our sleep detection system on a popular method called actigraphy. An accelerometer detects when you’ve stopped moving for a prolonged period of time and triggers a signal to your TV that pauses Netflix. When it detects that you’ve dozed off, an LED light in the cuff of the sock flashes red, warning that the pause signal is about to be sent to your TV. Any motion will stop it from firing. The accelerometer is very sensitive to little movements, so it’s good at detecting when you’re just sitting still, raptly watching Netflix, and when you’ve actually fallen asleep. The socks are the perfect solution to a problem no one really talks about. And it would be great not to experience the shame that comes when Netflix asks, “Are you still watching?” More:
5 Reasons You Will be Obsessed with Making of a Murderer
If you haven’t seen Netflix’s new show Making a Murderer yet, you surely have heard someone you know talking about it, or have seen Alec Baldwin tweeting about it. But what is it about the show that has everyone so obsessed? Here are a few reasons why we’re into it, and why you should binge-watch it before, after, and possibly even during your upcoming holiday celebrations. 1. It’s True. Making a Murderer centers around very bizarre events, which is made even more shocking by the fact that they all really happened. The show is about Steven Avery, a Wisconsin resident who was wrongfully convicted of a crime and served 18 years in prison for it before his exoneration. 20 years later, he is arrested again, for murder. This time around however, the evidence surrounding the case is more than fishy, and his lawyers point to the county’s embarrassed cops from mistaken arrest #1, for possibly framing Avery for this crime. Weird right? It all really happened! And the amount of well put together recorded phone calls, interviews, news coverage, and courtroom footage paint a clear albeit crazy picture of the case. If you’re like me, and the one channel you miss the most after cutting the cord is the Investigation Discovery channel for it’s 24/7 loop of true crime reenactments, this show is for you. For something that could have played out like a Court TV snooze fest, the show has a forward moving trajectory, as my colleague and friend-to-Decider John DeVore put it. Each episode sets up the next with just the right amount of unbelievable information, discovery of evidence, shocking deceit, heartbreaking perspectives from the families involved, and edge-of-your-seat drama that will keep your binge-watch going for hours. Without giving anything away, it will shock you to see how personal bias can prevail over the lack of credible evidence in a case, and how the power of suggestion can literally ruin someone’s entire life. As Jerome Buting, one of Steven Avery’s defense lawyers put it, “We can all say that we’re never going to commit a crime. But we can never guarantee that someone won’t accuse us of a crime. And if that happens, then good luck in this criminal justice system.” Yikes! More:
Legislators look at earmarks as budget trouble looms
The House and Senate will consider bills next year to remove earmarks from several revenue sources. If passed, the legislation could give budget framers more flexibility in building a General Fund but might also remove guaranteed sources of income from some agencies. “I just know that when we look at the General Fund and we look at the issues we are going to be facing again, we’re going to have to evaluate our earmarks and look at the General Fund and revenues,” said Rep. Mac McCutcheon, R-Huntsville, the House Rules Committee chairman and House sponsor of the legislation. “All these things are going to come into play.” Alabama earmarks more than four-fifths of its tax revenues for specific purposes. Governors and legislators often discuss removing earmarks to free up funding and allow prioritization of budget needs. But earmarks can also ensure funding to agencies in a state where tax revenues often fall short of needs. The bill sponsored by McCutcheon and Sen. Cam Ward, R-Alabaster, would shift a greater percentage of wine and liquor tax revenues and liquor store profits to the General Fund. The legislation would also remove earmarks on hospital license fees, business privilege taxes and some insurance fees and move them into the General Fund. A greater percentage of the cigarette tax would go into the often-troubled budget, which has few growth revenues. Legislators earlier this year filed bills to remove earmarks, without success. Legislation sponsored by Rep. Will Ainsworth, R-Guntersville, in the regular session died in committee. A similar piece of legislation filed by Rep. Allen Farley, R-McCalla, passed the House during the first special session last summer but did not make it out of the Senate. The bills raised concerned that the earmarks removed would make it harder to pull down federal matching dollars for state programs. Both McCutcheon and Ward said the version filed would avoid that. “We’re not messing with any money that’s a pull down for federal dollars,” he said. The new bill, unlike the old one, does not remove earmarks on agricultural inspection fees or address pesticides. Both McCutcheon and Ward said the bill had the backing of Gov. Robert Bentley. A message seeking comment was left with Bentley’s office Monday. The fiscal impact of the bill is unknown. Fiscal notes attached to Farley’s bill were not available Monday. McCutcheon and Ward said the bill could be worth hundreds of millions of dollars to the General Fund. The General Fund took six months and three legislative sessions to pass this year, and resulted in a number of funding reductions to state agencies. Budget chairs are warning that more trouble could be on the way next year and have already spoken of the possibility of further cuts to state agencies.
Boozer elected to chair College Savings Plan Network
Alabama State Treasurer Young Boozer has been elected to serve as chairman of the College Savings Plan Network (CSPN), effective Jan. 1. CSPN provides information about Section 529 College Savings Plans, which gives access to resources for families of all income levels to plan and save college, while reducing their reliance on student loans, according to a release. Boozer will work with the executive board to carry out programs in an effort to promote 529 plans. “It is an honor to be elected by my peers for the position as CSPN chair,” Boozer said. “Saving for college is a huge undertaking and I’m excited to work with the leading resource to encourage families to begin investing and give them the tools to do so.” Boozer currently serves as chair of the board for Alabama’s Prepaid College Tuition Program (PACT) and Alabama’s 529 college savings program, CollegeCounts.
Judge allows rejection of Walter Energy’s union deals, clears way for sale
A federal bankruptcy judge on Monday ruled against a motion to block retention bonuses for Walter Energy executives and also allowed the company terminate the collective bargaining agreements between the company and two unions. The judge allowed the company to reject the collective bargaining agreement between the United Mine Workers and United Steelworkers and the company, according to a court filing on Monday. Through this ruling, retiree benefits will also be terminated. Through the termination of the CBA, the company can now move forward with the sale of its assets to its senior lenders – a goal that attorneys for Walter Energy say will keep jobs in place and operations continuing. Negotiations over the CBA stalled for months, as no middle ground was reached despite concessions by both parties. According to court testimony, the company currently has $95 million in cash. As that number dwindles, the company is rapidly approaching the $30 million benchmark that would force the company to spend its remaining cash to permanently “wind down” operations. The company also told the court that the company’s cash in hand will dissipate to zero by January. Jim Walter Resources mines No. 4 and No. 7 represent the included Alabama assets in the sale. However, the company said no potential buyer has expressed interest in buying the partially idled mining operations in Brookwood. Walter’s investment banking advisor PJT Partners LP reported to the court that it contacted 47 strategic acquirers – including domestic coal producers, international coal producers and integrated steel companies – and 37 financial sponsors. Throughout the marketing process, PJT did not receive a single indication of interest to purchase all of the company’s Alabama coal operations.
Ethics Commission vice chair resigns after late filing of disclosure statement
The vice chair of the Alabama Ethics Commission resigned Sunday after being almost eight months late in submitting a complete disclosure form required by the state ethics law. Ethics Commission Executive Director Tom Albritton said Virginia Larkin Martin resigned on Sunday after he asked her to step down. Ethics Commission members are required to file an annual Statement of Economic Interests disclosing sources of income, debts, real estate holdings and other information. Elected officials, political candidates and some public employees are required to submit the same forms, which are due April 30 and are posted on the Ethics Commission website for public disclosure. Martin filed her Statement of Economic Interests in mid-April, ahead of the deadline, but it was incomplete, Albritton said. Albritton said Martin listed all sources of income but not the amounts of income in specific ranges, as required. Because Martin’s statement was not complete, it was not posted on the Ethics Commission website. Albritton said he discussed the situation with Martin when it came to his attention about a week ago. Albritton said Martin sought guidance from the commission on how to make her statement comply with the law. He said he told her she had to include all the required information. Martin submitted the completed form on Saturday. It is now posted on the website. “She had previously offered to resign and did so on the 27th after fully complying with the disclosure requirements,” Albritton said. “Her resignation was appropriate under the circumstances given her position on the Commission and she recognized that as much as anyone.” Martin was not available for comment. Martin manages her family’s farm operations in Lawrence County, according to her bio on the Ethics Commission website. Lt. Gov. Kay Ivey nominated her for the commission, and the Alabama Senate confirmed her appointment in January 2014. It’s up to Gov. Robert Bentley to appoint a replacement to complete Martin’s term, which runs until Aug. 31, 2018. The Ethics Commission is a five-member appointed board that reviews investigations of possible violations of the ethics act and issues opinions on the ethics law.
Environmental group challenges use of BP funds for new hotel
An environmental group has asked a judge to hear oral arguments in its lawsuit challenging Alabama’s plans to use oil spill settlement funds to build a 350-room beach hotel and conference center. The Gulf Restoration Network filed the request earlier this month in federal court. The group asked for expedited arguments, citing Alabama’s continued work on the project. The Louisiana-based group argues a hotel development isn’t a proper use of funds meant to restore the coast after the largest oil spill in United States history. The state contends that the hotel and conference center, designed to handle gatherings of up to 1,500 people, will help bring people to the coast. Alabama Conservation Commissioner Gunter Guy, a defendant in the case, opposed the request for oral arguments.
From 2010 until 2014 fellow Alabama Public Service Commission (PSC) commissioners Twinkle Andress Cavanaugh (R) and Terry Dunn (R) served on the PSC together and the pair of Republicans were frequently at loggerheads on how the PSC should conduct its business. Commissioner Dunn wanted to hold formal hearings on utility rates. PSC President Cavanaugh preferred the less litigious process of informal hearings. Fellow Commissioner Jeremy Oden (R) sided with Cavanaugh on the three member PSC; but the argument was both heated and very public. In 2014, the feud concluded with former Green County Commissioner Chris “Chip” Beaker unseating Dunn in the 2014 Republican Primary. Cavanaugh’s supporters charged that Dunn had a cozy relationship with radical environmentalists and Dunn charged that the other commissioners were too influenced by the companies they regulate. Now Dunn seeks to get back on the PSC and is seeking to unseat Cavanaugh as the PSC President. In November the PSC announced that it was lowering the rates that Alabama Power and Alabama Gas customers pay due to falling natural gas prices. President Cavanaugh stated, “While rates are going up in other states because of the Federal mandates handed down by the Obama Administration, our Commission has found a way to reduce rates for Alabama Power and Alabama Gas customers. We will continue to fight Obama and his out of control, job killing EPA. We will continue to use every measure available to fight Obama and keep rates as low as possible for Alabama families and businesses.” President Obama’s administration and his radical environmentalist cronies continue to press for policies that will make it more difficult to deliver low cost natural gas and electricity to Alabama families and businesses. While today’s reductions are significant, the Obama administration’s policies continue to negate the savings realized by ratepayers and jeopardize the future of lower natural gas prices. A skeptical Dunn alleged that the rate was overdue. Dunn charged in a statement, “Twinkle removed monthly report of Energy Cost Recovery months ago that has been available to the general public since the 1980’s in order to cover up her lies about the rate reduction. By doing this Twinkle was trying to hide the actual total fuel cost amount that was over collected from customers, which should have already been refunded back to customers, to set up her skim to deceive ratepayers.” Dunn said, “True transparency of the Public Service Commission is a deterrent to any further rate increases and business continuing to be conducted under the radar of the public.” The Republican Primary is on March 1.
Alabama in 2016: We won’t be thanking God for Mississippi
In a little over a month, Gov. Robert Bentley will deliver his 2016 State of the State Address. It’s a fair bet that his speech will sound different than last year. But the underlying data economic data will be much the same. This month, Pew Charitable Trusts released its Fiscal 50, a financial analysis of all 50 states and their governments. It provides a good snapshot of Alabama and a comparison of where we are versus everybody else. This year we won’t be thanking God for Mississippi. Here’s the key take: It shows that, while Alabama’s tax revenues have grown, they still are 6.4 percent below where the state was in the third quarter of 2008. See charts at link below. The shortfalls in Alabama’s General Fund is the symptom, though. The tepid growth of Alabama’s economy is the cause. We still haven’t recovered from the Great Recession. The good-ish news is that Alabama isn’t alone and we aren’t doing as poorly as some other states. Florida, which was perhaps the epicenter of the housing bubble, still lags behind the rest of the country. While Mississippi has recovered and is doing better than Alabama, Georgia is doing worse. Perhaps the most perplexing thing is that there is no discernable pattern here, at least not that I’ve seen. Without even a strong theory as to why some states have bounced back and others haven’t, how do we know what Alabama should do to change its fate? One thing is clear, though: What we have been doing — buying economic development from out-of-state corporations with huge incentive packages — isn’t yielding the economic rewards that Alabama needs. It’s time for Alabama’s leaders to do something different, whether that’s investing more in education or directing incentives to small businesses and home-grown companies, we’re almost at a point where it doesn’t matter. If we keep doing the same thing over and over again, we’ll keep getting the same results. And the governor’s State of the State will say the same thing, no matter if the words change or not. You can explore the full Fiscal 50 report from Pew here.
Editorial: Gov. Bentley’s mistake in Gulf Shores
Gov. Robert Bentley must think Alabamians are either gullible or dumb, or both. He’s using BP grant money to renovate the state’s 7,500 square-foot governor’s mansion in Gulf Shores, and he wants us to believe, to steal his words on Twitter, that it’s about “the future of Alabama.” Instead of Bentley being a frequent visitor at the six-bedroom, four-bath mansion that was damaged by a 1997 hurricane, the state will instead host business executives who fly in to scout Alabama opportunities, his spokeswoman says. Repairing it, Bentley’s logic goes, rids the state of an eyesore and costs taxpayers nothing. In other words, the governor wants Alabamians to ignore the obvious — that this tin-eared move insults the Gulf Coast’s recovery efforts and paints him as being wholly unaware of public perception. We can’t help but wonder: What is this man thinking? It’s convenient for Bentley’s harshest critics to cast the governor’s September divorce as the kindling that lit this regrettable move. That’s tawdry and, frankly, of little interest to us. What appals this editorial board is that the governor deems it justifiable to use BP grant money to repair a VIP mansion so invaluable that it hasn’t been used for 18 years. What’s more, the 2010 oil spill didn’t damage the mansion, and this creates the notion that CEOs and industry bigwigs can’t stay in one of Gulf Shores’ luxurious hotels or condos. That’s ludicrous, of course. Regardless of who sleeps in it, a two-story governor’s mansion in Gulf Shores is a luxury for a state whose needs are few and finances are firm. That’s not Alabama. That it’s BP grant money instead of state funds paying for the renovation is irrelevant. This $1.5 million should be put to better use repairing the long-term damage the oil spill caused. Bentley should be ashamed if he spends a single night in the place.
Morning Money will return January 4, 2016.
No public schedule
The house will return on January 6, 2016 and the Senate on January 11, 2016
Tips for Using Credit Bureaus to Help Protect Your Financial Accounts
IRS Security Awareness Tax Tip Number 6
If you believe you are a victim of identity theft, you should contact one of the three major credit bureaus to place a “fraud alert” on your credit account.
This critically important step makes it harder for identity thieves to open additional financial accounts, such as a bank account, in your name. This helps prevent identity thieves from directing fraudulent tax refunds into bank accounts they created or opening additional credit cards in your name.
The IRS has teamed up with state revenue departments and the tax industry to make sure you understand the dangers to your personal and financial data. Taxes. Security. Together. Working in partnership with you, we can make a difference.
Contacting a credit bureau if you think you are an identity theft victim can help you in many ways, including helping protect your tax information.
The three main credit bureaus:
- www.Equifax.com/CreditReportAssistance; 888-766-0008.
- www.Experian.com/fraudalert; 888-397-3742.
- www.TransUnion.com/fraud; 800-680-7289.
If you are an identity theft victim, you need contact only one of the three to request a fraud alert. One bureau must notify the others when a fraud alert is requested. You’ll get a letter from each credit bureau. It will confirm that they placed a fraud alert on your file.
A fraud alert is free, and it lasts for 90 days. You can renew it. It provides a red flag to other businesses where the thieves may be trying to open accounts and legitimate businesses may take additional steps to verify identities.
Three types of fraud alerts are available:
- Initial Fraud Alert. If you’re concerned about identity theft, but haven’t yet become a victim, this fraud alert will protect your credit from unverified access for at least 90 days. You may want to place a fraud alert on your file if your wallet, Social Security card, or other personal, financial or account information are lost or stolen.
- Extended Fraud Alert. For victims of identity theft, an extended fraud alert will protect your credit for seven years.
- Active Duty Military Alert. For those in the military who want to protect their credit while deployed, this fraud alert lasts for one year.
Also, you should get your free credit report right away to ensure identity thieves have not opened additional accounts. Go to annualcreditreport.com, which is operated by the three major bureaus, or call 877-322-8228.
If you want even stronger protections or if you were part of a large-scale data breach, you might consider a “credit freeze” which applies even stronger protections but often times for a fee that varies by state.
A credit freeze, also known as a security freeze, lets you restrict access to your credit report, which in turn makes it difficult for identity thieves to open new accounts in your name. You must contact each of the three credit bureaus to establish a credit freeze.
What’s the difference between a credit freeze and a fraud alert? A credit freeze locks down your credit. A fraud alert allows creditors to get a copy of your credit report as long as they take steps to verify your identity.
After receiving your freeze request, each credit reporting company will send you a confirmation letter containing a unique PIN (personal identification number) or password. Keep the PIN or password in a safe place. You will need it if you choose to lift the freeze.
If you apply for credit, a home mortgage or a job, you will have to temporarily lift the freeze so that the businesses may confirm your credit record. There is a fee for lifting a freeze as well.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.