Arms And The Man
Who's Making A Killing On Killing In Iraq?


Tuesday, April 08, 2003  

BOOTS & COOTS TEETERS ON BANKRUPTCY
Contract work in Iraq may not be enough to keep the oil field firefighters in business.
April 8, 2003: 8:04 PM EDT

"HOUSTON (Reuters) - Boots & Coots International Well Control Inc. acknowledged on Tuesday that it still faces bankruptcy risk despite the cash infusion it expects for its work battling oil well fires in Iraq.

"The Houston-based oil field fire-fighting company on March 28 rejected a proposal from one of its lenders, Checkpoint Business Inc., to declare Chapter 11 bankruptcy and cancel shareholders' equity...."

posted by Major Barbara | 8:42 PM
 

HOUSE DEMOCRATS WANT HALLIBURTON PROBE
Senior House Democrats Want Investigation of Contracts Awarded by Halliburton
The Associated Press
"WASHINGTON April 8 —
Questioning whether Vice President Dick Cheney's former company has received favored treatment from the Pentagon, senior House Democrats asked Congress' investigative agency Tuesday to delve into contracts awarded Halliburton Co. over the past two years.

"Halliburton's KBR subsidiary has a record of gouging the government in contracts awarded without competition, Reps. Henry Waxman of California and John Dingell of Michigan contended in a letter to the General Accounting Office...." [Emphasis added.]

* * *

Read on to get up to date on the two Times -- NY and LA -- and their race to see which will correct their errors -- last.

With Waxman and Conyers calling for investigation into the overbilling (read: fraud) in Halliburton's past, they might actually decide it behooves them to report the facts.

We hope so.

posted by Major Barbara | 1:49 PM
 

Just got off the phone with Mr. Gladstone.

Very professional.

In sum: The Times does not yet concede that it erred.

posted by Major Barbara | 12:41 PM
 

Just spoke with Rick Gladstone of the New York Times.

He called to find out what the problem was with the story they ran on Boots & Coots.

There were errors, I said. When will the Times run a correction?

"We already ran a correction."

That's a good jumping off point, so we discussed the first sentence of the article.

He listened attentively, took down the address of this site, and seemed to understand the phrase "error of fact."

Remarkable what it takes to get a little correction.

We'll see. It's a good thing the L.A. Times is on it, too.

* * *

It's hard not to see this as a story about how the New York Times let a story get away from them, facts and all.

Especially since we found out this:

The reporter who wrote the story is not a Times employee. J. Alex Tarquinio is a freelancer.

If you'll try the Google above, you'll find that Mr. Tarquinio's top-linked article starts with this in its close examination of "Double Taxation":

"If a stripper can write off a breast job, why can't you deduct a health club?"

We haven't scoured the rest of the links, but this one doesn't exactly bang the drum for Mr. Tarquinio's expertise. Still, it's clear, sexy prose -- perhaps even provocative. (The "double taxation" "breast job" jest is sort of clever.)

We understand the immense challenge such reporters face in trying to make business writing entertaining.

Nonetheless, we must question the Times' judgment in assigning a story with serious war time overtones to a stringer. Or even buying a pitch for such a story from a stringer. This was a story with real political -- and financial -- significance.

It appears the Times used a stringer, and didn't sufficiently check the facts in his copy, much less the accuracy and context of the story's background.

Editorial errors of judgment, it seems, led to the Times' errors of fact and omission.

posted by Major Barbara | 9:43 AM


Monday, April 07, 2003  

MAN AND SUPERMAN

"One man that has a mind and knows it."

We've been repeating that, in hopes that "one man" would show up -- with a newspaper behind him -- and print the facts about Boots & Coots International Well Control, Inc.

All day today, we have called newspapers, and attorneys, and accountants, and journalists, trying to build the solid foundation for a story. We are baffled why newspapers don't feel obliged to print the facts -- or to correct their mistakes in a timely manner.

We hope it is because they just don't realize we exist.

The New York Times printed their misleading story a week ago yesterday.

Still no correction.

Today, we called the New York Times no less than five times. We have e-mailed, on earlier dates, no less than seven different editors.

We left repeated messages for the editor to whose machine we were connected when asking for the "Sunday business desk."

Editor Ilene Rosenzweig -- the only one whose name was on her answering machine -- did not return any of our calls by deadline. Neither did the other editors.

To date, the only acknowledgment we have received, despite a good faith effort to make the editorial staff aware of their mistakes, is an automated e-mail from the business desk.

Contrast that with the responsive L.A. Times, who picked up the phone and got right to work on the information given. Who knows what they'll do with it -- but at least they're diligent.

This installment is called "Man and Superman" with no eye towards the man in the red cape whatsoever.

Instead, this is about humans -- and an institution that seems to hold itself above them.

Facts are facts.

We're still waiting for that correction from the New York Times.

It's coming.

If you'd like to urge them to correct their story, e-mail them here.

* * *

8:15 pm Pacific

At the request of a reader, we'll repost the letter we sent to the New York Times on April 1. No joke:

Date: Tue, 1 Apr 2003 13:19:04 -0800 (PST)
From: "Major Barbara"
Subject: Correction expected: 3/30/03 - "Fighting Oil Fields..." - ERROR OF FACT
To: nytnews@nytimes.com

Please correct the chief error of fact in the first sentence of Sunday's "Fighting Oil Fields, and Creditors." [Link added.]

"Boots & Coots International Well Control" was created in 1997 by a "reverse triangular merger." The figures cited are an aggregate of different companies and individuals who worked to control the oil well fires "in Kuwait in 1991." (There is no indication how the figures were calculated.)

This is not a minor error.

The story referred to "creditors" whose claims threatened a publicly-owned company.

That company was created in 1997 by a specific process that converted privately-held companies and assets into a single public company -- that had never existed before. Brand new stock warrants were issued. No business entity of this kind had existed before: It is the only stand-alone, publicly-traded oilfield firefighting company. It is unique.

Coots is dead [ed. 4/24: reportedly living.]. Boots is retired. It is misleading to equate their earlier company with the publicly-traded corporation that exists today.

Boots & Coots International Well Control is neither Boots & Coots nor International Well Control.

The SEC documents prove it (8-K, 7/29/97): The pre-existing company used as the vehicle for the merger was Havenwood Ventures, Inc., owned by Mark & Alice Leibovit and Reed Slatkin.

In my opinion, your correction should either simply state that the company was formed by a reverse triangular merger in 1997 -- or all pre-existing companies merged in that series of transactions should be listed.

Thank you for your diligence.

For more information, visit my website. All relevant documentation is linked there:

http://majorbarbara.blogspot.com

I have informed my readers that we await a correction.

Sincerely,

Major Barbara

* * *

Leads developing....

posted by Major Barbara | 7:02 PM
 

Just spoke with John Corrigan, who was covering the business desk for the L.A. Times. He was polite, if a little stunned by the question.

I told him I had "a pesky little weblog with a pesky little question": Yesterday the Times ran an article on Boots & Coots. Was he aware of the errors in the article concerning the company's history?

"No."

At that point, I offered to go off the record, just to caution Mr. Corrigan that I write for a weblog.

That seemed to be helpful. Once he understood that I was writing about this, he had to get off the phone pretty quickly. But he did take down this site's address.

So John Corrigan is on it. We're pleased about that.

* * *

4:15 p.m.

FYI: We have discussed whether or not it was fair to quote Mr. Corrigan, since there's some question about whether or not he understood what was meant by "weblog."

With apologies to Mr. Corrigan: He was at work; he answered the phone for the business desk; he didn't ask if this was on the record or off.

We had left two messages at the business desk earlier in the day.

At this point, we decline to speculate whether or not he understood the meaning of "weblog." We believe he knows the meaning of the word "pesky."

This entry will be removed from the website upon his request.

posted by Major Barbara | 2:44 PM
 

"Arms And The Man" challenges our papers of record -- the New York Times and the Los Angeles Times -- to correct their misstatement(s) of the facts regarding Boots & Coots International Well Control, Inc.

* * *

News later. Leads developing...

Calls have been placed to the business editorial desks at both papers. We await responses -- on the record.

posted by Major Barbara | 9:53 AM


Sunday, April 06, 2003  

TOO TRUE TO BE GOOD?
Which newspaper will correct its errors -- before it turns to fishwrap?

Today -- one week to the day after the dateline of a misleading story about Boots & Coots ran in the Sunday New York Times Business Section -- another paper has made some big mistakes.

The Sunday Los Angeles Times has printed a story about Boots & Coots that is erroneous and misleading.

And suspiciously short on background.

Gulled? The question has to be asked.

"Arms And The Man" will not knowingly link such a story by headline. We enforce a higher standard regarding the facts.

Facts are for the record. And we intend to hold a few editors' feet to the factual fire.

During war: Bad information can equal disinformation.

Our beef? Simple. Read just a bit to understand more about information and disinformation:

"...The principals of what became Boots & Coots had signed a strategic alliance with Halliburton in 1995, soon after Dick Cheney became the energy giant's CEO, the job he left to run for vice president. That alliance guaranteed Boots & Coots a big piece of work whenever Houston-based Halliburton had a contract that included capping oil well fires." [Emphasis mine.]

This is information.

But what's missing is almost disinformation: There's no mention of the fact that at the time IWC signed onto that "alliance" -- under the aegis of Halliburton, on Dick Cheney's watch -- the little company had only been created a few months before. Giant Halliburton's "total solution for well control on a global basis" hinges on a tiny start-up company?

Other hellfighting companies already existed -- like Wild Well Control. There was also a seasoned competitor in Canada, Safety Boss.

Why not use one of them -- established companies rather than a risky microcap start-up?

More:

"...The alliance between the two companies was signed in October 1995 by Halliburton and Boots & Coots' predecessor company, IWC Services Inc. Both Boots & Coots and IWC have ties to the most famous hellfighter of them all, Paul N. "Red" Adair...." [Emphasis mine.]

Oops. Here we go again. More "famous," fewer facts. Hellfighting "Red" makes sexy copy.

The predecessor company of Boots & Coots -- which was absorbed by IWC -- is, for one important reason, actually Havenwood Ventures, Inc. It was the targeted company in the reverse triangular merger that created the company that is traded -- publicly -- today. Its stock was the progenitor of the stock in Boots & Coots International Well Control, Inc.

Finally, the article doesn't mention Jed DiPaolo, Cheney's Sr. VP who left Halliburton to become the interim Chairman of the Board.

And who left Boots & Coots on or about the time those risky loan documents were signed with that shadowy group of Texas oilmen.

Remember that?

I know. Too complex!

That's what they're counting on, those who would keep the facts in shadows. It's too complex to follow.

I'll make it simple: The LATimes' -- and NYTimes' -- readers are ill-served by sloppy reporting.

Facts are facts.

The LATimes Business editor should join the NY Times in issuing a correction. Very soon.

For more information, scroll down and read:

FRAUD LINKED TO CHENEY'S HALLIBURTON ALLIANCE

We rely upon our discerning readers for correction. None to date.

* * *

Thank you, Agonist -- Eric Alterman -- and Christian Science Monitor for linking to this site!

* * *

Whimsy: More fun with Google!

Just click and read the #1 link to find 0 degrees of separation!

Now I know why they call it Hope Ranch!

Because all we can do is hope someone tells the truth.

Is this a whimsical question? Tell me what you think.


* * *

News below.

posted by Major Barbara | 10:51 AM
 

Again: "Arms And The Man" challenges the paper of record to correct its misstatement(s) of the facts regarding Boots & Coots International Well Control, Inc..

The correction is coming.

For background, scroll down to:

Fraud Linked To Cheney's Halliburton Alliance

* * *

Sunday Morning Herald: WHAT HAPPENS NEXT?

Part two: There are more than simple commercial interests at stake in the new Iraq ... America's hawks are planning their new world order.
By Neil Mackay

"JAY GARNER doesn't like his latest nickname -- the Sheriff of Baghdad. He sees it as a slur -- an affront and insult to a man who has been grandly designated by Washington as the director of the Office of Reconstruction and Humanitarian Assistance for Iraq. Other titles include Iraq's new king, viceroy, pro-consul, regent and president.

"But to his critics, the term sheriff is the most apt...."

* * *

"Arms And The Man" salutes Neil McKay: We suspect he is "one man that has a mind and knows it"!

* * *

Whimsy: Who's Making A ...?

Click above to see the #1 Google! entry for the word "no"!

Can anyone else figure this out -- just for fun? Just "one woman"?

How did Disney get to #1? For the word no?!

For fun: Follow the money and give me a clue.

News below.

* * *

~6:30 a.m. Pacific

SAExpress: WATCHDOGS QUESTION OIL FIRE CONTRACT
By Gary Martin
Express-News Washington Bureau

Web Posted : 04/06/2003 12:00 AM

"WASHINGTON — A contract to extinguish oil well fires in Iraq, handed to a subsidiary of Texas-based Halliburton Co. without competitive bids, has prompted lawmakers and ethics groups to scrutinize the Bush administration's postwar plans.

"Kellogg, Brown & Root received the multimillion-dollar contract to put out the fires after the Pentagon and U.S. Army Corps of Engineers waived the competitive bid process.

"A corps spokesman said the process was expedited to extinguish the fires quickly, before they posed environmental and health risks for U.S. troops.

"But critics have questioned the legality and cost effectiveness of a contract that has no time or dollar limit. They also question the company's ties to Vice President Dick Cheney, who was CEO of Halliburton from 1995 to 2000.

""It raised at least the appearance of a conflict of interest — and that can be as damning as a conflict of interest," said Mary Boyle, a spokeswoman for Common Cause, a citizens lobby for government ethics and campaign finance reform...." [Emphasis added.]

* * *

Newsweek: BUYING AMERICAN
European foes of the war worry that they may be squeezed out of the rebuilding

By Rana Foroohar
NEWSWEEK INTERNATIONAL

"April 14 issue — Is America monopolizing the business of rebuilding Iraq? In recent weeks Washington has handed out initial contracts for fighting oil fires and reconstructing roads, bridges and waterways—all to American firms, which could end up earning millions or even billions for their efforts.

"THE BUSH ADMINISTRATION has justified the “Buy American” approach by saying U.S. firms have the necessary experience in war zones—and the security clearances to work alongside U.S. troops...." [Emphasis added.]

posted by Major Barbara | 1:35 AM


Saturday, April 05, 2003  

"Arms And The Man" challenges the paper of record to correct its misstatement(s) of the facts regarding Boots & Coots International Well Control, Inc.

* * *

MSNBC: BIG ROLE URGED FOR OIL FIRMS AFTER WAR
Iraqi delegates recommend profit-sharing deals to boost production

"LONDON, April 5 — Iraqi exiles and senior U.S. officials agreed Saturday that international oil companies should take a leading post-war role in reviving Iraq’s oil industry, delegates to a policy meeting said...."

* * *

BECHTEL DRAWING ATTENTION
Postwar Iraq role has yet to unfold

By ANDREA ORR
Reuters News Service

"SAN FRANCISCO -- In a city that has become a center for U.S. antiwar protests, international construction giant Bechtel Group has found its headquarters here a main destination for protesters over contracts to rebuild Iraq.

"Since the first days of the war, there was talk of which companies would lead the postwar rebuilding effort. Houston-based Halliburton Co. withdrew from the running recently because of controversy over its political connections, including having Vice President Dick Cheney as its former CEO.
Bechtel, a privately held company that prides itself on keeping its business dealings private, is reportedly one of just a few finalists for a $600 million contract to rebuild schools, roads and hospitals. Pasadena, Calif.-based Parsons Corp. is another contender...." [Emphasis mine.]

posted by Major Barbara | 7:46 AM


Friday, April 04, 2003  

FRAUD LINKED TO CHENEY’S HALLIBURTON ALLIANCE

Admitted fraud Reed Slatkin – who has confessed to running what has been described as the biggest Ponzi scheme in history -- was a company insider in the formation of an oilfield firefighting company tied to Vice President Dick Cheney. SEC documents show the company, Boots & Coots International Well Control, Inc., was created under the aegis of a contractual “alliance” with Halliburton in 1997. At that time, Vice President Richard Cheney was Halliburton’s CEO – responsible for overseeing such operations on behalf of the Board of Directors. A unit of Halliburton now has an agreement to subcontract oil-well firefighting in Iraq to Boots & Coots.

A bankruptcy judge in Santa Barbara ruled in January that Slatkin's written agreement last year to plead guilty to fraud, conspiracy and money laundering establishes clearly that his investment empire was a scam from its beginning in 1986.

Though the physical SEC documents are definitive, the connection may not have come to light because of an inadequacy in EDGAR, the electronic SEC database which records information from financial filings. The database, which is incomplete, does not currently display Reed Slatkin’s name on the EDGAR index of the company for which he served as vice president and director: Havenwood Ventures.

Incorporated in Delaware in 1988, Havenwood was described in SEC documents as a “development company” aiming to build a theme park in the Sedona, Arizona desert. The project, dubbed the Sedona Spirit Theater, planned entertainment featuring interactive animatronic American Indians. Tracts of desert land were purchased, but the park was never built.

By 1997, Havenwood had "no assets", no "revenues," "no backlog," and "made no expenditures" (1996 SEC report). In March of that year, Havenwood president Mark Leibovit signed a “letter of intent” to merge his company with U.S. Liquids, a waste management company based in Houston, Texas specializing in nontoxic oilfield and commercial waste, such as cooking oil. Though Leibovit was compensated (SEC 10-Q, USL, 11/15/99) as a consultant for U.S. Liquids with stock warrants, the merger never took place.

Instead, publicly-owned Havenwood was targeted in a complex merger to create the new company, publicly-owned Boots & Coots International Well Control, Inc. Both Boots & Coots and International Well Control had been separate, privately held concerns.

The publicly-traded oilfield firefighting company was created in a complex series of business moves called a “reverse triangular merger” in July, 1997. According to SEC documents, Slatkin – accused of bilking investors of over $200 million dollars in a fifteen-year career -- was compensated with stock in Boots & Coots IWC. Public records show that Slatkin and other founding executives were granted original stock warrants in the new company.

As CEO of Halliburton, Cheney’s responsibilities included overseeing operations and ensuring the Board of Directors had sufficient, up-to-date information to execute its strategies. That included a new "total solution for well control on a global basis" touted in a press release only days after Cheney was elected CEO in 1995. The strategy was executed, in part, through a new “alliance” with recently-formed International Well Control, a company led by seasoned hellfighters who did a large portion of the oilfield firefighting in Kuwait in 1991.

Two years later in 1997, Halliburton’s “alliance” absorbed even more of the limited pool of experienced firefighters – many of whom learned their trade under legendary Red Adair – in that reverse triangular merger. The moves merged distinct companies into a new corporate identity, Boots & Coots International Well Control, Inc. It is unique: the only stand-alone, publicly traded oilfield firefighting company in existence.

Slatkin is accused of bilking investors of over $225 million in what has been described as the largest Ponzi-scheme in history. Slatkin, a Scientologist minister, used a garage in his Santa Barbara home to oversee a financial scheme that will take years to unravel in legal proceedings. Investors are trying to recover their losses in bankruptcy court, from both Slatkin and the wealthy investors who apparently made money: Among others, Fox News personality and Scientologist Greta van Susteren, actor Peter Coyote and actress Cheryl Tiegs all made a profit on their investments with Slatkin. But the overwhelming majority of investors lost big. Tens of millions – if not hundreds of millions -- of dollars are still missing.

But in 1997, Slatkin had a very different reputation. As a co-founder of Earthlink, Slatkin’s wealth mushroomed explosively. The dial-up Internet access company quickly boomed to become the second largest provider in the country. Cash-flush Slatkin was viewed by many to be one of the most successful businessmen in America. An SEC investigation began in 1999. He pled guilty to fraud charges in October, 2002.

But in 1997, cash-flush Slatkin owned 20% of Havenwood Ventures, and openly participated in the reverse triangular merger that formed Boots & Coots International Well Control. SEC documents show that the three stockholders in Havenwood – investment guru Mark Leibovit, Alice Leibovit and Slatkin – were compensated with stock in the newly formed company when they resigned their previous posts.

Slatkin and Mark Leibovit teamed up in at least one other venture, Lizardhead Partners, with which they intended to "buy and sell stock."

That compensation, in the form of stock or warrants for stock, could possibly become an issue in the Honorable Robin L. Riblet’s Santa Barbara court, where Slatkin's bankruptcy proceedings continue.

Financial victims may want to know: What happened to Reed Slatkin’s stock in Boots & Coots International Well Control?

Slatkin is due to be sentenced in criminal court on April 21, where he could face a prison term of more than a century.

Vice President Cheney currently faces criticism for his apparent conflict of interest regarding Halliburton.

* * *

"Arms And The Man" stands ready to correct any error of fact in this report. Documentation -- and a speedy request for correction -- will be appreciated.

* * *
Thanks, Atrios, for linking to this exclusive report!

* * *

CNN: Halliburton could get more Iraq work
The oilfield services and construction company could be a subcontractor for post-war rebuilding.

April 4, 2003: 1:16 PM EST
By Mark Gongloff, CNN/Money Staff Writer

"NEW YORK (CNN/Money) - Halliburton Co., which has already won the job of fixing Iraq's oil fields after the war, could also get a piece of the action in rebuilding the country's infrastructure, though its potential role is still unclear.

"Last week, news reports said Halliburton, once headed by Vice President Dick Cheney, was not in the running to get a State Department contract worth up to $600 million to rebuild Iraq's roads, bridges, hospitals and schools and do other jobs necessary to help 24 million Iraqis get back to something approaching a normal life...." [Emphasis mine.]

* * *

"Press Release Source: Boots & Coots International Well Control, Inc.

Webcast Alert [!?]: Boots & Coots Announces Conference Call to Discuss 2002 Operating Results
Friday April 4, 2:55 pm ET

"HOUSTON, April 4 /PRNewswire-FirstCall/ -- Boots & Coots International Well Control, Inc. (Amex: WEL - News), announced today that it will host a conference call on Tuesday, April 8, 2003 at 3:10 PM Central Time to discuss the operating results for the year ending 2002, as well as provide updates to recent activities, progress and developments. Kirk Krist, Chairman of the Board, Jerry Winchester, CEO, and Kevin Johnson, Vice President of Finance will lead the call.
The conference call will be broadcast in a listen-only mode. The Company will take shareholder questions in advance through Barry Gross, Investor Relations Counsel. Questions must be submitted to Barry Gross by email only at barry@grosscapital.com by no later than April 7, 2003. Please denote "Questions For Conference Call" in the subject heading of the email...." [Emphasis mine.]

ATTENTION WEL INVESTORS:

This may be your last, best chance to pose questions to the current executives of this publicly-owned company.

Caveat emptor!

Make those questions count!

Ask them loud and long!


(While you're in "a listen-only mode.")

posted by Major Barbara | 6:21 AM


Thursday, April 03, 2003  

Why the next correction from the paper of record might matter:

SEC: The Laws That Govern the Securities Industry

Securities Act of 1933
Often referred to as the "truth in securities" law, the Securities Act of 1933 has two basic objectives:

require that investors receive financial and other significant information concerning securities being offered for public sale; and prohibit deceit, misrepresentations, and other fraud in the sale of securities. The full text of this Act is available at: http://www.law.uc.edu/CCL/sldtoc.html. (The SEC does not control or maintain this site.)

Purpose of Registration

A primary means of accomplishing these goals is the disclosure of important financial information through the registration of securities. This information enables investors, not the government, to make informed judgments about whether to purchase a company's securities. While the SEC requires that the information provided be accurate, it does not guarantee it. Investors who purchase securities and suffer losses have important recovery rights if they can prove that there was incomplete or inaccurate disclosure of important information.... [Emphasis added.]

* * *

While investors continue to buy and sell WEL, appearances beg the question:

Who's in cahoots with Boots & Coots?

The correction is coming.

And we expect disclosure of the facts -- as many as the paper of record chooses to share with American investors.

* * *

8 pm Pacific

Here's a bit of help -- for the record -- just the facts, from the original SEC 8k, 7/29/97, page 3 of 331:

"GENERAL. Boots & Coots International Well Control, Inc. (the "Registrant") was incorporated in Delaware in April 1988 as Havenwood Ventures, Inc."

From page 83 of 331:

"AGREEMENT dated as of July __, 1997 ("Agreement"), among HAVENWOOD VENTURES, INC., a Delaware corporation ("Havenwood"), HAVENWOOD ACQUISITION CORP., a Texas corporation ("Newco"), and a wholly owned subsidiary of Havenwood, MARK LEIBOVIT, individually ("Leibovit"), REED SLATKIN individually ("Slatkin") and IWC SERVICES, INC., a Texas corporation ("IWC")."

That's it, New York Times. Please state the facts -- for the record -- about the original ownership of Boots & Coots IWC, Inc.

Nothing more is requested. Nothing less will suffice.

Whether or not the paper of record spells out Reed Slatkin's compensation is a matter of conscience.

* * *

LA Times, January 18, 2003 : Ruling Gives Boost to Slatkin Investors' Suit
Bankruptcy judge says money manager's plea agreement establishes that his investment empire was a scam.

posted by Major Barbara | 6:12 PM
 

As we wait for the New York Times, remember the question posed by this site:

"And why does 'a shadowy group of Texas oilmen' want to change [Boots & Coots] from public to private now?"

(AATM 3/16, "Misalliance: The Dianetics of Dick Cheney")

Read about the public-to-private trend below, and puzzle over the clues, if you'd like:

SF Business Times: Public companies mull going private
Mark Calvey

"Not only is there a dearth of initial public offerings, several publicly traded companies are weighing the possibility of going private.

"Many of the discussions are at the preliminary stage and occurring behind closed doors. But bankers and private equity investors say that the top executives of promising young companies with shares under pressure in the public stock markets are warming up to the idea of going private.

"Tighter scrutiny of public company finances, coupled with new federal disclosure laws, is adding to the cost of financing through the public equity markets...." [Emphasis added.]

Tighter scrutiny of finances? New federal disclosure laws?

Are you listening, New York Times?

The correction we're awaiting is not insignificant.

By my reading, the shareholder protection plan would provide only about 5 cents/share of common stock as compensation for defenseless small investors. (That can't be right, can it? Someone please do the math?)

Is that a bargain? Is that a motive? Help us out.

We don't expect this to be news as troops approach Baghdad. But we do expect due diligence -- and a correction.

Awaiting a clue...

* * *

3:15 p.m Pacific

HUFFINGTON: Corporate America's Most Wanted
By Arianna Huffington, AlterNet
April 2, 2003

"When it comes to learning from its mistakes, corporate America has fallen off the rehab wagon more times than Robert Downey, Jr.

"A quick glance at last week's papers reveals that it's monkey business as usual on Wall Street.....



posted by Major Barbara | 8:18 AM
 

WashPost: For Firefighters, Smoke of Battle Mostly Cleared
Despite Predictions, Few Blazes or Bombs Found in Southern Oil Fields
By Susan B. Glasser
Washington Post Foreign Service
Thursday, April 3, 2003; Page A34
SOUTH RUMAILA OILFIELD, Iraq -- His trademark red overalls wilting in the heat, Brian Krause kicked the desert dust near one of the two oil fires still blazing away in Iraq's richest oil field. Krause, president of Boots and Coots, a firefighting firm, was trying to figure out why there weren't more fires for him to fight here...."

posted by Major Barbara | 5:06 AM
 

A tip of the cap to Mark Rice-Oxley.

Mr. Rice-Oxley may just be "one man who has a mind and knows it."

* * *

As for corrections: Not a single complaint has addressed any error of fact or omission. Since this blog began.

Honest.

One reader has submitted his/her own much-appreciated clarification. We await permission to run his/her letter, so that we may address the only concern registered at this address.

We take such corrections very seriously. A Los Angeles Times photographer has recently been fired for altering photographs of the war in ways that some might consider trivial.

Please send requests for corrections, with documentation if possible.

posted by Major Barbara | 1:43 AM


Wednesday, April 02, 2003  

SENT YESTERDAY

No joke:

Date: Tue, 1 Apr 2003 13:19:04 -0800 (PST)
From: "Major Barbara"
Subject: Correction expected: 3/30/03 - "Fighting Oil Fields..." - ERROR OF FACT
To: nytnews@nytimes.com

Please correct the chief error of fact in the first sentence of Sunday's "Fighting Oil Fields, and Creditors."

"Boots & Coots International Well Control" was created in 1997 by a "reverse triangular merger." The figures cited are an aggregate of different companies and individuals who worked to control the oil well fires "in Kuwait in 1991." (There is no indication how the figures were calculated.)

This is not a minor error.

The story referred to "creditors" whose claims threatened a publicly-owned company.

That company was created in 1997 by a specific process that converted privately-held companies and assets into a single public company -- that had never existed before. Brand new stock warrants were issued. No business entity of this kind had existed before: It is the only stand-alone, publicly-traded oilfield firefighting company. It is unique.

Coots is dead. Boots is retired. It is misleading to equate their earlier company with the publicly-traded corporation that exists today.

Boots & Coots International Well Control is neither Boots & Coots nor International Well Control.

The SEC documents prove it (8-K, 7/29/97): The pre-existing company used as the vehicle for the merger was Havenwood Ventures, Inc., owned by Mark & Alice Leibovit and Reed Slatkin.

In my opinion, your correction should either simply state that the company was formed by a reverse triangular merger in 1997 -- or all pre-existing companies merged in that series of transactions should be listed.

Thank you for your diligence.

For more information, visit my website. All relevant documentation is linked there:

http://majorbarbara.blogspot.com

I have informed my readers that we await a correction.



Sincerely,

Major Barbara

* * *

The press moves on, without the New York Times. See bottom of page for link:

CSMonitor: Already, postwar bids begin
Reconstruction is on the agenda at an EU meeting with Colin Powell today.

By Mark Rice-Oxley | Special to the Christian Science Monitor

LONDON – The Iraq war may be far from over, but already European countries and companies are desperately jostling for position so as not to miss out on the peace....

Thank you Christian Science Monitor for linking to this blog!


posted by Major Barbara | 2:15 PM
 

Heeeeeeere's Fineman:

Postwar Battle Already Looming
on Control of Iraq

At issue: How much of a role U.S. will play vs. the U.N.

"...'This isn’t a war to make the world safe for Fluor and Bechtel, and certainly not Halliburton' said one Democratic senator, referring to three U.S.-based firms. As for which Iraqis should take part in a new government, influential Arab advisers to the Bush administration are warning against placing any trust in Chalabi, who has spent little time in Iraq. 'He has no credibility and we’ve told the White House,' said one.

"One skirmish between the Penta-Cons and Diplomatists took place the other day on Capitol Hill. Members of the appropriations committees 'earmarked' money to administer the reconstruction of Iraq—and ordered that the money could only be spent by the State Department, not Defense. The idea was to send a signal to the White House. Soon enough, we’ll see who, if anyone, was listening." [Emphasis mine.]

posted by Major Barbara | 12:29 PM
 

As troops approach Baghdad, where is this story going?

AP: Halliburton Seeks Iraq Subcontractor Work
Vice President Dick Cheney's Former Company Halliburton Aims to Subcontract in Iraq Rebuilding

WASHINGTON April 2 —
"Vice President Dick Cheney's former company is interested in Iraq reconstruction work, but declined to bid for a primary contract under a State Department procedure open to only a few experienced firms.

"Halliburton Co. said its KBR subsidiary "remains a potential subcontractor for this important work." Since secondary contractors do not have to submit bids, the Houston-based company bypassed a system that became controversial after revelations that the main contenders made substantial political donations mostly to Republicans...." [Emphasis mine.]

posted by Major Barbara | 10:48 AM
 

We await the third correction from the New York Times re:Boots & Coots.

See Fighting Oil Fires, and Creditors.

First correction, (3/31/03) following error blogged here (3/28/03).

Second correction (today), following error here.

Third correction.... tomorrow?

It will be blogged here.


* * *

Are you interested in learning "Who's in cahoots with Boots & Coots?"

Scrappy Axcess Business News is taking up the heavy lifting the New York Times avoided:

Boots & Coots Singes Checkpoint

"...Axcess Business News believes Prudential may have played some role in meeting the Checkpoint payoff and that Checkpoint's terms of canceling common shares may have been perceived by Prudential as a threat to their own subordination knowing bankruptcy could have forced them to accept a fraction of what was owed....

"While the amount owed Checkpoint was only $1 million, it rests on unclear answers for [current Chairman of the Board K. Kirk] Krist to have made two dramatic announcements in behalf of Boots & Coots in one day and not disclose where the funds came from to pay Checkpoint or why Prudential decided to convert. Knowing the 10-K would be filed and announced shortly, it seemed unusual, almost an avoidance, of the facts surrounding those material actions....

"Perhaps Krist has one more card up his scorched sleeve. Investors will have to wait to see what happens next...." [Emphasis mine.]

The writer is intrepid Dave Porter, who's showing far more starch than the Times in standing up to the facts.

"One man who has a mind and knows it"?

posted by Major Barbara | 6:59 AM


Tuesday, April 01, 2003  

This is not, by the way, an April Fool's joke. This is for the record:

Read the New York Times' second correction re: Boots & Coots.

Read on for details about the first.

Read about the third... tomorrow.

* * *

Again, a reminder: This is not an April Fool's joke.

SydneyMH.com: Oilmen's burning wish to help spurned

By Mike Seccombe
April 2 2003

"Danny Clayton, operations manager for the delightfully named United States firm Boots and Coots, is a disappointed man. There has not been nearly enough destruction in Iraq for his corporate liking.

"Clayton is cranky because the Iraqis had set fire to just nine oil wells in the south of the country. Unless they somehow torch a whole lot more, Clayton's Texas-based company will likely go bust...."

Repeat warning: The preceding is not an April Fool's joke. (Thanks to imaginary-wings for the tip!)

Other stories will be linked in good time. But for now we'll concentrate on that big-volume microcap Boots & Coots and the New York Times.

Based on appearances, I just have to keep asking:

Who's in cahoots with Boots & Coots?

* * *.

DISCLAIMER: This part is just for fun, in honor of April Fools everywhere. Even in New York (because I love New York!).

Who said, "One man that has a mind and knows it can always beat ten men who haven't and don't"?

Guess the connection to just about anything to do with this blog and its cause for extra credit. With your permission, I'll hope to publish the best guesses/insights/stylistics I get.

And every last correction.

As a discrete part of this blog's strategic "alliance" with Knopf.

Send me a guess... or a tip... or -- by all means -- a correction!

Caveat lector!

posted by Major Barbara | 10:40 PM
 

Blogger server problems today.

More later as we await another correction from the New York Times.

posted by Major Barbara | 12:34 PM


Monday, March 31, 2003  

THE APPLECART

Click on today’s title for current Boots & Coots stock price!
Click here for a snapshot of how the stock has traded before today!


The Pause is over. If it ever existed.

Today, oilfield firefighting Boots & Coots will face yet another moment of truth. Not in the Iraqi oilfields – but on the Spindletop of a jittery wartime Wall Street.

What's more, it looks like the New York Times may have gotten suckered into priming WEL’s pump -- and might have unwittingly set someone up for a gusher.

War fever has been igniting volatile Boots & Coots stock. Frantic speculators are hitting this site all over again, thanks to an improbable set of circumstances that may have led to the gulling of our nation’s paper of record.

In fact, for the purposes of this story, the Times' business desk might as well have sleepwalked from Friday evening until the Sunday bulldog edition hit the streets.

After the stock market closed on Friday, a surprise decision by the board of Boots & Coots suddenly resolved a mysterious loan that "a shadowy group of Texas oilmen" had threatened to use to take the company away from the stockholders!

And the stock price high-jumped in “after hours trading.”

Hold the presses? Dream on.

The Sunday national edition I’m holding in my hands right now – the same one countless thousands of everyday Janes and Joes scour for stock market information – features a story that smudges the line between fact and fancy. In a piece about the looming risk to Boots & Coots from creditors – specifically, the shadowy group that threatened to take the company away from the shareholders – here’s the money quote: “…the company will not provide further details until the board makes a decision, Mr. Winchester said.” [Emphasis added.]

Mr. Jerry Winchester, a former long-time Halliburton man and the interim CEO, apparently didn’t bother to tell the Times that the board was just about to make that decision. And the Times doesn't seem to have bothered to ask.

So the Sunday paper, knowingly or no, glossed over the decision the board announced Friday afternoon.

It doesn’t look good.

To the untrained eye, the big plays surrounding Boots & Coots International Well Control in recent weeks bear the appearance of stock price manipulation – of inside information being exploited – and of unsuspecting American investors being taken for Mr. Toad’s Wild Ride.

And it apparently hasn't stopped. If you’re an everyday American wanting to invest in the market – and you have the misfortune of clutching the Sunday New York Times Business Section just a tad too tightly – well, you might just wake up today, Monday, with a whole load of nonsense in your head about Boots and Coots.

Caveat emptor?

That’s just not good enough for the paper of record.

* * *

When deconstructing reporter J. Alex Tarquinio’s story, “Fighting Oil Fires, and Creditors,” some of the errors of fact and omission seem alarming.

Take, for example, the first sentence:

“The war in Iraq might just determine the fate of a little-known Houston company, Boots & Coots International Well Control, which put out about a third of the oil-well fires set in Kuwait in 1991 and earned perhaps as much as $100 million in the process.”

What’s the problem? Well, it’s not the $100 million. Why quibble with a company’s alleged income, or the alleged fraction of well fires it extinguished, when the company didn’t even exist in 1991! That’s right: “Boots & Coots International Well Control” wasn’t formed until 1997 – when Boots & Coots teamed up with International Well Control. Hence the name. It's the only stand-alone publicly traded oil well firefighting company, created by a reverse triangular merger that summer.

This is not a minor error. One of the chief advantages of such a merger is to allow a brand new, hand-picked board of directors to elect their very own chairman – and CEO – without any pesky stockholders to answer to. (Correct me if I'm wrong, readers, on any of this stuff!.)

Who did these directors – mostly the same guys who voted on Friday night – elect? Who was their specially chosen, reverse-triangulated chairman of the board and CEO – who ran the company up until resigning abruptly a few months ago?

Never mind. The New York Times didn’t bother to provide the information. Too bad, because this man – Larry Ramming – has made his business career about the very thing the story aimed to shed light on: debt and credit. In fact, I can't find any indication that Mr. Ramming was ever a hellfighter himself. He's a businessman, right?

You want to talk about Boots & Coots' debt, you should see The Man. He might have had a good quote or two.

What about his successor? That’s Jed DiPaolo, a man who had enjoyed his promotion to Sr. VP of Halliburton under Dick Cheney right up until the good ol’ board at Boots & Coots suddenly elected him chairman. He might have given up a quotable response -- especially since the board elected his replacement on or about the very day that the risky loan was signed with that shadowy group of Texas oilmen.

And as this blog has shown, a whole lot of shadowy stuff is linked to this company’s origins.

But forget about that stuff.

Forget about original company exec Reed Slatkin, the admitted fraudster who allegedly ran the biggest Ponzi scheme in history: His stock “warrants” had nothing to do with the story about the company’s creditors.

As background to a story about creditors, The Times decided you don't really need to know that -- in 1997 -- doing business with Reed Slatkin might have seemed very smart to someone like Dick Cheney, who was angling for "total well control on a global basis": Slatkin, one of the founding partners of Earthlink, was enjoying the ride of his financial life as that dial-up internet company exploded to become the number two provider in the country. What cash-flush businessman was a hotter prospect in 1997 than Reed Slatkin?

It wasn’t until a year or so ago that Slatkin began to be unmasked. And there’s still a lot of money missing. Tens of millions, if not hundreds of millions, of dollars.

For a story about creditors, this context didn't seem relevant to The Times: What seemed like an asset in 1997 could now be considered a very hot political liability. Slatkin is allegedly a fraud of epic dimension. Dick Cheney’s company arguably should have had the snap to uncover, with a spot of due diligence, what Slatkin has admitted: "that his investment empire was a scam from its beginning in 1986."

Why would Dick Cheney want his company doing any kind of business with Reed Slatkin -- when lots of wheezing companies could have been used for the hocus pocus of that reverse triangular merger? Oh, yeah. Reed Slatkin had a different shine in 1997, animatronic Indian theme park or no.

And would anyone care to cover that up, crime or no crime -- to, say, scrub an EDGAR index, or make a call to Yahoo to downplay the volume of a certain hyperactive penny stock?

But forget about that, or any conceivable role that may have had in motivating this shadowy business. It's not the crime, it's not the cover-up. It's the creditors, remember?

That’s some serious forgetting.

Why should a New York Times reporter, when writing an article about a company’s creditors, seem to forget the company’s original CEO and chairman of the board, and the obscure circumstances surrounding his ouster? After all, Larry Ramming (see bio) had been “actively involved in mortgage banking and the packaging and resale of mortgage notes, consumer loans and other debt instruments for over fifteen years” before Boots & Coots IWC was even formed. He knows a little something about creditors. In fact, Ramming brought the company back from near insolvency to a profitable 2001 mere months before he was unceremoniously replaced -- by the same guys who anointed him chairman and CEO to begin with.

Should a writer forget to mention that the company has three times used the story that it's "refocusing its efforts on maximizing opportunities in its well control and risk management divisions” to deal with its credit crunch, in a feast-or-famine business?

Even little ol’ Axcess Business News made room in the copy for that much background about “creditors.” Not the Times.

Likewise, the Times didn’t provide this context: that from 1995-2000 Dick Cheney was the Halliburton CEO responsible for its contractual “alliance for total well control” with Boots & Coots. Or that this “alliance” marked a bold new direction for Halliburton – and that it was announced only days after Cheney was named CEO. In fact, during Dick Cheney’s tenure at Halliburton, the "alliance" tied up more and more of the limited talent pool of hellfighters with contracts. Cheney’s Halliburton touted that alliance for “total well control on a global basis” in one of the very first press releases the company issued under his leadership.

Forget all that. The New York Times deemed it sufficient to say the companies had an “agreement to subcontract oilwell firefighting.”

How's this for sufficient? Mr. Tarquinio cited three primary sources for his supposedly up-to-the-minute quotes about the shadowy creditor situation -- and all three have a financial stake in the company.

Take note of Mr. Tarquinio’s “buyer beware”: When quoting “Michael E. Shonstrom, the president of Shonstrom Research Associates, an institutional analysis firm in Denver,” the article uses dashes to set off the phrase “said Mr. Shonstrom – who owns warrants in Boots & Coots--...”

That’s it.

Caveat!

For all you readers out there who may be a tad less sophisticated than Mr. Tarquinio, this kind of a warrant isn’t what a sheriff uses to go after bad guys. It’s a virtual claim check for stock in the company.

In other words, Mr. Shonstrom has a financial stake in the company he’s analyzing. Did you catch that little caveat, fellows? That's all the warning small investors -- Americans of modest means without insider information or access to "institutional analysis" -- deserve, decided the Times.

A bigger warning could have pointed out the bias in the sum of this article’s sources: Every spoken quote in this story was uttered by insiders with money to make and bills to pay and good reason to believe that Boots & Coots' fortunes are intertwined with theirs.

Balance? The New York Times didn’t deem it necessary to quote skeptical -- or even disinterested -- outsiders.

Didn’t want to upset the applecart?

* * *

So here's the big picture:

In this article about “Fighting Oil Fires, and Creditors,” the background information was largely accurate – but suspiciously incomplete. (Use that modest Axcess article as a baseline.)

Other key information – about the state of the board’s business with that shadowy group of Texas oilmen – was stale, at best. Recall that this very loan was one of the company’s biggest wild cards: The creditors’ identities are shielded by Panamanian law, and the uncertainty about their peremptory claims of default has dogged the stock for weeks, if not months. The board suddenly settled it on Friday, after the market closed.

The paper might as well have hurled itself into the bottom of the catbox by ignoring that kind of update.

Other writing in the piece – about the company’s origins and business “in Kuwait in 1991” – was inaccurate.
Further, there was room in the article to mention the John Wayne movie, “Hellfighters,” but not a word about the company’s founding CEO and chairman of the board – an expert in “creditors” who was replaced under unusual circumstances.

And the quotes were all from insiders with a financial stake in spinning the company's problems.

Nothing at all was written about the fact that the company was formed during an "alliance" with Halliburton, overseen by CEO Dick Cheney. Or that the strategy -- cultivated by Cheney's Halliburton -- for "total well control" banked on catastrophic oil field fires -- exactly like the ones hawks have long forecast for Iraq.

Want more? Well, there's no mention that Coots is rumored to be dead, and Boots – long since retired – is on the record saying, “It just hurts my feelings every time I hear people talk about it, because it, it’s my name.”

The last three grafs were moony grace notes: Mr. Danny Clayton, the “operations manager” whose recent insider trades might raise eyebrows, speculates on the money to be made per burning oil well. Mr. Shonstrom opines that the stock “could rise as high as $5.” The “guys at Boots & Coots,” he gushes, “are a little more gun-slingy than the other guys.”

Cowboy movies and moonbeams is what it sounds like to me. We’re left to wonder: Who’s in cahoots with Boots & Coots?

Thank you, Times, for this mackerel by moonlight. It shines.

And it stinks.

Now go out and make your stock plays, small investors. Let your conscience -- and the Sunday New York Times Business Section -- be your guide.

* * *

PS - 7:50 a.m. Pacific - Hope you caught this morning's small correction!

Oops!

Did I forget to say caveat emptor?

* * *

Thank you Atrios -- and Eric Alterman -- for linking to this blog!

posted by Major Barbara | 12:28 AM


Sunday, March 30, 2003  

Now someone has gone and told Fortune, too:

Will Halliburton Clean Up?
The company that Dick Cheney once ran stands to make millions rebuilding Iraq.

posted by Major Barbara | 6:43 PM
 

Newsweek gets a clue:

FANNING THE FLAMES
Cheney’s Halliburton ties come under increasing scrutiny
By Keith Naughton and Michael Hirsh
NEWSWEEK
April 7 issue — The stock market may be suffering, but Operation Iraqi Freedom has sure been good for business at Halliburton, the Houston oil-services company famous for its former CEO, Dick Cheney. THE VICE PRESIDENT hasn’t entirely severed his financial ties to the big defense contractor. Even while Halliburton is scoring Army contracts that could top $2 billion, Cheney is still receiving annual compensation from the company he led from 1995 to August 2000, NEWSWEEK has learned...." [Emphasis mine.]

All right, guys. Who told them?!

(For background, try this. It's the kind of reporting you just don't see in America anymore -- before it's fishwrap.)

* * *

Observer: US arms trader to run Iraq
Exclusive: Ex-general who will lead reconstruction heads firm behind Patriot missiles

"...Garner's business background is causing serious concerns at the United Nations and among aid agencies, who are already opposed to US administration of Iraq if it comes outside UN authority, and who say appointment of an American linked to the arms trade is the 'worst case scenario' for running the country after the war. ..." [Emphasis mine.]

(We'll see how fresh this story is when it hits our shores.)

posted by Major Barbara | 10:38 AM
 

AP: U.S. Steps Up Reinforcements, Supplies
"...Warplanes have dropped some 6,000 precision-guided munitions, Pentagon officials said, and 675 Tomahawk cruise missiles have been launched from the air and sea - just seven missing their targets because of apparent mechanical malfunctions.

"Tomahawk launches from the eastern Mediterranean Sea and the Red Sea were temporarily suspended because some missiles fell into Turkey and Saudi Arabia on their way to Iraq...."

675 Tomahawks @ $600,000 apiece? Or is it $1.4 million?

Only Raytheon knows for sure. Scroll down to follow the money in "Smart Bombing."

* * *

The Army Times is dropping hints about that whole Iraqui-cell-phone-can-of-peas Rep. Issa opened so unceremoniously the other day. In an article about Iraqui ultralights, a reader noticed something to puzzle over -- tucked away in the story's lengthy last graf:

"There was a second hint Saturday that U.S. forces may have underestimated Iraq’s technological capability. Journalists traveling with units in the field were told to stop using a certain brand of satellite telephone. The command is worried that, in some fashion it would not explain, the Iraqis might use signals from those phones to gather intelligence about American operations. The command did not order all phones shut down, just those using the Thuraya satellite. That system is based in the United Arab Emirates and is Arab owned. Other satellite phones, including those in the Iridium system, were not subject to a shut down order. Iridium is an American-owned system."

Thanks for following up, pineappletown. We should keep an eye on Iridium, eh?

posted by Major Barbara | 4:39 AM


Saturday, March 29, 2003  

Someone give a heads up to the NYTimes. The shadows are affecting their vision.

This story from the Sunday paper missed the Friday news entirely:

Fighting Oil Fires, and Creditors

"...The board of Boots & Coots is considering the Checkpoint proposal, and the company will not provide further details until the board makes a decision, Mr. Winchester said...." [Emphasis mine.]

Boots & Coots' board made their "decision" about that mysterious loan on Friday.

This is a real pants-down error for a paper of record. After all, that's what the story is about.

So... when things like this happen, who's responsible? Newspaper fact checkers -- or execs of publicly-owned companies who dissemble or delay to keep shareholders in the dark?

Scroll down to "Surprise!" for more.

posted by Major Barbara | 10:12 PM
 

SMART BOMBING

While there's a "pause," let's reflect on these smart bombs cruising into Iraq. And Kuwait. And Turkey and Saudi Arabia.

And while we're at it, let's share a word about government databases that aren't always so smart -- or honest -- either.

How many Tomahawk cruise missiles have been used in the last week or so?

They all have to be re-supplied -- at $600,000 a pop. And they all had to be stockpiled before the war began.

$600,000, by the way, is just the replacement cost. That doesn't include the price of the Tomahawk's development, which makes the real cost to taxpayers more than twice as much. Still, as a raw example, that's a good guess how much Raytheon would get to resupply that missile that flew off course and damaged a Kuwaiti shopping center. If it were a Tomahawk, of course. Smart bombs aren't supposed to target shopping centers. And thanks to the fog of war, news accounts differ in their forensics.

(This is, after all, just an example. Who knows? It might have been a Scud. Or a Silkworm. Or a Patriot. At least this missile didn't kill anyone.)

But right or wrong, Raytheon has it covered. There's no danger that the Tomahawk program will be abandoned. Just check the stats at the FEC. When I tried to run their soft money numbers, the FEC computer squirreled up and gave me a total no one in their right mind would believe: Total Soft Money: 119600.00.

Believe that? Don't. Databases aren't always reliable when they're lighting up the shadows. (Scroll down to "Getting Married" for more examples.)

Fortunately, just a couple of days ago, I got an e-mail from a very helpful anonymous source, culled from a more candid computer:

"* Raytheon, the third largest federal contractor, gave $475,675 during the 2002 cycle, or 2.84% of its government contracts.

A list of the 100 largest federal contractors is available from the Federal Procurement Data System. Specifically, go to the 2001 report, which is the most recent. It's available [here]. See section 1J, "Top 100 Federal Contractors." The largest military contractors are available [here], section B4."

More to come on this subject. Contracts are getting bigger -- fast.

Just remember that Raytheon allegedly kicked back "2.84% of its government contracts." Mostly to the GOP.

Some might call that a tithe. Others might not be as charitable in their description.

Just a reminder during this alleged pause: The Pentagon said U.S. forces have fired more than 675 Tomahawks during the war.

Let me know if you have helpful information.

posted by Major Barbara | 4:13 PM
 

IT'S SPRINGTIME FOR BECHTEL --
AND THE BOHEMIAN GROVE!


NYTimes: Bechtel Top Contender in Bidding Over Iraq

By ELIZABETH BECKER and RICHARD A. OPPEL Jr.

"WASHINGTON, March 28 — Bechtel has emerged as one of the top two contenders for the major contract to reconstruct Iraq, people involved in the bidding said.

Officials with the Agency for International Development said today that a final decision had been delayed until next week, because "outstanding issues are holding this up," a spokeswoman for the agency, Ellen Yount, said...."

* * *

Houston Chronicle: Houston company won't get contract
Halliburton off list for rebuilding Iraq

"...While it will not serve as the prime contractor, Halliburton could still do significant work as a subcontractor. USAID officials have said about half the value of the contract will filter down to other companies.

The companies reportedly invited in February to bid on for the contract were Bechtel Group, Fluor Corp., Louis Berger Group, Washington Group International and Parsons Group. Parsons Group is said to be allied with Halliburton...."

* * *

A quick trip to the FEC, and a search under "Bechtel" rendered this quick assessment of the political grease it takes to play the game:

"Total Soft Money: 926200.00"

Without a comma, that's not easy to read.... but it's within harking distance of a million bucks.

And that's not all, folks.

posted by Major Barbara | 6:14 AM


Friday, March 28, 2003  

SURPRISE!

In the best interests of their shareholders, Boots & Coots withheld the following press release until after the stock market closed for the weekend:

Boots & Coots Announces Payment of Checkpoint Business, Inc. Note
Friday March 28, 7:23 pm ET

HOUSTON, March 28 /PRNewswire-FirstCall/ -- "Boots & Coots International Well Control, Inc. (Amex: WEL - News) announced today that its Board of Directors decided against the restructuring proposal from Checkpoint Business, Inc. ("Checkpoint"). This proposal would have involved a voluntary Chapter 11 bankruptcy filing by Boots & Coots and the cancellation of Boots & Coots' common equity as part of the bankruptcy process. Additionally, Boots & Coots announced that it had paid in full its principal balance and interest outstanding under its Loan Agreement with Checkpoint...."

Why is this significant? "A shadowy group of Texas oilmen" had been threatening to take over the company -- just when feast-or-famine Boots & Coots was getting ready for the limelight!

For background, read The Devil's Disciple?, and You Never Can Tell.

Dick Cheney's Halliburton long fostered an "alliance" with debt-ridden Boots & Coots. With some manner of assistance from Arthur Andersen.

Read on for more...

* * *

Financial Times: Cheney's former company loses in bid race
By Sheila McNulty in Houston and Joshua Chaffin in Washington
Published: March 29 2003 4:00 | Last Updated: March 29 2003 4:00
Halliburton, the US engineering group, was ousted yesterday from the bidding process to become key contractor for the rebuilding of Iraq, easing pressure on the US government over close ties to US companies invited to bid.
While all of the large engineering and construction companies involved have close political ties, none is as politically embedded as Texas-based Halliburton. Dick Cheney, US vice-president, is Halliburton's former chief executive.
Halliburton declined to comment on its rejection. A source close to the process said the two finalists were Bechtel and Parsons...." [Emphasis added.]

If it's Bechtel, expect to hear a lot more about power hijinx at the Bohemian Grove.

posted by Major Barbara | 5:51 PM
 

And then there were two:
Reuters: Report: Halliburton Out of Iraq Deal Race AID administrator Andrew Natsios said this week that only two companies were still in the competition. He said he did not know which they were because of the arrangements for contracts of this nature.

Guesses anyone?

(My money's on Bechtel. But Louis Berger might be a more effective beard.)

posted by Major Barbara | 4:26 PM
 

MSNBC: Halliburton Out of the Running
The construction firm once run by Dick Cheney won’t get a big Iraq contract

CBS MarketWatch: Halliburton won't lead Iraq rebuild

Financial Times: Pentagon to blacklist companies investing in Iran

posted by Major Barbara | 3:14 PM
 

Rubin: Conflicts of interest on war and business hurt U.S. image
"When it comes to the Iraq war, images matter as much as guns.
President Bush has tried to frame this war as a moral crusade against evil. But many people in the Middle East, in Europe and even in America think this is a war to "grab" Iraqi oil and line the pockets of White House cronies. This is a gross oversimplification.
Yet the administration seems determined to convince cynics their worst fantasies are real...."

Toronto Star: Well-fire fighter shut out in Iraq
Safety Boss passed over despite acclaimed work in Kuwait
American contractor hires only U.S.-based firms to help

AP: Rep. Issa wants to give Qualcomm leg up in postwar Iraq
MARK SHERMAN
Associated Press
WASHINGTON - First the fries. Now the phones.
In another congressional swipe at Europeans who are not U.S. allies in Iraq, San Diego-area Rep. Darrell Issa is trying to prevent the Pentagon from using the European-based GSM cell phone technology in postwar Iraq.
One beneficiary of Issa's legislation, should it become law, would be San-Diego based Qualcomm Inc., which has developed the competing CDMA technology...."
(tip from pineappletown)

* * *

San Diego area Republican Darrell Issa has some very good reasons for his preemptive bid for business in Iraq for Qualcomm -- and most of them start with the letter $. According to the FEC, Qualcomm has spread around $282,500.00 in "total soft money" while Issa has raked in $163,600 in "Non-Federal Receipts 'Exempt From Limits.'" One possible conduit from Qualcomm to Issa? National Republican Congressional Committee Contributions. Other Republican funds also gave to Issa.

But the Congressman may be more altruistic than that. Qualcomm's soft money contributions have been shared between Republicans and Democrats. And Qualcomm's CEO, Dr. Irwin Mark Jacobs, and its president, Anthony Thornley, have contributed mostly to Democrats.

Money is money, eh? Especially since FEC documents apparently show car alarm-magnate Issa is still over $9 million in debt from his failed Senate campaign(s).

If anyone else is following the money, let me know.




posted by Major Barbara | 5:11 AM


Thursday, March 27, 2003  

NYTimes: Pentagon Adviser Is Stepping Down
By STEPHEN LABATON
WASHINGTON, March 27 — Richard N. Perle resigned today as chairman of an influential Pentagon advisory board in the wake of disclosures that his business dealings included a recent meeting with a Saudi arms dealer and a contract to advise a communications company that is seeking permission from the Defense Department to be sold to Chinese investors....

In a brief phone conversation this afternoon before the Pentagon's announcement, Mr. Perle sounded angry. Asked whether he had resigned, he replied: "Let me just tell you something. If I had, you'd be the last person in the world I'd want to talk to." He then slammed down the phone...."

Times: Bush adviser quits in conflict over profit from war

"...[Mr Perle] was also accused by John Conyers, a Democrat congressman, of having participated in a conference that discussed investment opportunities in postwar Iraq and of having received share options from a company doing business with the US military. Mr Conyers said: “I would submit that it is a conflict of interest for a high-ranking government official to be proffering advice on how to profit from the war....” "

posted by Major Barbara | 7:31 PM
 

Former Pentagon official Richard Perle resigns as key Rumsfeld adviser

Key Rumsfeld Adviser Resigns His Post
By ROBERT BURNS

"...Perle became embroiled in a recent controversy stemming from a New Yorker magazine article that said he had lunch in January with controversial Saudi-born businessman Adnan Khashoggi and a Saudi industrialist.

The industrialist, Harb Saleh Zuhair, was interested in investing in a venture capital firm, Trireme Partners, of which Perle is a managing partner. Nothing ever came of the lunch in Marseilles; no investment was made. But the New Yorker story, written by Seymour M. Hersh, suggested that Perle, a longtime critic of the Saudi regime, was inappropriately mixing business and politics.

Perle called the report preposterous and "monstrous."

Perle, 61, was so strongly opposed to nuclear arms control agreements with the former Soviet Union during his days in the Reagan administration that he became known as "the Prince of Darkness.""





posted by Major Barbara | 3:21 PM
 

IHT: U.S. Rejects Criticism on Awarding of Iraq Contracts
By BRIAN KNOWLTON
International Herald Tribune

WASHINGTON, March 27 — An American official has strongly rejected European complaints that the United States was unfairly awarding contracts for the reconstruction of Iraq to American companies. The overriding United States objective, he said today, was to provide the quickest possible relief to the Iraqi people.

The official, Alan Larson, an under secretary of state, said he was "surprised" by suggestions from European companies and officials that the United States was unfairly guarding the spoils of a highly controversial war by awarding the first big reconstruction contracts to American companies...."

posted by Major Barbara | 2:00 PM
 

Reuters: BP, Boots & Coots involved with war plans-report
NEW YORK, March 27 (Reuters) - BP Plc, Boots & Coots International Well Control Inc. and other companies involved in the energy business have played a larger role in military planning for the war in Iraq than previously known, the Wall Street Journal reported on Thursday....


posted by Major Barbara | 10:02 AM
 

Josh Marshall: Practice to Deceive
Chaos in the Middle East is not the Bush hawks' nightmare scenario--it's their plan...

posted by Major Barbara | 6:46 AM


Wednesday, March 26, 2003  

Reuters: Lawmaker seeks details of Halliburton's Iraq deal

WASHINGTON, March 26 (Reuters) - A lawmaker wrote to the U.S. military on Wednesday asking why it had awarded a government contract to extinguish oil well fires in Iraq to a subsidiary of Halliburton Co. (nyse: HAL - news - people).

In a letter to the U.S. Army Corps of Engineers, Rep. Henry Waxman, a California Democrat, sought details of the wartime contract, and inquired why the administration had not allowed other companies to bid on it."...

posted by Major Barbara | 6:27 PM
 

Birnbaum in Fortune: Iraq Rebuilding Contracts: What's at Stake?

Sydney Morning Herald: Anger over US army's multi-million dollar deal to fight oil fires

March 27 2003, 9:55 AM

"The US army came under fire today for granting an Iraqi oilwell firefighting contract to a subsidiary of Halliburton Co, once run by Vice President Dick Cheney, without a bidding process.

Henry Waxman, the senior Democrat in the House of Representatives' government reform committee, demanded an explanation in a letter to Army Corps of Engineers Lieutenant General Robert Flowers.

"I am writing to inquire why the administration entered into a contract potentially worth tens of millions of dollars to a subsidiary of Halliburton without any competition or even notice to Congress," he said....


posted by Major Barbara | 3:31 PM
 

CNNMoney: Halliburton gets a head start
Help wanted: Firm once headed by Cheney was gearing up to rebuild Iraq before war started.

Houston Business Journal: Boots & Coots firefighters expected to take on Iraqi wells

Financial Times: Halliburton's links sharpen bids dispute
By Joshua Chaffin in Washington
Published: March 26 2003 20:00 | Last Updated: March 26 2003 20:00

"As the US government begins awarding potentially lucrative contracts this week to rebuild Iraq, the controversy surrounding the process is engulfing one bidder more than the rest: Halliburton.

Foreign companies and governments complaining that they have been shut out of the process have pointed to the close political ties of the large US engineering and construction companies that have been invited to bid...."

posted by Major Barbara | 1:57 PM
 

GETTING MARRIED

What does hellfighting Boots & Coots IWC have in common with U.S. Liquids -- a waste management company clouded by insider trading charges?

1) A broken "letter of intent" with alleged fraudster Reed Slatkin and former partner Mark Leibovit's Havenwood Ventures.

2) Arthur Andersen.

(Why is number 2 no great suprise?)

Read the installments below to try to help connect the dots between a broken engagement and a troublesome marriage. It was a profitable little triangle where the bride was a failed animatronic theme park "development company" -- and the suitors were both up-and-coming Texas oil bidnesses.

Who both happened to use Arthur Andersen.

posted by Major Barbara | 12:22 PM
 

Before the matrimonial vows of a reverse triangular merger created Boots & Coots International Well Control in 1997, the bride in the marriage -- Havenwood Ventures -- had only recently been engaged to someone else.

Her intended: U.S. Liquids, an up-and-comer in the waste management business.

Waste management?

Now there may very well be less to these transactions than meets the eye, but the parties involved are pretty interesting. And the fact that a marriage such as this was called off at the last minute makes it even more interesting.

Especially since a fat consulting fee changed hands -- despite the ruined marriage.

And some of the parties involved have been indicted for insider trading.

The facts: In spring of 1997, Havenwood's president, Mark Leibovit, signed a "letter of intent" to merge his languishing company with U.S. Liquids.

But that summer, Havenwood merged with International Well Control to form Boots & Coots IWC, Inc. instead.

And U.S. Liquids soon acquired other companies in "pooling-of-interests transactions."

So both parties went on to other deals -- but U.S. Liquids still gave Mark Leibovit a nice consulting fee (USL, 10-Q, 11/15/99).

The process seems altogether deliberate.

And Mark Leibovit -- along with Reed Slatkin -- almost certainly made money on the "reverse triangular merger" that created Boots & Coots IWC, Inc. They were shareholders, after all, in Havenwood, so they were entitled to compensation.

One other thing: Within a year of all this, U.S. Liquids insiders -- "without admitting or denying the allegations against them" -- agreed to be "enjoined" and to pay more than $2.5 million to settle insider trading allegations.

And just last month:

Justice Department alleges fraud in trading
Waste firm charges hit execs, investors


Judging from this, Mark Leibovit was doing business with a pretty questionable group of Texas oilmen. So, it appears, was Arthur Andersen.

Why was Dick Cheney's vaunted "alliance" for "total well control" doing business with these characters?

Why was this company devoted to animatronic Indians suddenly in such demand? Is it a coincidence that both prospective deals for Havenwood involved Texas oilmen with companies based in the Houston area?

We're left to wonder who did the matchmaking in these mergers, and for what reasons.

If you know anything, let me know.

posted by Major Barbara | 10:00 AM
 

Reed Slatkin: admitted fraud, minister of Scientology, alleged Ponzi-schemer....

Hundreds of millions of dollars are missing.

Why was Slatkin in business with "allies" of Dick Cheney's Halliburton back in 1997?

"In pleading guilty to fraud last year, Slatkin described his investment empire as a scam from its start in 1986."

Over the years, lots of people were taken in. Most lost money. Some -- like Greta Van Susteren, Cheryl Tiegs and Peter Coyote -- allegedly made money, but are being targeted in the courts by victims of the scams. That, as I understand it, is the nature of a Ponzi scheme: A few investors make money off of the hidden losses of many more.

(Let's be clear about this: Dick Cheney's ties to Reed Slatkin are suspect because of the fraud, not the Scientology. Slatkin's religious affiliation probably helped him victimize many unsuspecting Scientologists.)

So if, as Slatkin admitted, he'd been in the fraud business since 1986, why was Dick Cheney's "ally," International Well Control, doing business with him in 1997?

Of all the many flat-lining companies available for a "reverse triangular merger," why choose Havenwood Ventures -- with which Reed Slatkin had been affiliated since at least 1992?

And why has the EDGAR index of the SEC database apparently been scrubbed to conceal Reed Slatkin and Mark Leibovit's association with Havenwood Ventures and Boots & Coots IWC, Inc.?

This last question is particularly troubling. Small investors rely on EDGAR -- but there's clearly something wrong with the indexing -- and it's awfully suspicious.

Remember: Scott Cohn's expose on Boots & Coots -- the article that initially piqued this blogger's interest -- doesn't even mention Reed Slatkin.

(If a reporter working on deadline -- say, someone like Scott Cohn -- relied on EDGAR indexing when researching his story, Reed Slatkin's participation in Havenwood would have been obscured. Without an accurate index, only a full, time-consuming reading of many SEC documents would have uncovered the connection.)

Would some of you please test this out? Log onto EDGAR and do a few searches on the "People" index. Let me know if you can find Reed Slatkin (or Mark & Alice Leibovit) linked to Havenwood Ventures or Boots & Coots IWC on any SEC index. (Those are the only three executives named on Havenwood's 1996 annual report.)

There may be no crime -- but this certainly suggests a cover-up.

* * *

For those of you who scoff at the mention of an electronic "cover-up," you may find this article from last week interesting:

'Boots, Coots, What's That?' Asks Yahoo!Mar 21, 2003 (financialwire.net via COMTEX) -- (FinancialWire) ...

Boots and Coots has been the "phenom" stock on the Street this week, trading over 127 million shares today, making it by far the most active among NYSE, Nasdaq and American Stock Exchange listed companies, but you wouldn't know by looking among the "volume leaders" at Yahoo! (NASDAQ: YHOO) Finance, the number one financial site. The company has been the subject of an expose by Dow Jones (NYSE: DJ) Reporter Carol Remond, the subject of commentary on CNBC, a General Electric unit (NYSE: GE), and, of course, a household word among owners of 127 million shares Wednesday alone, but unless users of Yahoo! Finance were specifically looking up its ticker symbol, they wouldn't know it exists.

A spokesperson at the Amex said its feed was open to the Yahoo site suppliers from http://www.amex.com, but could not speculate why Yahoo's users were not aware that Boots and Coots, which has been in play due to the war in Iraq and the company's traditional leadership in oil well fighting, was the most active stock on one of the three major U.S. exchanges over the past few days.

Spokespersons for Yahoo! Finance exchanged phone calls with FinancialWire Tuesday but had not explained the anamoly by press deadline. Yahoo! Finance has been known to have content rules that its trader-and-investor users are not always aware exist, but the cause for this odd omission is not yet apparent....

Let me know what you find.

posted by Major Barbara | 8:37 AM
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