Updated: March 8, 2002
iNews is a service provided by the IAM Communications Department and is intended for local and district webstewards and newsletter editors. All material found on iNews may be reproduced in IAM publications and websites.
 

Ex-Enron chief “fights for liquidity?”
Lay’s nest egg worth $900,000 a-year
It’s hard to forget the tearful face of ex-Enron chairman Kenneth Lay’s wife on the Today show. We are “fighting for liquidity,” Linda Lay told viewers. Their savings from Lay’s $360 million a year CEO job; their four vacation properties, worth $16 million, in Aspen, Colorado --  “It’s gone. There’s nothing left,” she sobbed, pointing to an avalanche of criminal trials, hearings and lawsuits headed their way.

 It seems she forgot about $4 million the couple has tucked away in a lawsuit-proof investment account.

The account “will guarantee the couple an annual income of about $900,000” for the rest of their lives, according to Bill Hogan, an editor for Mother Jones magazine. And a special set of Texas laws makes the $4 million account “virtually impervious to attack by creditors,” Hogan reported.

The fund will issue guaranteed payments of  $43,023 a month to Kenneth Lay and $32,643 a month to Linda, according to Mother Jones.

Bankruptcy “reform” could make future Enrons more likely
Congress may be writing new loopholes into the very laws they claim to be tightening in the wake of the Enron scandal.

According to critics, the proposed Bankruptcy Reform Act would make it easier for companies to use of “off the book” transactions to hide losses and generate cash without scrutiny from auditors, government agencies or shareholders. Section 912 of the Act deals with Enron’s favorite “shell game,” known in financial circles by the fancy name “asset securitization.”

It’s a simple accounting trick: a company sets up a subsidiary and “sells” some of its assets to the new company at one price. The subsidiary then sells those assets at another price, as bonds, to outside investors in exchange for cash. The new regulations would keep lawyers from reviewing these “off the book” transactions, entrusting oversight of the deals to auditors and bond-rating houses.

 “There are three institutions out there that scrutinize business disclosure,” one financial expert remarked. “One is the Securities Exchange Commission, one is accountants, and one is lawyers and judges. Enron suggests that two legs of the three-legged stool are already too short, and this statute would chop the third one out.” 

Jury awards $755,000 to union organizers beaten at N.C. plant
A North Carolina jury has awarded $755,000 in damages to an employee and a union organizer who were beaten and arrested during an NLRB-sanctioned union election inside a Smithfield Packing Co. plant.

Witnesses told the federal district jury that plant security guards and local sheriff’s deputies attacked a pro-union employee Rayshawn Ward and United Food and Commercial Workers’ organizer John Rodriguez while ballots were being counted for a bitterly contested union representation election in 1997.

The two were beaten, sprayed with mace, handcuffed and arrested on charges of with inciting to riot and assaulting a government official.

The jury found the beatings and false arrests violated the rights of Ward and Rodriquez under the federal 1871 Civil Rights Act (also known as the Ku Klux Klan Act of 1871).

This is the second verdict against Smithfield for its aggressive actions to break the organizing drive. In December 2000, an Administrative Law Judge of the National Labor Relations Board issued a 400-page ruling against Smithfield for massive violations of federal labor law. The Judge found Smithfield’s attorneys suborned perjury during the NLRB trial; that company witnesses “lied under oath” and that management conspired with the local Sheriff’s Department to physically intimidate and assault union supporters.

On the day of the election, for example, deputies in riot gear, carrying batons and shotguns, lined to driveways entering the plant. Smithfield told employees they would close the plant if the workers voted to unionize. “They would rather destroy the plant than accept the union,” remarked one attorney.

Smithfield succeeded in defeating the drive but the organizing continues and the union has challenged the results based on the massive interference and intimidation.

The international advocacy group Human Rights Watch has cited the Smithfield election as an example of U.S. failure to enforce its own labor laws.

Threats to fire members and bankrupt union
Fail to crush anti-privatization strike in Korea
Hundreds of workers may be fired and a leading union destroyed if the Korea Electric Power Corp. breaks a strike over privatization of that nation’s state-controlled energy industry.

Union leaders say government plans to dismantle the state-run industry ignore the needs of more than 8,500 workers, who face massive job and income losses. Government and industry officials insist the strike by public-sector energy workers is illegal (virtually all strikes in Korea are illegal) and say they will fire the strikers and levy massive fines that will bankrupt the union. Union leaders may also face criminal and civil charges if they refuse to end the strike, the officials added.

Instead of backing down, the union says it will broaden the strike to include several nuclear power plants if government and industry try to make good on their threats. 

“The companies told us yesterday they would talk to us if we changed our mind, but there are no changes in our demands,” a union leader explained.

A government crackdown and mass arrests last week halted strikes by rail and gas utility workers who battling the privatization of their industries.

To send letters of support to the strikers, click on: http://www.jinbo.net/maybbs/form.php?mod=write&db=base21&code=soli

For more information, click on: http://www.base21.org