The Full Court Press

Vol 1, Issue 9

Page 3

Monday, November 20, 2006

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  • Hidden Stories

    By Bernard Levy

        The following are a few of the "Hidden Stories." We define "hidden stories" as news that: 1) never receives coverage in mainstream media (MSM); 2) gets published, but insignificantly, e.g., in a newswire that's easily overlooked by a reader or placed in an out-of-the-way page, perhaps next to a large ad for vacuum cleaners; 3) is reported reasonably well once and then never or rarely seen again.

        Most are important stories containing information that affect our pocketbooks and lives, e.g., government incompetence and corruption that cost taxpayers money. We'll cover some in depth as time and resources permit. We hope you enjoy this feature. If you do, please let us know.

    We've culled our candidates for this week's issue to five. We start off with Wen Ho Lee, the former nuclear weapons scientist, who was accused of being a spy. Fired from his nuclear weapons scientist position at the Los Alamos National Laboratory in New Mexico, but never charged with espionage, he was kept in solitary confinement for nine months, then released in 2000 after he pled guilty to mishandling computer files. Although Mark Sherman of the Associated Press covered the story in June, 2006 of Mr. Lee's $1.6 million settlement, we've never read or heard whether the governmental officials, who accused him of spying and subjected him to solitary confinement, were ever charged with misconduct or, at least, reprimanded. Mr. Lee received $895,000 from the government for legal fees and taxes. As the AP article noted, he accused the Energy and Justice departments of "violating his privacy rights by leaking information that he was under investigation as a spy for China." Additionally, the AP and four other news organizations paid Lee $750,000 as their part of the settlement. The case against him was, at best, tenuous, if not nonexistent.

    Yes, the press did screw up, and they paid their portion of the settlement because "(they) decided this was the best course to protect our sources and protect our journalists." Protect sources that were wrong? Score one for justice but, again, why no follow up on those who wrongfully accused and incarcerated Mr. Lee?

    * * * * * * * *

    Just covered in the MSM, the Food and Drug Administration has lifted a 14-year ban on silicone-gel breast implants. This story was covered on all national November 17th evening newscasts.

    Only one of the networks noted that a primary reason for the ban's removal was the determination by the FDA that the manufacturing processes for such implants are much improved. All of the newscasts gave the following reason for approval - tests and research had determined that such implants are safe. The FDA, according to an Associated Press article written by Andrew Bridges, "warned that patients probably would need at least one additional operation because the implants don't last a lifetime."

    There are several hidden stories, including what pressures were brought to bear by implant manufacturers for clearance. One of the newscasts noted that at least 300,000 women would opt for these implants as soon as possible. I vividly remember the past litigation that resulted from implant patients. This story isn't over yet.

    * * * * * * * *

    I have waited since June 13, 2006, when an Associated Press small blurb was published with the headline "Banks' reserves under scrutiny." It appears, according to the article, that Fed Chairman Ben Bernanke communicated to the press that a "sweeping regulatory plan to improve risk management for the countries largest and most internationally active banks is important to make sure the U.S. financial system remains sound." I read a ton of financial and business print every month, but have yet to see a follow-up story. The last paragraph of the AP's article noted that "the aim of the proposal is to more closely match the risk in big banks' portfolio with the capital they hold in reserves." Hopefully, there will be no need for this hidden-away story to come to light.

    * * * * * * * *

    The following story is most recent, having been covered November 18, 2006 in The Oregonian in an article written by Lisa Grace Lednicer. It appears that the former West Linn Finance Director was sentenced to eight years for theft of $1.4 million from the City of West Linn to "support a gambling habit and lifestyle that included clothing from Ralph Lauren, gifts and $17,000 worth of jewelry." This theft occurred over a five year period. She pled guilty to 57 counts of theft and first-degree aggravated theft. Addicted to gambling, particularly video poker and slot machines, Elma Magkamit, had no previous criminal record and earned $85,596 a year in her position as the city's finance director. West Linn, for all non-Oregon readers, is a city suburb of Portland.

    She apparently had many enablers, including her husband, a small-business auditor, who wasn't a suspect in the thefts. However, "he often accompanied his wife during her gambling trips." The hidden story is how an employee of any governmental agency could continue to embezzle funds for a five year period without raising some suspicion on the part of those who should have overseen her position. As the article noted, "An accountant the city hired to prepare the paperwork for a required annual audit discovered Magkamit's thefts in April, while combing through the city's financial records." The instructive word in this quote is "annual." How in tarnation, being an old CPA/auditor, could this have continued to remain undetected for a period of time spanning many "annual" audits? Yes, persons in or working for government weren't doing their jobs. This problem is present in all levels of government; how about those Congressional Oversight Committees that have no sight?

    * * * * * * * *

    Again, we waited several months to feature this story, anticipating that additional MSM coverage would be forthcoming. According to Griff Witte of The L.A.-Washington Post Service, published by The Oregonian July 12, 2006, "The Army is discontinuing a controversial, multi-billion dollar deal with oil services giant Halliburton Co. to provide logistical support to U.S. troops worldwide, a decision that could cut deeply into the firm's dominance of government contracting in Iraq." This occurred after "many years of attacks from critics who saw the contract as a symbol of politically connected corporations profiteering on the war." Interestingly, this comes at the end of Halliburton's contract. Halliburton, the article noted, had the sole rights to give the military many services including military meals, shelter and communications. Government audits revealed "more than $1 billion in questionable costs," although Halliburton officials denied the allegations. The Pentagon will split such logistical services among three companies. Most instructive is the article's ending sentence, "No contractor has received more money as the result of the invasion of Iraq than Halliburton, whose former chief executive, Dick Cheney, is Vice President."

    The hidden question is what follow-up, if any, has taken place to debar Halliburton from entering in and performing contractual services with any federal governmental agency? It would be nice to know whether good ol' Dicky-boy's company is still receiving favored treatment.

    * * * * * * * *

    The Latin phrase "Quis custodiet ipsos custodies?" - "Who will guard the guard?" - seems appropriate to finish this column. Where are the checks and balances in our lives today? Whose minding those who "mind the store?" Isn't the entire point of an annual audit, oversight committee or government agency to uncover inaccuracies, frauds and downright thievery and protect the public? Just think about the favorable financial consequences that would occur if our taxpayers' money was managed properly. Jeepers, deficits could be reduced, and necessary services could be provided.

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