Tag Archives: ENRON

July 1, 2021 · 00:21

Big Oil in the family

We all have moments where we look at the sky and roll our eyes. Today was my moment when I was treated (by the Guardian) to ‘Big oil and gas kept a dirty secret for decades. Now they may pay the price’, in this I start with “Was it really a secret?” You see, we all want to blame someone else for the problems we helped create. And  when the (what I reverently call) the stupid people are bringing about “An unprecedented wave of lawsuits, filed by cities and states across the US, aim to hold the oil and gas industry to account for the environmental devastation caused by fossil fuels – and covering up what they knew along the way”. You see that is is merely one element of stupid. I gave light to ‘Uniform Nameless Entitlement Perforation’ on December 10th 2020 (at https://lawlordtobe.com/2020/12/10/uniform-nameless-entitlement-perforation/), I emphasised on a report by European Environmental Agency (EEA) where. We see that 147 industrial plants create 50% of the pollution, the media seemingly ignored the report I have not see the media go out and bash the nations for these 147 plants, we even had a joke (read: BBC article) by Tim McGrath on how the “Global ‘elite’ will need to slash high-carbon lifestyles”, so how stupid do people need to get?

In case you forgot

This reflects on the now when we see (at https://www.theguardian.com/environment/2021/jun/30/climate-crimes-oil-and-gas-environment) “Coastal cities struggling to keep rising sea levels at bay, midwestern states watching “mega-rains” destroy crops and homes, and fishing communities losing catches to warming waters, are now demanding the oil conglomerates pay damages and take urgent action to reduce further harm from burning fossil fuels”, just when you think that Americans can no longer become any more stupid, we get the next iteration of ‘stupid is as stupid does’. Statista shows us that in 1975 the US requires 1.747 BILLION kilowatt hours a year, this went up again and again until that number was well over doubled in 2005 (3.8B KwH), then it roughly stays the same. There was one spike in 2018, yet one source gives us “From 2003 to 2012, weather-related outages doubled”, I personally believe it is not all weather related. I believe that energy delivery hit a saturation point around 2005. This is why the last decade has so many of these failings and outages. Consider that it was not merely oil and gas, it was energy, the underlying need that drives this. If you doubt this you need but to read the entire ENRON scandal papers to get a clue on how it has always about greed and not about big oil and gas. When I see ‘Big Oil and gas’ I personally think it tends to be a hidden jab towards the Middle East. There have been carbon neutral solutions for almost two decades. Yes, they were expensive in the beginning, but how much effort was made to push this? It is about profit margins, it is about cheap and it is about exploitation. Oil and gas check most marks, but are they to blame? We can ignore settings like “In the early 1990s, Kenneth Lay helped to initiate the selling of electricity at market prices and, soon after, Congress approved legislation deregulating the sale of natural gas” that was almost 30 years ago, so how was electricity created? How do we get energy? And why is Congress not in the same accusation dock? Until the late 80’s the idea of Electricity at market prices was a lull and instead of protecting that part, it was left to the needy and the greedy.

So when they have another go at ‘Big Oil’ (to be honest, I have no idea what they are talking about), consider that the drive to have your own car started in the 50’s. Forbes gave us in 2020 ‘Traffic Congestion Costs U.S. Cities Billions Of Dollars Every Year’, which is fine, but that too relies on fuel, so when they gave us “New York had the highest economic losses out of any major U.S. city with congesting costing it $11 billion last year. Los Angeles lost $8.2 billion while Chicago suffered the third-worst impact at $7.6 billion.” And how much fuel is wasted in that setting? Do you want to blame ‘big oil’ for that too? This is a case that will go nowhere, the only thing it enforces is something I will touch on a little later. You see, when we saw the messages on how companies had enough of California, they vacated and left, Texas is such a much better place (it actually might be), and Forbes again gave us in February ‘Texas Energy Crisis Is An Epic Resilience And Leadership Failure’, yet how much consideration are we seeing when we get sources feeding us “There are several reasons tech companies shave been moving to Texas – lower housing costs, lower tax rates, less regulations have made it easier for companies to operate in Texas. There is already an abundance of technical talent all over Texas. Any company moving here can tap into a well-experienced talent pool. There is also a well-educated stream of new talent graduating from top schools like Texas, Rice, University of Houston, and Texas A&M.” I am not debating the act, I am fine with the action taken, but when you consider that the following companies moved to Texas, how much of a drain on energy in other places will that give you and when you see the sudden spike in some places requiring a lot more energy, all whilst the other places are not diminishing their offer, because people will always need power, how is ‘Big Oil’ to blame? So lets take a loot at that list and most names moved less then 2 year ago (or are about to move)
Guideline, Contango, Done, Carbon Neutral Energy, Tailift Material Handling, Estrada Hinojosa,  GBS Enterprises, Wedgewood, Verdant Chemical, Ranchland Food, Drive Shack, Invzbl,Markaaz, XR Masters, Elevate Brands, Harmonate, Einride, Green Dot, NRG Energy, Caterpillar,Flex Logix, Leaf Telecommunications, Katapult, Wayfair, Ribbon Communications, BSU Inc, Avetta, First Foundation, 5G LLC, TaskUs, BlockCap, Element Critical, City Shoppe, CrowdStreet, Lalamove, NinjaRMM, Gilad & Gilad, MDC Vacuum, FERA Diagnostics, Roboze, Leadr, SupplyHouse.com, Eleiko, Firehawk Aerospace, International Trademark Association, ZP Better Together, Precision Global Consulting, Loop Insurance, QSAM Biosciences, AHV, Dominion Aesthetics, Sage Integration, Quali, Samsung, Truelytics, Alpha Paw, Sentry Kiosk, ProtectAll, Optimal Elite Management, Ametrine, Digital Realty, Amazing Magnets, Lion Real Estate Group, NeuraLink, Maddox Defense, DZS Inc, The Boring Company, Oracle, Hewlett Packard Enterprise,Tesla, Optym, Longevity Partners, Iron Ox, Palantir, 8VC, Bonchon, Titans of CNC, Saleen Performance Parts, CBRE, Slync.io, Baronte Securities, Omnigo Software, Incora, Vio Security, JDR Cable Systems, FileTrail, Sonim Technologies, Murphy Oil Corp, Buff City Soap, Origin Clear, QuestionPro, SignEasy, Sense, Astura, Charles Schwab, Splunk,  Bill.com, Chip 1 Exchange, McKesson, and Lonza. This is not a complete list and I am not considering (at present) which ones are doing it for all kinds of tax hypes. Now consider how many people will move as well. I get it, California is expensive, but how will this change that represents the population of more than one large city impact the power needs in Texas that is already has it fair share of brownouts, and that is just for starters, how many gas and oil energy producing plants will Texas get? Is ‘Big oil’ to blame, or do they merely offer a commodity that EVERYONE needs? Consider that a powerful computer required a 200 Watt power unit in 1997, today it is 600Watt or even higher. There were roughly 51 million units sold last year alone. I cannot state how the division on laptop and desktop is, but the need for energy is unrelentingly large, how large? Consider all the staff moving to Texas and consider how many more energy issues Texas has in the next two years, that is your marker and ‘Big Oil’ had nothing to do with this. 

So when we reconsider “wave of lawsuits, filed by cities and states across the US”, how many of these claimants voted against wind farms, against solar power and against nuclear power? They did it for all kinds of reasons and we get it, some are expensive and you do not want your children to go to school glowing in the dark (yet in winter that is a case for less accidents), but in all this blaming ‘Big Oil’ is just too ludicrous to mention. So as for a promise earlier in this article. When the US goes on with silly and stupid court cases, how long until the owners of IP and Patents will consider the US to be too dangerous to remain in? Consider that the US has an IP value of $21,000,000,000,000 (trillion), it represents almost 90% of the S&P 500 value, so what do you think happens when a massive slice of that moves to Asia or the Middle East, optionally to Europe? I reckon that over 70% of Wall Street executives are on a floor above the 30th and there is every chance that well over 40% of them will do a (at https://www.youtube.com/watch?v=cEpKcBkkVMY); now consider the stage of blaming the wrong  party. I am not stating that any of the energy delivering components are innocent, yet we are all guilty, in almost every nation. We remained silent when energy prices remained the same (somehow), we have known about alternatives and most people never pushed their politicians, we have known about the dangers of erosion for decades and we see pollution report after report, yet nothing is done. We are all to blame and putting ‘Big Oil and Gas’ in the dock will never ever go anywhere, I reckon that Kenneth Lay set the charter for that. When we realise that we allowed a utility to become profit driven which we clearly get from ‘the selling of electricity at market prices’, we changed a whole range of processes and now that we see the impact we should not cry, we should look into the mirror for blame.

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February 6, 2015 · 00:14

A basket full of trash

Have you ever had this? I am not talking about the Christmas or the hospital basket. No, I am talking about those ‘greeting’ baskets you get. One of these: ‘welcome new member’ baskets. You accept them with a smile, whilst you know you are getting a bag full of goodies that have value that is close to zero. Now we get these baskets from book clubs and other longer term commitment places, none of this is a big mystery to many people, because at some point, we all get confronted with this basket. Now, let’s change the game a little, now we consider the same basket, but in this case we don’t look at some two bit online retail vendor, now we look at Price Waterhouse Coopers.

That part is seen in the Guardian as per today. Let me refresh you on some of the facts, for that I will take you back to my blog from October 25th 2014 called ‘Price Waterfall Blooper‘. In there I wrote the following “Consider that PwC had (a reported by the Guardian in an earlier blog) last year; PwC was paid £10.4m by Tesco for its auditing services and a further £3.6m for other consultancy work (a newer version at http://www.theguardian.com/commentisfree/2014/oct/23/guardian-view-tesco-auditing-debacle-pwc-systemic-shambles)“. Now when we add today’s information, information I quite honestly never considered: “The Groceries Code Adjudicator, Christine Tacon, announced the move, saying she had formed a “reasonable suspicion” that the retailer has breached the Groceries Supply Code of Practice“. Now, let’s take a quick look at this so called ‘code of practice’. First of all, the information is found here: https://www.gov.uk/government/publications/groceries-supply-code-of-practice. The fact that this is on a dot Gov dot UK site should indicate that this is the serious stuff. So this code of conduct states at 4.1 PART 4—PRICES AND PAYMENTS, the following: 5. No delay in Payments and at 9. We see Limited circumstances for Payments as a condition of being a Supplier. This is just two of a long list of a code of conduct. The reason to mention these two is the question that follows. ‘How come the auditor was not aware of these facts?’. These are not just simple facts, they are codes of conduct, and can someone please explain to me how this is not raised by the firm charging close to 14 million pounds for one year of work? There are two other parties who are about to see the limelight. Party one is the Press. You see, I was following part of this since last year October, yet, I do not remember seeing the press being awake on these facts. I have a decent excuse living on the other side of the planet and the fact that these elements are not part of my Master of Intellectual Property education, yet the press, Pricewaterhouse Coopers as well as whatever legal aid is out there in UK farmland, it seems to me that too many people were not paying attention at all. There is actually a third side to this. I missed it initially, but when you look at the Guardian on October 23rd (at http://www.theguardian.com/business/2014/oct/23/tesco-black-day-profits-down-92), we see the following: “Tesco claimed that the rogue accounting practices – which relate to how the supermarket banks payments from suppliers – dated back at least two years“. Now consider again the government side that states ‘Guidance Groceries Supply Code of Practice, Published 4 August 2009’, so the statement and the fact that there was a code of conduct out for half a decade, did no one consider that there were additional issues that might rise?

Who on earth is running PwC in London? More important, what on earth is mentoring these wannabe’s? I have good right to speak in this manner. This took me 5 minutes to figure out when I got wind of this small fact, the fact that PwC, the Press and others were not all over this from day one is a little too weird for words. Consider the people that quickly left Tesco when the water got slightly too uncomfortable. Should they have known? I’ll let you answer this question for yourself, but now also consider that the auditors did not make mention in reports on some of these parts, they DEFINITELY should have known about the codes of conduct for the simple reason that part of this is linked to the pesky rules regarding payments and so on. What else did these people miss? More important, consider the date I mentioned (October 23rd), now consider the Deloitte report, was this part in that report? If not, consider that they had to check on these ‘miscalculations’, as we see the mention ‘rogue accounting practices‘ and ‘payments from suppliers‘, did no one consider looking under rock number two? Granted that Deloitte did not get much time, but as we see that suppliers were part of the mix, did no one mention the question ‘What about the Groceries Supply Code of Practice? Do we need to consider any issues there?‘ Did that question seriously not come up?

Now consider my blog from October 13th called ‘A matter of Jurisprudence‘, there I wrote the following “company secretary Jonathan Lloyd, who advises the board on legal and governance issues, had resigned and was serving out his notice until March 2015”, the second one “Ken Hanna, chairman of Tesco’s audit committee, is also set to step aside as a non-executive director as the company’s chairman reshuffles his management team”, which was shown from several sources. Now consider the fact that we see Jonathan on legal issues and Ken as part of the audit committee, they should have known about the ‘Groceries Supply Code of Practice’, which now gives an entirely different light into their departures. So was PwC completely in the dark about this? If the answer is yes, then my next question should be ‘why are they allowed to be auditors?’ Is that such a weird question to ask? It is a code of practice, not a fraternity paper on how to score, so I reckon, especially as it has financial sides, the auditors should have taken a look, moreover, Deloitte should (they might) have reported on this. The fact that the press is only now revealing these events calls for additional questions, but their fumbling is not part of this article, the fumbling of accountancy firms a lot more, for the mere reason that the code states at 5. “A Retailer must pay a Supplier for Groceries delivered to that Retailer’s specification in accordance with the relevant Supply Agreement, and, in any case, within a reasonable time after the date of the Supplier’s invoice“, which should have been part of the financial checks, can we all agree on that part?

And as we take a better look at this basket (have you figured it out yet), we see that the players were in a lot deeper than initially suggested. This cesto, has harboured information, misinformation and above all else, a lack of illumination of the facts as is. First there is Tesco themselves, the latest information shines a harsh light on several members who have vacated their office, in addition there is the case I made on October 13th in my blog ‘A matter of Jurisprudence‘, where I mentioned one person (Rebecca Shelley) who would have been at the centre. The mention on the Birchwood Knight site was “As part of her corporate affairs role, Rebecca will be responsible for government and media relations, investor relations, internal communications and corporate social responsibility“. Rebecca’s job hits ‘government relations’ and ‘social responsibility’. How come that this ‘Groceries Supply Code of Practice’ remained so below the radar?

So when we see months of reporting and we see the lack of mention of this so called ‘code of practice’ we also see the mention in today’s article “Business secretary Vince Cable said: “This is an historic day for the groceries code adjudicator and shows we have created a regulator that has real teeth“. Who is this Vince Cable catering for? You see, if this statement had been given before December 1st 2014, then there might have been a case, at present the act of mentioning it months after going live is just another presentation of a sad story on how some people could be seen by many others as some parties remaining silent hoping to make a bundle down the track.

So I reckon that Tesco will have to sweat the small stuff for some time to come, however, the more we get to see at present, the less clean the image of PwC seems to be. In the case of PwC it will become a case that is worrying on several levels. Not only are the looking for hardship over what was done, as per now it seems that PwC will be scrutinised for the things they did not do, not properly oversee or missed altogether, as per today it sucks to be the senior account holder of the Tesco account, because the fallout will continue for a decently long time to come.

So as we see the basket (also known as a cesto) filled with the trash of information, wrongful acts and none acts, can we all agree that we got a whole lot of nothing, an act that will have severe repercussions and not just legal ones! Does anyone remember this Warren Buffett fellow and how he lost 2 billion in value? If we combine what we have seen so far and add the part that I discussed in October regarding the Chadbourne papers, I can repeat that quote: “that directors of companies must make certain disclosure statements in the directors’ reports. This applies not only to information which the officer actually knew of but also information he would have known about if he had conducted a reasonable enquiry. However, the provision goes further and requires the director to confirm that, so far as the director is aware, there is no relevant audit information of which the company’s auditors are unaware”. This now brings an entirely different light to the Groceries Supply Code of Practice, moreover, it could be suggested that Warren Buffett now has a clear case in legally reclaiming his losses, consider that the US has the Sarbanes–Oxley Act, after Enron, which took care of the power players real fast. The UK has the Corporate Governance Code. I reckon that it is not too far-fetched that Mr Warren Buffett could be offered a deal for his lost two billion. If so Warren, remember this poor blogger and I feel so much better getting to work in a new Jaguar XK, in British racing green of course.

 

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May 1, 2013 · 21:14

Another banking issue

People might have read a previous blog where I discussed the issues involving LIBOR and a resolution donation of over half a billion dollars of fines by the Royal Bank of Scotland.

Today’s article by Jill Treanor of the guardian at “http://www.guardian.co.uk/business/2013/may/01/vince-cable-rbs-prosecutions” gives notice of issues at play. Moreover, these issues have been at play for some time now and there is clear need for answers on several levels. The article mentions the issues as quoted: ‘Scotland’s Crown Office and Procurator Fiscal Service have been reviewing whether a case can be brought against any former directors since January 2012‘.
So, it seems that this investigation has been going on for 15 months. A letter was written to Lord Wallace in this matter. My question would be the why it is taking his Lordship the Advocate General of Scotland this long?

There is no doubt in my mind that it is a complex issue, yet overall, when it comes to banking issues, too often the public perceives this as the ‘out of sight, out of mind ploy’. The fact that this is the second bank involved in the LIBOR scandal and the fact that the fines are currently sailing close to 1 billion pounds in the UK alone, visibility should not wane for years to come.

This is not (just) about LIBOR. This entire issue is about the investigation into the directors who were in office at the time of the 2008 bailout. So, this is about a case 5 years old and this case seems to have only started in 2012 and now 15 months later there is still no final answer. This is interesting as the UK has the Limitation Act 1980. This statute has different limitations for different crimes, yet many of them is set at 6 years. This means that if defence can twist it that these crimes would fall under one of those statutes then prosecution has a lot less than 1 year left to take a stance and get started. The fact that these issues are still not for prosecution with the CPS are an additional matter of question.

If we look at the Limitation act and we consider this to be a tort, then Part 1, section 2 states: “2. An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued. (Time limit for actions founded on tort)“.

The same time limit applies to actions founded on simple contract. The interesting question becomes where these issues are founded on. Is mismanagement a wrongful act, and there for a Tort? Are these wrongful actions and forms of mismanagement breach of contract?

Yet, we should not despair. There is a wise addition in this act that is stated in section 32 of that same act, which deals with ‘Fraud, concealment and mistake‘. Hip, hip, hurrah!
There it states “the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.”

So we might have a little more time left. Yet, we should not…. how is that expression again? ‘Dilly dally’. Yes, that was it. My grandmother told me that more than once. So we should not dilly dally to find the answers whether we have a case against those directors, lest we forgot that time ran out.

So you see, I am not convicting them, but I do want to see a case brought to trial where they can either be convicted, or where they can submit evidence that would exonerate them. Either will be the case, yet no case means there will not be any answers forthcoming. This would be interestingly unfair as that bank gave the taxpayer an additional cost of 45 BILLION pounds to the taxpayer. If you are from the UK and reading this then you should ask yourself. Did you make your GBP 666 donation to the save the Royal Bank of Scotland funds? Will you? If not then we should figure out what happened and get this to trial. Considering that the UK has a 1 trillion dollar deficit, then the added debt is costing its citizens GBP 225 million each year in interests. That is almost 3.5 pounds per citizen each year just to keep that part of the debt on par.

So yes, it is interesting to read the article by Jill Treanor. It is also interesting that she was not the only one to mention it; similar articles could be read in the independent, the Telegraph and on the website of the BBC. It seems to me that this is not some political ploy as both MP Vince Cable (Twickenham) and Lord Wallace (Shetland) both seem to be Liberal Democrats, unless Mr Cable prefers Shetland over Twickenham.

The Guardian refers to the report of April on Banking Standards. The report was described to be enthusiastically damning. In another fine piece of writing by Jill Treanor at: “http://www.guardian.co.uk/business/2013/apr/04/bankers-brought-down-hbos” is one sentence that I found ….hmmm, ‘hilarious’ just does not describe that sinking feeling in me. The sentence was “Under pressure from parliament Goodwin’s pension was halved to £340,000“. Are you guys for flipping real? My total pension will never even come close to that amount as a total sum. If there was ever a case of evidence that incompetence pays, then that would be the evidence at hand.

This gives way to a quote in a book by Robert L. Bradley it states: “The businessman who refuses to acknowledge, despite clear evidence, that his facilities are out-dated, his product uncompetitive and his cash flow inadequate, is dishonest just as the one who makes fraudulent claims to the customers is dishonest. Both are trying, at the deepest level, to fake reality.” (Bradley,‘Capitalism at Work: Business, Government, and Energy’,2009,p.66).

I think with this quote he hits the nail on the head for a truckload of cases. He also shows a graphical  bar of difference between incompetence and prosecutable fraud, whilst showing unethical behaviour and Philosophic fraud somewhere on the trajectory. This book is actually quite the little gem where they look at more than just ENRON and a few other devious little greed seekers. It even takes time to discuss the UK and ‘the Coal panic’ of 1865. So keep this book in mind please, it is a diamond in its own right.

So even though we get into the ‘Cloak and Kegger’ mindset that it is not a crime to be incompetent, then there is still the need to assure ourselves of a situation where those people do not run places like banks and corporate enterprises. Financial Services Authority (FSA) was supposed to have handled issues and cases, yet the Parliamentary Commission on Banking Standards seems to show a lack of actions on several levels. That committee on their web page reflected “The regulators also have a lot of explaining to do when it comes to their role earlier in the HBOS debacle. From 2004 up until the latter part of 2007, the FSA was ‘not so much the dog that did not bark as the dog barking up the wrong tree’”

From my view I wonder whether the regulator realised they were indeed the fore mentioned dog, whether they realised what a tree was and whether it ended up eating a bone instead.

The commission report which can be read at: “http://www.publications.parliament.uk/pa/jt201213/jtselect/jtpcbs/144/144.pdf” leaves us with another question that requires serious visible pondering by the press on several levels too. If we consider the issues of HBOS (20 billion) and RBS (45 billion) and the consequent fines that followed over the timeline until now then there are serious questions on those getting an income from the Financial Services Authority (FSA). Here comes the kicker! “and was funded entirely by fees charged to the financial services industry.” So basically we have a group that was not biting the hand that feeds them. How was this ever a good idea?

As per April 1st (no joke) its responsibilities have been split between two new agencies, the Prudential Regulation Authority, the Financial Conduct Authority at the Bank of England.

If we see what has happened here on several levels, it seems to me that self-regulation has failed on a massive scale. Both the Banking and Press industry seems to have scuttled justice, fairness and ethics on many levels and at many places. The question is not how they can restore their integrity; the question should be ‘Why are they presently allowed a place on the negotiation table in the first place?’

This brings me back to the bars as displayed by Robert L. Bradley. In my mind the distance between incompetence and prosecutable Fraud needs to be a lot smaller then I am currently comfortable with and the buffer called Unethical behaviour is a buffer zone that should be nothing more than a mere hairline. From those parts I wonder why massive visible and noisy steps have not yet taken place to remove options of self-regulation in several places at present.

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