Wednesday, March 22, 2006
As Kerra Bolton reports for the Asheville Citizen-Times, North Carolina House Speaker Jim Black is facing further scrutiny into his campaign finances, this time for contributions from the video poker industry. On Wednesday, the State Board of Elections heard testimony from witnesses who have contributed to Black, some of whom hardly appear able to make the large contributions they did.
One woman who contributed $1,000 to Black and lives on a fixed income of $1,100 a month testified she found $800 in a drawer and borrowed $200 from her son to make the contribution. Some witnesses testified that they made the contributions with a cashier's check despite having checking accounts themselves. Many of the witnesses said they gave the contributions because of Black's opposition to prohibiting video poker.
Board of Elections chair Larry Leake said he had concerns that the funds were being illegally funneled through the straw donors to evade North Carolina's campaign contribution limits.
Black, an optometrist, was already under fire for receiving checks from the optometrists' trade association which left the payee line blank. Black was to decide who should get the checks and fill in the blank himself.
Contribution limits prevent financially powerful interests from gaining dominion over our government. Those interests rarely accept any form of diminished voice in affairs however, and often resort to legal loopholes and illegal evasion to circumvent limits. That they do so does not undermine the rationale for limits in the slightest, but rather means that the rest of us have to demand strong enforcement of campaign laws along with strong campaign laws themselves to ensure that our government is of the people, not just of the rich.
Our apologies for the hiatus since the last update.
As Mary Flood reports in the Houston Chronicle, former Enron company treasurer Ben Glisan testified yesterday in the federal case against former Enron CEOs Ken Lay and Jeff Skilling.
Glisan testified that both Lay and Skilling knew of the financial troubles looming for the company, that they knew of the illegal methods being used to hide those troubles, and that they both misled investors as to the company's financial standing. These allegations are generally the crux of the government's case.
As a treasurer, Glisan might be expected to speak in nearly incoherent financio-babble, but he apparently provided one of the clearest explanations to date of three of the main methods by which Enron cooked the books.
1) Enron disguised loans it received as cash flow, making it appear that its revenues were much higher than they actually were.
2) Enron used several mechanisms (Andy Fastow's infamous Raptors fall into this category) to offload debt from the company, making the company appear much more profitable than it was.
3) Again to boost revenue, Enron pretended to sell its assets to third parties, although the third party was often Enron itself.
Glisan also testified that had the true state of Enron's finances been known, it would have lowered the company's credit rating, a crucial component of Enron's borrow and buy strategy. Had the credit rating slipped and it become more difficult for Enron to obtain loans, Glisan testified that the company would have gone bankrupt.
According to Flood's account, Skilling looked uncharacteristically nervous at points during Glisan's testimony.