-Caveat Lector- from: http://www.aci.net/kalliste/ <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- ------------------------------------------------------------------------ Today's Lesson From 1984 by George Orwell War, it will be seen, not only accomplishes the necessary destruction, but accomplishes it in a psychologically acceptable way. In principle it would be quite simple to waste the surplus labor of the world by building temples and pyramids, by digging holes and filling them up again, or even by producing vast quantities of goods and then setting fire to them. But this would provide only the economic and not the emotional basis for a hierarchical society. What is concerned here is not the morale of the masses, whose attitude is unimportant so long as they are kept steadily at work, but the morale of the Party itself. Even the humblest Party member is expected to be competent, industrious, and even intelligent within narrow limits, but it is also necessary that he should be a credulous and ignorant fanatic whose prevailing moods are fear, hatred, adulation, and orgiastic triumph. In other words it is necessary that he should have the mentality appropriate to a state of war. It does not matter whether the war is actually happening, and, since no decisive victory is possible, it does not matter whether the war is going well or badly. All that is needed is that a state of war should exist. The splitting of the intelligence which the Party requires of its members, and which is more easily achieved in an atmosphere of war, is now almost universal, but the higher up the ranks one goes, the more marked it becomes. It is precisely in the Inner Party that war hysteria and hatred of the enemy are strongest. In his capacity as an administrator, it is often necessary for a member of the Inner Party to know that this or that item of war news is untruthful, and he may often be aware than the entire war is spurious and is either not happening or is being waged for purposes quite other than the declared ones; but such knowledge is easily neutralized by the techniques of doublethink. Meanwhile no Inner Party member wavers for an instant in his mystical belief that the war is real, and that it is bound to end victoriously, with Oceania the undisputed master of the entire world. ===== Internet Stocks Yahoo's Creative Accounting Why do earnings-per-share go from 1 cent to 11 cents while losses rise? What really got us mumbling on this was Yahoo's release of its quarterly earnings last week, which, the company's bullish claque proclaimed, had beat the estimates. After perusing the release and mulling the plasticity of the pro-forma contrivance, we were equally puzzled by (a) how anyone could make an earnings estimate in the first place; and (b) how any financial officer of the most modest competence could fail to beat it. Pro forma, Yahoo reported second-quarter earnings of 11 cents a share, compared with a penny a share in the year-earlier period. However, when you add in the merger costs and amortization of goodwill of this very busy acquirer, earnings disappear, replaced by a loss of seven cents a share, down from eight cents a share. Actually, the red ink flowed more abundantly than those figures suggest. For while it suffered a net loss of $15 million versus $14 million, the company in its June quarter this year benefited from a $3 million tax credit; by contrast, its 1998 June quarter was burdened by a tax charge of roughly that amount. Put another way, before taxes, Yahoo lost $18 million this year versus $11 million last year. Which neatly illustrates why Yahoo and its fans -- and so many of its Internet kith and kin -- cherish pro forma. For in earnings, like virtually everything else about these companies, illusion, not the real thing, is what counts. Barron's, July 12, 1999 Financial Scams Frankel Planned to Expand Empire Even More Life Insurance Companies to Loot Fugitive financier Martin R. Frankel's plans to expand his financial empire were at full throttle until just before he disappeared. In the months before he fled his Greenwich, Conn., mansion in May, Mr. Frankel created a new investment fund as an additional vehicle for his ambitions to buy large insurance companies. The fund, which ultimately was named American Life Acquisitions, was in the process of trying to line up wealthy European investment partners, including a Luxembourg bank, to contribute to the fund, according to John Yednock and Larry Brotzge, two insurance consultants recruited to help plan the expansion. At the same time, others who worked for Mr. Frankel were creating an annuity product he hoped to get approval from regulators to sell to investors in about eight states this summer. He had plans to market annuities through companies he hoped to acquire, according to people hired to help him, and was counting on attracting as much as $60 million a year in customer premiums from the annuity sales. These initiatives, previously unreported, were part of a broader strategy conceived by Mr. Frankel, many of which were never carried to fruition because his initial insurance dealings raised questions and began unraveling before the expansion plans were carried out. May Disappearance Sometime around May 5, Mr. Frankel disappeared from his Connecticut mansion. Regulators say at least $215 million is missing that Mr. Frankel was supposed to be investing for seven small insurers, most of which are now insolvent. As previously reported in The Wall Street Journal and elsewhere, Mr. Frankel also set up the charitable St. Francis of Assisi Foundation in 1998 -- a foundation that indicated it had ties to the Vatican -- and approached through intermediaries at least 10 insurance companies about acquiring them or buying blocks of assets. Also as reported, to add an additional aura of credibility to his acquisition efforts, Mr. Frankel had hired in April two respected executives from units of insurance giant Swiss Reinsurance Co. and General Electric Co. Simultaneously pursuing three avenues for making acquisitions indicates a far more ambitious strategy than the one Mr. Frankel used when he started acquiring small Southern insurance companies through only the Thunor Trust in 1991. His initial mergers-and-acquisitions team consisted of several Tennessee businessmen, led by former bank administrator John A. Hackney, with little or no experience in dealing with big insurance operations. By 1998, Mr. Frankel was apparently frustrated partly because his Tennessee team had been unable to acquire companies with billions of dollars in assets for him to manage, according to people familiar with his plans. Enamored of Annuities In addition to buying bigger insurers, Mr. Frankel also had grown enamored of the idea of selling fixed annuities and acquiring companies that specialized in that potentially lucrative product. The annuity business potentially was a far more lucrative line of business than burial insurance. Annuities are contracts under which investors hand over large chunks of premiums to insurance companies in return for a promised stream of payments, possibly years in the future, over a set period. Mr. Hackney, on the other hand, liked focusing on the companies' traditional mainstay, small life-insurance policies to cover burial expenses, according to a person who worked with Mr. Frankel. Such differences created tension between Mr. Frankel and Mr. Hackney, the person said. In April, about a month before he disappeared, Mr. Frankel told the associate that he was thinking of buying out Mr. Hackney, and that he and Mr. Hackney "didn't always see eye to eye on the business stuff," according to this person. Mr. Hackney's lawyer said he couldn't confirm the person's account. Mr. Frankel's first vehicle to make big insurance acquisitions, the St. Francis foundation, prompted questions from state regulators and potential acquirees about the source of its money, thus slowing its progress. While Mr. Frankel would continue to try to use the foundation for expansion until his plans collapsed, he also began creating another vehicle starting in late 1998. Mr. Frankel, using the alias David Rosse, gathered a new acquisition team, led by New York lawyer Larry Martin, who helped run what became American Life Acquisitions. Mr. Martin, through a longtime friend, tapped as advisers Mr. Yednock, a veteran insurance-industry executive, and Mr. Brotzge, a former executive at Providian Corp., whose insurance operations were bought by Aegon in 1997. Astrologically Favorable The new investment fund was formally created in late January, on a date chosen by Mr. Frankel because it was astrologically favorable, said Mr. Yednock. Its business-plan document referred to Mr. Frankel's purported success in managing assets for the seven small insurers owned by Thunor Trust. The consultants said it wasn't clear whether the fund would become the new owner of those insurers. The consultants said they understood Mr. Martin had met Mr. Frankel through Thomas Corbally, a business consultant who had made many connections for the missing financier. Warren Feldman, a lawyer for Mr. Martin, has declined to comment except to say that American Life Acquisitions was created as an investment vehicle for insurance acquisitions. Mr. Corbally declined to comment. Mr. Martin and an associate, a friend of Mr. Corbally's, traveled frequently to Europe, returning with news that they had lined up investors, including a Luxembourg bank, to invest in the new fund, according to Mr. Yednock and Mr. Brotzge. Mr. Martin was courting "three or four Swiss banks and some French banks," as well as some wealthy European investors, said another person briefed by Mr. Martin on the fund. The business plan also stated that a limited partnership associated with the new fund had been established in Luxembourg, with a minimum $25 million investment required for each partner, according to Mr. Yednock. Mystery Bothers Team Members The mystery surrounding the fund's donors bothered some of the professionals on the team. "That was one of my big concerns," says Mr. Brotzge. "There was some level of secrecy about who the, quote, wealthy investors were," he said. No money from investors was ever transferred to the fund, even though Mr. Martin and Mr. Frankel said they had lined up significant sums, the consultants said. The investment fund never acquired any companies, although it made overtures to several. Meanwhile, in addition to pursuing acquisitions, Mr. Frankel also had grand plans for the companies he had acquired under the Thunor umbrella, especially his largest and most financially sound purchase, First National Life Insurance Co. of Mississippi, which Thunor had bought in 1998 for $48 million. First National was planning to market a new, consumer-friendly annuity product that would offer a competitive interest rate to investors and a relatively short "surrender period," or time during which penalties would be charged for withdrawals. Mr. Frankel personally kept tabs on its development, according to a person who worked with him. The new product was expected to generate $60 million a year and would be attractive to consumers in part because Mr. Frankel's purportedly superior investment returns would enable him to offer "a little bit of a better rate" than many annuity products, said this person. Indeed, wholesalers had already been lined up to market the product and First National had already gotten approval from several states, says the person. Plans were dropped when Mr. Frankel disappeared. In the months before he disappeared, Mr. Frankel was anxious to do deals, sometimes regardless of the price. During ultimately unsuccessful negotiations to buy a block of business from Provident American, Mr. Brotzge wrote a letter telling Provident that its price was too high. Mr. Frankel read the letter "and went ballistic," recalled Mr. Brotzge. "He called me and said, 'Buy it.' " The Wall Street Journal, July 12, 1999 Spy vs. Spy CIA Admits Spying on British Cabinet Minister Genetically modified politicians CIA agents have secretly investigated the environment minister Michael Meacher, The Telegraph can reveal. Mr Meacher said last night that he was "astonished" after the US government confirmed that the CIA keeps a file on him. Compiled recently, it is believed to contain details of Mr Meacher's reservations about genetically-modified foods, which Washington promotes in Europe. The CIA last night refused to release details of the contents of its file, described by another department as a "biographical profile". Inquiries by The Telegraph have uncovered no other files compiled by the CIA on British ministers. Environment groups expressed alarm over the CIA's actions. Charles Secrett, director of Friends of the Earth, said: "The immediate fear is that the CIA is working hand in glove with Monsanto [the US biotechnology company] to do anything they can to force this technology down our throats whatever democratic politicians say. It would be dynamite if this file has anything about Michael Meacher's track record on genetically modified crops and foods. What business is it of the CIA's to worry about any politician's views about biotechnology products?" With the US pressing for GM products to be allowed more freely into Britain - despite British consumers' worries - GM food is emerging as a potential source of conflict between the two countries. President Clinton is known to have had several conversations on the subject with Tony Blair and US diplomatic missions abroad have been ordered to promote the GM industry. The existence of the CIA file on Mr Meacher came to light after The Telegraph conducted inquiries using the US Freedom of Information Act to ask whether Government agencies held any information about British ministers. Most agencies and departments said they had nothing. A small number of departments replied that they had drawn up conventional briefs to prepare their own staff for visits to Washington by British ministers. The briefs, which were drawn from published and embassy sources, were freely disclosed to The Telegraph. However, the US Environmental Protection Agency - Mr Meacher's counterpart department - said it held a file on him but could not disclose it because it "originated within the Central Intelligence Agency". The EPA could not say whether it held the complete file, or whether its holding was part of a larger CIA file. A spokesman, Lynn Schoolfield, said: "We have a biographical profile of Mr Meacher which was compiled by the CIA. But I don't think it's of any great concern. There's nothing to worry about here." The CIA said that it could not release Mr Meacher's file. A spokesman said: "We never comment to the press on the contents of files." Mr Meacher said he had "no idea" why the CIA had information on him. "I am astonished. I find it interesting, but I have no idea what the reason might be." Mr Meacher refused to comment on the action he may now take, but he is likely to raise the matter with the Deputy Prime Minister, John Prescott, and with the Cabinet Secretary, Sir Richard Wilson. Within the Government, Mr Meacher has been the most cautious on GM crops, insisting that none should be grown commercially before trial plantings establish whether they pose an environmental risk. He is also reconstituting the main committee advising ministers on GM foods to reduce the number of members with links to the biotechnology industry. Mr Meacher's background is on the Labour hard Left, but no more so than several other key figures in the Blair government. He led Tony Benn's campaign for the Labour deputy leadership in 1981 and was a member of the shadow cabinet before the 1997 election, but was not appointed to the Cabinet after Labour's election victory. He is well regarded by environmentalists. The London Telegraph, July 11 1999 Drug Distribution Fast Cars Go Better with Coke Formula One linked to cocaine smuggling FORMULA ONE racing has been linked to cocaine smuggling amid allegations that grand prix cars may have been used to conceal drugs as they are transported around the world. Customs officers revealed last week that they have been monitoring the movement of Formula One personnel and equipment through Dover. Officers say they were tipped off by an informant in the motor racing world 18 months ago. The disclosure follows an earlier inquiry by Scotland Yard drug squad detectives. Codenamed Operation Equipment, their investigation was sparked by details given by two informants that individuals within F1 were using the sport as cover for international drug trafficking. Two of the detectives involved told Insight that racing cars and their containers have allegedly been used to conceal cocaine. They say traffickers allegedly took advantage of the shipment of vehicles as cover to bring drugs into Britain and the Continent from South America. The drugs were believed to have been stashed in car parts and equipment and then placed in containers which were transported across the world. "Formula One teams do a lot of practice in Spain, Portugal and France. Stuff might be coming through there and then into Britain," said a source. At one point in their inquiries, Scotland Yard detectives considered putting an undercover policeman inside Formula One. They planned to ask Nigel Mansell, the former British world champion and a special police constable, to help them get their man in. Mansell said last week he was unable to comment. The wife of one well-known British driver revealed that she saw "white packages", believed to be cocaine, being put inside a container in Rio de Janeiro in Brazil. She said that F1 transporters were rarely searched: "After all, these guys are heroes. All anyone wants is an autograph. The containers were used to ship all sorts of goods. I saw white packages loaded into a container. I guessed it was cocaine," she said. Jackie Oliver, the former grand prix driver, said he was aware of an inquiry into alleged trafficking. He said F1 equipment had been seized on its way back from South America. "They pounced on all the equipment coming back from the Brazilian Grand Prix and held it up for days in customs while they went through everything with a fine tooth comb. We all complied and gave them full access and they got their sniffer dogs and went round everything - and never found anything." A third source close to several F1 teams said he had heard that containers had been secretly used to transport drugs and money, adding that he had been interviewed by police about their investigation. Customs officials in Dover confirmed last week they had recently received instructions from head office in London to monitor Formula One teams and their equipment as they entered this country. "We have previously been successful in finding drugs in vehicles associated with motor sport, and Formula One teams using the port will be treated to the same level of scrutiny," said Nigel Knott, customs spokesman for southeast England. "When you're talking about 15-metre trailers, the potential for hiding drugs is phenomenal. And there is more than one vehicle per team." There are at least 11 competing Formula One teams, each with more than a 100 members. Along with scores of hangers-on, hundreds of people have access to grand prix cars and their containers. Police sources say the high-profile nature of some teams makes it easier for them to travel unhindered across international borders. They suspect a number of rogue individuals have taken advantage of this. One of the men named by their informants is a convicted cocaine smuggler with links to figures in F1. Last week the man, a London businessman, told The Sunday Times he was aware he had been under surveillance and that he had complained to Scotland Yard that he had been harassed and threatened by police. Describing the allegations of a cocaine link to F1 as a "complete fairytale", he said he believed police had tried to entrap him in a "sting" operation involving hidden cameras. It is not the first time that motor racing has been implicated in drugs trafficking. In 1990 Johnny Herbert, the Formula One driver, told the Old Bailey he had been unwittingly sponsored by a man who, it turned out, had masterminded a £18m cannabis smuggling ring. Paul Newman, a London businessman, had his own box at Brands Hatch and used his drugs profits to set up two motor racing teams. He was sentenced to 10 years in prison. Herbert told the trial he did not realise there was any drugs connection. The Scotland Yard inquiry into Formula One was inconclusive but its existence was confirmed by Derek Todd, the former head of its central drugs squad. Duncan MacLaughlin, a former drugs squad detective in charge of the investigation, also revealed that allegations from within the motor racing world had been made that F1 was being used as a front for cocaine trafficking. It is believed that Bernie Ecclestone, the boss of Formula One, became aware of the inquiry 18 months ago after news of the operation started circulating within F1. MacLaughlin said Ecclestone had telephoned him in November 1997 to offer full co-operation. During Operation Equipment, police travelled to Los Angeles in 1995 to liaise with drug enforcement officers about an investigation there into money-laundering and F1. Scotland Yard has also made inquiries in Tokyo where evidence emerged of a possible link between some F1 individuals and drugs money laundering for the Japanese mafia, the Yakuza. MacLaughlin left the Metropolitan police last year and now runs a security consultancy that numbers Damon Hill, the former British world champion, among its clients. Ecclestone declined to discuss the affair last week. But an aide said: "He did not have any knowledge or evidence that individuals within F1 were doing anything of the sort [drug smuggling]. If he had information or evidence, he would have taken it to the police." Scotland Yard said this weekend that drug operations were now the responsibility of the National Crime Squad. A spokesman for the squad said: "We do not discuss our ongoing inquiries." A 32-year-old Royal Navy serviceman was being questioned by police yesterday on suspicion of manslaughter after an accident at Silverstone motor racing circuit that left one man dead. The accident happened when an open-top MG sports car drove onto the grand prix circuit, then spun off and overturned. Three men managed to crawl free, but a fourth died at the scene. The driver was later arrested. The man who died, aged 35, had not been named last night at his family's request. He was based at the Royal Naval Air Station at Yeovilton in Somerset and came from Salisbury. A spokesman for the Ministry of Defence confirmed that the other three, including the man who has been arrested, were from 771 Squadron, based at RNAS Culdrose in Helston, Cornwall. The accident happened just before 11pm on Friday night. The driver and the other two men, aged 36 and 40, were later taken to Northampton General Hospital and were discharged after treatment for minor injuries. The driver was then arrested and taken to Daventry police station for questioning. The men had all been off duty and were there as spectators, the MoD said. The London Times, July 11, 1999 Spy vs. Spy NATO Secrets on Missing Laptop Secret Briefing One: How Terrorists Get Security Passes SENSITIVE military secrets have been stolen in a second major security bungle involving a laptop computer. The portable PC belonging to Royal Navy Commander Paul Lloyd, was taken from a car in Pinner, Middlesex overnight on June 26. A security source told the Sunday Mirror: "This is a major security breach. "The laptop contains secret and highly sensitive information, which would be particularly useful to terrorist organisations." "This is the worse security lapse in 10 years," added the source. "It is being dealt with at the highest level." Commander Lloyd is a staff officer at the secretive tri-service Permanent Joint Headquarters, at Northwood, Middlesex. He is involved in daily briefings with Nato bosses and helped plan the Kosovo war and peace-keeping campaign. Commander Lloyd has also been involved with the Trident nuclear submarine programme. Amazingly, the computer, which police have been told contains "top secret/classified" material, was not protected by a password. The laptop, manufactured by the firm Leo, was in a black leather carry-case. The thief also took two high-level security passes in the name of Commander Lloyd along with his combat fatigues with their commander's insignia. Police have warned the passes allow access to Ministry of Defence and naval sites. A source said: "Commander Lloyd is a high flyer with a exemplary service record. It is highly embarrassing that this has happened to him." The MOD says the laptop did not hold information on the Balkans campaign or any Trident nuclear secrets.'" Commander Lloyd has not been suspended. No decision has been made on disciplinary charges. The Sunday Mirror, July 11, 1999 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. 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