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It's a tough competition, but this week's nominee is Rep. Patrick McHenry, Republican of North Carolina. From the Washington wire in today's Wall Street Journal:
TURNING TABLES: At House panel hearing on runaway executive compensation, Republicans highlight fees for plaintiffs lawyers, who are big Democratic donors. “Trial lawyers are the ones who are sopping up investors’ wealth,” argued Rep. McHenry, North Carolina Republican. Democrat Watt, also of North Carolina, called the argument “bizarre.”
Give me campaign donations, or give me death!
Posted by dan at 09:05 AM
Home Depot CEO Robert Nardelli, a former protege of GE CEO Jack Welch, should be asking himself WWJD. Certainly, he wouldn't do this sort of stuff. It's as if the company's board has decided it wants to foment a shareholder revolt. Ann Cairns reports in the Wall Street Journal:
"Home Depot Inc. said shareholders rejected seven out of eight proxy proposals at the retailer's annual meeting, including giving investors an advisory vote on executive pay. But the Atlanta company refused to disclose detailed vote results, and its handling of the meeting sparked fresh criticism of its corporate-governance practices.Home Depot Chairman and Chief Executive Bob Nardelli didn't respond to attacks on his total compensation of more than $100 million since he took the helm in 2000, despite a decline in the home-improvement chain's shares. There was no designated question and answer period at the meeting in Wilmington, Del., and Mr. Nardelli was the only Home Depot director to attend.
Each time Mr. Nardelli was addressed by someone presenting a shareholder proposal, he let them speak but then replied firmly that Home Depot's directors had urged voting against it, and moved on to the next agenda item. After about 30 minutes, Mr. Nardelli said "preliminary" results indicated that the company's slate of director nominees had been elected, adding that the only proposal to win a majority of shareholder votes was a recommendation led by the United Brotherhood of Carpenters pension fund to change the director-election process to require that nominees receive a majority of votes.
Mr. Nardelli then adjourned the meeting and left the building. Shareholders said they were told by a company representative that detailed vote results weren't available. Last year, Home Depot announced during its annual meeting the percentage of votes cast in favor of various proposals.
"It was pretty amazing," said Richard Metcalf, director of corporate affairs for the Laborers' International Union of North America, sponsor of a pension fund that failed to win approval for a proposal giving Home Depot shareholders the right to approve "extraordinary" executive-retirement plans.
A Home Depot spokesman said the company will report final vote counts in its next quarterly filing with the Securities and Exchange Commission, expected to occur next month. An SEC spokesman said companies must report vote results in quarterly filings and have wide discretion over shareholder meetings. . . .
Charles Elson, a corporate-governance expert at the University of Delaware, called the absence of Home Depot directors from the meeting "completely inappropriate." "That's the one time of the year you make yourself available to shareholders," he said.
Posted by dan at 09:01 AM
Robin Sidel reports in the Wall Street Journal that American consumers are getting better at playing interest-rate arbitrage.
The credit-card industry has a problem: Although Americans are deeper in debt than ever, they are paying off bigger portions of their monthly credit-card bills.For card issuers, which profit by collecting interest on unpaid balances, that's bad news. In the past, when interest rates crept up, as they are doing now, fewer cardholders could afford to pay down balances.
"Normally at this point in the economic cycle, you start to see payment rates decline. But that's not happening," says Richard Srednicki, who runs the credit-card business at J.P. Morgan Chase & Co., the nation's second-largest card issuer. "It is a tougher business if payment rates continue to stay up and consumers continue to pay off more. It's something we've got to understand and work at."
Although consumers are using plastic for more of their daily purchases, they are giving card issuers fits by juggling their debts more shrewdly. When cardholders are hit with high interest rates on one card, they routinely transfer balances to new cards at lower rates. And in recent years, as real-estate values soared and mortgage rates fell sharply, more consumers wiped out credit-card debts altogether by borrowing against their homes. . .
In March, U.S. cardholders paid down 20.6% of total credit-card debt, up from 17.9% a year earlier, according to an analysis by Barclays Capital of one portion of the market -- $400 billion of credit-card debt sold to investors as securities. That was the highest payoff rate in the five years tracked by Barclays. According to the Federal Reserve, during the fourth quarter of 2005, consumer debt, which includes credit-card debt and auto leases, represented 5.71% of total homeowner debt, down from 6.4% in the fourth quarter of 2000. That was the lowest level in a decade.
American consumers have not curbed their appetites for borrowing. During the fourth quarter, 13.86% of disposable personal income of Americans was consumed by debt payments of all kinds, up from 12.77% five years earlier. But an increasing portion of that total went to mortgages and home-equity loans, which ballooned in recent years as rates fell.
Posted by dan at 08:59 AM
Jason Singer and Jason Dean reported in yesterday's Wall Street Journal that a Chinese telecom firm is thinking of establishing a beachhead in Europe by buying a Luxembourg-based telecom firm.
China Mobile Communications Corp. is near a $5.3 billion pact to acquire Millicom International Cellular SA of Luxembourg, operator of mobile-telephone services in many of the world's poorest nations, in a move that would expand China's influence into international telecommunications, especially in emerging markets.The expected deal -- the biggest overseas acquisition by a Chinese company -- could also have a ripple effect on Chinese suppliers of telecom equipment and mobile handsets such as Huawei Technologies Co. and ZTE Corp. China Mobile is expected to upgrade the network of Millicom, which operates in 16 countries.
Gao Songge, deputy director of the General Department of China Mobile, said that "the talks are still going on. ... There's no news for disclosure for now." A spokesman for Millicom declined to comment.
The deal, which could be signed within days, is the latest sign of Chinese companies' ambitions in snapping up international assets. After watching Western companies invest billions in their home market, Chinese companies in recent years have been looking at purchases abroad, most notably with Lenovo Group Ltd.'s purchase of the personal-computer division of International Business Machines Corp. For China's government, the expansion of Chinese companies overseas is part of a broader push to expand the country's global influence.
And next month, China's government will come up with a few billion dollars more and just buy the whole country.
Posted by dan at 08:55 AM
The lead of Robert Pear's story on Congressional budget battles in the New York Times reads as follows:
A battle for the soul of the Republican Party flared up in Congress this week as fiscal conservatives heightened their attack on pet projects stuffed into spending bills with the consent of House leaders.
I'm sorry, but some skirmishes over miniscule earmarks doesn't a battle for the soul make. The article describes Rep. Jeff Flake's efforts "to strip out $229,000 for dairy education in Iowa, $180,000 for hydroopnic tomatoes in Ohio, $250,000 for the wine industry in California and $6.4 million for research on wood products in 10 sates." So this rabid fiscal conservative waged a battle to slash $7 million in spending, after he and his party have racked up a few trillion dollars in debt over the last few years? What's the point of trying to cut a few million dollars when you've created massive, permanent deficits on the order of several hundred billion dollars per year? Pear doesn't ask, and doesn't tell.
On fiscal matters, the battle for the soul of Republican party was over a long, long time ago. And the spending devil won.
Posted by dan at 05:29 PM
My take on the Enron verdicts, on Slate.
Posted by dan at 05:27 PM
There's an appalling news story today about climbers on Mt. Everest who left an ailing climber to his fate.
On Wall Street today, there's a similarly appalling story about a group of investment banks leaving an ailing initial public offering to its fate. On Wednesday, Vonage, the internet phone company, priced an initial public offering of 31.25 million shares at $17 a piece.
The offering was led by blue-chip underwriters: Citigroup, Deutsche Bank Securities, and UBS Investment Bank, with support from Bear, Stearns, Piper Jaffray, and Thomas Weisel Partners. For their troubles they probably shared somewhere between $15 million and $18 million in fees.
But the stock tanked almost from the get-go, falling about 13 percent on below the IPO price on the first day of trading. At noon today, the stock is down another 11 percent. Generally, when stocks flop on their first day or two of trading, the investment banks are expected to step in and buy shares to help stop the bleeding and to help guarantee that the people who bought into the IPO (i.e. their clients) don't lose money immediately. But clearly the banks (or Vonage) either mispriced the stock, or woefully underestimated investor demand for an unprofitable single-product company in a market with comparatively few barriers to entry and a group of deep-pocketed competitors--i.e. cable companies. Either way, the underwriters are like all those climbers on Mt. Everest, scrambling to get up or down while Vonage, the climber they ushered onto the market's highest plain, loses oxygen on the side of the trail.
Posted by dan at 11:46 AM
My latest on Slate, on the efficacy of government policies to promote fertility.
Posted by dan at 08:35 AM
Because it worked so well for Gateway? Donna Fuscaldo and Don Clark report in the Wall Street Journal on Dell's latest retail initiative.
After years of resistance, computer maker Dell Inc. plans to open two pilot retail locations.The company is known for relying on orders placed by phone or on the Web. In recent years, the Round Rock, Texas, company has opened about 160 kiosks in U.S. shopping malls, to let customers see and try out some Dell products, though they must still place purchase orders electronically while at the kiosk or at home.
Now, Dell is building on that approach, with plans to open test outlets in Dallas and near New York City in West Nyack, N.Y., with about 3,000 square feet of space and a more store-like layout. Jess Blackburn, a Dell spokesman, said the new outlets still won't stock inventory, so customers can't walk away with purchased computers; all sales still will be conducted via phone or the Web. . . .
The move follows the dramatic retail success of Apple Computer Inc., which opened its first store in 2001 and has since opened outlets elsewhere in the U.S. and abroad. The Cupertino, Calif., computer maker recently opened its 147th store, on Fifth Avenue in New York City.
Other computer makers haven't fared so well with stores. Gateway Inc., of Irvine, Calif., closed 188 retail stores in April 2004 and eliminated 2,500 retail jobs.
Posted by dan at 11:07 AM
Corporate raider turned shareholder activist Nelson Peltz has unveiled his brilliant plan to turn things around at Heinz: get people to eat consume more ketchup.
Janet Adamy reports in the Wall Street Journal:
Investor Nelson Peltz wants H.J. Heinz Co. to shed more food lines and pay retailers less money to promote its products as part of a plan his group outlined Tuesday to revive the ketchup maker.It is the first time Mr. Peltz and his firm, Trian Fund Management, have detailed their plans for Heinz since he announced his assault on the food company this spring. Mr. Peltz last month said he would wage a proxy fight to put himself and four other new directors on the Heinz board at the company's annual meeting in August. His firm and its affiliates own 5.4% of Heinz's shares.
Trian's plan, laid out in a filing with the Securities and Exchange Commission, calls for Heinz to sell its Plasmon Italian baby-food business and ABC soy and chili lines in Indonesia so it can pour resources into major products like its namesake Heinz condiments.
The firm suggests Heinz spend less on discounts and other promotions at grocery stores and instead "make it a mission for more people to eat ketchup with their fries and burgers," by using the Internet and other new forms of marketing, the firm said in the filing.
"Increasing usage of ketchup," the filing said, "must become Heinz's rallying cry." The plans also call for cost cuts, share buybacks and a higher long-term dividend-payout ratio.
Posted by dan at 11:04 AM
Commodities prices may be coming off the boil--at least as far as investors are concerned. But for companies that have to buy commodities as crucial inputs, prices aren't exactly easing. Paul Glader reports in the Wall Street Journal:
Steel prices, which had been expected to taper off in the second half of the year, are now expected to rise nearly 19% from current levels in the third and fourth quarters to offset rising iron-ore costs. . .Some analysts ratcheted up forecasts for steel prices following 19% increases in prices for iron ore, a steelmaking ingredient, from the world's three largest iron-ore exporters -- London's Rio Tinto PLC, Brazil's Companhia Vale do Rio Doce and Australia's BHP Billiton Ltd., which control 75% of iron ore shipped abroad. The three have negotiated price increases with major European and Asian steelmakers in recent days.
"It is just further global pressure on prices. Right now, you have a fairly tight global market," said Chicago steel-industry consultant Michelle Applebaum. . .
Some analysts believe steelmakers could increase prices by about $100 a ton, or about 19%, for some products, potentially surpassing record steel price levels in 2004. The world's average price for hot-rolled coil -- used to make auto parts and home appliances -- is at about $550 per metric ton this month, according to World Steel Dynamics, a research firm in Englewood Cliffs, N.J. The global price peaked at about $630 per metric ton in September 2004.
Though the revised steel-price forecast matches the 19% rise in iron-ore prices, the two don't necessarily move in tandem. Ms. Applebaum said the expected price increase this year, in part, represents spillover from a decline in steel prices last year despite a 72% rise in iron-ore prices.
Some steelmakers, mainly those in North America and parts of Eastern Europe, own iron-ore mines, but don't have enough to supply all their raw-materials needs and are also expected to raise prices by about 19%.
Posted by dan at 11:00 AM
Julie Creswell has an excellent piece on the front page of today's New York Times about the dysfunctional governance at Home Depot. The record of ex-Jack Welch acolyte Robert Nardelli: a few hundred million in compensation, a lagging stock price, cronyism in the boardroom, and a strategy shift tha thas yet to bear fruit. And yet some would have us believe that Nardelli is a hot property.
Furthermore, Mr. Nardelli's reputation has not been tarnished, insisted Gerard R. Roche, the high-profile recruiter who helped bring Mr. Nardelli to the retailer. "I know he has been approached by other companies. There are a number of people interested in lifting Nardelli out," Mr. Roche said. "I can tell you there are a number of companies telling me to get them another Nardelli."
As I said, a great piece. But why close it with a puffer of a quote from the headhunter who is responsible for bringing Nardelli into Home Depot?
Posted by dan at 09:26 AM
in the New York Times, David Leonhardt makes a convincing case that, on the whole, living standards are rising and that Democrats may misfire by arguing that the economy stinks. But what ignores--and what Democrats shouldn't--is that, even as living standards have risen in many ways, anxiety and insecurity has risen as well. Any discussion of the economy and politics that omits the three volatilities that define life for most working Americans--job volatility, income volatility, and benefit volatility--is omitting a crucial point.
Posted by dan at 09:23 AM
Valery Giscard d'Estaing has an interesting way of looking at majority rule. John Thornhill reports in the Financial Times.
France should give a second chance to the European constitutional treaty that was rejected a year ago in a tempestuous national referendum, says Valéry Giscard d'Estaing, former president.It is not France that has said no. It is 55 per centof the French people - 45per cent of the French people said yes," he said in an interview with the Financial Times. "I wish that we will have a new chance, a second chance, for the constitutional project."
Mr Giscard d'Estaing, "father of the constitution" and president of the European Convention that drew up the treaty, said France should reconsider the issue - either through a second referendum or a parliamentary vote - after next year's presidential elections.
Posted by dan at 09:52 AM
Just in time for the cool-off, housing futures have started trading on the Chicago Mercantile Exchange.
Posted by dan at 09:48 AM
First they sold the skyway. Now Chicago is selling Midway airport. Doug Cameron reports in the Financial Times.
Chicago is poised to appoint a financial adviser for the planned privatisation of Midway airport, the latest in a series of assets the city is leasing to balance its budget.The city last year raised $1.82bn (€1.4bn, £960m) from the 99-year lease of the Skyway toll road linking Chicago with Indiana, and last week outlined plans to lease the largest underground car park in the US to the private sector in what would be the country’s first privatisation of a public parking system.
The Skyway deal paved the way for similar projects in other states, and the Midway deal will be closely watched by municipal authorities seeking to plug budget gaps.
The Midway airport lease is expected to attract interest from global infrastructure groups such as the pairing of Spain’s Cintra and Australia’s Macquarie Infrastructure Group, which bid successfully for the Skyway deal and a second toll road in neighbouring Indiana.
Dana Levenson, the city of Chicago’s chief financial officer, said the Skyway deal sparked interest in what other assets could be monetised. “Our first thought was: ‘What else in the portfolio might serve the same purpose?’ There were quite a few,” he said.
The city narrowed the list down to Midway, its second airport after O’Hare International, three garbage recycling centres and the 9,176-space parking garages under two city- centre parks. Chicago has hired William Blair & Co, the investment bank, to run the auction for the car-park lease – which could run between 56 and 99 years – and hopes to have bids in by September.
Gee, it was sure nice of the taxpayers to build the airport and those parking garages so they could be turned into income-producing assets for private investors.
Posted by dan at 09:42 AM
My latest on Slate, on the trans-Atlantic exchanges between stock exchanges.
Posted by dan at 07:10 AM
The Travel Industry Association has issued a relatively pessimistic forecast for summer travel, blaming high gas prices.
Dr. Cook explained that gasoline prices of $3.00 per gallon could be the “tipping point” for many Americans. For example, it is the point at which 10 percent of travelers say they would seriously consider canceling a trip. Between $3.00 and $3.24 per gallon, an additional 26 percent would seriously consider canceling a trip. While the higher cost of gasoline this year will add only about $30 - $50 to the cost of the typical vacation, that alone does not account for the possible impacts on travel spending decisions from the week-to-week costs of keeping their gas tanks full prior to a vacation. Cook added that gas prices further complicate the picture because they threaten to fuel inflation and undermine economic growth and consumer confidence more generally.Americans expect to stay away an average of 6 nights on their longest pleasure trip. Travelers plan to spend an average of $1,033 on their longest pleasure trip this summer, essentially unchanged from the summer of 2005 ($1,019). However, they will have to economize in some areas to compensate for higher hotel room rates and airline fares in addition to higher gas costs.
I'm skeptical about singling out gas here. Look at what else is going on--higher interest rates on consumer debt, mortgages resetting at higher rates, stagnant median income, and inflation on the rise generally--all of these have the capacity to take far more than $30 to $50 out of the pocket of a typical American over the next few months.
Posted by dan at 10:34 AM
Bruce Bartlett had an op-ed in the Wall Street Journal last week on the immigration debate. It's useful information, but I"m not sure I agree with the upshot--i.e. tax income less and tax consumption more.
As the problem of illegal immigration becomes more heated, the experiences of the states provide lessons on how it can be minimized. Tax policy is one area where governments can help reduce the burden of illegal immigration.Illegal aliens are almost by definition members of the underground economy—that part of the economy that is unrecorded in the GDP. It consists of both criminal activity—drug-dealing and such—and otherwise legal economic output that stays hidden from government to avoid taxes, regulations and other constraints. No one really knows how big the underground economy is, but a common estimate is 10% of official GDP, which would be about $1.3 trillion. This production supports the employment of millions of workers. Since illegal aliens are already breaking the law just by being here, they are ideal employees for underground businesses.
This being the case, one cannot realistically tax them the way citizens are taxed. Workers in the underground economy are usually paid cash off the books. Such wages are unreported to the tax authorities and those receiving them are highly unlikely to file income tax returns. Therefore, the income tax is never going to raise much revenue from illegal aliens. Steve Camarota of the Center for Immigration Studies estimates that illegal-alien households pay only 20% as much income tax as non-illegal immigrant households.
It's not clear why they pay even that much, since most illegal aliens are fairly poor and the poor generally don't pay federal income taxes. Because of the Earned Income Tax Credit and other features of the tax code, one really needs to earn at least $30,000 before starting to pay federal income taxes.
Payroll taxes have broader coverage because there are no exemptions or offsets. So it is not surprising that illegal aliens pay more of these—about 40% of what citizens and legal aliens pay.However, when it comes to federal excise taxes, such as those for gasoline or tobacco, illegal aliens pay close to the same amount of tax as the rest of us. Mr. Camarota estimates that they pay 70% as much of such taxes as all households do.
This stands to reason. It's pretty hard to escape paying gasoline taxes. More than likely, illegal alien households pay almost exactly the same amount of federal excise taxes as those of the native born with the same income and consumption patterns.
Consequently, it is reasonable to assume that when it comes to state taxes, the same sort of pattern holds. Illegal aliens probably pay very little state income taxes, but close to their share of sales taxes. Therefore, states that rely more heavily on sales taxes than income taxes are going to get more revenue out of their illegal aliens to pay for the expenses they incur.
This helps explain why California is burdened much more by illegal aliens than Texas. The latter has no state income tax and raises almost all of its state-level revenue from general and selective sales taxes. In 2005, Texas obtained 79% of state revenue from these sources. By contrast, California raised a majority of its state revenue from income taxes, with just 38% coming from sales taxes.
Thus Texas gets the vast bulk of its revenue from sources that are most likely to be paid by illegal aliens, while California gets the bulk of its revenue from sources that they are much less likely to pay. Interestingly, California and Texas have the same sales tax rate. California's income tax mainly pays for significantly higher spending. In 2004, per capita state spending was 40% higher in California than in Texas. This spending also undoubtedly contributes to California being a magnet for illegal aliens, further adding to their burden there compared to Texas.
Liberals always condemn sales taxes as regressive—taking more in percentage terms from the poor than the rich. However, realistically, such taxes are the only ones that really get revenue from the illegal-alien population to offset the large and growing cost they impose for health care, education and other government services.
Posted by dan at 10:23 AM
Talk about real estate shock! Isabel Gorst reports ($ required) in the Financial Times that the U.S. government may be facing a huge rental increase on a foreign property.
Kyrgyzstan warned the US yesterday that it was at risk of being evicted from its last military base in central Asia unless it agreed to a 100-fold increase in rental for aircraft landing and refuelling facilities at Manas, outside the capital Bishkek.Kurmanbek Bakiyev, the Kyrgyz president, said the US must pay $200m (€156m, £106m) a year, up from $2.7m, for the use of Manas, which was set up in 2001 as a launch pad for US-coalition forces operations to overthrow the Taliban in Afghanistan. He said there would be "no room for haggling" in the next round of talks with the Pentagon opening in Bishkek next week.
Posted by dan at 10:13 AM
Abrahm Lustgarten reports in Fortune on the type of boring, incremental energy saving idea that could wind up making a huge difference.
"Trucks move 88% of the nation's goods over 440 billion miles a year. And when drivers stop to rest--for ten hours a day, by law--they idle in order to power the air conditioning and television inside their cabs. Now a privately held company called IdleAire, armed with $320 million in new venture funding, is building a nationwide system for drivers to shut down and plug in to the power grid via a multifunctional tube of electronics. Truckers can save gas, curb pollution, and avoid breathing in diesel fumes while they sleep. An end to all idling could cut CO2 emissions by 32 million tons, conserving more than 2% of U.S. oil imports a year."
Here's IdleAire.
Posted by dan at 09:56 AM
Which company has the largest funding gap in its pension: GM, Ford, Delta Airlines, or ExxonMobil? Why, ExxonMobil of course. Apparently, the company with the largest profits can't spare a few dimes, as David Henry reports in Business Week.
Scroll through the financial data of the biggest U.S. corporations and a surprising fact appears: Arguably the mightiest of them all, Exxon Mobil, has left its employee pension plans with the biggest funding deficit. Its assets are $11.2 billion short of projected obligations, according to company figures as of Dec. 31 -- greater even than the gaps at struggling Ford Motor (F )and General Motors.Exxon could write a check for its underfunding this afternoon. The oil giant has $27 billion in its coffers. It generated free cash of $9 billion last quarter -- almost enough to cover the pension shortfall. And it carries an AAA credit rating.
So why won't it? Exxon says it's in compliance with all labor laws and regulations. "We strenuously object to the use of the word 'underfunded' because we are not, [according to] the terms of the people who set the regulations," says media relations adviser Dave Gardner. "The company has the wherewithal to meet its funding obligations, period."
But whether pensions are funded or underfunded depends on which complex accounting prism you use. Exxon's main U.S. plan looks O.K. under government accounting rules. But it comes up short under generally accepted accounting principles, which are used in financial statements and give more attention to obligations projected to come due in the future. Whether Exxon ultimately will have the wherewithal to pay employees what they're expecting won't be known until it's time to send the checks. . . .
The fact is, Exxon could be topping off its tank for employees but isn't. It's declining to put more money away for a rainy day while the sun is shining on the oil industry. And it isn't apologizing, either. "We basically chose not to," says Gardner. "That's not an investment we want to put more into at this point. Our financial strength provides excellent security for any pension." We'll see.
Posted by dan at 09:50 AM
Lorraine Woellert and Dawn Kopecki report in Business Week that the government isn't just getting information on consumer behavior from the phone companies. It's also buying it from data collection companies.
The Departments of Justice, State, and Homeland Security spend millions annually to buy commercial databases that track Americans' finances, phone numbers, and biographical information, according to a report last month by the U.S. Government Accountability Office, the investigative arm of Congress. Often, the agencies and their contractors don't ensure the data's accuracy, the GAO found.Buying commercially collected data allows the government to dodge certain privacy rules. The Privacy Act of 1974 restricts how federal agencies may use such information and requires disclosure of what the government is doing with it. But the law applies only when the government is doing the data collecting.
"Grabbing data wholesale from the private sector is the way agencies are getting around the requirements of the Privacy Act and the Fourth Amendment," says Jim Harper, director of information policy studies at the libertarian Cato Institute in Washington and a member of the Homeland Security Dept.'s Data Privacy & Integrity Advisory Committee.
The Justice Dept. alone, which includes the FBI, spent $19 million in fiscal 2005 to obtain commercially gathered names, addresses, phone numbers, and other data, according to the GAO. The Justice Dept. obeys the Privacy Act and "protects information that might personally identify an individual," a spokesman says. Despite the GAO's findings, a Homeland Security spokesman denies that his agency purchases consumer records from private companies. The State Dept. didn't respond to requests for comment.
Posted by dan at 09:46 AM