Up Front
Edited by Ira Sager
Talk Show
"The administration of George W. Bush has pursued a Flintstones agenda in a Jetsons world." -- Democratic Presidential candidate Joseph I. Lieberman, criticizing President Bush's economic policies
AFTERLIVES
Dennis Levine: In the Hot Seat Again?
Dennis Levine, who served time for insider trading in the late 1980s, could be courting trouble again. A bankruptcy filing by a wireless telephone company claims Levine took $200,000 in fees he didn't earn.
Randi Altschul, founder of Cliffside Park (N.J.)-based Dieceland Technologies Corp., hired Levine in 2001 to find investors for her disposable cell phone. He was supposed to raise $3 million. Dieceland raised just $1.5 million, some of it through another consultant.
Dieceland's Jan. 3 bankruptcy filing listed Levine's fees as an asset because lawyers want him to repay the money. They also want $500,000 from lawyers and engineers Levine hired. Altschul, 43, says that Levine downplayed his past. "He told me he had had a run-in with the SEC; no big deal." Levine didn't return calls.
Levine is in a gray area of the law, say securities lawyers. His 1986 agreement with the SEC bars him from the securities industry, but doesn't prevent him from selling debt backed by a private company. "It's a very close question," says Villanova University School of Law Dean Mark Sargent.
Altschul says she has contacted the U.S. Attorney's office in Manhattan. The U.S. Attorney declined comment. Meanwhile, Altschul is seeking other funding to produce her phone.
By Timothy J. Mullaney
BALLPARK FIGURES
This Cup Won't Runneth Over
The Women's World Cup is returning to the U.S. this fall, after SARS forced tourney organizers to move the matches from China. But don't expect a reprise of the soccer mania -- from sellout crowds to star player Brandi Chastain showing off her sports bra -- that gripped America during its team's victory in the 1999 Cup.
The late venue change could rob this Cup of some kick. Companies that plowed ad dollars into the '99 Cup already have locked in their budgets. "We're looking, but it's an awfully short lead time," says Tom Fox, head of sports marketing at Gatorade.
Matching TV audiences -- the title match drew an impressive 40 million viewers -- may be hard. College football, the NFL, and Major League Baseball playoffs will be in full swing. Of course, the U.S. women have proven their mettle before in breaking through media clutter. Remember Chastain?
By Mark Hyman
CAMPAIGN 2004
Weighing Kerry's War Chest
A big reason Senator John Kerry (D-Mass.) is a top contender for his party's Presidential nomination is his family fortune. His wife, Teresa Heinz Kerry, is worth an estimated $550 million.
The senator has indicated that he might spend his own funds on his campaign if he were personally attacked. That assertion has been comforting to Dems who fear they will be trounced by President Bush. The President is expected to raise a record $200 million for his 2004 campaign.
Hold the campaign buttons. A big chunk of Mrs. Kerry's fortune could be off-limits. Campaign-finance analysts say candidates are allowed to use unlimited amounts of their own cash, but they cannot spend assets that belong to a family member. "The law is very clear on this point," says Larry Noble, a director of the Center for Responsive Politics.
The senator's financial disclosure statement indicates that most of his wife's wealth is tied up in Heinz trusts. The Kerry campaign refused to say whether he is a beneficiary, which would free the funds. Campaign officials say the senator has access to half the value of jointly held assets, although they declined to provide specifics.
"I don't think we've left people with the impression that the senator can pour half a billion dollars into his campaign," says spokesman Robert Gibbs. Translation: Keep the fund-raising machine running.
By Alexandra Starr
THE BIG PICTURE
I-WAY PATROL
Clamping Down on Imported Spam
At U.S. senate hearings on May 21, tech execs, including Microsoft (MSFT
) Chairman Bill Gates, begged lawmakers for relief from a fast-growing avalanche of junk e-mail. Spam now accounts for half of all e-mail. But as U.S. legislators are hurrying to enact tough new laws, spammers are one step ahead -- and, they hope, beyond the arm of the law.
Spammers are now using computers abroad to avoid detection. How? Some servers are shipped from the factory with software preset to relay e-mail messages automatically. If that setting isn't changed by the user, those machines can be commandeered by hackers to pass along e-mail. In countries with little tech support, that change is rarely done. China is a prime example. And even South Korea has thousands of computers functioning as relays, many of them in schools. "It opens up a port to the rest of the world," says Brian Sullivan, director of mail operations at America Online.
Senator Charles Schumer (D-N.Y.) wants an international crackdown on spam. The future of e-mail, he says, depends on it. With stakes that high, lawmakers may want to watch North Korea. Who needs nukes when spam for herbal Viagra can lay waste the Information Economy?
By Stephen Baker
UH-OH, CANADA
Axis of Evil, Eh?
Canadians have long complained that they aren't taken seriously by their U.S. neighbors. No more.
Outbreaks of mad cow disease and SARS, along with the country's refusal to support U.S. action in Iraq, have prompted several boycotts recently. Now, the Humane Society of the U.S. is raising money to launch a three-year, $3 million ad campaign in the next few weeks calling for another boycott because of Canada's stepped-up annual seal hunt.
Starting this fall, Canada will boost the limit on kills by more than 25%, to 350,000 seals. In reaction, says the Humane Society's John Grandy, "we're asking people to look at the beer they buy, the water they buy, and to not vacation in Canada." Ken England, Canada's vice-consul in New York, notes that "the seal hunt has been a running issue for years."
Maybe so, but the prospect of another round of bad publicity is hardly welcome news. A case of mad cow disease has forced the country to battle a ban on its beef mere weeks after it fought to lift a World Health Organization advisory against travel to Toronto because of SARS. With this kind of attention, maybe being perceived as the bland nice guy to the north isn't so bad.
By Diane Brady
REALITY CHECK
Tax Cuts: Timing Is Everything
The white house sold the latest tax cuts as a way to boost jobs in an ailing economy. Will the cuts do the trick? Not if the past two decades are any guide.
Economic theory says tax cuts should stimulate the economy, and that has been the case in many business cycles. But any job creation depends on how the tax cuts are structured and when they kick in during the business cycle. And sometimes, the private sector can throw fiscal theory for a loop: The Clinton tax hikes of 1993 -- which raised government revenues by $24 billion during the first year -- were supposed to clobber the private sector. Instead, the economy created 3.7 million new jobs.
By Kathleen Madigan
REALITY CHECK
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