Securities & Exchange Commission Chairman Harvey Pitt is using the crisis to launch a regulatory reform agenda. Emergency measures that let companies buy back more of their own stock--designed to ease the resumption of trading on Sept. 17--are likely to become permanent, Pitt tells BusinessWeek. "Why shouldn't we apply them across the board and not just in tragedies?" he asks.
That's just the first of Pitt's initiatives. Next up: letting companies that are issuing stock disclose data via the Net, rather than issuing prospectuses, and a push for financial disclosures more often than quarterly. Think you can do a better job of intelligence-gathering than those we have on the job now? Lots of people do. Applications to the Central Intelligence Agency have jumped fivefold, from 500 or 600 a week to 3,000 since the terrorist attacks on Sept. 11, the agency reports. The CIA, after considerable downsizing during the mid-'90s, embarked on a hiring binge in 1998, vowing to increase by 30% its still-secret number of operations personnel. The agency had planned to boost its operatives over a seven-year period.
Now, its Web site is being flooded with e-r?sum?s. In addition to operatives who know foreign languages, the agency is looking for people with degrees in computers, science, engineering, and related specialties. Well-wishers have also sent the CIA "messages of solidarity and offers of help, many from Americans living abroad," says a spokeswoman. Judging by recent events, the CIA can use all the help it can get. More attacks could be on the way, this time biological or chemical. And that fear has Americans buying out stocks of gas masks and protective clothing from military surplus stores nationwide, much as they did during the Gulf War. Gas masks are selling for $14 to $169.99, depending on their technological sophistication--and that's if you can get one. In New Orleans, Bill Poynot, who owns two military surplus stores, sold out his 60-plus masks in 48 hours to "businesses in high- rises downtown to make employees more comfortable, moms who are worried, and regular folks." The 120 more masks he was expecting Sept. 18 all sold before they arrived. Mystic (Conn.) Army Navy stores are searching for new suppliers of Israeli-made gas masks after they sold out, too. Customers are also buying British military-issue biological/chemical nuclear protective suits, at $25, says the stores' co-owner Bert Dahl. The suits are "charcoal-impregnated and absorb chemical agents," explains Dahl.
Experts say gas masks have no guarantee of working, however. "You'd have to do air monitoring on the spot to determine what kind of cartridge or filter and the type of respirator that is necessary," says Joan Baranek, sales director for Airgas Safety in Bristol, Pa. Says Brent Weiss, a Chicago military surplus store owner: "When I told one customer there were no guarantees on the masks, she said it was `better than nothing."' Phones have been ringing off the hook at the companies that charter private jets. Since the terrorist hijackings, calls to Petersen Aviation have been running nearly three times the usual five a day for its nine-jet fleet. EBizJets "threw out the answering machine" and started staffing switchboards "around the clock," says John Williams, CEO of the Boston-area charter.
Private jets aren't cheap. Petersen leases Gulfstreams at $5,000 an hour, making a Los Angeles-New York trip cost as much as $40,000. But the company says clients are worried enough about airline safety and long security lines at airports that they're willing to pay. Since the death of Frasier TV show producer David Angell on one of the hijacked planes, Petersen is getting calls from several TV production companies. Cliff Mayhew, whose Air Charter Network books flights for other operators, says a man paid $17,000 to fly his family from White Plains, N.Y., to Eagle, Colo., after the hijackings.
Some fall-off is certain as the economy cools. But the charters hope business will keep soaring as major airlines such as Continental, US Airways, and others cut back on service. Private jets can fly in and out of many more places. Plus, says Paul Travis of Air Partner, a Fort Lauderdale charter broker, many calls are coming from "people who want to know everyone on the airplane with them." In the agonizing hours following the Sept. 11 attacks, U.S. corporations gave more than $120 million for relief.
The amount far outstrips corporate giving at any time in history. Why such an outpouring of generosity? Because this time, it was personal. Terrorists struck on U.S. soil--at the preeminent emblem of American financial might. In addition, round-the-clock media coverage offered opportunities for publicity.
More important, the human toll, the damage, and the needs created were shocking. "This was a really unprecedented situation," says Sylvia Banks, who is corporate contributions manager at DuPont, which gave $5 million. "It demanded an unprecedented response from us."
Yet the recession economists predict will be bad for future corporate giving. History shows that recessions in the past three decades have been accompanied, at least initially, by a decline in donations. Even if that doesn't happen this time, the generosity now may end up cannibalizing the contributions that companies routinely make to other causes later on--mainly the two biggest recipients, health and education.
This comes at a time when the share of corporate profits going to charity has been sliding: Although gifts have climbed in absolute terms for nine years, to $10.8 billion in 2000, the amounts have fallen as a percentage of pretax income. Clearly, companies were reluctant to boost philanthropy even in the best of times.
Some companies, while not anticipating a cutback, aren't ruling it out either. Says Stanley Litow, IBM's vice-president for community relations: "Like everybody else, we'll be rethinking this as we go." That worries many, who say charities can ill afford to lose supporters at a time like this. New regulations banning knives in carry-on bags should be easy to enforce: Switchblades and Swiss Army knives easily trigger airport metal detectors. And airlines are even taking dinner knives off meal trays.
But the skies still aren't necessarily knife-free: Nonmetallic knives--made of ceramics or composites--pass through metal detectors without a peep. And they're widely available from knife dealers on the Net. One of the most popular is called Mad Dog Frequent Flyer, and costs $110 to $160.
Are composite knives a threat to air safety? "I don't think so," says Kevin McClung, whose MD Labs in Prescott Valley, Ariz., makes them. "There are thousands of these not being seen in airports around the world. Never, ever has one been used in a crime." McClung says the knives are popular with law-enforcement types, and with divers, because they don't corrode. His dealers limit sales to police and military, he says. But what about others who don't? "I'm not saying it's right or wrong." In incalculable amounts, companies donated water, food, medical supplies, clothing, glow-in-the-dark collars for search dogs, computer services, cell phones, helicopters, and search-and-rescue equipment. They also made cash donations to the rescue effort, some of the largest of which are listed here:
$5 MILLION TO $6 MILLION
AOL Time Warner
Bank of America
RBC Financial Group
Data: Bloomberg Financial Markets, The New York Times, United Way