Why would DeLay golf with fat cats amid such scrutiny? Jim Ellis, executive director of ARMPAC, said that criticisms of DeLay's travels were "false and frivolous" and that they were "not going to deter us from what we need to do." There's another explanation: ARMPAC needs all the fund-raising help it can get. Spending was up sharply in the first four months of 2005 vs. '03, the last com-parable point in an election cycle. But the PAC raised less money. Trump University, the Donald's new e-learning venture, has much going for it: a low $300 price for weeklong courses, a spanking new Ivy League-ish coat of arms, and the ubiquitous brand name. Too bad the enterprise isn't "street legal." Under New York education law, it's illegal for an enterprise to "use, advertise or transact business under the name 'university' or 'college"' without approval by the state Board of Regents. No such approval has been sought, or granted.
The regulation wasn't news to Donald Trump or Trump University President Michael Sexton. They just didn't much like it. "It doesn't seem to reflect the way education is actually delivered today," says Sexton. As for flouting the law: "It was a calculated risk." In past cases, the state Education Dept. has pursued legal action. But this time, it says, "we are discussing ways to resolve this issue as expeditiously as possible." Maybe Trump will put the HQ elsewhere. At trumpuniversity.com, meanwhile, classes go on -- including Entrepreneurship Essentials, which teaches how to "think critically...about the opportunities and risks of new businesses." Like, when to follow the rules and when to bend them. The science of stem cells is confusing enough. But for some parents, it's also expensive. Worried their newborn might miss out on medical breakthroughs, parents are rushing to store blood from the umbilical cord. At Cord Blood Registry, the largest private storage bank, enrollments rose 120% in May over a year earlier. The San Bruno (Calif.) outfit has 300,000 samples frozen at a storage facility in Tucson. It charges $1,975 to store blood, plus an annual $125 maintenance fee. "Like home insurance and car insurance, this is just-in-case insurance," says Stephen Grant, the bank's co-founder.
But the American Academy of Pediatrics says private storage is "unwise" unless families have a history of diseases such as sickle cell anemia. (In those cases, Cord Blood Registry will store it for free.) Usually donors and recipients need only have the same racial or ethnic heritage. "The chances that your own child will need to use banked cord blood are extremely low," says Dr. Maria Escolar, a stem cell researcher at the University of North Carolina at Chapel Hill. A better idea, she says: donate to one of 22 public banks for use in transplants and research. Shareholders of Ameristar Casinos (ASCA
) are in for a good read. On top of a 30% increase in earnings for 2004, the Las Vegas casino operator produced an annual report that mimics the look of a glossy magazine. Contained are recipes from company chefs and a CD with music from entertainers, such as Gladys Knight, who performed at its seven casinos. There are even free ads for vendors such as Skyy Vodka. Paul Eagleton, chief marketing officer for $850 million-a-year Ameristar, wouldn't say how much it cost to produce 20,000 copies, but figures it was worth it: "We wanted to make it a page-turner," he says. Blame the Easter Bunny. Build-A-Bear Workshop (BBW
), No. 25 on BusinessWeek's recent Hot Growth list, stunned Wall Street on June 3 when it cut spring profit expectations by 45%, to $2.5 million to $2.9 million. CEO Maxine Clark says an early Easter cut the vacation days in which she could sell to kids. And a 2004 promotion on The Oprah Winfrey Show distorted yearly comparisons. Clark still thinks 2005 profits will grow 26% to 32%. But same-store sales will be flat. That's why shares trade at a bearish $21, down from $28 on June 2. Howard Schmidt brings impressive cyber-security credentials to his new job as Chairman of Electronic Lifestyle Integration (ELI). The former cop's pioneering work in computer forensics led him to the FBI's National Drug Intelligence Center in the mid '90s. He was later chief security officer for Microsoft (MSFT
) and eBay (EBAY
), serving in between as President Bush's cyber-security czar. He considers "phishing" e-mails aimed at stealing personal data as a leading new threat. "The segments becoming more and more vulnerable are the consumer and small business," says Schmidt, 55.
Schmidt plans to tackle this menace at ELI. The privately held Mount Laurel (N.J.) company produces and sells a $199.99 super-secure modem. Nontechie users don't have to configure antivirus systems or wait for updates. For $9.99 per month, ELI will update the modem's security systems at least 30 times a day. For Schmidt, it's just the next counterattack in a long crusade. Good news for good drivers: State Farm Mutual Automobile Insurance is rethinking the way it prices policies. The nation's largest auto insurer is converting to the "tiered pricing" model adopted in the 1990s by its top competitors, Allstate (ALL
) and Progressive (PGR
). Sophisticated data-mining techniques enable insurers to be much more precise about assessing the risks of individual drivers.
Allstate, for instance, used to have just three main pricing categories -- preferred, standard, and nonstandard. Now it has more than 300. Tiered pricing "improves the overall level of auto insurance profits and takes out the volatility" caused by pricing cycles, says Jay Gelb, an insurance analyst with Lehman Brothers (LEH
Tiered pricing usually translates into lower coverage rates for the better drivers. That's one reason that State Farm has been losing ground to its competitors, as drivers shop around. The company wrote 39.5 million auto-insurance policies in 2004, down 200,000 from the year before. That marked a second year of decline for State Farm. No. 3 Progressive, meanwhile, increased the number of policies it wrote last year by 7%. Clearly, it was time for a tune-up at State Farm. As one of the "grumpy old men" at Morgan Stanley (MWD
), Anson Beard Jr. has dogged his former firm with letters demanding management changes. Now he's on the other end of the pen. Last week, J. Carlo Cannell, president at San Francisco hedge fund Cannell Capital, dashed off a scathing missive to BKF Capital Group, a New York asset manager where Beard is a director. Cannell, whose funds own 17.6% of BKF's stock, quoted from Cicero about "corruption," slamming BKF for its "richly compensated employees," "related party transactions" that read like "comic monkeyshines," and last year's thin 4% operating margin.
Cannell was mainly irked by Beard and two others -- Barton Biggs, former Morgan chief strategist, and Burton Malkiel, a finance professor at Princeton University. "One would expect such deportment from scalawags, but not you noble nabobs of Wall Street," wrote Cannell. In reply, BKF pointed out that Cicero also said: "Orators are most vehement when their cause is weak." Still, on June 8, BKF -- pressed for changes from another fund, Steel Partners, as well -- lowered some takeover defenses. Maybe that will hold off Cannell for a while.