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Info:Correction date: May 23, 1996
The Case Against Hurwitz
In one of the last big S&L cases from the '80s, two federal agencies are pursuing Charles Hurwitz over the failure of united Savings. And for once, Hurwitz may have no place to hide.
By Laurel Brubaker Calkins
On a crisp, midwinter day on the University of Texas campus, Houston financier Charles Hurwitz's famously pained smile was growing more pained by the moment. Beads of sweat were faintly detectable on his forehead, and his knuckles were noticeably whitening as he gripped the sides of the lectern.
Clad in his trademark dark pinstripe suit and starched white shirt, the CEO of Houston-based Maxxam Corp. was trying to lecture fledgling MBAs on -- of all things -- business ethics. But he was repeatedly interrupted midsentence by the muffled shouts of protesters surrounding the lecture hall. Accompanied by the drumming of angry fists on the wall outside and by the crackle of police walkie-talkies bleeding into the auditorium's sound system, Hurwitz's high-minded speech descended rapidly into farce.
Hurwitz struggled grimly to a conclusion and then took a few questions from the audience. To his obvious consternation, the students peppered him with accusations lifted straight from the protesters' fliers. Hurwitz nervously dodged several pointed queries, then stopped abruptly and fled -- pale and shaken -- out a back door to avoid the protesters.
It was the first time Hurwitz had come eye to eye with his most vociferous opponents, and the confrontation clearly rattled him. He had gone to Austin in that February of 1990 expecting to encounter only a sympathetic audience of business students. The lecture was the idea of his longtime mentor, George Kozmetsky, former dean of the UT business school and a board member of Hurwitz's Houston-based United Savings Association, which was Texas' largest thrift until it collapsed in 1988 at a cost to taxpayers of $1.6 billion.
Instead of a receptive student audience, Hurwitz was blind-sided by more than 40 protesters from the fringes of the environmental movement, some of whom had flown in from California strictly to heckle the reclusive corporate raider over the redwood logging practices of Maxxam's Pacific Lumber. Chanting "Axe Hurwitz, not the redwoods" and "Redwoods, not deadwoods," the protesters were barred from the lecture hall. But they busied themselves outside, picketing on the sidewalks and singing protest songs, keeping time with the music by beating on the auditorium walls.
One of those booing Hurwitz that day was Neal Tuttrup, an Austin landscaper and member of Earth First!, who got a glimpse of Hurwitz as he scurried from the rear of the lecture hall under police escort and dove into a waiting red Camaro with the license tag "CHEERZ." The activist gleefully recalls the fear in Hurwitz's eyes as the Camaro squealed away from the curb, racing off toward the highway that would take him back to Houston.
"I don't think he was used to having to deal with his opponents so directly," Tuttrup says, grinning at the memory. "He looked like a cornered rat."
Not that combat and opposition were anything new to Hurwitz. He's been dogged by angry investors and government regulators for almost his entire business career. But today, Hurwitz is the target of two different federal agencies that are pursuing what are expected to be the last big legal cases arising from the savings and loan debacle of the 1980s. And Hurwitz is finding it isn't so easy to duck out the back door, when it is federal regulators -- instead of a mob of disruptive protesters -- who are chasing you.
Charles E. Hurwitz, 55, rides at the helm of an aluminum, real estate and forest-products conglomerate that has been cobbled together over the past 15 years through a combination of junk bonds, hostile takeovers and steely nerves. With assets of $3.8 billion and 1995 revenues of $2.57 billion, Maxxam Inc. is one of the largest industrial concerns in America. Yet few people have heard of it, even here in its hometown.
That low profile could change dramatically later this year, when federal regulators plan to haul Hurwitz into court to face the most serious charges of his career. He stands accused by the Federal Deposit Insurance Corporation and the U.S. Treasury Department's Office of Thrift Supervision of running his old savings and loan into the ground for the personal benefit of himself and his friends.
The alleged wrongdoings took place in the mid- to late 1980s, but the case against Hurwitz and the officers and directors of United Savings has taken almost a decade to wend its way to court. Once there, it will likely prove the fight of Hurwitz's life. While he has not been accused of any activity that could send him to jail, Hurwitz might nonetheless end up stripped of many of the possessions he has toiled a lifetime to accumulate. The asset that die-hard environmentalists want most to see wrestled from Hurwitz's grip is a grove in California's ancient redwood forests, which Maxxam came to possess through a controversial chain of transactions that lies at the heart of the government's case against him.
The $1.6 billion failure of United Savings wasn't the biggest thrift crash Texas saw; Gibraltar Savings Association actually holds that record, costing taxpayers more than $5 billion. But for perspective, it should be noted that United's failure cost 26 times more than the $60 million collapse of Madison Guaranty, the Arkansas S&L that is the centerpiece of the Whitewater affair.
San Antonio Congressman Henry B. Gonzalez is quite familiar with the accusations against Hurwitz and his associates, having spent most of the past decade tracking down S&L violators as chairman of the House Banking Committee. Although Gonzalez lost his chairmanship after the Republicans won a House majority in 1994, he remains dedicated to cleaning up the debris left by S&L failures.
"While there are those who may argue that Charles Hurwitz faces no liability (for the failure of United Savings), I believe this is one of the biggest S&L cases outstanding," Gonzalez says. "Hurwitz may have significant liabilities to the FDIC, and it is possible that any liability could be utilized to preserve some of the most important redwood forests on earth. We're talking about a possible settlement that may be far more important than any money Mr. Hurwitz may owe."
The secretive Maxxam empire is in many ways a reflection of the man who created it: complicated, relatively unknown, mega-rich, often maligned, obsessed with control.
"When you look at Maxxam, it presents a nice, clear Mephistophelean picture of American business," says Dr. Lisa Newton, a professor of business ethics and environmental studies at Boston's Fairfield University. After preparing a case study on Maxxam for the Center for Business Ethics, Newton became convinced Hurwitz occupies a unique niche in corporate America. "I have never seen anyone with this much zeal and cleverness play things so close to the law," she says.
More than six feet tall, with inexpressive eyes and jet-black hair he slicks straight back, Hurwitz cuts a striking figure among Houston's power elite. He and his wife Barbara, a former school teacher uniformly described by acquaintances as a "wonderful person," are close friends of Mayor Bob and Elyse Lanier and until recently were frequently sighted at top-drawer charity events. (A month ago, however, Hurwitz decamped the family quarters in the Houstonian Estates for an apartment at the Four Seasons downtown. The couple has not filed for divorce.)
The son of a successful menswear retailer in Kilgore, Hurwitz earned a bachelor's business degree from the University of Oklahoma. He joined the Wall Street firm of Bache & Co. as a stockbroker, but soon moved to San Antonio to sell mutual funds with his brother-in-law. At 27, Hurwitz linked up with Kozmetsky, founder of Teledyne -- the giant electronics and defense contractor -- and the two kicked off a 20-year string of business deals that combined Hurwitz's smarts and Kozmetsky's money.
In the early 1970s, Hurwitz acquired Federated Development Co. and Summit Group, the latter of which he took public in 1971. But -- in Hurwitz Misstep No. 1 -- the Securities and Exchange Commission accused him of filing false and misleading statements regarding the Summit offering. Hurwitz signed a consent decree to settle the charges, but he later insisted he'd done nothing wrong and had settled to avoid getting bogged down in the midst of financing a deal.
Summit was declared insolvent just four years after Hurwitz took it over, and -- in Hurwitz Misstep No. 2 -- the New York State Insurance Department sued him for fraud and mismanagement of the company, claiming he had illegally siphoned off about $800,000 in profits to the parent company before Summit failed. Again, Hurwitz denied any guilt, but settled the case out of court, reportedly paying back about half of the profits he was accused of skimming.
Undeterred, Hurwitz forged ahead and acquired McCulloch Oil Company (MCO) in 1980 and Simplicity Pattern in 1982, stripping each company of its most lucrative assets and rechristening the remainder Maxxam. He jumped into the savings and loan business in 1983, becoming the largest stockholder in United Financial Group, which is United Savings' parent company. He then leveraged those assets in 1986 to conduct the first major hostile takeover paid for with junk bonds -- his successful raid on Pacific Lumber.
In perhaps his shrewdest deal, Hurwitz acquired massive Kaiser Aluminum at a fire-sale price, after its owner got spooked by the Wall Street crash of 1987. Along the way, he scooped up roughly $122 million in foreclosed properties from the Resolution Trust Corp. and developed a country club residential community in California's sensitive high desert country, drawing the ire of environmentalists and celebrity neighbors alike. More recently, he became the controlling partner of Sam Houston Race Park, emerging as the biggest player in Texas' nascent gambling industry.
"He is the Houdini of high finance," Craig Gilmore, a California investment adviser, told the Wall Street Journal several years ago. "Say what you will about him, the guy makes some great deals."
On a personal level, though, Hurwitz remains an enigma. "His name is so well-known you'd think you could find someone who knows him well with the snap of a finger," says consummate Houston insider Jack Steele. "But I've never really known anyone who knew him."
Hurwitz's official Maxxam-supplied biography consists of just seven sentences, and exhaustive Internet research yields only a few more details to flesh out the skimpy portrait: he is a former smoker and father of two grown sons who enjoys fast cars, an occasional drink and a competitive game of tennis. Most daybreaks find him jogging or pedaling a stationary bike, and he dabbles in blood sports, hunting doves in season.
Business foes who have faced Hurwitz across the bargaining table through the years describe him alternately as charming and witty or cold and arrogant. "Charles came across as so warm and caring," recalls one outfoxed rival in a 1984 BusinessWeek interview. "It took us almost two years to realize we'd lost control of our company."
"Charles Hurwitz is a very friendly, extremely bright, very strongly family-oriented man," says Bob Irelan, who, as Maxxam's corporate spokesman, is paid to say nice things about Hurwitz. "He is well-known to a number of people in government. He is extremely thorough in his research on anything. He is an absolutely brilliant financial mind, and a lot of fun to work for. He does like his privacy, and he doesn't want others to talk about his charitable activities. He doesn't do things because he is looking for publicity. He does things because he thinks they are important and need doing."
We would've liked to have shown you the sensitive side of this intensely private family man. But Hurwitz declined to talk to the Press, as did most of his tight circle of friends.
Nellie Connally, the wife of former Governor John Connally, who sat on the Maxxam board until his death last year, tried to think of a sweet story about her late husband's friend, but was at a loss for an example of Hurwitz's tender side.
"I love Charles and Barbara dearly; she is my very best friend," she confides. "Charles has been facing serious charges ever since I've known him, and people are going to fling things at him forever. But he is a survivor."
Connally suggests Hurwitz's detractors may just be jealous of the success he has attained at a relatively young age. "If he was 70 years old, things might be different than if he was in his fifties. People pick on him all the time. I don't know why people don't like him, but they don't."
Stan Creech, one of the city's best-connected real estate brokers, speculates Hurwitz just may not be the kind of man who makes friends easily. "We both work out at the Houstonian, and I've passed within three feet of him about a million times. I've thought dozens of times about sticking out my hand and introducing myself, but the look on his face always stopped me. His face is so cold and distant."
Declining to offer their insights were apartment developer Jenard Gross and former University of Houston chancellor Barry Munitz, both longtime Hurwitz colleagues who are co-defendants in the OTS lawsuit against Hurwitz. (Where the FDIC suit is against Hurwitz alone, the OTS action also pursues Maxxam, Federated and United Savings officers and directors Gross, Munitz, Arthur Berner, Ronald Huebsch and Michael Crow.)
Dallas financier Harold Simmons, no slouch as a corporate raider himself, managed a thumbnail sketch of Hurwitz, with whom he was friendly when Simmons lived in Houston during the late 1970s.
"I've always found him to be an astute, focused businessman and an investor who understands corporate values and makes good investments for his company," Simmons says. "At social events, he is a very pleasant person, quiet, but very personable. I actually liked him quite a lot. But mostly, he is very focused on making money and on keeping control of his assets. He will pursue that rather single-mindedly."
Not exactly a ringing endorsement. Then again, Simmons should be classified as a former friend of Hurwitz's. Though the two were once close, their friendship cooled when Simmons amassed a 15 percent stake in Maxxam in the 1980s, making the Dallas financier the largest individual shareholder in Hurwitz's empire behind the man himself. Apparently, Hurwitz feared Simmons might give him a dose of his own medicine.
"I guess he felt somehow threatened by me, that I would somehow try to get control of his company," Simmons recalls. "But he has absolute voting control of Maxxam through a super voting stock he holds. I told him I was buying it because I thought it was a good investment."
Oddly enough, Simmons is now suing Hurwitz over a business deal Simmons feels flagrantly favored Hurwitz's personal interests at the expense of Maxxam's other shareholders. Simmons would also like to unload his Maxxam holdings, as the stock has been a dog in his eyes. "It hasn't shown a real good return," he says. "But I'll hold until the price trades closer to the company's intrinsic value."
Simmons' lawsuit highlights something else that's been said about Hurwitz: lawyers love him because much of what he touches turns to litigation.
According to SEC and other public records, more than a dozen major lawsuits and administrative court actions are pending against Hurwitz personally or various parts of his corporate empire. Just one of those actions seeks more than $5 billion in damages, which is roughly 100 times Maxxam's 1995 profits and 50 times Hurwitz's estimated $100 million personal wealth. In 1989, Hurwitz's combined salary, bonuses and stock options totaled $7.48 million, ranking him first on the list of Houston's top-earning executives. In 1994, he pulled down $1.35 million in salary, bonuses and stock options, according to the most recent Maxxam proxy statement.
You can separate Hurwitz's legal opponents into three basic camps: In the first are the dispassionate feds, pursuing Hurwitz for alleged S&L improprieties and violations of financial laws. In the second are the environmentalists, trying to protect the vanishing old-growth redwoods. And in the last camp are an assortment of litigants ranging from disgruntled race track investors like Jim "Mattress Mac" McIngvale and attorney John O'Quinn to other federal agencies, such as the U.S. Department of Labor and the Environmental Protection Agency.
At present, it's the actions growing out of United Savings' failure that likely are giving Hurwitz the greatest cause for concern.
"We're at the tail end of the S&L crisis [with this case]," says Bert Ely, a thrift industry analyst who frequently testifies as an expert witness in big federal cases. "My sense is this is one of the biggest actions they've brought, and Hurwitz is one of the bigger fish."
Most Americans suffer from forced amnesia on the subject of the Great S&L Scandal of the 1980s. Few understood it; fewer still were able to connect it to their personal lives. But the more than $150 billion tab for bailing out insolvent thrifts played a major role in the astounding buildup of the national debt that occurred in the late 1980s. The savings and loan industry itself virtually disappeared as well, with the number of thrifts plunging from more than 4,000 15 years ago to about 1,500 today. In Texas, the number of S&Ls fell from more than 250 in the early 1980s to just 47.
Houstonians have better memories than most Americans when it comes to the S&L debacle. The city's real estate scene was devastated by the tidal wave of construction activity unleashed by hyperactive developers with a line to cash-happy S&L chiefs. Office buildings, shopping centers, apartment complexes and master-planned communities sprang up where there was no good reason for them, and waves of foreclosures began to roll blackly across the landscape. Coupled with the free-falling price of oil and the crashing Mexican peso, real estate values got killed. It didn't happen only in Texas, of course, but the resultant distress here was among the deepest and most widespread.
"It's like when people say, 'Guns don't kill people, people do,' " suggests Texas bank analyst Frank Anderson. "Well, the thrifts were the guns."
The charges lodged against Hurwitz by the FDIC last August and against Hurwitz and his United Savings colleagues by the OTS in late December dredge up the worst of the excesses of the '80s: corporate raiders, junk bonds, hostile takeovers, Michael Milken, Ivan Boesky, see-through office buildings, rampant foreclosures and imploding S&Ls.
Nearly all of these came together in Maxxam's 1986 acquisition of Pacific Lumber, which forever linked Hurwitz to the fate of the California redwoods, and which was accomplished, regulators claim, with funds misappropriated from United Savings.
Indeed, of all the players involved in the Pacific Lumber takeover -- Michael Milken, Drexel Burnham Lambert, Boyd Jefferies, Ivan Boesky, Charles Hurwitz and Maxxam -- only Hurwitz and Maxxam have not been convicted in criminal court.
Until Hurwitz came along and acquired control of its parent company, United Financial Group, United Savings was a sleepy, unimaginative S&L much like the one Jimmy Stewart ran in the movie It's a Wonderful Life. But under Hurwitz's direction, the thrift abandoned its traditional residential lending business and plunged headlong into the risky waters of commercial real estate lending and development and started investing heavily in high-risk junk bonds and slippery instruments called mortgage-backed securities. When United Savings failed in December 1988, it hadn't made a home loan in three years, but it had managed to lose more than $275 million on ill-advised financial investments. Meanwhile, losses in its commercial real estate division were piling up faster than corpses in an Ebola epidemic.
Here's how the FDIC sums up a big chunk of its case: "Under Hurwitz's control, the financial condition of United Savings steadily deteriorated. As the institution's financial health plummeted, Hurwitz, senior officers and United Savings board members serving at Hurwitz's request undertook greater and greater risks until both the officers and board members became entirely indifferent to losses the institution might incur. Rather than recognize United Savings' problems and confront them constructively, Hurwitz: (a) dramatically increased the liabilities of the association in violation of federal law; (b) gambled on large, cumbersome real estate projects with no realistic chance of success; and (c) invested in complex financial instruments which the officers understood poorly and which resulted in staggering losses to the association."
Why would Hurwitz do such a thing? Well, both the FDIC and OTS believe he needed to make United Savings' balance sheet look as fat as possible so he could utilize the thrift's assets to finance Maxxam's takeover raids.
In the mid-'80s, Maxxam's corporate assets weren't large enough to support borrowing the half-billion dollars Hurwitz needed to take over Pacific Lumber. But by throwing United Savings' $5 billion in assets onto the pile -- through a little reciprocal bond trading with Drexel Burnham's Milken -- Hurwitz would have more than enough to fund his big deal.
Central to both the FDIC and OTS cases is the allegation that Hurwitz set in motion a complicated chain of interrelated financial transactions -- with the help of Milken and Drexel Burnham -- which effectively freed up United Savings' federally insured deposits to fund Hurwitz's hostile raid on Pacific Lumber.
Federal regulators contend that from 1984 through 1988, United Savings bought $1.4 billion of Milken's junk bonds as an incentive for Milken to peddle $1.8 billion of Maxxam's takeover bonds to other Drexel clients.
Such a cozy relationship is called a quid pro quo, or a related-party transaction -- a type of mutual back-scratching that is written off as standard procedure in most good old boy circles. But while thrifts are legally permitted to buy junk bonds, the law specifically bars them from buying bonds from people they are already doing business with. That's because thrifts play with Other People's Money -- federally insured deposits. After all, if the government has to take the fall for the losses, where is the incentive for thrift managers to sidestep junk-grade investments and deadbeat borrowers?
Both the FDIC and OTS claim Hurwitz accomplished the alleged Drexel Burnham sleight of hand by his command of United Savings' boardroom. Hurwitz denies having legal control of the S&L, but regulators firmly believe he had actual control through a combination of stock and options owned by his family and by Hurwitz friends who also sat on the thrift's board and/or did business with Hurwitz's various companies.
SEC filings show Hurwitz and his family owned 23.3 percent of United Financial Group (UFG), which in turned owned 100 percent of United Savings. Hurwitz associates Kozmetsky and Gross both held sizable blocks of UFG. And up to 9.6 percent more of UFG's stock was parked at Drexel with Michael Milken. Both Hurwitz and Drexel held options that could be converted into additional shares of common stock. So, counting stock and options, Hurwitz had effective control over more than 35 percent of the stock of United Savings' parent company. From a practical standpoint, other directors would be hard-pressed to ignore the wishes of such a powerful shareholder, even if they wanted to.
The feds certainly have no doubts that Hurwitz ran the show. Take a deep breath and follow along as the FDIC lays out the thrift's chain of command in its suit:
"Hurwitz was the controlling force of United Savings, UFG, MCO and Federated," the FDIC suit contends. "He was the controlling shareholder of Federated which, in turn, was the controlling shareholder of MCO. Through MCO and Federated, which held significant stock ownership in UFG, Hurwitz was a controlling shareholder of UFG and United Savings. He was the chairman of the board and chief executive officer of UFG, MCO and Federated. He also served as UFG's president and was a member of UFG's executive committee and the UFG/United Savings strategic planning committee. Hurwitz was also a de facto director and senior officer of United Savings and voluntarily assumed the responsibilities of an officer and director of the institution. He functioned as an active member of the United Savings board, if not its de facto chairman. He directed and controlled United Savings' investment activity; he regularly attended board and committee meetings; he selected United Savings' officers and directors; he controlled and dominated virtually all of United Savings' activities. No significant decision concerning United Savings' affairs was undertaken without his approval."
In a 1992 interview with Houston Metropolitan magazine, no less an authority than onetime S&L owner Bob Lanier dismissed the notion that Hurwitz didn't run United Savings. "Come on," Lanier was quoted as saying. "You know how these things go. It was Charles who called the shots." (Lanier declined to return repeated phone calls for this story.)
Hurwitz, of course, denies he has done anything wrong and is reportedly puzzled that his character has been called into question over matters that took place so long ago. Rather, he prefers to characterize his role in the failure of United Savings as that of a mere "investor" who lost his stake along with everybody else in the great Texas S&L crash.
"Charles Hurwitz and Maxxam have been portrayed as the controlling influence in United Savings, but Maxxam was an investor, as was Federated Development," stresses Irelan, who begins to sound like a broken record if you talk to him long enough. "If you take those two investments and add them together, you get something on the order of 23 percent. That doesn't constitute control. Maxxam was a shareholder. We were an investor, and United Savings turned out not to be a good investment."
Hurwitz's opponents say that argument handily ignores the reality that many of United Savings' directors and officers owed their livelihoods to Hurwitz and also held stock in the thrift's parent company. "If you work for an organization that has anything to do with Hurwitz, you work for Hurwitz," says Bob Martel, a Northern California attorney who is suing Hurwitz and Maxxam on many of the same charges raised by the two federal S&L suits. "Hurwitz ran this thing completely and totally. No one did anything without his approval."
A redwood country native who has dedicated his life to bringing Hurwitz down, Martel says the Humboldt County newspaper he once owned was driven out of business by a Pacific Lumber-led boycott, which was sparked by the paper's anti-Hurwitz editorials. Martel, who has an entire room in his house lined with bookcases and file cabinets stuffed with nothing but Hurwitz-related documents, grew weary of waiting for the government to pursue Hurwitz for the United failure. So he sued Hurwitz, Maxxam and other United Savings directors in 1990 on behalf of the American public, seeking $1.6 billion in actual damages, $4.8 billion in punitive damages and a fine of $10,000 a day "for each day Hurwitz persisted in the lie."
The lie, according to Martel, is Hurwitz's claim that he didn't control United Savings.
Maxxam's Irelan dismisses Martel's $5 billion suit with a disgusted wave of his hand. "It is bizarre E a frivolous lawsuit without any merit," he says. "It has not been joined by the government, though he purports to be suing on behalf of everybody. That should tell you something about its merits."
But one thing the feds and Martel agree on: "Hurwitz had a substantial role in all substantial actions or inactions we've charged (in this case)," claims Richard Stearns, the OTS' deputy chief counsel for enforcement.
That isn't to say the regulators won't have a merry task proving Hurwitz's control of United Savings to a judge and jury. One of the primary problems with proving any accusation or case against Hurwitz is the highly complex structure of Maxxam, a holding company with subsidiary components controlled by interlocking, over-lapping managers and boards of directors. Sometimes, several wholly owned subsidiaries lie between actual moneymaking assets and the parent company, and each group may have a separate layer of financing and collateral. The advantage to this setup is that each company in the pyramid can claim to function on its own; it also makes it particularly difficult to trace which company has which assets and which debts.
A glance at Maxxam's corporate organization chart reminds you of a set of those Russian nesting dolls where, when you take one doll apart, there's another doll inside, and then another and another. Except in Maxxam's case, all the dolls have Hurwitz's face.
"These types of structures are done intentionally, to shield people like Hurwitz from being too closely scrutinized," says Michael Hoffman, director of Bentley College's Center for Business Ethics, located near Boston. "Trying to figure out who owns what and who owes the debts, with so many holding companies and subsidiaries E it is very hard to know where to hit."
Allan Sloan, a Newsweek columnist who has followed Hurwitz for more than a decade, agrees that Hurwitz's elaborate corporate structure is no accident. "You've got to watch what he is doing very closely because his deals are very complicated. He'll lose you in the complexities."
Hurwitz also tends to create single-purpose subsidiaries, which spring up with the frequency of mushrooms after a rain. Sometimes these companies go away after their purpose has been fulfilled. Sometimes, the newly formed entities serve to isolate particular assets from related debts and creditors, so Hurwitz has a better chance of hanging onto them if trouble comes.
For instance, Pacific Lumber was dramatically if quietly restructured after the takeover into three separate companies: One, Pacific Lumber Co., holds title to the land occupied by the company town of Scotia, its sawmills and other operating enterprises. Another, Scotia Pacific Holding Co., carries Pacific Lumber's takeover debt and holds title to essentially all the commercial forests where logging takes place. And a little-mentioned third company, Salmon Creek Corp., holds --debt free -- the deed to the Headwaters Forest, the holy of holies for environmentalists who are trying to wrest it away from Hurwitz.
Beyond charges of reciprocal business dealings with Milken, both the FDIC and OTS accuse Hurwitz of masterminding United Savings' violation of something called the "net worth maintenance agreement," an obscure clause that was applied to United Savings as part of a deal to merge it in 1983 with another thrift that was already under Hurwitz's partial control.
Basically, the clause is a promise by United Savings to keep on hand an adequate financial cushion to protect depositors against losses. The feds say UFG agreed to kick in additional capital if United Savings' financial cushion ever sank below a particular level, specifically $242 million. But the feds say none of the Hurwitz entities ever chipped in a dime to United Savings, even when the thrift's desperate financial condition was unmistakable.
"Notwithstanding this knowledge, Hurwitz failed to report (to regulators) the true net worth of United Savings, continued to take actions that aggravated United Savings' losses and further decreased its net worth," the FDIC suit charges.
When it comes to the net worth maintenance agreement, Hurwitz has played a coy, legalistic game, arguing that the clause does not pertain to him or UFG because he never signed papers the feds sent over to him on the subject. But Hurwitz and his colleagues obviously are taking the allegation seriously, as they spent 12 pages responding to the net worth maintenance charge in their official answer to the OTS action. Among their responses: "We deny that Maxxam or Federated was obligated to infuse any assets into United Savings for any reason. We deny that Hurwitz or Munitz had an obligation to direct Maxxam to pay a non-existent obligation. In fact, as directors and officers of Maxxam, their obligation would be to ensure that Maxxam does not honor meritless claims."
Spokesman Irelan is equally adamant on the subject. "Neither Maxxam nor Charles ever signed any commitment to maintain the net worth of the S&L. He didn't, never. You may see something that UFG -- before it was acquired by Maxxam -- had signed a net worth maintenance agreement. When that was discovered, the regulators came to us and wanted us to sign to maintain the net worth, and we said, 'No. We won't.' "
Both federal suits also contend that Hurwitz and his associates were able to keep their game for as long as they did because they cooked United's books and then lied to regulators about it. In their joint response to the OTS, Hurwitz and his co-defendants insist that they never lied. But they do make an interesting attempt to shift the blame to the thrift's accountants, as if to suggest, "If we were keeping bogus books, why didn't the bean counters call us on it?" Well, the feds counter, we think you were lying to your accountants, too.
"To 'keep the doors open,' to forestall regulatory intervention and to insulate UFG, MCO and Federated from the need to make capital contributions to United Savings, Hurwitz and his colleagues covered up the true state of the association by a pattern of deceptive financial reporting and balance sheet manipulation," the FDIC charges. "The effect was to keep United Savings operating despite its desperate condition E. Moreover, by failing to honor UFG, MCO and Federated's net worth maintenance obligation, significant wealth was preserved by Hurwitz and his colleagues for distribution to themselves or for other investment purposes." In any case, when regulators seized United Savings on December 30, 1988, the thrift's net worth was a negative $261 million -- about $500 million less than it was supposed to have on hand under its net worth maintenance agreement.
Besides violating the net worth maintenance agreement and engaging in a quid pro quo with Drexel, both federal agencies charge Hurwitz and his associates with numerous unsafe business practices. The FDIC zeros in on United's junk bond portfolio, while the OTS homes in on the thrift's real estate lending practices. For good measure, the OTS action also charges Hurwitz and the other defendants with unsound compensation practices that cost United millions it didn't have to spare.
The FDIC takes particular exception to a loss-plagued collection of mortgage-backed securities, which were essentially sophisticated bets on the direction of interest rates. It was called "Joe's Portfolio" after Joe Phillips, the thrift's junk bond analyst, but it might as well have been dubbed the "Runaway Train." The portfolio managed the neat trick of losing a bundle as interest rates plunged from 10 percent to 7 percent in the three months ending in January 1986, and then losing millions more when interest rates roared back up to 10 percent in the spring of 1987. The feds say "Joe" may have been in charge of the trading, but his superiors were to blame for not jerking him back in line and terminating the portfolio after the size of the losses became apparent. (Phillips could not be located for this story and is not a defendant in either suit.) For instance, in one eight-week period of late 1986, Joe's Portfolio lost $23.7 million. By the time the final gong sounded, United and a related mortgage subsidiary had lost more than $275 million trading these ill-considered securities.
"Hurwitz, United Savings' officers and board members did little or no due diligence on their own," the FDIC charges. "They had little or no appreciation of the complexity of the instruments they acquired. Worse, the institution itself had no procedures or policies with respect to such securities, and few if any internal controls. As a result, Joe's Portfolio was seriously flawed from the beginning."
The feds also accuse United of juggling losses from its mortgage-backed securities trading so the losses wouldn't show up on the balance sheet and trigger a cash call on Hurwitz under the terms of the net worth maintenance agreement. "Instead of trying to reduce the interest rate risk in United Savings' large portfolio, respondents speculated on the direction of interest rates, recognized gains on one side of its portfolio without recognizing the losses on the other side, increasing the risk to United Savings and misrepresenting to [regulators] that United Savings was not in violation of its minimum net worth requirements," the OTS charges.
In detailing the charges related to United's real estate lending practices, federal regulators appear to indulge in a bit of sarcasm, accusing the defendants of not even reading newspaper headlines to learn that Texas commercial real estate was crashing around their ears. They say the thrift used rookie real estate appraisers, took promoters' words for the profit potential of their projects and repeatedly threw good money after bad.
As might be expected, Hurwitz and associates categorically deny every single accusation lobbed at them, with Hurwitz stressing that he had limited involvement in the day-to-day operations of United Savings. The bottom line, Irelan insists, is "Maxxam did not run United Savings, and Charles did not run United Savings."
Interestingly, in their formal 113-page response to the OTS action, Hurwitz and his co-defendants offer a grab bag of possible explanations for their actions. Here's a sampling of some of the justifications Hurwitz and his colleagues make to the feds: 1) We were just following the advice of a series of articles published in the Dallas Federal Home Loan Board's quarterly magazine; 2) accounting procedures on mortgage-backed securities were evolving in 1985-1987, and you are trying to hold us accountable retroactively for today's standards; 3) we just did what our accountants and outside auditors told us to do; and 4) "Hurwitz's actions and decisions were taken in the exercise of his best business judgment at the time and are not legally subject to the FDIC's second-guessing."
The co-defendants repeatedly charge that various internal memos and documentary evidence the feds cite in their suits are quoted out of context, misunderstood or misrepresented, and they also offer the same catch-all defense any child knows to try in a pinch: it wasn't our fault and, besides, everybody was doing it. Their joint response states: "United Savings' problems stemmed primarily from the depressed real estate market in the areas served by United Savings in the early 1980s and from other forces beyond its control that resulted in the failure of every similarly sized thrift and many of the largest bank holding companies in Texas."
Hurwitz's co-defendants in the OTS action responded jointly with him to the charges, and declined to return phone calls from the Press to elaborate in their defense. However, some of United Financial Group's old annual reports and shareholder communiques offer an unintentionally humorous insight into what some of the players might have been thinking, back when the game was still in full swing.
In UFG's 1987 10-K report to the SEC, Jenard Gross -- who doubled as president of both United Savings and its parent, UFG -- made this pledge to stockholders: "I will not suggest to you that we have the answer to making United profitable in 1988 E. I can and will promise you, however, that our management team is of such strength and character that we will make the most out of this environment."
That they did. Although the thrift failed within a year, the directors and officers collected millions in paychecks and severance bonuses for three more years. Court documents show these payments included almost $1 million cash paid out to Barry Munitz, now chancellor of the California State University System, and the forgiveness of principal and interest on a $835,000 loan UFG had made to Jenard Gross.
To make sure United Savings would be able to pay these exorbitant salary contracts and golden parachutes, court documents show the officers stashed $6.6 million in an escrow account just ten weeks before the thrift failed so shareholders couldn't get hold of it. At the time, United was so wobbly it could ill afford to have any money siphoned off. But even after receiving written notice from regulatory watchdogs that the golden parachutes and bonuses were illegal, the board granted them anyway, and gift wrapped them in blanket indemnifications to boot.
If Hurwitz and his friends are guilty of anything, it may be of having gone right up to the legal limit and then leaning way, way over the line. While such actions may not be technically illegal, they could easily be unethical. Can you go to jail for unethical behavior? Probably not. Can you be stripped of millions in assets for shaving the line a bit too close for the comfort of a particular judge and jury? Maybe.
"Hurwitz was always within the boundary of the law," says ethics and environmental studies professor Newton. "But he is a perfect example of how it is possible for a person to be ethical at one level and totally unethical at another. He's like a robber baron who coaches Little League and is a great father on his own time. He does not have the foggiest idea that what he's doing from 9 a.m. to 5 p.m. Monday through Friday has a terribly damaging effect on the public."
"But Hurwitz must have gotten a clue somewhere along the line that ethical considerations are a problem for him, because he does walk the line so carefully," Newton adds. (This opinion, incidentally, has earned the professor the attention of Maxxam's lawyers. After a case study she had presented on Hurwitz, Maxxam and Pacific Lumber at a business ethics seminar was published in a collection of academic essays, Newton received threatening letters designed to muzzle her from Maxxam general counsel Anthony Piero. Of all the corporations and executives profiled at seminars conducted by the Center for Business Ethics in the past 20 years, only Maxxam has threatened to sue over its portrayal.)
The question of whether or not someone can be held liable for operating in a moral gray zone may be one reason Hurwitz is trying so hard to consolidate the OTS case into the FDIC case. While there is the temptation to view the FDIC and OTS actions as duplicative, there are substantial differences between the two. First and foremost, the FDIC action is a true lawsuit against Hurwitz alone, which will be tried in Judge Lynn Hughes' federal district court in Houston. The OTS case is an administrative court action against Hurwitz, his companies and the officers and directors of United Savings, which will be heard in front of an administrative judge in Washington, D.C., where the government's case may presumably be a bit easier to prove. Hurwitz has filed papers with the federal district court in Houston seeking to combine the two actions in his own home court.
Maxxam's Irelan insists that request is a practical matter. First, the company would like to hold down legal costs and defend only one trial. But more important, Irelan says, if Hurwitz loses to the OTS in administrative court, he will appeal to the nearest federal district court, and the FDIC case already is in the federal courts system. "Why go through an administrative action when you already have the whole subject before a court?" Irelan says.
What Irelan doesn't say is that an OTS judge is undoubtedly going to be vastly more familiar with thrift case law than a Houston district court judge. And Judge Hughes tends to side more often with anti-government arguments than he does with pro-federal views, which makes his court a doubly promising venue, from Maxxam's point of view.
Rick Stearns, who is handling the OTS case against Hurwitz, says his agency is under no obligation to roll its case in with that of another federal agency. In fact, he suggests that if the OTS is forcibly rolled in with the FDIC, he may refile the entire action again, and drag Hurwitz and the other defendants right back up to Washington.
It should be underscored that none of the charges lodged against Hurwitz by the federal thrift regulators warrants jail time, primarily because the word "fraud" never appears in any of the court papers.
Stearns says the OTS decided not to file civil fraud charges against Hurwitz and the others because it was principally interested in recovering the bailout money, not in setting Hurwitz up for a criminal prosecution.
"All we have to prove is willful and reckless disregard of the regulatory requirements," Stearns explains. "That is a much lesser standard of proof than a fraud charge. And there's no sense in our trying to prove a more difficult case when we can recover damages under regulatory violations."
The mere mention of fraud or criminal charges arouses Maxxam spokesman Irelan.
"In nothing that has been handed down by anybody is there any suggestion of criminality," he says emphatically. "None. Zero."
Passions run much higher in the United Savings case than in any of the previous actions against dead Texas thrifts because of how Hurwitz allegedly used the thrift to indirectly leverage his raid on Pacific Lumber, the corporate guardian of the largest remaining private stands of ancient redwoods in the world. After gaining control of Pacific Lumber, Hurwitz doubled and in some cases tripled logging rates to make enough money to pay down his huge takeover debts. Not only did that earn him the unceasing enmity of environmentalists, it also apparently led to his name appearing on a list of potential mail bomb targets compiled by the man accused of being the Unabomber, according to published reports.
And it has resulted in California environmentalists vigorously pushing their own solution to squaring United's debt to taxpayers by having the government expropriate the Headwaters Forest.
"There is a unique twist to this S&L case in that an outside group that has nothing to do with the FDIC is trying to push their own agenda -- something called debt-for-nature," says FDIC spokesman David Barr. "I guess it could be done, if it could be determined that whoever owned those trees was directly, financially responsible for decisions at that S&L. But there are a lot of legal things that would have to be ironed out to prove that."
The environmentalists see no such legal roadblocks. "We believe it is a very reasonable conclusion to this whole mess," says lawyer Jill Ratner of the Rose Foundation, a California group that studies economic and environmental issues. "The government has very substantial claims against Hurwitz and Maxxam as a result of the failure of United Savings. We believe those claims are real, and we believe the American people are entitled to receive something of value for the $1.6 billion we put into bailing out that S&L. Headwaters Forest would be an excellent property for the United States to receive in settlement of that claim."
Maybe so, but as Barr asks, "What's the FDIC going to do with a bunch of trees? We're in this to recover money."
Hurwitz has repeatedly said he is open to selling the Headwaters -- for the astronomical price of $500 million -- or trading it for prime federal lands. But he remains adamantly opposed to any plan that would reward his opponents with "something for nothing."
"There is no debt," Irelan reiterates. "Even if someone, somehow was to determine there is a debt, it has absolutely no ties to Pacific Lumber. This dialogue has to be recognized for what it is -- an attempt to get something -- the Headwaters Forest -- for nothing, a debt that doesn't exist."
Lately, Hurwitz has taken to characterizing the debt-for-nature swap as a frontal attack on private property rights. He has warned darkly in several op-ed pieces that such a deal would be the first step down a slippery slope to mass federal seizures. In an editorial published by the Houston Chronicle in mid-January, Hurwitz gravely cautions: "The tactics I describe could be imposed anywhere unless we, as American citizens, are steadfast in our resolve to defend what is fair and what is constitutional."
Irelan suggests Hurwitz may sue the federal government for damages under the Constitution's "takings" clause if loggers aren't permitted back into forests that are currently off limits through court orders protecting such endangered species as the spotted owl.
Numerous legislative efforts to create federal funding vehicles to pay for Headwaters have been unsuccessful, notes Irelan.
There were several state and federal bills that -- if Pacific Lumber had thrown its considerable weight behind them -- might have passed, setting up mechanisms whereby the government could acquire the Headwaters. However, the company backed a candidate (who had previously lobbied for Pacific Lumber) to unseat the author of the best of those measures. That Hurwitz-backed congressman -- Frank Riggs -- recently introduced legislation related to old-growth forests that one environmentalist describes as having "something to horrify everyone."
The Riggs measure would give Hurwitz a green light to do as he pleases in old-growth forests, where the enormous, clear-grained trees are worth several times the value of younger, knottier trees. The bill says if the federal government can't fork over the cash for Headwaters within 18 to 24 months, Pacific Lumber can enter the grove and log it indiscriminately, with total disregard for any impact on the ecosystem or endangered wildlife.
Irelan says Maxxam appreciates Riggs' efforts to get the issue "off dead center." But he says the whole notion of a debt-for-nature swap or a public buyout of Headwaters ignores the larger question of how many redwood trees the public wants to save.
"Some 80 percent of the remaining old-growth coastal redwoods are already permanently preserved in more than 350,000 acres of public parkland," he points out. "How much more do you want to preserve?"
The debt-for-nature proposal has sparked a flurry of letters between the idea's backers and White House chief of staff Leon Panetta, California Senators Barbara Boxer and Dianne Feinstein, virtually the entire California Democratic congressional delegation and Vice President Al Gore. All of those letters express support for the concept of debt-for-nature, but many suggest the mechanics of conducting such a swap would be difficult. But the mere existence of these communiques allows Maxxam to mutter darkly about being the target of political harassment.
However, Maxxam and Hurwitz haven't been reluctant to exercise their own muscle in the political arena. Late last year, Hurwitz fired off a series of letters to key members of Congress, attempting to get the endangered species protection lifted from the marbled murrelet -- an obscure seabird that nests almost exclusively in Pacific Lumber's old- growth forests -- and in 1992 he personally hosted Bob Dole's private reception during the Republican National Convention in Houston. He also has met with Gore to discuss Headwaters, in addition to Pacific Lumber's playing a large role in Riggs' campaign and the drafting of his Headwaters bill.
"I know Pacific Lumber had a big hand in writing the Riggs Bill because they told me they did," says Dana DuBose, an aide to Congressman George Brown, a California Democrat and one of the most knowledgeable people on Capitol Hill regarding the debt-for- nature issue. "The federal government can't require Hurwitz to offer up Headwaters, but we do want to reach a negotiated settlement that lets him win as well."
Despite opposition to virtually every move he makes, Hurwitz continues to cast himself in the role of civic benefactor. He tried it most recently in 1994, when he offered to bring casino gambling to downtown Houston. And he tried it a few years earlier when he offered to rescue faltering Continental Airlines with a deal that would've netted him $3 billion in assets for roughly $25 million of his own money.
"It would be funny if it weren't so tragic -- the chutzpah Hurwitz demonstrates trying to say he's good for the community when he's so bad for the community over the long-term," says Bill Bertain, another Northern California attorney who has been suing Hurwitz on a variety of matters for most of the past decade.
Newsweek columnist Sloan -- who has lambasted Hurwitz for years as a "junkmeister" and, jokingly, "Mr. Altruism" -- says Hurwitz's failed Continental Airlines and casino deals are typical of his style: "You can't blame Hurwitz for making these offers. Why not? If it works, he makes a fortune. If it doesn't, he doesn't lose. That's a Hurwitz kind of deal."
One thing Hurwitz is undeniably guilty of is having an enormous blind spot when it comes to public perception. The way Hurwitz has portrayed himself, he looks at things from a strictly business perspective, dispassionately reducing a scenario to unemotional spreadsheets and risk analysis profiles. After careful study, he makes a calculated -- if sometimes enormously risky -- gamble, using the funds of a corporation where, as the largest shareholder, he has more to lose than anybody else.
But Hurwitz seems to be consistently amazed when, in spite of his careful analysis and superior business judgment, all hell blows up after he makes a move. To call his confidence legendary is to understate it.
Witness Maxxam subsidiary Kaiser Aluminum's recently rebuffed $2.5 billion attempt to take over Alumax, a larger rival in the aluminum trade, which had previously passed on the chance to buy Kaiser for itself. Alumax insiders say the company turned the offer down in part because of management's concerns about Hurwitz's character and private agenda.
Or take the stock reclassification plan the Kaiser subsidiary unveiled several months ago, outraging some shareholders so severely that they went to court to stop it. The plan would've created a special class of super-voting stock, allowing Maxxam to sell two-thirds of its majority stake in Kaiser while maintaining absolute voting control. A Delaware Chancery Court issued a preliminary injunction against the reclassification two weeks ago.
Hurwitz seldom chooses to face his critics head-on. And who can blame him after that disastrous run-in he had with environmentalists in Austin six years ago? But there are signs that he may be wearying of the chase. After years of depositions, motions and other legal foot-dragging, Maxxam and its various entities are starting to break the logjams in courtrooms scattered from California to Delaware.
In California, for instance, Pacific Lumber and Maxxam agreed in December to settle a long-running collection of suits brought by attorney Bertain on behalf of the original Pacific Lumber shareholders, who felt the original Pacific Lumber board had sold them out for a ridiculously low price in Hurwitz's takeover. The angry shareholders had been seeking more than $1.5 billion in damages but accepted a settlement of $150 million, with about $33 million of that coming from Maxxam's pocket.
Meanwhile, Pacific Lumber, Maxxam and Hurwitz are in the final stages of an equally long-running fight with the U.S. Labor Department over whether Pacific Lumber illegally raided its employees' pension fund. After the takeover, Pacific liquidated the $60 million cash surplus in its pension fund and replaced the whole thing with annuities bought from Executive Life Insurance Co. -- another member of Milken's junk bond club -- which later went bust. Although Pacific Lumber has made up its workers' losses on the worthless annuities, the Labor Department is investigating possible violations of federal pension laws and illegal quid pro quo dealings.
In a January filing with the SEC, Maxxam revealed it has agreed in principle to settle the case, although it has yet to actually do so. But one of the federal attorneys working on the case hints that negotiations are particularly sensitive at the moment, meaning a settlement agreement is probably near.
Closer to home, United Savings' parent company -- UFG -- agreed in December to settle federal thrift regulators' claims related to its role in the violations of United Savings' net worth maintenance agreement and certain tax-sharing obligations. The OTS sopped up $9.45 million of the scant $12 million UFG had left in the bank. But, interestingly, neither the feds nor Maxxam will read any larger meaning into UFG's decision to settle rather than fight the federal case alongside Hurwitz. "It means UFG isn't a respondent; that's all," the OTS' Stearns says carefully.
Even Harold Simmons recently got his day in court, when his five-year-old suit against Hurwitz went into closing arguments in late February. No verdict had been returned at press time, "because you can't rush a Delaware court," Simmons says with a sigh.
"Hurwitz seems to be going through a settle-all-these-lawsuits-for-me phase," Martel suggests. "The issues are still alive, but the lawsuits are disappearing."
Yet Hurwitz has defiantly dug in his heels in the legal arenas where the stakes are highest. Hurwitz recently fired off a salvo of his own at federal thrift regulators, suing the OTS in federal court for refusing to sell him what was left of United Savings after the thrift went belly-up.
Maxxam's countersuit contends that its bid was $100 million higher than the one the feds chose, a decision that needlessly hiked the bailout tab for taxpayers. The countersuit also claims regulators lied to Maxxam about why its bid was rejected, and quotes at length from a draft RTC report that was prepared by the Washington law firm of Steptoe & Johnson.
However, what the suit fails to mention is that the Steptoe & Johnson report shows that the Federal Home Loan Bank Board members in charge of divvying up United's leftovers simply couldn't stomach the idea of giving them back to Hurwitz -- no matter how much he wanted to pay.
"If you had a group that had run a savings and loan into the ground, you did not want to reward such behavior by offering federal make-good money to allow these same individuals to retain control," explains New York University economics professor Lawrence White, a FHLBB member at the time who voted against Maxxam's bid.
Hurwitz will need all the moxie he can muster in a few months, when the battleground shifts to the courtroom. The OTS had planned to begin presenting its case in court by late summer, but Hurwitz's attorneys recently won a delay until January 1997. However, the FDIC is under orders to complete discovery in its case by the end of July. Pretrial motions and depositions in the lawsuit already fill the better part of a file cabinet at the federal courthouse in downtown Houston.
The nearly decade-long delay in bringing the federal case against Hurwitz and his associates worries some of his foes. Indeed, defense attorneys repeatedly point out in their responses to the FDIC and OTS that the various statutes of limitations have long since expired.
However, in light of the fact that Hurwitz and the other defendants kept signing federal tolling agreements, which extend the statute of limitations for as long as both sides agree to keep signing them, that argument is expected to go nowhere. Hurwitz stopped signing tolling agreements last July, and the FDIC filed suit against him in less than a week.
"Charles signed the tolling agreement because he had nothing to hide," Irelan says. "We gave the process time to work. As long as it has gone this far, we want the courts to resolve this."
Rick Stearns, for one, isn't worried about the lengthy delay in bringing the OTS case. "Our evidence is quite strong," he says. "We wouldn't have brought the case if we didn't expect to succeed on all charges. The documentary evidence will play a very large role; the trial will involve many, many exhibits."
Some of these exhibits look particularly damning for the Hurwitz side. One internal United Savings memo the feds obtained through subpoena discusses the dangerous state of the thrift's net worth and is marked "DESTROY AFTER READING." Apparently, somebody didn't.
But Hurwitz-obssessed California lawyer Martel worries that the passage of time has dimmed crucial memories, allowed important papers to be lost and softened public outrage.
"Hurwitz almost got away with it," Martel frets. "He may still."
So how will this all end for Hurwitz? The financial losses could be staggering -- both for him and Maxxam -- because of the sheer size of the damages being sought in the various cases.
Whip out a calculator and add these up: The FDIC wants $250 million from Hurwitz personally. The OTS wants its $1.6 billion back from the United Savings defendants, with a minimum of $200 million coming out of Maxxam's pocket. The settlement with the old Pacific Lumber shareholders will swallow $33 million of Maxxam's money, and the Department of Labor still hasn't said what price it will settle its pension case for. Harold Simmons wants Hurwitz to fork over about $43 million. Then there's Martel's claim for $5 billion. Whatever the total amount, it's more than either Hurwitz or Maxxam has.
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Undoubtedly, the coming months will be among the most personally painful in Hurwitz's life, as the intensely private executive is forced to take his place on a hard courtroom bench -- day after day after day. If Hurwitz couldn't shrug off the heckling at UT, how much more excruciating will it be for him to face down the potentially damning testimony of trusted aides and employees, who will no doubt be subpoenaed against him in both Houston and Washington?
Back in 1992, when regulators despaired of ever making a solid case against him, journalist Sloan wryly observed: "If the federal agencies dealing with Hurwitz were redwood trees, they'd all be picnic tables by now."
As the clock ticks down on the last of the government's big S&L cases, those tables may have finally turned. Soon, it may be Hurwitz's turn to feel the buzzsaw veering alarmingly close.
In the April 25 story "The Case Against Hurwitz," California Congressman Frank Riggs was misidentified as having once lobbied for Pacific Lumber.


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Meaning creative genius. One who is charismatic and posses the ability to energize a room or atmosphere. Has the ability to inconspicuously turning any situation into a positive one.
The room was dead until you walked into the room you just did a Balmelli!
by gbalmelli August 22, 2008
buy the domain for your pet vlog

subset: commoncrawl


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China Glaze Metal Crackle Glazes Swatches, Photos, Review
China Glaze Oxidized Aqua Metal Crackle Glaze over Deborah Lippmann Lady Sings the Blues Nail Lacquer
China Glaze Metal Crackle Glazes
For summer, China Glaze has six new Crackle Glazes–this time in metallic finishes. The six shades include: Cracked Medallion (Bold bronze), Haute Metal (pale pink), Latticed Lilac (soft lavender), Oxidized Aqua (deep aquamarine blue), Platinum Pieces (shimmering silver), and Tarnished Gold (warm, honeyed hue). These will be available in late June/early July.
China Glaze recommends using a lighter coat of polish for a "fine crackle" while a thicker coat will give a "deep shatter effect." I found the formula on these to be thicker rather than thinner, and it was far easier to do one thicker coat than doing a thin coat. I tried a few times, and the best part about the crackle trend is well, they're not clean. Messy is totally okay. Normally, if you did a thin coat and it was a little wonky and uneven, you'd have issues, but with these, it won't be noticeable once it crackles!
These will dry mostly matte, so you'll want to use a shiny top coat (I used Nubar's Diamont for all swatches, except Cracked Medallion). I prefer using a thicker top coat, too, just to give a smoother feel on the actual nail. I tried to use different finishes for the base colors, from cream to jelly to shimmer to glitter. It seemed like the Metal Crackle Glaze worked about the same across the finishes. It is best to wait until your base color has dried before applying the crackle coat, though, because it may pull at the base color and give it a sheerer look (I didn't quite wait long enough before applying Latticed Lilac, for example).
- Cracked Medallion is a burnished, copper-flecked gold. I wore it over Becca's Tangerine Dream, which is a coral-orange.
- Haute Metal is a mauve-tinted pink with silver and pink metallic shimmer. I wore it over Butter London's Branwen's Feather, which is a deep, dark plum purple.
- Latticed Lilac is a silvered lilac splashed with violet and silver shimmer. I wore it over Deborah Lippmann's I Know What Boys Like, which is a medium-dark indigo blue jelly.
- Oxidized Aqua is a silver shimmered aquamarine. I wore it over Deborah Lippmann's Lady Sings the Blues, which is an inky blackened blue with hexagonal glitter.
- Platinum Pieces is a medium-dark silver with silver shimmer. I wore it over Butter London Thames, which is a medium-dark green-leaning teal with metallic shimmer.
- Tarnished Gold is a medium-dark yellow gold. I wore it over Butter London's British Racing Green, a rich, deep dark hunter green.
I've only been testing the wear for a day and half or so, as these just arrived. Based on my experience with China Glaze's polishes, including their original Crackle Glaze polishes, I'm expecting normal wear (seven days with minor tip wear). If wear falls below that, I will revise the review to reflect that.


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I headed to one of the country's bigger bookstores a while back too see what they might have for kids on a particularly timely topic. It's easy to research such things online but true book believers like to see, touch and smell the goods.
I brought laptop, camera and cell phone along — every piece of electronics gear I own. Which is pretty much everything but the one they really want me to have. I know this because the kiosk for their bookreader gizmo greets me each time I enter their store.
I headed to the children's section, where I found craft kits, plush toys and lots of books with commercial tie-ins. But nothing I was really looking for. Not even a real live person who could assist me in my search. And they wonder why we're all addicted to Amazon.
In another section of the store, I overheard a man telling a bookseller that his child had read 300 books in the past year. I wanted to jump for joy, but the woman had a different reaction. "Imagine if they had an e-reader," she said. So imagine I did.
I imagined a weekend without father-daughter trips to the library, without cradling a book after falling asleep mid-chapter. I imagined my daughter's bedroom without shelves stacked with Shakespeare plays, without books signed by favorite authors like Jodi Picoult.
Normally I hit my favorite indie bookshop, but some days I feel too grungy to pop in to places where folks might see me in my tired old tee and saggy shorts. I'm gonna have to get over that. It beats the heck out of battling the big bookstore blues.
— Lynn
Note: The "1st Annual Rally for Literacy" takes place Sat, Oct 1 from 9-11am. Five Tucson literacy organizations are merging into a single one dedicated to promoting a culture of literacy and creative expression. Their new name and logo will be revealed at this rally. More info at www.bookmans.com.
Coming up: Arts and culture — festival style


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Nov. 9: 'Skyfall'
The last time Javier Bardem played a villain ("No Country for Old Men"), he won an Oscar. His participation in the latest installment of Daniel Craig's so-far-solid time in 007's suit suggests better things than the addition of director Sam Mendes ("Away We Go," "Revolutionary Road"), who's looking to break a cold streak.
Copyright © 2018, RedEye Chicago


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[CD-ROM] Veterinary Board...
13th October 2017, 05:16 AM
How to download Videos from...
28th May 2014, 06:09 PM
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Streaming video is finally here! This is primarily a feature for members maintaining "donator" status, however non-donators have some benefits as well. This is still beta so please let us know if you encounter any issues!
Here are some of the features:
- Preview any video on the site that is encoded for streaming
- Allow non-donators to stream your videos
- Stream videos you haven't seen, by category in order of highest star rating. (Link can be found on "Top Star Scale" page if you are a donator)
- Preview videos that donators allow non-donators to stream
- Preview your own videos
All Users:
- Stream videos that have achieved VCA semi-finalist status for the current year
- Rate, quickcomment, and leave opinions on videos without interrupting video playback
- Stream a random video that you have yet to see. (Link can be found on the bottom of the "All Search Options" page
We have currently encoded nearly 1500 videos so far. There are currently over 70000 videos that need to be encoded so as you might imagine it will take a while before they will all be encoded. We don't know how long it will take but Nago will be working around the clock to churn out encodes. In the meantime, we've created an "encoding queue" to specify the order videos will be encoded. This queue is mostly sorted by star rating with collaborations getting a little more precedence than single editor videos. This is a one time calculation that has already been accomplished. New videos and videos that did not previously have a star rating take precedence in this queue.
Previewing videos is very straight forward. If a stream is available to you, then a link called "Preview" will appear right above the video's Local link. Simply click the link to start watching the video.
Users are allowed to opt out of this system if for some reason they don't want watch preview or let users stream their videos. The option to do this can be found on the Edit Profile page.
Note: Please decide carefully when disabling streaming features if you are an editor. Disabling streaming will delete any streaming related encodes that you may have. If you later go back and re-enable streaming features, your videos will have to be re-encoded. To prevent people from tying up the queue of videos being encoded, your videos will be given a much lower priority than they did initially. In other words, with the 70000+ videos we need to encode, you might end up making your videos #69999 in the queue by disabling and re-enabling streaming.
We hope you enjoy this new feature. Please let us know what you think or if come across any bugs in the new system.


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According to artist Jamie Cornett, there's an ongoing joke among musicians; when they get frustrated with practicing or tired of music in general, they say they're going to turn their instrument into a lamp. Jamie wasn't frustrated or fed up with music, but he was intrigued by the lamp idea.
"I realized that there are so many instruments, beyond their playing years, that sit in closets and attics," he says. "They didn't even get to become lamps! It's my goal to find them and turn them into displayable pieces of functional art."
Although he calls his first attempt at lamp-making "a horrible disaster," he still uses his first lamp in his home today. "I had no idea what I was doing. I created it using the wrong tools, and too much glue! But I love it because it reminds me of the original idea and allows me to reflect on how that idea has become something that I'm really proud of," he says.
Jamie's lamps are definitely something to be proud of. He has improved his technique, refined his skill, and perfected his tools since. Now, his creations are not only working lamps, but also beautiful works of art.
Of course, Jamie doesn't always have an attic full of instruments. In fact, he works from his New York City apartment. So, he scours estate sales, pawn shops, and online auction sites for trumpets, clarinets, and flutes that have played their last notes. "I'm not ashamed to admit that at least one [instrument] has come from the streets of NYC on trash day," he tells us.
While these woodwind wonders and brass beauties won't be making melodies in the future, they are making people smile. "These lamps are the perfect gift because you can't look at one without reacting in some unexpected way," Jamie explains. "They remind people of their favorite jazz piece or hours spent in a practice room preparing for an audition. Each one has the ability to make you feel like it was made with just you in mind."


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Artist: Steven Clippinger
Title: "Industrial Charade"
Medium: Mixed-Medium - Collage
Size: 41" x 55"
Year Installed: 1984
Venue: Broward County Main Library
Using different materials and found objects, the artist conjured up an urban but abstracted landscape. Painted in an industrial grey tonality, the artwork is encased in a plexi-box and installed on the 4th floor of the Main Library.
"My work is depicting a mixture of urban and rural environments; therefore it is essentially architectural. I considers myself, however, as a landscape painter who tries to incorporate the human element into his work."


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|Episode Description
|Friday, Nov 9, 2012 - 12:00 PM
"Kite Flight/Hide and Seek"
Kite Flight - When Frog sails away on a big kite he built, it's up to Duck and Shark to save him. Luckily for the WordFriends, Kangaroo comes along just in time to help. Will her knowledge about the letter K rescue Frog and get them all home safely? Hide and Seek - The WordFriends play a game of Hide and Seek where they have to hide behind WordThings that end in "ake. D
Mountain Time
|More on IDAHO (MT)
|No upcoming shows in database


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|Live Graph JX 3.5
For Joomla! 3.6.x
|Live Graph JX 2.5
For Joomla! 2.5.x
With Live Graph JX you can get your data moving. Set up a graph directly from the data stored in your database and insert it into an article. You can select multiple datasets to be displayed on the same chart. The data can be displayed dinamically, which means that in each step another part of your data is displayed. This results in the graph line that moves across the graph area as you can see on the example below.
The admin interface is very similar to other Tools JX products. It allows you to select a database table from the list of all tables. Further more you can select and rename data sets from the selected table, set the color of the line graps and more. There is also a simple preview included within the admin interface. This product is suitable for any kind of data that you want to represent graphically. You are invited to take a look at demo and documentation pages for more information.
Graph JX Sample
* You will be able to re-download purchased products any time after. All you need to do is to register to our website using your PayPal email address. This is the email address that you have used to login to your PayPal account before purchasing.


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As a parent, you've probably read up on the vaccines that your child needs, keeping a careful record to make sure that your child is up-to-date on all of his shots. But when was the last time you considered your own immunization status? Every year, 40,000 to 50,000 people in this country die from diseases that might have been prevented by vaccines. Still, millions of American adults go without routine and recommended vaccinations. A recent report from The Trust For America's Health, a health advocacy organization, reveals some surprising stats:
- Only about one-third of adults are vaccinated against the seasonal flu
- Only about 10 percent of eligible adult women have had the human papillomavirus (HPV) vaccine
- Only 2 percent of adults have had recommended tetanus/diphtheria/whooping cough vaccine
So why aren't more adults properly vaccinated? Many think vaccines are a kid thing and assume the shots they got way back when will protect them for life. But some adults may not have completed the recommended schedule of vaccines as children; others may not have had access to some of the newer vaccines when they were growing up. Even for adults who got every shot they needed before they were 18, immunity can fade over time.
"Ideally, your doctor should review your vaccine status with you at every check-up, but sometimes vaccines aren't at the forefront of those visits," says Lance Rodewald, M.D., director of the immunization services division at the Centers for Disease Control and Prevention in Atlanta. "If your doctor doesn't bring it up, ask if you need any vaccines at this visit. If you're contemplating becoming pregnant, ask if there are any vaccines you should get before you conceive."
Not sure which shots you got as a kid, and which ones you didn't? You'll need to dig up or track down your old medical records. If you can't, blood tests can check for immunity from some diseases, or you can talk to your doctor about being re-vaccinated, which won't harm you.
Here, what you need to know about adult vaccines recommended by the CDC:
Flu (Influenza) Vaccine
When recommended: One dose every year for all adults in the fall or early winter
What you should know: The recommendations on who should get the flu vaccine have evolved over the last ten years. The list initially just including people age 65 and older and those who work in health care and/or have special health risks; now the shot is recommended for everyone ages six months and older. Why the change? "Time and research has shown us that everyone can benefit from this vaccine," says Dr. Rodewald. "The risk of influenza is very real for everybody. Influenza is a contagious disease and if you're vaccinated, you're much less likely to participate in a chain of transmission that continues to spread the infection. Over the years this vaccine has been shown to be very safe."
Possible side effects: Soreness, redness, or swelling at the injection site; Less common: hoarseness; sore, red or itchy eyes; cough; fever; aches that may begin soon after the shot and last 1-2 days.
HPV (Human papilloma virus) Vaccine
When recommended: For girls at age 11 or 12 in three doses, 2-3 months apart, and women up to age 26 who are not yet vaccinated (it has not been studied in women older than 26)
What you should know: HPV is extremely common in sexually active people, so many adults assume that the HPV vaccine is only effective if you haven't done the deed yet. However, there are over 120 strains of HPV, and even if you've contracted one strain, the vaccine might protect you against another. There are two types of vaccines, Gardasil and Cervarix, that protect against strains of HPV that cause cervical cancer and are recommended for females up to age 26. Cervarix protects against two strains of human papilloma virus (HPV) known to cause cervical cancer; however, it won't protect against genital warts. Gardisil is a quadrivalent vaccine; it protects against four strains of HPV -- the two covered by Cervarix, plus two others that are known to cause genital warts.
Possible side effects: Redness and pain at injection site, mild fever, headaches, muscle/joint pain, nausea/vomiting.
MMR (Measles, Mumps, Rubella) Vaccine
When recommended: If you have a record of receiving a live measles vaccine in the 1960s or later, you do not need to be revaccinated. If you were vaccinated prior to 1968 with a vaccine other than the live vaccine, you should be revaccinated. Generally, anyone 18 years of age or older who was born after 1956 should get at least one dose of MMR vaccine unless they can show that they have had either the vaccines or the diseases. Women should wait at least four weeks after the vaccine before trying to conceive.
What you should know: If you were born in 1956 or earlier, you do not need the MMR vaccine because you were most likely exposed to the diseases themselves in your youth. If you have had one or two of the conditions that the MMR vaccine prevents, but not all three, you should still get the MMR vaccine if you didn't as a child. The reason? Single vaccines for the individual diseases are no longer available. If you are already immune to one or two of the conditions, and you receive the MMR vaccine, your immune system will simply kill off the vaccine virus against the disease you've already had. But, if you were susceptible to measles, mumps, or rubella, the vaccine will replicate and trigger that immune system to protect you from those diseases in the future.
Possible side effects: Pain at the injection site, fever and, less commonly, a rash one to two weeks after receiving the vaccine.
Varicella (Chicken pox) Vaccine
When recommended: Anyone 13 years of age or older who has never had the chicken pox or the varicella vaccine (introduced in 1995) should get two doses at least 28 days apart of the varicella vaccine.
What you should know: Many people regard chicken pox as a harmless childhood illness, but adults are more at risk for a severe case and complications than children are. The varicella vaccine can raise the risk of getting shingles, a painful skin rash, slightly, but not as much as getting the chicken pox themselves. "No one should avoid getting the varicella vaccine for fear they will get shingles later," says Dr. Rodewald.
Possible side effects: Soreness at injection site, fever, mild rash
Herpes Zoster (Shingles) Vaccine
When recommended: A single dose of the shingles vaccine is recommended for people ages 60 and over.
What you should know: The shingles vaccine is a much stronger version of the varicella vaccine. That's because both shingles and chicken pox are caused by the varicella virus. If you contract chicken pox, once your blisters clear up, the virus stays dormant in your body. In some people, the virus becomes reactivated later - usually many years later - in the nerve cells, causing the sometimes severe pain of shingles. The varicella vaccine can raise the risk of getting shingles slightly, but not as much as getting the chicken pox themselves. "No one should avoid getting the varicella vaccine for fear they will get shingles later," says Dr. Rodewald.
Possible side effects: redness, soreness, itching at injection site and headache
Tdap (tetanus, diphtheria, acellular pertussis) vaccine and Td (tetanus) vaccine
When recommended: One Tdap shot two years or more after last Td shot followed by a Td shot every ten years. New moms who have never had a Tdap shot (introduced in 2005) should get a dose as soon as possible after delivery.
What you should know: This vaccine protects against three bacterial infections: tetanus (lockjaw), diphtheria and pertussis (whooping cough) which causes severe coughing spells that can lead to weight loss, incontinence, vomiting, and fractured ribs. Dr. Rodewald notes that pertussis is still pretty common in and adults and teens can spread the disease to many who are too young to vaccinate. Diphtheria, which can lead to breathing problems, paralysis, heart failure and death, and pertussis are spread from person to person through coughing and sneezing. Tetanus which causes painful muscle spasms all over the body and extreme tightening of the jaw muscles, killing about 20 percent of infected people enters the body through cuts, scratches, or wounds, and can lead to tightening of the jaw muscles that affect normal opening of the mouth or swallowing. For years, doctors told adults simply that they needed to get a tetanus booster shot every ten years, while only children were vaccinated against diphtheria and pertussis. Outbreaks of pertussis (whooping cough) among adolescents and adults alerted scientists that the protection provided by the childhood pertussis vaccine wanes with time, making this older age group vulnerable. Today, the recommendation is for adolescents and adults - especially parents and caregivers to babies -- to have one Tdap shot, followed by a tetanus booster alone every ten years. That recommendation may change with time to make all of the boosters Tdap. Studies are ongoing.
Possible side effects: From either vaccine: Pain, redness or swelling; mild fever; headache. From Tdap: Fatigue; nausea, vomiting, diarrhea, stomach ache; chills, body aches, sore joints, rash, swollen glands (uncommon)
4 Other Vaccines to Know About
Other vaccines are recommended for certain people who may be at increased risk of severe illness should they contract one of the diseases. These vaccines include pneumococcal vaccine, Hepatitis A and B vaccines, and meninogococcal vaccine. In addition, international travel may require you to get vaccinated against other illnesses. Check with your doctor to be sure that you don't fall into any of the "at-risk" groups for whom additional vaccines are recommended.


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Manufacturer: Tusa
Product Code: M-28
The M-28s unique 2-window design offers exceptional visibility and low-volume comfort while incorporating Tusa's patented 3-D Strap and Round Edge skirt technologies. A newly designed skirt mounted Quick-Adjust Buckle System further enhances comfort and ease of fit. Additionally, the Geminus accepts MC-7500 Rx Lenses for an easy transition to a corrective lens mask. NOTE: Positive lenses are "reader lenses" the entire lense is not corrective. Simply, the Geminus leads where others will follow.


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Now that the weather has warmed up and the soil has thawed, landscape crews are back at work, installing perennials and grasses in the planting beds throughout Section 2.
Follow us after the jump for more photos.
The High Line is home to a mix of microclimates with varied conditions of light, shade, exposure, wind, and soil depth. The original, wild landscape reflected the variation in growing conditions. Where the High Line was narrow and sheltered by adjacent buildings, water was retained, soil was deeper, and vegetation was thicker. Where the High Line was exposed to winds off the Hudson, the landscape was dominated by several varieties of tough, drought-resistant grasses and wildflowers.
When Section 2 opens in late spring, visitors will find a landscape that retains the design vocabulary of the planting beds in Section 1, while introducing new features that are inspired by the self-sown landscape that grew up on the High Line when the trains stopped running.
The Philip A. and Lisa Maria Falcone Flyover, located between West 25th and West 27th Streets, will carry visitors upward into a shady canopy of sumac and magnolia trees, allowing an undulating terrain of shady groundcover to fill in below. This stretch of the High Line is sheltered by two historic warehouse buildings that create a microclimate that supports denser plantings. It was along this stretch that a grove of tall sumacs grew up between the tracks after the High Line fell into disuse.
Recently, crews installed more than 8,000 perennials and grasses that will form a dense, lush groundcover below the Flyover walkway. Next, crews will install greenroof, soil, and plantings at the Wildflower Field. Here, the landscape design will feature a mix of native species that grew up spontaneously on the High Line and new species that will ensure a variety of blooms throughout the growing season. Once planting is complete, the landscape contractor will begin placing drip irrigation lines and spreading the stone mulch to aid in water retention and prevent soil erosion.


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Grateful Dead
My Account
- About Me
One of rare Swedish deadheads. Been listening to then since 1967, Saw them in Stockholm, Sweden, 1990. Saw The Other Ones in MSG, NYC, 2000. I play bass with Movio. Been doing it since 1970. www.movio.se! We´re on Spotify, too...
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I´m mostly into the old septet. Recently I´ve enjoyed 1973. I´m interested in everything about Phil Lesh bassplaying; equipment, technique...
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The Lifespan TR1200 DT3 is a treadmill that you can use under your standing desk. This convenient treadmill is able to fit under most standing desks and will help you exercise while you are doing your work. This model gives you the flexibility to use the desk that you want or to turn your standing desk into a walking desk. Moreover, the Lifespan TR1200 is able to be bluetooth enabled so that you can download your walking activity to your computer. The Lifespan TR1200-DT3 will help you work out while you are sitting at your desk. It will help you burn calories and will exercise while you have to multi-task. This exercise invention will help you lose weight.
The pros of this product include the fact that you can use it under a standing desk quite comfortably. The Lifespan has some good safety features including a function where the treadmill will automatically stop the rolling if you decide to abruptly step off. This product is also bluetooth enabled, meaning that you can download your product to any computer for easy record keeping. Moreover, this product also has a small design so that you can discreetly put it on or under your desk. No one needs to know that you are looking. The small design also makes it easier to store.
The cons of this product would include the fact that it is not very amenable on the console. It doesn't have a large readout so it does not read very high. Although it is quiet it does have very loud and annoying beeps when turning on and off. Unfortunately the console always resets to "0″ every time someone steps on or off of it. This is very inconvenient if someone is used to adjusting the speed to exactly where they want it when they begin. The console also has an easy time of getting misaligned.
The console does have its drawback but one benefit that it does have a quiet function. This console will help you get the exercise that you need while you are at your desk. One thing that people sometimes have to get used to would be in the function of typing while they are walking on the treadmill. This does take some getting used to and it takes more getting used to in moving the mouse. You can read more in-depth reviews of this treadmill and other Lifespan treadmills at the SmartMonkeyFitness.com Review Blog. Because of the lightweight function of this treadmill and because it is very quiet, it is very well worth the money and the investment. This product is also very easy to store and is very durable.


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U.S. cable news network CNN says it plans to air an hourlong special called "Prince William's Passion: New Father, New Hope" next month.
"Big royal interviews don't happen overnight and if you're lucky, they come through and at just the right time. For a long while, I have wanted to speak to Prince William about the cause closest to his heart, African conservation, and I've been in contact with his office for more than two years about making it happen," CNN's Max Foster said.
"Of course, I had to ask him about becoming a dad for the first time as well. I think you will be struck by how natural he is, passionate, frank and happy. So many parents will relate to what he's saying. William isn't just a big star, he is set to become head of state in 16 countries and here he is talking about his own successor for the very first time. It's an historic moment and I am thrilled he agreed to speak to me."
The program is to premiere on CNN and CNN International Sept. 15.


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Selecting your vehicle's model and year allows us to display only parts and items specific to your car's model and year.
Part# PCS1210
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OPGI Price: $179.99
Part Type: (A) Aftermarket product, usually an enhancement product
Years: 1968
Sold As: PAIR
2017 Grand Prix Catalog Page: 171
Get the lowered stance you want with these professional lowering springs. Why risk damaging your suspension by heating or cutting springs when you can get your desired stance with a set of custom-manufactured "low profile" springs? Lowering your car from OE ride height and keeping a comfortable ride is a snap with these springs. Lower your car, while saving money and time without sacrificing your ride.
WARNING: This product can expose you to chemicals including but not limited to lead, sulfur, nickel, chromium, vanadium, titanium, polyvinyl chloride and/or 4,4'-methylenebis (2-chloroaniline) which are known to the state of California to cause cancer or birth defects or other reproductive harm. For more information, visit www.P65Warnings.ca.gov Click here for complete details.


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It's Day 20 for the Benghazi CSI-team hostage crisis. That's how long an FBI forensic team has been trying to gain access in Libya to what the State Department still calls a crime scene — the Obama administration's preferred term for the location of the first assassination of a U.S. ambassador since 1979 and the first successful Al Qaeda-backed attack on U.S. soil since the 9/11 strikes (our embassies and consulates are sovereign U.S. territory).
It is perhaps not accidental that the State Department cites the need to complete the investigation as an excuse to stay silent on the whole matter. "You're not going to hear anything from here unless my guidance changes…," explained Victoria Nuland, the State Department spokeswoman. "When we open a criminal investigation in the United States, generally, we don't brief out in pieces until the investigation is complete so we don't prejudice the outcome. I have to respect their process, obviously."
That's helpful for an administration that doesn't want to say anything about terrorism or the Middle East other than "Osama bin Laden's dead" and "the Iraq war is over." And there's more.
"There's a chance we never make it in there," a source described as "a senior law enforcement official" told The New York Times.
"Never" may be unacceptable even to this White House, but anything past Nov. 6 will do just fine.
Unfortunately, the rest of the administration's PR operation isn't going nearly as well. It is not clear whether U.N. Ambassador Susan Rice lied or made a fool of herself — and the administration — when she blamed a YouTube video for the Sept. 11 Libya attack and denied that the administration's security precautions were scandalously insufficient.
On a slew of Sunday shows on Sept. 16, Rice said the two former Navy SEALs who were also killed were providing security. Former Navy SEAL bodyguards do not die in safe houses far from those they're protecting, just as spontaneous mobs do not orchestrate a sophisticated ground assault complete with rocket-propelled grenades.
The Libya follies are merely the most visible flashpoint of the larger unraveling of the Obama administration's foreign policy. The U.S.-Israel relationship has become a bad soap opera. Afghanistan is slipping away, as our troops are being killed by the men they're supposed to be training for the handover. Egypt is now run by the Muslim Brotherhood. Russia casually mocks and defies us. China is rapidly replacing us as an Asian hegemon and rattling sabers at our ally Japan.
Most troubling, as Fred and Kimberly Kagan document in the current issue of National Review, Iraq is rapidly becoming an Iranian vassal state. When President Obama entered office, we had nearly 150,000 troops in Iraq and much sway over the course that nation took. Now we have 150 and almost no sway. Sectarian violence is up, and Al Qaeda in Iraq is resurgent.
Meanwhile, note the Kagans (who helped craft the Iraq "surge" strategy), Iraqi airspace has become a "critical lifeline for the vicious regime of Bashar Assad" as he kills thousands of his own people in Syria.
They also note that Iraq has become an essential pathway for Iran to circumvent the sanctions intended to prevent it from pursuing a nuclear bomb.
There's a dark irony to all of this. At least until the killing of Bin Laden, Obama kept foreign policy out of the headlines so he could concentrate on domestic policy. Even after Bin Laden's death, when Obama started to tout foreign policy to compensate for a sputtering economy, the message was that under Obama, there's no drama.
The quiet yet massive increase in drone-strike killings, the reluctance to support democratic regime-change in Iran, saying yes to the Afghan surge while insisting on an expiration date, his unwillingness to push for a continued presence in Iraq, his capitulation to Bush policies on Guantanamo Bay and domestic terrorism trials, the administration's reflexive spinning of thwarted and actual terrorism attacks (the Times Square and "underwear" bombers, the Ft. Hood shooting) as "isolated incidents" — all gave the impression there was nothing to worry about with Obama at the helm.
But making problems easy to ignore isn't the same as solving them. How fitting then that the game of kick-the-can faltered just five weeks from election day.