The Belgravia Dispatch: Icahn's Rules

October 25, 2006

Icahn's Rules

Overhead costs have consumed more than half the budget of some reconstruction projects in Iraq, according to a government estimate released yesterday, leaving far less money than expected to provide the oil, water and electricity needed to improve the lives of Iraqis.
The report provided the first official estimate that, in some cases, more money was being spent on housing and feeding employees, completing paperwork and providing security than on actual construction.

Those overhead costs have ranged from under 20 percent to as much as 55 percent of the budgets, according to the report, by the Special Inspector General for Iraq Reconstruction. On similar projects in the United States, those costs generally run to a few percent.

Carl Icahn/ImClone:

Biotechnology company ImClone Systems Inc. on Tuesday said its chairman, David Kies, has resigned, together with William Crouse, a member of the board.
The resignations follow intense pressure from billionaire investor Carl Icahn, who recently joined the board and has lobbied relentlessly for the resignation of Kies and others, saying the company would perform better if the management were "competent."

If only the competence demanded in the private sector by corporate raiders like Icahn was applied to our Executive Branch. We used to have, in some bygone era, something called Congressional oversight. Let's get it back on November 7th. I never thought I'd write these words, but having a Henry Waxman delve into the details of matters like our contracting policy strikes me as just the medicine the doctor ordered. A sense of having genuinely, co-equal branches of government needs to be restored urgently, even for those like me who are happy to grant the Executive some deference on foreign policy matters. But not carte blanche. Not an end to demanding basic competence, accountability, and leadership. Time for Icahn's Rules to migrate to Washington. And soon.

Posted by Gregory at October 25, 2006 03:47 AM

Comments

I hope them Democrats win too.... back in the old days, your insight and intelligence made this blog a must read for me --- now that we agree on so much, its gotten much less interesting. Hopefully, if the Democrats win, you'll find lots to criticize and reading you will make me refine my own ideas again! ;)

Posted by: p.lukasiak at October 25, 2006 05:55 AM | Permalink to this comment

BG: You do have an excellent blog.

As one of the few Democrats I know who actually supported the Iraq War (and I now have much egg on my face!), I find your views honest and refreshing. My reasons for it were always "humanitarian" in that I didn't think it could get worse than Saddam (I heard many first hand accounts from my time in Jordan). The mere fact that we created a situation which is in many ways worse than Saddam's horror-show indicates how profoundly wrong our approach has been.

Also, I had no idea how utterly inept the Administration would be in this, and it seems really hard for many conservatives to admit that this disater in Iraq won't just go away by pointing out flaws in Chomsky's or Michael Moore's world-view.

Recognizing a problem is the first step in dealing with it. So kudos for you BG you did it. I'm still waiting for some concrete ideas here. So what will it be?

Withdrawl to bases and let the place futher tear itself apart?
Partition the place and withdrawl to Kurdistan?

Posted by: Eric at October 25, 2006 07:16 AM | Permalink to this comment

One does wonder why, in erstwhile days, having a Henry Waxman trying to find out where billions and billions of taxpayer dollars were "lost" in Iraq would have been distasteful to you. . . .

Were you blinded by partisanship, perhaps?

Posted by: Barry at October 25, 2006 01:30 PM | Permalink to this comment

Dingell-grams, away!!

Posted by: v at October 25, 2006 01:50 PM | Permalink to this comment

Demand competence? Amen to that Greg.

Now about that deference you give the executive on foreign policy...let's focus on that ridiculous bit of drool on your chin, shall we?

Smarten up. Bush 43 cannot be trusted on any subject.

Posted by: Redretch at October 25, 2006 05:00 PM | Permalink to this comment

Now about that deference you give the executive on foreign policy...let's focus on that ridiculous bit of drool on your chin, shall we?

unfortunately for the country, Greg is right about the deference one must give to the executive on military and foreign policy matters. That's the constitutional design, and its one that makes sense -- a legislature simply cannot micro-manage military or foreign affairs.

"Deference" does not, however, mean a lack of oversight -- and oversight can (or at least should) have a significant impact on how foreign and military affairs are conducted -- and I would bet that Greg would agree with me on that.

Posted by: p.lukasiak at October 25, 2006 05:39 PM | Permalink to this comment

I'd add that, when the president has demonstrated this level of arrogance, dishonest, incompetancy and just plain evil, it's totally proper that Congress shouls castrate him, to the maximum extent that they can.

Posted by: Barry at October 25, 2006 07:12 PM | Permalink to this comment

> I'd add that, when the president has demonstrated this level of arrogance, dishonest, incompetancy and just plain evil, it's totally proper that Congress shouls castrate him, to the maximum extent that they can.

I think the design is that Congress deal with this by impeachment rather than micromanagement.

I don't think the design is built to address the current problem, when the dishonest party has control of Administration and majority control of both chambers of the legislature.

Posted by: hank williams at October 25, 2006 07:44 PM | Permalink to this comment

Sure, we Repubs/former Independents want a credible opposition. But how would voting in the likes of Cyndi Sheehan aficionados and assorted Chicken Dhimmis accomplish that? Dems show no economic sense at all, either, and certainly no knowledge of what goes into solving problems, except for the all-important task of assigning blame by their noble 'investigations', at which they do excell - always ex post facto, that is.

Farewell, my noble witch hunters.

Posted by: J. Peden at October 26, 2006 12:28 AM | Permalink to this comment

Yeah, those stupid Dhimmis are economic dunces. It's not like they eliminated the deficit or created a huge budget surplus under Clinton or anything. It took W to get us back into the black.

Yes, I remember those days well. Part of what made it such a great time is that Republicans weren't holding any silly investigations during the Clinton Presidency, so he had the luxury of working without distractions.

A vote for any Democrat is most certainly a vote for "Cyndi" Sheehan. Right on, bro!

Posted by: Barry at October 26, 2006 12:34 AM | Permalink to this comment

Henry Waxman is my representative, and I would just encourage you to reconsider any argument that he's providing a meaningful check on the administration. He voted for the war, and has done nothing significant to reign in the administration's conduct of it ever since. What he's done instead is to police the margins, checking contracts to catch Halliburton overcharging for things. He won't intervene in the disaster, but he damn sure expects that we have a properly thrifty disaster.

Henry Waxman on the deck of the Titanic, watching the band play as the ship slides beneath the waves: "Now, how much did you pay for these deck chairs?"

I'm reminded of the letter I got from Barbara Boxer that started with three paragraphs about how horribly un-American the Patriot Act is, before a fourth paragraph that acknowledged she voted for the thing.

We might as well abandon the pretence that we have an opposition party.

Posted by: Chris Bray at October 26, 2006 02:58 AM | Permalink to this comment

Well worth looking at Waxman's website, by the way, to see what issues he's focusing on as we indefinitely suspend habeas corpus for anyone the executive branch waves the "unlawful enemy combatant" wand at, and as the war staggers on toward no particular end. For example:

"Monday, October 23, 2006 -- Citing a new Claritin-D advertisement, Rep. Waxman renews his request that the FDA investigate whether phenyleprhine oral nasal decongestants are effective. In the ad, Schering-Plough announced that it will not reformulate Claritin-D, a pseudoephedrine-based oral nasal decongestant, to switch to phenylephrine. Provisions in the 2006 reauthorization of the Patriot Act require that pseudoephedrine products be moved behind the counter, so Claritin-D will not be able to be sold over-the counter. Therefore, Schering’s decision not to reformulate Clairitin-D strongly suggests that a study of phenylephrine’s effectiveness that the company conducted and completed in 2006 may have raised significant questions about the effectiveness of phenylephrine."

Yep, he's a maverick for wartime accountability.

Posted by: Chris Bray at October 26, 2006 03:06 AM | Permalink to this comment

Unfortunately there are no Harry Trumans in Congres anymore. At least any with any sort of power or influence on either side of the aisle. It's not the Dems or the Repubs. The great "pork buster" John McCain is as bad as anyone. All he does is point out a few bad examples for PR value and then let everything sail by, maybe picking off a couple of the most egregious examples out of thousands.

I don't think there are many in congress that really would say about many issues, this is more important than that plum commitee asignment, or more important than getting my picture taken with the President, or finally and most importantly, this is worth losing reelection. There are always a few, Feingold is one that I can think of off hand, but they are few and far between, and most of the time they don't have the influence necessary to stop things or get things done.

Posted by: jon at October 26, 2006 08:46 PM | Permalink to this comment

There are more appropriate metaphors. Not to disparage him too much, but Icahn's interests often seem to be purely personal and probably wouldn't be a good basis for good government.

In the case of Kerr-McGee for example (if I recall correctly), he wanted them to sell assets and sell future oil production in order to fund a large special dividend (buyback?) that would have been of tremendous value in the short term to him and other shorter term shareholders but very harmful to the long-term health of the company.

In the case of Time Warner, he tried to discredit Dick Parsons who is well regarded as an executive, because Parsons did not agree to undertake as large a stock buyback as Icahn wanted (that could have made the company more in debt and less financially sound).

In any case, executive oversight is dearly needed right now in the US goverment, Icahn notwithstanding

On a amusing note - when an investor buys a certain percentage of a company's stock (5%?), they have to file a form (13-D) with the SEC stating their intentions. Some funds/raiders use it as an opportunity to fire a shot across the bow. I read about these and one point and will pass them along in the hope you'll get a laugh out of them:

"A review of your record reveals years of value destruction and
strategic blunders which have led us to dub you one of the most dangerous and incompetent executives in America. "
-http://www.sec.gov/Archives/edgar/data/1002590/000089914005000128/t2774169.txt

"Unlike the shareholders who preceded me, I will not breathe the hot air that you seem to naturally produce. I can't be bargained with, nor do I feel pity, remorse or fear."
-http://www.sec.gov/Archives/edgar/data/880432/000101359403000097/misonixsc13d.txt

Posted by: ajm at October 28, 2006 08:27 AM | Permalink to this comment

I agree with ajm above. We can argue about the political point you're making, but I wouldn't used the banner of Carl Icahn to promote it. I've gone short Imclone stock as he takes over, because I don't think he knows how to run a biotech company, and has greatly underestimated the problems he faces.

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