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International Conference on Alzheimer's Disease in Jerusalem in May 2008 Promotes Interfaith Collaboration and Coexistence

My friend and college classmate, Mark Gluck, continues to promote inter-faith tolerance and cooperation in Israel through adult education.  In cooperation with the Hebrew University of Jerusalem's Institute for Advanced Studies, Mark has organized the second US-Israeli-Palestinian Brain Research Conference, which will be held next May in Jerusalem and at Al Quds University in the West Bank on the Early Detection of Alzheimer's Disease.  Mark is a Professor of Neuroscience at Rutgers, and his efforts are bringing together students and academics from around the world for this important collaboration.  In my view, this is positive change, unlike the misguided academic boycott of Israel that a group of British professors continue to promote.  to contact Mark about the conference, email him at gluck .@pavlov.rutgers.edu

Dennis Kozlowski, Mark Swartz, and "the Niceties of Corporate Governance"

 

Floyd Norris posted a story in his blog in today's New York Times, "Unhappy Birthday, Dennis", citing the New York State appellate court's unanimous ruling upholding the criminal convictions of Dennis Kozlowski and Mark Swartz for "grand larceny in the first degree (12 counts), conspiracy in the fourth degree, violation of General Business Law § 352-c(5) and falsifying business records in the first degree (8 counts)", otherwise known as stealing millions of dollars from Tyco and Tyco's shareholders.

In his blog post, Norris walks down memory lane and notes how he wrote a column in 1999 questioning the integrity of the Tyco juggernaut, whose astronomical growth throughout the 1990's was often compared to that of General Electric under the stewardship of Jack Welch.  Bringing us forward to the present day, Norris reflects:

"An investor who bought when I wrote back in 1999 could have gotten out with a nice profit a few months later. But if he held on, he would have since lost a third of his investment.  In that 1999 column, I quoted Mr. Kozlowski as saying there was “no risk that investors will wake up one day and find out there’s something wrong.” Perhaps the operative part of that forecast was “wake up.”

Based on my own direct experience with Kozlowski and Swartz in the context of Tyco's AMP acquistion in 1998-1999, in 2002 I wrote an extensive expose of the Tyco fiasco in Directors & Boards Magazine titled "Tyco's Betrayal of Corporate Governance".  This story followed my Spring 1999 story, also featured in Directors & Boards, titled "The Problem of Emotion in the Boardroom", which dissected the topic of emotional dysfunction in both the public and prviate boardroom, using the example of the board dynamics at AMP, which was Tyco's last major acquisition ($11 billion).  In this case, in October 1998 Tyco interceded as a "white knight" to Allied Signal's hostile takeover bid for AMP in August 1998.

In reading the appellate court's decision (click here for the full text of the decision), I found it particularly galling that Mark Swartz and Dennis Kozlowski have persisted in claiming that they were legitimately entitled to the egregious compensation that they awarded to themselves.  Happily, the appellate court blasts this claim:

" More significantly, though, the entitlement claim was flatly refuted by Mark Foley, the Tyco executive who was responsible for the calculation of the year-end figures on which the annual bonuses were based. In fact, Foley's testimony unequivocally established that defendants received everything they were entitled to under the end-of-the-year formula. Thus, defendants' claims only succeeded in pitting their credibility against that of the committee members and Foley and various other members of their own staff. Defendants even contradicted each other on a number of points. The jury's resolution of this factual issue is amply supported by the weight of the evidence since defendants' self-serving testimony was illogical, internally inconsistent, refuted by Tyco's records and shown to be false by all other witnesses."

But I find the implications of Swartz and Kozlowski's assertions that corporate governance process is irrelevant even more disturbing:

"Most notably, Tyco's annual proxy statements, prepared under defendants' supervision, failed to indicate even the most oblique reference to their multimillion-dollar midyear bonuses. This documentary void revealed more than a few isolated "procedural irregularities," as Swartz maintains, or a "fail[ure] to adhere meticulously to all of the niceties of corporate governance," as Kozlowski would have it. Rather this consistent pattern of documentary omission over a period of years constituted powerful evidence of defendants' intentional hiding of these payments from the directors and led inexorably to the jury's conclusion that defendants took these bonuses without permission or authority. The absence of any reference to these transactions in the chain of documentation available to the committee clearly demonstrates defendants' coverup of their thievery."

Happily, the court soundly rejects these notions, yet I am deeply troubled that anyone, even a desperate person such as Kozlowski, would consider the approach that portraying corporate governance requirements as a "nicety" might carry weight with a panel of judges.

The requirements of corporate governance are not niceties.  They represent necessary processes with a fundamental purpose-- to protect investors and to safeguard the duties of responsible stewardship and oversight that define core director responsibilities.

Kozlowski and Swartz amply deserve to serve their full jail time, and it is cold comfort for investors who lost billions of dollars to see this small measure of justice strongly reaffirmed by the appellate court of the State of New York.

I wonder if Dennis was able to stick a small birthday candle in one of his delicious jailhouse vending machine Payday candy bars today to celebrate his 61st birthday?

      

   

Local Outrage-- We'll Pay the Price for SF Oil Spill for Years

What used to be a normal day at Crissy Field--

Now ruined by a toxic oil spill on the water--

One of the great pleasures of living in San Francisco is the ability to enjoy the natural beauty and unique features of the San Francisco Bay.  When I first moved to San Francisco in 1990 I would windsurf regularly under the Golden Gate Bridge, launching from Crissy Field.  In 1993, I joined the South End Rowing Club (one of two local Polar Bear swimming clubs) and would actually swim in the Bay three to five times a week, immersing myself in the exhilarating waters of Aquatic Park for as long as thirty three minutes... 

More recently, I've been riding my bike down to the Golden Gate Bridge through the Presidio and taking advantage of the new cycling paths next to the superb wetlands restoration project at Crissy Field.  I often cross the Golden Gate on my bicycle and ride up into the Marin Headlands. But cyclists are depressed, windurfers are grounded, and nobody is swimming in the Bay after the collision of the Cosco Busan cargo ship into the Bay Bridge on Wednesday November 8th at 8:30 AM released 58,000 gallons of oil into the Bay. Click here for Sacramento Bee story.

Crissy Field is desolate and adorned only by oil spill cleanup booms; virtually all of our San Francisco Bay beaches are closed due to the disastrous oil spill that has befouled our Bay-- and the spill now stretches out to sea 10 miles, threatening sensitive bird breeding grounds in the Farallon Islands.

click on image to enlarge

We, the cyclists, swimmers, sailors, beach-loving families, and, most of all, the defenseless wildlife that are our national treasure, are going to be paying the price for this negligence for years.  It appears that emergency crews did not act in a timely manner to stem the damage-- and the sad fact is that in 30 minutes, the bulk of the damage was done. 

The earth is already in trouble from climate change, and avoidable tragedies such as this one should only punctuate the need to plan ahead for the low probability, high loss events that can impact our lives and destroy the natural habitat that makes the Bay Area special.  It is a sad day for all of us. 

Young Adult American Jews Can Reverse a Trend of Indifference and Alienation by Visiting Israel

An increasingly large proportion of American Jews under the age of 35 is becoming increasingly indifferent to and alienated from Israel.  Why?  Primarily because these people have not visited Israel. 

According to a new white paper- Beyond Distancing: Young Adult American Jews and Their Alienation from Israel, by Steven M. Cohen and Ari Y. Kelman, “the erosion on Israel engagement has taken place over the entire age spectrum, from elderly, to upper-middle-aged, to lower-middle-aged, to young adult. … We see a pattern of shifting (declining) attachment to Israel stretching over 50 years, from those who are now 65 and older down to those in their 20s.”

Funded by the Jewish Identity Project of Reboot and the Andrea and Charles Bronfman Philanthropies, this paper’s conclusions are based on a survey of 1,828 Jewish respondents between December 2006 and January 2007 and focuses on non-Orthodox respondents.
    
What does Jewish American alienation from Israel mean?  It means that the majority of American Jews under the age of 35 do not believe that the destruction of Israel would be a personal tragedy and do not talk about Israel to non-Jewish friends.  Over 40% of American Jews under the age of 35 and almost 40% of American Jews under the age of 50 describe their level of Israel attachment as Low.  60% of the respondents have never been to Israel, and only 15% have been more than once.  48% of respondents believe that there is either a moderate amount of anti-Semitism in the U.S. today; 38% believe that there is a great deal of anti-Semitism in the U.S. today (62% believe there is a great deal of anti-Semitism in Europe today).  More importantly, 47% believe that anti-Semitism will increase in the U.S. over the next several years (62% believe so in Europe).       

Among the paper’s most important observations, intermarriage has an important influence on the distancing of American Jews from Israel.  However “contrary to widely held beliefs, left-liberal political identity is not primarily responsible for driving down the Israel attachment scores among the non-Orthodox.  If left-liberal politics were influential, we should see significant differences between liberal-Democrats and conservative-Republicans.  The absence of such a pattern, and their inconsistent variations within age groups, run contrary to the assertion that political views are the prime source of disaffection from Israel.”

I am the son of a Holocaust survivor with a strong Jewish religious education, but I was largely indifferent to Israel for much of my life because I didn't have the perspective that you gain from actually going there.

I first visited Israel in early 2002 and have now been there 11 times.  Going there has completely changed my perspective about the importance of the State of Israel.  Today I am actively involved in direct philanthropic initiatives in Israel that promote religious pluralism.  I care deeply for Israel while being highly sensitive to the country’s many faults and contradictions.  I care about preserving the Jewish State of Israel in the face of great challenges, and I respect the deeply passionate people who make the commitment to live in Israel, even though I may not share their social or political views.

If you are a Jew who is indifferent to or alienated from Israel, you should visit the country and see for yourself why it is the center of so much global controversy.  Don’t be a bystander in this developing story.  The Business Leadership Council of the San Francisco Jewish Community Federation is leading a business professionals Mission to Israel next April 30—in my view, this is a great opportunity to gain a new perspective on Israel and on your Jewish identity.