May 2008 Archives

May 10, 2008

Long Beach customs agents seize 18,560 pairs of fake shoes

U.S. Customs and Border Protection officers discovered 18,560 pairs of fake Nike sneakers inside two shipping containers that arrived from China, Associated Press has reported. The ship’s manifest listed the containers as holding drainage pipeline fittings, but when officers at the Port of Long Beach opened them they found the shoes instead. “The average consumer who walks into a store I think would be fooled by them,” said Bonnie Lemert, U.S. Customs and Border Protection acting port director for the Los Angeles/Long Beach Seaport. So far this year, the customs agency has seized at least eight containers of footwear, mostly the Nike brand, said the federal agency’s spokesman Mike Fleming. Last year, agents seized $20.6 million dollars of counterfeit merchandise, and 80 percent of the fakes come from China, authorities said.

Filed under California Ports, China, Legal and Criminal Issues by

May 12, 2008

Schwarzenegger calls for more junkets

Governor Schwarzenegger, who has displayed incredible ineptitude in developing international trade and economic development policies for California, has brazenly called for State officials to take more junkets with Corporate money. As reported in a L.A. Times article entitled “See the world, let special interests pay”:

Gov. Arnold Schwarzenegger on Wednesday encouraged lawmakers — especially those from small towns — to do more globe-trotting on the dime of special interests. Speaking at a forum on global economics held by the nonprofit Milken Institute, the governor suggested lawmakers would be more willing to embrace his plans to privatize the building of roads, schools, high-speed rail systems and other public works if they could see how effectively it has worked in other countries.

“Some of them come from those little towns, you know what I am saying, they come from those little towns and they don’t have that vision yet of an airport or of a highway that maybe has 10 lanes or of putting a highway on top of a highway,” Schwarzenegger said. “They look at you and say, ‘We don’t have that in my town. What are you talking about?’

“So they are kind of shocked when you say certain things. So I like them to travel around.” Such travel is typically paid for by a combination of special interests with business before the Legislature and foreign governments.

It usually involves stays at luxury resorts, high-end dining and the option of bringing a spouse along. Schwarzenegger has jetted around the world on “trade missions” paid for by donors whose identity is not disclosed. Campaign finance reformers are troubled by the ethical issues raised by such trips. Schwarzenegger said he is not.

“I am always against when the media beats up” on lawmakers “for traveling around because someone else is paying for their trips,” he said. “I mean, so what. If they were to take the money from the taxpayers,” then the media “would complain about using tax dollars to travel around the world and live in luxury and all this stuff.

Filed under California Politics, Governor Schwarzenegger by

May 19, 2008

Craigslist charges eBay with corporate espionage

Two California-based Internet icons- Craigslist and eBay have become involved in a bitter legal dispute. Ebay, which owns about 28 percent of Craigslist, fired the first salvo by filing suit in Delaware state court that that accused Craigslist of discriminating against eBay as a shareholder and using “clandestine meetings” to dilute eBay’s ownership stake. Craigslist has now filed a countersuit charging that eBay used its position to gather competitive information that was used to help lauch Kijiji, which many consider to be a direct competitor to Craigslist. The complaint charges that eBay code-named this its “Craigslist killer” in internal strategy discussions. Craigslist’s also alleges a plot by eBay to use its position as a minority shareholder and its position on the board to pressure Craigslist into a full-scale acquisition deal by eBay. “In the months leading up to the launch of its competing Kijiji site … eBay used its shareholder status to plant on Craigslist’s board of directors the individual responsible for launching and/or operating Kijiji,” the suit alleges. “Using the pretext that the information was necessary for Craigslist board-related matters, eBay made constant demands for confidential information in excess of what was required for that purpose”.

Filed under Internet, Legal and Criminal Issues, Mergers and Acquisitions by

California agricultural products face shipping squeeze

Big farm products exporters are finding it more difficult and more expensive to ship their products overseas. The problem apparently is a result of high fuel prices a weakening economy- which is buying fewer foreign products resulting in fewer empty containers are heading out of U.S. ports. As reported in Sacramento Bee:

As the weak dollar makes the fruits of California farms ever more attractive to overseas buyers, big exporters like Sacramento’s Blue Diamond Growers are finding it tougher to get their products to far-off customers. The high price of oil and shifts in the global balance of trade have made space on container ships hard to come by. Cargo rates are up sharply. Delays of several months have become routine.

“It’s really put a crunch on U.S. ag exporters,” said Tammy Rossi, Blue Diamond’s manager of logistics and operations, as a forklift driver parked the last of 22 tons of almonds in a shipping container at the company’s

If all goes well, the 40-foot-long box will sail from the Port of Oakland through the Golden Gate on Monday and reach Germany 30 days later. A tangle of economic trends, however, has made the journey from Sacramento to Hamburg far less routine than it was just two years ago. From 2001 through 2006, a growing trade imbalance meant more and more containers reached U.S. ports full but left empty. Cargo carriers hungry to fill their ships offered rock-bottom prices and quick service to exporters.

“If the alternative is to send an empty container back, you put your hands on any customer you can,” said Asaf Ashar, co-director of the University of New Orleans’ National Ports and Waterways Institute. But the tide has shifted. The slumping U.S. economy has lowered demand for imports, while booming global demand for food commodities has boosted exports. The weak dollar, which has lost 24 percent of its value against the euro since early 2006, has made imports more expensive for U.S. buyers and exports cheaper for customers abroad.

As a result, fewer empty containers are heading out of U.S. ports. “The market power is changed,” Ashar said. “Shipping lines are putting the squeeze on (exporters) now.” The base cost of shipping a 20-foot-long container – the industry benchmark – from the Port of Oakland to Europe has risen 25 percent in the past year to around $2,500, according to David Enberg, a manager with the freight-forwarding firm EFI Logistics. He expects prices to rise another 20 percent by year end.

Filed under Agriculture and Food, Freight and Logistics by

More corporate gifts for Schwarzenegger and his associates

In the most recent in a series of endless reports about Corporate gifts being given to our Governor and his associates – ostensibly in the “public interest”, the LA Times has reported that General Electric will be sponsoring a glitzy Governors Conference this August at Universal Studios in Hollywood.

The event could cost more than $3 million between GE and other private sponsors, according to participants in the planning of the conference, who requested anonymity because they were not authorized to discuss the arrangements. That would make it an expensive example of a technique Schwarzenegger has embraced to bring the glitzy style he appreciates to ceremonial state functions: getting corporations and wealthy supporters to pay for them. The governor’s aides say the practice saves taxpayers money.

Government watchdog groups argue that it may compromise the administration’s independence from corporate interests. Schwarzenegger’s phone call with Immelt was arranged by a GE executive, formerly an advisor to the governor, who oversees the company’s lobbyists in Sacramento.

“It’s a governmental conference, with governmental officials,” said Robert Stern, president of the Center for Governmental Studies in Los Angeles. “If GE is paying for it, the question is what does GE expect for their contribution? And they are certainly going to expect good will.” A spokesman for General Electric said the size and nature of the company’s contribution have not been finalized, and administration officials said there is no budget yet. Schwarzenegger’s office has accepted millions of dollars in private gifts for things such as state dinners, international travel and ornaments on state Christmas trees.

The cross-border conference, held each year in one of the 10 participating U.S. and Mexican states, is an important event for Schwarzenegger because it is the first to be hosted in California in eight years, and the only one while he is governor. “We are going to take this important annual event to a whole new level,” Schwarzenegger said last month in a statement announcing the partnership…

The bulk of private support received by Schwarzenegger’s office has come from the California Protocol Foundation, a nonprofit group affiliated with the California Chamber of Commerce that does not disclose the names of its donors or the details of specific expenditures.

Filed under California Politics, Governor Schwarzenegger by

May 26, 2008

State Public Employee salaries soaring under Schwarzenegger

The state of California’s payroll is skyrocketing under Govern Schwarzenegger, even as its budget deficit has grown to billions of dollars, according to an analysis by the San Francisco Chronicle.

In Gov. Arnold Schwarzenegger’s first four years, the total bill for state workers salaries jumped by 37 percent, compared with a 5 percent increase in the preceding four years under then-Gov. Gray Davis, a Chronicle analysis of state payroll records shows.

One month before Schwarzenegger took office in November 2003, just eight state employees earned more than $200,000 a year working in the core state government, which excludes universities and the Legislature. In April of this year, there were nearly a thousand, according to records.

And the number of state employees making six-figure salaries has more than doubled since 2003, to nearly 15,000. Meanwhile, the number of state workers has grown by 26,000 under Schwarzenegger after being cut by Davis, who was recalled from office in the midst of a severe budget crisis.

Some of the pay increases in recent years have been out of Schwarzenegger’s control, including previously negotiated pay raises for some employee unions and court-ordered pay hikes for medical workers in the state prison system that are estimated to have cost the state hundreds of millions of dollars.

Also fueling the spurt in payroll growth: salary increases for employees in a few politically powerful labor unions, including the state’s prison guards, as well as pay hikes for workers in the upper echelons of state government. Elected members of the Legislature, who will decide in the coming weeks how to resolve the state’s $17.2 billion deficit for the fiscal year beginning July 1, also received increases last year.

“Salaries have only gone one way – up,” said Charles Murray, chair of the California Citizens Compensation Commission, which sets pay for the state’s top elected officials. Murray, a Republican from San Marino (Los Angeles County), has called for a pay cut for legislators and other elected officers in light of the state’s huge deficit.

“If we had control over the janitors, I’d ask them to take a pay cut, too,” he said. “The reasoning is very simple: We’re in big trouble moneywise.”

Legislators, gubernatorial aides and top medical professionals have received pay hikes in the last 12 months. And as the state looks at drastic cuts in many programs, the governor is proposing about $260 million in salary increases for the state’s prison guards, whose pay jumped about 34 percent in five years under their previous contract.

At the same time, pay for many lower-ranking civil service workers has not kept up with the 15 percent increase in the state’s consumer price index in the past four years, according to an analysis by the state Legislative Analyst’s Office. Most civil service workers saw their pay rise by only 12 percent over that time.

The winners of the payroll race seem to be the unions with the strongest political ties or those who spend big bucks on political contributions and lobbying, said Christina Lokke of California Common Cause, a good-government watchdog group.

“There’s lobbying going on among all these groups of state employees – and the outcomes are pretty imbalanced,” she said. Sometimes, politics and money beat good policy, that’s when the public loses out.

Schwarzenegger spokesman Aaron McLear said much of the blame rests with the Davis administration, which negotiated some contracts in which workers deferred initial pay raises for bigger gains in later years. Essentially, when the governor came into office, many of these promises had already been made, he said.

California Highway Patrol officers got a 32 percent pay increase over four years through a contract negotiated by the Davis administration that linked their pay to the five largest police departments in the state. The average officer now makes $73,000 a year. The state’s professional engineers received a 31 percent pay raise through a similar automatic-increase mechanism negotiated by Gov. Gray Davis’ administration.

Examples of the salary hikes revealed in the state’s payroll database and compensation documents include:

* More than 100 physicians and surgeons working in state prisons saw their pay increase from an average of $129,000 to $238,000 in four years, and salaries for supervising psychiatrists jumped to $236,000, after a federal court-appointed receiver, Robert Sillen, determined that pay had been so low that the system was having difficulty attracting competent medical workers.

* Legislators’ annual pay climbed from $99,000 in 2003 to $116,000 this year, while the state attorney general’s increased from $148,000 to $184,000. The governor’s salary also rose, from $175,000 to $212,000, but Schwarzenegger declines to accept his salary. The state citizen’s compensation commission sets these pay rates, and some of its members are now looking at whether it can lower them.

* Eleven top advisers in the governor’s office got hefty pay increases in August, a week after the governor signed a budget that slashed programs for the homeless, mental health services and parks. Chief of staff Susan Kennedy received a $32,000 pay raise, boosting her government salary to $175,000. Four years ago, the top aide in the governor’s office earned a base pay of $138,000.

* At the top of the state’s salary list were chief officers for the California Public Employees Retirement System and the state’s stem cell research facility in San Francisco, known as the Institute for Regenerative Medicine, each of which is controlled by a separate board that is independent of state elected officials.

CalPERS Chief Investment Officer Russell Read made a base salary of $555,000 – plus incentive pay that pushed his total earnings to more than $900,000, according to a spokeswoman for the system. Alan Trounson, a renowned biologist appointed last year to head the stem cell agency, is paid $490,000. Four years ago, the top employee in the retirement system made a base salary of $360,000, and the stem cell agency didn’t exist.

H.D. Palmer, a spokesman in the governor’s Department of Finance, said state pay rates often aren’t competitive with those in the private sector and in city and county governments throughout the state. This year, the three top investment officers at CalPERS, including Read, announced they will leave to pursue private-sector investment jobs, many of which pay millions of dollars a year.

While the public needs to be concerned with the salaries being paid out to state employees, it also needs to know the state is in a competitive market and we need to find ways to attract and keep the best people, said Jason Dickerson of the Legislative Analyst’s Office, which has recommended that the state keep a tight lid on any further pay increases.

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