Tracking the Peregrines in Cisco Systems

But in a sign of the major media’s dislike of Bush administration foreign policy, not one of the papers agreed to publish it.

“Think about that — every one of the major newspapers approached refused to publish an essay by the secretary of state,” Joel Brinkley, a professor of journalism at Stanford University, writes in the San Francisco Chronicle. Brinkley suggested Rice’s influence had dwindled.

Rice enlisted the aid of John Chambers, chief executive officer of Cisco Systems, and together they wrote about public/private partnerships that might help rebuild Lebanon following last summer’s conflict there.

Price Floyd, until recently the State Department’s director of media affairs, said the essay was sent to papers including The Wall Street Journal and the New York Times. When there were no takers, the department tried a foreign newspaper, the Financial Times of London, but again there was no interest.

“As a last-ditch strategy, the State Department briefly considered translating the article into Arabic and trying a Lebanese paper, but finally they just gave up,” writes Brinkley, a former foreign policy correspondent for The New York Times.

“Floyd said: ‘I kept hearing the same thing: There’s no news in this.’ The piece, he said, was littered with glowing references to President Bush’s wise leadership. ‘It read like a campaign document.’”

Brinkley opines that Rice’s waning influence can be attributed in part to her department’s failure to achieve significant positive results, especially regarding Iraq, Iran, Darfur, Russia, and Venezuela.

Recalling a round-the-world trip Brinkley took with Rice soon after she took office 2 1/2 years ago, he said back then crowds enthusiastically greeted Condi, interviewers peppered her with questions about a possible White House run, and “one reporter in India told her she was ‘arguably the most powerful woman in the world.’"

CHICAGO -- High-profile United States Attorney Patrick Fitzgerald's office is defending three employees of the Internal Revenue Service (IRS) and U.S. Attorney Lynne Murphy for their part in a purported $9 million tax fraud. They have been sued in the Northern District of Illinois for allegedly fabricating and falsifying IRS tax records.

According to the suit, one Michael Henry purchased $8 million of stock in American Metrocomm Communications, by paying $2 million cash and giving the company a non-recourse note in the amount of $6 million....

M. Michele Burns, age 50, is chairwoman and chief executive officer of Mercer. Ms. Burns joined MMC as executive vice president on March 1, 2006, assumed the position of chief financial officer of MMC on March 31, 2006 and moved to her current position with Mercer on September 25, 2006.

Prior to joining MMC, Ms. Burns was executive vice president and chief financial officer since May 2004, and chief restructuring officer, and chief financial officer since August 2004, of Mirant Corporation, an energy company, following the company’s bankruptcy filing in 2003.

Prior to joining Mirant, she was executive vice president and chief financial officer of Delta Air Lines, Inc. from August 2000 to April 2004. She held various other positions in the finance and tax departments of Delta beginning in January 1999. Delta filed for protection under Chapter 11 of the United States Bankruptcy Code in September 2005.

In 2006, Wal-Mart was 67th most profitable corporation (profits divided by total revenue), behind retailers Home Depot, Dell, and Target, and ahead of Costco and Kroger. For the fiscal year ending January 31, 2006, Wal-Mart reported a net income of $12.178 billion on $344.992 billion of sales revenue (3.5% profit margin). For the fiscal year ending January 31, 2006, Wal-Mart's international operations accounted for about 20.1% of total sales. As of Mar 06, 2008, net sales for the 4-week period ending Feb 29, 2008 was $29.1 billion, up 8.9% from the previous year's results.

Wal-Mart is governed by a fifteen-member Board of Directors, which is elected annually by shareholders. S. Robson Walton, the eldest son of founder Sam Walton, serves as Chairman of the Board. Lee Scott, the Chief Executive Officer, serves on the board as well. Other members of the board include Aída Álvarez, James Breyer, M. Michele Burns, James Cash, Roger Corbett, Douglas N. Daft, David Glass, Roland A. Hernandez, Allen Questrom, Jack Shewmaker, Jim Walton, Christopher J. Williams, and Linda S. Wolf.

Notable former members of the board include Hillary Clinton (1985–1992) and Tom Coughlin (2003–2004), the latter having served as Vice Chairman. Clinton left the board before the 1992 U.S. Presidential Election, and Coughlin left in December 2005 after pleading guilty to wire fraud and tax evasion for stealing hundreds of thousands of dollars from Wal-Mart. On August 11, 2006, he was sentenced to 27 months of home confinement, five years of probation, and ordered to pay $411,000 in restitution.

Michael Kevin Powell (born March 23, 1963) is an American Republican politician. He was appointed to the Federal Communications Commission by President Bill Clinton on 3 November 1997. President George W. Bush designated him chairman of the commission on January 22, 2001. Powell is the son of former Secretary of State Colin Powell and Alma Powell.

As the chairman of the FCC, Powell led from his long-stated libertarian philosophy of deregulation of communications. Powell saw excessive regulation as stifling to technological innovation, and led the charge to open up markets in VoIP, Wi-Fi, and Broadband over Powerline (BPL). His Chicago School approach believed that these new communications technologies would allow small companies to take on established corporations, and that regulations often stood in the way of progress.

Powell began his tenure at the FCC with an unfortunate comment comparing the digital divide to a Mercedes divide. His libertarian deregulatory policy coincided with a period of significant consolidation in the communications market. He advocated an updating of media ownership rules to reflect new communications technologies such as the Internet, a move that critics derided as increasing rampant media consolidation. He opposed applying telephone-era regulations to new Internet technologies, a move critics charged would deny open access to communications facilities. He articulated a policy of network neutrality, and in March 2005 fined Madison River Communications for blocking voice over IP applications, the first-ever government action of its kind....

When Powell resigned, Kevin Martin, who served George W. Bush's presidential campaign in Florida, was named the FCC's new Chairman. Martin has subsequently purged the FCC of many of Powell's staff....

Powell resigned as Chairman of the FCC on January 21, 2005. He said that he was glad to spend more time with his wife. In March 2006, Powell became a Trustee of the RAND Corporation. He is now a member of the Board of Visitors at his alma mater, the College of William and Mary.

On April 21, 2006, Powell was elected the Rector of the Board of Visitors, making him the first African-American to serve in that post in the College's 313 year history. He is on the board of directors of Object Video, CMWare and Cisco.

John Morgridge Takes Over for Henry M. Paulson,
Who Last Week Was Confirmed As U.S. Treasury Secretary

ARLINGTON, VA — Today, The Nature Conservancy announced that John Morgridge, former President and CEO of Cisco Systems, Inc., will become the global conservation organization’s new Board of Directors chairman, effective immediately.

A member of the Conservancy’s Board since 1998, Morgridge succeeds Henry M. Paulson, who stepped down as Board chairman following last week’s Senate vote confirming him as the new U.S. Secretary of the Treasury.

Like his predecessor Hank Paulson, John is a tireless advocate for conservation in the business arena and beyond,” said Steve McCormick, President and CEO of The Nature Conservancy. “John’s passion for the Conservancy’s mission and his constant drive for the organization to do more and work smarter will serve him well in this important role.”

Morgridge joined Cisco Systems, a worldwide internet networking company, in 1988 as President and CEO, growing the company from $5 million to more than $1 billion in sales. In 1990 he took Cisco public, and in 1995 he became Chairman of the company’s Board of Directors. In that role, he continues to champion a range of philanthropic and corporate citizenship initiatives on behalf of the company, such as the importance of addressing basic human needs and providing better access to education around the world.

Morgridge also is deeply involved with Stanford University, where he serves as a trustee, teaches at its Graduate School of Business and serves on the business school’s Advisory Council.

Morgridge also serves on the boards of CARE, Interplast and the Wisconsin Alumni Research Foundation (WARF).

Microsoft erected a financial pyramid scheme, using employee stock options, designed to leverage growth in its stock price. Cisco Systems competitive response ... involved using a merger scheme designed to leverage growth in its own share price. What neither company anticipated was the impact of Citigroup, quietly using a merger scheme similar to Cisco’s, in addition to a variety of predatory practices designed to generate merger fees through its Salomon Smith Barney subsidiary.

While all eyes are on technology, Citigroup has effectively unplugged the new economy due to excessive mergers and their various peripheral implications, in addition to becoming a watered stock itself. This may represent the biggest untold story in the financial media and also the greatest overall risk to the stock market and economy.

No one doubts the remarkable transformation brought about by the Internet. It has ignited a whole new era of economic prosperity. With an 85% market share in routers Cisco has certainly seized this opportunity and seen its stock market value soar to half a trillion dollars....

Meanwhile, Cisco Systems’ remarkable market capitalization is supported by only $20 billion in total revenue and represents a mere $2.35 in sales per share. The current share price is $67 and there are 8.5 billion shares of stock outstanding, including options.

It’s the 8.5 billion shares outstanding that deserves more attention along with the illusion that Cisco is rewarding employees with stock options when in reality employees are prepaying their own wages while management pilfers the retirement system in a desperate attempt to sustain their financial scheme. A scheme largely based upon Microsoft like anti-competitive business practices still unknown to the general public.

Cisco claims that “everyone is doing it” yet this report will confirm that this is simply not true. One notable exemption, however, is Citigroup, which now has 4.5 billion shares outstanding and is the largest bank in the country with a market value of $230 billion. Citigroup is using a similar merger scheme and the equivalent of a “fee mill” to sustain its stock price.

This includes aggressively selling high priced annuity contracts into pension plans and various other practices, the exact opposite one would expect in a period of increased automation and efficiency....

For the new economy to regain its footing, industry dominating predators like Cisco Systems and Citigroup must first be exposed for what they are doing.

This will allow consumers to instead focus on the many excellent alternatives available, both as consumers of financial services and as investors....

Cisco Systems is using techniques no different than those used by Charles Keating. Many forget that Keating was a hero in his day ... with even Alan Greenspan referring to his bank as “an outstanding success.” Sadly, Keating was the catalyst in destroying a great industry that allowed many consumers to purchase their first home....

You might ask, how does a company become worth half a trillion dollars with gross revenues of only $20 billion? And why do leading pension funds including Fidelity, Janus, AXA and Vanguard, which alone own more than $50 billion worth of Cisco shares, invest in the company?

If $300 billion worth of Cisco shares are in equity mutual funds and other managed investment accounts, it is likely that more than $4.5 billion in management and brokerage fees, 1.5 percent, are being siphoned from its equity base each year....

Cisco is a giant company that has placed its employees, shareholders and customers in a mathematical vice resulting from a collapse of ethics and integrity by management. While they will note that “everyone is doing it,” we will see what is simply false....

1) Excessive use of the pooling method to account for acquisitions, thereby hiding the true cost of acquisition activity....

2) Paying employee wages mostly in non-qualified stock options. This removes the cost of labor from the financial statements and overstates earnings because these wages for options exercised, unlike cash wages, are not included as a charge to earnings.

3) Sales adjustments now represent a large component of gross revenues and investors should begin to ask questions. The first question should be, are gross revenues being manipulated by management?...

4) Cisco’s auditors, PricewaterhouseCoopers, are not independent and are helping disguise the scheme. This firm also audits Fidelity, Janus, AXA and Vanguard in addition to co-marketing Cisco’s products through its consulting division....

... Cisco boasts that it will acquire 25 companies this year, many software related, by simply issuing more shares of stock that are never accounted for in the financial statements.

This is done by using what accountants call the ‘pooling technique’ for acquisitions. As with the excessive issuance of stock options to cover wage costs, no cash is required and such costs are not reflected in the financial statements. The only direct cost for pooling and options is a small amount of ink toner and paper used to print up new stock certificates....

Pooling, already outlawed in most countries, was scheduled to be repealed by the Securities and Exchange Commission in December. Cisco has since mounted a quiet and furious lobbying effort and already pushed the repeal back 6 months to June 2001....

In addition to pooling, Cisco Systems is also simultaneously issuing a large number of employee stock options instead of paying cash wages. The wage expense for the options exercised is not shown as a charge against the company’s earnings even though the company gets a full tax deduction for such wages.

This explains why Cisco Systems no longer pays federal income tax, even though they report billions in profits....

The company has offloaded its entire tax burden to employees who, along with the retirement system, are being left with inflated shares....

Holder	Shares	% Out	Value*	Reported
BARCLAYS GLOBAL INVESTORS UK HOLDINGS Ltd	312,068,279	5.11	$6,762,519,605	31-Mar-06
CAPITAL RESEARCH AND MANAGEMENT COMPANY	248,137,000	4.06	$5,377,128,790	31-Mar-06
STATE STREET CORPORATION	183,577,476	3.01	$3,978,123,904	31-Mar-06
VANGUARD GROUP, INC. (THE)	154,647,424	2.53	$3,351,209,678	31-Mar-06
WELLINGTON MANAGEMENT COMPANY, LLP	129,415,589	2.12	$2,804,435,813	31-Mar-06
LEGG MASON INC.	119,884,336	1.96	$2,597,893,561	31-Mar-06
FMR CORPORATION (FIDELITY MANAGEMENT & RESEARCH )	116,017,595	1.90	$2,514,101,283	31-Mar-06
GOLDMAN SACHS GROUP INC	94,629,348	1.55	$2,050,617,971	31-Mar-06
NORTHERN TRUST CORPORATION	89,341,902	1.46	$1,936,039,016	31-Mar-06
MELLON FINANCIAL CORPORATION	82,136,116	1.35	$1,779,889,633	31-Mar-06

Holder	Shares	% Out	Value*	Reported
GROWTH FUND OF AMERICA INC	89,940,000	1.47	$1,948,999,800	31-Mar-06
VANGUARD 500 INDEX FUND	57,722,202	.95	$1,250,840,117	31-Mar-06
COLLEGE RETIREMENT EQUITIES FUND-STOCK ACCOUNT	44,099,414	.72	$955,634,301	31-Mar-06
VANGUARD/WINDSOR FUND INC.	41,873,100	.69	$777,583,467	31-Jan-06
NASCAQ 100 TRUST-SERIES 1	34,485,638	.56	$617,982,632	30-Sep-05
INVESTMENT COMPANY OF AMERICA	31,870,400	.52	$690,631,568	31-Mar-06
VANGUARD INSTITUTIONAL INDEX FUND	31,164,884	.51	$675,343,036	31-Mar-06
AMERICAN BALANCED FUND	30,500,000	.50	$660,935,000	31-Mar-06
VANGUARD TOTAL STOCK MARKET INDEX FUND	29,083,301	.48	$630,235,132	31-Mar-06
SPDR TRUST SERIES 1	27,166,660	.45	$486,826,547	30-Sep-05

Cisco Systems Inc. said Tuesday it will invest more than $265 million in Saudi Arabia over the next five years.

San Jose-based Cisco (NASDAQ:CSCO) said the money will go into staffing, leasing and finance, innovation hubs, public-private partnerships, education and philanthropy....

Cisco Helps American Savings Bank Reduce Costs,
Improve Productivity, and Enhance Customer Service

American Savings Bank has deployed a Cisco® Branch of the Future solution to support data, voice, and video communications throughout its headquarters and branch offices, reducing operational costs, enhancing productivity, and easing administration to improve customer service and competitive position.

American Savings Bank is a US$6.4 billion federal savings bank that has served the state of Hawaii for more than 75 years....

...“In 2001, we decided that we needed to revamp our infrastructure,” says Craig Lee, vice president and chief information officer at American Savings Bank....

American Savings Bank partnered with Verizon Hawaii to deploy a Cisco Systems network that brought together its voice and data networks on a single converged IP infrastructure....

NOTE: The donations listed may be made by individuals associated with the organization as well as by the organization itself.

Contributor	Occupation	Date	Amount	Recipient
AREY, LORENE LOS ALTOS HILLS, CA	HOMEMAKER	10/26/2000	$100,000	Democratic National Cmte
CARR, JOHN F AUBURNDALE, MA		11/30/2000	$250	Libertarian National Cmte
CHAMBERS, CONSTANCE E LOS ALTOS, CA	HOMEMAKER	9/27/2000	$25,000	Democratic Congressional Campaign Cmte
CHAMBERS, JOHN SAN JOSE, CA	CISCO SYSTEMS	10/16/2000	$25,000	Democratic Senatorial Campaign Cmte
CHAMBERS, JOHN LOS ALTOS HILLS, CA		10/2/2000	$54,433	Republican National Cmte
CHAMBERS, JOHN SAN JOSE, CA		12/22/1999	$15,000	Democratic Senatorial Campaign Cmte
CHAMBERS, JOHN LOS ALTOS, CA		9/29/2000	$25,000	National Republican Senatorial Cmte
CHAMBERS, JOHN T LOS ALTOS, CA	CISCO SYSTEMS	10/26/2000	$100,000	Republican National Cmte
CHAMBERS, JOHN T LOS ALTOS, CA	CISCO SYSTEMS	3/30/1999	$12,500	Democratic Congressional Campaign Cmte
CHAMBERS, JOHN T LOS ALTOS, CA		3/7/2000	$100,000	National Republican Congressional Cmte
CHAMBERS, JOHN T LOS ALTOS, CA	CISCO SYSTEMS	9/29/2000	$45,000	Republican National Cmte
CHAMBERS, JOHN T LOS ALTOS, CA		3/7/2000	$10,000	National Republican Congressional Cmte
CHAMBERS, JOHN T LOS ALTOS, CA		3/14/2000	$100,000	2000 Republican Senate/House Dinner Cmte
CHANDLER, MARK PALO ALTO, CA		10/10/2000	$2,500	Democratic Congressional Campaign Cmte
CHANDLER, MARK MR PALO ALTO, CA	CISCO SYSTEM	10/14/1999	$5,000	Democratic National Cmte
CISCO SYSTEMS WASHINGTON, DC		10/26/2000	$350	National Republican Senatorial Cmte
CISCO SYSTEMS WASHINGTON, DC		10/26/2000	$350	National Republican Senatorial Cmte
DENUCCIO, KEVIN LOS ALTOS HILLS, CA	CISCO SYSTEMS	3/21/2000	$5,000	Democratic National Cmte
MIRGRIDGE, JOHN PORTOLA VALLEY, CA	CISCO SYSTEMS	9/30/2000	$10,000	Democratic National Cmte
MORGRIDGE, JOHN P PORTOLA VALLEY, CA	CISCO SYSTEMS	4/28/2000	$30,000	Democratic National Cmte
SCHEINMAN, A DANIEL SAN MATEO, CA		9/27/2000	$25,000	Democratic Congressional Campaign Cmte

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To Democrats:	$255,000	(37%)
To Republicans:	$435,133	(63%)
Total:	$690,383