I’ll be on Investoradio this Saturday, Aug. 21, talking about Ray Lucia and high fees. You can listen online through this link. Just like Lucia, Investoradio hosts Tom Cock and Don McDonald run their own investment advisory, but their fees are less than 1 percent, compared to as much as 2.9 percent for RJL Wealth Management.
Here’s a link to the show.
McCain/Palin campaign spokesman W. Taylor Griffin is coordinating the public relations response to Mina Corp., the secretive defense contractor that is the subject of a congressional investigation into its fuel contracts for a U.S. airbase in Kyrgzystan.
Griffin is a partner in Hamilton Place Strategies LLC, the PR firm that, as I reported yesterday, employs former White House Press Secretary Dana Perino and her former colleague, Tony Fratto.
As part of the Palin team, Griffin led a crisis communications team that dealt with the “Troopergate” affair.
Griffin was part of the communications team for the 2000 and 2004 Bush presidential campaigns, and did a stint in the Treasury Department’s Office of Public Affairs and the Senate Foreign Relations Committee.
A secretive defense contractor that is at the center of a congressional investigation of a $1.4 billion contract to supply aviation fuel at the U.S. air base in Kyrgyzstan has hired a powerhouse D.C. lobbying team that includes Dana Perino and others from the Bush White House.
Congress wants to know whether the sole-source, classified contracts awarded to Mina Corp., Ltd., and Red Star Enterprises Ltd., were a vehicle for the U.S. government to deliver payoffs to the family of Kyrgyzstan leaders who were ousted amid charges of corruption linked to the Manas air base.
Mina Corp.’s fuel contract, awarded last year, is worth up to $730.9 million over three years for services at the Manas, the only U.S. airbase in Central Asia outside of Afghanistan.
Kyrgyzstan has also opened its own investigation, prompting the U.S. Embassy in Bishkek to say that the contract was issued in accordance with U.S. and local laws. Mina Corp has told both governments that it has never directed U.S. government funds to Kyrgyz officials.
As Congress turned up the heat on Mina and Red Star in July, the companies sent Washington lobbyists to the Hill to plead their case.
Senate lobbying disclosure forms show that on July 12 Mina Corp. hired public affairs firm Hamilton Place Strategies LLC to lobby Congress and the Defense Department.
Senate filings show the Hamilton Place team includes Perino, now a Fox News political commentator, W. Taylor Griffin, a spokesman for the McCain/Palin campaign who handled the “Troopergate” affair, and Tony Fratto, who spoke for the president on issues including intelligence matters, terrorist financing and financial crimes.
Also joining the Mina Corp. team this month were McLean, Virginia-based Dudinsky, Lisker & Associates, which says it is “monitoring and reporting Congressional activity” on behalf of Mina.” Principal Joel Lisker is a former FBI agent who headed the Justice Department’s foreign agent registration unit in the Carter years. His investigation led the president’s brother, Billy, to register as a foreign agent for Libya.
Barbour, Griffith & Rogers’ Ed Rogers, a Reagan and Bush I White House veteran, and Morris Reid, registered July 20 as lobbyists for Mina to handle a House investigation regarding Department of Defense contracts to provide jet fuel to U.S. military base in Bagham, Afghanistan.
Jeff Stein at The Washington Post’s SpyTalk blog reported last wek that after weeks of tense negotiations, a House oversight subcommittee has gotten promises of cooperation from Mina and Red Star.
“The heart of the investigation,” a source told Stein, “is why Red Star and Mina Corp. were not investigated under” the Foreign Corrupt Practices Act, which forbids U.S. companies from paying bribes or kickbacks to foreign officials.”
Mina Corp. has also hired the D.C. law firm, Weil, Gotschal and Manges LLP. The Weil team includes partner William Burck, who served in the Bush White House Counsel’s office. Burck specializes in FCPA investigations among other things, according to his law firm biography.
In a press release announcing last week’s agreement between Mina, Red Star and the National Security and Foreign Affairs Subcommittee of the House Committee on Oversight and Government Reform, Burck said maintaining his client’s secrecy was a key to the deal.
“We’ve worked closely with staff to make sure the Subcommittee obtains the information it seeks while preserving the confidentiality of the companies’ operations and the privacy of its personnel. Confidentiality is essential to permit the companies to meet the U.S. military’s needs in volatile areas of the world and supply vital fuel to our troops in the field.”
The Senate lobbying forms also raise fresh questions about who or what is behind Mina and Red Star.
The Defense Department has identified to Mina and Red Star Enterprises as companies based in Gibraltar. Mina Corp. was registered in London in 2003, records show.
The Senate lobbying disclosures identify Mina as a Dubai firm affiliated with “Mina Petroleum FZE” with an office in the Dubai Airport Free Zone. Companies operating within the free zone are treated as offshore, outside the United Arab Emirates.
Adding to the confusion, Mina’s webserver, minacorp.com, is registered in Vernier, Switzerland.
For more visit: A Professional’s View of Ray Lucia’s Non-Traded REITs
Investor and local radio talk show host Ray “Buckets of Money” Lucia has threatened to sue me for $300,000 for defamation over a blog post I wrote last month.
Robert K. Butterfield, a San Diego attorney, is outraged that I dared to besmirch the good name of Raymond J. Lucia, who dispenses financial wisdom on a daily radio show in several big media markets. This is after all the same man actor Ben Stein recently described in an opinion piece in The New York Times as a “stock guru.”
Attorney Butterfield insists that I must stop pointing out Lucia’s relationship to San Diego-based First Allied Securities, which recently agreed to pay nearly $2 million to settle U.S. Securities and Exchange Commission charges that it failed to supervise one of its employees.
He also demands that I never again repeat the blasphemy that fees for Lucia account run as high as 2 percent, paid quarterly in advance. (Lucia Defamation Threat Letter)
Your statement that Mr. Lucia’s company has never charged a management fee of 2% is completely false and another intentional malicious act. His company has never charged a management fee of over 1% even though they have the ability to charge up to 2% — but you did not bother to check this — did you?
Even though Lucia’s own SEC disclosure plainly states “The standard annual managed fees for RJL [Raymond J. Lucia] Adviser Directed accounts are 2 percent,” Attorney Butterfield has a point. Fees for one “wealth management” program pushed by Lucia actually run as high as 2.9 percent
That is an eye-popping number. It’s about half of the compound rate of return of the Dow Jones Industrial Average for the past 50 years. That fee is assessed on the entire value of whatever you invest with Lucia, even if he loses money. It makes me wonder whose wealth is really being “managed” here.
If they gave out Pulitzers for editing, Susan White, who left The San Diego Union-Tribune in 2007, would have collected her second yesterday.
White is now in New York at ProPublica, the online investigative site, where she edited Sheri Fink’s story that claimed a Pulitzer for investigative reporting. This is the first time an online site has won journalism’s top honor.
What it feels like spend 25 minutes in a runaway Toyota Prius on a San Diego interstate — KGTV (.mp3)
Laura Duffy, Obama’s nominee for U.S. Attorney in San Diego, is one tough lady — Main Justice.
Forget Elmo. Tickle me, ex-Rep. Massa! (A proud former San Diegan) — Gawker
Lerach is back — Reuters
It might seem incongruous for the conservative San Diego Union-Tribune to advocate putting public pension dollars in Iran.
But that’s exactly what it called for in this overheated editorial in today’s newspaper.
The subject of the newspaper’s ire is a 2007 California law that prohibits CalPERS and CalSTRS, the giant state pension funds, from investing in a company with business operations in Iran.
The fact that CalPERS hasn’t complied with the law was brought to the public’s attention through the efforts of Dave Maass in San Diego CityBeat.
The U-T calls the California Public Divest from Iran Act “political posturing, pure and simple.” The stated goal of the bill’s author La Mesa Assemblyman Joel Anderson — punishing Iran for its support of international terrorism — is dismissed as “nonsense.”
The real targets of the editorial are Jerry Brown and Steve Poizner, two state officials who are running for governor. Brown is guilty of “unadulterated folly” for demanding the giant state pensions comply with state law.
The U-T is entitled to its opinion, but the editorial is misleading, distorting, and just plain wrong on a number of fronts:
The California Public Divest from Iran Act requires CalPERS and CalSTRS “to sell stock holdings in international companies that did business with Iran.”
Not quite. The law bars companies that invest or operate in Iran’s defense and nuclear sectors or develop oil and natural gas resources.
You can still sell soap and medical equipment to Iran.
Is this really so unreasonable?
“And if we believe that the state government should deter investments in nations that are at geopolitical risk, why would Iran be the only nation on the list?”
Well, it’s not.
Current law also requires CalPERS and CalSTRS to sell or transfer investments in Sudan. In the 1980s, the state approved similar measures to allow state entities to divest in South Africa in order to protest its apartheid policies.
“The professionals advising CalPERS and CalSTRS on portfolio strategies were obviously better qualified to evaluate investment danger.”
What professionals are they referring to?
The professionals who lost $1 billion by investing CalPERS assets in LandSource Communities, a bankrupt company that owns raw land in California. Or the professionals who advised the pension fund to put $500 million in Peter Cooper Village in New York, now in foreclosure?
Perhaps they mean the shady, unregistered professional placement agents who collected millions of dollars in payments from fund managers seeking business from CalPERS?
“Among the many respected international firms whose affiliates do business with Iran are Royal Dutch Shell, Siemens AG, Hyundai and Alcatel. Their operations are perfectly legal under U.S. and international law.”
First off, Hyundai no longer has active business operations in Iran, as CalPERS notes in its 2009 report on its Iran investments. Siemens recently announced it is pulling out by mid-2010.
Second, “respected” Siemens AG settled a U.S. Justice Department investigation into the company’s bribery of foreign officials by paying a record fine and admitting systemic violations of the Foreign Corrupt Practices Act.
Third, thanks to the Iran divestment act, we now know about CalPERS’ investments in Chinese state-owned firms:
- China Petroleum & Chemical Company (Sinopec), Asia’s biggest oil refiner, which signed four exploration contracts in Iran.
- CNPC Hong Kong Ltd., which has a service contract for the Masjed Soleiman oilfields and is developing gas fields.
- CNOOC Ltd., the state-owned Chinese oil firm that was thwarted in its 2005 effort to buy Unocal.
These companies are investing in Iran (and Sudan) to secure reliable energy supplies for China, now the world’s second biggest oil consumer. Sooner or later, that will put them directly at odds with U.S. interests.
If, as the U-T maintains, CalPERS’ investments in these firms aren’t all that significant, then why should we support them with public pension dollars?
Update: CityBeat‘s latest report finds CalPERS is correcting its annual report as it has no holdings in Sinopec.