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Markowitz: Shoddy scandal at GE shocking

hypocritexposer

Well-known member
How much did GE get in stimulus funds? Taxpayers will end up paying this fine.

Markowitz: Shoddy scandal at GE shocking

By Jack Markowitz
FOR THE TRIBUNE-REVIEW
Sunday, August 9, 2009

Say it ain't so, General. (But sad to say, it is.)

General Electric agreed to pay a $50 million fine this past week for cooking its books.

The "errors" -- that's what GE called them, errors -- made profits look better than they were at the "most admired company in America." For a little while, and not really by very much, a great firm managed to avoid disappointing the "analysts" who watch its stock.

The offenses occurred a half-dozen years ago and officially have been corrected and atoned for. Today's financial statements presumably are the last word in clean. Unnamed perpetrators got disciplined or fired.

Still, this happened at General Electric!

In what company can small investors and every pension and mutual fund under the sun believe if not the win-at-everything conglomerate once led by management whiz Jack Welch and, a century earlier, inventor Thomas Edison?

GE produces power plants, jet engines and medical imaging machines; televisions, windmill rotors and network news (NBC); locomotives (and there's no one bigger at that than at Erie, Pa.), and so much else.

But the bookkeeping? Shoddy. More exactly, too clever by half.

At least so it was in the 2002-2003 period that came under Securities and Exchange Commission scrutiny. A civil fraud probe -- not criminal -- started in 2005 and ended Tuesday in a Connecticut federal court, four long years (and $200 million in legal costs) later.

As often happens when white-collar fakery is caught, there was no formal admission of wrongdoing.

But what GE did, according to SEC enforcement director Robert Khuzami, was to "bend the accounting rules beyond the breaking point." It booked locomotive sales, for instance, in advance of signed orders. Result: a $370 million boost to revenues. A change in accounting for spare aircraft parts allowed net income to fly $585 million higher. Without a slight change in a "hedge" on short-term borrowing costs GE would have missed analysts' profit estimates for the first time in eight years.

Under SEC prodding the far-spreading enterprise had to restate earnings twice, always a disgrace.

"Overly aggressive accounting can distort a company's true financial condition and mislead investors," Khuzami lectured the company in court.

The publicity mill at GE's suburban Fairfield, Conn., headquarters responded in the sort of legalese guaranteed to put a courtroom to sleep. GE is "committed to the highest standards of accounting," it intoned. "The errors at issue fell short of our standards ... (We) have implemented numerous remedial actions and internal control enhancements to prevent such errors from recurring."

CEO Jeffrey Immelt apparently had no mea culpa for the record. He succeeded the colorful Welch in 2001 but hasn't extended the growth stock image, despite a politically blessed plunge into "green" markets. GE shares are down 16 percent so far this year to $13 or so, definitely the low-rent district for a blue chip like this.
 

hypocritexposer

Well-known member
Obama Administration Gave General Electric—Parent Company of NBC--$24.9 Million in ‘Stimulus’ Grants
Monday, October 11, 2010
By Fred Lucas



[1]
President Barack Obama and Vice President Joe Biden react to cheers as they arrive in the East Room of the White House in Washington, Tuesday, March 23, 2010(AP Photo/J. Scott Applewhite)

The Obama administration gave corporate giant General Electric—the parent company of NBC--$24.9 million in grants from the $787-billion economic “stimulus” law President Barack Obama signed in February 2009, according to records posted by the administration at Recovery.gov.

Despite getting $24.9 million from U.S. taxpayers, GE decreased its U.S.-based employees by 18,000 in 2009, according to the company’s 2009 annual report.

According to Standard & Poor's, GE took in $156 billion in revenue in 2009.

GE was the primary recipient of 14 stimulus grants, a spokeswoman for Recovery.gov confirmed to CNSNews.com. These 14 grants provided GE with $24.9 million in tax dollars. On four additional stimulus grants, the primary recipient of the federal money hired GE as a contractor. Recovery.gov is the administration’s website that tracks stimulus expenditures.

At the end of 2008, GE employed 152,000 U.S. workers, according to its 2009 annual report. But at the end of 2009, according to the report, it employed only 134,000 U.S. workers, a decline of 18,000 workers.

The Energy Department provided GE with 9 stimulus grants, the Department of Health and Human Services provided the company with 3, and the Justice Department and the Commerce Department each gave the company 1 stimulus grant.

All of these federal stimulus grants went to GE’s Global Research Center.

The earliest of the stimulus grants went to GE in July 2009 and the latest in April 2010.

CNSNews.com asked a GE spokesperson if the company contested Recovery.gov’s representation that GE had received 14 stimulus grants worth $24.9 million, and also whether the company now employed more or fewer workers as a result of receiving the grants.

In an e-mail response, GE spokeswoman Anne Eisele said, “I’m afraid I must politely decline to comment.”

What did all the money to GE go for? Recovery.gov posts brief explanations of each grant. For example, the Department of Justice gave GE $999,955 in stimulus money. “The goal of this program,” said Recovery.gov, “is to develop a comprehensive reasoning system for event and scenario recognition for an intelligent video system.”

In addition to the $24.9 million it received in stimulus grants, GE was also awarded $5 million in federal contracts under the economic stimulus law. These contracts were payment for services provided by the company.

http://www.cnsnews.com/print/76412
 

Lonecowboy

Well-known member
I thought the "stimulus" was about JOBS?

Despite getting $24.9 million from U.S. taxpayers, GE decreased its U.S.-based employees by 18,000 in 2009, according to the company’s 2009 annual report.

According to Standard & Poor's, GE took in $156 billion in revenue in 2009.

I wonder how much GE contributed to obama's campaign? :(
 
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