"Today we made the decision to join the Third World." -- Andrei Illarionov, an economic adviser to Russian Prime Minister Vladimir Putin, slamming the sale of Yukos' main production unit to a government entity
Because corporations can't donate to Presidential candidates -- and their top executives are limited to $2,000 individual contributions -- it's mighty hard for Big Business to express its gratitude to the CEO of USA Inc. But there's one loophole large enough to drive several hundred limousines through: the Presidential Inaugural Committee.
Companies and individuals are allowed to open their wallets to underwrite the celebration of George W. Bush's reelection, and as of Dec. 23 business interests have anted up nearly $8 million. At least 28 defense contractors, energy giants, financial firms, Big Tobacco, techies, and health-care companies have ponied up $100,000 or more, according to a BusinessWeek analysis of the latest donor list posted on the 2005 inaugural Web site.
Among those giving a quarter-million bucks, the max set by the Bush team: ExxonMobil (XOM), ChevronTexaco (CVX), Occidental Petroleum (OXY), Southern Co. (SO), United Technologies (UTX), Sallie Mae (SLM), and Altria (MO). While most have long histories of GOP loyalty, Boeing and Qualcomm execs and political action committees gave generously to both parties -- but the companies sent a six-figure check to the winning side after the election.
The Environmental Protection Agency and the Defense Dept. are locking horns over perchlorate. A primary ingredient in rocket fuel and fireworks, the chemical has been found in at least 20 states -- or 4% of the U.S. water supply. The EPA worries that levels found in drinking water near military bases may be unacceptable. That could make the Defense Dept. liable for hundreds of millions in cleanup costs.
The two have turned to the National Academy of Sciences to evaluate the risks. BusinessWeek has learned that the NAS will recommend this month a specific amount judged safe for consumption, instead of its usually more general guidance. Plenty is at stake: Adults can tolerate perchlorate, but it can block iodide uptake into the thyroid gland, an essential function that aids development in children. If the NAS's level is low, both the Pentagon and defense contractors may have to fund cleanups.
Contractors are hedging their bets. Lockheed Martin (LMT), Kerr McGee (KMG), GenCorp (GY) unit Aerojet, and perchlorate maker American Pacific are all setting aside reserves or doing cleanups while fighting perchlorate limits in Washington. Neither NAS nor Defense officials would comment.
Ousted Fannie Mae CEO Franklin D. Raines has quite the gilded parachute to soften his landing. In addition to $19 million in severance payments, Raines, 55, gets a lifetime salary of $1.37 million. If he lives until 75, that's $27.4 million. Add: $21 million in stock already awarded, $23.8 million in future stock payouts, a life insurance policy, and an additional $23.8 million in performance-based options. That's on top of more than $17.5 million paid to Raines since 1999. The grand total is worth $140 million -- not bad for just six years on the job.
An unexpected problem may cramp the European Union's expansion. When the EU added 10 members in 2004, the number of official languages rose from 11 to 20. In this modern Babel, costs for document translation and interpreting services jumped from about 700 million ($950 million) to 1.2 billion ($1.6 billion) euros a year, estimate Jan Fidrmuc and Victor Ginsburgh of the Universit? Libre de Bruxelles. Already, some new policies have been delayed because the EU's staff of 2,400 swamped translators could not produce local versions fast enough.
As membership for Turkey and other candidates looms, linguists and economists from Oxford to Ankara are puzzling over ways to alleviate the bind while preserving the EU's multilingual principles. Economists Fidrmuc and Ginsburgh have devised a market-based solution: They suggest in a recent discussion paper that countries be given the chance to take the money slotted for translations and use it in some other, perhaps more productive, way. They figure that translations in English, French, and German would satisfy the language needs of about 70% of EU citizens.
Critics, though, ask how the EU could enforce laws that Greeks or Italians, for instance, can't read. Others contend that the money allocated to language services pales against other categories, such as agriculture.
Beyond rising costs, a lack of capable translators is another obstacle. To make matters worse, some EU states have put in requests to treat their minority languages as official: Catal?n, Gaelic, and Basque, to name a few. Little political will exists to tackle the issue. And France opposes any changes, for fear they will favor English and German. For now, new EU head Jean-Claude Juncker can still get memos in his native Luxembourgish.
This holiday season, some altruistic givers barely lifted a finger. They used "virtual food drives" at companies such as Sun Microsystems (SUNW), Accenture (ACN), and the Greater Chicago Food Depository. Web sites are set up for workers or clients who click on items, select how much to send, and watch the site tally the pledges for food depositories around the world. The donations are collected and food is bought in bulk. More than 225 drives, handled by software from Dallas' Aidmatrix, raised $295,148 in 2004. Accenture alone has raised more than $79,500 from 29 offices nationwide. The means may be virtual, but the results couldn't get more real.
In a year marked by uncertainty -- over Iraq and Afghanistan, the dollar, the fledgling recovery, and the election -- it's hard to remember that 2004 did give us some things we can be sure about. Try our annual quiz on the year in business news:
1 What percentage of U.S. cows are now tested for mad cow disease?
2 Which General Electric (GE) alumnus delivered the best shareholder returns in 2004?
A James McNerney, 3M (MMM)
B Tom Tiller, Polaris Industries (PII)
C Robert Nardelli, Home Depot (HD)
D David Cote, Honeywell (HON)
3 In her press conference to ask the judge for a speedy sentencing decision, Martha Stewart listed things she would miss behind bars. Which of the following was not named?
4 What was the euphemism given to kickbacks paid to insurance brokers, targeted by New York Attorney General Eliot Spitzer?
A "contingency fees"
B "compulsory assessments"
C "back-scratch fees"
D "convenience charges"
5 Which chief executive saw a record 45% of shareholders withhold their votes for him?
A Michael Eisner, Disney (DIS)
B Michael Jordan, EDS (EDS)
C Steven Burd, Safeway (SWY)
D Lawrence Ellison, Oracle (ORCL)
6 Royal Dutch/Shell Group (RD) slashed its estimate of proven oil and gas reserves by nearly 25%. It had relied on:
A Arthur Andersen to estimate its reserves
B a part-time auditor to check its reserves estimate
C 1960s-era geologic strata-sampling technology
D cutting-edge, but unproven, geologic strata-sampling technology
7 In June, SpaceShipOne became the first privately built vehicle to reach space -- what fuel did it burn?
A rubber and laughing gas
B kerosene and liquid oxygen
C liquid hydrogen and liquid oxygen
D lithium pellets and hydrogen peroxide
8 Which of the following has licensed SpaceShipOne's technology and hopes to launch a space-tourism business in 2007?
A a new NASA spin-off company
B Emirates Airline
C All Nippon Airways
D Virgin Atlantic
9 The money Citigroup (C) set aside for legal actions, including Enron and WorldCom-related liabilities, is what percentage of its $18 billion in '03 profits?
10 Which stock group had the best performance in 2004?
A Internet retail
B gold mining
C fertilizers and agricultural chemicals
11 Amid a sour market, which tech company cut its IPO price by 25% at the last minute?
B Google (GOOG)
12 Which of the following set a record in 2004?
A junk-bond issuance
B mergers and acquisitions
C initial public offerings
D all of the above
13 Including a December request, how much has been appropriated for operations in Iraq and Afghanistan since the beginning of the Iraq war?
A $50 billion to $100 billion
B $100 billion to $150 billion
C $150 billion to $200 billion
D more than $200 billion
14 After early exit polls pegged John Kerry as the election winner, how did the Dow react?
A dipped more than 5%
B dipped about 1%
C rose about 1%
D rose more than 5%
15 Of the following executives embroiled in legal trouble in 2004, who was the subject of a criminal conviction and received the longest prison sentence?
A Martha Stewart
B Lea Fastow
C Dennis Kozlowski
D Bernard Ebbers
MATCH THE FINE
16 The FCC levied a record amount of fines for indecency this year -- almost $8 million. Match the offense with the fines it provoked:
A Fox's (FOX) Married by America reality show, which portrayed adults engaged to be wed in "sexual situations"
B CBS' Super Bowl halftime show, which featured Janet Jackson's "wardrobe malfunction"
C Clear Channel Communications' (CCU) Bubba the Love Sponge radio show, for graphic discussions of sex and drugs
D ClearChannel, for Howard Stern's raunchy banter on his radio talk show
Answer Key: 1-a; 2-b; 3-a; 4-a; 5-a; 6-b; 7-a; 8-d; 9-c; 10-a; 11-b; 12-a; 13-d; 14-b; 15-b; 16: a-2, b-4, c-3, d-1