Revolution is Now II

“Do YOUR part. Fight the Machine. GET DOWN!

Wednesday, January 07, 2004

PALO ALTO, Calif. — Amid rising hopes for a high-tech turnaround, there's this sobering sign: Martin Pichinson (search) — a man who has buried nearly 150 failed startups since 1999 — has swooped into Silicon Valley (search) like a vulture lurking over a pack of wounded animals.

Pichinson, a self-described "doctor of reality" who helps liquidate companies, says he wouldn't have moved from Los Angeles to Palo Alto (search) a few months ago had he not smelled more high-tech trouble looming.

"Sadly, it looks like 2004 is going to be another busy year for me," Pichinson said. "There's still another 6,500 to 7,500 companies out there who are among the walking dead."

Even before the move, Pichinson became a familiar face in Silicon Valley and other high-tech hubs, largely because so many venture capitalists summoned him and his firm, Sherwood Partners, to help clear the debris left by the dot-com implosion.

Kozmo.com, iChristian.com and Alladvantage.com are among the high-profile casualties bagged by Pichinson during the past four years. Pichinson figures more than 50,000 people have lost their jobs on his death watch.

It's a macabre job that most venture capitalists abhor.

"Venture capitalists only want to deal with the top 40 percent of the companies in their portfolios," Pichinson said. "We get the bottom of the barrel."

With most of the dregs flowing from Silicon Valley, Pichinson decided to move Sherwood's headquarters to the high-tech center so he's in a better position to handle the future carnage.

Sometimes, Pichinson and Sherwood's 60 employees are able to salvage troubled startups by cutting costs and training the executives to rethink their ways. Sherwood even brings in an FBI consultant specializing in hostage negotiation techniques to help management.

But for every company that Pichinson has saved, he has overseen the liquidation of roughly three others since 1999.

Conventional wisdom says Pichinson, 57, is about to face a business downturn himself. With technology stocks finishing their best year since the 1990s and companies poised to spend more money on computer gear, there's a growing consensus high-tech's high death toll is tapering off.

"Most of the biggest problem companies have been restructured, sold off or closed down," said Barry Kramer, a Palo Alto attorney who advises venture capitalists.

Pichinson scoffs at that notion, predicting the carcasses of doomed startups will continue to pile up for the next three to seven years.

"I have closed more companies than anyone in the world, so no one knows better about all the things that can go wrong in a business," Pichinson said.

Sweeping statements like that are vintage Pichinson — a colorful former pop music manager who enjoys schmoozing, even when he is filling the role of a grim reaper. Pichinson boasts that his Rolodex is filled with more than 5,000 Silicon Valley contacts.

"Someone has to dance to bring in the business and Marty likes to dance," Sherwood Partners co-founder Michael Maidy says of Pichinson's networking skills.

While Pichinson's showmanship helps open doors, it's his ability to close businesses that wins Sherwood the trust — and patronage — of venture capitalists.

"Marty likes to talk, but he also walks the walk," said Spencer Tall, a general partner with APV Technology Partners, a Palo Alto firm that has worked with Pichinson. "He can help you make some very cogent decisions."

It's a process that often requires Pichinson to be brutally honest with the entrepreneurs running a troubled startup. Sherwood Partners "comes in and talks tough," said Doug Koo, who ran a failing San Francisco startup, Cat Technology. "They teach you that some of the things are a necessary evil."

When Sherwood entered the picture in late 2002, Cat Technology didn't have enough money to cover about $15 million in unpaid bills, Koo said. The startup seemed destined for bankruptcy until Sherwood engineered a restructuring that led to the startup's sale to a rival firm, FusionStorm.

Sherwood Partners isn't the only business gravedigger in Silicon Valley. The list of other high-tech undertakers in the area includes Diablo Management Group, Venture Asset Group, Gerbsman Partners and the Sage Group.

But Pichinson's flair has helped separate Sherwood from the rest of the pack, enabling the firm to demand a premium fee. When closing a startup, Pichinson says Sherwood typically charges a 7.5 percent commission on the liquidation of the company's assets or $75,000, whichever is greater.

Pichinson began working with the downtrodden in the early 1970s when he began managing music acts around Los Angeles.

His clients included The Miracles after Smokey Robinson left the group, and Lou Rawls several years after the singer had fallen on hard times.

Under Pichinson's management, both acts turned out major hits in 1976, "Love Machine" by The Miracles and "You'll Never Find A Love Like Mine" by Rawls.

Pichinson grew weary of music management and left the entertainment business to begin working with distressed companies in the 1980s. He shows no signs of burning out in his current job, despite all the tales of woe.

"We are trusted caregivers, like a hospice," Pichinson said. "There is always going to be something in trouble, or someone who needs our help."





We need to get rid of the pigs that rape our land, steal from our children and pillage our old. The time is NOW!!

GET DOWN!!”

“So, the innocents pay for Bush's revenge!?!?!


O'Neill: Bush planned Iraq invasion before 9/11
In new book, ex-Treasury secretary criticizes administration


(CNN) -- The Bush administration began planning to use U.S. troops to invade Iraq within days after the former Texas governor entered the White House three years ago, former Treasury Secretary Paul O'Neill told CBS News' 60 Minutes.

"From the very beginning, there was a conviction that Saddam Hussein was a bad person and that he needed to go," O'Neill told CBS, according to excerpts released Saturday by the network. "For me, the notion of pre-emption, that the U.S. has the unilateral right to do whatever we decide to do, is a really huge leap."

O'Neill, who served nearly two years in Bush's Cabinet, was asked to resign by the White House in December 2002 over differences he had with the president's tax cuts. O'Neill was the main source for "The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O'Neill," by former Wall Street Journal reporter Ron Suskind.

The CBS report is scheduled to be broadcast Sunday night; the book is to be released Tuesday by publisher Simon & Schuster.

Suskind said O'Neill and other White House insiders gave him documents showing that in early 2001 the administration was already considering the use of force to oust Saddam, as well as planning for the aftermath.

"There are memos," Suskind told the network. "One of them marked 'secret' says 'Plan for Post-Saddam Iraq.'"

Suskind cited a Pentagon document titled "Foreign Suitors For Iraqi Oilfield Contracts," which, he said, outlines areas of oil exploration. "It talks about contractors around the world from ... 30, 40 countries and which ones have what intentions on oil in Iraq."

In the book, O'Neill is quoted as saying he was surprised that no one in a National Security Council meeting asked why Iraq should be invaded.

"It was all about finding a way to do it. That was the tone of it. The president saying 'Go find me a way to do this,'" O'Neill said.

Suskind also described a White House meeting in which he said Bush seemed to waver about going forward with a second round of tax cuts.

"Haven't we already given money to rich people... Shouldn't we be giving money to the middle?" Suskind says Bush asked, according to what CBS called a "nearly verbatim" transcript of an economic team meeting Suskind said he obtained from someone at the meeting.

O'Neill also said in the book that President Bush "was like a blind man in a roomful of deaf people" during Cabinet meetings.

One-on-one meetings were no different, O'Neill told the network.

Describing his first such meeting with Bush, O'Neill said, "I went in with a long list of things to talk about and, I thought, to engage [him] on. ... I was surprised it turned out me talking and the president just listening. It was mostly a monologue."

White House spokesman Scott McClellan brushed off O'Neill's criticism.

"We appreciate his service, but we are not in the business of doing book reviews," he told reporters. "It appears that the world according to Mr. O'Neill is more about trying to justify his own opinion than looking at the reality of the results we are achieving on behalf of the American people. The president will continue to be forward-looking, focusing on building upon the results we are achieving to strengthen the economy and making the world a safer and better place."

A senior administration official, who asked not to be named, expressed bewilderment at O'Neill's comments on the alleged war plans.

"The treasury secretary is not in the position to have access to that kind of information, where he can make observations of that nature," the official said. "This is a head-scratcher."

Even before the interview is broadcast, the topic became grist for election-year politics.

Former Vermont Gov. Howard Dean, who is the early front-runner for the Democratic presidential nomination, issued a statement in response.

"I've always said the president had failed to make the case to go to war with Iraq," Dean said. "My Democratic opponents reached a different conclusion, and in the process, they failed to ask the difficult questions. Now, after the fact, we are learning new information about the true circumstances of the Bush administration's push for war, this time, by one of his former Cabinet secretaries.

"The country deserves to know -- and the president needs to answer -- why the American people were presented with misleading or manufactured intelligence as to why going to war with Iraq was necessary."

Democratic Sen. John Kerry of Massachusetts also issued a statement. In 2002, Kerry voted to support a resolution giving Bush authority to wage war against Iraq if it didn't dismantle its presumed illegal weapons program.

"These are very serious charges. It would mean [Bush administration officials] were dead-set on going to war alone since almost the day they took office and deliberately lied to the American people, Congress, and the world," Kerry said. "It would mean that for purely ideological reasons they planned on putting American troops in a shooting gallery, occupying an Arab country almost alone. The White House needs to answer these charges truthfully because they threaten to shatter [its] already damaged credibility as never before."”

“Report: Pentagon auditors altered records

Saturday, January 10, 2004 Posted: 10:55 PM EST (0355 GMT)


WASHINGTON (AP) -- Pentagon auditors spent 1,139 hours altering their own files in order to pass an internal review, say investigators who found that the accounting sleuths engaged in just the kind of wasteful activity they are supposed to expose.

When the auditors in the New York City office learned well in advance which files a review team would check, they spent the equivalent of more than 47 days doctoring the papers and updating records from several audits, the Defense Department's inspector general concluded. Administrative staff, audit supervisors and other employees also participated in the scheme.

The fabrication at the Defense Contract Audit Agency "certainly violates the spirit and intent" of government auditing standards and rules on ethical conduct, according to the inspector general's report obtained by The Associated Press.

The fabrication was discovered in 2001, but the report on it was not disclosed until Tuesday.

The defense agency, which audits government contracts, is the same one that recently reported that Vice President Dick Cheney's former company, Halliburton, may have overcharged the Army as much as $61 million for gasoline in Iraq.

The audit agency ran up some charges of its own when its auditors worked on altering the records.

The task of rewriting the files was so daunting that auditors came in from other offices to help make the changes, costing taxpayers more than $1,600 in travel expenses.

The agency "is supposed to be the watchdog for defense contracts," said Sen. Charles Grassley, R-Iowa, a constant critic of government waste.

"Altering audit work papers could undermine the accuracy of the Pentagons cost reports. Falsifying official reports is a crime, and those involved must be held accountable."

To stop any fabrications in the future, the review teams only give 48 hours advance notice of the files they want to inspect. The advance time under the old policy was much longer.

Discipline was proposed for the manger who directed the alterations, but was never imposed because the official resigned, the report said.

Daniel Tucciarone, executive officer of the audit agency, said a second senior management official who "had not been forthcoming and acted inappropriately to conceal information" was punished.

Tucciarone told the AP that the agency took "appropriate disciplinary action in all cases" but added that federal privacy law prevented him from releasing such information about individual employees.

The revisions were so pervasive that the work continued even after the review team arrived to inspect the auditors' files. The New York branch manager directed a senior auditor to delete electronic backup files of original documents, the inspector general said.

The report said agency employees believed that "upgrading" the working papers was a normal and acceptable practice and that they did not try to hide what they were doing.

The inspector general uncovered the file deletions following a tip to a fraud, waste and abuse hot line.

This is not the first time that Pentagon anti-waste investigators were found to have altered documents.

The AP reported in 2001 that the inspector general's office itself destroyed documents and replaced them with fakes to avoid embarrassment in a review of its work.”