Jose Canseco’s request for immunity so that he can testify completely — beyond the statements already contained in his book, 60 Minutes interview, and numerous other promotional appearances — has been rejected by the House Government Reform Committee, to no one’s real surprise.  The Committee did excuse Jason Giambi from having to testify because he had already testified before a federal grand jury in 2003 under a grant of immunity, and it likely did not want to grant him immunity while denying it to the other witnesses.  Whether any of the other witnesses, which will include Mark McGwire, who had not indicated earlier whether he would attend, will assert the Fifth Amendment is still unclear.  The hearing begins Thursday, March 17 at 10:00 a.m., and will be carried live on ESPN, feeding the circus atmosphere. An AP story here discusses the Committee’s decision and the reaction of Canseco’s attorney.

The jostling between the baseball players subpoenaed to testify and the House Government Reform Committee over whether they will appear is coming to a head. Jason Giambi, Frank Thomas, and Rafael Palmeiro have asked the Committee to withdraw the subpoenas, and they would most likely assert the Fifth Amendment if there is not a grant of immunity. Jose Conseco continues to ask for immunity so that he can speak freely at the hearing, despite having written a book about the use of steroids in baseball, including his own use. The Justice Department usually is reticent about granting immunity blindly, i.e. without a proffer or some other indication about the scope of the witness’ testimony, so it would not be a surprise if the players did not receive any protection. The question then becomes whether the Committee will still demand that they appear and assert their Fifth Amendment privilege, something done to witnesses in the investigations of various corporate collapses. A story on ESPN.com (here) discusses the question about whether the players will testify. (ph)

Maurice Greenberg has led American International Group Inc. (AIG) since 1967, but his days as CEO may end as soon as today as the company deals with growing pressure from regulatory investigations.  The company is being investigated by New York Attorney General Eliot Spitzer for bid-rigging in the insurance brokerage industry, an investigation that resulted in the resignation of his son, Jeffrey, who was CEO of Marsh & McLennan.  On Feb. 14, AIG disclosed (press release here) that the SEC and Spitzer were investigating it for possible earnings manipulation related to a "non-traditional insurance contract" (how’s that for a red flag) with General Re, a unit of Berkshire Hathaway; Greenberg was involved directly in the transaction.  The company also settled civil and criminal charges in November 2004 by paying a $126 million fine and agreeing to a series of reforms that include a beefed-up compliance program related to more non-traditional insurance contracts that allowed companies to manipulate their earnings.  According to a Wall Street Journal story (here), Greenberg has retained Robert Morvillo, who was lead trial counsel for Martha Stewart, to represent him personally in the SEC and NYAG investigations. The pressure on boards to deal quickly with CEOs (and other officers) caught up in federal and state investigations just keeps growing. (ph)

UPDATE: The answer is yes.  Greenberg retired as CEO of AIG this evening (March 14), although he will stay on as Chairman of the Board.  His successor is Martin Sullivan, who was the co-chief operating officer and a lifelong employee of AIG.  A Wall Street Journal story (here) states that the Board was concerned about Greenberg’s involvement in the General Re insurance transaction, and that e-mails indicate Greenberg’s large role in the deal — yet another instances where the e-mails provide the paper trail. (ph)

The crack of the bat, the pop of the catcher’s mitt, and the service of subpoenas — it sure sounds like Spring Training.  The House Government Reform Committee issued subpoenas to the eleven players and executives (earlier post here listing scheduled participants) who it wishes to hear from on March 17 at a hearing into baseball’s steroid policy.  The Committee was even kind enough to post copies of the subpoenas (here) for all to see, and you get the autograph of Rep. Tom Davis (Committee chair) at the bottom of each for free.  A release by the Committee explains the reason for its scheduled hearing:

The Committee will conduct a thorough, fair, and responsible investigation. It is important the American people know the facts on baseball’s steroid scandal. And it is important that all Americans, especially children, know about the dangers of drug use. Consistent with our jurisdiction over the nation’s drug policy, we need to better understand the steps MLB is taking to get a handle on the steroid issue, and whether news of those steps – and the public health danger posed by steroid use – is reaching America’s youth.

Interestingly, the Committee did not invite (and then subpoena) Barry Bonds, the best-known player and an admitted, albeit unknowing according to his grand jury testimony, user of steroids.  Does Bonds bring too much star power, drawing attention away from the topic — and, perhaps, overshadowing Chairman Davis and the other Representatives during their moment in the spotlight (and, more importantly, on ESPN’s SportsCenter)? 

Jose Canseco has asked for immunity (despite writing a book about his and others steroid use), and he identified Rafael Palmeiro as a steroid user in the book, which Palmeiro vehemently denies. Their appearance together at the hearing promises to be testy.  Jason Giambi testified in 2003 before a federal grand jury under a grant of immunity, and he will likely demand another grant to testify again before the Committee.  To this point, only Curt Schilling, who has been critical of steroid use by players, has agreed to testify without any reservations.  Just like Spring Training games, this doesn’t count in the standings, but that doesn’t detract from the circus.  An article on ESPN.com by Jayson Stark (here) raises question about the Committee’s motive for the hearing. (ph)

The firing of Harry Stonecipher yesterday as CEO of Boeing for his affair with a company executive was triggered by an anonymous tip that included a "very graphic" e-mail Stonecipher sent to the woman.  Somehow, the e-mail made it out to a broader audience — is anyone surprised about that? — and reached the company’s lead director, who had corporate counsel conduct an investigation.  This is another example of how some people view e-mail as non-existent ether that dissipates as quickly as a water-cooler conversation. We have reached the point where the lack of an e-mail trail is considered an oddity, as in the prosecution of Bernie Ebbers in which there is virtually no e-mail traffic from Ebbers, and only a few to him. An AP story here discusses the termination of Stonecipher. (ph)

The Sarbanes-Oxley Act requires corporate counsel and directors to investigate all reports of potential wrongdoing at a corporation, and an anonymous tip appears to have led to the removal of Boeing CEO Harry Stonecipher because he was having an affair with another Boeing executive.  A press release issued by the company (here) discusses an investigation of Stonecipher by inside and outside cousnel that led to the Board’s decision to fire him:

The Board actions were taken following an investigation by internal and external legal counsel of the facts and circumstances surrounding a personal relationship between Stonecipher and a female executive of the company who did not report directly to him. The Board determined that his actions were inconsistent with Boeing’s Code of Conduct.“ The Board concluded that the facts reflected poorly on Harry’s judgment and would impair his ability to lead the company,” said Platt.

Stonecipher will no doubt receive a nice severance package, although the assertion that the other excutive did not report to him "directly" seems a bit disingenuous — doesn’t everyone report to the CEO?  Stonecipher’s demise probably is not nearly as damaging to the company as the firing of his predecessor, Phil Condit, because of the scandel involving the aborted hiring of former Air Force procurement chief Darleen Druyun in 2003.  Moreover, the Pentagon’s suspension of Boeing from bidding on rocket contracts because of its misuse of information from Lockheed Martin was lifted just last week.  At least the company is finding new ways to act improperly. (ph)

The ChoicePoint website states:

"ChoicePoint (NYSE: CPS) Chairman and Chief Executive Officer Derek V. Smith on Friday announced that the company will discontinue the sale of information products that contain sensitive consumer data, including Social Security and driver’s license numbers, except where there is a specific consumer-driven transaction or benefit, or where the products support federal, state or local government and criminal justice purposes."

Not surprising…

It seems that the SEC and the FTC are investigating ChoicePoint (informal investigation by SEC) and ChoicePoint has stated that they will cooperate.  According to the Atl. Jrl. Const. it is alleged that some fraudulent activity may have comprised data from ChoicePoint   (See here for more). The investigation also appears to include a review of stock sales by two executives shortly after disclosure of the identity theft.  (See  Wall Street Jrl for for here).

ChoicePoint has also added a new compliance measure as the company reports that it "has created an independent office of Credentialing, Compliance and Privacy that will report to the Board of Directors’ Privacy Committee. "

(esp)

The House Government Reform Committee announced that it had issued invitations to seven current and former major league baseball players and four executives, including Commissioner Bud Selig, to appear at a hearing on March 17 on the topic of major league baseball’s new steroid policy.  As described in a Committee news release (here), there will be two panels with the following participants invited to testify:

Panel I:
Jose Canseco – former Oakland Athletic and Texas Ranger
Jason Giambi – current New York Yankee and former Oakland Athletic
Mark McGwire – former Oakland Athletic and St. Louis Cardinal
Rafael Palmeiro – current Baltimore Oriole and former Texas Ranger
Curt Schilling – current Boston Red Sox
Sammy Sosa – current Baltimore Oriole and former Chicago Cub
Frank Thomas – current Chicago White Sox

Panel II
Bud Selig – Commissioner of Baseball – Major League Baseball
Sandy Alderson – former General Manager, Oakland Athletics, and
current Executive Vice President of Baseball Operations, Major League Baseball
Don Fehr, Esq. – Executive Director & General Counsel, Major League Baseball Players Association
Kevin Towers – General Manager & Executive Vice President, San Diego Padres

According to a New York Times article (here), if the invitations are declined, the Committee will issue subpoenas to compel the appearance of the witnesses, and all witness will be placed under oath for their testimony.  Interestingly, the highest profile player caught up in the steroids issue — Barry Bonds — is not on the list.  Bonds and Giambi testified before a federal grand jury in the BALCO investigation, and they would be the most likely candidates to assert the Fifth Amendment if subpoenaed to testify.

Canseco’s attorney asserted that his client would testify if granted immunity — one wonders if that position is designed to help sales of Canseco’s new book, "Juiced," which accuses McGwire and Palmeiro (among others) of using steroids.  Somehow, claiming the Fifth Amendment after writing a book about the subject seems a bit disingenuous, but that has not stopped Canseco before. Congress has been rather gun-shy about granting immunity since the Iran-Contra hearings in which Oliver North received immunity and testified with the assistance of his counsel, Brendan Sullivan (who asserted that he is not a shrub or other type of plant), that resulted in North’s conviction being overturned on Fifth Amendment grounds. A spokesman for Rep. Tom Davis (R-Va), the Committee chair, asserted that the hearing is not an attempt at grandstanding on a topic in the news because it is "a national public health issue."  Far be it from politicians to seek out the spotlight and use a hearing to garner attention for themselves. Batter up! (ph)

On February 14 and 15, AIG issued statements regarding the subpeonas and actions of the SEC and Office of the Attorney General of New York as they related to the company.  The question will be, will they issue a new statement today, or within the next few days, in response to the latest turn of events.  The Wall Street Journal is reporting that federal prosecutors have entered into the investigation, specifically an investigation between AIG and Berkshire Hathaway, Inc. General Reinsurance unit.  For details on this story see here.

(esp)