DDD73

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Dirt Diggers Digest No. 73  

Editor: Philip Mattera

December 4, 2006

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Contents

-- 1. Democrats may challenge Bush Administration on closing of EPA libraries

-- 2. DOJ files fewer white-collar cases but recovers more on contractor fraud

-- 3. GAO: States collect minimal ownership information from companies

-- 4. UK Companies Bill becomes law

-- 5. Online docket access upgraded for New York courts

-- 6. Maryland court makes economic development process more transparent

-- 7. SEC moves ahead with EDGAR search tool

-- 8. Manta poses dubious challenge to Hoover’s

-- 9. More than three decades of FTC decisions now online

-- 10. Obituary: H. Donald Wilson

1. Democrats may challenge Bush Administration on closing of EPA libraries

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In what is shaping up to be one of the first confrontations over information policy between the new Democratic-controlled Congress and the Bush Administration, a growing number of legislators have been speaking out against a decision by the Environmental Protection Agency to close some of its regional libraries and limit access to the others. The EPA began the process as part of a budget-cutting move while insisting that material in the shuttered libraries would remain accessible online (though it is not clear how long it will take to digitize all those documents that now exist only on paper).

In the latest expression of concern, four senior Democrats in the House—including Rep. Henry Waxman of California, who will became chairman of the Committee on Government Reform—sent a letter to EPA Administrator Stephen Johnson last week. Suggesting that more vigorous oversight is in the offing, they wrote: “We request that you maintain the status quo of the libraries and their materials while this issue is under investigation and review by Congress.”

Speaking of oversight, Dirt Diggers editor Phil Mattera is part of a group that has been meeting to discuss a corporate reform agenda—including enhanced disclosure—to present to allies in the new Congress. There will be more to report on this in the next issue of the Digest.

2. DOJ files fewer white-collar cases but recovers more on contractor fraud

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The Transactional Records Access Clearinghouse, which tracks (among other things) trends in the volume of white-collar crime cases brought by the U.S. Department of Justice (DOJ), reports that the number of such prosecutions has been on the decline. During the latest month, the volume of new cases was down nearly 12 percent from the year before and more than 30 percent from the level reported in 2001.

Meanwhile, DOJ recently announced that during the fiscal year ending in September, it recovered a record $3.1 billion in settlements and judgments in cases involving allegations of fraud against the federal government. Nearly half the total came from two high-profile cases: the one involving Tenet Healthcare Corporation and another involving The Boeing Company.

Some interesting corporation litigation data was also released recently by the law firm of Fulbright & Jaworski. In a survey of in-house law departments at large U.S. corporations, Fulbright found that companies with $1 billion or more in revenue had an average of 556 pending lawsuits. Nearly half of those firms added an average of 50 new cases a year. The industry with the largest number of cases was insurance, followed by retail and energy. UK-based companies surveyed by Fulbright reported an average of only 178 pending cases.

3. GAO: States collect minimal ownership information from companies

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In recent testimony before a Senate subcommittee, the Government Accountability Office warned that most states collect only a minimum of ownership information as part of their oversight of corporations and limited liability companies. In her written submission, GAO official Yvonne D. Jones also pointed out that states normally do not verify the limited ownership information they are given.

The point of the hearing was not to urge improvements that would make life easier for corporate researchers. The event, convened by the investigations subcommittee of the Senate Committee on Homeland Security and Governmental Affairs, was titled: “Failure to Identify Company Owners Impedes Law Enforcement.” Jones emphasized the fact that federal law enforcement officials are concerned that the lax ownership collection process is making it easier for criminals to use shell companies to conceal their identity and their illicit activities. Her testimony was a synopsis of a GAO report published earlier this year. Links to the prepared testimony of the other witnesses can be found on the committee’s website.

4. UK Companies Bill becomes law

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While progressives in the United States are still wishing for corporate reform, some significant improvements have actually been put into effect in Britain. Recently, the Companies Bill we reported on in the previous issue of the Digest was approved by Parliament, received Royal Assent by the Queen and became law. Among other things, the Companies Act requires publicly traded firms to expand reporting on environmental, labor and supply chain issues, but UK advocacy groups such as the Corporate Responsibility Coalition (CORE) and the Trade Justice Movement issued a statement complaining that the legislation did not impose a statutory standard for such disclosure.

5. Online docket access upgraded for New York courts

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For those researching court dockets on the open web, New York courts have been a source of frustration. Now there are websites that provide much easier access to the records of civil cases in New York’s Supreme Court, the state’s trial court. A system called WebCivil provides online access to data about cases in all 62 counties of the state. One can search by plaintiff, defendant, lawyer or case number. Another site called SCROLL gives access to more detailed information—including scanned images of key documents—for cases filed in New York County (Manhattan).

6. Maryland court makes economic development process more transparent

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Economic development bodies—the entities that seek to lure investment to a particular area, often through the use of corporate subsidies—frequently operate in a gray area between the public and private sectors and keep their deliberations largely secret. Thanks to a recent court ruling in Maryland, the Baltimore Development Corporation (BDC) will have to operate in a more transparent manner. Maryland’s Court of Appeals ruled that BDC, nominally a private non-profit, must open its meetings and records to the public. BDC, which was analyzed in a 2002 report by Good Jobs First, has overseen a great deal of the city’s subsidized economic development and receives most of its funding from the city.

7. SEC moves ahead with EDGAR search tool

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Earlier this year (as reported in Digest No. 70), the Securities and Exchange Commission announced that it was testing a tool that for the first time allowed full-text searching of company filings in the EDGAR system. The trial was apparently a success, so the Commission recently announced that the search engine was being officially added to the EDGAR website. The tool now allows for searches of documents filed during the past four years.

8. Manta poses dubious challenge to Hoover’s

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For quite a while, Hoover's has been the best free website for getting quick basic information about a large company. But ever since it was acquired by D&B, Hoover's has limited its free content and placed more information behind the wall of expensive subscriptions. A new service called Manta has come along to challenge Hoover’s position with a site that claims to cover a universe of 13 million U.S. firms (which includes subsidiaries and branch locations). It provides free basic information, which may consist simply of name, address, phone number and line of business. If you are willing to submit a free registration, you get a bit more information such as key financials and executives. If you want a real profile, you have to fork over $130 for a D&B Comprehensive Report. You can also get basic information or buy pricey reports on industries or foreign companies, none of which seem to be unique to Manta.

Overall, Manta seems to have less to offer in the way of free information than Hoover’s and—given the mixing of headquarters, branches and subsidiaries—is clumsier to navigate. It may be useful, however, for locating smaller firms.

9. More than three decades of FTC decisions now online

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The Federal Trade Commission recently announced that it had added the texts of all its decisions over the past 37 years to the agency’s website. The full set of documents had previously been available to the public only in printed volumes containing a total of more than 70,000 pages (or via expensive online services such as Lexis-Nexis). The annual volumes (in PDF form) can be accessed directly but are searchable only through the general search engine for the entire FTC site.

10. Obituary: H. Donald Wilson

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The Digest does not normally run obituaries, but your editor decided to make an exception in the case of H. Donald Wilson, who oversaw the initial development of Lexis-Nexis and thus pioneered the field of electronic research. Wilson died recently of a heart attack at the age of 82. The Washington Post obit on Wilson credited him with being one of the first to realize the appeal of vast archives of news articles, legal opinions and the like for lawyers, journalists and other professionals. As a management consultant in the 1960s, Wilson wrote the business plan for Mead Data Central, the company that gave birth to Lexis-Nexis, and then served as the firm’s president for four years. Wilson then returned to consulting and subsequently worked on numerous other information ventures.