MARCH 2005


 Political Season Starts Early

Governor Schwarzenegger kicked off the political season a year early by announcing his intent to bypass the California State Legislature with a new political campaign to gather signatures for a special election to be held later this year.  The Governor's referendums do not cover business or job creation issues and instead focuses on reform of government with initiatives to eliminate the State's pension system, introduce merit pay for Teachers, put a cap on government spending and redraw elective district boundaries five years early.  Governor Schwarzenegger has launched a nation-wide fundraising campaign for these referendums where he hopes to raise up to $50 million from Republican loyalists who support his efforts.  It may cost as much as $70 million in taxpayer money to hold this special election and Democrats have challenged the Governor to gather the signatures he needs without paid signature gatherers, saying that if these initiatives really have that much support he should be able to get then with volunteers.   Continued


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  News and Politics    back

Identity Theft Running Rampant 

The recent theft of private personal and financial information by professional criminals hit California like a brick- and the stunning magnitude of the problem is only now starting to hit home.  The credit information broker ChoicePoint has acknowledged that they sold private financial and personal information on more than 35,000 Californians to a network of criminals operating in Los Angeles and Nigeria.  As many as a dozen accomplices are still at large and are believed have possession of people's credit reports, home addresses, driver's license numbers, social security numbers, bankruptcy files and property records.  This is just one of several major security breeches that have hit California recently.  

Typically, identity thieves use this data to create driver's licenses bearing their own photograph and someone else's address.  Then they apply for new credit cards or take out loans for electronic goods or even big-ticket items like cars.  At the time this crime was uncovered, the criminals were in the process of changing the mailing addresses of hundreds of consumers- as a first step before running up bills with fraudulently obtained credit cards. Authorities worry, however, that this time the information could be used for even more sinister purposes:  "terrorists could use this information to steal identities to enter the United States illegally or to finance terrorist attacks," said Rep. Bennie Thompson (D-Miss.), ranking minority member of the House Committee on Homeland Security.

The scam may never have been uncovered if it had not been for a recently adopted California law requiring companies in the state to disclose any loss of customers' data.   On Feb. 15, ChoicePoint acknowledged it was notifying 35,000 Californians that con artists had accessed their data. After complaints from federal politicians and attorneys general in other states, the company began sending warnings to 110,000 consumers in other states. The law requires companies to notify consumers whenever security breaches expose personal data and in the worst cases, executives must alert news organizations and issue news releases about these security failures.

California is now considered to be the nation's identity theft capital.   The Los Angeles County Sheriff Department has more than 20,000 identity theft cases last year and the State had more than one million victims- a stunning number and more by far than any other State.  The information ends up in cyberspace, where stolen data is often bought and sold by organized crime and individual criminals through Internet chat rooms, online casinos and electronic-payment systems. The information can end up anywhere - in the hands of Nigerian scammers, on Russian websites, and even in the Middle East where terrorist groups use identity theft to finance their operations.  Some of the problem in California can be attributed to "tweekers" - i.e. users of crystal methamphetamine who use identity theft to finance drug labs or to feed their own addiction.  Street gangs in South Central Los Angeles are also said to be active in identity theft- "in some cases, gangs burglarize homes to steal personal data and leave jewelry untouched", said Jeff McGrath, a deputy district attorney for the Los Angeles County District Attorney's office.

A spokesman for ChoicePoint responded to the recent crisis by saying,"We were victimized by some extremely well-organized criminals".  The San Francisco Chronicle, however, pointed out that ChoicePoint was just as much perpetrator as the victim, and responsibility for other recent security breaches lies directly with some of our largest Corporations.  They noted that authorities usually pretend responsibility belongs with individual citizens and they often advise consumers to "lock their mailboxes" or to "buy a shredder".  This doesn't protect citizens, however, when Corporations sell this private information in the shadowy world of information brokers or have their own security breaches.  Here are just a few other recent examples:

Bank of America - Recently lost computer data tapes for 1.2 million federal employees, including some members of the U.S. Senate and about 900,000 Defense Department employees.. The missing tapes contain customer and account information, including Social Security numbers, from a federal government program using Visa cards for government travel and procurement.

Wells Fargo - The bank has recently had several computers stolen that contained private information.  According to an internal memo obtained by the San Francisco Chronicle, bank officials have admitted that most of the customer data the has entrusted to its business partners may be in the hands of criminals. 

Science Applications International Corporation - This San Diego based company aggressively seeks Homeland Security funding, but they were unable to protect their own employees at their cyber-locked fortress when criminals used the low tech technique of breaking a window to steal financial data on most of the staff there.

University of California.  The University of California at Berkley recently exposed Social Security numbers on more than 1 million social-services recipients  They exposed the names, addresses, phone numbers, Social Security numbers and birthdays of everyone who participated in a state in-home care program.

United States Postal Service - The Postal Service in San Diego was forced to make an embarrassing announcement last month that one of their employees had stolen hundreds, maybe thousands of letters containing identity information and then sold it to criminal networks to finance a crystal  methamphetamine habit. 

The ChoicePoint scam was first uncovered when Los Angeles sheriff's Detective Duane Decker was given a case about suspicious inquiries being made to ChoicePoint.  According to a report in the Atlanta Journal Constitution, he used his cop's instinct to set up a sting- he asked a ChoicePoint employee to telephone the suspicious caller, ask him for his fax number and tell him ChoicePoint needed to fax him an application that had to be signed and returned.  The detective then traced the fax number to a Copymat store on Sunset Boulevard, where anybody can send or receive faxes for a fee. 

Detective Decker then went to the Copymat store and waited. Soon a man came in using the name that had been given to ChoicePoint and asked if there was a fax for him.  Decker asked the man to step outside the store and on questioning him learned that his real name was Olatunji Oluwatosin (pictured at left) and that he was an immigrant from Nigeria who lived in a Hollywood apartment building.  He said he was really picking up the fax for a white man named "Bobby," but couldn't describe Bobby or where he lived.  Detective Decker searched Oluwatosin and found several cell phones that had been used to call ChoicePoint and several fraudulent credit cards- he was read his rights and arrested.

That might have been just another routine bust in Los Angeles, but it turns out Oluwatosin was part of an identity fraud scam that was among the biggest ever uncovered. Using fake IDs and business licenses, Oluwatosin allegedly convinced ChoicePoint that he was running a legitimate financial business. That gave him access to parts of the company's vast database, which contains sensitive personal information on virtually everyone in the United States.  ChoicePoint, which collects personal data and sells it to banks, government agencies and others, acknowledges that sensitive information on 145,000 people across the country (including 35,000 in California) may has fallen into the hands of international thieves. On Feb. 17, Oluwatosin pleaded no contest to a single charge of identity theft. He wassentenced to 16 months in jail and will probably be deported when he gets out.

Experts Say Gas Prices Might Go Way Up.   The Oil Price Information Service, a company that tracks the fuel market, says that the sliding value of the U.S. dollar and refinery slowdowns virtually guarantees that gas prices will be increasing soon.  The chief analyst of this organization, Tom Kloza, was quoted by the Press Enterprise as saying that gas prices could pass the records set last year:  "I think we're on the cusp of something pretty big". he said, "Saying gas prices will hit $2.40 in the next two months is the equivalent of a lay-up shot".  The Utility Action Network, a San Diego-based watchdog group, says that oil companies are keeping prices artificially high to boost their profits. The group suspects that refiners engage in a practice known as zone pricing, in which dealers get gas from one source at prices that can be higher than those charged to other dealers.  Even under the best circumstances, Californians pay among the highest gas prices in the nation. That's because of high state and local taxes, and also because the state has the nation's most stringent environmental standards for gas, which makes it expensive to produce. Also, there are no major pipelines that cross the Rocky Mountains, and gasoline produced in the eastern portion of the United States can reach California only by tanker through the Panama Canal.  It is impossible to predict, but some people are saying gas might hit $3.00 per gallon in California this summer.

Chinese Karaoke Bars under Legal Attack.  Karaoke bars in Chinese American throughout California have become targets in a piracy war by an entrepreneur demanding royalties on Cantonese pop music.  Karaoke bars, where patrons sing to pre-recorded music, is a rare example of a cultural trend that started in the East and spread to the West.   A recent LA Times article described the cultural importance of Karaoke in Chinese American life and how it is the heart of the social scene in immigrant communities in the San Gabriel Valley. Private investigators have been infiltrating this scene and and documenting the use of bootlegged music videos. Chinese Karaoke bars are now being sued and threatened with criminal prosecution. Sheriff's deputies have descended on karaoke establishments, seizing microphones, speakers and stacks of DVDs.  The man behind the crackdown is Nicolas Chai, a former waiter and karaoke bar manager. Chai is demanding royalties of $20,000 or more per year from 300 karaoke bars across the United States.  Karaoke bar owners say such payments would drive them out of business and the situation is causing anger and distress in Chinese American communities throughout California.

California Cows are NOT Happy.  The huge amount of rain we had in recently has made a huge mass has left dairy cows, calves and other cattle mired in mud and manure throughout Southern California.  The cows have to drag through this muck to the feed and the milk barn, and they are exhausted and have been dying at three times the normal rate.  Cows need dry ground where they can lie down and rest but surrounded by mud, the cows have to stand which wears them out and increases their chances of catching pneumonia and other diseases. The rain is costing dairy farmers millions of dollars in lost cows and milk production and extra labor to manage the animals and control manure-tainted runoff.  The Los Angeles County Economic Development Corp has said that that this could cause as much as $500 million in damage to the Southern California economy.

Governor Charged with Conflict of Interest in Japan Trip.   A CBS News affiliate, Channel 5 in the Bay Area, has charged Governor Schwarzenegger with conflict of interest and favoritism in the award of contracts during his November trade mission to Japan. They reported that the state signed a contract with a major public relations company to help promote and organize e the California Festival, a rally for Schwarzenegger in Tokyo.  CBS 5 obtained documents that show that although that trade mission had been in the works for months, state officials apparently didn't hire a PR firm to put that festival together until the last minute. Then, they didn't put that contract out for public bid and instead awarded the work to two companies with connections to the Governor.  One company was the Japanese firm "Dentsu". Schwarzenegger the worked with Dentsu throughout the 90's, pitching products in Japanese TV ads and reportedly making millions of dollars doing it.  The other company was "Manning Selvage and Lee" and the contact person for the organization was said to be Marty Wilson- one of the Governor's top fundraisers, and a consultant making tens of thousands of dollars working on Schwarzenegger's campaign initiatives.  The investigative report said that administration officials got around the bidding process by changing the definition of the California Festival from being an "event" to being a "conference" in the final contract.  It is alleged that they did this because state rules say conferences under $250,000 are exempt from public bidding, and the contract for the California Festival ended up just under that.  

Tunnel found between Calexico and Mexicali.  Investigators have found a tunnel between Calexico and Mexicali by using special scanners to find anomalies underground.  The Tunnel was 3-foot-wide and 3-foot-tall, about 20 feet underground and equipped with a power cord for electricity and an air hose for ventilation.  It was not known if the tunnel was used to smuggle drugs or people.  "This area is know for tunneling", an expert on the scene said, "we have had three in the last 15 months".   A 5-foot-tall passageway with electric and ventilation systems and security cameras leading from a Mexicali residence to a house just across the border in Calexico.  After four days of searching with robots, U.S. investigators found the tunnel's exit under a residence in east Calexico. No arrests have been reported on either side of the border, and the owners of the Mexicali and Calexico houses have not have not been identified. The Mexican Attorney General's Office said in a statement Sunday that the tunnel was probably used by drug traffickers. But U.S. officials have not commented, save to express concern that terrorists might be entering the United States with weapons.

California Firm May Have to Surrender Internet Control to United Nations.  A United Nations-sponsored panel hopes to settle a long-running dispute over control of the Internet by July and propose solutions to problems such as cyber crime and email spam.   A special panel, set up in December 2003, will lay groundwork for a final decision to be taken in Tunis in November at a U.N.-sponsored World Summit on the Information Society, where global control of the world wide web may be decided.  Right now, the only real Internet governance body is a California-based non-profit company, the International Corporation for Assigned Names and Numbers (ICANN).  But developing countries want an international body, such as the U.N.'s International Telecommunication Union (ITU), to have control over governance issues such as distributing Web site domains to fighting spam.  "There is an issue that is out there and that needs to be resolved," said Nitin Desai, chairman of working group and special adviser to U.N. Secretary-General Kofi Annan. Incorporated in 1998, ICANN oversees management of the Internet's crucial addressing system which matches numerical addresses to familiar Web site addresses.  While its oversight has been confined to technical matters, critics say that it is subject to U.S. political influence.The ITU, a 138-year-old trade body that among other things established country code rules for international telephone calls, is seen by developing countries as being better able to address their needs.

Cops out in Force at LAX.    A multi-agency law enforcement operation was conducted last week at Los Angeles International Airport (LAX) that resulted in 14 commercial ground transportation vehicles being pulled from service and 19 drivers cited for violations with potential fines averaging $400.  According to a press release by Los Angeles World Airports, the goal of the operation was to enhance the personal safety of the general public who use commercial ground transportation services. Nearly 40 representatives from Los Angeles Airport Police, the California Highway Patrol (CHP), the California Public Utilities Commission (PUC), and Los Angeles World Airports (LAWA) Landside Operations and Airfield Permits Units conducted operations in front of Terminal 7 and in the airport's commercial ground transportation holding lot.   The unannounced inspections of commercial ground transportation vehicles included both mechanical and administrative processes. Nearly 120 limousines, door-to-door shuttle vans, taxis, long-distance vans and buses, and hotel and private parking lot courtesy shuttles were pulled over for inspection during the five-hour operation.

Armenian Charities receive WWI Settlement.  Settling a very old case, New York Life Insurance Co. paid four Armenian charities $333,000 each as part of a $20 million settlement between an insurance firm and relatives of Armenians killed 90 years ago in the Ottoman Empire. The company also agreed to earmark $11 million for the heirs of policyholders. The settlement was approved last year by U.S. District Court Judge Christina A. Snyder. Armenians say 1.5 million people were executed between 1915 and 1919 in a genocide by Turkish authorities who believed the Armenians helped Russian invaders during World War I. The genocide claim has been rejected by Turkey.

Political Season Starting Early (continued)   The Governor announced this campaign at the State Republican Convention where he offered red meat to wildly enthusiastic party members.  He mocked Democrats in the Legislature for not responding to his proposals by saying that they must be on "sleeping pills ... or medication" and at  one point even seemed to characterize his opponents as "evil". "Those poor little guys. They're trying very hard. ... They may have a wonderful dream about that. But the reality is very sad for them. The reality is that they're not going to get my numbers down, and we're going to get our message out there, and we're going to go all the way, and we're going to win this year with all four reforms". 

The Governor was referring to his poll numbers, but since he made these comments his popularity has dropped significantly and even some some previously strong supporters question his new highly partisan approach.  Teachers, for example, have turned on the Governor for suggesting that teachers are the biggest problem in the state's schools and that his approach, to label the teachers union a "special interests'' has hurt talks on improving education. 

Some people believe that by giving the State Legislature almost no time to address his initiatives, the Governor never really wanted to involve them so he could show his ability to take his initiatives "to the people".   A few analysts, however, point out a possible danger in this approach in that the Governor is really having an early referendum on his own administration.  His pension reform plan, for example, could have broad public support, but even some strong supporters of pension reform believe that giving the State Legislature only 10 days to digest this complex legislation has not been reasonable. 

It is also possible that the referendum petitions will be withdrawn- the Governor has backed down or changed his position in the past.  For example, his expressed desire to "blow up boxes" - meaning he wanted to eliminate unnecessary commissions has quietly been dropped.   It was realized that many of these commissions actually perform mundane, but important public services- for example commissions to regulate Dentist or Hairstylists, at very little cost and often staffed by volunteers. It was thought that he would be picking fights with too many different groups.

One group he did pick a fight with- California nurses, showed that they could punch back.  In December, a small group of nurses gathered at conference to protest Schwarzenegger's decision to delay changes to the state's nurse-to-patient ratio. Governor Schwarzenegger responded to the protesters by saying, "The special interests don't like me in Sacramento because I am always kicking their butts".  

The nurses union then took out full-page newspaper ads suggesting Schwarzenegger's corporate campaign donors are the real special interests.  Nurses union leader Rose Ann DeMoro said the ad "goes to the heart of the matter, which is that the governor is trying to turn the state Capitol into a fraternity for corporate interests".  DeMoro said the nurses decided they had to  go national with the ad because the Governor is going national with his efforts to raise more money for his "reform" initiatives.  Last week, some 300 nurses and their supporters disrupted a movie premiere in Sacramento, booing Schwarzenegger as he posed with actors Vince Vaughn and The Rock.  They followed him to the Arnold Fitness Weekend and formed groups of noisy protestors.  Last week, the Nurses delivered a knock out punch as a Superior Court Judge ruled that Schwarzenegger had no authority to override the law on patient ratios.

The Governor's decision to make this a national campaign has also had some possibly unexpected consequences.   The new Chairman of the DNC, Howard Dean says that because of this national Democratic Party is forced to respond.  He plans to counter Schwarzenegger's big Corporation fundraising  with small donations from large groups of people to fight these referendums - a technique that was perfected in the last national election.  Democrats will be asked to report sightings of the paid signature gathers via cell phone ands then "flash mobs" will be formed to encourage people to not sign the petitions.   

  Letters to the Editor    back


Response from U.S. Commercial Services

Dear Mr. Gordon,

I wanted to provide some clarification on yourarticle questioning the value of a recent Memorandum of Agreement the U.S. Commercial Service, USCS, signed in California. The MOA establishes a working agreement between the USCS and several California based nonprofit trade organizations and trade promoting governmental organizations. The objective is to collaborate in ways that enhance California's international commerce & trade efforts. The California Business Transportation and Housing Agency is not one of the partners to that agreement.  Nonetheless we think it's an excellent foundation for coordination & collaboration among the export assistance organizations in the state. As you know, the State of California no longer has a funded Trade & Commerce Agency, so it is even more important that the USCS and nonprofit trade organizations effectively partner and leverage resources to better serve the state's exporters.  The Commercial Service has numerous MOAs like this around the USA, including with States like Florida, which has a world-wide recognized partnerships to promote the State's trade. We find MOAs provide a good vehicle for coordinating efforts and avoiding duplication. In this case, we believe the State, and BT&H, could benefit from better utilizing the programs these organizations and others offer to California firms.

While you say you are underwhelmed by our desire to coordinate calendars of events, share research and jointly promote events, we think this is an effective way to avoid duplication and let Californian exporters know of the many programs and resources available to them. However, you go on to state that the "real purpose" is to provide funding or grants. In fact there is no new funding or grants for this partnership. Title VII states that "Each party shall bear its own costs and expenses with regard to all activities relating to the subject of this Agreement.  Parties will not exchange any monies or allocate values to any activities required to carry out this Agreement".  

You also suggest that this is a secret agreement and one that does not provide opportunities for other interested parties to work with the USCS. In fact, this is a pubic document and MOAs are a  standard way to openly disclose our plans to work with trade partners. I also hope you will use your newsletter to let the many other trade promoting associations in the State know that the Commercial Service stands ready to enter into similar MOU's with trade promotion organizations where the key purpose would be to promote exports. While we do not sign these type of MOUs with for-profit firms like yours, we have other vehicles to engage in agreements with for profit firms. We can put those firms in touch with the CS offices in Washington for further information.

In sum, I think an honest review of the agreement would show that it is an earnest effort to try to work together to serve the public in a more productive way. I hope you will use your widely read newsletter to clarify this matter and help us all look for new ways to expand collaboration on trade promotion in the State.

Best regards.

Michael W. Liikala

U.S. Commercial Services

Sacramento, California

Editor's note: The copy of the MOA that we saw had a strong exclusivity clause, it would not have been possible for any other group to participate unless they could get written permission from every one of the original signees, and we also don't think that an already signed agreement should be the Federal government's "standard way to openly disclose our plans to work with trade partners".  Still, we welcome the decision to at least open the agreement to other non-profits and hope that any information developed will be available to everybody.  

Thinks we are Trade Deficit Alarmists

C'mon Rob:

Try editorializing about economic/physical causes, not the political causes of deficits. Look at Canada. 83% of everything they make goes to the US. They have a huge trade surplus. They still have a lousy economy, and double the taxes than the US which was equal 40 years ago. The dollar is low for the purpose of attracting purchases from outside -- which is now happening,. Go back and look at your graph again, and you will see that both imports and exports went up about 16%. This means we are selling more, but we are buying more, but it is in proportion to the overall growth of the GDP and growth around the world with minor fluctuations.

This has bloody nothing to do with the Bush administration or the Chinese government. Remember, as our prices (export prices) decrease it stimulates more sales, but appears to show a slower export dollar. Import prices are the same as before, so it appears to be a higher number. When the time is right, the dollar will increase in value and the deficit will be begin to evaporate. There is a lot more to this story than your feeble liberal slant.

Dennis Fisher, President
Basic Business Services
2230-100 Lake Park Drive
San Jacinto, California

Thinks we Goofed


In reading through your otherwise delightful and informative newsletter, I came across an unfortunate error in the form of a bit of data attributed to Howard Shatz. Specifically, you have him stating that, based on data through November 2004, California's merchandise exports are up 6.5% over 2003. In fact, when comparing the first eleven months of 2004 with the same period in 2003, California's merchandise export trade is running 17.8% over 2003 levels. The only way a 6.5% increase could be obtained would involve comparing the $100.1 exports reported in the first eleven months of 2004 with the $94.0 billion in exports reported in all of 2003.

Jock O'Connell

The Clark Street Group

Sacramento, California



  Public Sector    back

Report Says One Million California Manufacturing Jobs at Risk.  According to a report issued by the Bay Area Economic Forum, with a pro-bono contribution from the management consulting firm McKinsey & Company, up to a million manufacturing jobs in California are potentially at at risk of being moved off shore.  The study found that more than 312,000 California manufacturing jobs have been lost between 2000 and 2003 due to a slow economy, falling exports and the shift of jobs to other States and countries.  The report also said, however, that these jobs could be still be saved if state government eased up on regulations and did a better job of informing companies of the benefits of producing locally and if manufacturers did their part by resist the temptation to move manufacturing away and by performing a more thorough analysis of the true cost of moving operations off shore. The report also noted that that California has a lot to lose if it doesn't  improve conditions for manufacturers. The State is home to more manufacturing jobs than any other state directly employing about 1.5 million Californians and indirectly employing and additional 3 million workers.  That is about 70 percent more than Texas, the second biggest manufacturing State.  The full report can be found at this link:

Homeland Security Audit Reveals Port Fund Misuse.  An internal audit at the Department of Homeland Security has revealed that the funds allocated for the protection of US ports have been spent without sufficiently focusing on the most vulnerable facilities, according to an article in the New York Times. The department’s inspector general has concluded that the country’s spending policy could restrict the nation’s ability to defend itself against terrorist attacks. The audit found that the amount spent on many smaller ports should have been utilized on larger and more vital ports receiving large quantities of goods. The department distributed $517 million in grants for port security between June 2002 and December 2003, but less than one-quarter of the money had been spent as of September, the audit revealed. The grant program was intended to limit grants to strategic ports, while the audit revealed that funds were even given to ports that were not eligible. Ninety-five percent of all international commerce enters the US through the nation's 360 ports. But nearly 80% of that trade moves through only 10 ports, with the biggest loads passing through New York, Los Angeles and Long Beach and Oakland.

Million Solar Roofs Legislation Reintroduced with Bi-Partisan Support.   Governor Schwarzenegger released the latest version of his comprehensive solar energy legislation- a bi-partisan bill co-authored by Senators Murray (D-LA) and Campbell (R-Orange County). The bill is intended to kick start a boom of solar development over the next decade producing an equivalent to 40 new natural gas power plants.  Unlike last year's plan, the Governor's new Million Solar Roofs Initiative does away with a mandatory requirement that all California builders include solar energy systems on all new homes. Instead, this year's bill focuses on ensuring long term stability for solar through a guarantee of declining buy-down rebates for no less than 10 years.  "This is the best piece of solar legislation ever introduced in the U.S.," said David Hochschild, Director of Programs for the California-based Vote Solar Initiative. "This will send a message to the state and to the country that California is serious about this".

The legislation directs the Public Utilities Commission (PUC) to provide funding and support, through a self-generated incentive program, for the installation of solar energy systems on new and existing residential and commercial sites. It will also provide a tax credit for solar systems by extending the current provision slated to sunset this year. There will also be a property tax provision that prevents property reassessment upon the installation of a solar system.  "In my State of the State speech I said I was going to encourage builders to build homes using solar power," said Governor  Schwarzenegger. "Today, in California where we are famous for the sun, we are going to put the positive benefits of that sun to good use. Through the 'Million Solar Roofs Initiative' and the willingness of the building community to join us in this effort, we will succeed in providing a stable alternative source of energy."

Homeowners would realize a positive cash flow in energy savings almost immediately. At the time of purchase, on average, they would receive nearly a 40 percent rebate, or $5,000 on an overall $13,000 cost for a solar energy system. Over the average 25-year life of the system, with electricity bill savings and mortgage interest tax savings, the system would pay for itself. More importantly, the consumer would realize consistent and ongoing monthly savings in energy cost reductions and tax savings during that time.

California Sacred Lands Law Triggers $50 Million NAFTA Claim.  A law to intended to protect sacred Indian lands and place tough restrictions on open-pit metal mining in 2003, put a Southern California gold mine out of business.  Now the Canadian mine owner is seeking $50 million dollars in compensation under NAFTA, the North American Free Trade Agreement.   Several environmental groups and some state lawmakers say the NAFTA provision lets foreign corporations undermine state and federal laws and regulations.  They' have been criticizing the Bush administration for seeking to expand the free trade treaty and accompanying arbitration agreement to Central America.  State Senator Liz Figueroa has introduced a bill that would require that California pass a law agreeing to any future international trade agreements that she said currently "threaten democracy and public well-being."

Immigrant Student English Skills Improving.  State Superintendent of Public Instruction Jack O'Connell released results of the 2004 administration of the annual California English Language Development Test (CELDT) taken by more than 1.3 million English learners. Preliminary results show that 47 percent of English learners in California's public schools scored at early advanced or advanced overall in English proficiency. This is compared to 43 percent scoring at early advanced or advanced in 2003, 34 percent in 2002, and 25 percent in 2001, an increase of 22 percentage points in four years.  "These results are a clear indication that statewide efforts to help all students learn English as quickly as possible are working," O'Connell said. "This is so important because as English learners achieve greater proficiency in English, they are more likely to reach higher academic levels in all their subjects".  In addition to state law, annual CELDT administration also meets the federal "No Child Left Behind" requirement that English learners must take an English proficiency test annually until they are reclassified to fluent English proficient. School districts receive annual progress reports indicating the number of English learners whose growth in English proficiency meets California's NCLB targets.  Compared to the rest of the nation, California has the greatest number of students whose primary language is not English.

Director for Stem Cell Center Selected.  Zach Hall, a neuroscientist who helped found a biotech firm and planned San Francisco's Mission Bay medical school, is expected to be selected to be interim president of the California Center for Regenerative Medicine.  According to a report in the Sacramento Bee,Hall, who was a top official at the University of Southern California's medical school, was the choice of a subcommittee of the Citizens Oversight Committee. Hall will  replace Robert Klein II, the stem cell oversight committee chairman who took on the role of acting president until one could be named. The agency president is a full-time paid position as the chief science officer of a new state agency that could eventually employ 50 workers. Hall is expected to serve up to one year until a permanent president is hired. Brian Henderson, dean of the medical school at USC and a member of the stem cell oversight committee, said Hall is a "world class scientist" and a proven leader.  "I can think of no one more capable of leading the California Institute for Regenerative Medicine than Zach Hall".

California Tops Patent Count.  California had more patents issued than all U.S. states and every country except Japan in 2003, and in all recorded years combined through 2003, according to patent data recently released by the U. S. Patent and Trademark Office.   California had 19,692 patents issues in 2003, and 333,887 patents issued in all recorded years up through 2003, more than any other U.S. state and more than any other country except Japan, including Germany, United Kingdom, and France, the closest three international contenders. New York was a distant second place in 2003 with 6,237 patents issued in 2003, and 191,978 for all recorded years up through 2003. Massachusetts placed third in 2003 with 3,909.

Border Fence Approved.   The San Diego County Board of Supervisors endorsed proposed federal legislation that would allow a triple-layer fence to be completed along the westernmost portion of the U.S.-Mexico border without meeting environmental regulations.   The final five miles of the fencing project calls for two additional fences running parallel to a corrugated steel barrier along the border, a patrol road and lighting between the first and second fences and a maintenance road between the second and third fences.  It is estimated to cost $37 million.  The fence had been controversial because of environment concerns but the House of Representatives recently approved a bill that would exempt the fence and parallel security roads from all state and federal environmental laws. "National Security trumps the environment" one Supervisor said explaining his decision.

Schwarzenegger headed to China.  Governor Schwarzenegger's office has announced that he is planning a trip to China next month. The trip is designed to market California as a tourist destination and as a source for agricultural products, merchandise and services, and also to encourage more Chinese investment in California. The trip is being organized by the California Jobs and Economic Development Commission, a not-for-profit organization that the Governor started to promote his economic agenda.  At the time of this publication, the Commission had not returned phone calls and email messages asking for more information on this trip, or how the business community could participate.

  Commercial News    back

Titan Pays Record $28 Million Fine for Foreign Bribery.   Titan Corporation of San Diego has paid a heavy price for its admitted bribery when it was running a telephone system joint venture in the West African country of Benin.  The company pleaded guilty to bribery and agreed to pay a record $28.5 million to end government investigations in a scandal that also killed a $1.7 billion buyout offer from Lockheed last June. The combined civil and criminal penalties are the largest imposed on any company under the 1977 Foreign Corrupt Practices Act.
Titan admitted it made more than $2 million in corrupt payments for the 2001 presidential election campaign in Benin. An assistant to U.S. District Judge Roger T. Benitez said Titan's conduct was egregious because the company paid bribes to influence an election in another country. Titan also settled a related lawsuit brought by the Securities and Exchange Commission. "Despite using more than 120 agents and consultants in more than 60 countries," the SEC alleged that Titan 'failed to have meaningful oversight over its foreign agents.' The company consented to a permanent order that prohibits future violations of the anti-bribery law and to pay $15.5 million as payment for these "ill-gotten gains".  Titan also said it had reached a related settlement with the government that will allow the company to continue to receive Pentagon contracts, and the Department of Defense waived their right to disbar Titan from future contracts.  The company has a backlog of more than $6 billion in government contracts. Titan has decided to withdraw from its international business and commercial markets to focus on its core defense business.

Unocal being Suited by Chevron Texaco and the Chinese.  The Southern California oil company Unocal is apparently "in play".  ABC News has reported talk of a possible merger between Unocal and San Ramon-based Chevron Texaco, the country's second largest oil company.  They also reported that the Chinese National Overseas Oil Company, a state-owned enterprise, has also expressed interest in the company. China is quickly replacing Japan as the second biggest buyer of foreign oil, second only to the U.S. AND currently imports a third of its oil. Studies indicate China's oil demand will double in the next five years, making it the world's second largest oil customer. They quoted Severin Borenstein, of the University of California Energy Institute as saying: "I think we are seeing an increasing global scrabble for oil, and so we're seeing more and more interest in looking in new places and finding new sources."

California Wine Sales Increasing.  Preliminary figures released by the U.S. Commerce Department and reported by the San Francisco-based Wine Institute showed wine exports were up 28 percent from the previous year, totaling $794 million in winery revenues. Some 95 percent of wine exports are from California. By volume, the increase was 29 percent, to 119 million gallons. The top overseas market for California wine was the United Kingdom. Export revenues to that country were up 41 percent to $299 million, and volume was up 20 percent to 38 million gallons. Wine Institute International Director Joseph A. Rollo said in a statement that the weaker dollar helped California wineries better compete on pricing.

Levi Strauss Still on Downhill Slide.   One of California's oldest and most respected companies: Levi Strauss & Co., reported a loss of $19 million for the three months ended November 28.  Though not nearly as bad as the $245 million loss same period for the previous year, this marked the eighth consecutive year of declining sales.  The company said the loss would have been worse if it were not for a boost the company received on overseas sales due to the weak dollar.  The loss occurred in spite of considerable belt tightening at Levi's including worker lay-offs and better inventory control. Levi Strauss was the last major jeans maker to manufacture clothes in the United States, putting it at a huge price disadvantage with rivals who shifted operations to low wage contractors in Asia and Latin America.  The company started in 1850 when Levi Strauss, a German immigrant, took some canvas he had bought and turned it into durable men's pants for the gold rush miners.  This evolved into the ubiquitous blue jeans, now the standard apparel for Americas and popular throughout the world.        

Low Dollar Driving Hotel Industry Recovery.  Higher room rates and an influx of visitors are driving a recovery in the US lodging industry, and the rebound is expected to continue as owners of high-end hotels convert the properties to other uses according senior hotel executives and analysts.   After a three-year downturn, hotels saw travelers flock back in 2004 and 2005. Hotels filled up much quicker than Marriott International Inc expected, giving it the power to raise rates earlier in the recovery than in previous cycles, chief financial officer Arne Sorenson told the Reuters Hotels and Casinos Summit.  “There is no reason to believe we can’t get back” within a few years to the peak revenue level that the industry enjoyed in 2000, he said.  Today, higher room prices are driving hotel profit growth amid still-limited interest in building new hotels.  “We are in the sweet spot of the lodging industry,” said Hilton Hotels Corp chief operating officer Matthew Hart. “The economy is recovering, air fares are cheap, the dollar is weak and there is limited construction of new full-service hotels.”   At the same time, strong real estate prices have been an incentive to convert some hotels into condominiums.  Last month, the St. Regis Los Angeles was closed for conversion into residences, while New York's Plaza Hotel will close at the end of April and reopen next year as a condominium-hotel-retail complex.

First Arrest for Instant Messenger Spamming.  Anthony Greco, 18, of New York was arrested at LAX  on suspicion of sending unsolicited instant messages- the first person to be charged with this offense.  Mr. Greco was lured from New York to Los Angeles under the pretence of a business meeting. He was arrested upon arrival at Los Angeles International Airport last Wednesday.  Greco allegedly sent 1.5 million messages advertising pornography and mortgages. According to reports, the recipients of the messages were all members of the online networking service.   He may also be facing extortion charges.  Greco had allegedly threatened to share his methods for spamming members of the group if didn't sign an exclusive marketing deal that would have legitimized the messages he was sending via the service.   Greco believed he was flying to Los Angeles to finalize the agreement with MySpace President Tom Anderson.  Assistant U.S. Attorney Brian Hoffstadt confirmed the arrest was the first criminal case brought against an individual sending spam over IM. But he warned there may well be more to come.  "We're just beginning to get the tip of the iceberg. This could be a new wave as online communities start up," he said in a statement. 

Taiwanese Man Charged with Trade Secrets Theft.   A Californian resident was charged last week with the alleged theft of trade secrets. The semiconductor design engineer is accused of e-mailing some of his employer’s proprietary “data sheets” to a rival firm in Taiwan.  Taiwanese Shin-Guo Tsai, 35, of San Jose, California, was arrested by FBI agents on last Sunday night and appeared in court yesterday the next day to fact the charges. According to Reuters, Tsai had been employed by Silicon Valley-based Volterra Semiconductor Corp for over two and half years, but announced in February that he was going back to Taiwan to get married.  The complaint accuses Tsai of contacting the chairman of rival Taiwanese company CMSC Inc and of sending the data sheets to that company. The allegedly stolen information included product specifications and functionality regarding several Volterra products.  ,Tsai is charged with the interstate or foreign transportation of stolen property in breach of US federal laws. If convicted he faces a maximum penalty of 10 years in prison and a fine of $250,000.

   People on the Move    back

Carly Fiorina, the CEO of Hewlett Packard, who resigned under pressure last month suffered the ultimate humiliation for a Corporate Executive when HPs stock rose on news of her leaving.  Now it looks as though she might land on her feet. She is said to be a strong candidate to become president of the World Bank, a source in the Bush administration told the New York Times.  Paul Wolfowitz, the deputy secretary of defense, is also a candidate but because he is one of the neoconservative architects of the Iraq war he may not be acceptable to European nations.  Ms. Fiorina is given a better than even chance of getting this job, but she will have some interesting competition.  Treasury Secretary John Snow has suggested "Bono" Rock Star of the Irish band U2 who has has campaigned for debt relief in the developing world.

J.B. Wagoner planted blue agave around his 25-acre property as an alternative to citrus or avocado groves and after years of research and experimentation, he plans to use the 1,000 agaves in hopes of producing the first American-made tequila."  Despite the demand, there is an obstacle to Wagoner's plan. International trade laws forbid use of the name tequila unless it's made from blue agave in the Mexican state of Jalisco.   Wagoner has come up with a solution. He labels his liquor "Temequila," after the city of Temecula, 85 miles southeast of Los Angeles, where it's produced.  "There are some 50 different kinds of tequilas from Mexico," he said, "but there's only one that's 100 percent agave tequila, made in the USA."

India Times reports that Madan Bellan, 40, the former founder and CEO of Maaya Corp, an enterprise software company, and former CEO of uWiFi, is the latest in a long line of Indian American techies branching out into filmmaking.  Set in San Jose, Calif., Chains is a thriller about a young bride freshly arrived from India, Meera (Anusha Kuchibhotla), and her yuppie husband Ravi (Jacob Narayan).  When the couple’s creepy and violent next-door neighbor, Susan (Ann Russell), mistakes their traditional Indian home life as abusive and restrictive, she takes it upon herself to free Meera from her ‘chains’. American actor Eric Roberts has a small role in the film. He was inspired by his own marriage, which he describes as an arranged marriage that is also a very happy one. Viewed from the outside by a Westerner not familiar with Indian culture, he said, an Indian marriage might seem restrictive.

Wireless communications technology maker Qualcomm Inc. said Tuesday that Paul E. Jacobs will succeed his father Irwin Jacobs as chief executive officer July 1 under the company's management succession plan. Paul Jacobs, 42, will also join the board on July 1. Irwin Jacobs, 71, who co-founded the company in 1968, will remain as board chairman.Paul Jacobs, who joined the company full time in 1990, has focused on developing the company's wireless communications systems


  Heard on the Street    back

They say there is nothing worse than a revolutionary that gets into power.  The fierce Mongol warriors who swept into China on horseback grew old and corrupt in the cities they sought to destroy.  That's why it is with sadness that we learn that Apple Computer Corporation has joined the ranks of the Corporations waging war on American values.  They have filed a lawsuit against a Canadian blogger who published information about one of their unreleased products  that Apple considered a trade secret. Apple's position is that since everyone at Apple who knows about this product signed a non-disclosure agreement then by inference this blogger has also stolen this information and they demanded that he reveal the source of the leak.  The lawsuit has since been expanded to three other blogs and according to court papers, the company says the people who run these sites aren't "legitimate members of the press," and therefore it has the right to subpoena information that will reveal which Apple employees are violating their confidentiality agreements. In most cases, journalists are protected under the First Amendment and don't have to reveal their sources.

This is a huge can of worms, and the Electronic Freedom Frontier is defending the bloggers. According to EFF attorney Kevin Bankston: "They're people who gather news, and they do so with the intent to disseminate that news to the public. The only distinction to be made between these people and professional journalists at The New York Times is that they're online only. The bloggers are not without considerable power of their own.  Conservative bloggers recently brought down Dan Rather and CNN Executive Eason Jordon.  Liberal bloggers exposed James Guckert- the homosexual prostitute operating with a fake name inside the White House press corps for the apparent purpose of asking the President softball questions.  Even Apple co-founder Steve Wozniak is turning on his old company and has donated $1000 to the Canadian student's defense. 

Remember that stunning 1984 Superbowl ad that made advertising history- (you'd have to be 30 or so to remember it- but they have replayed it enough times that everyone has seen it- if not, you can see it here).  In it, fascist images of a thought controlling corporation are displayed on ha huge screen, but an individual is loose in the system.  She runs through the scene, pursued by Gestapo-like police, and then smashes the screen by throwing an anvil at it.  Now it looks as if we need another hero to help us fight the Corporate thought police.  That's why CIBR is awarding this month's Lame Award to Apple Computer Corporation.   Please forward your candidates for the Lame Award to the editor of this publication.  We plan to print 10 hard copies of this and sell them for 10 cents a piece so some Corporation won't come along and try to say we have no constitutional rights

Whoops, we did it again.   The runner-up for the Lame Award has to be Science Applications International Corporation of San Diego- also called SAIC- but they could probably get this award every month.  Many in this community remember SAIC as the Corporation that botched the TradePort system in the late 90's.  It was supposed to be a project to develop a sophisticated international trade portal for California, and it was supposed to be sustainable, but after burning through a few million dollars in Federal money they dropped the project and ran off.  They have had so many multi million dollar boondoggles that it is hard to know which one to write about- they were, for example, responsible for an costly electronic surveillance system at the Greek Olympics and were one of the few companies singled out by the Olympic Organizing Committee as potentially delaying the entire Olympics.

After 9/11 happened, and the Homeland Security Department was established, they were practically licking their chops at all the funding they would get- and get it they did, but as we have already reported here, they couldn't even protect their own employees from identity thieves who used the low tech method of breaking a window at one of their cyber-locked facilities.  The government absolutely delights in being ripped off by this company- and they keep winning more government contracts because this company is the government, staffed with revolving door bureaucrats- mostly from the Defense department.  Their most recent fiasco, however, could have put our country in serious danger.  The company was contracted to design a critical case management system for the FBI - this was considered to be extremely important response to 9/11 when the FBI had been accused of being unable to "connect the dots".  Unfortunately, they picked SAIC for their "virtual case management" tool that doesn't work and will probably have to be scrapped.  An exasperated FBI Director Robert Mueller admitted that the $113 million dollars his agency paid to SAIC was mostly wasted but promised to see if there is any part of their work that could be salvaged. 

Last month, we asked the rhetorical question about California international business policy, "Is the State Legislature being cut out of the deal?"  Now we can answer with a resounding Yes!    That should come as no surprise to anyone following the bickering and name calling between the Governor and the Legislature.  Now we have learned, however, that the California State Legislature might be taking the first tentative steps towards asserting some role in this area.  Senator Fegueroa has introducedSB 348  "This bill would express the intent of the Legislature to enact legislation to establish a Legislative Point of Contact on International Trade to serve as the Legislature's official liaison on
international trade related matters and to require that both the Legislature and the Governor jointly consent before the State of California agrees to any provision of an international trade agreement". 

That sounded interesting so I called Senator Figueroa's office and spoke with staff member Laura Metune and asked her why it was being introduced.  She said they were concerned that international agreements were being made that affected their responsibilities but no one was consulting with them.  The event that inspired it was an agreement with the Australia made by the U.S. Trade Representative.  This agreement included a "procurement chapter" that would prevent States in either country from requiring the use of local employees for economic development purposes- something that they considered to be their turf.  "The U.S. Trade Representative didn't consult with us", she said, "and they said they only consult with the Governor as a courtesy".  "We wrote the Governor to complain but he never answered our letter.  Hey Laura, join the club!   Say what you will about the California Legislature but at least they return phone calls- they are vastly more responsive than anyone in the Governor's office.

Other bills that seem to be reasserting Legislative interest in this area areAB 790 introduced by Leland Yee and seems to be mostly philosophical:  "this bill would state the intent of the Legislature to enactlegislation to support the implementation and growth of internationaltrade and investment in California through proactive policies,procedures, and structures that will encourage investment inCalifornia and thereby strengthen the economy of both the state andthe nation".  AB 331 introduced by Assembly Member Bogh - says their can be no official State travel if Mexico refuses to return fugitives who are wanted for serious crimes. AB 402  funds and reorganizes the State office of California-Mexico affairs. AB 905,  introduced by Assembly Member Houston- allows the Secretary of Business, Transportation and Housing to acceptprivate sector money for the purposes of promoting international trade and investment in an amount not to exceed $10,000 per quarter per doner.

There has been another rogue memo of understanding- this one was signed by new San Diego Port Commissioner Kourosh Hangafarin, who signed an unauthorized deal between the San Diego Unified Port District and a company in Cuba.  Hangafarin was awarded this position by Mayor Dick Murphy because he has been active in fundraising in the Iranian community for the Republican party.  He replaced outgoing Port Commissioner Peter Q Davis who was fired by Mayor Murphy in retribution for running against him in the recent Mayoral election.  Hangafarin was convinced to go to Cuba by by Alex Procopio, an the owner of American Trading Services, who lives in the same downtown condominium building.  Mr. Procopio has been involved in many trade missions to Cuba and pushed the envelop on trade regulation a bit recently when he arranged to sell Viagra to the Cubans. 

The pact would have allowed more food and medicine to be shipped to Cuba from San Diego.  Hangafarin returned to San Diego expecting high fives, but instead was met by an uproar of controversy.  He says his goal in Cuba was simply to bring more revenue to the port. He said he thought the trip was authorized and was so excited after signing the agreement that he faxed a copy to the port and asked for it to be distributed to everyone.  By coincidence, the Bush Administration cracked down on these deals at almost the same time and Cuban firms must pay upfront for all food and medicine trade deals.  The Port of San Diego has contacted the U.S. Treasury, State and Commerce Departments to see if the trip will have any ramifications at the federal level.

Stop us before we kill again! That is the take by Timothy Noah of Slate on a speech given in Los Angeles by Wal-Mart CEO H. Lee Scott Jr.  In this speech Mr. Scott claimed that they have achieved low prices for their jobs by being good to their employees.  Noah said that the apparent purpose of the speech was to counter political resistance to the building of Wal-Mart "supercenters" in California: "if Scott saw much danger that Wall Street might believe his rosy picture of labor relations, he wouldn't paint it, because that would create an investor stampede away from Wal-Mart stock. What we have, then, is a unique rhetorical form: Nonsense recited by someone who is relying on most of his listeners to understand that he is spouting nonsense".  He points out that Scotts claim that Wal-Mart employees get an average of $10 per hour is misleading.  That number would be skewed upward by the large salaries of relatively few highly-paid company executives- the appropriate number would be the median. The average pay of a sales clerk, he notes, is $8.50 per hour or about $14,000 a year, $1,000 below the government's definition of the poverty level for a family of three."

I must admit I am not a huge fan of Wal-Mart.  In fact, I have only been in a Wal-Mart once in my life.  I bought a cheap warm-up suit there, and cheap it was- it fell apart at the seams the very next day.  "If you want single-use ceiling fans, Wal-Mart is the place to go" a friend told me.   Californians concerned about high gas prices should be aware of one technique Wal-Mart uses to kill off competition.  They now put gas stations in front of their superstores and price the gas lower than anyone else in the area.  People visiting these stores fill up there for convenience and because of the low prices. As soon as this competition goes belly up, voila instant monopoly, and then they are free to raise their prices.

Interesting conversation with Jean Kregel- Trade Manager of the World Trade Center of Los Angeles/Long Beachwho previously worked at the old California Technology Trade and Commerce Agency (CTTCA).  We have previously quoted Jean here because of his belief that the World Trade Centers are operating on an outmoded business model but this time he had something more serious to say.  He is not bullish on California, and says that it is his sense that not too many foreign companies want to stay here anymore.  Many of his old Japanese associates are no longer interested in building here and many are considering leaving California to get a fresh start someplace new.  "Let's face it", he said, "we live in a two-tiered society- the people who have capital, and the people who don't have capital.  The people who have capital are doing everything they can right now to conserve it.  The people who don't have capital are just trying to survive.  None of the politicians even think this is a crises", he went on. "but the system is screwing all of us".  I'll tell you, he said, "ever since the CTTCA went away there has been a lot of monkey business going on in government in this area".  He also lamented what he sees as a loss of creativity in California, "there really aren't even that many design firms here anymore", he said.  He thinks that California need to find it's strengths fast, "we need to identify those areas where we really have an advantage", he said.  Mr. Kregel, who is originally from France, admits that he is not optimistic, "if it really tanks, I can just leave", he said, but ended the conversation with a complement of our work- "at least you are trying to fix it".

Let's talk about Drugs.  The Governor is doing so- he took quite a bit of heat after he told told George Stephanopoulos on ABC's "This Week" that he does not regret taking steroids as a bodybuilder, but emphasized that it was legal at the time.  He has since back tracked, but his new stance that bodybuilders should fight steroid use was met with stony silence at the annual Arnold Fitness Weekend in Ohio.  A few bloggers remarked that on his recent Corporate fundraising drive he had a booster lunch near the White House that was hosted by the Dutko group- the lead lobbying firm opposing FDA oversight of Ephedra, the herbal performance enhancer.  For the record, I liked ephedra- I thought it was a good work-out drug, but unfortunately some morbidly obese people took it to lose weight without working out and the product was linked to several deaths.  The California Legislature passed a law banning ephedra in 2003 and the FDA followed suit about a year later. 

News that the California Certified Organic Farmers (CCOF) wants to legalize hemp and have even gotten some political support from Assemblyman Mark Leno who has introduced legislation to legalize the industrial strain of the plant. "We contacted many of our growers throughout the state and found that they were excited about this opportunity and welcomed hemp production options for their farms. In a time when business in California is harder than ever and agricultural industries depend on every opportunity, every new crop and income option cannot be ignored" said Jake Lewin, their Director of Marketing and International Programs.  Does this possibly suggest a way that we could end California's budget crises- simply by legalizing the non industrial strain of hemp?  It is still said to be California's largest cash crop- just legalize it and treat it like any controlled substance- tobacco or hard liquor and tax the hell out of it.  California would be awash in cash - however if I run for office, this probably won't be my platform.

By the way, any strange bedfellows arrangements out there on the issue of Gambling in our society.  The Schwarzenegger administration has pushed the California lottery to join one of the the multi-State lotteries- either  Powerball or Mega Millions with jackpots in the hundreds of millions of dollars.   I grew up in Michigan, and I remember the lottery there being fun- you would always here about some friend of yours winning 20 bucks or occasionally more- I think the top prize back then was a million dollars.  Both these multi-State lotteries have had awards of over 300 million dollars.  Do we really need this?  This in on top of the corrupting influence of Indian Casinos on our society and government.  Many of our retired citizens and others have become addicted to their electronic slot machines, and that seems like an unfortunate use of our society's capital.  Much worse, however, is the corrupting influence this is having on our young people. Where we used to hear about people starting a business or a successfule career to get rich, now they say they hope to win the lottery.   Is this a possible issue that could link the Left and the Right?   I don't know- so to quote Forrest Gump, until next month, "that's all I've got to say about that".


   News you can use    back


Afghanistan Interest Group.  A new group has formed in the Bay Area for people interested in U.S. - Afghanistan relations. Learn more about the  Afgan Friends Network at this link:

Telecommunications & Broadcasting Sectors Market Briefs from Asia.  The U.S. Department of Commerce reports thatU.S. firms in the ICT Industry have repeatedly requested comparative data for the Asia Pacific region in order to develop effective market entry strategies. In response, they have launched Asia Now, a coordinated export initiative aimed at supporting a multi-market entry strategy for American companies to export into the Asia Pacific region. Working together with our U.S. and Asian based members of our ICT and Asia Pacific teams, these reports provide valuable insights on the telecommunications and broadcasting sectors in Asia - one of the best prospects for U.S. companies seeking to expand into the region's markets.  These Asia Now briefs cover the telecommunications and broadcasting sectors in:Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, Vietnam.   The reports are available at the following link:

Making the Internet Fun Again.  This is not really business related but it is an interesting online service.  It is a plugin to the FireFox browser called "stumble upon". It lets you select categories of things that interest you and then, when you push a button, randomly displays a webpage it thinks might interest you. You then "rank" this page by pushing one of two buttons. One says "I like it" and the other says "not for me". The system then uses this information to make better recommendations on websites it thinks you would like.  I've only used this for a few days, I have already found some incredibly interesting, creative and fun sites. It is actually worth downloading the Firefox browser to get this pluging.

Please send ideas for listing here to

  Meetings and Events    back

March 10: Long Beach.  State of the Trade and Transportation Industry Town Hall Meeting. Sponsored by the Center for International Trade and Transportation at California State University.  The meeting and parking are free.  Information Link:

March 10: Los Angeles.  FTA Spring Networking Mixer.  Hosted by the Foreign Trade Association of Southern California.$20 members; $30 non-members.

March 13: San Francisco.  Mongolia Cultural Tourism Restoration Project.   Cosponsored by Bay Area International International Development Development Organization (BAIDO) and the Cultural Tourism Restoration Project (CRTP).   Learn how the Khentii community is restoring their 300-year-old Buddhist temple and find out how you can participate in the rebuilding while on vacation in Mongolia. For more information please visit:

March 14-15: San Francisco.  Technology and Counter Terrorism.   George J. Tenet, former Director of
Central Intelligence for the United States Central Intelligence Agency, and Stephen E. Flynn, retired U.S. Coast Guard Commander will address the Fourth Annual International Conference on Public Safety: Technology & Counter-Terrorism at the Fairmont San Francisco Hotel.

March 17: Riverside.  NAFTA and Foreign Trade Zone Seminar.    Hosted by the Center for International Trade Development (CITD) Riverside.  Learn how to accurately complete the NAFTA Certificate of Origin; NAFTA Rules of Origin and the Regional Value Content calculations and the benefits of Foreign Trade Zones. Cost $159.

March 18-27: Los Angeles.  Trade Mission to Vietnam. Organized by the Los Angeles Area Chamber of

March 21-22: San Francisco.  Strategies for Trade & Investment in Russia. San Francisco.  Organized by the Atlas Information Group. For more informaton:

March 22: Sacramento.  U.S. Regulations Expo.   Hosted by U.S. Commercial Services.  Specialists from the US Census Bureau and the US Bureau of Customs and Border Protection will conduct an all day seminar on the new regulations and how to submit a Shipper's Export Declaration through the Automated Export System.  Cost: $175.

March 24: San Francisco.  Zimbabwe: Elections and Human Rights Trip Report.  Co-sponsors: BAIDO, Child Family Health International (CFHI), Foundation for Sustainable Development (FSD), International Development Exchange (IDEX), and the World Affairs Council.  Learn about and discuss the current political, social, health and economic conditions in the Zimbabwe.  Please RSVP to the World Affairs Council by calling (415) 293-4600 or via its website

March 24: Riverside. International Trade Finance. Hosted by the Center for International Trade Development (CITD) Riverside. Seminar will cover the international payment collection methods and their associated risks, including letter of credit and documentary collections.  Cost: $159.

March 31: Riverside.  Cross Cultural Communications Skills.  Hosted by the Center for International Trade Development (CITD) Riverside.  A course in understanding cultural differences.  Cost: $159.

April 18-20: Los Angeles.  The Milken Institute Global Conference. Los Angeles. Organized by the Milken Institute.


Please send events for listing here to  The publication date for CIBR is the first Monday of the month- if your event is near that date, please make sure we get your listing at least 5 weeks in advance.

    Opinion  back

Towards a California Foreign Policy

Should California have it's own foreign policy?  This might be a very good time to ask this question, and the idea really isn't as radical as it sounds.  Almost every aspect of our lives is being affected by globalization, and that influence well only grow.  The idea sounds a little less scary when you rearrange the words "California foreign policy" to be "policies for California's foreign relations". 

We are in a unique geopolitical position: our western shore faces the enormous economies of Asia and the Pacific Rim Nations, our Southern border faces Mexico and South America, and our eastern and northern border faces the United States and the vast North American continent with whom we share a common history and culture.  Maybe a better question is, "why doesn't California have a Foreign policy?". 

In fact, we already have laws on the books that govern our relations with other countries.  A bill is being considered-  AB 331 that would ban travel to Mexico by State officials if Mexico refuses to comply with a warrant for someone who may get the death penalty or life imprisonment.  Like it or not, that is a foreign policy.  Without knowing whether this particular bill is a good idea, or even if it has a chance to pass- it is interesting because it tries to use "a stick".  For California to have a globally assertive foreign policy we will probably need to find and occasionally use our sticks, but it is more important that we find and use our "carrots". 

What would a California Foreign policy look like?  We can't know for certain until we start a dialog and take the first steps in that direction, but for a possible idea, we can look, ironically, to the Bush administration.  During the first Bush administration the policy direction was that the United States would have individual relations with individual countries.  In other words, the U.S. might focus on "France" or "Spain" and deemphasize the "European Union".  

This might have been a better way for our foreign relations to evolve but the problem was that Bush used this approach not to form better trade relations with individual countries, but to reward countries that supported his Iraq policies.  The neoconservatives in the Bush administration have emphasized military power as a way of asserting American interests in the world, and deemphasized economic power- which they mockingly call "soft power". President Bush has since abandoned the individual country approach and is now a big believer in the huge regional trading blocks.

This might give California an opening.  While the United States focuses on big trading block agreements, for example CAFTA (Central America Free Trade Agreement), California can focus on relations with individual countries like Costa Rica and Honduras, etc.  We are, after all, bigger than many of these countries.  While the United States emphasizes its military power, California should emphasize- and of course nurture, its economic power.   It is one thing to talk about California as a "Nation-State", or as having the sixth largest economy in the world; it is another thing to assert that position.

The Governor is wrong when he says we don't need to worry about China and India.  These countries have vastly more people than we do, and soon will have far more highly educated people.  We stand among giants.  An associate of mine told me of a business meeting he attended on a trade mission to China recently where one of the Chinese hosts privately said:  "We recognize that because of the flaws in American society that we are destined to be the leader of the world, and we recognize the importance of this profound responsibility". 

They might just be able to do that, perhaps even one day to dominate the United States economically, but to do that, they will have to get through California first.  The problem right now with California is that our international interests have become dangerouslybalkanized into hundreds of competing interests.  This weakens us in the international community when California really doesn't mean anything.  We should form a foreign policy that represents everybody- the Executive branch- i.e. the Governor's office should be involved and so should the Legislature, both Democrats and Republicans, the public and private sectors and both big and small business should be involved. Within the confines of U.S. law, we should push the envelop and do everything we can to assert our international interests.

The State Legislature got needlessly hung up on the Foreign Trade Office issues.  One of these days, we will do a post mortem and give our take on why they failed, but for now lets just say that the idea that 12 offices could represent the international business interests of a State as huge as California was patently absurd.   That does not mean, however, that shouldn't have a presence overseas.  In fact, we already do in the form of thousands of California expatriates, but no one is making any serious attempt to reach out to them.   That is just one of hundreds of things we could do if we started working together to develop a more comprehensive foreign policy and international strategy.

Are we less "American" because we want California to have it's own progressive and representative Foreign policy- one that reflects our deep desire to be a positive force in the world.  Not all all, in fact- as they say in Texas, them is fightin words.  We need to engage the world to save the United States, not to abandon her.  This was always considered to be the most progressive, cutting edge State- the innovative leader of the U.S.  It is only natural that we look beyond our shores. 




The California Trade Network

The California Trade Network is a  private sector initiative with the goal of providing high quality information and communication services for California's international business community.  This service operates a  Registry of firms and professionals in California with international business interests.  This includes a free international profile record, directory listing and access to our basic trade database for any company or professional in this State.  We have recently greatly expanded the utility of this service by including all companies in California that we know to be involved in international trade and business.  As a precaution, we are only including basic information and web addresses in the public listings for the California International Business Directory but full contact information is available in our secured database.  Please review the directory and if you find a listing for your company use the Password Request form to request access to your international business profile. or send us a remove request if you want to be delisted.  If you are not listed please register on the CALTRADE.COM portal.  In general, we are seeking the person responsible for international business development or international marketing in each organization.    

The California Trade Network also operates premere services including a Trade Opportunity Database as well as several other information services and on-line business forums.  We are also developing more sophisticated commercial services including an international trade opportunity matching service and higher quality information content and communication services.  We are especially excited about the new CALTRADE Community Portal - it uses a business networking technology with integrated Internet Telephony- and can be used for communication and collaboration among international business professionals.   We are actively looking for partners and sponsors for these initiatives so please contact us if you would like to discuss business possibilities.  For more information about the current services of the California Trade Network please see this link or visit us on the web at:


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