How does one explain Economic Warfare to people who live in a country in which corporate predation of competitors and customers is common, willful blindness to illegality by regulators is the norm and with a Justice Department that has an obsession for navel gazing?   It's all just business right?   Maybe not.  Follow this story to the end to see if maybe there are other ways of war that don't involve bullets and bombs - keeping in mind that if you can't buy the bullets and bombs, you lose no matter how many tough guys you have in your military.

 

White Collar War

Did anybody notice that John Chambers, the S&P Analyst who downgraded U.S. debt has a wee bit of an Irish accent?  He’s had voice training and his pronunciations are very good, but the ‘tells’ are there.    So what is that supposed to mean?   I don’t know… it could mean that the Standard & Poors Rating Service is an Irish or UK owned company – like Goldman Sachs, which is headquartered in the UK.  It used to be an American corporation – but they aren’t and haven’t been for a long time.  But then again, S&P could still be American and could just be giving their honest appraisal of the American future.  If I were giving a rating, it would be a D3 – for Dire, Dismal and Dreadful.  Regardless, the fact of the “tell” is registered in the Davis memory banks, in the anomalies category and it will stay there until resolved. 

The idea that Standard & Poors could be foreign owned didn’t just come to me out of the blue.  It was due to retrieval of another anomaly from the Davis memory banks.   A few years back, one of my research projects was to find out why an Affordable Housing development was being built in Star, ID.  Star is a small rural farm community outside of Boise, ID and was a very unlikely location for a large development – first because there was no market for the homes, second, Boise was losing jobs due to outsourcing, and third, because it wasn’t close enough to the highway to be convenient to travel to where the jobs are located – either in Meridian or Boise.   It was an anomaly.

New info... just in...   US rating downgrade: Jharkhand boy shakes the world
 

A company named Avimor built the homes.  The parent company of Avimor was SunCor, an Arizona Corporation.  SunCor, formerly named Energy Development Corporation (name change 1986), was a wholly owned subsidiary of Pinnacle West Capital, a publically traded company (PNW).  Pinnacle West Capital was also the holding company for Arizona Public Service, Arizona’s largest electric utility. 

Source: Recovered SunCor webpage from 2006

 
So, we have a utility company – with a holding company in violation of the Public Utility Holding Company Act of 1935 (PUHCA), developing thousands of acres of property in several states over
a period of years.   It seems to me there might be a lawsuit in there for Arizona electric rate payers with the defendants being APS, Pinnacle West, the Arizona Public Utility Commission (assuming there is one), the State of Arizona, FERC and the U.S. Justice Department and probably others.   But besides that, I found something even more interesting, a foreign owned rating company that gave Pinnacle West Capital it’s highest rating.  From a 2006 SunCor Press Release:
 
New York, 24 January 2006: Innovest Strategic Value Advisors, Inc. (ISVA) released its new electric power industry report covering the largest publicly traded electric power companies in the U.S. The Innovest analysis indicates that companies that take positive and proactive measures to address environmental, social, and governance factors (ESG) can capture significant benefits for shareholders. In line with this, Innovest found that the half of this group of electric power companies with better ESG ratings outperformed, on average, their below-average industry peers by 1700 basis points (or 17 percentage points) in total shareholder return (stock price appreciation plus dividends) over the over the past 3 years from November 2003 to November 2005. Additionally, Innovest’ results show that electric power companies with better environmental performance consistently outperformed laggards financially during the last seven years.

Although electric power producers are, on average, highly exposed to ESG factors, Innovest identifies wide variations in exposure and management strategies with the potential to affect shareholder value in this industry. FPL Group (FPL) and Pinnacle West Capital (PNW) received the highest ESG ratings, while Allegheny Energy (AYE) and First Energy (FE) received the lowest. The implications of these ratings will increase as managers continue to improve their corporate ESG performance.
 
                                                                                                                                                  
ESG Factors?  A rating based on environmental, social factors and governance factors?		        

MSCI is an ESG Research / Ratings company:

"MSCI offers a wide range of ESG products and services, backed by a global team of analysts and researchers, to support the investment processes of a wide array of institutional investors including pension funds, asset managers and hedge funds. The MSCI ESG Research products and services are designed to address both the financial and the values dimensions of ESG investment strategies ESG Research."
 

 

Norms-Based Screening and Controversy Alerts

• Identifies violations of global norms and conventions and rates
severity of violation
• Evaluates performance and strategy across to four themes:

– human rights
– labor rights
– environmental issues
– corruption

• Provides an overall assessment of corporate ESG compliance
• Provides ratings and assessment of strategy, as well as systems to manage sector specific risks, ESG impacts, and to avoid violations
• Background information on violations, strategy, and systems
• Coverage: 2,000+ global companies
• Custom screening available

Compliance Screening

• New flexible interface for online screening with portfolio upload capabilities

– Products: Tobacco, Weapons, Gambling
– Countries: Burma, Sudan, Iran
– Issues: Animal Testing, Stem Cell
– Sustainability: Environment, Human Rights, Employee Safety, Discrimination
– Standard Packages – including SRI, Catholic Values

• Uses MSCI’s securities database
• Data feeds and flexible delivery formats are easily integrated into client
trading and compliance systems
 

Who is Innovest Strategic Advisors?   From the same 2006 SunCor Press Release:   

 

 

 

 
                                                              
Innovest Strategic Value Advisors is an internationally recognized investment research and advisory firm specializing in the analysis of non-traditional sources of investment risk and out-performance. Innovest’s major strategic investor is ABP, the largest pension fund in Europe, who owns a minority position. Its chairman, Jim Martin, was chief investment officer for TIAA-CREF, one of the largest pension funds in the world, for over fifteen years. The firm’s founder and Chief Executive, Dr. Matthew Kiernan, is a former partner with KPMG and director of the World Council for Sustainable Development in Geneva. In addition to ABP, the firm’s other clients include SSgA, T. Rowe Price, Neuberger Berman, Rockefeller & Co., Cazenove Capital, BP Investments, Henderson Global Investors, HSBC Asset Management, UBS and the England & Wales Environment Agency. The firm currently has over £1.1 billion million under direct sub-advisory mandates, and has clients in 20 countries.

 

 

 

 
                                                                         
 

A 2007 Innovest report was located in a subsequent search.  The following are excerpts from the   “Innovest Strategic Value Advisors & the United Nations Principles for Responsible Investment”.

 

UNPRI & Innovest’s Services


By providing institutional investors with enhanced research on environmental, social and corporate governance (ESG) issues, Innovest is helping PRI signatories fulfil their commitments to the Principles in a variety of ways. Whether signatories are interested in company ratings and quantitative ESG data, or engagement and advisory services, Innovest’s Products and Services are flexibly packaged and designed to meet investors’ needs.

Specifically, Innovest’s ‘i-Ratings’ is our client web portal where the following
Innovest products and services can be accessed:

» Intangible Value Assessment (IVA) ratings and Company Profiles on over 2,000 companies.
» UN Global Compact Plus screening and assessment service on companies in the global MSCI index.
» Innovest Activities Screening – negative screening service
» Innovest Strategic Engagement and Advisory Services (ISEAS).
» Regular News Updates (Weekly Stock Monitor and monthly Client Delivery Newsletter).
» Sector Reviews and Reports on over 60 industries.
» Thematic reports - eg Carbon Disclosure Project.
» Innovest’s Carbon Finance and Clean Technology Practice including our Carbon Beta Platform and Carbon Portfolio Value Audits.
» Innovest Data Suite and asset management sub advisory services

Innovest’s Intangible Value Assessment (IVA) ratings are focused on the nontraditional factors which contribute most heavily to financial out-performance.  Specifically, our ratings evaluate more 2,000 companies on 120 different performance metrics that fall under the following four pillars:

» Stakeholder Capital
» Strategic Governance
» Human Capital
» Environmental Management

 

  
 

Another search, and another hit.  It's Banki and Wolf - and it's me you hear howling at the Moon.

UNPRI  -  "Principles for Responsible Investment"

"An investor initiative in partnership with UNEP Finance Initiative and the UN Global Compact"
 

One final piece to this chapter in the White Collar War...   from the TIAA-CREF History Page:

TIAA-CREF

Thanks to philanthropist Andrew Carnegie, colleges, universities and other institutions throughout the U.S. nonprofit community offer some of the best retirement plans in the nation. With customary foresight, Carnegie recognized that adequate pensions were needed to attract talented teachers.

In 1918 the Carnegie Foundation established Teachers Insurance and Annuity Association (TIAA), a fully-funded system of pensions for professors. Funding was provided by a combination of grants from the foundation and Carnegie Corporation of New York — including an initial gift of $1 million — and ongoing contributions from participating institutions and individuals. Incorporated as a life insurance company in the state of New York, TIAA began operation under the leadership of Henry S. Pritchett, a former president of the Massachusetts Institute of Technology. By the end of its first year, 30 public and private institutions had signed on.

...

When the Second World War ended, government grants made it possible for many returning veterans to go to college. The number of graduates tripled between 1944 and 1950. TIAA now had nearly 600 participating institutions, but it was facing new challenges. During the 1940s, inflation averaged more than 7 percent per year, with a record 18.2 percent in 1946. In addition, increased longevity was radically changing actuarial projections. In just 50 years, the average life expectancy in the United States had increased from 48 years to nearly 70.

TIAA’s pensions were meant to last a lifetime, and with lives lasting longer and the dollar shrinking, new strategies were needed. TIAA responded by creating the College Retirement Equities Fund, the world’s first variable annuity, which began operation on July 1, 1952. Later that year, an editor at Fortune wrote to a colleague: "I think this is the biggest development in the insurance-investment business since the passage of the Social Security Act."
 

With consideration for all of the above, it makes the Trojan Triangles of the university-led economic development system as exemplified by "The CORE" more understandable.   All my instincts tell me that the "illuminated ones" are once again attempting to solidify power to put the masses in the yoke of control for eternal servitude...

                                                            

Vicky Davis
August 7, 2011