What Did Darrell Issa Do With DEI? Another NYT Piece To Consider

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UPDATE, Sunday morning: Here’s a piece about Issa by my most-excellent North County Times colleague, Mark Walker:

After eight months at work as the Republican Party’s chief watchdog in Congress, Vista Rep. Darrell Issa has yet to find any “smoking guns” revealing corruption in the Obama administration.

But in his role as chairman of the powerful House Oversight and Government Reform Committee, Issa is making headway.

He’s leading a high-profile investigation into a highly questionable Bureau of Alcohol, Tobacco and Firearms sting operation involving gun sales to Mexican drug dealers.

He’s also gaining ground with a National Labor Relations Board complaint against aerospace giant Boeing that he argues could unfairly restrict the company from moving jobs from one state to another. He cites the agency’s action as an example of administration short-sightedness. . .

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Columnist Floyd Norris takes a swing at Rep. Issa in the New York Times.

There’s a lot of suggestion in this piece that Issa screwed small investors through a reverse stock split of the company he founded but no longer runs, DEI Holdings. At least that the way the SD Reader’s Don Bauder interprets it.

“Floyd Norris has a column in today’s (Aug. 19) New York Times showing how North County’s Rep. Darrell Issa screwed small investors in a Vista-based company named DEI Holdings, maker of such things as vehicle security devices — Issa’s road to riches. Issa was the founder.The original, incorrect headline is at the top left

The original, incorrect headline is at the top left

 

(Anomaly alert: While the NYT column that I’m reading is headlined: “A Regulator, a Lawmaker, and a Quandary,” the text at the top of my browser window identifies it as “Darrell Issa’s Company and the S.E.C.’s Quandary.” And the URL itself contains this text string: “darrell-issas-company-and-the-securities-and-exchange-commissions-quandary.html.”

Like digital fossils, this suggests that the column’s original headline said DEI is Issa’s company, although Issa hasn’t owned it for years. If so, then Norris may have written his column under that false assumption, and thought Issa’s involvement was self-evident, when it isn’t. That raises the question of whether the NYT also did a stealth revision of the article’s text.)

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But after reading through it several times, I can’t find anything in the NYT column that shows Issa took the lead on this. The column says that Issa remained “a director and substantial shareholder” (the column doesn’t say how much is “substantial”) in DEI. But that doesn’t mean the reverse split was Issa’s brainchild.

Maybe Issa did personally orchestrate this scheme. And maybe there was no good business reason for it other than screwing small shareholders. But I’m not finding the smoking gun in the column — or enough quantifiable information to let me make an independent judgment. Norris writes:

“The company went public in December 2005 in an offering that was relatively small — it raised $150 million — but nonetheless had a prominent list of underwriters. Goldman Sachs was the lead underwriter, with J. P. Morgan Securities, CIBC World Markets, Wachovia and Citigroup also listed on the cover of the prospectus.

“A large part of the money  went to selling shareholders, including Representative Issa’s family foundation, which received $3.8 million, and most of the rest went to pay off debts. None of the offering proceeds were to be invested in company operations.

What is a “large part of the money”? What is “most of the rest”? And what is  objectionable to paying off debts, as opposed to being invested in company operations?”

As Norris explicitly said his column was inspired by the earlier NYT article on Issa, I’d like to find more evidence whether there’s anything to substantiate what he wrote about Issa.

So I turn to the commenters, pro-, anti-, and neutral on Issa. What do you think?

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(DISCLAIMER: This is my opinion, and not necessarily that of my employer, the North County Times).

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