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University Daily Kansan
Inquiry implicates employees
E.F. Hutton talks of overdrafts
Thursday, Sept. 5, 1985
United Press International
WASHINGTON - An internal inquiry of E.F. Hutton & Co., conducted by former Attorney General Griffin Bell, implicates a dozen company employees in the firm's multimillion-dollar check-kiting scheme, a company spokesman said yesterday.
The company employees involved, described as mid-level managers and branch office managers — not top company officials — will be named Thursday when Bell formally releases the results of his investigation.
Hutton, which hired Bell to conduct the inquiry, continues to be the
subject of several government investigations into whether high-level company officials should be held responsible for the massive overdrafting scheme.
Earlier this summer, Hutton released documents indicating that some top officials may have been aware of the scheme and conceded that the information should have been turned over to the grand jury three years ago when the investigation first began.
Under the scheme, the company had the interest-free use of hundreds of millions of dollars in bank finances on certain days by drawing down bank accounts in excess of expected deposits.
Although Hutton officials have said they halted illegal overdrafting when the practice came to their attention in 1982, the Washington Post reported yesterday that the company included $405 million in liabilities in 1984, which the company comproller told a congressional subcommittee consisted largely of overdrafts.
In a talk over the company's public address system Tuesday, Robert Fomon, chairman and chief executive officer, told Hutton employees that "more like a dozen" of the firm's employees would be named in Bell's report, the spokesman said.
Fomon did not name the employees involved, but said one-fourth of the company's more than 300 offices
Hutton will impose penalties on those named, ranging from censure, fines or suspension, to dismissal, he said.
were involved in the illegal checkoverdrafting scheme, the spokesman said.
Reports appearing in the Wall Street Journal and the New York Times yesterday quoted Fomon as saying, "Senior management was not involved in designing or carrying out the illegal practices," but "senior management was responsible for the absence of controls that would have detected those practices."
Fomon told employees the report "won't make pleasant reading."
SAN FRANCISCO — A three-judge panel of the 9th U.S. Court of Appeals yesterday rejected Washington state employees' $400 million "comparable worth" sex discrimination case in a precedent-setting ruling.
Bitter root yields sweet profit
The state stood to lose an estimated $400 million in payments of backpay.
the panel overturned a 1983 U.S. District Court decision which awarded back pay to women state workers paid less for jobs with similar skill requirements as jobs dominated by males.
Panel kills suit asking equal wages
United Press International
The Associated Press
The concept of comparable worth has been pressed as a means of resolving pay inequities between men and women in a number of cases nationwide.
HALDER, Wis. — Some farmers in this north-central area of Wisconsin, the beer-and-butter state, are learning to speak Chinese.
How better to deal with buyers from Hong Kong who buy, at more than $30 a pound, a crop that in parts of Asia is reputed, among other things, to improve sexual performance?
Because the price is determined by dickering between each buyer and seller, about 20 growers and brokers have signed up for a course in conversational Chinese being offered through the University of Wisconsin-Marathon Center.
In Marathon County, seat of the state's ginseng industry since the mid-1800s, approximately 1,000 growers expect to harvest more than 800,000 pounds of the root this fall, said Jeff Schira, president of the Wisconsin Ginseng Growers Association.
The state is the richest source of cultivated ginseng in the United States, a bitter brown root prized in China and other Asian nations, where it is chewed raw or brewed into tea for its supposed medicinal value. The plant also grows wild in some areas, especially the central Appalachians.
Most of the ginseng ends up in China, Schira said, but it also is distributed throughout Asia and even in Canada and Europe.
Ginseng brought more than $25 million into Marathon County last year, Schira said. Most of the farmers who grow it are dairy or grain farmers who set aside an acre or two for ginseng gardens.
The gardens must be weeded by hand and carefully tended to prevent root rot from spreading. They must have about 70 percent shade. Ginseng seeds take 18 months to germinate and plants must grow four years before their roots reach the minimum 5-inch length desired by Asian buwers.
But with yields averaging 1,400 pounds, or more than $45,400 worth
Farm lender needs help,official says
And it's expensive. Several growers estimated it cost $20,000 an acre to get started, with $90-a-pound seed accounting for half of that.
an acre, it's easy to understand the industry's rapid growth.
"My obligation, this department's obligation, is to look out for the interest of the American farmer, protect him and try to insure that he has a sound source of credit that's affordable and competitive." Block said at a news conference.
From Kansan wires
Agriculture Secretary John Block said the government would help, but declined to be specific.
The Farm Credit Administration's board of directors met to review the system's problems and to decide what steps, including government assistance, would be needed.
WASHINGTON — Economic conditions in U.S. agriculture have slumped so badly that the $74 billion farm credit system, the nation's largest farm lender, no longer can absorb its losses and will have to seek outside help, system spokesmen said yesterday.
Block scheduled the briefing to report on his recent trip to the
Regulators of the farm lender have insisted for months that they had adequate reserves to withstand current financial problems in agriculture and have been raising interest rates, shifting money and streamlining operations in an effort to shore up its financial position.
Soviet Union and Hungary.
But the picture has worsened in recent weeks. Projections of bumper grain crops mean increased surpluses and lower prices to farmers, which decreases their ability to keep up with loan payments. Export sales of farm goods continue to erode, and the value of farmland that is used for collateral still is plummeting.
Reporters were more interested in his response to a Wall Street Journal interview in which Donald Wilkinson, governor of the Farm Credit Administration, revealed that the system — big enough to be the nation's fourth largest bank — cannot absorb its losses.
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Bring 2-meter gear for a transmitter hunt following the meeting.
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FIRST MEETING
Thurs., Sept. 5
Burge Union Lobby
6:30 p.m.
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All men and women interested in intercollegiate bowling need to contact
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Call the Kansan.
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KU BAHA'I CLUB
Invites Interested Students and Faculty to Attend Our First Meeting
Thursday, Sept.5
7:30
SUNDAYS.
Please stop by.
Oread Room Kansas Union
FOREIGN LANGUAGE STUDY SKILLS PROGRAM
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Jayhawk Rm., Kansas Union
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