A plea agreement, though, contained language indicating he may end up serving six months in prison or less.
Moffat, once considered a candidate for chief executive officer at IBM, was considered the highest level executive arrested in a case that resulted in 21 arrests. He is the 11th person to plead guilty. He remained free on $2 million bail. Sentencing was set for July 26. His lawyers said he was not cooperating with the government's probe.
During a hearing in U.S. District Court in Manhattan, Moffat told the magistrate in a shaky voice that he provided inside information between August and October 2008 to Daniele Chiesi, a friend and a co-defendant in the case. At the time, Moffat was senior vice president and group executive at International Business Machines Corp.'s Systems and Technology Group. ...
Chiesi and Rajaratnam were heard on a government wiretap of a Sept. 26, 2008, phone conversation discussing whether Moffat should move from IBM to a different technology company to aid the scheme, according to the papers. "Put him in some company where we can trade well," Rajaratnam was quoted in the court papers as saying. The complaint said Chiesi replied: "I know, I know. I'm thinking that too. Or just keep him at IBM, you know, because this guy is giving me more information. ... I'd like to keep him at IBM right now because that's a very powerful place for him. For us, too." According to the court papers, Rajaratnam replied: "Only if he becomes CEO." And Chiesi was quoted as replying: "Well, not really. I mean, come on. ... you know, we nailed it."
IBM also lobbied Congress, the Department of Commerce, the Department of Homeland Security and other agencies regarding U.S. trade agreements and other issues involving international sales.
Jobs, and where they're being created and lost, have become an increasingly sore point with many Americans as unemployment remains stubbornly high and offshoring of work to other countries becomes more common. IBM's decision comes as the percentage of its work force based in the U.S. shrinks to a new low. IBM now has about 25 percent of its nearly 400,000-person work force in this country and 75 percent in other countries. In the 1990s, it was about 50-50. ...
Robert Djurdjevic, president of Annex Research in Maui, Hawaii, said the underlying reason for IBM's move is likely the usual one: "In every case, it's a marketing motivation." In the corporate world, "If the number makes them look good, they publish it. If not, they hide it," he said. Djurdjevic said IBM's global perspective is not only for real but more real than many of its competitors. "IBM may have been among the first to recognize the importance of being global in every respect," he said. But this does pose an inherent conflict, Djurdjevic said. "You don't belong to any flag. That is going to rile the politicians anywhere," he said.
America now has plenty of countries it's competing with -- many of which are much more serious about innovation than we are. Just look at the numbers:
Many regulators say that violations are widespread, but that it is unusually hard to mount a major enforcement effort because interns are often afraid to file complaints. Many fear they will become known as troublemakers in their chosen field, endangering their chances with a potential future employer. ...
In California, officials have issued guidance letters advising employers whether they are breaking the law, while Oregon regulators have unearthed numerous abuses. “We’ve had cases where unpaid interns really were displacing workers and where they weren’t being supervised in an educational capacity,” said Bob Estabrook, spokesman for Oregon’s labor department. His department recently handled complaints involving two individuals at a solar panel company who received $3,350 in back pay after claiming that they were wrongly treated as unpaid interns.
On the one hand I am elated to be leaving. At one point I went 3 years without a raise. Was told on 3 different occasions that I was going to be the replacement for the next lead in my department but 2nd line manager stepped in and over turned the decision by my first line so a friend could have the position instead. No training, no OT and no hope in site in ITD for any advancement.
On the other hand, I am working in a convenient location that coincides with me being able to drop my children off at day care. I have a 401K Loan I am paying off which now since I lost my employment I will be forced to default on the loan which will cost me thousands next tax season. 2010 has shown to be a difficult year for me and my family. This was the one thing I thought I would not have to worry about. I guess things happen for a reason. What that reason is, is beyond me.
I wish all of my fellow RA'ed brethren the best of luck. It is pathetic that one of the the big "3 letter" companies which is suppose to be part of the economic foundations of this country is so horrible to work for. I pray that this all comes full circle for IBM. -Anonymous-
Editor's note: Many more job cut comments resulting from the March 1st firings are available in the highlights from these weeks:
The subsidy has been controversial from the beginning. Companies have been able to receive subsidies even when retirees pay some or all of the cost of the prescription drugs, and have been allowed to deduct the cost of the benefits that retirees pay for. Now, they'll continue to receive the tax-free subsidy based on their retirees' contributions, but won't be able to deduct the amounts. "Companies not only get the get the subsidy tax-free, but they then deduct the amount. Our bill simply closes the loophole," said White House Press Secretary Robert Gibbs on Thursday.
Before Medicare Part D was created, these companies provided prescription drug coverage for their retirees, and paid for it out of their own (corporate) pockets.
Then, Part D came along, and to keep companies that already provided prescription benefits from dumping their employees/retirees into Part D and increasing the total cost to the taxpayer of Part D, Congress decided to give the companies a subsidy to continue their plans.
The Part D subsidy is 28% of the cost the company spends on prescription coverage for Medicare employees/retirees. On average, companies spend about $2000 per Medicare employee/retiree to provide these plans and thus get a subsidy of around $560.
The subsidy is a tax free gift to these companies from us, the taxpayers. The companies are allowed to deduct the FULL COST of the prescription coverage as an expense on their income taxes. Not just the $1440 they had to spend out of their own pockets, but they can also deduct the $560 we gave them!
The health care reform law changes this. Now, companies that receive the subsidy will not be allowed to deduct it as an expense on their income taxes. They can only deduct the $1440 of their own money that they had to spend.
For a company that pays a 30% corporate income tax rate (AT&T paid 32.4% in 2009; Verizon paid 10.5%), this will increase their taxes by $168 per year per Medicare employee/retiree. And these companies are claiming they can't afford that and may have to reduce health care benefits FOR ALL EMPLOYEES AND RETIREES in the future.
Can you say crocodile tears?
There is no reason they have to takes these charges now, since the tax changes don't go into effect yet. But this seems like a good opportunity for them to blame health care reform for benefit reductions they want to make anyway, or to hide other accounting shenanigans from investors.
Ellen Schultz wrote about this back in 2004: http://online.wsj.com/public/resources/documents/SB107350927860976500.htm. Excerpt:
The new federal program calls for employers to be reimbursed for 28% of the cost for prescriptions of more than $250 per retiree, up to an annual subsidy of $1,330 per retiree, beginning in 2006. The subsidy will be significant at companies with thousands of retirees ages 65 or older, because prescription-drug costs make up a large part of the expenses that employers incur for seniors under their retiree medical plans.
Thanks to a little-noticed provision in the new law, the government will calculate the subsidy based on both what the employer spends for prescription drugs and what the retiree spends.
So if an employer and a retiree each pay $1,000 toward the retiree's medical costs, the employer's subsidy is calculated on the full $2,000, bringing the company a total subsidy of $490, rather than the $210 that it would get if it received a subsidy only on its share.
As a result, when combined with tax and accounting rules, the program allows employers in some cases to use the subsidy to erase the entire cost of prescription drugs for retirees, or even turn a profit from a drug plan. For instance, if a Medicare-eligible retiree's prescription costs are $2,550, and his former employer pays $1,000 of it, under long-standing tax rules, the employer can deduct its full $1,000 for tax purposes, meaning the after-tax cost to the company is $650 at a 35% corporate tax rate.
Meanwhile, the company doesn't pay taxes on the subsidy it receives, thanks to another provision of the new Medicare law. So in this example, the employer would receive a subsidy of $644, based on the full amount paid by both employer and retiree, reducing the company's cost for the retiree to $6 for the year.
Wouldn't it be great if we could all deduct money that other people spent on our own income taxes? The equivalent of this would be allowing retirees (some of them anyway) to deduct the $7,000 or so that IBM spends subsidizing their medical plan as a medical expense on their tax forms.
If we aren't allowed to do that, why should the corporations?
Federal health officials said the program would be available from late June of this year to Jan. 1, 2014, when private insurers will be required to accept all applicants without varying premiums on account of a person’s medical condition.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Sample posts follow:
We all have to play nice-nice with our GR (global resource) peers. and when your GR team lead sends notes to IBM US mgmt that they need MORE WORK from their US counterparts, IBM mgmt. rolls over and gives them more work. Reminds me of an old CCR song: Fortunate Son.
And when you ask them, how much should we give? Ooh, they only answer more! more! more. What a sad, pathetic, f'ng company.
What's more pathetic is how India is not held accountable since they are Sam's chosen ones and how anyone who reports problems with India are considered anti-team, racist and uncooperative.
The sacred cows over in India aren't cattle, they're the "office boys" pretending to be IT professionals working for IBM. What a sad, pathetic f'ng company indeed.
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