http://www.newsmakingnews.com/#NOTES FROM THE WATERFRONT NOTES FROM THE WATERFRONT "TRIAD" TO TAKE DOWN AGRICULTURE PRESERVE IN NAPA COUNTY. STINKY DEALS HIT COUNTY HARD. Plans to forever alter 3,200 acres of land in Pope Valley (Napa County) into a "master planned community" of very high-end vineyard estates reveal a disaster in the making. And there's a stench everywhere we turn. Not much different from on the waterfront. Oh, those smelly, fishy deals.... Or do we just have dumb bankers out there? One of the stinkers: B of A is behind the deal. The seller of "Juliana Vineyards" is Reunion Industries, successor to the infamous Buttes Gas & Oil. Reunion is out of compliance with the terms of its financing from Bank of America and its heady 13% debenture as well (go to http://www.freeedgar.com, view filings, then select Form 10-K405 filed 3/30/00). With losses of $1.5 million (and more each year), Reunion can't even come close to meeting its hurdle of $7.5 million/year minimum earnings before taxes (in this case a credit of $226,000) and interest (which is $3.4 million/yr). When B of A booked the loan commitment for $40 million, they collected a $1million fee in Oct. 1998. They were lending at that time to a bankrupt concern and have a lien on all the Juliana Vineyards as of that date--all 3,200 acres remaining. So, it looks like the "ex-Marines" heading B of A are landing again to attempt to dominate and sway the Planning Commission and Board of Supervisors where opposition groups plan to challenge the project to the bitter end. Just as stinky.... Price Waterhouse hasn't even qualified their audit opinion with respect to Reunion! But then, perhaps it isn't such a surprise from a CPA firm until recently ruled by Don Dominic Tarantino. (We have a long history of fishy deals in this San Francisco family.) Price Waterhouse has not questioned the ability of Reunion to survive as an ongoing concern. When CPA letters are not "qualified," the loan can be innocuously categorized as to risk/quality by the bank, thereby escaping scrutiny of regulators who otherwise carefully examine classified (poor quality) loan portfolios. But then again, at PriceWaterhouse (now PriceWaterhouse Coopers) there have been recent shakeups with the revelation that 82% of all partners (more than 2,600 of them worldwide) are "in conflict of interest" holding securities in corporations they audit! Talk about stinky, fishy, waterfront stuff. Things are so bad there as ongoing Federal investigations reveal that one SEC enforcer said "there seems to be a culture problem here." (See http://www.sec.gov for early Y2K press release). In fact if the numbers from Reunion's financial statements are put through the Altman Bankruptcy Model, the firm was in the "likely to fail within 12 months" range at the time the loan was made! Why would Bank of America pick up this type of loan business? They have not been a lender to Reunion Industries in the past, or to Buttes except indirectly through Napa National Bank, an affiliate. Could B of A also be the financiers behind Triad Development, Inc.? It would be nice to know, but once exposed to the local press, developers Fred Grimm and John Goodman, have failed to return calls. B of A has had a long-standing association with "spooks" and mobs of every ethnic and non-ethnic persuasion. It doesn�t look like much changed despite the recent merger with NationsBank. STINKY-SPOOKY POWER PLAYS How many people recall that "spooks" Kermit Roosevelt and Miles Copeland worked for Gulf Oil which in turn had a subsidiary--Gulf Resources. Remember, it was Gulf Resources that was used as a conduit for the $100,000 CIA-related payment to the Watergate burglar crew in the good 'ole Dick Nixon years. Now that one was really stinky! With Kermit Roosevelt hanging out at Gulf then, and moving thereafter to the Board of Buttes Gas & Oil of which Reunion Industries is a successor, is there some deeper reason, some compulsion on the part of the bank to keep this hemorrhaging firm in business? Former Marine Col. Ollie North, in testimony before Congress in 1987 described the CIA and "secret government" practice of maintaining "off the shelf" companies to help conduit monies and goods. He also described his responsibilities, which included "working with the private sector to deliver arms to the Contras" in coordination with the CIA, then under the wing of the National Security Council. His cute little diversion account discovered in Switzerland was from one of those shelf businesses known as Lake Resources. (See Joseph Persico's "Casey", Rachel Ehrenfield's "Evil Money" and Miles Copeland's "The Gameplayer.") Meanwhile, the then-local spook about the Bay Area, Kermit Roosevelt, maintained many "Buttes Resources." Resources, resources, resources.... Examine anything with resources in the name--even Brent Scowcroft did while on the Board of Pennzoil. A former National Security Advisor, Scowcroft fended off a hostile take-over attempt of Pennzoil by Union Pacific Resources (all aptly described in documents filed with the SEC by Pennzoil). And who sits on the Board of Union Pacific Resources today? Why, Lynne Cheney, wife of Richard Cheney, George Bush's choice for Vice President! The "resources" network has even more potential to be called off the shelf with this line-up of a former Secretary of Defense (who helped bring us Gulf War and Gulf War Syndrome) to whom the CIA would report if he's enshrined in the White House. Cheney's wife conveniently sits on the board of one of the more infamous resources of them all! (But mind you, Pennzoil still holds all those spicy corporate records Drew Lewis (George H.W. Bush's Bohemian Grove camp-mate) was trying to grab with the Pennzoil take-over. Remember: Pennzoil is in fact the old Zapata Oil founded by George H.W. Bush and the Leidtke brothers, whose father was chief counsel for Gulf Oil during all those Roosevelt-Copeland years of service). Heaven knows how many "shelf businesses" may rest within the Pennzoil fold. After all, George H.W. Bush was the big tuna of the CIA in 1976. SO WHY DOES REUNION INDUSTRIES, (SUCCESSOR TO REUNION RESOURCES, SUCCESSOR TO BUTTES GAS & OIL AND ITS RESOURCES) STINK SO MUCH? At this writing, the three biggest assets of Reunion Industries are (1) Juliana Vineyards up for grabs by Triad Development, Inc. (2) approximately $225 million in "tax-loss carry-forwards" and (3) a series of inactive (note, inactive, not closed, discontinued, or otherwise dissolved) subsidiaries. These subsidiaries are found on pages 69-70 of the 10-K Annual Report filed by Reunion Industries 3/30/97--lots of spooky Delaware corporations. Many of them have yet other subsidiaries layered down. They rest, we think in reserve, in such places as Malaysia and Sharjah. As $1.3 billion in aid is being dumped into Colombia, we are reminded of "Buttes Resources International, Buttes Resources Guatemala, Buttes Resources Nicaragua, Ocean Phoenix, Buttes Resources do Brazil, Progress Drilling International (a Panamanian corporation showing a mailing address of P.O. Box 77, Pope Valley). All of these are listed as inactive subsidiaries of Reunion Industries! With the sale, who's going to be minding that post office box in Pope Valley if Progress Drilling International is "popped off the shelf" as Ollie would say? Why do the residents of Pope Valley and Napa County have to suffer the lunacy legacy of these "nuts?" Even the widow of Kermit Roosevelt said her late husband "didn't talk about that spook stuff." When interviewed, Kermit's son vaguely and disingenuously said "I think he once served in intelligence with the OSS during World War II in Sicily" (with the infamous Allan Dulles no less). "Nuttiness" obviously runs in the family if Kermit's son missed the New York Times expose of his father last April 16. Give us a break--I mean 2 full pages and a front page header. Yep, your Dad was the one who failed to "stand down" thus bringing us "the Shah of Iran" and a new flood of heroin into the pipelines after 1953. Even wonder why heroin began to surface in a big way by 1954 in New York? The French Connection ...? WHAT'S BANK OF AMERICA'S PROBLEM? Why can't B of A simply find some nice cattleman among its customer ranks to buy the land for its truly highest and best use? Take a loss on the loan as it rightfully should? Say, why not make a corporate gift to the County of Napa--open space for a park, no strings attached. The Juliana properties are lovely range, studded with oak-covered hills. It's heaven on earth for cattle, all 3,200 acres. For Pope Valley, development of any type presents an ecological nightmare -- from water problems, to hillside development and the attendant spoilages that result ... sedimentary runoff, extinguished wildlife habitats, the introduction of nitrogens to the water systems when all of those estates and vineyards are tended, and on and on and on. WATCH OUT! IT PROMISES TO BE A CONSUMER RIP-OFF! And what of any future owner of the properties? Juliana Vineyards hasn't returned a profit in its entire history of vineyard ownership. The county has already determined that because of the costs of financing land acquisitions, one has to have 160 acres of growing vines to break even. It is another reason parcels were set to this minimum. So why did Reunion Industries with a little help from developer Pacific Union carve themdown to 50 acres in size? This was at a time when vineyards were going for $35,000/acre. Recent sales: $106,000 - $150,000 per acre. The above sales suggest that Reunion or Triad would need to "bundle up those lots" so their residents could afford to "farm them"--like have at least 400 acres of vines to possibly break-even? And check it out with facts. Recent sales in 1997, 1998 and 1999 by Reunion Industries were 520 acres to Hess Collection Winery, 420 acres to Mildara Blass (a division of Foster's Brewing from the land down under), and 260 acres to St. Supery. Could these new residents ever break even when Juliana has been losing its shirt farming at one time more than 700 acres? And with the "glassy winged sharp-shooter" heading this way? The carrier of Pierce's Disease which is fatal to vines? Is B of A behind a consumer rip-off? Who finances Triad Development, Inc? Who came up with this "stinky deal" that has been consistently rejected by Napa County government? What gives Triad Development, Inc. the "balls" to think they can buy the County into this one? A highly motivated lender? Please note: There are judgments up the ka-zooooooh against Reunion Industries for millions upon millions of dollars. So why is B of A now sapping up and sucking up in asset spin-off deals?
