Saturday, January 20, 2007

Democratic Hypocrisy Watch

John Edwards finally succeeded in selling his Georgetown home. He declined to identify the buyer at the time of the sale, but has confirmed that it was bought by the founder of Sunrise Assisted Living, who is being investigated for improper accounting practices, and the related exercise of stock options:

...The house sale comes at a time when the Securities and Exchange Commission has opened an inquiry into allegations that the Klaassens, founders of Sunrise Senior Living, and other company insiders cashed $32 million in stock options before Sunrise announced in May an accounting problem that caused its stock to dip.

SEC insider-trading notifications show that the Klaassens withdrew $20 million from their company in the year before they bought the house. Some of that money was taken out the week before the company announced an accounting review in May.

A letter to the board from the Service Employees International Union states that after Sunrise announced the accounting change and filing delay in May the stock value plummeted 34 percent and that the cumulative impact of company restatements will reduce net income for 2003 through 2005 by 26 percent.

The Klaassens sold 600,000 shares, worth about $20 million, in 12 transactions from Dec. 19, 2005, to May 2, 2006 -- the last sales coming one week before the company's accounting troubles came to light and the company's stock plunged, according to public records confirmed by Sunrise sources.

Several stockholders in Sunrise, including two large unions whose support Edwards has courted, have pressed for action.

The 1.8 million-worker SEIU alleges its pension fund lost significant money in its investment in Sunrise, and the union asked for an independent investigator to take over the internal probe of the stock trades and accounting practices. Pension funds for the United Food and Commercial Workers Union filed a class-action lawsuit against Sunrise this week, seeking to recover losses from the stock's fall...

Just doing his part to help the working man.

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