Irrevocable Letter of Credit and The courts are operating under Statute Law
The courts are operating under Statute Law. A “Statute” is defined in black’s 4th edition revised as a kind of bond or obligation of record, being an abbreviation for “statute merchant” or “statute staple.”
Statute –merchant = is defined as a security for a debt acknowledged to be due, entered into before the chief magistrate of some trading town, pursuant to the statute 13 Edward I. De Mercatoribus, by which not only the body of the debtor might be imprisoned, and his goods seized in satisfaction of the debt, but also his lands might be delivered to the creditor till out of the rents and profits of them the debt be satisfied. This was also called a Pocket Judgment.
Statute Staple = A 1353 statute establishing procedure for settling disputes among merchants who traded in staple towns. The statute helped merchants receive swift judgment for debt. Cf. STATUTE MERCHANT. 2. A bond for commercial debt. A statute staple gave the lender a possessory right in the land of a debtor who failed to repay a loan. See STAPLE.
“A popular form of security after 1285 . . . was the . . . ‘statute staple’ – whereby the borrower could by means of a registered contract charge his land and goods without giving up possession; if he failed to pay, the lender became a tenant of the land until satisfied . . . the borrower under a statue or recognizance remained in possession of his land, and it later became a common practice under the common-law forms of mortgage likewise to allow the mortgagor to remain in possession as a tenant at will or at sufferance of the mortgage.”J.H. Baker, An introduction to English Legal History 354 (3d edition 1990).
Recognizance = A bond or obligation of record binding a person to some act as to appear in court and subject to forfeit money if obligation is not fulfilled. Fifa = Fifa, short for the Latin phrase fieri facias (“let it be made . . .”) was a court (execution) to the sheriff to levy on (Take) the property of a debtor in order to satisfy a judgment (see judgment and execution dockets, above). The sheriff might typically keep track of fifas in a Sheriff’s Fifa Docket Book. Usually written on a fill-in-the blank form, a fifa names the parties to the court judgment and the value of property to be taken to satisfy the judgment. On the back, the sheriff or his deputies annotate their actions in carrying out the order. The fifas were to be returned to the court which issued them and the actions annotated on the Judgment Docket. Theoretically, the docket books should contain everything that was noted on the fifas.
In websters 1913 dictionary the word stand is defined as being also the word statute. I believe this is why the judge in every court always asks do you under – stand the charges being assessed against you. In the O.E. [Old English] it is understandan, to stand under or to be subjected to or under the control of or I am subjecting or agreeing to put my myself under the control of or putting myself under the statute or bond of record.
I have been doing more research on our prison system via the internet and have found out some interesting things, regarding what is really going on in the courtroom. The court is looking for an acceptance and acceptor under 3-410 of the U.C.C. as the Principal has the primary obligation to pay or discharge any instrument presented for acceptance. Since they are presenting a Bill of Exchange [indictment] for acceptance. This is called an acceptance for honor, which involves a negotiable instrument especially a bill of exchange [indictment] that has been accepted for payment. The complaint, information, or indictment is a three party Draft, Commercial paper, or Bill of Exchange under Article 3 of the U.C.C. The Grand Jury Foreman is the Drawer or Maker of the Indictment by his signature, the Defendant/Debtor or Straw man is the Drawee and the State is the Payee and the live man is the Payor. What they are doing in the courtroom is all commercial, this is in conformity to 27 CFR 72.11, where it says all crimes are commercial. What the judge and prosecutor are doing in the courtroom is making a commercial presentment under section 3-501 (1) "Unless excused (section 3-511) presentment is necessary to charge secondary parties as follows":
(a) Presentment for acceptance is necessary to charge the drawer and endorsers of a draft where the draft so provides, or is payable elsewhere than at the residence or place of business of the Drawee, or its date of payment depends upon such presentment. The holder may at his option present for acceptance any other draft payable at a stated date;
(b) Presentment for payment is necessary to charge any endorser;
(c) in the case of any drawer, the acceptor of a draft payable at a bank or the maker of a note payable at a bank, presentment for payment is necessary, but failure to make presentment discharges such drawer, acceptor or maker only as stated in section 3-502 (1)(B).
If you don't accept the charge or presentment you are in dishonor for non acceptance under 3-505 of the U.C.C. (c) and 3-501 (2) (a), (b). Acceptance is the drawer's signed engagement to honor the draft as presented. It must be written on the draft, and may consist of his signature alone. It becomes operative when completed by delivery or notification 3-410 of the U.C.C.
You are the fiduciary trustee of the straw man which is a Cesti Que Trust; in this capacity you have the responsibility to discharge all his debts, by operation of law.
“All moneys of the Federal Reserve Board shall be treated as trust funds for the purpose of section 906 (a)(2) (FOOTNOTE 1) of title 2. This section is effective for fiscal year 1986 and every fiscal year thereafter.” TITLE 12 BANKS AND BANKING CHAPTER 14 SECTION 1772 (e). Every account is a trust, this is why every deed, conveyance or transfer uses the words Grantor, Grantee, or Assignor, Assignee, or Transferor or Transferee.
You are also the principal or asset holder on the private side of the accounting ledger; you are holding the exemption necessary to discharge the debt. When they monetize debt they have to have a principal, capital and interest is what circulates as principal and is called revenue or re-venue. Principal is where venue lies. Revenue is a Tax debt or Tax bills. All bills when presented represent revenue, interest, capitol, or accruals circulating from you as the principal, when it is returned back to you as capital or interest it is called income or incoming. This method of accounting is called the "Accrual Accounting Method" and is represented by debits and credits. Debits are assets Credits are liabilities. The credits and liabilities have to be in balance, this is accomplished through double bookkeeping entries or reverse bookkeeping entry. These bookkeeping entries are the funds referred to in commercial banking. When you are in dishonor they cannot use your exemption to pass the debt or charge through your account to obtain a discharge, so they sell your dishonor, which has a commercial of $ 1,000,000 dollars for each count. When social security # is assigned or issued a blank bond is issued and when you are imprisoned the bond is filled out. This bond is called a Bid Bond, standard form 24 (REV. 10- 98) prescribed by GSA-FAR (48CFR) 53.228(a). This is also called a prison bond. These are also referred to as contract surety bonds. The first, the bid bond, provides financial assurance that the bid has been submitted in good faith and that the contractor intends to enter into the contract at the price bid and provide the required performance and payment bonds. The second, the performance bond, protects the obligee from financial loss should the contractor fail to perform the contract in accordance with the terms and conditions of the contract documents. The Third kind of contract bond is the payment bond which guarantees that the contractor will pay that the contractor will pay certain subcontractor, labor and material bills associated with the project.
The fourth bond and most important is the STANDARD FORM 28 (Rev. 6/2003) prescribed by GSA-FAR (48 CFR) 53.228 (e) OMB No. 9000-0001, if you read this form carefully it says under the sworn statement “I also depose and say that, concerning any stocks or bonds included in the assets listed below, that there are no restrictions on the resale of these securities pursuant to the registration provisions of Section 5 of the Securities Exchange Act of 1933. The word securities takes you back to section 8-102 (9) of Article 8 of the UCC, which defines securities as a financial asset (i) security (ii) obligation of a person, or a share, participation of a person or in property or an enterprise of a person, which is, or is of a type, dealt in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment; or (iii) any property held by a securities intermediary for another person in a securities account if the securities intermediary has expressly agreed with the other person that the person that the property is to be treated as a financial asset under this Article. As the context requires, the term means either the interest itself or the means by which a person’s claim to it is evidenced, including a certificated or uncertificated security, a security certificate, or a security entitlement.
The definition of “security” has three components. First, there is the subparagraph (i) test that the interest or obligation be fully transferable, in the sense that the issuer either maintains transfer books or the obligation or interest is represented by a certificate in bearer or 5 registered form. Second, there is the subparagraph (ii) test that the interest or obligation be divisible, that is, one of a class or series, as distinguished from individual obligations of the sort governed by ordinary contract law or by Article 3. Third, there is the subparagraph (iii) functional test, which generally turns on whether the interest or obligation is, or is of a type, dealt in or traded on securities markets or securities exchanges. There is, however, an “opt in” provision in subparagraph (iii) which permits the issuer of any interest or obligation that is “a medium of investment” to specify that it is a security governed by Article 8.
The divisibility test of subparagraph (ii) applies to the security-that is, the underlying intangible interest-not the means by which that interest is evidenced. Thus, securities issued in book-entry only form meet the divisibility test because the underlying intangible interest is divisible via the mechanism of the indirect holding system. This is so even though the clearing corporation is the only eligible direct holder of the security. The third component, the functional test in subparagraph (iii), provides flexibility while ensuring that the Article 8 rules do not apply to interest or obligations in circumstances so unconnected with the securities markets that parties are unlikely to have thought of the possibility that Article 8 might apply. Subparagraph (iii)(A) covers interests or obligations that either are dealt in or traded on securities exchanges or securities markets, or are of a type dealt in or traded on securities exchanges or securities markets. The “is dealt in or traded on” phrase eliminates problems in the characterization of new forms of securities Which are to be traded in the markets, even though no similar type has previously been dealt in or traded in the markets. Subparagraph (iii)(B) covers the broader category of media for investment, but it applies only if the terms of the interest or obligation specify that it is an Article 8 security. This opt-in provision allows for deliberate expansion of the scope of Article 8.
Section 8-103 contains additional rules on the treatment of particular interests as securities or financial assets.
1. Part 5 rules apply to security entitlements, and Section 8-501 (b) provides that a person has a security entitlement when a financial asset has been credited to a “security account.” Thus, the term “securities account” specifies the type of arrangements between institutions and their customers that are covered by Part 5. A securities account is a consensual arrangement in which the intermediary undertakes to treat the customer as entitled to exercise The rights that comprise the financial asset. The consensual aspect is covered by the requirement that the account be established pursuant to agreement. The term agreement is used in the broad sense defined in section 1- 201(3). There is no requirement that a formal or written agreement.
1-201(3) “Agreement”, as distinguished from “contract”, means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in Section 1-303.
1-303. Course of performance, Course of Dealing, and Usage of Trade.
(a) A “course of performance” is a sequence of conduct between the parties to a particular transaction that exists if;
(1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and
(2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.
(b) A “course of dealing” is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.
(c) A “usage of trade”is any practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage must be proved as facts. If it is established that such a usage is embodied in a trade code or similar record, the interpretation of the record is a question of law.
(d) A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties’ agreement, may give particular meaning to specific terms of the agreement,and may supplement or qualify the terms of the agreement. A usage of trade applicable in the place in which part of the performance under the agreement is to occur may be so utilized as to that part of the performance.
(e) Except as otherwise provided in subsection (f), the express terms of an agreement and any applicable course of performance, course of dealing, or usage of trade must be construed whenever reasonable as consistent with each other. If such a construction is unreasonable:
(1) express terms prevail over course of performance, course of dealing,and usage of trade;
(2) course of performance prevails over course of dealing and usage of trade;
And
(3) course of dealing prevails over usage of trade
(f) Subject to Section 2-209 and Section 2A-208, a course of performance is relevant to show a waiver or modification of any term inconsistent with the course of performance.
(g) Evidence of relevant usage of trade offered by one party is not admissible unless the party has given the other party notice that the court finds sufficient to prevent unfair surprise to the other party.
Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR28.203-5]
[Page 541-542]
TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
CHAPTER 1--FEDERAL ACQUISITION REGULATION
PART 28_BONDS AND INSURANCE--Table of Contents
Subpart 28.2_Sureties and Other Security for Bonds
Sec. 28.203-5 Release of lien.
(a) After consultation with legal counsel, the contracting officer shall release the security interest on the individual surety's assets using the Optional Form 90, Release of Lien on Real Property, or Optional Form 91, Release of Personal Property from Escrow, or a similar release as soon as possible consistent with the conditions in subparagraphs (a) (1) and (2) of this subsection. A surety's assets pledged in support of a payment bond may be released to a subcontractor or supplier upon Government receipt of a Federal district court
[[Page 542]]
judgment, or a sworn statement by the subcontractor or supplier that the claim is correct along with a notarized authorization of the release by the surety stating that it approves of such release.
(1) Contracts subject to the Miller Act. The security interest shall be maintained for the later of (i) 1 year following final payment, (ii) until completion of any warranty period (applicable only to performance bonds), or (iii) pending resolution of all claims filed against the payment bond during the 1-year period following final payment.
(2) Contracts subject to alternative payment protection (28.102- 1(b)(1)). The security interest shall be maintained for the full contract performance period plus one year.
Click read more of TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
52.228-14 -- Irrevocable Letter of Credit.
As prescribed in 28.204-4, insert the following clause:
Irrevocable Letter of Credit (Dec 1999)
(a) “Irrevocable letter of credit” (ILC), as used in this clause, means a written commitment by a federally insured financial institution to pay all or part of a stated amount of money, until the expiration date of the letter, upon presentation by the Government (the beneficiary) of a written demand therefor. Neither the financial institution nor the offeror/Contractor can revoke or condition the letter of credit.
(b) If the offeror intends to use an ILC in lieu of a bid bond, or to secure other types of bonds such as performance and payment bonds, the letter of credit and letter of confirmation formats in paragraphs (e) and (f) of this clause shall be used.
(c) The letter of credit shall be irrevocable, shall require presentation of no document other than a written demand and the ILC (including confirming letter, if any), shall be issued/confirmed by an acceptable federally insured financial institution as provided in paragraph (d) of this clause, and --
(1) If used as a bid guarantee, the ILC shall expire no earlier than 60 days after the close of the bid acceptance period;
(2) If used as an alternative to corporate or individual sureties as security for a performance or payment bond, the offeror/Contractor may submit an ILC with an initial expiration date estimated to cover the entire period for which financial security is required or may submit an ILC with an initial expiration date that is a minimum period of one year from the date of issuance. The ILC shall provide that, unless the issuer provides the beneficiary written notice of non-renewal at least 60 days in advance of the current expiration date, the ILC is automatically extended without amendment for one year from the expiration date, or any future expiration date, until the period of required coverage is completed and the Contracting Officer provides the financial institution with a written statement waiving the right to payment. The period of required coverage shall be:
(i) For contracts subject to the Miller Act, the later of --
(A) One year following the expected date of final payment;
(B) For performance bonds only, until completion of any warranty period; or
(C) For payment bonds only, until resolution of all claims filed against the payment bond during the one-year period following final payment. (ii) For contracts not subject to the Miller Act, the later of --
(A) 90 days following final payment; or
(B) For performance bonds only, until completion of any warranty period.
(d) Only federally insured financial institutions rated investment grade or higher shall issue or confirm the ILC. The offeror/Contractor shall provide the Contracting Officer a credit rating that indicates the financial institution has the required rating(s) as of the date of issuance of the ILC. Unless the financial institution issuing the ILC had letter of credit business of at least $25 million in the past year, ILCs over $5 million must be confirmed by another acceptable financial institution that had letter of credit business of at least $25 million in the past year.
(e) The following format shall be used by the issuing financial institution to create an ILC: _____________________________________________________
[Issuing Financial Institution’s Letterhead or Name and Address]
Issue Date ______
Irrevocable Letter of Credit No. ________________
Account party’s name ________________________
Account party’s address ______________________
For Solicitation No. __________ (for reference only)
To: [U.S. Government agency]
[U.S. Government Agency’s Address]
1. We hereby establish this irrevocable and transferable Letter of Credit in your favor for one or more drawings up to United States $ ______. This Letter of Credit is payable at [issuing financial institution’s and, if any, confirming financial institution’s] office at [issuing financial institution’s address and, if any, confirming financial institution’s address] and expires with our close of business on ______, or any automatically extended expiration date.
2. We hereby undertake to honor your or the transferee’s sight draft(s) drawn on the issuing or, if any, the confirming financial institution, for all or any part of this credit if presented with this Letter of Credit and confirmation, if any, at the office specified in paragraph 1 of this Letter of Credit on or before the expiration date or any automatically extended expiration date.
3. [This paragraph is omitted if used as a bid guarantee, and subsequent paragraphs are renumbered.] It is a condition of this Letter of Credit that it is deemed to be automatically extended without amendment for one year from the expiration date hereof, or any future expiration date, unless at least 60 days prior to any expiration date, we notify you or the transferee by registered mail, or other receipted means of delivery, that we elect not to consider this Letter of Credit renewed for any such additional period. At the time we notify you, we also agree to notify the account party (and confirming financial institution, if any) by the same means of delivery.
4. This Letter of Credit is transferable. Transfers and assignments of proceeds are to be effected without charge to either the beneficiary or the transferee/assignee of proceeds. Such transfer or assignment shall be only at the written direction of the Government (the beneficiary) in a form satisfactory to the issuing financial institution and the confirming financial institution, if any.
5. This Letter of Credit is subject to the Uniform Customs and Practice (UCP) for Documentary Credits, 1993 Revision, International Chamber of Commerce Publication No. 500, and to the extent not inconsistent therewith, to the laws of _____________________ [state of confirming financial institution, if any, otherwise state of issuing financial institution].
6. If this credit expires during an interruption of business of this financial institution as described in Article 17 of the UCP, the financial institution specifically agrees to effect payment if this credit is drawn against within 30 days after the resumption of our business
Sincerely, _______________________
[Issuing financial institution]
(f) The following format shall be used by the financial institution to confirm an ILC: ___________________________________________________________________
[Confirming Financial Institution’s Letterhead or Name and Address
] (Date) _____________
Our Letter of Credit Advice Number _____________
Beneficiary: ___________
[U.S. Government agency] Issuing Financial Institution: __________________
Issuing Financial Institution’s LC No.: ___________
Gentlemen:
1. We hereby confirm the above indicated Letter of Credit, the original of which is attached, issued by __________ [name of issuing financial institution] for drawings of up to United States dollars ___________/U.S. $_______ and expiring with our close of business on _____________ [the expiration date], or any automatically extended expiration date.
2. Draft(s) drawn under the Letter of Credit and this Confirmation are payable at our office located at ___________________.
3. We hereby undertake to honor sight draft(s) drawn under and presented with the Letter of Credit and this Confirmation at our offices as specified herein.
4. [This paragraph is omitted if used as a bid guarantee, and subsequent paragraphs are renumbered.] It is a condition of this confirmation that it be deemed automatically extended without amendment for one year from the expiration date hereof, or any automatically extended expiration date, unless:
(a) At least 60 days prior to any such expiration date, we shall notify the Contracting Officer, or the transferee and the issuing financial institution, by registered mail or other receipted means of delivery, that we elect not to consider this confirmation extended for any such additional period; or
(b) The issuing financial institution shall have exercised its right to notify you or the transferee, the account party, and ourselves, of its election not to extend the expiration date of the Letter of Credit.
5. This confirmation is subject to the Uniform Customs and Practice (UCP) for Documentary Credits, 1993 Revision, International Chamber of Commerce Publication No. 500, and to the extent not inconsistent therewith, to the laws of ________ [state of confirming financial institution].
6. If this confirmation expires during an interruption of business of this financial institution as described in Article 17 of the UCP, we specifically agree to effect payment if this credit is drawn against within 30 days after the resumption of our business.
Sincerely, ___________________________
[Confirming financial institution]
(g) The following format shall be used by the Contracting Officer for a sight draft to draw on the Letter of Credit:
Sight Draft
[City, State]
(Date) ______________
[Name and address of financial institution]
Pay to the order of ______________ [Beneficiary Agency] ___________ the sum of United States $____________. This draft is drawn under Irrevocable Letter of Credit No. ______________.
____________________
[Beneficiary Agency]
____________________
[By]
On April 9, 2002 (12:18 pm) Lehman Brothers Banking Cartel in New York City agreed to provide prison industry leader CCA (Corrections Corporation of America) with a new $ 695,000,000 senior secured credit facility, to be combined with a $150 million notes offering. The war on terrorism has created a buzz in the private prison industry. Less than three weeks after September 11th, a New York Post story on the forprofit private prison industry stated, "America's new wall of homeland security is creating a big demand for cells to hold suspects and illegal aliens who might be rounded up." In order to prosper, prison operators need to maintain a steady flow of prisoners and prison dollars. One of the Industries tools for accomplishing this is the American Legislative Exchange Council, a powerful right wing lobby group that helps corporations draft and enacts "model" legislation-- for a price. Industry leaders CCA and Wackenhut have paid tens (if not hundreds) of thousands of dollars in exchange for a privileged position on ALEC's Criminal Justice Task Force (which CCA chairs). ALEC, in turn, not only promotes privatization, but also brags of having helped enact "Truth in Sentencing" and "Three Strikes" laws in 25 states. In addition to investing heavily in groups like ALEC and the Reason Foundation, the industry spends millions on campaign contributions. From 1995 to 2000, CCA, Wackenhut, and Cornell spent $520,000 in Federal elections, and in 1998, the industry spent $540,000 on state elections, where a little money goes a long way.
Corporations work on the Fiscal Accounting Cycle because they operate using commercial debt, we as owner principal’s work on the General Calendar Accounting Year or Cycle. New York City has a $ 6.6 billion dollar deficit, this deficit represents unredeemed debt on the credit side of the accrual accounting system and cannot be executed to the debit side of accrual accounting ledger, except through the principal's exemption. New York has therefore put its bond underwriting business up for bid. This means that New York will issue $ 6.6 billion in bonds and pay underwriters over $30, million in fees in the next fiscal year alone. Lehman Brothers Bank will underwrite New York's $ 6.6 billion dollar deficit. An underwriter is an Insurer or one who buys stock from the issuer with an intent to resell it to the public or an entity or person, especially an investment banker, who guarantees the sale of newly issued securities by purchasing all or part of the shares for resale to the public. The term underwriter derives its meaning from former British Insurance Practices. When insuring their cargo shippers would seek out investors to insure their property. The insurers would add their signatures and would write their names under those of the shipper; hence the term 'underwriter'. Both in terms of the insurance industry and securities markets, the concept of underwriting have expanded significantly since its inception. West Mutual Shippers Association out of Luxemburg is underwriting Social Security Administration a surety ship contract or Bond. Now you know how they are financing the commodities and securities market and why New York City is called the Great Whore of Babylon in the Book of Revelations Chapter 18 verses 10-24.
The Corrections Corporation of America owns most of your prison systems and sells its stock and shares on the New York Stock Exchange, the major stock holder is the Paine Webber Group. They have a Dunn & Bradstreet rating and are headquartered in Nashville, Tennessee at 10 Burton Hills Blvd and can be reached at 1-800-624- 2931. Their Ticker Symbol for their stock is CXW_pb on the NYSE and CXW under business services on the NYSE. In Berlin Germany there ticker symbol is CXW.BE and CXW.DE in Frankfurt, Germany.
CCA later merged into PRISON REALTY TRUST, a Real Estate Investment Trust that is exempt from corporate taxes if it meets certain conditions. This was a $4 Billion Transaction; companies acquire U.S. Corrections Corporation. One important condition is that it distribute 95% of its income to shareholders, a provision making REITs attractive to investors. Prison Realty Trust failed to meet those conditions of cash flow problems; it posted a $62,000,000 loss for 1999 and was in default on the terms of its credit facility. Wall Street was unimpressed at the company’s earlier scheme to issue junk bonds. Investors are angry that PZN lost its REIT status and the related dividend; they are filing class actions suits against Prison Realty Trust for false claims on Securities and Exchange Commission documents. Specifically, they are concerned about the non-disclosure of payments by PZN to CCA. Meanwhile Prison Realty just paid a dividend on their preferred stock (belonging to executives and institutional partners), which sent the common stock to new lows as shareholders realized they are not likely to see dividends soon.
In April of 2000, company audits expressed doubt about the company’s solvency. Shares hit a new 52 week low of 2.12 each, down from the 52 week high of $22.37. In his book the Perpetual Prisoner Machine [see resources], Joel Dyer notes that outside one CCA facility, there is a placard with the words “Yesterday’s closing stock price.” Imagine the legitimacy and confidence that are lost by people driving by seeing the stock price plummet, or even seeing “Yesterday’s Closing Stock Price: $2.12”.
Together, CCA and its spin off Prison Realty Trust, lost $265 million: “It’s a slim chance, but bankruptcy is a possibility,” says an analyst for First Union Securities. Localities that have contracts with the companies are concerned about whether guards will get paid, and how morale or turnover will effect daily operations, including prison security. The private prison was offered a $200,000,000 restricting plan from its current shareholder Pacific Life Insurance Co. The Private prison’s largest shareholder, Dreman Value Management, was pleased at the offer: “We always maintained that the (prison) business was great, but this has been a financial engineering disaster.”
Shareholder lawsuits still must be settled on satisfactory terms for the deal to be finalized, but the other requirement was met when Lehman Brothers refinanced PZN’s $ 1 billion credit line. At the close of business 26 April, the price closed below $3 a share again after briefly hitting $3.50 the previous week. Prices through the first half of may have generally been below $3 a share. On June 7, the stock hit a new low of $2.00 and talks started on financial restructuring to remedy default on credit line. During the next week, stock rose $1 a share on news that their $1 billion credit line is restructured and they receive a $780,000,000 federal contract.
Instrumental in pulling off this contract was former Federal Bureau of Prisons head J. Michael Quinlan, who is now on the Board of PZN. The Federal Contract, with guaranteed 95% occupancy rate, provided financial resources to reject a restructuring offer from Pacific Life Insurance, but a Legg-Mason stock analyst declared PZN an UNDERPERFORM. Quinlan is now one of the top executives in the company.
Because the stock has lost 75% of its value, two of the executives are leaving, but not without a $1.3 million severance. Of course, there’s also been millions in attorney fees, class action lawsuits from shareholders about the merger and management fees for restructuring. Share prices bottomed out at $0.18 –yes, 18 cents; that really inspires confidence in the justice system. They instituted a 10 for 1 split, which does not change the underlying financials of the company, but prevented them from being removed from the New York Stock Exchange. On February 23, 2000 Pacific Life Insurance Company submitted to the board of directors of Prison Realty Trust a shareholder based proposal to invest in and restructure Prison Realty Trust (NYSE:PZN). The shareholder proposal would involve additional value, less dilution and potentially higher returns for existing shareholders of Prison Realty Trust, than the agreement Prison Realty Trust currently has with Fortress Investment Group LLC, the Blackstone Group and Bank of America. Fortress Investment Group is a global alternative investment and asset management firm founded in 1998 with approximately $11 billion in equity capitol. They are located at 1251 Avenue of the Americas 16th floor New York, NY 10020 1-212-798-6100. Fortress just recently completed the acquisition of Germany’s fourth largest residential housing company, GAGFAH, from the German Federal Government’s social security and pension agency, Bundesversicherungsanstalt Fuer Angestellte (or BfA). The transaction, which is valued at approximately 3.5 billion euros (U.S. $4.3 billion), includes the assumption of 1.4 billion euros of existing financing, a $1.4 billion acquisition loan, and 700 million euros of private equity capitol.
Fortress on November 15, 2004 merged with Stelmar Shipping Ltd. Stelmar is an international provider of petroleum products and crude oil transportation services and is Headquartered in Athens, Greece, Stelmar operates one of the world’s largest and most modern Handymax and Panamax tanker fleets with an average age of approximately six years. Stelmar’s 40 vessel fleet consists of 24 Handymax, 13 Panamax and three Aframax tankers.
The Blackstone group is a private investment banking firm and describes itself as a leading global investment and advisory firm. The Blackstone Group was founded in 1985 by a group of four, including Peter G. Peterson and Stephen A. Schwarzman.
The Blackstone Group has ties to American International Group Inc. (AIG) and Kissinger Associates, Inc./Henry Kissinger. According to the Blackstone website, AIG acquired a 7 % non-voting interest in the company in 1998 for $150 million”and committed to invest $1.2 billion in future Blackstone sponsored funds.”
Blackstone has developed strategic alliances with some of the largest and most sophisticated international financial institutions. In addition to AIG, they include Kissinger Associates, Roland Berger & Partner, GmbH, and Scandinaviska Enskilda Banken,” the website states [1] (http://www.blackstone.com/company/bst_group.html).
The company’s Blackstone Alternative Asset Management unit handles $1 billion in hedge funds for pension giant CalPERS.
John Kerry Forbes 2004 campaign ‘advisor’ Roger C. Altman was Vice Chairman of the Blackstone Group from 1987 through 1992 “where he led the firm’s merger advisory business.”
In December 2001, the Blackstone Group was appointed as Enron’s principal financial advisor with regard to financial restructuring.
The Blackstone Group is also handling the restructuring of Global Crossing. The Blackstone Group is located at 345 Park Avenue New York, NY 10154 USA Phone; +1 212 583 5000 Fax: +1 212 583 5712. London location is the Blackstone Group International Limited, Stirling Square, 5-7 Carlton Gardens, 4th Floor London, SW1Y 5AD U.K. Phone: +44 20 7451 4000 Fax: +44 20 7451 4038.
In October 2004, Kissinger Associates and APCO Worldwide announced that they had formed “a strategic alliance”. APCO Worldwide is located at 1615 L St. N.W., # 900, Washington, D.C. phone # 1-202-778-1000. APCO worldwide was started by Margery Kraus in 1984 and she is active on the board of Group Menatep (chair, Advisory Board), the largest Russian holding company; Teuza Fund, a Fairchild technology venture (Israel). Group MENATEP is an international diversified holding company and long-term Russian strategic and portfolio investor in international financial and capital markets.
Kissinger Associates is located at 350 Park Avenue, New York. Other groups associated with Kissinger are Kissinger McLarty Associates, Military-industrial complex and oil industry. Henry Kissinger’s real name is Henry Stern, who started and trained the terrorist group the Stern Gang in Israel, which is now called the Mossad. He trains global terrorist groups for the FBI, CIA, and the military, which are the groups running are government at every facet of its existence.
Pacific Life, a long term investor, beneficially owns approximately 4.5 million shares of Prison Realty Trust. The shareholder proposal by Pacific Life provides for additional value in the form of Series C Preferred Stock (approximately $2.20 per share) to be distributed to existing shareholders, and potentially higher future returns, along with generating between $45 to $123 million in additional cash flow to Prison Realty Trust. Pacific Life was founded in 1868 and provides life and health insurance products, individual annuities and group employee benefits, and offers to individuals, businesses and pension plans a variety of investment products and services. The pacific life family of companies manages $300 billion in assets, making it one of the largest financial institutions in America, and currently counts 65 of the 100 largest U.S. companies as clients. Pacific Life Insurance Company is a member of the fortune 500 group.
The Prison Realty Trust [PZN], which is a real estate investment trust [REIT] and is the world’s largest private sector owner and developer. A REIT is a company that buys, develops, manages and sells real estate assets, REIT’s allows participates to invest in a professionally managed portfolio of real estate properties, REIT’s qualify as pass through entities, companies who are able distribute the majority of income cash flows to investors without taxation at the corporate level (providing that certain conditions are met). As pass through entities, whose main function is to pass profits on to investors, a REIT’s business activities are generally restricted to generation of property rental income. Another major advantage of REIT investment is its liquidity (ease of liquidation of assets into cash), as compared to traditional private real estate ownership which are not very easy to liquidate. One reason for the liquid nature of REIT investments is that its shares are primarily traded on major exchanges, making it easier to buy and sell REIT assets/shares than to buy and sell properties in private markets.
The origins of the real estate investment trust, or REIT (pronounced “reet”) date back to the 1880s. At that time, investors could avoid double taxation because trusts were not taxed at the corporate level if income was distributed to beneficiaries. This tax advantage, however, was reversed in the 1930s, and all passive investments were taxed first at the corporate level and later taxed as a part of individual incomes. Unlike stock and bond investment companies, REIT’s were unable to secure legislation to overturn the 1930 decision until 30 years later. Following WWII, the demand for real estate funds skyrocketed and President Eisenhower signed the 1960 real estate investment trust tax provision which reestablished the special tax considerations qualifying REIT’s as pass through entities (thus eliminating the double taxation). This law has remained relatively intact with minor improvements since its inception.
REIT investment increased throughout the 1980s with the elimination of certain real estate tax shelters. Investments in real estate provided investors with income and appreciation. The Tax Reform Act of 1986 allowed REIT’s to manage their properties directly, and in 1993 REIT investment barriers to pension funds were eliminated. This trend of reforms continued to increase the interest in and value of REIT investment.
Today, there are over 300 publicly traded REIT’s operating in the United States their assets total over $300 billion. Approximately twothirds of these trade on the national stock exchanges. '
REIT’s fall into three broad categories:
Equity REIT’s: (96.1%)
Equity REITS invest and own properties (thus responsible for the equity or value of their real estate assets). Their revenues come principally from their property rents.
Mortgage REITs: (1.6%)
Mortgage REITs deal in investment and ownership of property mortgages.
These REITs loan money for mortgages to owners of real estate, or invest in (purchase) existing mortgages or mortgage backed securities.
Their revenues are generated primarily by the interest that they earn on the mortgage loans.
Hybrid REITs: (2.3%) Hybrid
REITs combine the investment strategies of Equity
REITs and Mortgage
REITs by investing in both properties and mortgages.
Individual REITs are able to distinguish themselves by specialization. REITs may focus their investments geographically (by region, state, or metropolitan area), or in property types (such as retail properties, industrial facilities, office buildings, apartments or healthcare facilities). Certain REITs choose a broader focus, investing in a variety of types of property and mortgage assets across a wider spectrum of locations.
The current REIT industry’s investment choices can be broken down by property:
Retail 20%
• Residential 21.0%
• Industrial/Office 33.1%
• Specialty 2.3 %
• Health Care 3.8%
• Self Storage 3.6%
• Diversified 8.5%
• Mortgage Backed 1.5%
• Lodging/Resort 6.1%
Federal Prison Industries, also known by its trade name UNICOR, founded in 1934, is operated by the Department of Justice (DOJ) and is wholly owned government corporation which employs 25 percent of the Federal Bureau of Prisons’ sentenced inmate population. Unicor is a supplier to the military during the current war in Iraq.
The government has also created the Prison Industrial Complex, which is composed of the following Agencies:
Biometric Consortium
Border Research and Technology Center (BRTC)
Bureau of Alcohol, Tobacco, and Firearms (BATF)
Corrections Program Office (CPO)
Counter drug Technology Assessment Center (CTAC)
Drug Enforcement Administration (DEA) Federal Bureau of Prisons
(FBP) Federal Prison Industries (operated by DOJ); also known as UNICOR Immigration and Naturalization Service National Institute of Corrections (NIC)
National Institute of Justice (NIJ)
National Law Enforcement and Corrections Technology Center (NLECTC)
National Technical Information Service (NTIS)
Office of Correctional Education (OVAE)
Office of Drug Control Policy (ODCP)
Office of Law Enforcement Standards (OLES)
Office of Law Enforcement Technology Commercialization (OLETC)
Office of National Drug Control Policy (ONDCP)
Office of Science and Technology (OS&T) 23 Space and Naval Warfare Systems Center, San Diego (Navy SSC San Diego)
Space and Naval Warfare Systems Center, San Diego (Navy SSC San Diego)
Southwest Border High Intensity Drug Trafficking Area (HIDTA) UNICOR
U.S. Customs Service
U.S. Department of Defense (DOD)/Biometric Management Office (BMO) '
U.S. Department of Homeland Security/Border and Transportation Security Directorate (BTS)
U.S. Department of Justice (DOJ)
U.S. Parole Commission
Non-Governmental Entities:
Alternative Monitoring Services
American Correctional Association
American Legislative Exchange Council (ALEC)
“Bed brokers”
BI Inc. (Biometric Systems)
The [Biometric Foundation]
Bobby Ross Group
Capital Correction Resources
Cornell Corrections correctionalnews.com corrections.com
Corrections Corporation of America (CCA)
Corrections Yellow Pages
Dominion Management
Dove Development
Corporation Earl
Warren Legal Institute
Federal Extradition Agency (private)
General Security Service Government owned/contractor operated
Iridian Technologies, Inc. (formerly IriScan, Inc.)
Juvenile and Jail Facility Management Services Justice Policy Institute (JPI)
Justice Technology Information Network (JTIN)
Law Enforcement and Corrections
Technology Advisory Council (LECTAC) Mace Security Inc.
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