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In Brief

News highlights from around the world

Issue: "Bureaucratic burial," June 29, 2002

Charitable mistrust

Snake-oil schemes never go away-they just change their skins. The Securities and Exchange Commission (SEC) announced on June 7 a judge's ruling against Robert R. Dillie, Mid-America Foundation, Inc., and Mid-America Financial Group. The agency says that Mr. Dillie and Mid-America fleeced hundreds of mostly elderly citizens of an estimated $54 million since 1997, by selling Charitable Gift Annuities (CGAs). CGAs are like traditional fixed annuities but are invested in nonprofit groups. An investor transfers an asset, such as stock, cash, or property, to a charity. In return, the charity pays the investor a fixed amount of money each year, based on a contract interest rate. More than 4,000 nonprofits offer such investments. But Mr. Dillie and Mid-America never donated millions that investors gave them, according to the SEC. Mr. Dillie and his firm instead used investors' money to finance aircraft charters, gambling debts, lavish personal residences, and even a ranch. Defendants used some of the money to pay child support. But investors won in the end: In addition to a civil penalty, the June 7 judgment requires Mr. Dillie and Mid-America to pay "disgorgement"-a repayment to victims of ill-gotten gains, plus interest.

Scholastic angst

Scholastic, the world's largest publisher and distributor of children's books, last week snagged 13 "EdPress" awards, the Oscar-like accolades that the Association of Educational Publishers gives out each year. But the Scholastic publications honored reveal that any post-9/11 resurgence of traditionalism bypassed academia. For example, EdPress honored Scholastic Art magazine for an editorial series called "Alice Neel Portraits." Ms. Neel, a mid-20th-century artist who won fame for her portraits of "urban angst," was a committed socialist. Junior Scholastic magazine received an award for "Lost Childhoods," an article on child labor, which ran alongside stories for children on trendy environmental themes. EdPress also named Science World magazine "Periodical of the Year," and gave it the Association's highest honor, the "Golden Lamp Award." But Science World is written to meet science education standards developed by the National Academy of Science, a hard-line Darwinist group.

Martha and the vandals?

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What did Martha Stewart know and when did she know it? The latest in a series of corporate scandals threatens to depose the queen of domestic living, who is a close friend of embattled ImClone founder Samuel Waksal. Investigators want to know whether Mr. Waksal tipped off Ms. Stewart in December that the Food and Drug Administration (FDA) was about to reject the biotech company's highly promoted drug, Erbitux. Ms. Stewart sold 3,928 shares of ImClone on Dec. 27, the day before the FDA announced its decision on Erbitux. ImClone stock has dropped 90 percent since the FDA's decision. Ms. Stewart insists that she knew nothing about the decision and says she had an order with her broker to sell the shares whenever they fell below $60. Still, the investigation has made investors nervous, and shares in Ms. Stewart's company, Martha Stewart Living Omnimedia, have fallen. The Securities and Exchange Commission, meanwhile, charged Mr. Waksal with fraud for insider trading. The scandal comes as prosecutors are more aggressively pursing corporate abuse in the wake of the dot-com meltdown and the Enron disaster. Treasury Secretary Paul O'Neill said that while such cases are rare, they are a "disgrace in this country right now-the unethical behavior of a few notorious company executives."

Nickelodeon dimed

For homosexual propaganda aimed at children, Nick News Special Edition: My Family Is Different could have been worse. Liberal journalist Linda Ellerbee last week hosted the show for the children's cable channel Nickelodeon about children who live with homosexual parents. It seemed predictable that the program would follow the gay-activist line that anyone who disapproves of homosexuality is a hater. That, at least, didn't happen. The half-hour show featured a panel of children, some of whom live with gay parents, and three homosexual adults. The panel spent the bulk of the show making the laudable point that no one should tease or bully kids who live with homosexual parents. Most of the panelists also argued that homosexual parents aren't much different from heterosexual parents. But the panel included three Christian kids who did their best to stand for truth, and Ms. Ellerbee let them speak their minds. One boy said that no child should call another child names, but that Christians also have a responsibility to stand against what the Bible says is wrong. A Christian girl named Paige pointed out that mothers and fathers parent differently, and that a child who doesn't have one of each is missing something important. The show also included a clip about Jerry Falwell, who noted that while Christians cannot approve of homosexuality, they should treat homosexuals as they themselves would want to be treated. The show resisted the urge to become heavy-handed until the closing minutes, when Ms. Ellerbee showed a montage of clips about people who all argued that families headed by homosexual parents are as healthy, and as good for children, as heterosexual families. That was the last word on the subject. So the show was bad, but it could have been worse. Yet the question remains: Is any show about homosexuality really appropriate for a children's network? | Timothy Lamer


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