The New York Times knocks out a well-reported story on how computer-maker Dell shot itself in the foot by screwing its customers:
After the math department at the University of Texas noticed some of its Dell computers failing, Dell examined the machines. The company came up with an unusual reason for the computers’ demise: the school had overtaxed the machines by making them perform difficult math calculations.
Dell, however, had actually sent the university, in Austin, desktop PCs riddled with faulty electrical components that were leaking chemicals and causing the malfunctions.
Despite internal reports that estimated 97 percent of the 12 million relevant computers sold would go bad:
…Dell employees went out of their way to conceal these problems. In one e-mail exchange between Dell customer support employees concerning computers at the Simpson Thacher & Bartlett law firm, a Dell worker states, “We need to avoid all language indicating the boards were bad or had ‘issues’ per our discussion this morning.”
In other documents about how to handle questions around the faulty OptiPlex systems, Dell salespeople were told, “Don’t bring this to customer’s attention proactively” and “Emphasize uncertainty.”
All this happened while the company was cooking its books. That’s a corporate culture gone seriously awry.
Maybe Michael Dell should “shut it down and give the money back to the shareholders”.
— I like this Huffington Post Investigative Fund report showing college reporters (and everyone else) how to investigate their universities’ credit-card tie-ins. It’s part of a distributed reporting project, but it also works as a guide to doing your own story.
I sure could have used that as a cub reporter at my college paper when CBS reported that the University of Oklahoma got paid $1.3 million a year (plus 0.4 percent of every purchase) to allow a credit-card company on campus.
This is kind of an investigation in a box. More, please.
— Reuters reports that the SEC’s revolving door is swinging freely with the hedge-fund industry:
Hedge fund manager John Paulson in June tapped former SEC chairman Harvey Pitt and former commissioner Roel Campos as outside directors at some funds run by his $35 billion firm, to help beef up compliance and governance operations.
Earlier this year, Pitt plus former SEC Commissioners Aulana Peters and Joseph Grundfest signed on as advisers to Israel Englander’s $7.8 billion Millennium Management hedge fund. Former SEC Chairman Arthur Levitt also is doing his fair share of consulting work for private equity firms and hedge funds.
The high-profile consulting assignments are raising eyebrows of some on Wall Street and Capitol Hill, who worry hedge fund managers may be trying to find ways to influence or lean on regulators. Critics see the move by hedge funds to rent-a-regulator as just one more example of the historic revolving door between government agencies and Wall Street.