Tell It To Al

Struggling retailer J.C. Penney confirmed Friday that it is cutting an additional 2,200 workers amid plummeting sales and soaring losses.

This is on top of the 19,000 jobs cut since former Apple executive Ron Johnson took the helm of the Plano, Texas-based chain in November 2011.

Last week, many observers were questioning whether Mr. Johnson should remain in his job after J.C. Penney  unveiled more losses and sales declines. And then Mr. Johnson took the witness stand in a bizarre lawsuit between Macy’s, Martha Stewart and J.C. Penney. Click here to read my column on that episode.

Mr. Johnson’s credibility is a declining commodity. Listening to his investor call last week, I was struck by his circuitous answer after someone asked about the prospect of more layoffs on the way. “This has been much more rumor than it is fact,” he said on the call.

Well, that was last week. This week it’s more fact than rumor.

Here’s a little transcript of what Mr. Johnson  said on the call:

“There is a rumor a day about J.C. Penney and some incredibly layoff that’s coming. Two weeks ago, it was 300 people. It was a Valentine’s Day this-or-that. And I think that’s really hard on our teams. It’s hard on our transformation to have to live in this fishbowl of rumors.

”The truth is, we promoted 400 people here in Plano and at our existing regional centers in the past year, that nobody writes about.

“We’ve  told our teams … last week here in Plano, and had a very detailed town-hall, and answered every question that they had. And we made it very clear that we are always going to be in transformation. We are always going to be looking for ways to do things better and more effectively. When work that doesn’t need to be done anymore goes away, we don’t want someone to pretend they are working when we don’t have work for them. We’ll try to get them into another job. We’ve got to constantly invest in the next new thing so we stay current.

“So we’re going to be always in transformation, but the goal is to build great careers for our teams here. But this idea that we’ve got massive headcounts reductions on the way  is just really rumored.”

It was a tough week for J.C. Penney CEO Ron Johnson.

First, he delivered the bad news: $985 million in losses and shrinking sales for 2012, his first full year as CEO of the struggling retailer.

Then on Friday he took the witness stand in lawsuits that competitor Macy’s filed against J.C. Penney and Martha Stewart Living Omnimedia. Macy’s claims Mr. Johnson and Ms. Stewart have violated a contract it has to sell Martha Stewart-branded products, exclusively.

Mr. Johnson has included Ms. Stewart’s products in his larger strategy of putting boutique stores within his stores. So far, it doesn’t seem to be working out.

Click here to read my column in The Sunday Wall Street Journal. And click here to watch me talk about this and other subjects with Will Ripley of Denver’s NBC affiliate, 9News.

It’s been difficult to see how Mr. Johnson’s strategy would ever work out. Click here to read what I wrote about it last year.

Sometimes all it take to blow up a company is a boss with an enormous ego who refuses to listen to anything other than his own insulated mind.

This is largely what caused the meltdown of MF Global, a $40 billion commodities trading and investment firm run into the ground by Jon Corzine, the former Goldman Sachs chairman, Democractic U.S. Senator and New Jersey governor, according to a report released by Republican members of the House financial services committee.

Of course, there’s no law against having a ridiculously sized ego, and the report stops short of assigning any sort of criminal liability.

Click here to read my column in the Sunday Wall Street Journal. And click here to download the full report from the commitee.

Attorneys for Rajat Gupta compiled an amazing list of good deeds the former Goldman Sachs board director committed before he was convicted for securities fraud.

It played into the relatively light prison sentence Mr. Gupta received this week, with Mr. Gupta receiving only two years in federal prison while prosecutors had asked for more than 10.

U.S. District Court Judge Jed Rakoff offered this theory as to why Mr. Gupta strayed from his otherwise noble path:

“After so many years of assuming the role of father to all, Gupta may have longed to escape the straightjacket of overwhelming responsibility, and had begun to loosen his self-restraint in ways that clouded his judgment.”

I have watched many criminal defendants present their good works at sentencing. It helps a judge decide whether they are dealing with a heartless psychopath or an ordinarly flawed human being who made a mistake. But after making that call, what difference does a list of good deeds make?

Good people do bad things. Bad people do good things.

We all have a dark side, and with a little discipline, we don’t have to give in to it.

Imagine handing out a lighter sentence to a murder defendant just because he volunteered at the homeless shelter. You do the crime. You get the time.

Click here to read my column on MarketWatch.

Michael Gilliland, former  CEO of Sunflower market and founder of Wild Oats Market, is headed to jail for five months after pleading guilty to a felony count of pandering.

Click here to read the details reported in the Arizona Republic. Mr. Gilliland fell for one of the most common law enforcement traps in the book. He answered an ad from a woman posing as an under-aged prostitute who was really a police detective.

Click here to read the column I wrote on Mr. Gilliland last year. How dumb can a CEO be? Hasn’t Mr. Gilliland ever watched “To Catch A Predator” on MSNBC?

I really thought, given his resources and unblemished record,  Mr. Gilliland would find a lawyer who could help him beat this rap, sick as it is. And that losing his CEO job would be the worst of his problems.

Now he’s trading organic fare for jailhouse food.

When companies collude they rarely put it to writing.

That does not seem to be the case with two naturual gas giants bidding on land leases. Reuters reports  Chesapeake Energy Corp. plotted with Encana, it’s fiercest competitor, to suppress land prices at public land auctions in Michigan. Click here to read it’s investigation.

We are talking bid rigging, price fixing, bid-rotation, collusion – all those things corporate people like to attribute to wild conspiracy theorists. And it appears to be contained in emails. Who writes things like this down in emails?

In a July 16, 2010 email, Chesapeaike’s CEO Aubrey McClendon suggested his company “smoke a  peace pipe” with Encana.

It’s unclear what he expected to put in that pipe.

McClendon is already embattled for personally borrowing more than $1.3 billion from a company that also finances his publicly traded company. He’s been removed from the company’s board and the Securities and Exchange Commission and the IRS have launched inquiries.

JP Morgan Chase CEO Jamie Dimon knows how easy it can be for people to deceive themselves, and yet he somehow still deceives himself.

Long before his bank suffered more than $2 billion in surprise trading losses last week, Dimon had this to say to students at Harvard: “You have to fight self-deception. Human beings are experts at it. I do it, too.”

 Nothing like making a point and then proving it.

Click here to read my column on Marketwatch. And click here to watch me talk about this story with Matt Flener of Denver’s 9News.

Yahoo CEO Scott Thompson would be so much better off today had he read my February 2009 column headlined, “Of all the indignities, don’t get Minkowed.”

Click here to read what Thompson should have read. Basically, a famous convicted felon named Barry Minkow was looking for lies on corporate bios and then shorting the stocks of the companies where he found them. The point of the column was that any resume exaggeration out there can eventually become uncovered.

Now it’s 2012 and yet another top executive has been embarrassed after someone discovered he claimed a degree on his corporate bio that he did not have. It remains to be seen whether Thompson is going to survive the ensuing turmoil, and demands from a dissident shareholder that he be fired. Click here to read my latest column about “getting Minkowed” on Marketwatch.

What kind of yahoo did they hire at Yahoo?

A dissident shareholder caught Yahoo’s new CEO Scott Thompson in a misrepresentation on his resume, and in Yahoo’s regulatory filings.  Click here to read all about it.

Thompson had claimed a bachelor’s degree in computer science from Stonehill College, a small school in Easton, Mass.. When New York hedge fund manager Daniel Loeb, whose firm owns 5.8% of Yahoo, challenged that claim, the company admitted it was an exaggeration.

Thompson does have an accounting degree from the school, just not a computer science degree on top of it, as he claimed.

Yahoo confirmed the misrepresentation and issued a statement shamelessly backing Thompson: “This in no way alters that fact that Mr. Thompson is a highly qualified executive with a successful track record leading large consumer technology companies. … Under Mr. Thompson’s leadership, Yahoo is moving forward to grow the company and drive shareholder value.”

This sort of whitewash ignores the fact that the CEO of a publicly traded company misrepresented himself to shareholders and regulators. It doesn’t matter if it’s a small  exaggeration. If Thompson exaggerated his academic achievements, what else is he going to exaggerate?

Any time  someone is caught in a lie, they lose credibility. We are left to wonder if it was just this one little gaffe we  uncovered, or whether there is more to the story telling. We are also left to wonder how a person who spins a yarn in good times is going to react when things turn ugly.

Yahoo dare not fire any low-level employee for misrepresentations on their.resumes. It is setting a horrible example for itself, it’s employees and the rest of corporate America.

And what about those people who actually completed degrees in computer science at Stonehill, spending the necessary, time, energy and money? I’d hate to work so hard  for a degree only to realize that any windbag CEO can simply claim  one for free.

I missed what might have been a Pulitzer Prize-winning photo outside of former Illinois Gov. Rod Blagojevich’s house Wednesday.

Blago was standing on his front porch, just before turning himself over to the federal correctional system, shaking hands with well-wishers and signing autographs like the reality TV star he is.

He was stretching over an iron balustrade to do this. He stretched so far, I thought he might fall into the enormous crowd of fans and media that were blocking the streets outside his home. It was a chaotic scene, with helicopters buzzing in the sky, TV cameras bumping into heads, and people crawling all over each other to get to Blago. “Free our governor,” supporters chanted.

So here was the shot I missed: Blago crouched down to talk to some TV reporters through the bars of his balustrade. As he did this, he put both hands on the bars.

“Whoa, I don’t like the way that looks,” he said aloud to himself, and jumped up before I could get the shot.

He looked just like he’s probably going to look for the next 14 years as inmate No. 40892-424. But I missed what might have been the very first photo of him clutching the bars. I caught only his very sudden leap to a more dignified pose, and, alas, the Pulitzer Prize for Blago news photography was missed by only fractions of a second.

Yes, for me, this is one of those fish-that-got-away stories. But it also shows Blago is already on the path to reform. He was about to do something that could be portrayed as incriminating, and he caught himself.

I am proud of him.

If only he had said, “Whoa, I don’t like the way that sounds,” when the FBI was wiretapping his phone. He might not be where he is today.

I have grown fond of Blago after covering parts of his two corruption trials. While he was on trial for his very life, he took time out of his day to greet just about everyone in the courthouse. He even spent time talking to my mom, who like so many others thinks he’s a really nice man who got a really bad break.

“He didn’t do anything any other politician hasn’t done,” said Blago fan Kay Osborn.

I have run into Osborn every time I’ve come to a Blago event, and there she was with her “Free Blago” sign Wednesday. She will tell you that anyone would expect something in return for a U.S. Senate seat. Blago was just a little more specific about how he characterized this expectation.

It is, after all, Chicago. When people ask me why I am also so suspicious of just about anyone in a position of power, I say it’s because I grew up in Chicago.

It turns out, Blago’s home is just a few blocks away from what used to be my grandmother’s house. This is the neighborhood where my father grew up. And now Blago is something of a neighbor with me, having moved to the Federal Correctional Institution Englewood in suburban Denver.

Colorado is just as excited about having him as Illinois. The same buzzing helicopters and media throngs were there to greet him when he arrived at the Denver International Airport on Thursday. They followed as his car stopped at a hamburger joint on his way to the pokey.

Someone at the restaurant reportedly recognized him from the television show “The Apprentice.”

“Donald Trump fired me, but that’s nothing compared to what I’m facing today,” Blago reportedly replied.

This kind of talk may not have played so well with the judge, but it is what makes Blago so likable among the people. In the history of white-collar crimes, no one has done reality TV shows while out on bail.

My mom has suggested that if Patti Blagojevich moves to the Mile High City to be closer to her husband, that my wife and I show her around. You know, meet her at the neighborhood Starbucks, introduce her daughters to our son, and make her feel right at home.

“He’s going to get out,” my mother said. “He’s not going to be in jail for 14 years. Not for that.”

Indeed, murders often get less time. But I tell my mom not to be so sure. So far, the only thing Blago has beat is the shutter speed on my camera.