Corra Daily Planet » 2006 » July

Check Out Potential Business Partners Before They Ruin Your Company

Tue, July 25th, 2006 - 7:25 pm - By Gordon Basichis

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We saw this article in the New York Times and found it particularly interesting.

Creditors Declare Yukos Bankrupt

MOSCOW, July 25 — The Yukos oil company’s long fight for its existence neared an end today when creditors rejected its plans for recovery and recommended that what was once Russia’s largest and most successful oil conglomerate be declared bankrupt.

The vote by creditors all but ensures that Yukos will be liquidated — the final chapter in a saga that began nearly three years ago when Yukos’s billionaire founder, Mikhail B. Khodorkovsky, was arrested by masked law enforcement officers and hustled away.

Mr. Khodorkovsky is now serving a term in a Siberian labor camp, after being convicted last year of tax evasion and other crimes in what he and his supporters call a show trial orchestrated by the Kremlin to punish him for his political ambitions. President Vladimir V. Putin has denied that allegation.

But the fate of his company now lies in a bankruptcy hearing here next week, at which the creditors — largely connected to the Kremlin — will ask that the firm be liquidated and its assets redistributed.

To serve as the receiver, the creditors nominated Eduard Rebgun, the court-appointed manager who recommended that the company be declared bankrupt.

The meeting today progressed according to previous patterns, with the official Russian position trumping Yukos’s data and assertions.

Relying on financial information from Mr. Rebgun, the creditors ignored the company’s contention that its assets, which Yukos says are valued at nearly $38 billion, exceeded its liabilities by more than $20 billion and were more than enough for Yukos to pay off its debts.

Instead, the creditors accepted Mr. Rebgun’s assessment that the company’s assets were far less valuable — about $18 billion — and that its debts exceeded their value by more than $500 million.

Yukos’s lost its principal pumping subsidiary, Yuganskneftegas, in a bizarrely rigged auction in 2004. That firm, a huge asset that pumped as much oil in a day as Indonesia, has since fallen under the Kremlin’s control and become part Russia’s growing portfolio and might as an energy power.

But Yukos has retained ownership of several oil prospects, as well as 1,302 retail gas stations, five refineries and pumping concerns in Tomsk and Samara. It also owns a 9.2 percent stake in RosNeft, Russia’s state oil company. And a 20 percent stake in Gazprom Neft, a subsidiary of the state-controlled energy giant, Gazprom, that it obtained when Gazprom acquired Sibneft.

Gazprom has offered to buy this stake at about half price.

Despite oil prices hovering near record highs and the company’s potential to increase its revenue, the creditors voted that Yukos would not be able to continue as a going concern and pay its debts.

In a swift succession of votes in the afternoon, the creditors rejected Yukos’s arguments, decided to ask the court to declare the firm bankrupt, and set up a committee of creditors.

A Yukos spokeswoman, Claire Davidson, called the events “the latest step in the forced and systematic expropriation of Yukos assets by the Russian Federation.”

It’s an old story. Be careful to whom you hitch your wagon, lest they ruin you. You may be the best intended business manager but putting in with a company that is burdened with legal baggage may give your more difficulty than you ever bargained for. More than one business was ruined by the wrong association. Naively, they entered strategic partnerships with companies that were either robbing and stealing or had inflated its true value. Can we say Enron? Thigns are going swimmingly until the day someone shows up at your door with a subpeona or, worse, the feds show up with a warrant to search and seize your files and freeze your money.

So there you are holding the bag, all because you entered into a joint venture with a company that had been up to something illegal. Only then do you find out their CEO and a half-dozen others are going to trial and then to jail, while what’s left of their assets are seized by their creditors. The thing is your assets may come under fire and also be vulnerable to attachment. Guilt by association.

You may be the most reputable company on earth, and you may have innocently broken bread with this nefarious entity, but like it or not, quite often you are going along for the ride. Whether your new partner meant to implicate you, or whether it was an accident hardly matters at the end of this long and trying day. Bottom line, tag, you’re it, and it will get expensive.

Even if you can show there was no deliberate conspiracy of any sort and you can wend your way out of total destruction, there are still severe penalties. Just think of the legal costs alone. Think of the embarrassment and how it may make your clients and associates feel about you and your business. Let’s face it, no matter how innocent you are there will always be some faction of the world who believes you are guilty.

So whether you are a large, small or medium sized business, before you enter into any strategic partnership or joint venture, check out the other guys. Run a background check. See if the other guys are still playing by the rules, or if they have warrants out or liens and judgments against the principals. Run background screenings that will help tell if they are legitimate and reputable. Conduct a background research to see if they are litigious and may after the courting is over end up suing you.

Check Them Out Before You Partner.

Economic Slowdown Might Give Human Resources Might Have Better Selection of Job Candidates

Thu, July 20th, 2006 - 2:10 pm - By Gordon Basichis

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We recently saw this article on Tech Web.

Monster Sees Dip In Online Recruitment

By W. David Gardner,

Rising gas prices and interest rates appear to be taking their toll on the pace of hiring, as Monster Worldwide Inc. reported Thursday that online recruitment activity has declined in 24 of the top 28 Metro markets.

The sharpest recruitment downturn was reported in Denver, Sacramento and Cincinnati, which all showed lower overall demand for workers.

On the plus side, Minneapolis and St. Louis saw an increase in online hiring activity while Atlanta and Baltimore were unchanged from May’s hiring.

The Monster report marked a reversal in online hiring trends, which had been on an uptick in recent months.

The new Monster report indicated that major retailers are trimming their hiring, partially in keeping with typical seasonal summer slowdown hiring activity and as retail employers appear to be taking a more conservative approach to adding employees.

“The June findings of the Monster Local Employment Index suggest a mild slowdown in major metro market recruitment activity last month as consumer spending was further tempered by higher gasoline prices and rising interest rates,” said Monster International group president Steve Pogorzelski, in a statement. “Broader business expansion activities slowed with the start of the summer vacation season.”

This is but one indication of an ecomic slowdown that usually leads to a decline in new employment hires. While this situation my night be the best overall for national concerns, it does provide Human Resources Managers with a better selection of job candidates. What was a short while ago a merely acceptable job candidate can now be passed over in preference to an employment candidate who is better qualified and therefore much more desirable.

While this does present HR Management with an excellent opportunity, you can never assume that your job candidate isn’t hiding a negative personal and employment history. Even the most qualified of candidates may have an employment background rife with substance abuse problems or a history of theft and violence. These are the kinds of things that can serverely disrupt your workplace. They can open you to liability and bring lawsuits while reducing employee morale and productivity.

Your Human Resources Department should never take anything for granted. In this day and age, especially, make it mandatory to conduct a comprehensive background check With the majority of candidates lying on their resumes, it is also essential to run an employment verification check as well as an education background check. Don’t take anything for granted, especially a resume.

Check Them Out Before you Hire!

Take a Lesson from Coca-Cola: Your Proprietary Information May Be Vulnerable to Employee Theft

Wed, July 19th, 2006 - 1:33 pm - By Gordon Basichis

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We found this well written article in the Washington Post. Although this general news article has run just about everywhere, this is most comprehensive in explaining the story. It should be recognized as a warning about internal security for your business.

3 Accused In Theft Of Coke Secrets

Information Offered To Pepsi, FBI Says

Washington Post Staff Writer
Thursday, July 6, 2006; Page D01

The FBI arrested three people in Atlanta yesterday on charges that they conspired to steal trade secrets from Coca-Cola Co. and sell the information for more than $1.5 million to PepsiCo Inc., federal law enforcement officials said.The defendants, including one Coca-Cola employee, who worked as an administrative assistant in the company’s Atlanta headquarters, contacted PepsiCo officials in May, who tipped off Coca-Cola officials, who then contacted the FBI, according to Atlanta U.S. Attorney David E. Nahmias.Coca-Cola and PepsiCo, whose fierce rivalry in the soft-drink and food arena has provided case studies for generations of marketing students, worked together to help federal agents set up an undercover sting operation that led to yesterday’s arrests.A company surveillance camera caught Coca-Cola employee Joya Williams at her desk looking through files and “stuffing documents into bags,” Nahmias and FBI officials said. Then in June, an undercover FBI agent met at the Atlanta airport with another of the defendants, handing him $30,000 in a yellow Girl Scout Cookie box in exchange for an Armani bag containing confidential Coca-Cola documents and a sample of a product the company was developing, officials said.

The FBI agent promised $45,000 more would be provided later, after the sample product had been tested. On June 27, an FBI agent offered to pay $1.5 million for additional documents and information, the officials said.

The three defendants, who were in jail last night pending an appearance before a judge this morning, were unavailable for comment.

Coca-Cola spokesman Ben Deutsch would not comment on the information the three suspects are alleged to have stolen except to say it did not contain the tightly guarded recipe for Coke. “The secret formula was not and is not at risk,” he said.

The company released a memo that was sent by Coca-Cola’s chairman and chief executive, E. Neville Isdell, sent to the company’s 50,000 employees worldwide, detailing the arrests and saying the case has caused the company to reconsider security of trade secrets from the top down.

“As this is an ongoing criminal matter, we are limited in what we can communicate,” Isdell said in the memo. “However, it should be noted that no personal employee information was ever at risk.” The involvement in the alleged scheme by a Coca-Cola employee was “difficult for all of us to accept,” he said, but it underscored the need to safeguard trade secrets.

“I would also like to express our sincere appreciation to PepsiCo for alerting us to this attack,” he said.

Dave DeCecco, spokesman for Pepsi-Cola North America, said: “We only did what any responsible company would do. Competition can sometimes be fierce, but it also must be fair and legal.”

Federal prosecutors said the alleged conspirator who made the airport exchange, whom they identified as Ibrahim Dimson of New York, sent an e-mail to an FBI undercover agent saying: “I have information that’s all classified and extremely confidential, that only a handful of the top execs at my company have seen. I can even provide actual products and packaging of certain products.”

The third alleged conspirator, identified by prosecutors as Edmund Duhaney of Decatur, Ga., opened a bank account with Dimson the day the FBI agent agreed to pay $1.5 million for additional information, the officials said.

This is a most compelling story on many levels. One significant aspect that deserves mention is Pepsi’s ethical behavior in rejecting overtures from the alleged thieves. It should also be noted that this incident has caused the Coca-Cola Company to review its general security practices. We don’t know much about Coca-Cola’s security procedures, but we hope it doesn’t take a serious threat to cause a serious reevaluation. Security evaluations should be performed periodically and on a regular basis.Good security begins with a pre-employment background check. As this incident demonstrates, you can have all the security cameras, passwords and security codes, but a determined thief can access your most important proprietary information. While a preemployment background screening cannot guarantee protection against internal theft it is a good first line of defense. Background checks are inespensive and highly cost effective, especially when measured against your potential losses and liability exposure.While the Pepsi and Coca Cola companies have displayed commendable ethics and graciousness in dealing with in this situation, on a global basis there may be more than a few companies that would jump at the opportunity to snatch Coca-Cola’s special formula. Taking it one step further, no matter what your business, there is always a company somewhere in this world who would gladly pay for your company’s propriatary secrets. Whether it be your research and development projects, your special software, your mailing lists or intellectual property, there is always someone willing to steal it and always someone willing to buy it.With a global economy your risk epands accordingly. Chances are you are hiring workers from foreign countries, sourcing and shipping all over the world. It is wise in the case of foreign workers to conduct international background checks for those who have access to your sensitive information. For domestic workers there is any number of background checks your HR department may choose to utilize.There are enough precautionary measures you can take to prevent thieves from stealing your most valuable information and materials. These measures are cost effective, especially when compared to the potential damage that can be done to your business. Take these precautions, please. Conduct security reviews on a regular basis. Order background checks not only for your new canddiates but do periodic background screens for your current employees.Remember, Check Them Out Before You Hire.

Lying About Your Resume

Mon, July 17th, 2006 - 4:30 pm - By Gordon Basichis

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We found this article awhile ago on

Study: Almost Half of Résumés are Bogus

From: By: Ted O’Callahan

A new six-month review of résumés found that a surprising number contained “major misrepresentations.”

Feb. 28, 2006–While much attention has been focused on performance-enhancing drugs in the sports world over the past few years, a new study shows that the business world may be suffering from even more cheating — at least when it comes to résumés.

Résumé, a South Burlington, Vt.-based résumé-counseling company, spent six months verifying dates of employment, job titles, and educational background on more than 1,000 résumés, and found that 42.7% had one or more significant errors. The study, which was the company’s first, looked a résumés for positions ranging from entry level to executive.

“I was shocked at how many people include a major misrepresentation in their résumé,” said Mike Worthington, co-founder of RésuméDoctor.

There is certainly no shortage of high-profile résumé flaps. Just last week, RadioShack CEO Dave Edmonson resigned after admitting misstatements on his résumé. Michael Brown, the embattled former head of the Federal Emergency Management Agency, faced scathing criticism after Hurricane Katrina over the thinness of his résumé. And George O’Leary lost his job as Notre Dame’s head football coach four years ago for inventing a master’s degree on his résumé.

But, Worthington said, such fabrication is not exclusive to just high-level executives, and impacts companies of all sizes.

Linda Brandenberger of Oklahoma City-based Partners Human Resources said that many résumés take a “most poetic license” with the truth. “Inaccuracies are a huge problem,” she added.

Brandenberger said she believes that people exaggerate because they want to cast themselves in the most positive light, even though “just giving an honest picture” may actually do more to get a job.

Brandenberger, who has been an HR director for 20 years, said the trend continues to grow, citing many examples she has seen of certifications, degrees, and jobs that were completely fabricated. “You have to verify everything now,” she said.

Todd Springer, a managing partner at Footbridge, an Andover, Mass.-based engineering and IT staffing firm, said he has seen many instances of title inaccuracies and date discrepancies. “A résumé is designed to be a selling tool,” he said, noting that it is an employer’s obligation to then verify that sales pitch. Interviews, he has found, are an essential part of the vetting process.

At the same time, contacting references is key, Springer said, recalling a résumé he once came across where the candidate was actually covering up prison time with bogus information. He suggests cold-calling references, especially if the employer has pre-existing relationships with someone in a company listed on an applicants résumé.

RésuméDoctor’s Worthington said that the fear of lawsuits makes many companies reluctant to do thorough résumé checks.

Okay, so for most Human Resource Managers I’m sure it’s not secret that people like on their resumes. There may well be, as the article states, litigation dangers as a consequence of checking out resumes. But think of the consequences and the dangers to your business if you put the wrong person in the wrong position under the misguided belief that they are actually qualified. Most businesses, after all, don’t die exactly from natural causes. Businesses die from screw ups and miscalculations, substance abusers and incompetent personnel.

In the age of moral relativity, let’s face it, more than a few don’t see the harm in lying about their education degrees, past jobs and responsibilities. Therefore it is essential to separate the puff aspects and embellishments from the out and out fabrications. It’s may be arguable that your candidate supervised as many projects as he said, and it may be arguable that he was instrumental increasing revenue by a zillion percent. However there is no arguement concerning actual skill sets and degrees that he earned.

Since we are a background checking company we realize that many of our clients have a zero tolerance policy when it comes to lying. You can admit misdemeanors and even some felonies or tell them up front you didn’t quite get your Bacherlor’s Degree, but if you lie about it your candidacy is automatically rejected. It is a good policy, sound in ethics and logic. If you enter into a job lying, chances are you are going to be lying on the job as well.

We know we are predjudiced but we truly believe you have to be crazy not to run background checks on your employment candidates. For the few bucks it costs you should run education verification checks and past employment verification as well as criminal checks and for certain positions credit checks and DMV screening as well. You could be paying a lot more than you think for someonewho is ill equipped or lacking in skill sets to occupy a pivotal job in your company.

Education background checks will put an end to any doubt or considerations about a candidate’s scholastic achievements. Employment verification will help clarify your candidate’s resume. Pre-employment screening is your only counter against lying candidates and bogus resumes. Background checks will help eliminate any rude surprises.

So do yourself and establish a steadfast policy for your HR deparment that they conduct pre-employment screenings along with education and employment verification background checks. You will save money, time and a whole lot of aggravation.

Check Them Out Before You Hire!

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