MORE THAN DOUBLE STANDARD FOR WINTER OLYMPICS ATHLETES

By Diane M. Grassi

Big media and corporate sponsorship of sporting events in the United States have become as big a story these days as the sports and athletes they themselves sponsor, with nary an opportunity missed by advertisers and networks alike to promote themselves. Whether it is the National Football League, Major League Baseball, the National Basketball Association, the National Hockey League, the National Collegiate Athletics Association, or the United States Olympics teams, the broadcasting rights and contracts and their respective advertising dollars rule. But unfortunately, how individual sports and their respective athletes are treated by such entities varies, and especially if the athlete is on the U.S. Winter Olympics team.

There are a bevy of ironies which most sports fans are aware of when it comes to “non-professional” athletes and teams. For starters, the Winter Olympics is not given the gravitas that the Summer Olympic Games enjoy every four years. In fact, most American spectator-sports fans are hardly cognizant that the 2006 Winter Olympics’ Opening Ceremonies are set for February 10, 2006 in Torino, Italy, a mere five days following the NFL’s Super Bowl XL.

These days the Super Bowl trumps all other sports for television viewership in the U.S., although not historically. And we cannot blame the failure of promoting the Winter Olympics and its respective sports on the success of the NFL. However, we can be critical of the non-existent coverage, for example, of World Cup skiing since the 2002 Winter Olympics, and arguably the most broadly appealing event of the Winter Games, as a truly competitive sport, maybe with the exception of ice hockey. After all, people in the U.S. do ski. And even though figure skating is a big draw, we all know that it is more a presentation that an athletic competition. And how many of us go on curling vacations?

Years ago, the World Championships for skiing were featured on broadcast television, namely on ABC Sports. Nowadays, sports fans are lucky if they happen to catch it on the obscure cable television network, Outdoor Life, which on occasion and inconsistently provides taped coverage of the U.S. Ski Team, usually a week to ten days even after the event has taken place. What a great way to promote interest!

Then, we have the hypocrisy of the U.S. Olympic Ski Team and the United States Olympics Committee which wants to have it both ways. They need the television coverage and sponsors and expect their athletes to tow the party line in being “part of the team.” However, virtually almost all the Olympic athletes compete as individuals.

There is also the rub that the American people do not have the appetite for winter sports. But with little exposure but every four years but for two weeks of coverage, you cannot blame the fans. On top of that the USOC expects the U.S. Olympic team to display exceptional behavior above and beyond those in the professional sports community, since its athletes represent the U.S. on the world’s stage. Others argue that an Olympian should not be treated any differently than say U.S. tennis champion, Andy Roddick, who competes for the World Tennis Association or even golfer, Tiger Woods, when competing in Professional Golfers Association events.

That brings us to the latest media frenzy regarding 2005 World Cup Skiing Champion, Bode Miller. For those of us who have more than a five-minute memory, you may recall that Miller won two silver medals during the 2002 Winter Olympics in Salt Lake City, UT. In fact, television ratings and American awareness of the Winter Olympics are said to have surpassed expectations in 2002, because the Games were held just months after the September 11, 2001 attack on the U.S., and the Olympics offered an opportunity for Americans to “heal.” Therefore, those who normally would not watch the Winter Olympics did and Bode Miller was one of the feel-good stories of the Games.

Bode Miller was not expected to medal in 2002 and walked off with the silver in both the alpine combined and giant slalom races. He nearly fell down during the course of one of his races but still managed to finish second. Miller was hardly a lost story of the 2002 Winter Games. But for those potential new fans which could have come aboard since or those of us who would have liked to follow Miller’s career since, we have been locked out.

In 2005, Miller spent 250 days on the road competing nearly six months predominantly in Europe, where he is far better known. He became the first American skier in 22 years to win the overall World Cup Skiing Championship title. He competed in all four alpine skiing disciplines on the slopes which includes the downhill, the slalom, the giant slalom, the Super-G and the combined, which is one downhill run followed by two slalom runs. If you tried really hard you perhaps heard about it by seeing it on the internet or deeply buried in your favorite sports section.

But on January 8, 2006, infotainment television show, “60-Minutes,” once heralded as the best news magazine program on television, featured an interview piece with Bode Miller by Bob Simon. Unfortunately, “60 Minutes” chose to go the way of most tabloids these days by emphasizing Miller’s controversial remarks concerning tying one on after ski races and then having to pay the price the next day, in addition to his criticism about the drug testing system for World Cup athletes by the U.S. Anti-Doping Agency. It presented a rather skewed look at Miller, but according to the sports media has now put the Winter Olympics back on the map and that now Americans will finally start caring about winter sports. Hopefully, most sports fans find that rather insulting, along with the piece by “60 Minutes,” which has become so desperate for TV ratings these days they have stooped to the level of tabloid journalism.

The broadcast networks and the USOC underestimate the sophistication of the American viewing public. We are fed a daily diet of indiscretions and inappropriate behavior including felonies committed by both professional and college athletes. Most fans do not like it, but accept it and even give athletes the benefit of the doubt, while others sadly have just become numb to such activities. But now we have a World Champion athlete, given nearly no positive coverage for four years, and he mentions that he goes out and downs a few cool ones after his ski races and we are supposed to be shocked and outraged. Yet, we are also expected to care deeply because he is on the U.S. Winter Olympics team headed for Torino and must hold him to a higher standard.

Confused yet? The truth is, Bode Miller, not unlike a lot of athletes, does not conform to some of what his coaches say, and even chooses to travel apart from the team. He trains on his own as well and since he entered the World Cup circuit in 2001 has never been one to keep his yap shut. So what’s this all about anyway? Sounds like the quickest way to stir up interest for the Winter Olympics is to create controversy. In fact, it’s a lot cheaper for the USOC and Winter Olympics broadcast host, NBC, to fuel such stories. Instead of raising awareness of lesser known athletes deserving of attention, make sure to get them in the news every four years, any way you can, even it is at the expense of their achievements.

CORPORATE BUYOUTS OF MINES PLAY PART IN SAFETY ISSUES

By Diane M. Grassi

West Virginia was the second largest producer of coal in the United States in 2005, producing 160 million tons or 13% of total production, while Wyoming was number one, producing 380 million tons, approximately 35% of the nation’s total coal production. However, the coal produced by West Virginia is more in demand than that which is produced in western states as it is considered a cleaner burning coal.

With demand for alternative energy sources in the U.S. at an all time high, the price of coal doubled over the past two years, as natural gas and oil prices have sky rocketed with supplies diminishing, especially in the wake of Hurricane Katrina in the Gulf of Mexico in August of 2005. The Gulf produces nearly 40% of the nation’s natural gas and refines nearly 30% of the nation’s oil and is still hampered by the storm’s devastation. In 2006, coal is expected to provide over 50% of the energy necessary for U.S. electric utilities and speculators expect the future of the coal industry to extend its growth over the next decade, returning to its rate of production prior to the 1970’s.

The tragedies of the 2005 hurricane season along the Gulf Coast as well as the subsequent flooding of New Orleans, LA served to expose flawed emergency services systems on all levels of government in addition to failed levee maintenance. Victims who endured Hurricane Katrina and Hurricane Rita as well as several other storms in Louisiana, Mississippi, parts of Texas as well as Florida, have been promised that government and its respective agencies would be examined and mistakes made would be corrected. Yet it remains to be seen if proper funding oversight will be followed through or if indeed lessons will be learned.

Similarly, the mining explosion of Sago Mine in Tallmansville, WVA, in which 12 miners lost their lives on January 2, 2006, with one surviving miner who still remains in a coma as of a week later, will be steeped in paperwork and months of several independent investigations, including federal and state hearings. While it would appear that running a mining operation is fairly straight forward, the fact that the work in this underground mine is done 25 stories below the surface of the earth, makes it ripe for facts to be less than forthcoming. But maybe the legacy of the tragedy of Sago will unveil the real cost of the purchase of mining operations in the 21st century, by investors with little or no interest in the history of mining or its real inherent risks.

The evolution of mining technology as well as the work of the United Mine Workers Association (UMWA) has led the way for miners’ safety rights vastly improving the lives of miners throughout the U.S. The UMWA was largely responsible for the advent of the Federal Coal Mine Health and Safety Act of 1969, known as the Coal Act, which established health and safety standards for miners both in underground and above-ground mines. The Bureau of Mines was given the power to levy fines and criminal penalties on mines in violation of the law. In addition, free chest x-rays were available for underground miners as well as a compensation fund.

The Coal Act was amended in 1977 in what is now known as the Federal Mine Safety and Health Act, or the Mine Act, which is the prevailing legislation today. The Mine Act helped strengthened the Coal Act with better enforcement of its statutes and combined federal safety and health regulations for all mines, coal and non-coal, under the same piece of legislation. In addition, a new agency within the Department of Labor, known as the Mine Safety and Health Administration (MSHA) was established with a director appointed by the president of the U.S.

The UMWA was founded in Columbus, OH in 1890 with the merger of the Knights of Labor Trade Assembly No. 135 and the National Progressive Union of Miners and Mine Laborers. Its initial constitution “barred discrimination based on race, religion, or national origin.” It was a leader in fighting racism and ethnic discrimination before the turn of the 20th century. Also included in their early fights, the UMWA fought for the 8-hour day in 1898, followed by collective bargaining rights in 1933, health and retirement benefits in 1946 and the eventual health and safety protections resulting in the federal legislation in 1969.

And perhaps most important to the UMWA’s accomplishments was its plowing the way for the National Industrial Recovery Act, which granted workers the right to form unions and bargain collectively with their employers. And after the success of organizing the nation’s coal miners, the UMWA extended its work to the steel and auto industries in order to help those workers organize.

While fatalities in the mines have fallen significantly over the past century and working conditions improved, by the 1980’s many of the smaller mines went out of business, with more nuclear power plants coming online and with the oil crisis of the 1970’s supposedly over. Coal became less of a necessity. Many mines which remained opened decided to hire only non-union personnel. With fewer jobs available in rural communities, workers became willing to forego union benefits and guaranteed pension plans. They sacrificed the transparency with management regarding safety concerns which the union provided them and without fear of retribution.

Today, according to Cecil E. Roberts, President of the UMWA, only 32-35% of all mines are union shops. With the majority of today’s miners comprised of an aging workforce in their late 40’s and 50’s facing retirement, cash bonuses and higher salaries are luring the next generation, now in their 20’s. In the past 20 years as mines shut down and union-busting was rampant, workers were headed to other cities for more lucrative manufacturing jobs. But with steel mills on the decline, textile mills losing out to overseas manufacturing and impending layoffs of automakers, the coalmines are becoming the last bastion for those living in communities where the average annual salary is $25,000. Non-union miners can look forward to earning twice that amount.

However, the recent history of the Sago Mine as well as others its size is not unlike that which has become of other major industries in the 21st century, with individual companies and its workers left victim to bankruptcy or corporate takeover. The Sago Mine, which had 145 employees prior to January 2nd, was operated by Anker West Virginia Mining Co. until November 2005. The International Coal Group Inc. (ICG), purchased it in April 2005, and completed its purchase in November 2005 at which point it took over Sago’s operation.

Famed New York investment financier and billionaire, Wilbur Ross, formed ICG in May 2004, now listed on the NY Stock Exchange, buying up coalmines belonging to Horizon Natural Resources. One of those holdings was the Sago Mine. Ross’ purchase of Sago followed his foray into the steel industry, founding the International Steel Group Inc. and buying Bethlehem Steel Corp., Acme Steel Co. and Weirton Steel Co., all in bankruptcy at the time. However, the deals depended on the United Steelworkers Union agreeing to contract concessions and billions of dollars in unfunded pension benefits which were ultimately dumped on the federal pension benefits program by Ross and now paid by the U.S. taxpayers.

Unlike the steel business, however, coal mining is dependent upon safety measures necessary to execute every 24-hours, requiring constant follow-up. It can mean the difference between life and death. The learning curve has changed with investors who did not originate from the mining industry and running mining operations, some of which have been closed for years, housing a host of unsafe conditions much less present in a maintained mine. In addition, many unskilled miners are coming into the workforce in non-union environments and lax federal government oversight, in which many citations and fines in very small amounts are doled out, rarely if ever shutting down a mine for unsafe working conditions.

Much has been publicized about the number of citations Sago Mine received in 2005. MSHA levied 208 citations, orders and/or safeguards. Half of the citations were for “significant violations” which generally commanded fines between $60.00 and $440.00. The fines totaled approximately $25,000. However, in the 11-week review ending December 22, 2005 and three times in a period of five days, MSHA cited the mine for 46 alleged violations with 18 deemed “unwarrantable failures” and with three still pending. According to Ben Hatfield, President of ICG, all violations were corrected; however, the MSHA has yet to publicly release any documents nor will comment on the three pending violations.

Serious violations which Sago was cited for included failing to enforce an adequate ventilation plan, key to preventing the buildup of methane gases which occur naturally underground, failing to conduct safety inspections before each 8-hour shift, 11 roof collapses over the course of the past year and dangerous buildup of flammable coal dust.

While ICG has skirted answering questions thus far, Ben Hatfield did lay blame on the inherited problems from the Anker group. But also important to the upcoming investigations will be if there were continued failure of safety inspections and prior to entering the mine over the New Year’s weekend, at which time the mine was shut for two days. Closed mines can be deadly especially during winter, when methane accumulates faster due to cold temperatures and changes in barometric pressure.

In addition, Sago did not keep a rescue team on site, like a good many operations due. And speculation of the delay in getting a team together was further hampered by federal and state workers who would normally be available, were not since January 2nd was an observed Monday holiday following New Year’s Day. Since Sago chose to open knowing that it was a state and federal holiday it may have put its crews at unnecessary risk, as it took 11 hours for a rescue team to be assembled. That will also be examined by the several investigations already having been announced.

The MSHA will conduct its own investigation, and West Virginia Governor, Joe Manchin, III, has hired former Director of MSHA under President Clinton, J. Javitt McAteer, to be special advisor to the investigation for the state of West Virginia. The White House will lodge another investigation with requests by Senators and House Representatives calling for hearings on Sago as well as on mine safety.

Similar to the discovered cuts in the funding of levee maintenance after Hurricane Katrina hit New Orleans, funding for MSHA for 2006 was cut $5 million from 2005. The agency also has seen a decrease of 170 staffers since 2001. Also, 17 proposed standards to further protect miners’ safety and health were denied by MSHA. The entire budget for MSHA for 2006 is $280 million. It is expected that its appropriations will be reviewed.

Senator Robert Byrd (D-WVA) has announced that the first Congressional hearing on the Sago Mine will be held on January 19, 2005, which will include federal and state mine safety officials, labor and business representatives as well as academic experts in mine safety testifying. Senator Ted Kennedy (D-MA) as well as Senator Jay Rockefeller (D-WVA) have also called for a series of Senate hearings on the broader issues impacting mine safety. Representative George Miller (D-CA) and ranking member of the House Education and Workforce Committee has requested all documents relevant to the Sago mine disaster from Labor Secretary, Elaine Chao. Rep. Miller expects to hold hearings after the Senate hearings. No reports for any of the investigations, however, are expected before July 2006.

The Government Accountability Office in 2003 found that over the past decade, inspectors had often failed to ensure that violations were corrected by deadlines. In addition, there has been criticism that political appointees running MSHA are primarily former mining executives from the private sector, and there exists a fundamental conflict of interest in issuing citations and such diminutive fines. Further, the Congress has not held one hearing in either the Senate or House on mining safety issues since 2001.

September 23, 2001, 13 coal miners died at the Jim Walter Resources (JWR) Blue Creek No. 5 mine in Brookwood, Alabama. In June 2003, the Federal Mine Safety and Health Administration fined Walter Industries more than $400,000 for eight safety violations that "directly contributed" to the 2001 accident. The company subsequently appealed the fine. In November of 2005, an administrative law judge on behalf of MSHA threw out six of the eight safety violations and slashed the fines to $3,000. Let us hope that history does not repeat itself and that we learn from this crisis. Here is but one more opportunity to do right by our miners. They deserve at least that much.

U.S. Gambling Culture Spreads to Wall Street

By Diane M. Grassi

In 1995 we saw the emergence of internet casino gambling, which includes playing games of chance such as poker, blackjack, and roulette as well as betting on sports events. By the year 2000, nearly 300 companies around the world operated almost 2,000 internet gambling websites. And in 2005, worldwide online gambling revenue is expected to be over $US10 billion for such operators while a total of $US 200 billion is expected to have been wagered.

Widely an issue of intense debate since its inception, the criminality of online gambling has been argued at the U.S. Department of Justice as well as in the halls of the U.S. Congress. But since internet gaming sites are primarily offshore, U.S. residents are presently not held accountable for breaking federal law in the absence of such precedent. However, individual states may mandate such practices illegal, going after banking institutions to prevent such transactions, for example, but individuals have not been prosecuted.

The prevalence of online gaming and the large revenues enjoyed from it has however prompted major U.S. brokerage firms to claim their piece of the pie. At stake is whether or not the Department of Justice will apply the Wire Act of 1961 in enforcing the law and how long it will be before the Congress can agree on passing new legislation which will help strengthen the Wire Act. The main dispute is that the Wire Act was intended exclusively for placing bets on the phone to bookmakers for sports events, and was largely put in place by then U.S. Attorney General, Robert F. Kennedy, in order to discourage organized crime and bookmaking. Whether the law now applies to communication between a home computer and an establishment or casino not located in the U.S. still remains a gray area.

But in the era of industrial globalization, it appears that firms such as Goldman Sachs & Co., Merrill Lynch & Co. and Fidelity Investments are willing to risk the vagueness of the law in order to make investments on behalf of their clients by way of stocks and mutual funds. By providing financing for offshore casinos the question remains as to whether they are skirting the law as well as whether they are making reliable investments for their clients, for whom most have no idea that their mutual funds are involved in such ventures.

It is now commonplace for American firms to invest in overseas corporations, even those which may be considered illegal under U.S. federal law, such as those manufacturers utilizing sweatshops and child labor or by outsourcing business to countries which do business with other countries sanctioned by the U.S. government. However, the issue of online gaming is perhaps just the latest industry in worldwide commerce in which laws and customs have not yet caught up to it, given the sophistication of the technology involved.

The argument is whether someone who generates a gambling transaction from their living room to a country outside of the U.S. qualifies as an illegal U.S. transaction and whether or not it can be reasonably policed beyond U.S. shores. In addition to the Wire Act, the Professional and Amateur Sports Protection Act was enacted in 1992, which banned all wagering on sports events in all states except those with pre-existing operations in the states of Nevada, Oregon and Delaware. That was followed by both President Clinton’s administration as well as the present President Bush’s administration both of which conveyed that the Wire Act applied to all forms of internet gambling and therefore illegal under existing law.

Yet the U.S. Court of Appeals for the Fifth Circuit in 2002 interpreted the Wire Act in another way. In Thompson v. MasterCard International et. al., the court affirmed a lower court ruling that according to federal statutes sports betting conducted over the internet is illegal, but casino games are legal. As such, since the Wire Act was specifically enacted to prevent sports betting, it would seem that the court got it right, with the gambling industry arguing that banning online gaming would require additional legislation.

And in 2004 the World Trade Organization got their say when the Caribbean Island nation of Antigua sued the U.S. government in 2003 in an effort to block U.S. actions to prohibit online gaming. The WTO ruled that the U.S. government was in violation of commercial services accords, and that the U.S. could be subject to trade sanctions. But Elliott Spitzer, New York State Attorney General, through his Internet Bureau Office lodged an investigation against national banking institutions based out of New York such as Citibank, N.A., Bank of America, N.A., JP Morgan Chase & Co. and MBNA America Bank, N.A., that process credit card transactions online. They as well as Visa and MasterCard agreed to voluntarily block transactions to online gambling sites with respect to the laws of the state of New York. However, other states must set up their own mechanisms in preventing such gambling.

While the societal impact of gambling has been debated endlessly for decades, from mental health issues to risk of bankruptcy, the evils of gambling will continue to prey upon those most vulnerable. However, the repercussions of online gambling are too new for them to be realized as yet on a grand scale. And while we hear of more and more minor children and young adults using credit cards to participate in online gaming, according to experts, more research and education needs to be done in order to warn children and their parents about irresponsible gambling.

But with respect to those who choose not to gamble, the issue of brokerage houses maintaining mutual funds, unbeknownst to their clients, by investing in offshore betting by way of the internet, will perhaps present unanticipated complaints, once consumers become more aware of how their life savings are being invested.
As such, Americans should have the choice of investing in a product which has been deemed illegal by several U.S. administrations. Without a clear and decisive law, which does not conflict with cyberspace jurisdiction as well as world trade policies, such transactions continue to go on unabated.

Until there is legal clarity, however, the online gambling industry will continue to trump any perceived notion of criminality. And since 2005 saw no new legislation proposed by either the House of Representatives or the Senate to restrict online gaming, it appears that the U.S. would rather gamble itself, in doing nothing about it, rather than protect its consumers and those most susceptible to its ills. Rather than owning up to their responsibilities to protect the interests of the American people and thereby U.S. consumers, both the U.S. government and U.S. corporations would rather wager that most will not care about their cashing in, either.