Wednesday, July 24, 2002
Who Was Minding the Store:
The Board of Directors of Adelphia Communications
The handcuffs are out and they’re being slapped on an increasing number of people whom we suspect never anticipated getting caught in their misdeeds, and if by chance they did, expected to walk away with a fine or possibly a year at a low-security detention facility, i.e., tennis camp.
The latest corporate executives to be arrested and indicted: John Rigas, the founder, chairman, and chief executive officer of Adelphia Communications Inc., the Coudersport, Pa.-based publicly traded cable television company, along with two of his sons, Timothy Rigas, former chief financial officer, and Michael Rigas, former executive vice president of operations.
All three were arrested early this morning and appeared in Manhattan federal court later in the day.
The U.S. attorney’s complaint accuses John Rigas and his family of “using the company as the Rigas family’s personal piggy bank at the expense of public investors and creditors.”
“The scheme charged in the complaint is one of the largest and most egregious frauds ever perpetrated on investors and creditors,” said Manhattan U.S. Attorney James Comey, quoted in a story moved by Reuters at around 4:30 p.m. this afternoon.
“The government alleges the former executives improperly used company funds for everything from personal loans, to constructing a $13 million golf course on the senior Rigas’[s] property, to shuttling family members back and forth from a safari vacation in Africa,” according to Reuters.
Also arrested in Coudersport today, two former Adelphia executives: James Brown, former vice president of finance, and Michael Mulcahey, former director of internal reporting of treasury functions
In addition to the federal criminal charges, the Securities & Exchange Commission filed a civil suit against Adelphia, the five named executives, as well as James Rigas, former executive vice president of strategic planning, on fraud charges.
As reported, Rigas and the other Adelphia executives resigned from the firm, which filed for bankruptcy protection in June following the disclosure of $2.3 billion of off-balance-sheet loans to the Rigas family guaranteed by Adelphia, allegations of overstated earnings, and questions about the company's accounting methods, according to Reuters.
For the record
Continuing our series “For the Record,” we present for your consideration the oh-so-vigilant board of directors of Adelphia, including the biographical information presented in the copy’s most recent proxy statement, a filing mandated annually that Adelphia has not filed since July 6, 2001.
Thus, this is the board of directors that was in place as the Rivas family’s alleged misdeeds were reaching their peak. Not surprisingly, it’s a very cozy little group.
John J. Rigas, 76, founder, chairman, president, and chief executive officer of Adelphia, and president of its subsidiaries. John Rigas is the father of Michael Rigas, Timothy Rigas, and James Rigas, each a director and executive officer of Adelphia, and the father-in-law of Peter L. Venetis, another director of Adelphia.
Michael J. Rigas, 47, executive vice president, operations and secretary of Adelphia, as well as a vice president of its subsidiaries. From 1979 to 1981, Michael Rigas worked for Webster, Chamberlain & Bean, a Washington, D.C. law firm.
Timothy J. Rigas, 45, executive vice president, chief financial officer, chief accounting officer, and treasurer of Adelphia and its subsidiaries.
James P. Rigas, 43, executive vice president for strategic planning of Adelphia and a vice president of its subsidiaries. Jame Rigas is a member of the board of directors of Cable Labs. In the 1980s, he worked as a consultant for two years at Bain & Co., a management consulting firm.
Pete J. Metros, 61, director since 1986. President, managing director, and a member of the board of directors of Siemenes Dematic AG. Metros previously was employed by subsidiaries of Lear Siegler Holding Corp. and Dresser-Rand Co. [Ed.: Now owned by Halliburton Co.], and in the Large Gas Turbine Division of General Electric Co.
Dennis P. Coyle, 62, general counsel and secretary of FPL Group Inc. and Florida Power & Light Co.
Leslie J. Gelber, 44, president and chief operating officer of Caithness Corp. Previously he was president of Cogen Technologies Inc. and before that president of ESI Energy Inc., a subsidiary of FPL Group, and before that director of corporate development for FPL Group and chairman of FPL Group’s cable subsidiary and president of its information services subsidiary.
Peter L. Venetis, 43, managing partner of Praxis Capital Ventures L.P., a private equity investment firm that is a subsidiary of Adelphia. Previously, Venetis was president and CEO of the Atlantic Bank of New York, a director in the leveraged finance group at Salomon Brothers Inc. Venetis is also a director of the Atlantic Bank of New York.
Erland E. Kailbourne, 59, retired chairman and CEO (for the New York Region) of Fleet National Bank, currently chairman and president of the John R. Oishei Foundation, a director of the New York ISO Utilities Board, a director of Albany International Corp., Bush Industries Inc., Rand Capital Corp., Statewide Zone Capital Corp., Allegany Co-op Insurance Co., and USA Niagara Development Corp. Kailbourne is also a member of the Advisory Council of the New York State Office of Science, Technology, and Academic Research; the New York State Banking Board; and the Trooper Foundation.The Rittenhouse Review | Copyright 2002-2006 | PERMALINK |