ACTUAL BURRIS SENATE COMMITTEE FORMED

ALL SYSTEMS GO FOR OBAMA REPLACEMENT TO RAISE CASH

BURRIS RESIGNS LAW SEAT

SURRENDERS LOBBYIST REGISTRATION

CAMPAIGN TREASURER VOLUNTEERS IN SENATE OFFICE

Special to the Readers of Milwaukeeworld.com

By Michael Horne

And The Milwaukee World Hound Dog Team

The Burris for Senate Committee has been registered with the Federal Election Commission by Fred Lebed, Treasurer. The committee's address, 35 E. Wacker Drive, Suite 500, Chicago, is also that of Roland Burris’s former law firm Gonzalez Saggio and Harlan [home office, Milwaukee] and of Burris Lebed Consulting LLC. – a lobbying firm headed by the now-senator and treasurer Lebed, who is also one of the closest aides and advisers to Burris.

A Burris for Senate committee mentioned in an earlier milwaukeeworld post was, as we guessed, somebody's prank. (It listed Burris as a Republican from Louisiana). But this one is the real thing! No caretaker he, that Burris!

Contrary to the policy of most lobbyists, Lebed has consented to serve without pay as Chief of Staff to Sen. Burris while he gets himself set up in Washington. If only all lobbyists would be so selfless! If only all politicians had lobbyists as their principal aides!

As registered lobbyists in Illinois, “Burris & Lebed combines traditional public relations with ‘inside baseball’ media strategy. All media messages and project targets are crafted with both the general public and government leaders in mind,” according to its website.

Burris terminated his registration as a lobbyist on January 5^th, 2009, while Lebed continues to represent Comcast, the Illinois Funeral Directors Association, and the Metropolitan Chicago Healthcare Council in Springfield. Let’s hope he can pick up some part-time work in Washington to defray the costs he must bear in his volunteer capacity helping the new senator find his way around our nation's capital. You do your part by sending a check to the campaign. Pretend you're a Chicago voter -- do it early and often!

FEDS SET TO GET YEARLY 5% DIVIDENDS FROM M&I STOCK
Regular Shareholders Not That Lucky

The board of directors of the M&I Corporation [NYSE:MI] has declared an initial quarterly dividend totaling $21,437,500 to be paid on Monday, February 16^th 2009 to holders of its “Senior Preferred Stock Series ‘B’.” That’s a hefty $12.50 per share, and 5 per cent a year!

Make that holder of its preferred stock, since there is only one – The United States Treasury, which paid $1,000 each for all 1,715,000 shares issued by the firm late last year as part of the Troubled Assets Recovery Program. (The “Bank Bailout Fund.”)
The shares were created on November 14^th 2008 and registered with the Securities and Exchange Commission at a cost of about $250,000 (including a $150,000 fee to the law firm of Godfrey & Kahn, located right upstairs from the bank at 780 N. Water St.).

The new stock issue resulted in proceeds of $1.715 billion to the bank, of which $1.3 billion is to be used for new loans, the company tells us in its Shareholder letter [pdf] January, 2009. That shareholder letter also told holders of the 265.3 million shares of M&I Common Stock that their quarterly dividend would be cut from $.32 per share to $.01. It was the first dividend reduction after 36 years of continual annual dividend increases, and a shock to hundreds of shareholders in Milwaukee, many elderly, with large holdings of M&I stock.
The October 17^th 2008 shareholder letter made no mention of impending TARP purchase, announced the next day, and made things sound positively rosy, even to the point of retaining the $.32 dividend for what turned out to be the last quarter. Back then, M&I traded at around $18 per share, already some $30 off its high. It trades under $5 today.

To put matters in perspective, many M&I stockholders considered their investment to be about as gilt-edged as a security could be. (The decades of sustained, annual dividend increases gives proof to that). They would attend the annual meeting by the hundreds, always waiting for the last item on the agenda – the announcement of the increased dividend rate. It would have taken the purchase of a relatively few shares (under 2,000) of M&I 30 years ago to amount to 10,000 shares today – even without reinvesting dividends. Many, many people had that many shares, which provided $12,800 in dividends per year at last year’s rate – and only $400 at this year’s. That’s the difference between going to Florida for the winter, or staying home and eating cat food.

M&I management explained its expansion to other states over the years by pointing out that Wisconsin, its home, is a slow-growth state, and the only hope for the company’s future was in such high-growth states like Arizona, Nevada and Florida. Guess what? Slow-growth Wisconsin stayed true and steady, relatively speaking, while the high-growth states tanked.

It would be interesting to see how much of its own stock M&I holds as collateral for loans it has issued to various individuals and entities. Imagine the humiliation for a banker to place a margin call when the pledged security is his own bank! ("Sorry Mr. Smith, you'll have to come down here with $50,000 because that stock you left with us ain't worth much any more.")

Perhaps there are some real estate developers or other business folk in Milwaukee who have used their personal holdings of M&I to finance their projects, thinking the collateral would be good. Who would have doubted them, even a year ago!

The bank will continue paying $12.50 quarterly dividends to the Treasury for a term of five years. After that the rate jumps to $22.50 (9%) per share per quarter.

--Michael Horne

BUD TAKES A HIT FROM THE GRAVE

Bill Werber, who died last month at 100 was the oldest surviving former major league baseball player. He spoke out about Bud Selig from the grave in his obituary printed in The New York Times on January 24^th, 2009. [The Times never misses an opportunity to tweak Bud.]

Werber said he had written to Selig to complain that today’s players should shape up and get a haircut, dammit! “The commissioner wrote me a very nice letter, but he didn’t say anything. He toe dances around every subject.”

-- Michael Horne