“The Lannan Foundation was formed in 1960 by the late J. Patrick Lannan, entrepreneur and ITT director….When the foundation received $100 million from the Lannan estate in 1986, trustees vowed to concentrate on support for the contemporary visual arts….Directors who have input are Sharon A. Ferrill, John R. Lannan, Michael J. Lannan, Frank Lawler, Patricia Lawler, John J. Lannan, Tscheng S. Feng and Mark Hampton."
--the Los Angeles Times (10/16/86)
“…Defendant Lannan received a direct financial benefit by ignoring the numerous red flags raised by the China Trust Bank participation loans, approving them regardless, and then accepting a $75,000 referral fee on the very loans he approved…”
--from the “Complaint for Negligence, Gross Negligence and Breach of Fiduciary Duty” filed on April 20, 2012 by the FDIC as Receiver for First Bank of Beverly Hills (case 2:12-CV-034480DDP-CW)
CounterPunch and ISO’s Lannan Foundation Connection—Part 2
Following the failure of the First Bank of Beverly Hills, the California Department of Financial Institutions closed the First Bank of Beverly Hills on April 24, 2009 and the Federal Deposit Insurance Corporation [FDIC] was appointed as its Receiver. The FDIC was then compelled to spend around $349 million to reimburse the First Bank of Beverly Hills customers whose deposits had been insured by the FDIC; and those First Bank of Beverly Hills depositors whose accounts contained more than the maximum amount covered by FDIC insurance also lost around $179,000 in uninsured bank deposits.
On April 20, 2012, the FDIC then filed in court a legal “Complaint for Negligence, Gross Negligence and Breach of Fiduciary Duty” against the First Bank of Beverly Hills’s former executive officers and directors which stated the following:
“…The FDIC as Receiver [for First Bank of Beverly Hills] seeks to recover losses of at least $100.6 million the Bank suffered…In derogation of their duty to engage in `safe and sound’ banking practices, Defendants recklessly implemented an unsustainable business model pursuing rapid asset growth concentrated in large high-risk loans without having adequate loan underwriting policies and practices to manage the risk. In addition, Defendants routinely violated the Bank’s Loan Policy, thereby improperly approving loans that had little chance of repayment…
“Defendants’ abdication of responsibility rose to a new level of willful blindness when, shortly after receiving significant regulatory criticism concerning the Bank’s poor underwriting practices, Defendants approved two large Loss Loans containing the exact same deficiencies the regulators had just criticized.
“By approving the Loss Loans despite their myriad obvious deficiencies, the Defendants lined their own pockets when First Bank of Beverly Hills dividends, boosted by false profits on large problematic loans that were unlikely to be repaid, were upstreamed to the Bank’s parent company—of which numerous Defendants were shareholders….Defendants…voted to approve nine loans in the total amount of $143.5 million in disregard of sound banking principles and the bank’s own lending policy…”
The FDIC’s April 20, 2012 legal complaint also contained the following references and allegations with respect to a former First Bank of Beverly Hills director named John Lannan:
“John Lannan was a director from June 2003 until June 2008…The China Trust Bank loans were part of a $117.1 million package of eight loan participations with China Trust Bank…Lannan voted to approve the purchase of the China Trust Bank loan participations, despite the fact that he stood to benefit personally from the approval of the loan. In fact, Lannan received a $75,000 referral fee from the Bank for referring the participations to the Bank…Defendant Lannan owed to First Bank of Beverly Hills the duty to not approve loans for which he would obtain financial benefit…
“Defendant Lannan was negligent in affirmatively voting in favor of approving the China Trust Bank loans and then accepting financial benefit in connection with those same loans, in the form of referral fees for bringing the China Trust Bank loans to First Bank of Beverly Hills…As a direct and proximate result of Defendant Lannan’s negligence, the FDIC-Receivership suffered damages in an amount to be proven at trial in excess of $52 million…”
Coincidentally, according to an October 16, 1986 article in the Los Angeles Times, a “John R. Lannan” and a “John J. Lannan” were members of the Lannan Foundation board of directors during the 1980s; and according to the Lannan Foundation’s Form 990 financial filing for 2006, a “John J. Lannan” was an assistant treasurer of the Lannan Foundation at that time.
According to its Form 990 financial filing for 2011, the tax-exempt, “non-profit” Lannan Foundation paid its president—former Federal Signal Corporation board member J. Patrick Lannan, Jr.—an annual salary of over $260,000, earned over $5 million in interest and dividends, and took in over $5 million from its sale of assets in 2011. In addition, between the beginning and end of 2011, the value of the “non-profit” Lannan Foundation’s total assets increased from over $199.7 million to over $213.1 million.
The Lannan Foundation earns its dividends and interest—and obtains much of its money for “charitable” grants—from investing in the stocks and bonds investment portfolios of funds like Prime Global Assets Fund, FPA New Global Allocations, Crescent Fund and Blackrock Global Allocation—whose portfolios include stock in transnational corporations that exploit workers and consumers in the United States and foreign countries. According to its Form 990 financial filing for 2006, the Lannan Foundation owned, for example, $124 million worth of corporate stock—including big chunks of stock in the following corporations: Wal-Mart Stores ($3.5 million worth of stock); Goldman Sachs ($3.5 million worth of stock); Wells Fargo ($3.9 million worth of stock); AIG ($3.1 million worth of stock); Berkshire Hathaway ($6 million worth of stock); Coca-Cola ($2.8 million worth of stock); Walt Disney-ABC ($1.3 million worth of stock); Gannet Inc/USA Today ($2.5 million worth of stock); General Electric ($3.8 million worth of stock); Johnson and Johnson ($3.1 million worth of stock); IBM ($3.9 million worth of stock); Microsoft ($2.4 million worth of stock); Pepsico ($2.9 million worth of stock); Procter and Gamble ($1.8 million worth of stock); and Manpower Inc. ($861,000 worth of stock).
Yet, ironically, some U.S. alternative media groups and U.S. left groups and columnists who claim to be opposed to the exploitation of U.S. working-class and middle-class people by ultra-rich families like the Lannan family--and the transnational corporations which the ultra-rich families and their foundations own-- apparently accepted “charitable grants” in 2011 from the Lannan Foundation that former ITT Director and major ITT stockholder J. Patrick Lannan, Sr. originally set up in 1960.
Besides giving the Institute for the Advancement of Journalistic Clarity/CounterPunch alternative media group a $2,000 charitable grant for “support of CounterPunch” and $117,000 in charitable grant money plus a $200,000 interest-free loan to the International Socialist Organization [ISO]-affiliated Center for Economic Research and Social Change in 2011, the Lannan Foundation--according to its Form 990 financial filing--gave the following other grants to U.S. alternative media and U.S. left or left-liberal groups or individual journalists in 2011:
1. A $300,000 “charitable grant” to the Democracy Now! “Foundation"’/Democracy Now! “for general operating support;.
2. A $180,000 “charitable grant” to The Nation magazine/The Nation Institute;.
3. A $150,000 individual “Cultural Freedom Award” charitable grant to then-Salon columnist Glenn Greenwald;.
4. A $100,000 “charitable grant” to Mother Jones magazine/Foundation for National Progress; and
5. A $2,000 “charitable grant” to Common Dreams.
So don’t expect much critical investigative reporting about current ultra-rich Lannan family members, J. Patrick Lannan, Sr., the Federal Signal Corporation or the Lannan Foundation and its special economic interests to be provided by CounterPunch, Democracy Now!, The Nation magazine, Glenn Greenwald, Mother Jones magazine, Common Dreams, Haymarket Books or any ISO-affiliated publication during the next few years. (end of article)
The effect of the GOP tax scam on real estate
58 minutes ago