February 3, 2009
Shipping Executive Sentenced to
48 Months in Jail
By Tim Holland
The Anti-Trust Division of the Department of
Justice announced the sentencing of Peter Baci of
Jacksonville, FL for his role in an antitrust
conspiracy involving the transportation of goods
to and from the continental United States and
Puerto Rico by ocean vessel.
On Friday, January 30, Baci was sentenced to
serve 48 months in jail and to pay a $20,000
criminal fine
In a press release the Department of Justice
advised that Peter Baci of Jacksonville, Fla.,
pleaded guilty on Oct. 20, 2008, in the U.S.
District Court in Jacksonville for his role in the
conspiracy, which began at least as early as May
2002 and continued until as late as April 2008.
He was charged with engaging in a conspiracy to
suppress and eliminate competition in the coastal
water freight transportation services between the
continental United States and Puerto Rico by
agreeing to allocate customers, agreeing to rig bids
submitted to government and commercial buyers,
and agreeing to fix the prices of rates, surcharges,
and other fees charged to customers.
“Today’s sentencing should make clear
that individuals who violate the antitrust laws
will be prosecuted to the fullest extent of the law,
� said Scott D. Hammond, Acting Assistant
Attorney General in charge of the Departmentâ
€™s Antitrust Division. “Significant jail time
will be a consequence of harming consumers and
competition in both the continental United States
and Puerto Rico.�
There was no indication of the economic impact
the actions and activities of Mr. Baco had on the
shipping industry or if the sentence represented
a departure from previous actions by the court.
However, it was noted that Congress raised the
maximum sentence for antitrust crimes to 10
years from three in June of 2004.
It was also indicated that the current prosecution
rose from an ongoing federal antitrust
investigation into big rigging and other
anticompetitive conduct in the shipping industry.
The Holland Report
NEWS Reports
Page 2
|
February 4, 2009
Fed Releases Opinion Survey on Bank Lending
Practices
By Tim Holland
There has been much conjecture about the lending practices of the
nations banks since Troubled Asset Relief Funds (TARP) have
been made available to the banking system. On Monday,
January 2, the Federal Reserve released “The January 2009
Senior Loan Officer Opinion Survey on Bank Lending Practices,â
€� which is destined to be analyzed and discussed from one end
of the country to the next.
The survey is broken into specific sections in an effort to cover
the entire lending spectrum of the banking system and following
are the basic results of the survey:
I - Questions on Lending to Business
a) Commercial and Industrial Lending
This section reported that “about 65 percent of domestic
banks reported having tightened lending standards on commercial
and industrial (C&I) loans to large and middle market firms over
the past three months.� In a further note, the report also
looked at the prices reporting banks were charging for lending to
their customers. Loan pricing is usually a reflection of risk that a
lending institution perceives to be attached to the loan and is
usually determined by adding percentage points to a loan over
and above their cost of acquiring the funds they are lending. The
report found that “about 90 percent of domestic banks
indicated that they had increased spreads of loan rates over their
cost of funds for C&I loans to large and middle-market firms and
to small firms.�
b) Commercial Real Estate Lending
Here again what was anticipated was confirmed in that the
survey reported that “On balance, about 80 percent of
domestic banks reported that they had tightened their lending
standards on commercial real estate (CRE) loans over the past
three months.�
Lending standards for (CRE) loans, as with all commercial loans,
have been tightened by both domestic and foreign banks doing
business in the United States. The report also confirmed a drop
in the demand for commercial loans, which could represent a
combination of the contracting economy, the higher cost of the
loans and the tightening standards.
II – Questions on Lending to Households
a) Residential Real Estate Lending
Here the report spread a small bit of sunshine in the it found a
smaller tightening in the loan market for residential real estate
than in commercial real estate. “About 45 percent of domestic
respondents indicated that they had tightened their lending
standards on prime mortgages over the past three months, and
almost 50 percent of the 25 banks that originated nontraditional
residential mortgage loans over the survey period reported having
tightened their lending standards on such loans.� The area
where there has been a major drop in mortgage lending is the one
that most experts say it should be reduced and that is in the sub-
prime category, the loans that have caused the major problems
for the banks during the current crisis. Only four banks
responding to the survey reported as having made sub-prime
loans over the past three months.
b) Consumer Lending
Here again there was no surprise for anyone with a credit card
balance and the survey reported “Large fractions of domestic
banks continued to report a tightening of policies on both credit
card and other consumer loans over the past three months.
Nearly 60 percent of respondents indicated that they had
tightened lending standards on credit cards and other consumer
loans, about the same fractions as in the October survey.�
The report was based upon responses from 53 domestic and 23
U. S. branches and agencies of foreign banks.