June 3, 2002; Sponsors of High Greed Partnerships Are Tainted

We often ask ourselves whether our concern about apparent fraud in partnerships is overdone.  We seem to be a lonely voice.  When we remind ourselves that fraud isn’t usually proven until after investors lose their investment we have new justification to continue pointing out our concerns.

At the same time even thirty or forty billion dollars is not much in the context of the stock market.  Yet a larger issue seems to be taking shape.  With the further erosion of confidence in partnership sponsors Kinder Morgan, El Paso, Williams, Dynegy and Duke, the connection appears to be growing between willingness to set up a partnership to fleece investors and willingness to engage in other questionable practices.  We urge investors to reconsider their investment in any company that sponsors a high greed partnership.  Some of the sponsors we have mentioned have much larger market capitalization than their partnerships and are owned by investors who may not actually own partnership units.  There are sponsors we have not mentioned among refining companies and coal companies among others.  If you know of a company contemplating a high greed partnership, tell them not to do it.  If they already have one, tell them to scale back the general partner tax, rein in their greed, tone down the hype, collapse the debt pyramid and disclose honestly the current and potential dilutive effect not only on reported income, but also on EBITDA, cash flow per share and book value