|
 
COVER
STORY | PUBLISHER | ART BEAT | CALENDAR
July 31, 2003
The
$200 million connection
Humboldt Bank was involved
with online porn merchants big time
by
KEITH EASTHOUSE
At the height of its involvement
with the Internet pornography industry, Humboldt Bank processed
from $100 million to $200 million in credit card charges a year
for online dealers of adult-oriented entertainment.
In an interview this week, Pat
Rusnak, chief financial officer for the bank's holding company,
Humboldt Bancorp, emphasized that the amounts represented only
about 5 percent of the bank's lucrative merchant card business,
which in the late 1990s and early 2000s handled as much as $4
billion in processing fees annually.
Nonetheless, he acknowledged
that the bank's involvement with so-called "porn merchants"
was much more extensive than that of National Bank of the Redwoods,
a Santa Rosa-based bank that in the 1990s processed less than
$20 million a year in charges for adult entertainment companies.
Humboldt Bank recently sold
its merchant bankcard division to First National Bank of Arizona,
in part because it wanted to reduce its ties to the porn business.
That division, which is based in Eureka, still processes about
$36 million a year in charges for the online porn industry.
John Dalby, former president
of Humboldt Bank, which recently moved its headquarters from
Eureka to Roseville, near Sacramento, said that while he knew
the merchant card division did business with the online porn
industry, he didn't know the scope of it. "I'm as shocked
as anybody," Dalby said last week.
He said that his decision to
leave the bank last year had nothing to do with the bank's porn
dealings. He said instead that he was concerned that the bank
was losing its community focus.
Diane Harincar, a Eureka resident
who alerted the local press to Humboldt Bank's porn connection,
said that she was horrified when she learned of it after reading
an article that appeared in Forbes magazine in June.
"Our church had just finished
a 40-day prayer and fasting and one of the things we were praying
for was an end to pornography," said Harincar, who described
herself as a Christian. "And then I hear about this with
our local bank..." Her voiced trailed off. Then she said,
"I think it's just sickening."
Rev. Bud Tillinghast, retired
from the United Methodist Church, said that while he didn't consider
himself a prude, he too is offended at Humboldt Bank's connection
to the porn industry. "Internet pornography is a horrible
thing, the scope of it and its availability," Tillinghast
said. "It preys on people's weaknesses."
The Forbes magazine article
said that until it sold the merchant card division this past
March, Humboldt Bank was one of only three banks in the country
that processed credit card charges for the online porn industry.
Seth Lubove, West Coast bureau chief of Forbes magazine
and the author of the report, said that if banks were to stop
processing the charges, the online porn industry "would
disappear overnight."
Ken Musante, who managed the
bankcard division while it was with Humboldt Bank, said the claim
that Humboldt Bank was one of only three banks that did business
with the porn merchants was false. He said a number of financial
institutions in the country do so.
Last year, Humboldt Bank stopped
accepting new adult entertainment merchants into its merchant
card program. That program included both the bank's proprietary
portfolio -- accounts owned by the bank -- and its contracts
with Independent Service Organizations (ISOs), companies that
act as intermediaries between merchants and credit card companies.
"We're not going to debate
the moral aspect," said Rusnak. He said that when the bank
first entered into a business relationship with ISOs that included
porn merchants in the 1990s, "we did so for sound financial
reasons."
While acknowledging that the
porn connection "to some could be distasteful," he
said the bank decided that online pornography "was not part
of our core community values."
Nonetheless, Humboldt Bank is
still processing transactions for an ISO with porn merchants
as clients, Rusnak said.
Rusnak estimated that about
16 accounts out of 27,000 are with the purveyors of adult entertainment.
He said those would disappear by the end of September because
that's when the contract with the ISO expires.
As for the merchant bankcard
division that was sold, it is still based in Eureka. Called Humboldt
Merchant Services, it had about 100 adult accounts out of about
12,000 -- less than 1 percent -- at the time of the sale in March
of this year. According to company official Ann Condon, the proportion
has grown smaller since then, to about 90 accounts out of 13,500
presently. She estimated that of the $77 million in charges that
the company processes monthly, about $3 million a month are for
the porn business.
Musante, who heads up Humboldt
Merchant Services, said the accounts are open-ended and do not
have expiration dates. Nonetheless, he said the company's "adult"
clients would continue to dwindle because no new porn merchants
are being taken on.
HUMBOLDT PEOPLE
No respect
Humboldt umpires have
a lot in common with Rodney Dangerfield
by
BILL KELVIN
 HOW MANY OCCUPATIONS REQUIRE ONE TO TAKE verbal
abuse? OK, maybe quite a few. However, baseball umpiring allows
abuse to be spread among a crowd and delivered in unison.
Dealing with an angry customer
is never easy. Hearing hundreds of them calling you names must
be dreadful.
"Are you an idiot? Get
some glasses! How much are they paying you?" The list of
insults goes on.
I tried umpiring Little League
baseball, but "retired" after a handful of games.
My first experience as an ump
-- calling girls' softball league games -- was more satisfying.
The action was interesting, the players and coaches friendly,
the crowd bearable. At $15 a game, which took less than an hour
and a half, the pay wasn't bad either. I must have been OK, because
I was invited to umpire Little League boys' games.
The pay was usually similar,
but could be a lot worse. The softball games had mandatory time
limits, which the Little League games did not. With extra innings,
a game could go on indefinitely.
Like the players, I would wear
cleats. But unlike them, I would do two games in a row, and I
rarely got chances to sit down. My feet would ache at work's
end.
As home plate umpire, I crouched
behind the catcher repeatedly, wreaking havoc on my back. It
was hot underneath the facemask and chest-plate, causing Arcata's
humidity to be very apparent. Once home I was sweaty, dirty and
sore.
However, many jobs leave employees
in a sorry state physically. What burned me out was the emotional
strain.
Obviously, some people enjoy
the job, or there wouldn't be umpires. Max Lippman, a 19-year-old
from Arcata, umpired Little League for three years in Arcata.
"The Little League around
here doesn't pay enough, it comes out to about $5 or $6 an hour,"
he said.
Still, Lippman likes the job.
"It's a nice profession
because you don't have to work nights, you have total control,
and if you do your job well, you know, because you get a lot
of feedback," Lippman said.
Yes, you do get feedback. The
fans, so supportive of the players, seemed sure my calls could
be more accurate, and they didn't hesitate to communicate this
to me. After being harangued for hours, I had quite a chip on
my shoulder.
To macho types I probably sound
whiney, but how fun is it to have every decision you make questioned?
Not much, let me tell you. Besides the heckling, my nerves were
frazzled from stressful interactions with coaches and players
who seemed shocked at my incompetence.
"I've been called every
name in the book 10 times over," John O'Leary said. A 10-year-veteran,
O'Leary umpired for five years on the North Coast, including
Humboldt Crabs games.
Luckily, I didn't stick with
the profession long enough to get called every name, but
a few were enough.
There were bright spots. Sometimes
the batter and I would share a joke and a smile, "mentor"
umpires would give me tips between innings about strike-zone
consistency, and I had great views of the game.
A former baseball player, Andy
Miner, a 29-year-old who lives in Eureka, has been umpiring for
three years. He calls high school and American Legion games now.
"I love the action," Miner said, "I love double
plays, pitching duels, plays at the plate."
Ah, the play at the plate, that's
one of the most fun to call. The runner charging towards home,
catcher waiting with ball in mitt, then BOOM!
When I felt sure my calls were
accurate, it was easy to laugh off criticism. When unsure, I
felt like the emperor in a parade, repeatedly being brought new
invisible suits. There's only so much humiliation one can take.
Eventually I called things back
and forth to keep both sides reasonably satisfied. A close call
would go Team A's way; the next inning, Team B would get the
same kindness. When I kept the game close no one would complain
much.
I wonder if that's how Major
League Baseball umpires deal with the bloated egos of stars.
It seems like it would be good for ratings and competition.
"My goal in life was to
be a MLB ump," O'Leary said, "but it's very hard to
get to that level."
I imagine it's a stressful journey
as well. Harassed by Little League parents, booed by high schoolers,
insulted by frat boys, then on to The Show. No, thanks!
Bill Kelvin is a freelance
writer living in Arcata. His articles have appeared in a number
of publications including The Lumberjack;
Osprey, put out by the HSU journalism department; and
Indian Country Today.
Biodiesel
bus takes the show on the road
 The
Sustainable Communities Biodiesel Roadshow is an awfully long
name for a bus, but then this is a special vehicle. Originally
used to transport school kids, it now ferries local activists
to protests as far afield as San Francisco and Sacramento. In
line with its new identity -- by law only school buses can be
yellow -- the bus recently got a new look: the colorful, hip-hop,
graffiti style design you see in the photo.
So what, you say? Well, so nothing
-- except it makes for a striking image. Which is really the
point of the paint job. Mary Ann Lyons, a local activist, figures
that high visibility will translate into more attention for protesters.
She also hopes it will spur interest in biodiesel technology.
That's the other thing about
the bus -- it consumes vegetable oil. That means that what comes
out of its tailpipe is a heckuva lot cleaner than what comes
out of the tailpipes of most other buses -- or cars and trucks,
for that matter.
So far only one side of the
bus, presently parked outside Lyons' Arcata home, has been painted.
The muralist, Forest Stearns, founder of Empire Squared, a local
artists' collective, expects to do the other side in coming weeks.
The paint, in case you're interested,
cost several hundred dollars and came at a discount from Montana
Paints, a high-quality spray paint company based in -- you guessed
it -- Montana. The buyer was the Redwood Peace & Justice
Center.
PL:
Gallegos missed deadline
An attorney for Pacific Lumber
Co. argued in court Monday that District Attorney Paul Gallegos'
fraud case against the company should be thrown out because Gallegos
missed the deadline for filing the case.
Edgar Washburn, a San Francisco
attorney representing PL, told Humboldt County Superior Court
Judge Christopher Wilson that the four-year statute of limitations
clock for unfair business practices -- the charge leveled by
Gallegos -- started ticking on Nov. 18, 1998.
Gallegos filed his suit in February
of this year -- three months too late by Washburn's reckoning.
Washburn argued that the four-year
time period should stem from the date PL submitted to government
agencies the allegedly fraudulent data on landslides in the Jordan
Creek area near Humboldt Redwoods State Park.
Assistant District Attorney
Tim Stoen told the judge the timeline should be traced to when
"appreciable damage" started occurring from the landslides.
In a second motion, Washburn
repeated the company's claim that Gallegos' suit is based on
false information and that sanctions should be levied against
the DA's office for bringing the case.
Judge Wilson, who presided over
a packed hearing in Eureka, made no decision on the deadline
issue or the sanctions motion. He has 60 days to issue a ruling
on those matters.
Washburn also argued that, based
on a doctrine called Noerr-Pennington (after two U.S. Supreme
Court decisions), the suit should be thrown out because "whoever
petitions the government is immune from liability." In other
words, Pacific Lumber can't be held liable for its communications
with state and federal agencies regarding the 1999 Headwaters
agreement. (The fraud charge hinges on data that PL supplied
to the California Department of Forestry.)
Stoen said Washburn was essentially
arguing that PL "had the right to lie to CDF." Such
protection is available only for activity classified as lobbying
or petitioning the government, not seeking a permit in a regulatory
scheme, he added.
The fraud case accuses Pacific
Lumber of lying in government documents it filed as a part of
the Headwaters agreement, the deal in which the federal and state
governments paid $480 million for 7,500 acres of timber land.
The fraudulent data resulted in major landslides that destroyed
ancient redwoods and caused great harm to streams, bridges and
roads, the suit alleges.
A
win, maybe
In a victory for environmentalists,
visiting Judge John Golden last week ruled that a key document
undergirding the 1999 Headwaters agreement was flawed and would
have to be redone.
However, Golden was scheduled
to hold a hearing this Wednesday, July 30, to consider the impact
of the ruling on the Pacific Lumber Co. versus the continued
harm to endangered species should its logging continue.
Last December, Golden essentially
reversed a similar order he had issued a few months before out
of concern that it would curtail logging to the point that PL
would suffer undue economic harm.
In the latest ruling, Golden
wrote that the state Forestry Department had not ensured that
Pacific Lumber's 100-year logging plan, devised as a part of
the Headwaters agreement, would do enough to protect endangered
species and watersheds.
He also ruled that the Sustained
Yield Plan was not in a form in which it could be reviewed by
regulators or the public.
The suit was brought by the
Garberville-based Environmental Protection Information Center,
the Sierra Club and a steelworkers' union.
The implication of Golden's
decision should it stand isn't entirely clear.
"The judge ruled in our
favor on virtually everything," said Paul Mason, state forestry
lobbyist for the Sierra Club. "What that actually means
on the ground, we don't know until we have this final hearing."
Pacific Lumber spokesman Jim
Branham declined to comment on the ruling.
Noguez
sentenced
The man who murdered two people
in Orick, burying one of them under a dairy barn, was sentenced
to life without the possibility of parole (see
"Degree of Guilt," July 3).
Rafael Alejandro Noguez, 22,
was convicted in June of killing Crystal Ann Brantley, 18, and
Jarliz "Raul" Amador Rivera, 26, in mid-2001.
During his July 25 sentencing,
Noguez apologized to the families of his victims, and said he
"condemned" the first day he ever used drugs. Judge
Christopher Wilson told him that he should not blame his actions
on methamphetamine, but rather accept that he made a choice to
kill.
Neither
sizzling nor fizzling
Backers of the effort to recall
Humboldt County District Attorney Paul Gallegos said that as
of last week they had 75 to 80 percent of the signatures they
need to force an election.
Over the weekend signature gatherers
were busy at the Fortuna Autorama, and they plan to have a booth
at the Humboldt County Fair in Ferndale Aug. 7-17.
"Those two events should
put us over the top," predicted Tim Crowley, owner of North
Coast Fabricators, one of several businesses serving as distribution
points for petitions.
Crowley and others are volunteers.
However, some anti-Gallegos signature gatherers are paid a standard
$1 per signature.
Unlike the Gov. Gray Davis recall
effort, which easily qualified for the ballot last week and is
scheduled for an Oct. 7 vote, all Gallegos recall signatures
must be turned in at the same time.
The county elections division
then has one month to verify signatures and report to the Board
of Supervisors. If the backers have 11,138 valid signatures,
the board must schedule a special election within three to four
months.
Yuroks angry with Davis
Tribal leaders, including Yurok
Tribal Chairwoman Sue Masten, said in a press release Friday
that they are angry with Gov. Gray Davis for not signing tribal-state
gaming agreements identical to those approved in 1999 by the
governor and state legislators.
A Davis aide said Tuesday the
governor believes the 1999 compacts are flawed. "It's not
that he won't sign them. He won't sign them `as is.'"
The compacts, which allow 61
tribes to operate casinos, contain a provision to reopen negotiations.
Davis wants changes in the environmental section to allow participation
of neighboring cities and the counties where the casinos operate.
Laying
the line
SBC construction crews resumed
work earlier this week, laying a new fiber optic cable to bring
additional bandwidth and new advanced telecommunications services
to Humboldt County.
The crews will be placing the
final 21 miles of cable underground from the company's central
office in Rio Dell north toward Eureka along the Highway 101
right-of-way.
Resumption of construction ended
a 19-month project suspension. Caltrans had refused to issue
construction permits without a multimillion-dollar payment from
SBC.
Following litigation, both parties
agreed to SBC placing the disputed permit fees into an escrow
account pending final resolution of the dispute.
The cable installation is expected
to be completed by fall.
A
bad week
In the fourth traffic fatality
in one week, a motorcyclist died Sunday after he was hit head-on
by a truck that had drifted into oncoming traffic on Old Arcata
Road near the Bayside cutoff.
The driver of the truck, Bayside
resident Cende Tanen, 43, sideswiped a car driven by Grace Marton,
56, of Arcata, about 2 p.m. before slamming into a motorcycle
driven by Richard Lee Williams, 51, also of Arcata.
Marten was unhurt. Williams
received CPR at the scene, but later died at St. Joseph Hospital.
Williams, a father of five, worked at the hospital as a surgical
nurse.
Tanen and her passengers received
minor injuries. The cause of the accident is under investigation.
In Ferndale last Friday afternoon,
residents Daniel Nunes, 75, and his wife Shirley Nunes, 66, were
killed after their truck collided with a truck driven by 21-year-old
Kalib Manzi, also of Ferndale. The accident took place at the
intersection of Fulmore and Goble streets. Manzi suffered minor
injuries.
Ronda Marshall, 40, a Hoopa
Elementary School teacher, died on Wednesday of last week after
the car driven by her daughter, Cassandra Chavez, 19, ran into
a truck pulling a tractor-trailer. The collision took place on
Highway 299 near the Lord Ellis Summit.
Home
invasions
Five men entered a Fortuna home
on the 600 block of 15th Street Monday night and robbed two residents
at gunpoint, police said.
One of the residents was roughed
up during the break-in. He was taken to Redwood Memorial Hospital
and released about an hour later.
The suspects -- described as
black males in their 20s -- made off with some of the victims'
property.
The victims said they knew one
of the suspects, who remain at large, police said.
The previous Thursday in Eureka,
two white men in their mid-20s robbed an elderly man in the 1400
block of Union Street.
The men reportedly knocked on
the door of the elderly man's home and asked if "John Little"
was there. After he responded that no one by that name lived
at the house, the men made casual conversation with the victim
before snatching his wallet and fleeing the scene.
The victim was not able to offer
a detailed description of the robbers due to poor eyesight, police
said. There are no suspects at this time.
COVER
STORY | PUBLISHER | ART BEAT | CALENDAR
Comments?
© Copyright 2003, North Coast Journal,
Inc.
|