Heads up. Democrats and other loyal Americans in Massachusetts should particularly take note. SEC filings regarding State Street Corporationhighlight some alarming connections.

1. fiduciary responsibilities given to State Street include some remaining Enron assets, but without close monitoring by representatives for the public.
2. State Street has a mega role in the U.S. pensions sector.
3. Andrew Card, formerly Chief of Staff for the GWBush White House, has ties with the current Chairman and CEO of State Street.
4. Shareholders raising questions have been ejected from shareholder meetings.
5. State Street is involved in litigation re United Airlines, Polaroid pensions.
6. State Street has long been involved with Halliburton.

The shareholder filing the press release quoted below apparently supports eventual privatization of Social Security, a position opposed by this writer. Setting aside those arguments, the material touched on below raises some alarming possibilities about the U.S. pension industry.

“State Street's Central Role in America's Pension Fund Industry
Makes Superior Corporate Governance Controls Crucial, Shareholder Says

ALEXANDRIA, VIRGINIA, September 8, 2006 --- Patrick Jorstad, the State Street shareholder seeking to hold a Special Meeting of State Street's shareholders in October, points to State Street's central role in America's pension fund industry as yet another reason to ensure that superior corporate governance controls and practices are in place at the company.”

“"The President called on Corporate America to be more accountable to employees and shareholders, and to be held to the highest standards of conduct. Yet, as a plan participant in State Street's Salary Savings Program, and as a shareholder who holds shares outside that pension plan, I was ejected from the annual meeting (and my partner and plan beneficiary was arrested) for asking questions that touched directly on the purported independence of our Board of Directors," says Jorstad.

            "As I've said before, asking questions about the touted independence of directors should not get an owner booted out of a shareholders' meeting. I'm especially puzzled by Mr. Logue's conduct, given his relationship with the President's former Chief of Staff, Andy Card."

            Jorstad cites an interview that State Street's current Chairman and CEO, Ronald E. Logue, gave to the Boston Globe. The article, titled "Rocky Times at 'Staid' Street: New CEO Looks to Get the Firm Back on Track through Focusing on Execution," ran on August 4, 2004, and was written by Andrew Caffrey of the Globe's staff.

            The article mentions that "...Logue is a Holbrook native who graduated from high school with White House Chief of Staff Andrew Card..."

            “A photo of Logue and Card, published in the Boston Herald on April 28, 2001, is captioned: "SHARING A LAUGH: White House Chief of Staff Andrew H. Card, the featured speaker at yesterday's Herald Hundred awards luncheon at the Fairmont Copley Plaza, chats with Ron Logue of State Street Corp. Political figures and prominent business people attended the event." (Staff photos by Ted Fitzgerald.)

            " . . . State Street's employees are told, right on the face of their Salary Savings Program voting instruction form, that they are not permitted to vote at the shareholders' meetings."

            “Jorstad points to the still-pending class action ERISA lawsuit that Polaroid employees have brought, naming State Street Bank & Trust as a co-defendant. "That case involves interlocked Directors sitting on both State Street's and Polaroid's boards, and Ropes & Gray represented the former Polaroid CEO until this May, when Ropes was replaced by WilmerHale."

            Jorstad also cites the Seventh Circuit Court of Appeals' decision in Summers et al. v. State Street Bank & Trust and UAL ESOP Committee et al. (05-4005 and 05-4317). That decision was handed down on June 28, 2006, and is available in many public repositories. The Plaintiffs/Appellants in that case are participants and beneficiaries of United Airlines' Employee Stock Ownership Plan, or ESOP.”

“State Street's Selection by Bush Administration as
Enron Special Fiduciary Raises Questions for State Street's Shareholders, Jorstad Says;
Fallout and Spillover from Enron Felt in Pending Polaroid Class Action

Jorstad also raises his concerns about State Street's selection by senior Bush Administration officials to take on the role of special fiduciary in the Enron matter.

"In the immediate aftermath of Enron's implosion, the media seemed to focus their attention almost exclusively on the devastating consequences for Enron families. Very few reports emerged about the quiet secondary story: the full-court press that Labor Secretary Elaine Chao and Labor Solicitor Eugene Scalia made to handpick State Street Bank & Trust as the special fiduciary for the Enron plans."

            . . . “Jorstad cites the Memorandum and Order signed by The Honorable William H. Pauley, III, U.S. District Judge, dated February 4, 2005. That Order related to State Street Bank & Trust's Motion to Disqualify the Polaroid Plaintiffs' attorneys. Mr. Jorstad has obtained an electronic copy of this Order, which is also available from the website of the Polaroid Plaintiff's attorneys, Keller Rohrback, LLP, by visiting their pending ERISA cases.

 . . . Judge Pauley, who serves on the Federal bench in the Southern District of

New York, wrote: "The present motion hinges on State Street's and Keller's interaction in another ERISA action that is pending in the Southern District of Texas titled Tittle v. Enron Corp. (In Re: Enron Corporation ERISA Litigation), No. H-01-3913 (the 'Enron Litigation')."

            Later in the Memorandum, Judge Pauley continues: "In March 2002, at the urging of the Department of Labor, Enron selected State Street to serve as the independent fiduciary supervising its retirement plans.

 . . . Jorstad says, "First, note the timing of the Labor Department's intervention to handpick State Street: just two months after the President's State of the Union Address, when the Administration was still reeling from news reports of the close ties with 'Kenny Boy' Lay. Clearly, this issue was front and center for the White House, and it was no accident that State Street got the nod."

. . . "For the interlocked, conflict-ridden Boards of Polaroid and State Street to argue that the Polaroid Plaintiffs should be deprived of their chosen legal counsel on this basis was breathtaking in its hypocrisy," says Jorstad, adding, "Keller Rohrback wasn't removed, but Ropes & Gray - whose own conflicts with the State Street Board are now well known - was replaced as defense counsel for Polaroid's former CEO earlier this year by WilmerHale."

The bottom line for State Street shareholders? "It seems that the Polaroid case has

gone from bad to worse for State Street and its co-defendants, in part because of State Street's work with Keller Rohrback in the Enron matter. So, I return to the original question: why did State Street's senior executive management sign on for the Enron slog, at the urging of the senior-most Labor Department officials in the Bush Administration?"

"I'd love to give Labor Secretary Elaine Chao and former Labor Solicitor Eugene Scalia an earful about how State Street treats its own plan participants," Jorstad says. Chao is married to U.S. Senator Mitch McConnell (R-KY). Eugene Scalia is the son of U.S. Supreme Court Justice Antonin Scalia, and is now in private practice at the law firm of Gibson, Dunn & Crutcher.

            Jorstad openly speculates on why such senior members of the Bush Administration argued for State Street's selection as the "fixer" for the Enron mess. "Did it have anything to do with the relationship between Mr. Card and Mr. Logue? I don't know, but a few well-crafted Freedom of Information Act requests to Secretary Chao and the Executive Office of the President ought to shed some light on the matter. There has to be a paper trail leading up to the public selection of State Street by Secretary Chao and Solicitor Scalia."

            “As further evidence of a special relationship with the Bush Administration, Jorstad cites the press release that State Street issued on October 6, 2005, entitled, "State Street Renews Contract with Halliburton after More Than a Decade of Service".

            "That coincides with the Vice President's tenure at Halliburton," Jorstad says, pointing to Halliburton's proxy materials for the year 2000 (the year the former head of Halliburton resigned to run for Vice President). "He became President and CEO of Halliburton in 1995, right around the time that State Street got the Halliburton pension fund mandate."

            "Look, as a State Street shareholder, I'm pleased that we earn fees from Halliburton," says Jorstad. "But if the close ties to Bush Administration officials compromised the Directors' and senior executive officers' judgment in deciding to take on the role of special fiduciary in the Enron matter, I think that is worth further intra-corporate discussion. Just look at the fallout and spillover from the Enron matter into the Polaroid class action, with Keller Rohrback allegedly using the playbook that State Street taught them to go after a competitor (Northern Trust), to now come after State Street itself."

“Outcome of Mid-Terms Could Lead to Enhanced Scrutiny of Entire Industry, Jorstad Says;
Notes State Street's Quiet Role as Custodian or Asset Manager Throughout America

"If you look up the Form 5500's filed by pension plans with the Department of Labor, you will find that in every state, every Congressional District, State Street is listed as a service provider to pension plans both large and small," says Jorstad. "Those filings are available from the Department of Labor, and are also available at the FreeERISA website. If you look up State Street, State Street Bank, State Street Bank and Trust, CitiStreet, State Street Global Advisors, SSgA, and other variations of the parent, subsidiaries, and joint ventures, you'll find filing after filing, with State Street's fees shown on one or more of the Schedules."

            Jorstad continues: "Most Americans have probably never even heard of State Street. But if they check the fine print of their pension plan documents or mutual fund mailings, they'll often-times discover that their plan or fund is paying fees to the Corporation. In the case of many mutual funds, they'll also find that Ropes & Gray is legal counsel to those funds."

. . . "What do we say to a prospective client that points to the Polaroid ESOP fiasco, and asks why they should entrust their plan to State Street's care? How do we explain the interlocks that existed between Polaroid's board and ours? How do we explain State Street's attempt to deprive the Polaroid Plaintiffs of their chosen legal counsel? These are questions I'd like to pose to the non-management Directors, and to the next CEO of State Street.”