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Gwen Brown has been CFO of the National Aeronautics and Space Administration for only six months, but as a taxpayer, I was greatly disappointed to read about her recent congressional testimony in your item in Grapevine (July).
The third paragraph reads, "In her testimony, Brown assured subcommittee members that the missing $2 billion was not the result of 'fraud, waste, or abuse.' But when pressed on what did cause the money to go missing, she admitted that the agency wasn't sure."
Am I the only person who finds these statements to be totally inconsistent with each other? In my humble opinion, I think that both Ms. Brown and NASA should be completely embarrassed by the lack of accountability ($2 billion) and their unwillingness to be straightforward and explain how NASA can be so sure it wasn't waste, fraud, or abuse, when they really don't know.
On the other hand, NASA's rocket scientists once again deserve a mighty round of applause for their recent success involving the pictures of the rings of Saturn. Those NASA employees certainly deserve appropriate praise for a great job.
Tom Murphy
Via E-mail
The Legal Linux
In your recent article on Linux insurance ("Penguin Suits," TechWatch, June), you reported on the ongoing efforts of vendor SCO Group to get Linux users to pay the company a licensing fee. You also noted that SCO's assertion that Linux is derived from Unix is "unproven as yet."
I'm glad you mentioned that SCO's claims are unproven. Spend some time reviewing the court documents, and you find that SCO's assertions are more than just unproven. Despite violating two court orders compelling SCO to provide specific evidence of copyright violation in Linux, SCO has been unable to demonstrate a single line of copied code to the court. In fact, the suit against IBM wasn't even about copyright violation. SCO's original claim was that Big Blue violated the company's trade secrets.
Now, SCO is claiming that IBM was contractually obligated to keep IBM's own additions to AIX confidential. Note that SCO's case is based on a very loose (and unsupported) definition of derivative works. Even if IBM violated the SCO contract, there is no way this contract case could enjoin, damage, or claim copyrights on Linux source code.
If SCO has proof that Linux is taken in part from Unix, then the firm is legally required (as per copyright law) to perform mitigation of damages by contacting Linux creator Linus Torvalds with specific proof of copyright violation. The company is also required to request corrective actions. In my opinion, if SCO ever does litigate for copyright violation, the company's current actions will demonstrate bad faith to a judge and jury.
Tim Dion
Via E-mail
Measure for Measure
The practices and prescriptions for setting executive incentive compensation mentioned in "New Carrots, Old Yardsticks?" (June) rested largely on traditional, enterprisewide accounting metrics: ROI, growth rates of revenues, cash flow, free cash flow, and so on. A better way to gauge a manager's performance is to create and organize business units into profit centers and measure performance in terms of contribution profits.
A further drawback to relying on accounting measures of performance is that one of the central principles of accounting, the matching principle, is not always followed, especially when it comes to R&D, product launch, and other costs where the anticipated revenues won't materialize until future accounting periods. These factors, along with others such as channel stuffing, open wide the door to gaming merit-pay systems where bonuses are based on conventional accounting measures of performance, rather than EVA (economic value added) measures.
The CFO's budget, planning, audit, and control functions need to expand to include performance evaluation based on an assessment of the degree to which managers follow shareholder-value maximizing principles in their decision making. There are many EVA measures that can serve as guidelines. Unfortunately, none were laid out in the article.
Norman P. Monson
San Diego
Opinions on Offshoring
Your cover package "Off Shore" (June) was right on the mark. Americans don't care whether their jobs are "offshored" to India or "outsourced" to Indiana. Regardless of the term or place, it is a disease that destroys employee morale and hampers the organization's ability to grow. It may cut costs in the short term, but at the expense of the people who have the potential to create value for the organization in the long term. What's needed is bold, decisive, and visionary leadership in business and government capable of releasing this potential.
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