1. Checks and Balances at America OnlineA big shoutout this week to Time Warner's (TWX - Get Report) America Online unit, for reminding us how fun -- and how fictional -- the dot-com bubble could be.
We're referring, of course, to Wednesday's announcement of a settlement between Time Warner and the Justice Department -- an agreement that puts some closure on an accounting investigation that has dogged AOL and Time Warner for more than two years.
As part of the settlement, which leads to a penalty and litigation fund totaling $210 million, the Justice Department included a fascinating chronology it calls a Statement of Facts.
This addendum outlines the case against AOL and its executives, and it looks like the backbone of a fraud case that Justice would have pursued in the absence of Wednesday's settlement. That fraud case revolves around AOL's relationship with the now-defunct business-to-business software company PurchasePro, which the feds allege inflated its revenue in 2000 and 2001 with the help of AOL executives. In return for their assistance, says Justice, AOL cut deals that inflated its own advertising revenue.What we particularly like about the PurchasePro timeline is the spotlight it casts on the nitty-gritty details necessary for implementing an alleged accounting fraud. For example, on or about March 31, 2001 -- just as the first quarter was closing -- Justice says three AOL employees demanded PurchasePro pay AOL $12.2 million in commissions supposedly due for AOL's sales of a PurchasePro product -- even though AOL was actually owed $6.7 million at most. Because the money had to be received by midnight on March 31 to be recognized for the first quarter, says Justice, "a senior executive at PurchasePro personally delivered to AOL a hand written check for $12.2 million." Not only that, but somebody fixed it so AOL's April sales of PurchasePro product could be backdated into PurchasePro's first quarter. Or, as someone at AOL explained in an email back then, "This is the scoop. During the week of 4/5
2. A Whole Mess of GoogleBoy, that was quick.
Geico couldn't be a contender