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| KB Home - Where Trust Is NOT Built |
When you think of KB Home, does the word "trust" come to mind? It sure doesn't for us. That's why we aren't holding our collective breath while we
wait for the results of the July 2, 2007 sampling results to come back from the labs that the City of Simi Valley hired to test for arsenic. We know that
whatever the results, KB Home will probably spin it that all is fine with Runkle Canyon. We just don't trust this company and we certainly aren't going
to entrust it with the health consequences of radioactive and chemical contamination hurting our community.
Why? Because KB Home has a sorry history which includes a federal criminal investigation of its long-time CEO Bruce Karatz who was forced to resign
in late 2006. The company was the target of a lawsuit over it building a development on top of a former bombing range in Texas that has been
reported on nationwide. KB Homes is the company that forced us to dig into our pockets to test Runkle Canyon's dirty water because they wouldn't.
This is most certainly not the company that founder Eli Broad, prominent Los Angeles billionaire and philanthropist, founded decades ago. Or is it?
Trust is built in a company through knowing that the principals aren't a bunch of crooks. To understand just how this trust in KB Hpme has been
damaged, check out this excellent May 2007 Los Angeles magazine article "Man of the House -- How one of the city's most powerful executives, KB
Home CEO Bruce Karatz, found himself out of a job and under investigation," by Mark Lacter. In it is a stunning portrayal of a man who simply wasn't
satisfied with the hundreds of millions he was making out of this massive company that wants to make a lot more off of Runkle Canyon, come hell or
arsenic water.
Both the U.S. Attorney’s Office and the Securities and Exchange Commission are investigating whether Karatz pocketed millions of extra dollars in
stock gains without telling shareholders or the board, Lacter wrote. What he appears to have done is a variation of the old "buy low, sell high" maxim,
except the system was rigged so that he could go back in time and handpick a particularly low stock price. That way, he maximized his profit at the
other end. KB’s own investigation concluded that on seven occasions between 1998 and 2005, Karatz and human resources head Gary Ray
engaged in a practice known as backdating (KB calls it "hindsight"). KB said no one else at the company was aware of the activity.
Nobody knew that the boss was possibly fleecing the shareholders and allegedly breaking the law doing it? Right.
Total compensation in 2005—his last full year as CEO—was a stunning $135.6 million (only three executives of public companies in the United States
made more that year), Lacter continued. Over a five-year stretch, he made $227.4 million. Even by the recent standards of excessive executive pay,
that’s way over-the-top. So when KB’s investigation found that the backdating overages amounted to a relatively modest $13 million (which Karatz
has offered to return), everyone was asking the same thing: Why on earth would he risk losing all that fame and fortune for the sake of a few more
bucks?
The answer is greed, pure and simple. And it is greed that drives KB Home to develop Runkle Canyon even knowing full well that its environmental
reports about the place are inaccurate, missing chunks of crucial data, and appear phony on the face of it. But they would never build on property
that would be dangerous?, you think. Think again.
In 2001, 64 residents of a KB Home subdivision in Texas sued the company, according to a Dallas Business Journal article, for not disclosing that the
subdivision was built on the site of a former military bombing practice range!
The homeowners allege that when KB Home bought the land in the late 1990s and started the Southridge Hills subdivision, KB Home had actual
knowledge that the U.S. Navy had used the land as a practice bombing range and that there were dangerous unexploded ordnances in the ground.
The lawsuit also alleges that KB Home ignored the recommendation of the U.S. Army Corp of Engineers to hire an unexploded ordnance contractor
to remove the subsurface bombs from the site prior to any development.
The Southridge Hills homeowners claim that at the point of sale KB Home, acting by and through their agents and employees, intentionally withheld
the information from the plaintiffs that the homes they were purchasing were built on top of a bombing site and that the area had contained a
number of subsurface, unexploded bombs. Had the defendants disclosed the information, the plaintiffs would not have purchased homes in the
Southridge Hills subdivision, attorneys said.
As this controversy continued, WFAA - Channel 8 in Dallas/Fort Worth ran pieces in 2005 and documented this incredulous story:
When Southridge Hills was built, bombs had been cleared from the surface, but there were many more underground. Soon, the Corps of Engineers
will begin digging for them.
"It's very likely we'll recover a number of the Mark 23 (practice bombs)," Ford said.
Despite the bombs underground, builder KB Home built hundreds of houses on top. KB officials said the site was long ago "remediated", and certified
by the U.S. government. The Corps of Engineers, however, said the site is a potential safety hazard, and is spending more than $1 million to clean it
up.
As citizens of Simi Valley, we don't want the situation in Runkle Canyon to get to this point -- there has to be a new Environmental Impact Report
demanded by the City of KB Homes, top to bottom. Full transparency. In-depth testing of all radionuclides and chemicals that we know have been
spilled, released or just plain vented into the environment by the nuclear meltdowns that happened at neighboring Rocketdyne. We already know
that leukemia-causing Strontium-90 has been found at extremely elevated levels in and around Runkle Canyon. This land is indeed "hot property."
There is another possibility for a positive future for this land -- Eli Broad could save it. Broad just gave $26 million to Michigan State for an art museum
which is surely admirable. How about spending even less on buying and preserving Runkle Canyon so no radioactive and chemical toxins are released
from KB Home's construction of this polluted land? Why not become a Hero in Southern California where you live, Mr. Broad, and build that trust
back up where it used to be? This is your chance to do something that will possibly save the lives of the very people you've made your fortune from.
wait for the results of the July 2, 2007 sampling results to come back from the labs that the City of Simi Valley hired to test for arsenic. We know that
whatever the results, KB Home will probably spin it that all is fine with Runkle Canyon. We just don't trust this company and we certainly aren't going
to entrust it with the health consequences of radioactive and chemical contamination hurting our community.
Why? Because KB Home has a sorry history which includes a federal criminal investigation of its long-time CEO Bruce Karatz who was forced to resign
in late 2006. The company was the target of a lawsuit over it building a development on top of a former bombing range in Texas that has been
reported on nationwide. KB Homes is the company that forced us to dig into our pockets to test Runkle Canyon's dirty water because they wouldn't.
This is most certainly not the company that founder Eli Broad, prominent Los Angeles billionaire and philanthropist, founded decades ago. Or is it?
Trust is built in a company through knowing that the principals aren't a bunch of crooks. To understand just how this trust in KB Hpme has been
damaged, check out this excellent May 2007 Los Angeles magazine article "Man of the House -- How one of the city's most powerful executives, KB
Home CEO Bruce Karatz, found himself out of a job and under investigation," by Mark Lacter. In it is a stunning portrayal of a man who simply wasn't
satisfied with the hundreds of millions he was making out of this massive company that wants to make a lot more off of Runkle Canyon, come hell or
arsenic water.
Both the U.S. Attorney’s Office and the Securities and Exchange Commission are investigating whether Karatz pocketed millions of extra dollars in
stock gains without telling shareholders or the board, Lacter wrote. What he appears to have done is a variation of the old "buy low, sell high" maxim,
except the system was rigged so that he could go back in time and handpick a particularly low stock price. That way, he maximized his profit at the
other end. KB’s own investigation concluded that on seven occasions between 1998 and 2005, Karatz and human resources head Gary Ray
engaged in a practice known as backdating (KB calls it "hindsight"). KB said no one else at the company was aware of the activity.
Nobody knew that the boss was possibly fleecing the shareholders and allegedly breaking the law doing it? Right.
Total compensation in 2005—his last full year as CEO—was a stunning $135.6 million (only three executives of public companies in the United States
made more that year), Lacter continued. Over a five-year stretch, he made $227.4 million. Even by the recent standards of excessive executive pay,
that’s way over-the-top. So when KB’s investigation found that the backdating overages amounted to a relatively modest $13 million (which Karatz
has offered to return), everyone was asking the same thing: Why on earth would he risk losing all that fame and fortune for the sake of a few more
bucks?
The answer is greed, pure and simple. And it is greed that drives KB Home to develop Runkle Canyon even knowing full well that its environmental
reports about the place are inaccurate, missing chunks of crucial data, and appear phony on the face of it. But they would never build on property
that would be dangerous?, you think. Think again.
In 2001, 64 residents of a KB Home subdivision in Texas sued the company, according to a Dallas Business Journal article, for not disclosing that the
subdivision was built on the site of a former military bombing practice range!
The homeowners allege that when KB Home bought the land in the late 1990s and started the Southridge Hills subdivision, KB Home had actual
knowledge that the U.S. Navy had used the land as a practice bombing range and that there were dangerous unexploded ordnances in the ground.
The lawsuit also alleges that KB Home ignored the recommendation of the U.S. Army Corp of Engineers to hire an unexploded ordnance contractor
to remove the subsurface bombs from the site prior to any development.
The Southridge Hills homeowners claim that at the point of sale KB Home, acting by and through their agents and employees, intentionally withheld
the information from the plaintiffs that the homes they were purchasing were built on top of a bombing site and that the area had contained a
number of subsurface, unexploded bombs. Had the defendants disclosed the information, the plaintiffs would not have purchased homes in the
Southridge Hills subdivision, attorneys said.
As this controversy continued, WFAA - Channel 8 in Dallas/Fort Worth ran pieces in 2005 and documented this incredulous story:
When Southridge Hills was built, bombs had been cleared from the surface, but there were many more underground. Soon, the Corps of Engineers
will begin digging for them.
"It's very likely we'll recover a number of the Mark 23 (practice bombs)," Ford said.
Despite the bombs underground, builder KB Home built hundreds of houses on top. KB officials said the site was long ago "remediated", and certified
by the U.S. government. The Corps of Engineers, however, said the site is a potential safety hazard, and is spending more than $1 million to clean it
up.
As citizens of Simi Valley, we don't want the situation in Runkle Canyon to get to this point -- there has to be a new Environmental Impact Report
demanded by the City of KB Homes, top to bottom. Full transparency. In-depth testing of all radionuclides and chemicals that we know have been
spilled, released or just plain vented into the environment by the nuclear meltdowns that happened at neighboring Rocketdyne. We already know
that leukemia-causing Strontium-90 has been found at extremely elevated levels in and around Runkle Canyon. This land is indeed "hot property."
There is another possibility for a positive future for this land -- Eli Broad could save it. Broad just gave $26 million to Michigan State for an art museum
which is surely admirable. How about spending even less on buying and preserving Runkle Canyon so no radioactive and chemical toxins are released
from KB Home's construction of this polluted land? Why not become a Hero in Southern California where you live, Mr. Broad, and build that trust
back up where it used to be? This is your chance to do something that will possibly save the lives of the very people you've made your fortune from.