Later On

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It took Toshiba 70 years to reach its peak—and just a decade to fall into an abyss

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Josh Horwitz has a fascinating article on Toshiba’s rise and fall. From the article:

A 334-page report by an investigation committee set up by Toshiba stated that Nishida at times encouraged accountants to fudge the numbers. In January 2009, when an employee told Nishida the PC division would incur an operating profit loss of ¥18 billion (about $203 million then) over a six-month period, Nishida demanded an “improvement” in profit of ¥10 billion, lest the unit face closure. “Do all that you can as if your life depends on it,” Nishida reportedly told subordinates (pdf, p. 245).

While the scandal didn’t lead directly to Toshiba’s downfall, it exposed deeper problems at the company, shared by many tech conglomerates in Japan. Managers accustomed to beating out the competition were afraid to deliver bad news to the leadership, who didn’t want to hear it in the first place. As a consequence, this culture stifled Toshiba’s ability to innovate, at a time when it badly needed to. (Toshiba declined an interview request for this story.)

Professor Ulrike Schaede, who researches Japanese conglomerates at the University of California, San Diego, described Toshiba and its ilk as “full of yes men that do things because they think the boss wants them to do it, rather than what they think is a good idea or the right thing to do.” As a result, “everyone’s moving in lockstep in the direction of the bosses, and you don’t get any new ideas.”

Sound familiar?

Written by LeisureGuy

29 April 2017 at 8:00 pm

Posted in Business

Man Trump Named to Fix Mortgage Markets Figured in Infamous Financial Crisis Episode

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Matt Taibbi writes in Rolling Stone:

In early 2007, a group of Morgan Stanley bankers bundled a group of subprime mortgage instruments into a package they hoped to sell to investors. The only problem was, they couldn’t come up with a name for the package of mortgage-backed derivatives, which they all knew were doomed.

The bankers decided to play around with potential names. In a series of emails back and forth, they suggested possibilities. “Jon is voting for ‘Hitman,'” wrote one. “How about ‘Nuclear Holocaust 2007-1?'” wrote another, adding a few more possible names: Shitbag, Mike Tyson’s Punchout and Fludderfish.

Eventually they stopped with the comedy jokes, gave the pile of “nuclear” assets a more respectable name – “Stack” – and sold the $500 million Collateralized Debt Obligation with a straight face to the China Development Industrial Bank. Within three years, the bank was suing a series of parties, including Morgan Stanley, to recover losses from the toxic fund.

The name on the original registration document for Stack? Craig S. Phillips, then president of Morgan Stanley’s ABS (Asset-Backed Securities) division. Phillips may not have written the emails in question, but he was the boss of this sordid episode, and it was his name on the comedy-free document that was presented to Chinese investors.

This is just another detail in the emerging absurd narrative that is Donald Trump naming Phillips, of all people, to head up the effort to reform the Government-Sponsored Entities, Fannie Mae and Freddie Mac.

As ace investigative reporter Gretchen Morgenson of the New York Times noted in a piece back on April 7th, Phillips headed a division that sold billions of dollars of mortgage-backed investments to Fannie and Freddie. Many of those investments were as bad as the ones his unit sold to the Chinese. In fact, as Morgenson noted, Phillips became a named defendant in a lawsuit filed by the Federal Housing Finance Authority (FHFA), which essentially charged, as the Chinese did, that Morgan Stanley knowingly sold Fannie and Freddie a pile of crap.

Morgan Stanley ended up having to pay $625 million apiece to Fannie and Freddie to settle securities fraud charges in that case.

Phillips worked in an area of investment banking that was highly lucrative and highly predatory. The basic scam in the subprime world in particular was buying up mortgages from people who couldn’t possibly afford them, making those bad mortgages into securities, and then turning around and hawking those same mortgages to unsuspecting institutional dopes like the Chinese and Fannie and Freddie.

Phillips had a critical role in this activity. As Morgan Stanley’s ABS chief, he was among other things responsible for liaising with fly-by-night subprime mortgage lenders like New Century, who fanned into low-income neighborhoods and handed out subprime mortgages to anyone with a pulse.

In a 2012 suit, a group of Detroit-based borrowers accused Morgan Stanley of discriminatory practices, claiming the bank helped New Century target minority areas with predatory loans. One Morgan Stanley due diligence officer, Pamela Barrow, joked in an email about how to go after borrowers.

“We should call all their mommas,” Barrow wrote. “Betcha that would get some of them good old boys to pay that house bill.”

Phillips was named in the suit and quoted in the complaint. He said that New Century was “extremely open to our advice and involvement in all elements of their operation.”

The worst actors in the financial crisis worked in this shady world involving the creation of subprime-backed securities.

Of those bad actors, there is a subset of still-worse actors, who not only sold these toxic investments to institutional investors like pension funds and Fannie and Freddie, but helped get a generation of home borrowers – often minorities and the poor – into deadly mortgages that ended up wiping out their equity. . .

Continue reading.

Written by LeisureGuy

28 April 2017 at 6:52 pm

The Noakes trial exposes the power and dishonesty of business-funded research

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I blogged yesterday links to posts about the Noakes trial in South Africa: he tweeted a recommendation for weaning a baby onto a low-carb high-fat diet (e.g., not focused on cereals) and as a result became the target of a vindictive campaign to smear his name and wreck him professionally, a campaign that failed utterly.

It’s an amazing clown show. The organization charging Noakes stalled until they could do a meta-analysis to disprove his findings, but the meta-analysis was so badly flawed it was clearly intended merely as an attack: it included studies that did not meet the criteria established by the meta-analysis authors, it included several studies that showed that supported the advice Noakes gave.

In addition the organization issued a press release in October of last year saying that Noakes had been found guilty. But the trial was not over and in fact the final decision was just announced. Although the press release was quickly retracted (after it had gone viral on social media in South Africa), its release does show bad faith (and incompetence) by the organization that brought the charges.

It’s quite a drama if you read it all. Nina Teicholz (a favorite of mine for her excellent book The Big Fat Surprise).

The best articles seem to be in FoodMed.net, and they have a category for the Noakes trial. The articles are listed in descending chronological order, so start with the last article listed and read your way up. It really is fascinating.

Written by LeisureGuy

27 April 2017 at 4:00 pm

America’s Other Drug Problem

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Marshall Allen reports in ProPublica:

Every week in Des Moines, Iowa, the employees of a small nonprofit collect bins of unexpired prescription drugs tossed out by nursing homes after residents died, moved out or no longer needed them. The drugs are given to patients who couldn’t otherwise afford them.

But travel 1,000 miles east to Long Island, New York, and you’ll find nursing homes flushing similar leftover drugs down the toilet, alarming state environmental regulators worried they’ll further contaminate the water supply.

In Baltimore, Maryland, a massive incinerator burns up tons of the drugs each year — for a fee — from nursing homes across the Eastern seaboard.

If you want to know why the nation’s health care costs are among the highest in the world, a good place to start is with what we throw away. Across the country, nursing homes routinely toss large quantities of perfectly good prescription medication: tablets for diabetes, syringes of blood thinners, pricey pills for psychosis and seizures.

At a time when anger over soaring drug costs has perhaps never been more intense, redistributing discarded drugs seems like a no-brainer. Yet it’s estimated that American taxpayers, through Medicare, spend hundreds of millions of dollars each year on drugs for nursing home patients — much of which literally go down the tubes.

“It would not surprise me if as much as 20 percent of the medications we receive we end up having to destroy,” said Mark Coggins, who oversees the pharmacy services for Diversicare, a chain of more than 70 nursing homes in 10 states. “It’s very discouraging throwing away all those drugs when you know it can benefit somebody.”

No one tracks this waste nationwide, but estimates show it’s substantial. Colorado officials have said the state’s 220 long-term care facilities throw away a whopping 17.5 tons of potentially reusable drugs every year, with a price tag of about $10 million. The Environmental Protection Agency estimated in 2015 that about 740 tons of drugs are wasted by nursing homes each year.

This is, of course, part of a bigger problem. The National Academy of Medicine estimated in 2012 that the United States squanders more than a quarter of what it spends on health care — about $765 billion a year.

ProPublica is investigating the types of waste in health care that academics and politicians typically overlook. Our first installment examined the tens of millions worth of equipment and brand new supplies that hospitals jettison.

Today we look at the wasteful, and potentially harmful, ways nursing homes dispose of leftover meds — and how some states, like Iowa, have found a solution.


On a recent Wednesday in Des Moines, Ami Bradwell, a certified pharmacy technician, popped open the lids of several 31-gallon bins full of prescription drugs. In each were hundreds of what are known as “bingo cards” filled with rows of pills in sealed bubbles.

“Metformin — for diabetics,” Bradwell said, holding up a card of large white pills. “It’s not crazy expensive, but it’s in high demand.”

She held up an entire box of the anti-nausea drug Ondansetron. It goes for about $5 a pill, according to the website drugs.com. “Expensive.”

Another card had three large pills stuffed in each chamber, a find Bradwell called “a ‘jackpot’ card. You can’t live without it because it’s a seizure medication.”

Bradwell works for the nonprofit SafeNetRx. Each week the group takes in dozens of bins full of such drugs, as well as boxes mailed in from across Iowa and several other states — pharmaceutical trash that exists because, for convenience and cost, long-term care pharmacies often dispense nursing home patients’ medications in bulk, a months‘ worth at a time.

Should a patient die, leave or stop taking the drug, what’s left is typically tossed. The drugs have already been paid for, by Medicare in most cases, so there’s little incentive to try to recycle them. In some states, such reuse is against the law.

Some of the cards Bradwell examined that day were missing only a few pills. One card had been thrown out even though it only lacked one of its 31 doses of oxybutynin, which reduces muscle spasms of the bladder. The remaining 30 are worth more than $13.

“There are literally millions of dollars of prescription medications thrown away every day in this country,” said John Forbes, an Iowa pharmacist who dispenses SafeNetRx’s recovered drugs to his low-income patients.

Although most states technically allow some leftover drugs to be recycled, Iowa is one of the few rescuing a significant percentage of the drugs from destruction. The state funds the program for about $600,000 a year, said SafeNetRx CEO Jon Rosmann, who calls it a “common sense” solution. In fiscal 2016 the program recovered and distributed drugs valued at about $3.4 million. This year it’s on pace to top $5 million. . .

Continue reading. There’s a lot more, and it is interesting.

Written by LeisureGuy

27 April 2017 at 2:06 pm

Bribe Cases, a Secret Jared Kushner Partner and Potential Conflicts

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Jesse Drucker reports in the NY Times:

It was the summer of 2012, and Jared Kushner was headed downtown.

His family’s real estate firm, the Kushner Companies, would spend about $190 million over the next few months on dozens of apartment buildings in tony Lower Manhattan neighborhoods including the East Village, the West Village and SoHo.

For much of the roughly $50 million in down payments, Mr. Kushner turned to an undisclosed overseas partner. Public records and shell companies shield the investor’s identity. But, it turns out, the money came from a member of Israel’s Steinmetz family, which built a fortune as one of the world’s leading diamond traders.

A Kushner Companies spokeswoman and several Steinmetz representatives say Raz Steinmetz, 53, was behind the deals. His uncle, and the family’s most prominent figure, is the billionaire Beny Steinmetz, who is under scrutiny by law enforcement authorities in four countries. In the United States, federal prosecutors are investigating whether representatives of his firm bribed government officials in Guinea to secure a multibillion dollar mining concession. In Israel, Mr. Steinmetz was detained in December and questioned in a bribery and money laundering investigation. In Switzerland and Guinea, prosecutors have conducted similar inquiries.

The Steinmetz partnership with Mr. Kushner underscores the mystery behind his family’s multibillion-dollar business and its potential for conflicts with his role as perhaps the second-most powerful man in the White House, behind only his father-in-law, President Trump.

Although Mr. Kushner resigned in January from his chief executive role at Kushner Companies, he remains the beneficiary of trusts that own the sprawling real estate business. The firm has taken part in roughly $7 billion in acquisitions over the last decade, many of them backed by foreign partners whose identities he will not reveal. Last month, his company announced that it had ended talks with the Anbang Insurance Group, a Chinese financial firm linked to leading members of the ruling Communist Party. The potential agreement, first disclosed by The New York Times, had raised questions because of its favorable terms for the Kushners.

Dealings with the Steinmetz family could create complications for Mr. Kushner. The Justice Department, led by Trump appointees, oversees the investigation into Beny Steinmetz. Even as Mr. Kushner’s company maintains extensive business ties to Israel, as a top White House adviser, he has been charged with leading American efforts to broker peace in the Middle East as part of his broad global portfolio.

“Mr. Kushner continues to work with the Office of the White House Counsel and personal counsel to ensure he recuses from any particular matter involving specific parties in which he has a business relationship with a party to the matter,” said Hope Hicks, a White House spokeswoman. . .

Continue reading.

The U.S. government is now led by a thoroughly corrupt and unethical family. And the GOP Congress is on board with that.

Written by LeisureGuy

26 April 2017 at 1:32 pm

Big Pharma’s Dirtiest Dealer

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Many (most?) corporations nowadays lack any sort of moral compass or ethical guidelines. They judge all actions by how those actions affect profits; actions that increase profits are deemed “good,” actions that don’t improve profits are deemed “bad.” Legal, moral, and ethical considerations do not matter.

Here’s an example, reported in Motherboard by David Bienenstock:

Insys Therapeutics executives suffered multiple arrests for bribing doctors to prescribe its fentanyl-based pain medication while funding anti-weed campaigns and developing its own lab-made THC drug.

Sarah Fuller first got her hands on Subsys in January 2015, when FedEx delivered a box containing a twenty-day supply of the fentanyl-based mouth spray. During the fifteen months from her first dose of Subsys, Insys Therapeutics’s flagship opioid pain medication, until her death at 32 from a fatal overdose, Medicare shelled out $250,544 to cover the drug, STAT News reported.

According to Fuller’s family and transcripts of their lawsuit against Insys, she had previously struggled with opioid dependency following two car accidents that left her with painful fibromyalgia. But after experiencing kidney problems related to prescription painkillers, she’d subsequently gone cold turkey and was off all pharmaceuticals the first time she visited with Dr. Vivienne Matalon (whose license was subsequently suspended) in her office in Cherry Hill, New Jersey.

That’s where Fuller reportedly encountered an Insys sales rep, who was present during one of her doctor’s appointments to helpfully explain how spraying Subsys under her tongue every four hours would work wonders on that pesky pain. Never mind her history of abuse, or that Subsys had only ever been approved for cancer patients with breakthrough pain.

“As far as I’m concerned they killed her,” Sarah’s mother told STAT in a video interview, referring to both Dr. Matalon and the Insys sales rep.

Read more: Can Weed Cure America’s Opioid Epidemic?

In my fifteen years of reporting on the War on Drugs—the disproportionate government crackdown on certain communities using narcotics—I’ve never seen a case that pulled back the curtain and tied the whole room together quite like Insys Therapeutics.

First, you’ve got a publicly-traded pharmaceutical company pushing fentanyl, a drug that’s 50 times stronger than heroin. And then you’ve got the same company donating half-a-million dollars to a smear campaign against cannabis legalization in Arizona, where Insys is based, while simultaneously developing its own synthetic THC (tetrahydrocannabinol, the main psychoactive component of cannabis) drug with full state and federal government approval. What a magnificent intersection of irony, hypocrisy, and corruption.

Meanwhile, given the way the War on Drugs is generally conducted in America, the only truly surprising event in this whole sordid affair is that the Federal Bureau of Investigation actually stepped in last year and arrested six former Insys executives, including the company’s one-time CEO, for allegedly “leading a nationwide conspiracy to bribe medical practitioners to unnecessarily prescribe a fentanyl-based pain medication and defraud healthcare insurers.”

Not to mention the countless people who got seriously hooked on Subsys. Throw in multiple lawsuits and a looming Congressional investigation, and it’s all taken a sizable toll on the company’s bottom line. On April 4, Insys reported a 41.6 percent decline in quarterly revenue, presumably the only negative outcome the company really cares about.

But it’s not all bad news for Insys. Just last month the company won approval from the Drug Enforcement Administration to start selling Syndros, a wholly lab-produced 100 percent THC liquid. Meaning, as far as the federal government is concerned, a cancer patient smoking a joint in California is a criminal in possession of a Schedule 1 narcotic with no proven medical value and a high risk of abuse. But Insys can produce and sell marijuana’s most psychoactive component in its purest possible form.

How is this okay with the DEA? According to a Washington Post investigation, since 2005, at least 42 officials from the agency have gone on to work for Big Pharma, including 31 directly from a division tasked with regulating the industry.

Congress, however, is about to step in.

Continue reading.

Do read the entire article. There’s a lot more and it shows how very broken the U.S. has become.

Written by LeisureGuy

26 April 2017 at 1:15 pm

Barbecue: America’s most political food

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Lauren Collins writes in the New Yorker:

In February of 2015, Kathleen Purvis, the food editor of the Charlotte Observer, drove to Birmingham, Alabama, to attend Food Media South, an annual symposium. The keynote session, “Hey, You, Pitch Me Something,” was meant to be a friendly wind-down to a weekend of talks. Participants were invited to get up in front of the editor of the Web magazine the Bitter Southerner and, well, pitch him something.

There were several hundred people in the room. Purvis knew that in the name of politeness she should probably stay quiet, but she couldn’t resist the opportunity to “toss a good word grenade,” she recalled later, into a clubby crowd that she felt tended to overlook, along with chiffon cakes and canning, some of the most complicated questions about Southern cuisine. She raised her hand, and the editor nodded her way.

“Men are the new carpetbaggers of Southern food writing,” she said.

He replied, “Sold.”

The resulting essay argues that “the Southern food-writing world has been unduly influenced, usurped, yes, even invaded, by a barbecue-entranced, bourbon-preoccupied and pork belly-obsessed horde of mostly testosterone-fueled scribes,” who dwell on hackneyed tales of Southern eccentricity without developing “the clear-eyed vision” to see them in a contemporary light. The piece generated controversy, though not as much as Purvis’s investigation into the racial dimensions of the practice of putting sugar in corn bread. “Honest to God, I really hate that hokey-jokey Hey-us-Southerners-aren’t-we-cute stuff,” she told me. “I’ve always said that my beat is food and the meaning of life.”

Gamely, the organizers invited her to the conference the next year as a speaker. “I was getting ready to get up and talk,” Purvis said. “I was sitting there very quietly in a corner, and a woman came up to me and said, ‘So, is it O.K. to go back to the Piggie Park?’ ”

The woman was referring to Maurice’s Piggie Park, a small chain of barbecue restaurants, established in West Columbia, South Carolina, in 1953. The original restaurant occupies a barnlike building on a busy intersection and is presided over by a regionally famous electric marquee that features the boast “world’s best bar-b-q,” along with a grinning piglet named Little Joe. The Piggie Park is important in the history of barbecue, which is more or less the history of America. One reason is that its founder, Maurice Bessinger, popularized the yellow, mustard-based sauce that typifies the barbecue of South Carolina’s Midlands area. Another is that Bessinger was a white supremacist who, in 1968, went to the Supreme Court in an unsuccessful fight against desegregation, and, in 1974, ran a losing gubernatorial campaign, wearing a white suit and riding a white horse.

In 2000, when the Confederate flag was removed from the South Carolina statehouse dome, Bessinger raised Confederate flags over all his restaurants. (By then, there were nine.) A king-sheet-size version went up over the West Columbia location, where he had long distributed tracts alleging, for example, that “African slaves blessed the Lord for allowing them to be enslaved and sent to America.” He was a figure whose hate spawned contempt, leading a writer from the Charleston City Paper to fantasize about how “Satan and his minions would slather his body in mustard-based BBQ sauce before they dined.”

In 2007, Bessinger, who suffered from Alzheimer’s at the end of his life, handed the business over to his two sons, Paul and Lloyd, and a daughter, Debbie. In the months before his death, in 2014, they took down the flags and got rid of the slavery pamphlets. “Dad liked politics,” Lloyd, who serves as the public face of the operation, told a reporter. “That’s not something we’re interested in doing. We want to serve great barbecue.”

By the time the news reached Kathleen Purvis, she hadn’t eaten Bessinger’s barbecue in nearly three decades. She grew up in Wilson, North Carolina, where her father was an R.C. Cola salesman and barbecue sauce is made with vinegar. Early in her career, she’d become a fan of the Bessinger family’s line of packaged foods—“handy for a quick dinner when I was working nights”—but, she wrote, in an article in the Observer in December, “When I learned about Bessinger’s history, I stopped buying his products. I followed a simple policy on the Piggie Park: I didn’t go there. Ever.” During the flag scandal, thousands of South Carolinians made the same call, going cold turkey. “I first made Maurice’s acquaintance when I was a child,” the barbecue expert William McKinney wrote, on the Web site of the Southern Foodways Alliance. “His barbecue was sold in the freezer aisle of the grocery store. It would bubble up in our family’s oven, its orange sauce as vivid as a river of lava. My mother would pack his barbecue in my lunch bag routinely, and I ate those sandwiches all the way through high school, wrapped up in aluminum foil and still a touch warm once lunch time came around.” It was as though Jif peanut butter or Katz’s Deli had become irredeemably tainted.

The Piggie Park had bad vibes, but it retained a pull on the community. For barbecue obsessives, it held a special fascination as one of the few restaurants in the country to still cook entirely over hickory wood, using no electricity or gas. One prominent Columbia resident, a black man, told me that he was addicted to Bessinger’s sauce, but that he would never admit it in public. The regime shift, then, represented a touchy moment. Some people wanted to go only if things had changed (but, if they were going to go, they wanted to get there before things had changed too much). For others, no amount of change was ever going to mitigate the legacy of a man who had caused so much hurt. Even asking if it was O.K. to return was a form of blindness to that pain. “They could change the last name, redo the building, then dig the old man up . . . it still wouldn’t matter to those who continue to carry the ‘chip on the shoulder’ mentality,” a man named James Last, of Wilmington, North Carolina, wrote in response to Purvis’s article, prompting Durward White, of Katy, Texas, to reply, “Are you saying no matter how vile and disrespectful his actions were we should move on? People still can’t move on from Tom Brady and deflate gate and that was 3 years ago.”

Barbecue might be America’s most political food. The first significant reference to it that the barbecue scholar Robert F. Moss has been able to find is in “The Barbacue Feast: or, the three pigs of Peckham, broiled under an apple-tree,” an account of a 1706 banquet in Jamaica. The revellers were English colonists, but the pigs were “nicely cook’d after the West Indian manner”: whole, over coals, on long wooden spits on which they turned as a cook basted them in a spicy sauce (green Virginia pepper and Madeira wine), using a foxtail tied to a stick. Native Americans on the East Coast of North America used similar cooking techniques. But the main thing about barbecues is that they were social affairs, a day’s entertainment for the community. Between 1769 and 1774, George Washington attended at least six of them, he wrote in his diary, including “a Barbicue of my own giving at Accotinck.”

A whole hog can feed as many as a hundred people. Barbecues, often held on the Fourth of July, became overtly political in the nineteenth century. As Moss writes in “Barbecue: The History of an American Institution,” they were “the quintessential form of democratic public celebration, bringing together citizens from all stations to express and reaffirm their shared civic values.” They adhered to a ritualized format: parade, prayer, reading of the Declaration of Independence, oration, and dinner in a shady grove near a drinking spring, after which dignitaries gave a series of “regular” toasts (thirteen of them, on patriotic subjects), followed by “voluntary” toasts from the masses (thirty or forty, on issues ranging from local elections to the free navigation of the Mississippi, or whatever else happened to be the day’s concerns). Often, the festivities turned rowdy. If an antebellum politician had wanted to rile folks up about building a wall, he would have done it at a barbecue.

Before the Civil War, enslaved men often cooked these civic meals. They prepared their own feasts, too, either sanctioned by their owners or organized on the quiet. Much of the planning for the rebellions organized by Gabriel Prosser and Nat Turner took place at barbecues. After emancipation, black men continued to be some of the country’s leading pit masters, catering enormous spreads that featured everything from barbecued hogs, shoats, chickens, and lambs to stuffed potatoes, stewed corn, cheese relish, puddings, coffee, and cigars. In 1909, the Times noted the death of a man born around 1865, on a plantation in Edgefield County, South Carolina. “Pickens Wells, . . .

Continue reading.

Written by LeisureGuy

23 April 2017 at 7:18 am

Posted in Business, Food, Politics

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