No Costco for you, Iranian diplomats

The Seattle Times

As the U.S. weighs a military strike against Syria, the economic sanctions against Iran and Syria that were tightened 12 months ago are manifesting themselves in both odd and serious ways.

Four Iranian diplomats in Tokyo, for instance, can no longer shop at Costco, at least not using the embassy�s two business memberships.

They spent $5,178 between mid-November and mid-May, yielding Costco an estimated profit of less than $160.

But that�s all over now � those Costco cards were recently revoked. So was Iran Air�s Costco business membership in the United Kingdom, which rang up zero sales during that period.

We know this only because such details must be reported in a company�s regulatory filings under the Securities and Exchange Commission�s (SEC) implementation of the Iran Threat Reduction and Syria Human Rights Act of 2012, which became law a year ago.

The SEC says disclosure is required if a company �knowingly engaged in certain specified activities involving contacts with or support for Iran or other identified persons involved in terrorism or the creation of weapons of mass destruction.�

The only other local company to report a similar transgression since those disclosures began in January is Bellevue-based Esterline, which makes munitions and aerospace components such as cockpit display and navigation systems.

Esterline acknowledged Aug. 30 that back in March, its Canadian subsidiary CMC Electronics sold an $8,814, one-year subscription for a navigation database to a customer called Ukrainian-Mediterranean Airlines.

A couple months later, the U.S. Treasury Department put the Kiev-based airline on its Specially Designated Global Terrorist list.

The airline�s website says its scheduled flights go to �the capitals of Iran, Lebanon, Jordan and Syria,� and it carried 62,000 passengers to those destinations in 2010.

The Treasury says UM Air and two other airlines �served as intermediaries for the acquisition of aircraft by (Tehran-based) Mahan Air and Iran Air as Iran continues to move illicit cargo to Syria for the Assad regime�s violent crackdown against its own citizens.�

In addition to leasing aircraft to Mahan, UM was helping train its pilots and engineers, according to a Treasury statement.

Esterline reports that UM Air downloaded its electronic subscription June 19. That was almost three weeks after Treasury slapped the sanctions on UM, but four days before Esterline ran �its periodic prohibited party screening of its customer base� to look for banned buyers.

The Bellevue company says it won�t allow any more updates for UM Air � so presumably no repeat of the $6,027 net profit it logged on the sale. The company also is improving its screening practices to find customers with sanctions issues in a more timely fashion.

U.S. public companies seem to be bending over backward to comply with the reporting requirements � take the recent disclosure from Pinnacle Foods of New Jersey.

It doesn�t confess to shipping any baked beans or frozen vegetables to Iran or its friends. But it reveals that Pinnacle�s controlling shareholder is private equity firm Blackstone Group, which also controls Hilton Worldwide. Two Hilton-branded hotels in the United Arab Emirates are run by independent franchise operators, who paid the wages of some employees with direct deposits into their accounts at an Iranian-owned bank that�s on the Treasury blacklist.

Is that five or six degrees of separation? Apparently, you can�t be too careful these days.

Year Up class gets official visitor

Information-technology instructor Mike McCarty was showing a roomful of young adults in Seattle how to take apart a Dell desktop computer on Thursday when he received an unlikely visitor: U.S. Commerce Secretary Penny Pritzker.

McCarty�s classroom seemed as good a place as any for Pritzker to talk about a growing gap between American jobs that need to be filled and job seekers with just the right skills.

McCarty aims to prepare his 20 students for IT careers as part of an intensive program run by the Seattle nonprofit Year Up Puget Sound.

Pritzker, a Chicago businesswoman who joined President Obama�s second-term cabinet this summer, says a top concern of companies is the so-called skills gap.

�We don�t have enough skilled people for the open jobs. I hear this everywhere I�ve been,� she told the classroom. �You should get trained. There are jobs out there for those who are ready to work and know how to work.�

Seattle was the 11th stop on a nationwide listening tour by Pritzker, who also met with local business leaders including Phyllis Campbell, chairwoman of the Pacific Northwest region of JPMorgan Chase; Zillow co-founder Rich Barton; and Scott Di Valerio, chief executive of Outerwall, which owns the Redbox movie-rental business.

Pritzker, 54, an heir to the Hyatt Hotel fortune and longtime Obama backer, said she wanted to shine a spotlight on Year Up because of its focus on preparing young adults for high-demand jobs.

The Belltown nonprofit, which is part of a national organization founded in Boston by entrepreneur Gerald Chertavian, provides low-income adults in their late teens and early 20s up to six months of full-time training, followed by a six-month internship at a corporate sponsor.

�The president is very interested in youth jobs and what are we doing to help youth get into good career pathways,� Pritzker told reporters afterward. �Year Up is one of those providers that�s helping young folks who are struggling in that area.�

Indeed, the U.S. unemployment rate for 20- to 24-year-olds was 13 percent in August, compared with joblessness overall of 7.3 percent. What�s more, the total number of long-term unemployed, or those without a job for at least 27 weeks, was virtually unchanged last month at 4.3 million.

Corporate complaints of a skills gap can seem at odds with weak job growth nationwide. Pritzker said that while the Seattle area has a �wonderfully low� unemployment rate of less than 5 percent, many people still are struggling.

�In Chicago, we have 200,000 open jobs and 240,000 unemployed. Something�s wrong,� she said.

Top geneticist led Microsoft-Motorola jury

Among the interesting tidbits to come out of the recently concluded Microsoft-Motorola patent trial is this fact: The presiding juror was Mary-Claire King, a University of Washington professor and a renowned geneticist who played a leading role in the identification of breast-cancer genes.

King, who declined to comment on the trial, led the jury that on Wednesday delivered a unanimous verdict in favor of Microsoft.

The jury had decided that Motorola had breached its agreements to two standards-setting organizations to license certain of its patents to Microsoft on fair and reasonable terms. It awarded Microsoft about $14.5 million in damages.

King, who is a professor in the UW School of Medicine�s departments of medicine and genome sciences, discovered the BRCA1 gene. Mutations in that gene, as well as in the BRCA2 gene, can lead to increased risk of breast and ovarian cancer.

She�s also the subject of an upcoming movie called �Decoding Annie Parker,� in which she is portrayed by actress Helen Hunt. The film screened at the Seattle International Film Festival this summer.

It is unknown if King led the jury�s �theme day� efforts, in which the jury dressed in different themes each day. On Tuesday, the theme was green. On Wednesday, it was sports shirts.

� Rami Grunbaum: [email protected]