Poppy Comes to Princeton

In Your Face, Virtually

Health for Sale

Environmental Hot Topics

Corrections or additions?

These articles by Kathleen McGinn Spring and Bart Jackson were

prepared for the June 23, 2004 issue of U.S. 1 Newspaper. All rights


Survival Guide

Top Of Page
Poppy Comes to Princeton

Stockbrokers are drawn to Princeton like metal to a magnet, with the

most recent additions to the retail financial scene being Fidelity

Investments and TIAA-CREF.

Now here comes David Lerner, the 68-year-old from the Bronx whose

pitch is frequently heard on New York radio stations. Unlike most of

the giant companies, Lerner’s firm carries the founder’s name. And

unlike the company that Charles Schwab founded – which does have the

founder’s name – Lerner personally supervises and gives seminars for

potential clients. Lerner will speak at Seasons on Quakerbridge Road

on Wednesday, June 23, at 7 p.m. The seminar is free by reservation;

call 609-806-2700.

Lerner’s firm is regional, and his target client is over 50, those who

are finished raising their children and have a little money to invest.

It has more than 50,000 clients and 350 employees in five offices,

including the headquarters in Syosset, Long Island, and branches in

White Plains, New York; Darien, Connecticut; Teaneck; and now

Princeton. One of David Lerner’s younger brothers, Martin, works for

the firm.

The founder’s story, billed as a Horatio Alger tale, starts with his

being the son of a house painter. He grew up with four brothers in a

small apartment in the Bronx, developed polio at age 13, and spent a

year in a charity hospital. He graduated from Hunter (now Lehman)

College and has a master’s degree from the City University of New

York. He taught history and economics for years at Bayside High School

in Queens and sold mutual funds on the side.

David Lerner’s "Eureka moment" came in 1976 when he was taking a


"He had this brilliant idea that he could teach investing to the

public the same way he was teaching his high school students. He

called out to his wife that he had a great idea for a new business and

was told to get back in the shower and not make the floor wet," says

Susan Lipsig, company spokesperson.

The "Poppy" part of Lerner’s ads came from his grandchildren, who

called him by that nickname. "He used to say he was buying zero coupon

bonds for his grandchildren," says Lipsig, "and so we called them

Poppy bonds. We began to use that in the ads, saying, `Take a tip from

Poppy.’ So he became known throughout the area as Poppy."

Vince Monaco manages the new Princeton branch, which moved on Monday,

June 14, into 5,200 square feet on Rockingham Row at Princeton

Forrestal Village (609-806-2700). Matthew Malatich of CB Richard Ellis

helped Lerner find this space, and Greg Lezynski represented the Gale


The son of a New York detective, Monaco grew up on Staten Island and

majored in marketing at Pace University, Class of 1986. He was

assistant branch manager in Teaneck before coming to Princeton to open

this office. He and his wife live in Mahwah and have three school-age

daughters, including a set of twins.

Though Lerner is a full service firm with a $20 billion portfolio, it

has a definite bias toward tax free municipal bonds, real estate

investment trusts or REITS, and collateralized mortgage obligations.

"Our sales policy is safe, conservative, dividend producing, focusing

on preserving capital," says Monaco.

Recruits go through a 12-week training period and do not need industry

experience. In fact, inexperience is preferred. "We have our own

philosophy," says Monaco. "We bring in a lump of clay and mold them to

be a David Lerner broker. Our message is loud and clear. Tax-free

bonds are essential and the stock, for us, is an accommodation. None

of our brokers will ever call our clients with the hot stock of the


Lerner brokers will offer stocks or mutual funds as an accommodation

for a client who insists on buying them, but Lerner focuses on older

clients who want to preserve capital and gives them three investment


Bonds. "We have one of the largest regional municipal bond trading

desks on the east coast, and we trade millions of dollars a day. We

carry dozens of bonds at any given time," says Monaco.

The value of the bonds will go down in a rising interest rate market,

Monaco admits, "but if you hold them to maturity you are guaranteed

the interest rate will never fluctuate and you will get the principal

back at maturity." On what he calls the "buy and hold" philosophy

Monaco advises his clients to buy the longest maturity to get the

highest coupon rate.

With its big focus on municipal bonds, the Lerner company sells them

at both a wholesale and a retail level. Retail sales are represented

by offices like Princeton’s. On the secondary market, Lerner could

sell to banks or brokerage houses. As might be expected, the company

has very good relationships with municipalities, and after the 9/11

crisis David Lerner and Bear Stearns together raised $1 billion in

municipal bonds for the city of New York.

REITs. Lerner always offers a real estate investment trust, and the

last four REITs in its portfolio focused on hotels. The current REIT

has extended stay hotels and targets an eight percent dividend. "They

cater to traveling business people who always have to do business.

Even if they can’t fly, they will drive," says Monaco. After the 9/11

crisis, occupancies dipped, "but that went right back up and we were

able to pay our dividend. We don’t say it’s guaranteed, because it is

a business. But it is a business with an 11-year track record and

52,000 investors."

Collaterized mortgage obligations or CMOs are paying six percent, says

Monaco. Taxable and usually offered for a short term, they are

guaranteed by Fannie Mae and Freddy Mac and have never defaulted.

"When someone says they need something guaranteed, we show them a

CMO," says Monaco.

"Our last three years have been record years," Monaco says, referring

to the bull market that burned some equity investors. "We say that the

stock market is for the extra money and not to gamble with your hard

earned assets. People don’t want to worry about their principal, and

the stock market can’t guarantee that. Our clients use the money to

help pay monthly bills."

Top Of Page
In Your Face, Virtually

Nothing beats good old face to face. Pressing the flesh, displaying

your gizmo, and then guiding the potential customer smoothly,

patiently through all of its bells and whistles remains the best sales

clincher. But the cost efficiency of running a rep out to Ulaan

Battar, Mongolia, is dubious – to say the least. And today, for many

businesses, that’s exactly how wide their clients and potential

clients range. So, if not the best thing, companies are opting for

virtually the best thing – video and audio conferencing.

For the uninitiated, conducting cyber-business transactions becomes a

bit more understandable with the half-day seminar, "Growing your

Business with Web and Conferencing Tools," on Thursday, June 24, at

9:30 a.m. at the College of New Jersey. Cost: $10. Call 609-989-5232

or visit www.NJSBDC.org. Sponsored jointly by the New Jersey Small

Business Development Center and the New Jersey Technology Council,

this workshop features Linda Dumas, sales director for a

Freehold-based conference technology company, HelpMeeting. Designed

for sales, marketing, and customer service professionals, this seminar

shows various levels of teleconferencing and the tools available to

facilitate each.

"Most people have a fair idea of what conferencing tools are out

there," says Dumas, "but they don’t connect them with their business

needs." But for Dumas, technology has always been just one more tool

to get the job done.

She grew up in a tiny, friendly town in the northwest corner of

Tennessee, and moved just slightly north to attend Kentucky’s Murray

State College, where she earned an undergraduate degree in business

and marketing. After earning an MBA from New York University, Dumas

spent the next 15 years in technology sales for large companies in New

York and New Jersey.

"I even tried my own entrepreneurial company," she says, "but that was

in 2000, and what with going the venture capital route, it never

really got well launched." So, using a tool even more powerful than

technology, she networked, contacting two engineers with whom she had

worked at Lucent Technologies. In a prime example of the power of

keeping up with former colleagues, she learned that the two engineers

were starting HelpMeeting to sell their newly invented conferencing

software, and they needed a good head of sales.

Dumas sees audio and video conferencing as a selection of levels,

rather than as a collection of features. "You have to ask yourself,

‘what level of interactivity do I need for each conference?’ Bigger is

not always better," she says. At each level, various capabilities can

be added on to make the total conferencing package.

Audio only. Mr. Bell’s telephone remains the ideal tool for many

conferencing needs. Problems seldom get solved via the impersonal

transfer of E-mails. Human voices can work out solutions with much

less ambiguity, and more precise subtlety, than can notes swapped back

and forth.

Teleconferencing lines are now inexpensive, and can be set up quickly.

If you must employ your computer, use it to type out a script or

points you want to cover during the conversation. It will make you

look polished and prepared.

Hint: the conference call only works if you use it. Establish regular,

periodic call-in times so that your scattered sales force can exchange

ideas at the end of day, even if only for a few minutes.

Basic data transfer. Share with your client what you’ve got on your

PC. Show him a sales demo or a troubleshooting disk. Utility

companies, sick and tired of arguing over the phone with customers,

are increasingly making the switch. Now when a customer calls up

questioning a statement, both parties can pull it up and discuss over

the phone what they see on the screen. Such basic data sharing can be

done with still files – or even with videos.

"The main consideration with such shared files," says Dumas adamantly,

"is that they should never need downloading." Many institutions,

including banks, are not only leery of downloading strange files into

their systems, but also have set absolute policies against it.

Generally, people do not mind a simple log on system, even with a

temporary password exchanged over the phone.

Expanded sharing. Once the spreadsheet or demonstration video is

posted for all in the conference to view, there are a host of add-ons

that make interaction more real. Collaboration capability allows any

party online to change data on the transferred file. Thus everyone in

your sales force can instantly update the spreadsheet they share


A nifty tool for meetings is "whitepapering," which sets a blank page

before all in the conference and allows anyone to sketch new images,

just as they would when sitting around a table with that big flip pad

at the head. Sketches and marks can also be imposed over existing

images, as NFL game announcers do in an attempt to make the game more


Chat capability allows flashes of written commentary to zip from

virtual meeting attendees’ keyboards into an area beside the shared

file. This method of communication is slower than speaking via the

telephone or internal microphone within a computer, but it does

provide a permanent record of the comments.

As you pile on the conference toys, Dumas warns, take care to watch

for mistakes. "Remember, your transmissions are representing your

company’s product," she says. Potential clients translate the

slightest flaw in your presentation into a flaw in your product.

Advanced audio/visual. Putting a face to that distant voice brings a

touch of humanity to the whole meeting. For several years now, it has

been possible to show still photos of each attendee, and to have a

light bar flit among them as each was speaking. These images can be

thumbprint size, or they can fill the screen. The technology has

improved, the images have sharpened, and the entire process is now

cheaper and easier to operate.

In all of these processes, speed becomes a factor. "Cable and DSL are

not yet available everywhere," points out Dumas. "If you plan to shoot

out a video to people in northwest Tennessee, they may still be

receiving on dial-up and will lag far behind you. Instead of that

video you planned, you may want to try a lower speed PowerPoint


Real time video. This is as slick as it gets. Ten people, each in his

own office, can examine videos and documents in real time. You’ve seen

it on TV, watching the candidate squirm in a chair several states

away, while the anchor and other video guests fire questions at him.

It looks great and now you can do it – sort of.

"With each level comes trade-offs," says Dumas. "You have to be aware

that you are never going to get the quality you see on TV." Exactly

how cleanly the images come through depends on the capacity of your

software, your computers, and your monitors. This is definitely a tool

you should try out before you buy.

After 20 years in the field, Dumas admits that video/audio

conferencing will never replace face-to-face. In fact, it will

probably not supplant personal meetings as extensively as E-mail

already has replaced the hand-written letter. But it will supplement

our communication. Some pieces of business can be quickly and

inexpensively handled by chatting across cyberspace, saving the

matters we value most, for the venue we most prefer – chatting across

the desk.

– Bart Jackson

Top Of Page
Health for Sale

Why are healthcare costs spiraling skyward? Place 12 people in a room,

pose that question, and you will net an even dozen completely

different, confidently emphatic answers. The New Jersey Hospital

Association has seen it time and again in its focus groups. Each

individual points to his favorite villain – the overpaid, yacht-owning

doctors, the plutocrat pharma, the HMOs, or the current U.S.

president. Very few see rising medical costs as an ever-expanding

beast that is fed by many, but controlled by none.

To help business owners and voters gain a greater understanding of

what drives medical expenses, the Middlesex County Chamber of Commerce

is hosting a forum on "The Rising Cost of Healthcare" on Friday, June

25, at 8:30 a.m. at Devry College in North Brunswick. Cost: $40. Call

732-821-1700. The seminar speakers include Ron Czajkowski,

communications director of the New Jersey Hospital Association; Jim

Leonard, of the New Jersey State Chamber; and Michele Guhl of the New

Jersey Association of Health Plans.

Seasoned journalist Czajkowski has spent the last two decades charting

America’s rising healthcare demands and noting the effects. Czajkowski

grew up in Somerville and earned a bachelor’s degree in English from

Muhlenberg College in English literature. After receiving a master’s

degree in journalism from Syracuse University, Czajkowski stepped into

the professional world in l973, writing for a series of New Jersey

papers, including the Hunterdon County Democrat and the New Brunswick

Daily Home News. He also spent several years teaching English at

Blairstown Academy.

In l985 Czajkowski brought his media relations talents to the New

Jersey Hospital Association, where has remained ever since. Throughout

his tenure, he has observed the financial vices squeezing our state’s


"Healthcare costs are a global issue," says Czajkowski. "It’s less a

case of hidden villains than a host of cost drivers, of which most

people are not even aware."

Providing unfunded, but mandated, care. With the stick of law and the

carrot of funding, both state and federal governments have prodded

hospitals into scores of expanded programs, ranging from drug

rehabilitation to in-house safety councils. These laws were well

intended. Legislators simply sought better hospital care for their

constituents, and with great public hoopla the first year’s funding

checks were awarded to finance the program.

Then, with year after year of belt tightening, the state’s checks

diminished by some 20 percent annually, and, finally, for some

programs, they vanished. But the legal responsibility of the hospital

to produce the expanded service went merrily on. Now, with the federal

government opting for bullets over bandages, hospital funds are

slashed even further.

Caring for the uninsured. Most hospitals take their roles as care

givers to patients of all circumstances very seriously. Yet care

entails cost. Despite a proliferation of insurance plans, Czajkowski

points out that we now face geometrically rising numbers of uninsured.

Over 44 million Americans currently have no form of health insurance.

New Jersey’s 1.4 million uninsured are now costing healthcare

providers $800 million annually.

Calling Dr. HMO. We live in an era of medical rationing, and decisions

on care are often left to health maintenance organizations. Many state

residents have been refused treatment, have had treatment curtailed,

or have had reimbursement partially denied due to HMO or other

insurance restrictions. Such cost-engendered guidelines frequently

curtail the physician from giving what he sees as the best of care.

Doctors are told that the patient’s insurance company does not see a

given operation as necessary, or that his reimbursement for a

procedure done in New Jersey will be based on a cost estimated in


Additionally, healthcare providers face an unprecedented challenge of

bill collecting against these stone-walling health maintenance

organizations. New Jersey hospitals are now owed $250 million in

uncollected payments.

Taking more drugs. Large pharmaceutical companies and malpractice

suits are often cited as major medical bandits – both by providers and

by recipients. While Czajkowski grants that they are definite cost

drivers in medical treatment, he says that they are not the prime

factors – at least not compared with effect of the soaring cost of

prescription drugs.

Last year, Americans spent $169 billion on drugs. Various surveys show

the average American over 40 taking from two to five more daily

medications than that age group was taking 20 years ago. Whatever the

reason, virtually all experts see this trend increasing and all of us

gobbling more pills in our future.

Girding for malpractice suits. Increasingly, it is not the cost of the

law suits themselves that are bankrupting physicians and hospitals,

but the fear of them. Insurance companies, in fear of the massive pay

out, charge crushing malpractice premiums. Physicians are asked to pay

extra insurance for each in-house procedure – drawing blood, for


Going out of business. Three of New Jersey’s 84 hospitals have

recently been forced to close their doors for lack of funds. What with

cut funding, increased non-paying patient loads, and restricted

remuneration guidelines, they have had little choice. Of those

remaining, only one is currently run as a for-profit organization.

Interestingly, the lone for-profit, Salem County Hospital, faced the

same cash-flow dilemma. Its investors came in, refinanced debt, and

have helped it back to the break even point.

But more than any financial juggling, Czajkowski says that we need

better policies and more money for healthcare coming from all levels

of government. "Healthcare is a big expense," he says, "and the money

has to come from somewhere. The last time I went to a ball game in

Canada, every ticket, hot dog, and beer was tagged with an incredible

tax, but the Canadians calmly explained that this paid for their

national healthcare."

In terms of policy, many healthcare advocates see a minimal

"Volkswagen-level" of healthcare federally provided for everyone in

America, with optional, purchasable coverage that can bring it up to a

Cadillac. This seems sensible, and would function for a fraction of

the administrative costs involved in private plans. Yet, Czajkowski

notes, there are scores of industry and interest groups that strongly

oppose such a set-up.

"Our best hope," Czajkowski insists, "lies in the democratic venue.

Like this talk. Getting the word out, and having the public push its

policy makers to the decision they want."

– Bart Jackson

Top Of Page
Environmental Hot Topics

Hey, are we running out of room? A high-profile mid-June economic

report trumpeted the fact that New Jersey is way ahead of its

metro-area neighbors in adding jobs. Housing is going up at a rapid

clip too. Growth is good, but can we be experiencing too much of a

good thing? Many in the Garden State are wondering just how green it

can remain – and for how long.

As if in answer, several surprisingly low profile pieces of

legislation have recently sought compromise between environmentalists

and developers. All of these recent laws are discussed in "Hot Topics

in Environmental Law," part of the New Jersey Bar Association’s annual

Environmental Law Forum Friday through Sunday, June 25 through 27, at

the Golden Inn Hotel in Avalon. Full registration: $299 (daily rates

available). Call 732-214-8500 or visit www.NJICLE.com.

The Hot Topics roundtable opens the Environmental forum with a panel

selected to cover all legal aspects. Co-moderator John McKinney Jr.,

partner with Wolff & Samson P.C., covers what has to come to be know

as the Highlands Bill, and also the Fast Track bill (S-1368). New

Jersey’s recent brownfield reconstruction legislation is presented by

Dennis Toft, also a partner in Wolff Samson, while New York’s legal

solutions to the same situation are reviewed by attorney James J.

Perconi of Perconi LLC. Neil Yoskin, partner with Bennett and Yoskin,

discusses new storm water legislation. A summary of current federal

decisions, particularly about polluted site cleanup suits, is provided

by Kenneth Mack of Fox Rothschild LLP.

These are the laws that will sculpt the shape of our land for years to


For the past three decades McKinney has been monitoring environmental

dilemmas. He is the fourth generation of McKinney attorneys, with the

fifth currently in law school. Virtually all of his legal experience

has been tied up with environmental matters. In fact, McKinney was the

first full-time environmental attorney ever hired by AT&T.

"Actually, I felt very much at home in AT&T," he says. "Scientists and

managers all respected my counsel. After all, they lived in this state


After earning a B.A. from Principia College in St. Louis and a law

degree from William & Mary, McKinney settled in his hometown of

Princeton, joining a Nassau Street law firm. Today, as a partner in

West Orange’s Wolff Samson, McKinney lives in Hackettstown – "one of

the prime development centers in the Highlands bill’s master plan," he


Log rolling is customary in legislatures. It is the way things get

done in the face of opposing points of view. Based on an old term

loggers used when two men tried to stand on a single floating log, it

means: If you can roll this piece of legislation this way I’ll vote

for it, as long as you vote for my favorite bill. Such was the process

employed in passing the massive Highlands Preservation Bill.

The Highlands bill. Covering a whopping 800,000 acres in Warren,

Sussex, Hunterdon, Bergen, Morris, Passaic, and Essex counties, the

recently passed Highlands Bill has set up a state-governed

environmental preservation plan for one-sixth of New Jersey’s total

land mass. It designates 395,000 acres as preserved, of which 145,000

acres are undeveloped. Taken as a single chunk, it is an odd

assortment of regions with some of New Jersey’ most densely populated

areas standing cheek-by-jowl with some of her most scenic and rural.

It encircles the Delaware Water Gap, home to the Appalachian Trail,

and also suburban Paramus, land of sprawling malls.

The goal of the bill is to lay out a master plan for this area that

would prevent the Appalachian Trail from becoming a mall walk. The

concept is to allow, and even encourage, further development within

zones that are already highly populated, while leaving the pristine

areas pristine. A Highlands Council of state appointed representatives

is to oversee the plan. If a municipality seeks to develop outside one

of the defined zones, it must gain a variance from the board.

Actually, the stated purpose of this bill is to protect water

supplies. And even this purpose is controversial. Opponents state that

it goes way beyond water and severely limits growth. Proponents point

out that water quality reaches far beyond sewage dumping alone. Even

if the sewage from a developed area is treated, the vast amount of

paving entailed in such land use causes rain to run off into the

streams, carrying all the roadway’s pollutants with it.

Further, by destroying wetlands, (a point noted in the Route 92 versus

Plainsboro Preserve argument), water is carried quickly away without

time to naturally filter itself through the cleansing soils. For much

of central and northern New Jersey, the water supply flows through the

area covered by the Highlands Bill.

As might be expected, environmentalists, overall, have praised the

bill, with a few unhappy rankles. The construction lobby is less

happy, worrying about loss of business. Home rule advocates in towns

within the Highlands Bill area are not happy either, complaining that

their right to manage has been ceded to the state. Other towns, those

with preservation high on their agendas, are pleased.

But now the log rolls back.

The fast track. In a deliberately unheralded move on Friday, June 11,

Senate bill S-1368 came of committee with an unusually small amount of

publicity. Nicknamed the Fast Track, this bill, seen by some as a

McGreevey bargaining chip, aims at streamlining the process of

obtaining construction permits.

"People are calling this a companion piece of legislature," says

McKinney, "but that is not really correct." The Highlands Bill covers

only the 800,000 acres mentioned above, while the Fast Track’s

"streamlining" applies to any region of the state designated for

growth – about 30 percent of the state’s total land mass.

Specifically, the proposed legislation mandates a 45-day decision on

permits from the day of application made to the community.

Additionally, the state would appoint a Fast Track Czar in the

Department of Community Affairs. His veto alone would squelch all

protests from local communicates, the Department of Environmental

Protection, or any other institution seeking to halt or qualify a


The construction firms applying for Fast Track would have to pay extra

fees for the privilege, creating a fund to be used to hire more DEP


Builders are supporting this proposal as a landmark slashing of red

tape. But by Friday, June 10, word of the bill had gotten through to

the environmental community and outraged voices could be heard. This

legislation guts any municipal power to ward off the invasion of

unwanted housing or business developments, they are saying.

A green future? Certainly, the two pieces of legislation have failed

as a compromise, and have brought preservationists and developers to

unprecedented disagreement. Yet this debate is as old as democracy.

"This is a long range plan," notes McKinney. "We really cannot tell

how the Highlands Bill will shape our landscape, for better or ill,

for at least another 25 years." But he cites it as a significant

change in public policy. The state now has a master plan that will

direct growth into some areas and keep other areas protected.

"Previously, much of preservation policy has been decided by

litigation," says McKinney. The local town councils would square off

against a builder, and take the issue to court. Zoning policies

typically extended no more than the few miles across any given town.

Now the state has made a choice. We must give it a chance and

determine its wisdom.

The federal hand. While who builds where has become a state

environmental issue, the ground they build on falls increasingly under

federal restriction. Attorney Mack, partner in Princeton-based Fox

Rothschild notes that many major cleanup projects have become mired in

some tricky legal and ethical issues.

During WW II, the U.S. government ran many manufacturing operations

nationwide, sometimes alone, sometimes jointly with extant

corporations. In some cases, pollution resulted from these operations.

Dupont was one such government partner, and the company has run into

an interesting problem in trying to clean up contaminant spills caused

by their dumping and by that of the government. Dupont was mandated to

clean up, in compliance with the Resource Conservation and Recovery

Act. But since part of the original pollution came at the hands of the

government, Dupont sued for help in the cleanup.

The government denied Dupont’s claim, saying that the company’s

clean-up was voluntary. No one was suing them to do it. Dupont said

that complying with the law is scarcely voluntary. The case, now in

appeals, sets precedent for hundreds of sites where government

pollution was involved.

"To have the government make the law and then deny aid where they were

contributory, seems a little like squeezing the company at both ends

and certainly discourages their going the extra cleanup mile," says


– Bart Jackson

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