Saturday, May 20, 2006
Friday, May 19, 2006
Just minutes after he had cross-examined Enron's former chief financial officer two months ago, Michael W. Ramsey, the lead lawyer for Kenneth L. Lay, turned to one of Mr. Lay's daughters. "I think I just had a heart attack," he half-jokingly told the daughter, Elizabeth Vittor, looking her in the eye across the defense table.
Mr. Ramsey said he thought the discomfort would subside in an hour. It did not.
Within days Mr. Ramsey was forced into surgery to clear an arterial blockage. For the 66-year-old, who describes himself as a hard-drinking, chain-smoking legal warhorse, it was the beginning of the most challenging personal odyssey of his career and an event that may turn out to play a crucial role in the outcome of Mr. Lay's case.
This issue of an entity paying the legal bills of its criminal defendant employees, has also surfaced in the KPMG case pending in New York. There the judge wonders whether the DOJ's tactics in discouraging the payment of legal fees is constitutional.
Obviously the PR is different in the political, rather than corporate, context. But should it be?
Thursday, May 18, 2006
As Richard, 53, stands trial again, this time on corruption charges, Leslie's image as diamond-studded trophy wife is much misunderstood, friends and associates say. In the first trial, the 37-year-old former Junior Miss from Florida with sweeping brown hair and green eyes not only offered spiritual advice, but much, much more.
"Leslie was a key adviser, a morale booster, a commentator on proposed strategy and a co-decision maker," said one of Scrushy's defense lawyers, Donald V. Watkins.
After 16 months of inactivity and partisan infighting, the House ethics committee launched investigations last night into bribery allegations against Reps. Robert W. Ney (R-Ohio) and William Jefferson (D-La.) and a separate inquiry into the widening scandal surrounding former congressman Randy "Duke" Cunningham (R-Calif.).NYT also reports.
The committee said it would have ordered another investigation, into the overseas trips of former House majority leader Tom DeLay (R-Tex.), had the once-powerful lawmaker not announced that he will resign from the House on June 9.
Is border security really the sort of thing contractors should be doing? Are there any purely government functions left?
Wednesday, May 17, 2006
The Remington is one of three of Mr. Mollohan's real estate deals under scrutiny. The others are $2 million in beach property in North Carolina that he bought with the director of another earmark-dependent nonprofit he created, and a $900,000 farm purchased with a friend whose company got several federal contracts based on his earmarks.
Mr. Mollohan refused repeated requests to discuss the Remington and Mr. Jarvis, with a spokesman saying he was still compiling "documents necessary to answer questions" about his real estate transactions. Among the issues are why Mr. Mollohan and his wife borrowed $2.3 million from a bank on the same day in 1999 that they and the Jarvises loaned the partnership the same amount — both using the condominiums as collateral — and why these loans were not listed on the congressman's financial disclosure forms.
Tuesday, May 16, 2006
It's a little-known tradition of Prince William County politics: Members of the Board of County Supervisors get $47,500 a year in public money to put into individual "discretionary funds."This kind of thing probably goes on in more than a few communities.
The eight board members can spend the money on anything from furnishing their offices to hiring part-time workers to donating to charities and nonprofit groups.
But the supervisors rarely spend all the money during the first three years of their terms. Instead, records show, supervisors roll over much of the money until they are nearing their reelection campaigns. Many of them then write checks to favorite charities or pet projects, a 14-year-old practice that critics say could be seen as an attempt to influence votes.
And Becker's response: "Posner points out that corruption flourishes with a weak legal system, and with larger government. Obviously, if governments strongly regulate many activities, then companies, unions, and other groups that are regulated can do better if they can "bribe" officials to overlook or relax these regulations. So the wider is the reach of governments, the greater is the corruption potential. There was relatively little corruption in the Federal government of the US in the early 19th century primarily because the government did so little then."
It seems a feat of strength to suggest that the answer to public corruption is to reduce the scope of government regulation. Obviously, if the government did not regulate a particular area, it would reduce the necessity for corruption. Carried to its logical conclusion, it seems that we could eliminate crime entirely by deregulating all conduct.
Perhaps the corruption question should be viewed through a different economic paradigm. Perhaps corruption could be viewed as imposing a transaction cost on law-abiding citizens. Perhaps the reduction of corruption promotes efficiency by reducing a transaction cost. Perhaps there is some economic value associated with trust, and that value is realized more efficiently when we reduce fraud and corruption in business and government. Perhaps?
Reacting to reports that the companies complied with NSA requests to look at the records, [FCC Chairman Michael J.] Copps said that "protecting the security of the American people is our government's number one responsibility" and that a probe was necessary to determine whether a violation of Section 222 or any other provisions of the Telecommunications Act of 1996 occurred. On Thursday, US Sen. Arlen Specter (R-PA), chairman of the Senate Judiciary Committee, said that he would call on the phone companies [Reuters report] implicated in the USA Today report to provide information to the committee on the allegations, while President Bush defended domestic surveillance activities.
U.S. Rep. William Jefferson said Monday he will not resign in the face of a federal investigation that has netted two guilty pleas from people who implicated him in a bribery scheme.
Jefferson, a Democrat in his eighth congressional term, declared his innocence during an afternoon news conference outside the federal building in New Orleans.
"I would take full responsibility for any crime that I committed, if that were the case. But I will not plead guilty to something I did not do, no matter how things are made to look and no matter the risk," Jefferson said, reading from a statement.
Update -- Prosecutors are encountering resistance:
The United States attorney's office in San Diego has asked for copies of "tens of thousands" of documents from the House Appropriations and Intelligence Committees, the official said, as part of its inquiry into whether Mr. Cunningham illegally influenced the process the committees use to designate money for military projects.
But lawyers for the Republican-controlled House rebuffed the request as unreasonably broad, the official said, and asked the United States attorney's office for a shorter list.
Monday, May 15, 2006
Instead, the road to delivering this critical antiterrorism tool has taken detours to locations, companies and groups often linked to Representative Harold Rogers, a Kentucky Republican who is the powerful chairman of the House subcommittee that controls the Homeland Security budget.
It is a route that has benefited Mr. Rogers, creating jobs in his home district and profits for companies that are donors to his political causes. The congressman has also taken 11 trips — including six to Hawaii — on the tab of an organization that until this week was to profit from a no-bid contract Mr. Rogers helped arrange. Work has even been set aside for a tiny start-up company in Kentucky that employs John Rogers, the congressman's son.
Starting in the 1990s, Rep. Alan B. Mollohan (D-W.Va.) chose an unusual way to funnel federal funds into his poverty-ridden district. He set up a network of nonprofit organizations to administer the millions of dollars he directed to such public endeavors as high-tech research and historic preservation.Of course, the difficulty here is separating pork barrel spending from classic corruption -- which is an increasing part of the problem. The presumably proper quid pro quo with voters seems to be "vote for me and I'll bring home the bacon." How is that different from the presumably improper quid pro quo with contributors "finance me and I'll bring home the bacon"? It seems to me the only difference here is where "home" really is.
Over the same period, Mollohan's personal fortunes soared. From 2000 to 2004, his assets grew from no more than $565,000 to at least $6.3 million. The partners in his rapidly expanding real estate empire included the head of one of these nonprofit groups and the owner of a local company for which he arranged substantial federal aid.
Mollohan used his seat on the House Appropriations Committee to secure more than $150 million for five nonprofit groups. One of the groups is headed by a former aide with whom Mollohan bought $2 million worth of property on Bald Head Island, N.C.
Controversy over this blending of commerce and legislation has triggered a federal probe, cost Mollohan his position on the House ethics committee and undermined the Democrats' effort to portray the GOP as the party of corruption because of the Jack Abramoff scandal. As early as today, the 12-term congressman will admit that he misstated some transactions in his congressional filings, according to Mollohan staffers.
If one is unethical (and probably illegal), shouldn't the other one be viewed the same way? In addition to criminal investigations and procesuctions, maybe we also need a new bargain with our politicians that clarifies the distinction between good government and corruption.
UPDATE -- See another example here. And another here.