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Alabama Sues Banks In $3.2 Billion Bond Fiasco
Headline Topics |
2008/09/04 07:24
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Alabama sued bond consultants Blount, Parrish amp; Roton and 12 banks and insurers for their part in Jefferson County's sewer bond fiasco: the $3.2 billion debt has the county on the verge becoming the nation's largest-ever municipal bankruptcy. The state claims Blount Parrish bribed Jefferson County Commission President Larry Langford to get its consulting contract, and JP Morgan Chase Bank and others profited by refinancing the enormous debt with auction rate securities and interest rate swaps, for their own benefit.
The Jefferson Parish sewer bond fiasco was the lead item in New York Times financial columnist Gretchen Morgenson's Sunday column on Aug. 31. Morgenson used Jefferson County to illustrate the perils faced by investors in municipal securities, which have $2.6 trillion in outstanding debt.
As state entities, the municipal agencies are largely free of regulatory oversight. More than half of them have failed to file required financial reports, and more than 25 percent chronically fail to do so, Morgenson reported, citing a recent study by DPC Data, one of four data collectors known as nationally recognized municipal securities information repositories.
Alabama claims in Jefferson County Court that Blount Parrish JP Morgan Chase employee Charles LeCroy, on behalf of defendants JP Morgan and JP Morgan Bank, teamed with defendant Blount Parrish to perpetrate the plan of refinancing the County's fixed rate sewer debt with auction rate securities and interest rate swaps, such plan to be for the benefit of the Defendants. It is alleged that co-conspirators Blount and LeCroy, having secured the cooperation of Langford, seized the opportunity to launch the massive sewer debt re-finance plan at issue herein which has brought the County to the brink of ruin.
As a direct and proximate result of the Defendants' alleged conduct, the County and the public have suffered enormous financial harm and the future viability of the County's operations vital to the public has been put in imminent peril. Each Defendant allegedly profited directly fro the scheme or conspiracy perpetrated by Langford, Blount, LaPierre and LeCroy with each Defendant receiving valuable and lucrative contracts relating to the County's bond offerings and swap contracts.
(LaPierre is Al LaPierre, of Blount Parrish.)
The State says that public corruption in Jefferson County government is well documents. In the past several years there have been 21 criminal convictions related to the sewer system, including the conviction of a former county commissioner.
Named as defendants are Blount Parrish amp; Roton, JP Morgan Chase amp; Co., JP Morgan Chase Bank, Bear Stearns Capital Markets, Stern, Agee amp; Leach, Bank of America NA, CDR Financial Services, Goldman, Sachs Capital Markets, National Bank of Commerce of Birmingham, Bank of New York, Financial Guaranty Insurance Co., Financial Security Assurance Inc., and XL Capital Assurance.
The State is represented by James O'Neal and Law One Group of Birmingham. |
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Court Chides Judiciary for Relying on Wikipedia
Headline Court News |
2008/09/03 07:28
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An immigration judge should not have relied on information the Department of Homeland Security gleaned from Wikipedia to bolster its case for denying asylum to an Ethiopian immigrant, the 8th Circuit ruled.
The government used the free online encyclopedia to glean information about the purpose of a laissez-passer, the travel document that petitioner Lamilem Badasa claimed would establish her identity.
The Board of Immigration Appeals stated that it did not condone or encourage the use of resources such as Wikipedia.com in reaching pivotal decisions in immigration proceedings, but held that the immigration judge's denial of asylum was supported by enough evidence to find no clear error.
However, Judge Colloton said the immigration judge might not have denied asylum without the use of Wikipedia. The court also reiterated that anyone can edit the entries in the online reference.
Because the BIA's ultimate conclusion that Badasa failed to establish her identity is not adequately explained, Colloton wrote, we must remand for further proceedings. |
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Landlord Can Demand Gold Coins, Court Says
Headline Court News |
2008/09/02 07:17
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The owners of a building in downtown Cleveland have the right to ask for payment in gold coins, the 6th Circuit ruled.
The landowner, 216 Jamaica Avenue, sued Samp;R Playhouse Realty to enforce a gold clause in the original lease for the Halle Building, which was signed in 1912.
Instead of being paid the annual $35,000 rent in cash, Jamaica asked to be paid in 35,000 gold coins. The district court declined to enforce the clause, but Judge Sutton reversed the decision.
Gold clauses were used as a safety net against the effects of inflation until they were outlawed by Congress in 1933. Forty-four years later, Congress reversed field and allowed gold clauses to be enforced again.
Despite this winding road, Sutton ruled that the 99-year lease signed by the Halle brothers in 1912 is still standing because the 1982 assignment agreement between the two parties obligated Samp;R to the terms of the lease.
The parties to a contract are free to structure it however they wish, so long as they do not offend a constitutional, statutory or common-law prohibition, Judge Sutton wrote.
The judge also refuted Samp;R's objection that there was no meeting of the minds by noting that the assignment agreement quoted extensively from the 1912 contract.
That clarity precludes Samp;R from establishing that the parties failed to have an objective meeting of the minds, Sutton wrote.
Since the gold clause is enforceable, Sutton remanded the case to district court to determine how much Samp;R will have to pay. |
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Church to defy federal ruling upholding funeral protests ban
Headline Topics |
2008/08/29 08:15
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Followers of the Kansas-based fundamentalist Westboro Baptist Church plan to stage a protest at the funeral for late Congresswoman Stephanie Tubbs Jones Thursday, despite a federal appeals court ruling last week that upheld an Ohio law limiting funeral protests. The US Court of Appeals for the Sixth Circuit last week upheld Ohio's funeral protest law against a constitutional challenge raised by Westboro member Shirley Phelps-Roper. Westboro church members have been going around the country picketing military funerals in recent years, claiming US soldiers have been killed because America tolerates homosexuals. Phelps-Roper claimed that the Ohio law was unconstitutionally overbroad, in violation of the First Amendment. The district court rejected Phelps-Roper's challenge, concluding that the provision was a constitutional content-neutral regulation of the time and manner of protests and that the state of Ohio has a significant interest in protecting its citizens from disruptions during funeral events. The Sixth Circuit affirmed, stating that the law was reasonable and that:
blockquote Individuals mourning the loss of a loved one share a privacy right similar to individuals in their homes or individuals entering a medical facility...Unwanted intrusion during the last moments the mourners share with the deceased during a sacred ritual surely infringes upon the recognized right of survivors to mourn the deceased. Furthermore, just as a resident subjected to picketing is 'left with no ready means of avoiding the unwanted speech,' mourners cannot easily avoid unwanted protests without sacrificing their right to partake in the funeral or burial service./blockquoteIn April, Kansas Governor Kathleen Sebelius signed similar legislation banning protests within 150 feet of a funeral one hour before, during, and two hours after the end of a service. At least 37 other states have passed similar laws in response to the Westboro pickets, and a federal lawnbsp; restricting protests at Arlington National Cemetery and other federal cemeteries has also been passed. |
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Attorney Need Not Deliver Subpoenaed Transcript
Topics |
2008/08/28 07:17
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An attorney does not have to turn over the transcript of an interview with a son of his client, despite a grand jury subpoena, the Missouri Supreme Court ruled unanimously.
In a 6-0 decision, the state's high court ruled that the jury failed to show substantial need to have the transcript turned over and that the transcript is a product of attorney-client privilege.
The attorney, John Rogers, was representing a client who was a person of interest in the disappearance of the client's son. The client claimed his vehicle was stolen from a parking lot while his son, a 10-year-old with disabilities, was inside. The vehicle was later found, but the child's whereabouts remain a mystery. Rogers took the statement from his client's older son, while representing the client.
After receiving the subpoena, Rogers filed a motion to quash because he claimed it was an attorney work product and that it would be unreasonable and oppressive to release it.
The circuit court found that the transcript was not an attorney work product because it did not contain the attorney's opinions, theories or conclusions.
blockquoteBecause Missouri defines work product in criminal procedure only in regard to the attorney's opinions, theories or conclusions, the Missouri Supreme Court found that because grand jury proceedings do not take place before an indictment is filed, the discovery rules for criminal proceedings do not apply./blockquoteblockquoteHistorically, a lawyer is an officer of the court and is bound to work for the advancement of justice while faithfully protecting the rightful interests of his clients, Judge Patricia Breckenridge wrote. In performing his various duties, however, it is essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their counsel. Proper preparation of a client's case demands that he assemble information, sift what he considers to be the relevant from the irrelevant facts, prepare his legal theories and plan his strategy without undue and needless interference. ... Were such materials open to opposing counsel on mere demand, much of what is now put down in writing would remain unwritten. An attorney's thoughts, heretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices would inevitably develop in the giving of legal advice and in the preparation of cases for trial. The effect on the legal profession would be demoralizing. And the interests of the clients and the cause of justice would be poorly served. /blockquote
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Citibank Stole From 53,000 Customers
Topics |
2008/08/27 11:24
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Citibank agreed Tuesday to repay $14 million taken from 53,000 customer credit accounts, plus interest and penalties, after after a three-year investigation by the California Attorney General's office revealed the bank's policy of clearing positive balances off customer credit accounts.
Citibank used a computerized process between 1992 and 2003, which automatically and immediately erased positive balances from credit-card accounts. The Attorney General's office quotes a bank executive saying, Stealing from our customers is a business decision, not a legal decision.
Underscoring the intentional nature of the bank's actions, the Attorney General said an insider at Citibank reported the credit sweeps to an internal audit team in 2001, and was first ignored and then fired.
The investigation took three years to complete because the state investigators had to overcome legal trench warfare from Citibank which resisted subpoenas from the state to third parties who had information about the theft, said a spokesman for the Attorney General.
The company knowingly stole from its customers, mostly poor people and the recently deceased when it... implemented the sweeps, said California Attorney General Jerry Brown Jr.
Positive balances happen when a customer over-pays, or when a customer returns a purchase for credit. A spokesman for Brown's office, Dana Simas, said the poor and the dead tend to be less financially organized, which accounts for their increased exposure to Citibank's credit sweeps.
$1.6 million was swiped from Californians alone.
Citibank was represented in the matter by Julia Strickland and Julie Nelson with the Stroock law firm.
The settlement calls on Citibank to refund the victims for the amount stolen, along with a 10% interest. It also imposes a $3.5 million fine to be paid to California, and prevents Citibank from re-initiating the credit sweeps.
Once Citibank has complied, an independent auditor will ensure that Citibank has fulfilled its requirements.
The state's investigation was led by Frederick Acker. |
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US soldier sentenced for desertion
Headline Topics |
2008/08/26 08:15
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A US military judge in Colorado sentenced US Army Pfc. Robin Long Friday to 15 months in prison, dishonorable discharge and demotion after Long pleaded guilty to desertion with intent to remain away permanently. Long fled to Canada in 2005 in moral opposition to the war in Iraq and filed for refugee status there, but a Canadian immigration judge denied his motion in August 2007, writing:nbsp;
blockquote I find nothing in the claimant’s evidence that would support a finding that he could not rely upon the state to protect him from persecution or any other harm. There is no support for a finding that it was objectively reasonable for the claimant not to have sought protection in his country./blockquoteCanadian officials deported Long to the US in July. US authorities initially charged him with desertion with intent to shirk hazardous duty, a more serious offense under the Uniform Code of Military Justice, but Long pleaded to the lesser offense of desertion with intent to remain away permanently the same day as the scheduled start of his court-martial proceedings.
In early July, Canada's House of Commons passed a non-binding resolution to grant US military deserters asylum. In November 2007, the Supreme Court of Canada declined to hear the appeals of Jeremy Hinzman and Brandon Hughey, two US military deserters who had unsuccessfully applied for asylum before the Immigration and Refugee Board of Canada. The IRB had concluded that the two men would receive a fair trial if they were returned to the US and that they would not face persecution or cruel and unusual punishment. |
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