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Sunday, June 19, 2016

Idiots and Smart Contracts

One of the major blockchain distributed asset organizations was disrupted this weekend, causing a temporary 30-50% decline (in 36 hours!) in the value of certain related "cryptocurrencies." (Note that I avoid the use of the word "hack.")

The cause was -- we think, because it's not certain yet -- a flaw in the blockchain code underlying one of these supposedly shiny, bright new things. Now, codes fail, because their creators are imperfect. Nothing new there. It's also possible the code worked as designed, in which case the code itself was bad, not in operation but in planning, and then the "contract" within the code was flawed. If the latter explanation holds true, then the problem is the bad contract. Which brings me to my point.

The contract is the issue, because we have been hearing more and more in the financial press about this supposedly wonderful new innovation called a "smart contract." I've heard supposedly brilliant innovators talk about "smart contracts" for at least three years. These are the two words that make you sound really smart, or hip. Just like putting "dot com" behind any rubbish made you money 20 years ago.

Beware!

Underlying all this is an anti-intellectual arrogance. It's the arrogance bred from a disdain for the law, the rule of law, and lawyers, and the idea that non-lawyers can do contracts much better than lawyers -- who've been doing this for decades -- can do and have been. Now, you see the result.

The tragic flaw in the DAO, the subject of the attack? It might be the uncorrected confidence of people who have never done, that they know better -- and are better -- than those who have.

If you want a smart contract, you need to start with a strong understanding of a contract, how it is constructed, how it works, and what you're actually trying to do.

Until then, you're just a dreamer with a laptop and lots of unearned confidence, but no record of achievement to match. Ignorance is no substitute for knowledge.

Some more reading on this. http://www.ericdixonlaw.com/2016/03/what-hell-is-blockchain-smart-contract.html

Eric Dixon has been a New York lawyer since graduating from Yale Law School in 1994. He works with and is a shareholder in several blockchain startups and seed-stage ventures.

Saturday, June 4, 2016

When Should Unindicted Co-Conspirators Be Identified?

Do unindicted co-conspirators have a privacy right to keep their names secret from the public?

Do reputational or financial issues warrant this?

Does the unindicted co-conspirator's public employment (or other status) change the analysis? And should it? What about the Equal Protection Clause? Aren't we all equally subject to the law, and equally protected?

And what about the Sixth Amendment's Confrontation Clause? (More on that later.)

These and other issues are going to be involved in. or affected by the Third Circuit Court of Appeals' consideration Monday of a motion by a "John Doe" to keep his name secret.

PREVIOUS COMMENTARY: Click here

Some other facts: first, John Doe is an unindicted co-conspirator as that term is used by the federal government. It means that prosecutors have labelled him as such.

Understandably, John Doe is upset over the characterization. And unless John Doe is indicted, and takes the case to a jury, John Doe will never get the chance to confront the government, its witnesses and its evidence to determine whether he has in fact committed a federal crime.

This means that John Doe could be impugned by the characterization AND have no way to "confront his accusers." John Doe is actually deprived of his Constitutional right, because he is not an "accused." He gets the right to confront, and clear his name, only if he is "accused," that is, charged with a crime.

For that, let's turn to the Sixth Amendment of the U.S. Constitution, which provides:
" . . . in all criminal prosecutions, the accused shall enjoy the right . . . to be confronted with the witnesses against him."
To be simple, this means that you need a prosecution to trigger the right. No prosecution, no right. So anything short of being charged, and it sort of means the government gets to go open season on your reputation. Particularly since John Doe is not specifically identified. The rationale may be that any government action short of charging someone is not sufficiently injurious enough to implicate Constitutional rights. (A fascinating sidebar that should be explored more by the federal appellate and even the Supreme Court.)

Except that...

Except that John Doe is listed in court documents in the ongoing criminal cases of two other people as being a potential witness. This means that if those other two cases go to trial, the public may find out who John Doe is -- and John Doe could be a witness and testify and be subject to cross examination. It also means the testimony might be John Doe's way to "exonerate" himself, but it might also be a danger by showing things he might wish had never occurred or he had never said. He might never be charged but the revelations might be very damaging to his reputation and career.

One can also see how the government can use these considerations to bargain for the cooperation of people whom it could charge, but would agree not to, in exchange for witness testimony.

There are Justice Department guidelines on the naming of unindicted co-conspirators. See the following, straight from the United States Attorneys' Manual (with my emphasis in bold text):
In the absence of some significant justification, federal prosecutors generally should not identify unindicted co-conspirators in conspiracy indictments. The practice of naming individuals as unindicted co-conspirators in an indictment charging a criminal conspiracy has been severely criticized in United States v. Briggs, 514 F.2d 794 (5th Cir. 1975). 
Ordinarily, there is no need to name a person as an unindicted co-conspirator in an indictment in order to fulfill any legitimate prosecutorial interest or duty. For purposes of indictment itself, it is sufficient, for example, to allege that the defendant conspired with "another person or persons known." In any indictment where an allegation that the defendant conspired with "another person or persons known" is insufficient, some other generic reference should be used, such as "Employee 1" or "Company 2". The use of non-generic descriptors, like a person's actual initials, is usually an unnecessarily-specific description and should not be used. 
If identification of the person is required, it can be supplied, upon request, in a bill of particulars. See USAM 9-27.760. With respect to the trial, the person's identity and status as a co-conspirator can be established, for evidentiary purposes, through the introduction of proof sufficient to invoke the co-conspirator hearsay exception without subjecting the person to the burden of a formal accusation by a grand jury. 
In the absence of some significant justification, federal prosecutors generally should not identify unindicted co-conspirators in conspiracy indictments. 

Perhaps the solution is to have the Department of Justice further revise its guidelines governing how its prosecutors refer to unindicted co-conspirators. One way is to standardize how they are identified so that their identities cannot be ascertained, not even by investigative lawyers like the author.

The above guideline is overtly critical of certain practices. (The same United States Attorney's Office in New Jersey handling the Bridgegate investigation and related criminal cases, when under the auspices of possible current co-conspirator Governor Chris Christie as U.S. Attorney, used to identify co-conspirators with initials and residence hometowns, for example.) Clearly, there are ways to identify the players. For instance, if an indictment referred to a certain white former basketball player with curly blonde hair, you'd be pretty certain we're talking about Larry Bird.

Sometimes the opaque "CC-1" is used (CC for co-conspirator). But other times an acronym or phrase is used, often in conjunction with additional narrative detail as to the person's job, title, age or residence (any of which might serve absolutely no purpose for the purposes of a charging document relating to someone else) and it allows for good educated guesses. The problem is that the descriptions can and do allow for the identification of uncharged persons, who never get a chance to clear their names. This is not only unfair to the unindicted co-conspirator, who may never be charged and thus may suffer permanent and irreparable harm (basically, this is the "John Doe" situation), but his very safety may be jeopardized.

And it is quite possible that this reputational damage is done, quite on purpose, whether to pressure the uncharged and unindicted into cooperation (an exchange of testimony for a promise not to reveal or damage the person's reputation). A cynic could argue that this is exactly the type of psychological coercion designed to induce an investigative target to "agree to cooperate," essentially to safeguard his own safety. But then again, anyone who testifies -- and in open court, it's all public -- loses any anonymity or secrecy hopes anyway.

This was the case years ago in a high profile public corruption case where the U.S. Attorney's Office wrote up a charging indictment that referred to an unindicted co-conspirator as "State Official 1." Everyone quickly figured out who the Governor was. And that Governor -- now out of public life -- was never charged.

And never able to exonerate himself either.  Indeed, the "cloud" still hovers over that ex-Governor (whom by now you've probably been able to identify).

Let's remember these important issues and the need for reasoned balancing of the considerations at stake here. Perhaps this is a judgment to eventually be made by Congress.

A good news source to follow this emerging saga is the Record of Hackensack, which will be updating this story over the next few days. A link to their current story is here:
http://www.northjersey.com/news/john-doe-s-privacy-gets-day-in-court-in-gwb-case-1.1610512

Friday, May 13, 2016

Should Unindicted Co-Conspirators Be Identified?

Is it fair to publicly identify unindicted co-conspirators in a criminal investigation?

The attorney for one such person involved in the Bridgegate - George Washington Bridge lane closing federal investigation argues it is not fair, because such identification deprives the identified co-conspirator of due process and brands him (or her) as a potential criminal suspect (or felon).

There are several issues here.

First, can the unindicted co-conspirator be identified? It is one thing if the authorities use opaque descriptions like "CC-1." (The CC stands for co-conspirator.) It is quite another if the authorities use a pretty defined term like "Public Official 1," which term was used once to refer to a certain former state governor and which led in short order to press suspicions and a confirmation from said governor that, yes, he was the person referred to in the criminal information (the charging document issued when a defendant enters a guilty plea to avoid a formal indictment). There are actually formal guidelines for the identification of suspects who have not been charged and the authorities generally try (or at least the guidelines give the impression of the effort) to avoid impugning the reputation of uncharged individuals.

That's because of the second issue. If the identifiable unindicted co-conspirator is never charged but only suspected, his reputation may be seriously harmed.

Most critically, the third issue: The suspect, who is "outed" as a suspect, may never be charged. The good news is avoiding an indictment and surely the greater reputational damage (assuming the suspect is in fact innocent and ultimately exonerated or cleared by a judge or jury) of the indictment, perp walk and pre-trial drama. 

The bad news? 

The suspect co-conspirator never "gets his day in court" to answer, oppose and refute the suspicions. 

The suspect never gets to see (or debunk) the purported evidence against him. 

The suspect never gets to confront his witnesses.

The result?

The suspect gets outed as a suspect, suffers the reputational harm (or at least the prospect of it), and is denied any opportunity at rehabilitating his reputation or establishing his actual innocence.

It's like calling the batter out on strikes, without even letting the batter get to the plate.

Is this fair? What do you think?

Thursday, May 12, 2016

Cults of Personality And Manipulation: The Foundation For Fraud

A main tactic of manipulators seeking to control others and exert their will is to remove the moral authority of their targets to object or resist. This tactic is employed because the most effective tactic, the use of brute force, is too often considered a felony.

The control strategy is deployed by thoroughly researching a target to discover flaws, weaknesses or facts the revelation of which would be likely to cause serious emotional, financial, reputational or even physical harm. The threatened harm would have to be serious enough to induce the target to respond to the threat with acquiescence instead of defiance. Once the target's will to resist has been compromised, the target can be controlled for an indefinite period of time.

A certain charismatic leader is presently deploying this strategy on classic American conservatives -- today. (Tomorrow it may be a different target.) He has fashioned himself as the white middle class Toxic Avenger, in so doing, making himself a veritable pariah in many circles. More significantly, he is making his followers equally toxic. Yet he does not care, because he can and will destroy the reputations of anyone associated with or supporting him. Worst of all, he can benefit, offloading the consequences of misguided loyalty, ignorance or naïveté upon his lessers. Once those hapless supporters discover the plot, their reputations may be ruined for good. Only then will the final part of the plan unfold. These victims of their own ambition will then be left without reputations and in some cases without friends or livelihoods. In their reduced state, they will grow ever more dependent on the Boardwalk Emperor who in turn can continue to exploit them and profit from the ever-declining cost to him of the favors he feels like providing.

This is how the Maximum Leader can become like the drug dealer who profits more and more from the deepening addiction of his customers. Power is reinforced. So is dependence, as the victims fall into a reputational quicksand.

Surely these nefarious strategies are practiced by many, in business, politics and civic life, and even in some families. Criminals use this manipulation to deceive and then to embarrass those who might reveal a fraud. Darker hues of the human behavior know no boundaries except for those set, and then reinforced, by those who resist. Is this the fate which awaits those who embrace the charismatic leaders of cults of personality? You decide.

Tuesday, May 10, 2016

In Defense Of The Bomb: Rethinking Hiroshima

Western civilization apologists and others who simply hate "the West" love to insist on the United States apologizing and seeking redemption for using the atomic bomb to end World War II.

These criticisms are either ill-informed given the evidence that existed at the time, or willingly ignore the lack of a suitable alternative course of action.

The horrors of the atomic bomb, no matter its target, are manifest.

However, there were many other factors which played into President Harry Truman's decision to use this weapon of mass destruction.

As a historian of sorts whose college thesis nearly became a doctoral thesis (before law school interfered), I did the original research needed to offer this compelling competing viewpoint. Here are some inconvenient facts:

First: Japan remained in the war despite the surrender of its European theater allies of convenience, Italy and Nazi Germany, in April 1945.

Second: There was concern in both the European and Pacific theaters that the Soviet Union would try to permanently occupy any and all territories which its military controlled. Hence the race in Germany to reach Berlin. And thus the United States sought to proactively end the war with Japan instead of, say, bleeding them through a protracted air war and bombing the cities into utter ruin (which course of action might have produced even greater civilian casualties).

Third: The Japanese had earned a reputation for particular fierce and brutal fighting. The mentality which bred the kamikaze pilot was also expected to infuse its infantry. Indeed, such ferocity was encountered by American troops as they engaged in their successful, yet arduous, campaign of "island hopping" in the Pacific as they closed in on the mainland. There was no reason not to expect the same type of last ditch intense defense of the Japanese homeland if and when an invasion was launched. Furthermore, military intelligence reported that the Japanese had implemented a complex civil defense system. The result was the expectation that American soldiers would encounter hand to hand, street by street combat throughout Japan, and likely sustain significant casualties along with civilian casualties.

Fourth: Sustained air bombings of the mainland in 1945 did not induce surrender and supported the belief that an invasion would be needed to end the war. As explained above, an invasion was believed necessary but also was not preferred.

One must understand these factors in order to see how the decision to use the atomic bomb could be made for humanitarian purposes with a legitimate strategic objective of ending the war as quickly as possible, minimizing civilian and military casualties to both sides and maximizing the chance of preventing a Soviet invasion and later subjugation of the Japanese home islands.

Sunday, May 1, 2016

How Convention Delegates Can Be Conscientious Objectors To Trump

This is why people love to hate lawyers.
There is a conscientious objector "out clause" for Republican national convention delegates who get elected to those party positions this year.
This is how Donald Trump may not become the Republican nominee, no matter how many delegates he wins.
An example is from one of the remaining few states whose voters have not voted in a primary or caucus. Let's look at New Jersey.
The New Jersey Republican State Committee, basically run by acolytes or allies of that state's Governor, Chris Christie (who is the highest-ranking elected official anywhere to endorse Trump), adopted delegate selection rules last September. Those rules provide as follows:
First, look at Rule 6 which states: 
"All delegates and alternates to the Republican National Convention once a allocated and/or committed to a particular candidate by virtue of the June primary election shall be obligated and required to cast their vote for that candidate at the first vote to select the Republican Party's nominee for the office of President of the United States at the Republican National Convention."

But a rule is only as effective as its ability to be enforced, or the ability to punish noncompliance. Now read Rule 7.
 "Any delegate or alternate allocated and/or committed to a particular candidate by virtue of the results of the June primary election who fails or refuses to act in accordance with their allocation and/or commitment to that candidate as set forth herein shall be subject to censure by the New Jersey Republican State Committee and/or the County Republican Committees. Censure may include, among other things, being permanently barred from acting as a delegate or alternate to any future National Convention of the Republican Party."
The operation of these Rules allows for conscientious delegates-elect to exercise their judgment at the convention. This is, after all, how republics work. America is not a direct democracy, it never has been, and the Founding Fathers actually recognized the dangers of direct democracy. (A careful reading of The Federalist Papers is in order, if you wish.) While you can dial in the objections of opposing candidates, these rules are posted and explained so readers can understand that delegates who vote for Trump this summer, and hide behind the explanation that they were "required" to do so, are simply using an excuse to avoid criticism.  

Monday, March 28, 2016

What The Hell Is A Blockchain Smart Contract

The promise of blockchain technology's so-called smart contracts needs an evolutionary jump in order to become adaptable.

Adaptability will lead to commercial use, which will lead to revenue and sales growth for related applications.

But has anyone thought through the problem the smart contract is supposed to solve?

As a matter of fact, does anyone really know what the hell a smart contract actually is? What it does?

Or is this just a really-smart and cutesy term, useful for people who don't know what the hell they're talking about, to sound smart to people who are less knowledgeable about blockchain technology derivatives?

The classic smart contract is a self-executing code. Under that paradigm, the occurrence of specified events, based on a previously agreed protocol, leads to performance without a further decision or action being required.

This simple transaction has been around for years in the securities markets. We already have self executing contracts.

My point is that we have "smart contracts," which are not contracts. They're not necessarily smart, either.

We should take a step back and figure out the problem we are trying to solve. Even Prehistoric Man took this approach with the use of fire and the wheel. These discoveries only continued and evolved into use because of their usefulness. So what is the utility of a smart contract? What is the problem to be solved?
This is the issue most technologists in the blockchain industry seem to miss.

It seems blockchain technology, the distributed and immutable ledger, is very much a solution in search of a problem.

* Eric Dixon is a New York based corporate lawyer who works with some blockchain startups to solve questions pertaining to precisely this type of issue.

Sunday, March 13, 2016

Psychology: The Secret To Winning In Court, And In Politics

A common problem in litigation is the sense that the case has been pre-judged. That is, the sense that the decision has been made. It could be the decision on the verdict, or the motion, it really doesn't matter much. Having this sense means that one also believes that the facts no longer matter (you'll try to argue them anyway) or the law or legal precedents (other rulings) don't matter (ditto). The quandary for the advocate is how to crack this dilemma, to control the damage, to live to fight another day.

One way around this is to try to totally change the foundational paradigm of the case. An example might be to shift the argument radically. If a straightforward recitation of facts and the law is not apparently working, then you've got to strike at something deeper. That is, to go after the "core values" of the decisionmaker -- the judge or, in rare instances, the jury.

Identifying those core beliefs is difficult. A case in point is any political campaign, whose success ultimately depends on voter turnout. Forget what people say, what they tell pollsters. As the football coaching legend Bill Parcells said once, "You are what your record says you are." You win or you lose. Results matter. In fact, that is all that matters -- did you win?

Getting to politics. How does one determine a campaign's or candidate's real supporters?

There's a big gap between spoken beliefs and actual beliefs. The truest test of where someone stands, whether it's for a candidate or a particular political ideology, is NOT some sort of pop quiz where if you get eight out of ten "right," you're in a certain category. Forget ideology. It's psychology that matters.

And adversity often brings out the truth. I've long believed that certain human emotions are actually incompatible with truly sincere ideological beliefs. Want to see how progressive your buddies are? Watch how they react when they get passed over for a promotion by an equally or more-qualified minority group member? Want to see how conservative your friends are? See how they squirm with envy when you get that house, promotion, etc.

The core emotion of envy / jealousy reveals that ideology doesn't drive voting decisions. Psychology does. Human weaknesses do. And activism thrives, not on ideology, but on these psychological drivers.

If you're thinking that "ideology" or "party identification" is the driver in those decisions, you're confusing the symptom (the stated belief) with the real, underlying cause (the psychological belief or value system).

If you want to pull out that victory, in any field, you have to recognize the symptom first. But then you must go one step further. To avoid the false positive, the indicator that leads you to one conclusion which could be very wrong, you have to dig for the underlying belief.

Very simply, it becomes: Why does someone believe in something?

If you aren't diligent enough at doing the digging to get to the real answer, you run the real risk of being really, really wrong.

Eric Dixon is a New York-based investigative and corporate attorney.


Tuesday, March 8, 2016

Why Sponsors Are Really Dumping Maria Sharapova

WHY SHE'S GETTING DUMPED. 

Maria #Sharapova is not being dumped by sponsors because of a failed drug test. 

She's being dumped -- or "suspended" -- because sponsors aren't happy with the return on their investment so far, or are seeing that the value of her "brand" may suffer temporarily. They are taking advantage of this, but then again, every sponsorship deal is a risk on future performance based on past performance. The sponsors are using every contractual right they have to stop payment and reassess their relationship. And, they have every right to do so.

Any sponsor getting its "bang for the buck" would have no reason, none at all, to dump her.

Friday, March 4, 2016

Trump's Psychology Ponzi Scheme

The presidential candidacy of Donald J. Trump, and in particular, his very public statements and mannerisms, may be the latest and greatest example of a particular bullying strategy that is sometimes deployed by some "control freak" businessmen and politicians.

Something noticeable in a certain type of egotistical person is the use of the following tactic. The person will say increasingly controversial, even outrageous, things. Notably, this will be done in the presence of others. That is because the object of the statement is not the content of the statement or its outrageousness, its political incorrectness. The object of the statement is the fact that it is made among an audience, and the target of the statement, while nominally about persons or things voiced in the statement, is really the audience, that is, the people around the speaker.

That's because the strategy of the speaker is to make those people in the audience uncomfortable. The strategy is to make those people associated with the speaker. (In high society, among the well-bred, you'll note that certain offensive statements are met with silent retreats but almost never an outright denunciation. That's because of the belief in the principle, however fair or unfair, of "guilty by association.") The speaker exploits the desire of the audience to "kiss up to" him, the fawning adoration, and the susceptibility of people unable to generate light of their own, to bask in the reflected light of others.

It is often in this way that supporters, associates, colleagues, etc. end up becoming the new victims. They're so often the psychological marks of the speaker, and never ever figure out the ruse.

When those people have finally had "enough," the egotist will challenge their objection with charges that "you support me," or "you've given me money," or "you've been my customer," or even, "you said this was a great course and you signed something." (Sound familiar yet?) The challenge is really a threat to embarrass others, anyone who objects. And that threat is felt by its marks, even if it can rarely be articulated, never mind, tied in to an actual, objective fact. That difficulty helps the perpetrator continue, to overcome the objections and carry on his activities. In fact, the perpetrator sometimes is able to build on rejecting the objections, because his object is control, and he has no objection to control through fear. 

This might work for a while. But the psychological Ponzi scheme cannot be sustained. Watch the egotist carefully; you'll see he rarely has the same people around him for a long period of time (unless they're on his payroll, or another more nefarious explanation exists). 

Those of us who have uncovered these shady characters know the signs. It is a terrible shame when these people act this way. They often harm others, but they also waste their own potential, their ideas, their rhetoric, their inventions, all wasted in the employ of an addiction to psychological dysfunctions.

Are we seeing this unfold now? I've given you my theory. Time will tell -- and the longer the time horizon, the more evidence that can be collected to make that determination.

Eric Dixon is a New York based lawyer who has investigated fraud in various contexts over the years.


Friday, February 19, 2016

Apple's Encryption and Blockchain Solutions

Many readers already know that Apple Computer is resisting a federal court order to modify its software to allow an encryption bypass and indefinite password attempts, as requested by federal authorities investigating the San Bernardino terror attack in 2015.

There are bigger issues at work here. The last two decades have seen a trend -- under both Republican and Democratic administrations -- for an expansion of government authority over private enterprise.

Here, the issue boils down to an important objective, being used to justify the government requesting and a federal court ordering a private enterprise to change its product.

There are precedents, of course, when safety or health are involved. But here, the request is to help the government do its job.

Here is the troubling implication: The government is declaring and imposing a duty on a private business, yet not compensating the business for its burden.

This is a form of conscription, a form of the expropriation of private property, on the basis of an asserted (and yes, an important) government objective, by the government.

This is the same premise behind eminent domain, the taking of the private for the asserted good of the public.

This is no different, really, from the troubling trend of government agencies coming down on business managers and imposing all sorts of duties and obligations to root out wrongdoing -- but critically, without compensating, protecting or giving the targets of this imposed burden any resources with which to undertake this imposed task.

The unfairness is illustrated by the fact that the targets (Apple today, corporate managers in the last decade) become unpaid and unindemnified deputies of the government, charged with extra responsibilities (and liabilities), yet ironically possessing NONE of the protections enjoyed by government workers.

This is a tax on business. This is a tax on the people who work in business. These impositions are burdens and punishments. And it makes you wonder whether there is another agenda at work here. Something beyond the cover of a top priority investigation. Is it a power grab, a desire to assert government control over private innovation? And could this even be a way to weaken the anti-hacking protections consumers enjoy, so that prying government eyes can access data without those pesky warrants and subpoenas?

The objections seem rooted in objectors' warranted lack of trust in human institutions, and particularly (but not exclusively) the government. This condition is actually avoided by, and is the basis for the appeal, of blockchain technology.

And blockchain, lest we forget, is based on a ledger of all activity and all data which is publicly-available, immutable and, perhaps most crucially, decentralized. That decentralization feature means the data is uniquely not susceptible to attack, deformation, corruption or inaccessibility.

Ordinarily the vast majority of people would cooperate with a government terror investigation. But this case is inadvertently becoming a cause célèbre for a protest of a terror investigation. Many tech industry players are warning -- not as loquaciously as they should -- that the government's measures pose a potential grand threat to information security and consumer protection. But I wonder whether this is a new attack in a stealth campaign, to nationalize private industry.

If the authorities were more interested at building trust, they might receive much more cooperation from tech innovators. But that trust requires a demonstration of action that would inspire confidence. Remember, this is the same federal government which elects to selectively enforce -- or not enforce at all -- existing federal immigration laws on the books for years, in the wake of the same terror threat which is invoked to justify government encroachment on rights in a different scenario. I sense the tech industry and other private enterprise players see these requests as an effort for the government to make itself a dominant partner and overseer. I believe that is the spectre which they feel, and fear.

Eric Dixon is a New York lawyer who works extensively with blockchain and cryptocurrency innovators and startups.

Sunday, February 14, 2016

Vacant Real Estate And The Value Of Location

The vacancy rate with residential real estate correlates in the inverse with property values, which are largely dependent on three factors: location, location and location.

Some New Jersey data shows that two of the counties with the lowest numbers of vacant residences are two of its most populous: Bergen and Hudson Counties. Those two counties, with direct access to New York City, stay in demand because of the location. Even if the commute is poor. That's because getting out of Manhattan is an ordeal for everyone, no matter which direction you travel.

The lesson? The next time someone proposes a bad policy like the New Jersey Residential Foreclosure Transformation Act -- whose 2012 incarnation (passed by the New Jersey Legislature but vetoed by Governor Chris Christie) would have allowed the state to buy vacant homes and turn them into homeless shelters and so on -- just remind them that there's no cure for a bad location or a property that "just won't sell." 

Bad properties are the result of speculation. An unwanted property is a verdict on the intrinsic value of the property.

In other areas, nothing stays vacant. That is also a verdict on the demand for the location of those properties.

But that's no reason to pass a law that will allow the government to turn your deadbeat neighbor's property into a drug rehab clinic in the name of "the common good."

And it also shows the danger of the uncontrolled use of eminent domain to seize private property (and typically the ones most vulnerable will be the poor owners in low-value areas), sometimes for the benefit of "the common good" but almost always with the incidental benefit of certain neighboring properties.


Saturday, February 13, 2016

When I Questioned Antonin Scalia One on One

In honor of the man, and the judge, after his passing earlier today...

I met then-newbie Associate Supreme Court Justice Antonin Scalia personally in 1989. I was a college student (Brooklyn College); Scalia's father had been a Brooklyn College professor in prior decades. And Scalia and I were both "Sons of Xavier," fellow graduates of the renowned Jesuit high school that is still on Manhattan's West 16th Street.

I got a few minutes to question Scalia about the Constitution, with the understanding -- and his permission -- that this would be on the record. I was on the college's primary newspaper, the Kingsman. 

(Side note: Three of my colleagues back then have gone on to illustrious journalism careers -- Michael McAuliffe with Huffington Post, Rich Calder with the New York Post, and Glenn Thrush with Politico. We all have taken the long trip.)

My sharpest memory was not of constitutional theory. It was that Scalia was one hell of a chain smoker. The room was full of a haze. It was truly a smoke-filled back room. There was so much smoke, you'd think the College of Cardinals had just elected a new Pope. 

I do remember that Scalia kept talking about strict interpretation of the Constitution. He felt it was important for the judiciary to respect its own boundaries, to interpret the Constitution but only restrain the legislature (or executive) when the Constitution was clearly overstepped. 

And finally, I can add that Scalia was genial, a younger man back then (52). Very few would have taken the time he did that day to talk to a then-newbie college journalist. He had class, and his ideological detractors never understood that. 

Eric Dixon is a New York-based lawyer, strategic consultant and blockchain technology application (FinTech) developer. He can be reached at EDixon@NYBusinessCounsel.com.

Rhetoric, Politics and Successful Advocacy: Targeting Your Audience

The most successful communicators are able to say one thing, and have it deliver multiple meanings.

Just like one billiards shot can sink multiple balls.

Political campaigns get the attention that most courtroom deliveries and negotiations almost never get (until after the fact, perhaps). There are a lot of canned deliveries, repeated statements -- it's all quite boring, frankly, unless you have a strong personal interest for (or against) a certain candidate. Many observers and "people involved in politics" get emotionally twisted up obsessing over how this or that candidate could make this outrageous statement, insult or obscenity.

This is all missing the point.

The point of those utterances is to play to a specific audience.

And almost always, that audience . . . Is. Not. You.

A message targeted to a certain audience is no different than an advertisement, or a closing argument inside a largely-vacant courtroom. It is designed to hit certain emotional notes, in order to produce a desired response: Buy this product, vote for me, etc. 

The candidate may not necessarily support, agree with or believe what he or she is saying, but "political realities" may compel a particular appeal, e.g., "I will go after the banks." (Note: I am speaking specifically about the Democratic Party, whose incumbent officeholders are increasingly changing their rhetoric in order to placate an increasingly rabid activist core and hopefully avoid primary challenges. I have been told this first hand. The political upheaval of our time is very much inside the Democratic Party, not the Republican Party.) This is the same calculation made by the advocate, the lawyer who may have to make an argument he finds personally distasteful, in order to represent a client. The difference is that the politician is viewed as personally benefiting from being elected, so the appeal is considered less honest.

So if you get upset at something you watch, read, or hear, I suggest just taking a few steps back, a deep breath or two, and trying to take this all a little less seriously.




Saturday, February 6, 2016

Open Primaries Are An Attack On Voting Rights

The New Hampshire presidential primaries are days away. New Hampshire has what is called an open primary. That means anyone can vote in the primary regardless of their pre-existing party affiliation, which then changes upon their voting. You could call this "instant affiliation." I suggest you call it by its real name: Instant vote dilution.

In many states, voting in a party primary is restricted to people who have chosen their party in advance, sometimes well in advance. But in New Hampshire, the laws are incredibly permissive.

  • You can register to vote in New Hampshire and vote in the primary the same day.
  • You can "move" to New Hampshire, declare your "domicile," and vote -- all on Primary Day. 
  • You can declare your party affiliation -- on Primary Day.
  • After Primary Day, you can immediately un-affiliate by declaring you want to leave the party, just by filling out a form.
New Hampshire's laws punish bonafide party members and dilute their votes. In effect, they diminish the value of the affiliation. A long-time party member's vote counts no more than the vote of the individual who may "just have moved" from any of the neighboring states, or decided to vote in the party which he opposes, in order (as the theory goes) to have the opposed party choose the weaker general-election candidate.

This very danger was recognized by the United States Supreme Court in its excellent 1970 decision in Rosario v. Rockefeller. That decision explained the practice of "party raiding" and the value of deterring such raiding by making voters choose their political party well in advance of the primary election. (That case, in which the defendant was the legendary New York Governor Nelson Rockefeller, upheld New York State's 11-month deferred enrollment practice.) 

New York, and many other states, have a "closed primary" that restricts primary voting to party members makes party affiliation meaningful. The closed primary protects the First Amendment right of association of voters. The Rosario case recognized and upheld the concept that the idea of a party primary is to have the members of that party choose its nominee. It is the basis for party affiliation and the prime reason to be in a political party (for legal, voter registration purposes). 

Closed primary election laws act like anti-virus software. They allow bonafide and committed members to associate but to keep out hostile attackers. 

The open primary, conversely, attacks the right of association. It allows hostile attackers to dilute and affect the outcome. Open laws like those in New Hampshire, and Missisippi to name another state, invite mischief and effectively denigrate party affiliation. Nothing diminishes the value of party affiliation than to allow outsiders -- non-bonafide members with no allegiance to the "party" -- to participate in and distort the outcome of its primaries. 

The open primary also arguably violates the Fourteenth Amendment's Equal Protection Clause. That's because it subordinates the First Amendment associational right of "long time" party members to the hostile attackers' right to invade. If you're thinking that closed primary or durational-registration requirements (e.g., register in the party by some deadline well in advance of the primary) are unconstitutional on a similar ground that they "keep out" others who "have a right" to participate in whatever primary they choose, the answer is that they merely erect an even deadline, applicable to all voters, in advance of the primary. A conditional requirement like a deadline is thus not a barrier, but the result of a legal presumption of legitimacy of a voter who switches or declares parties sufficiently well in advance of the primary.

In other words, party affiliation (also called "party enrollment") deadlines do not prevent party raiding or electoral mischief. They just place a premium on attackers having the foresight to organize weeks or months in advance of the targeted primary.

What do you think about open primaries? Do you think an open primary defeats the purpose of selecting a political party?

Eric Dixon is a New York lawyer. 

Monday, February 1, 2016

DeBlasio Connection To New Jersey Waterfront Murder Today

A young man arrested and charged today for manslaughter today for a homicide in Edgewater NJ this morning of a 16 year old youth from Spring Valley NY, is the son of New York City mayor Bill deBlasio's wife's chief of staff.

This blog asserts it was the first to publicly report this connection at around 7:40 pm Monday evening. The earliest press report to make the same connection hit the Internet after 8:00 pm.

UPDATE: However, a recent press report indicates the stabbing may have been done in self-defense.

Khari Noerdlinger is the 19 year old son of the former chief of staff, Rachel Noerdlinger. She is the chief of staff of Chirlane McCray, the wife of New York City Mayor Bill deBlasio.

Rachel Noerdlinger was revealed by the New York Post last year to have a live in boyfriend names Hassaun McFarland, a convicted killer. The elder Noerdlinger was criticized for holding her position while living outside New York City and was reportedly granted a residency waiver.

More details may be provided later as more information is obtained. This report has relied on information reported since 2014 by various news sources.

UPDATE 2: From NJ Advance Media Monday night, 9 PM.

Saturday, January 30, 2016

First Amendment Not A Shield Against Criticism For Cuba Trip

Ten New Jersey State Assemblymembers traveled briefly to Cuba this past week and are getting blasted for it. But one of the targets thinks the Bill of Rights provides him with a "safe space" from criticism.

One of the members, Assemblyman Reed Gusciora, denounced his critics by saying, "It's disappointing some people in the Cuban-American community want to stifle our rights of free speech and free association." 

It is disappointing, to put it mildly, to have any elected official impute dark motives to anyone questioning his positions, statements or actions. The claim that one's critics want to "deny me my rights" is as insidious as it is flatly overused. 

There is no right to be insulated or immunized against criticism. That would actually require the type of law expressly prohibited by the Framers of the Constitution when they enacted the First Amendment.

Assemblyman Gusciora needs a brief constitutional law primer. The First Amendment prohibits government interference with the rights of free speech and free association. This is what it says:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances. (Emphasis added)

It says nothing about protecting people from unwanted criticism. In fact, invoking the First Amendment when one is criticized is a backdoor way of asserting a privilege to speak and act with immunity from criticism. That position, incidentally, requires prohibiting the freedom of speech of one's critics.

If one is to serve the public, one should be strong enough to withstand criticism (fairly or unfairly) without resorting to unconstitutional remedies.




Sunday, January 24, 2016

Blizzard Jonas, Disaster Prep And When Businesses Shut Down



As of the time of this writing, the Blizzard Jonas* has deposited more than two feet on much of the urban Interstate 95 corridor from Washington DC to Philadelphia to New York City and points northeast.

(* - the unofficial name given to major winter storms by The Weather Channel, similar to the official name designations used by the National Hurricane Center)

Plenty of elected officials have warned people to get home and stay home in advance of the storm. Not unusual for truly "major" storms. New York City Mayor Bill DeBlasio urged businesses to close so that their employees could get home and not risk being stranded when that city began shutting down escape routes like parts of its transit system, and bridges and tunnels leading out of the city towards New Jersey. (Note: When government does that, it essentially uses its own force majeure to compel a business to shut down. There is such a thing as business interruption insurance, for precisely this type of situation; whether that is worthwhile is a different question.)

How a business reacts to a crisis is critical to its future. Certainly, a business which stays open in these conditions may get a revenue windfall because all its competitors may be closed. The business may also get positive public relations by noy gouging its customers by charging $20 for a liter of water or some other idiocy by "having been there" for its customers in their time of desperation need. But I consider these positive crisis moments for a business because they are opportunities for the business to distinguish itself from its competitors.

These opportunities are rare, they often occur by surprise and they offer free publicity. That is a perfect storm for taking advantage.

This is when a young business can make a name for itself. Consider these situations as challenges and opportunities to market yourself.

Eric Dixon is a New York lawyer, business consultant, advisor to several young privately-held companies, and advisor to and part-owner in several blockchain technology companies. Contact him at EDixon@NYBusinessCounsel.com if you think you need help with your business or potential enterprise. 


Monday, January 18, 2016

Candidate Immunity? When the Justice Department Targets Candidates

Your status as a candidate might delay official action by the Department of Justice against you, according to this 2007 publication from the Department's Public Integrity section.

That's because DOJ has long aimed to "ensure that an investigation is timed in a manner that does not interfere with the adjudication of the election itself." (See page 87). The DOJ guidelines also caution prosecutors to consider "whether an investigative step under consideration has the potential to affect the election itself." (Page 91) Similarly, the guidelines state an exception to this approach "may" apply where "it is possible" to both complete an investigation and file charges "prior to the period immediately before an election." (See pages 92-93) 

As such, one may infer an unofficial 'safe harbor' from prosecution for candidates who are or may be under federal criminal investigation, which might delay -- but not preclude or prevent -- the timing of an indictment, in order to avoid affecting the outcome of an election.

There are campaign or candidate partisans who fervently hope that legal action, e.g., an indictment, will accomplish for them what an election might not. However, these DOJ guidelines suggest (but do not mandate) that official discretion should be exercised to avoid interfering with the outcome of an election.

The Justice Department publication makes for a fascinating read for those of you with the patience to read through hundreds of pages of analyses as to the commonality of broader types of corruption extending beyond crimes touching on the right or process of voting. However, readers are cautioned that the publication, released in 2007, predates the dawn of modern social media which has created new avenues for opportunities for mischief, e.g., new media.


Sunday, January 17, 2016

The File: The Trump New York Values

Upon request, here is the first report on the voluminous history of political contributions by Donald Trump.
CHECK BACK FOR UPDATES AS MORE DATA IS POSTED.

Investigators look for the facts. So, on the issue of "New York values," what are the facts regarding Donald Trump, the subject of the phrase?

Until just a few years ago, Donald Trump gave, and gave lavishly, to leading liberal Democrats in New York City, New York State and across the nation.
  • Helping Obama Get Out The Vote?:  In 2008, Trump was helping Barack Obama where it counted: with money. Leading up to the general election, Donald Trump gave Democratic Party organizations at least $61,000 to help Barack Obama win, including $5,000 to the Democratic Senatorial Campaign Committee, and one $50,000 check to the New York State Democratic Party in July 2008
    when Obama's nomination was assured and there were no major contested races for Democrats in New York that year -- so it's reasonable to assume the money had to go for get out the vote and other support operations for the general election ticket with Obama at the top of the ballot!
  • NEW! You can infer Donald Trump's indirect support for Barack Obama continued after his election to the White House in 2008. This is not a typo -- Trump personally gave $50,000 to former Obama chief of staff Rahm Emanuel's Chicago mayoral campaign in December 2010. 
  • NEW! $5,000 in 2002 to former Illinois Governor Rod Blagojevich, who was sentenced to 14 years by a federal judge after being convicted on 18 federal felony corruption charges arising from actions he took as Governor. Also note in the same photo the two contributions to the Cook County Democratic Party. These are not one-off, isolated contributions. 
  • Another big-city Democrat also got a contribution from Donald Trump. In November 2008, Trump gave $1,000 to longtime Los Angeles Mayor Antonio Villaraigoisa. 
  • Dinkins over Rudy: The trend line of supporting liberal, big-government, destroy-the-middle-class mayors goes back a long time. When Rudolph Giuliani ran for Mayor of New York City in 1993, Donald Trump gave to his opponent, Democrat incumbent David Dinkins, a total of $5,500.
  • After 9/11 and when Rudolph Giuliani was term-limited, Donald Trump gave to the far-left Mark Green (who was the co-founder of the ultra-progressive Air America Radio Network, now defunct), running against Michael Bloomberg,
    $4,500 in October 2001.
  • In the years after 9/11, Donald Trump gave $10,200 to former Sen. Hillary Clinton (D-NY) and at least $11,000 to Rep. Charles Rangel (D-NY)(including this $2,400 contribution in 2007), and $6,000 more to Senator Charles Schumer (D-NY) as recently as 2010
  • Scandal? No Big Deal. Trump has given thousands to two elected New York officials whose scandals drove them from office, thousands to former Governor Eliot Spitzer (aka "Client 9")
  • There were thousands more to former House Representative Anthony Weiner (aka "Carlos Danger" from the sexting scandals, and current husband of former Hillary Clinton aide Huma Abedin).
  • Trump also gave thousands to a campaign committee for now-convicted former New York State Assembly Speaker Sheldon Silver. 
  • Between 2001-09, Trump gave at least $64,000 to current New York State Governor Andrew Cuomo including this big $25,000 donation; 
  • Trump gave congressional Democrats, leading up to the 2006 midterms, at least $28,500 including this big $20,000 donation to the Democratic Congressional Campaign Committee in June 2006;
  • Trump gave $2,400 to Senate Majority Leader Harry Reid (D-NV) as recently as March 2009. 
  • As recently as October 2010, Trump gave ultra-liberal New York State Attorney General candidate Eric Schneiderman $12,500.
    Schneiderman is considered to be an overregulator of business (see how his office has tried to regulate bitcoin), believing that in New York the anti-business sentiment helps you win elections. 
Eric Dixon is a New York based business and investigative lawyer.

Wednesday, January 13, 2016

Crashing Real Estate: Feds To Target Secret Condo Buyers

The value of high-end residential real estate faces an imminent new threat: A curious federal initiative to investigate certain all-cash purchases of condos and other properties by entities which shield the individuals behind them from public disclosure. (Here is a link to the article which will run in Thursday's New York Times.)

Most real estate records do reveal information about property owners. It isn't easy to track down the individuals behind them. Government authorities, though, have access to entity records (e.g., corporations, partnerships, limited liability partnerships and so on), tax records and so on. The information is not easily unraveled, but the idea behind these entities is often anonymity which is important to those in the public eye. A second common motive is asset protection -- which is not illegal, although definitely frustrating to creditors and, sometimes, the government authorities. 

This action, however, threatens to have a serious and unintended consequence, one which I suspect will dwarf the government's reasons (whatever they are) for this initiative.

Not everyone who wants anonymity has a nefarious reason for it. The number of "bad actors" who buy real estate is certainly low compared to the overall universe of all-cash buyers.

The main reason buyers will pay in cash is that, when you have the wealth to buy a high-end property, you generally don't need to finance it, nor do you want to disclose personal information to strangers working in various levels of the banks. Sellers also prefer all-cash buyers because they want the comfort of a buyer who can close whenever they bring the cash. Sellers don't want the uncertainty of a mortgage contingency which can delay a deal for months or scuttle it altogether.

But why would our government be overly concerned with what I'll call "bad actors" (whatever the reason for that label)? 

After all, real estate is perhaps the least portable valuable asset. It is also probably one of the easiest to seize, encumber or control. As such, one would think that the government would want bad actors to put their money into precisely this type of asset class, and precisely in the United States. 

The unintended consequence? This will not increase demand for American real estate. It will reduce the demand pool for real estate. That will hurt current owners. 

So, exactly who wins here? That's my question.

What's yours?

Eric Dixon is a New York lawyer who handles business and investigative matters for a variety of clients, but none in this field. 

Tuesday, January 12, 2016

What The State Of The Union Teaches About Advocacy

Great lawyers and politicians have much in common.

When a politician is also a lawyer -- and current President Obama is one, and a former law professor to boot -- then, watch out! (Among the lawyers running for President in 2016: Former Senator Hillary Clinton, former U.S. Attorney and current New Jersey Governor Chris Christie, and Senator Ted Cruz of Texas.)

That's because such skilled orators are great advocates.

And what makes a great advocate is (1) knowing your target audience, (2) delivering the message you need to, to your target audience, and (3) knowing whom you can ignore.

That third point is shocking and dismaying to many -- but it is a critical point in business. It is from that truth that the success in lawyering, whether in a negotiation, mediation or to a lesser extent, before the (increasinglyy rare) jury at trial, flows. 

You need to know who matters, and who doesn't.

While the words spoken are meant for a certain audience, and sometimes are targeted precisely for a certain group or constituency (the phrase you'll hear is "interest group"), it is just as important to listen to who doesn't get mentioned, whose interests don't get mentioned. The absence of those mentions sends two crucial messages. Understanding those silent messages is key to knowing how certain "buttons get pushed."

One message is to the favored group, allies or a target whom you need to persuade. The message consists of emphasizing their interests, needs or priority status. Appealing to ego is a great move when you need just one or two people to see things your way, but it also works in the broader-public-appeal arena of politics. The best thing is that silence towards others is easily used to imply "most favored nation" status towards your favored audience, and allows you to avoid ever having to explain what you never said.

The second message is targeted at the disfavored. It conveys the recognition of who is in control, whose opinion matters, and who doesn't matter at all. 

Often in legal situations, there are very few people whose opinions really matter. 

There may be eight people around the table, but there is so often just one opinion leader and perhaps one trusted adviser. That's it. Everyone else? They're often just there to bill hours, look good and do enough to justify keeping their job before someone notices they're really superfluous.

In court, it's really just the judge and, in a jury trial, a few people at most in that jury. There are always leaders (whose statements carry great weight) and dominators (who take up much of the space but do not necessarily add much value). Again, most of the rest are sheep. Followers. They don't count.

So...tonight's lesson is: Know. Your. Audience.

Because the people who run things never forget that lesson.

Eric Dixon is a New York lawyer who works with private businesses and organizations on various legal, regulatory and management matters. 



Tuesday, January 5, 2016

With Relief Pitchers, Stats DO Lie

"Statistics are like bikinis," said my late, great college history professor Hans Trefousse. "What they reveal is interesting, but what they conceal, is essential!"

These days, with eggshell-skull ninnies running the asylums we call higher education and, increasingly, corporate America, a comment like Trefousse's might get him to lose tenure or fired. But he is smack on whether we are talking about government statistics or the merits of candidates for the Baseball Hall of Fame.

Particularly with relief pitchers.

The very role of relief pitcher evolved in the 1960s and 1970s. Typically, you needed a pitcher who could work his way out of a jam and keep inherited runners from scoring -- and then finish up the game!

Those were the days of the eight or nine-man pitching staff. Total. Starters and relievers. Today, some entire clubs have an eight man bullpen!

The role of the reliever was different. The relief pitcher was not a "closer." He was a "fireman" who would have a speciality of pitching and excelling in precisely high stress situations and preventing opposing runners on base from scoring.

Think Rollie Fingers, Goose Gossage, Tug McGraw and Sparky Lyle. (Each pitched in several postseasons in their 60s-70s era.)

Those firemen often were called I whenever the starter got into trouble. And that could be the fifth inning or even earlier! It was not uncommon for these firemen to have the game-is-on-the-line moment in the seventh inning. And the firemen would carry the rest of the game.

This is in wide contrast to today's relievers whose roles seem hyperspecialized based on the inning and not the situation. (This is an explicit criticism of today's by-the-book managers who are using the wrong book!) Hence, we have a sixth inning guy, a seventh inning guy, an eighth inning guy and then your closer.

To me, and maybe to you, there's a recipe for using your third best option in your most dangerous crisis.

Is that any way to run your company? Is that any way to manage a crisis? Is that any way to win a negotiation?

Conversely, your best reliever might be facing the easiest three outs in the ninth. That leads to ridiculous save totals from some relative newcomers who can chuck the ball 95 miles an hour but who cannot necessarily put out a fire.

Some of the very best relievers were the ones mentioned above -- only Gossage was a fastball pitcher -- and they did their job with guile and guts. Men like split-finger pitcher Bruce Sutter, the submarine pitcher Dan Quisenberry, sidearmer Kent Tekulve and more recently, the slider/change-up artist John Franco.

This I believe: none of the aforementioned pitchers blow three saves in five games in the World Series. Because those pitchers were the best options on their clubs and were brought in at the most crucial crises.

And not only based upon what inning of the game.

Is that any way to manage your team?

Is that any way to win?

Whether it's your lawyer or your late inning reliever, when you see fire, you need a fireman.

Because you use your talent to fulfill the role you need, the role that the crisis demands.

In baseball, as in business, misunderstanding the real role of your talent is a sure fire way to underutilize your talent and to risk being caught using less than your best.

And don't we all deserve the best?

Wednesday, December 30, 2015

The Three Tea Parties And The 2016 Republican Race

The Obama-admiring and allegedly George Soros-financed Occupy Wall Street movement seemed to be efficient, effective and highly centralized when it publicly emerged in 2011.

Occupy quickly accomplished the same effect on the Democratic Party as its perhaps-polar-opposite on the Right, the "Tea Party," is credited (or disparaged) for doing to Republicans: causing its target to lurch sharply from the center towards the political fringe.

The Tea Party movement is different. The movement is largely characterized by its adherents in elected office who advance the causes of fiscal restraint and, to a lesser degree, constitutional and lega restraint. As such it is less a reform movement than a restraint movement. Yet the Occupy comparison is apt. The Tea Party's true target is not its ideological antithesis nor its obvious political opponents, but rather the GOP establishment.

This classic view is somewhat at odds with the activist view, which supports the theory that the movement consists of three competing camps which do not often move in tandem or even in a coherent direction.

The first camp is an establishment co-option of the movement. This camp does not consist of elected officials like Senators Ted Cruz and Mike Lee, who are outsiders on Capitol Hill. It consists of the Washington political, business and media establishment insofar as they see how using the movement to both make money and divert resources (e.g., activist contributions) away from the second or third camps.

The second camp consists of the populists. These are the people who "feel" their positions. This camp is described as more psychological than ideological. They have energy but rarely a coherent strategy that they can execute. Also lacking in tactics and often the barest of campaign materials, this camp can get primary challengers and even the occasional general election challenger like Delaware's Christine O'Donnell, but they cannot win and have not yet won a race of major significance.

The third and smallest camp consists of those intellectuals and professionals who understand both the ideological basis for policy reform and the mechanics of a successful campaign. They are not necessarily activists altogether they work just as hard; they may be described as working smart to make up for the lack of sheer numbers. They are most often found in or around businesses and campaigns and do not need to use the tea party label. They do, however, act as opinion leaders and, crucially, they don't just talk and scream and wave signs. These are the dependable voters who are self-motivated.

They also write checks.

So which camp is dominant? The clues lie not in what is said, but what is done. That is, it's all in the behavior.