More From Eric Dixon at http://www.NYBusinessCounsel.com

Twitter Rank #35 For Startup Advice May 2014 (#44 June 2014, #50 July 2014 -- now TRENDING UP at #41 for August 2014). Go to my professional site for solutions to your legal, business and strategic problems. Bitcoin Protocol Development -- Among the World's Legal Leaders in New Bitcoin Technology -- Top Strategic Judgment -- When You Need A Fixer -- Explore Information Protection and Cryptographic Security -- MUST-WIN: JUST DON'T LOSE -- SURVIVE!: Under Investigation? Being Sued? Handling Extreme Stress -- Corporate Issues -- Startup Issues -- Investor Issues -- Contracts To Meet Your Needs -- Opposition Research -- Trademark, Patent, Copyright -- Media and Reputation Issues -- Independent, top-notch legal, strategic and personal advice -- Extensive ghostwriting, speechwriting, book writing, issue research, press and crisis management services. Listed among the American Bar Association's Law Bloggers (Blawgers). Contact EDixon@NYBusinessCounsel.com 917-696-2442.

Monday, July 6, 2015

Investigating The Port Authority

Behind the scenes of the various investigations into the Port Authority of New York and New Jersey, certain appointees to the PANYNJ by Governors Cuomo of New York and Christie of New Jersey, and perhaps even cabinet officials of the Governors and the Governors themselves, is the possibility that various investigations by various agencies may be looking at a curious $2.875 million grant by the PANYNJ to a New Jersey city which has no apparent connection to the PANYNJ, its facilities or to the port (it has no access to any harbor or river).

The current investigations are reportedly looking into possible fraud -- possible criminal fraud -- in connection with sales of more than $1 billion in bonds by the PANYNJ. More than one year ago, I speculated on the extensive criminal penalties that could be in store for participants in the fraud. 

Some of my work back in 2012 for a client got the attention of the local media back then, and has been remembered by some of those reporters. That work is the genesis behind this Sunday report.

If you scroll down to the comments section you will see a reference to a different press report which has video of a press conference I did in early December 2012. 

This is the product of my investigative analyses and illustrates what I bring to the table.


Thursday, July 2, 2015

After Obergefell: Can You Be Forced To Marry?

This recent Supreme Court case may illustrate the prime characteristic of bad law: unintended consequences that can really go haywire.

The headline value of the Obergefell v. Hodges decision issued June 26th is that same sex couples may get married in any state and be recognized as a legal married unit.

But what exactly is a right to marriage?  And what is a "right"?

The classic meaning of a right is something which is inherent in one's existence and - and this is crucial - imposes no burden or duty on another.  

That means in simplest terms that anything which is a right is something which does not require a cost, obligation or action imposed on or by anyone else.

But the Supreme Court's declared right to marry is precisely that. This is so because a marriage involves more than one person. (Warning: Polygamy is coming.)  That means that marriage requires an act by another to trigger and fulfill the "right" of the first person. 

That is not a right. That is a contingent achievement, insofar as a person has successfully found another person who agrees to marry.

A marriage requires a unit. There may be a right to marry by a unit, of more than one person, but then the right is held and exercisable only by the couple. The individual cannot exercise the right without first achieving the membership in or admission to a couple. So how is there an individual right to marry when the ability to marry requires becoming a couple and finding a willing partner?

Nor can marriage be an entitlement. Not unless we wish to declare that some of us are obligated to get married.

That is because an entitlement by one person involves, and requires, an obligation to act by another. It involves a duty and a compulsion to act. 

This is how the right to marry can result in legal shotgun marriages where people are forced to couple up. This is not merely a return to the custom of arranged marriages in many societies; it is in effect a return to slavery where the owner could create and destroy familial relations through his entirely illegitimate property right.

The right to marry goes hand in hand with an imagined right to be fulfilled. We all have the right to try to achieve marriage, but we do not have the right, nor the guarantee, to achieve it.  This is what is meant by "the right of...the pursuit of happiness." You have the right to the pursuit, the chase, if you will. That requires no one else's cooperation, no compulsion, no coercion, just your own effort. 

We all want opportunities. But no one is simply entitled to have the outcome they want. Not even if we dress it up and play games with the meanings of words and call it a right. 






Sunday, June 28, 2015

Obergefell And The Supreme Court's Warning To Finance, Business Communities

The Supreme Court rulings in two cases involving statutory interpretation of the Affordable Care Act and constitutional interpretation of the Equal Protection Clause's treatment of states' recognition of same sex marriage show contradictory reasoning. By so doing, the high court has raised troubling questions about a new era of legal uncertainty about how any plain language document, from laws to regulations to contracts, can and will be interpreted and enforced.

In an era where the legal establishment is increasingly openly hostile to and contemptuous of asset holders and business owners in general, what does this mean for the average homeowner, the average small business owner and even the regular investor?

Last week's momentous Supreme Court rulings hit many people in the finance and business communities hard in the gut, for reasons having nothing to do with partisan politics or one’s personal beliefs regarding same-sex marriage. The rulings sparked feelings, probably very hard to express, define or articulate, all owing to a sense that something is about to go very, very wrong.

That's because the decisions – King v. Burwell,[1] the ruling reaffirming the Affordable Care Act (the "ACA") released Thursday, and Obergefell v. Hodges,[2] the ruling extending same-sex marriage recognition nationally released Friday -- reaffirm the growing unpredictability of legal interpretations from the nation's highest court. That means that when the law becomes uncertain, when its enforcement becomes dependent on hope instead of the law, the power of the law diminishes and the power of its enforcers grows in inverse and perverse proportion.

The message is implied, and it is chilling.  It is, must be, that laws, and certainly the contracts that govern relations among honest people in commerce, are far more open to reinterpretation that they once would have been.

Whereas not too long ago contracts and statutes would have been interpreted, and enforced, according to the "four corners" of the document (that is, what's contained on the paper and nothing more), rulings from the Supreme Court invite a new level of sophistry from people determined to argue that words are to be accorded meanings that are something different, if not something completely opposite, from those intended by their writers.

Consider Chief Justice John Roberts’ majority opinion in King, where he criticizes the quality of the statutory drafting of the ACA.  He wrote, in relevant part:

“The Affordable Care Act contains more than a few examples of inartful drafting. (To cite just one, the Act creates three separate Section 1563s. See 124 Stat. 270, 911, 912.) Several features of the Act’s passage contributed to that unfortunate reality. Congress wrote key parts of the Act behind closed doors, rather than through “the traditional legislative process.” Cannan, A Legislative History of the Affordable Care Act: How Legislative Procedure Shapes Legislative History, 105 L. Lib. J. 131, 163 (2013). And Congress passed much of the Act using a complicated budgetary procedure known as “reconciliation,” which limited opportunities for debate and amendment, and bypassed the Senate’s normal 60-vote filibuster requirement. Id., at 159–167. As a result, the Act does not reflect the type of care and deliberation that one might expect of such significant legislation. Cf. Frankfurter, Some Reflections on the Reading of Statutes, 47 Colum. L. Rev. 527, 545 (1947) (describing a cartoon “in which a senator tells his colleagues ‘I admit this new bill is too complicated to understand. We’ll just have to pass it to find out what it means.’”).
King v. Burwell, pp. 14-15 (emphasis added in bold).

As our legal jurisprudence respects and relies on the precedential value of prior court opinions, you can just imagine the fear of the potential for abuse of the precedent this ruling, and this specific passage, carries for the future. Indeed, for Roberts further wrote:

“In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.
King v. Burwell, p. 20 (emphasis added in bold).

But then consider that the same Justice Roberts, evaluating Obergefell at the same time as King, reached the opposite conclusion. Consider from his dissent:

“Today, however, the Court takes the extraordinary step of ordering every State to license and recognize same-sex marriage. Many people will rejoice at this decision, and I begrudge none their celebration. But for those who believe in a government of laws, not of men, the majority’s approach is deeply disheartening.”
Obergefell v. Hodges, p. 2 (Roberts, C.J., dissenting)

Roberts continued:

“The majority’s decision is an act of will, not legal judgment. The right it announces has no basis in the Constitution or this Court’s precedent. The majority expressly disclaims judicial “caution” and omits even a pretense of humility, openly relying on its desire to remake society according to its own “new insight” into the “nature of injustice.” Ante, at 11, 23. As a result, the Court invalidates the marriage laws of more than half the States and orders the transformation of a social institution that has formed the basis of human society for millennia, for the Kalahari Bushmen and the Han Chinese, the Carthaginians and the Aztecs. Just who do we think we are? “It can be tempting for judges to confuse our own preferences with the requirements of the law. But as this Court has been reminded throughout our history, the Constitution “is made for people of fundamentally differing views.” Lochner v. New York,198 U. S. 45, 76 (1905) (Holmes, J., dissenting). Accordingly, “courts are not concerned with the wisdom or policy of legislation.” Id., at 69 (Harlan, J., dissenting). The majority today neglects that restrained conception of the judicial role.”
Obergefell v. Hodges, p. 3 (Roberts, C.J., dissenting)

Justice Roberts flips the coin, taking one side in King and another in Obergefell.  But such is the nature of decisions made arbitrarily. In so doing, he conveys the alarming implication that no lesser an authority than the Supreme Court shall decide questions of our law by first choosing the outcome, and then working backwards to reach the appropriate patina of legal legitimacy. This is the type of reason which provides ammunition to future would-be abusers of the government’s often-fearsome arsenal of powers.  

In reality, last week's decisions have implications going far beyond the “headline” subject matter of their decisions. They have far more impact on future legal jurisprudence. That is because our legal system is based on and often accords high respect to precedent, meaning prior court rulings.

So when the court rules that a law will be rewritten so it may "work," the finance community should be alarmed. Not because it agrees or doesn't agree with the Affordable Care Act. Rather, because now the confidence that one is obeying the law and can enforce legal rights has been greatly upset.

Think this is an overreaction? Consider that the legal profession is dominated -- run by -- activists who increasingly believe in "economic justice." Such phrases should alarm readers. Simple concepts require no adjectives to modify them, not unless the purpose is to convey the opposite meaning, and so it is with "economic justice." The reality is a legal establishment, now firmly ensconced in the judiciary and among regulators and prosecutors, which is not merely overtly hostile to business in general and "the rich" (read: anyone with assets) in particular, but believes it is now emboldened -- no, empowered -- to go after these sectors with an impunity borne by the delusion that their end justifies any means, and the confidence that their allies will allow them to act unimpeded and their targets have neither the will nor the power to resist. 

In such an environment where hostile actors now have the Supreme Court's green light to erase the plain language of laws, certainly those in contracts will be next.

How far are we from a legal system where the likelihood of getting a contract enforced depends, for all intents and purposes, on one's industry, political contributions or "most favored nation" status. In other words, when does your legal status depend on who you are?

The new sense of the nation being a nation of men, instead of a nation of laws, explains why the public proclamations commending Friday's ruling on same-sex marriage may be more obligatory than sincere, as it is accompanied by a new uncertainty for business. 

Indeed, it is as if the capitalist class consciousness has been raised, to recognize The Dawn Of The End Of Law. And the public celebrations on social media may well be masking a silent dread that dares not be spoken, not in these politically correct times where departure from a shifting, almost undefinable political correctness may mean being targeted with boycotts, or the loss of tenure, or one's contract, or one's job.

The questions now are how the capitalist class will respond. It -- those of us with assets, even if modest amounts -- is mobile, certainly more than the average citizen who is largely tethered to his job, his home, his community, more by immobility from fear of the loss of job, insurance and familiarity than anything else. 

Will this class simply retreat from public life, determined more than ever to make profits and showing its defiance through indifference?

Will the capitalist class publicly wink at the new trends, the new legal paradigm, while privately resolving to avoid any and all encounters with the legal system, the political system and those who would make economic threats at the slightest hint of unorthodoxy?

Legal certainty and the rule of law have always set America's economy apart from the rest of the world's. The new era of unpredictability, save for the predictable animus towards business and asset-holders, simply won't help encourage capital to come here, stay here or be invested here. 

Last week's Supreme Court ruling may make this nation more equal -- that is, more equal with the rest of the world. For Americans, that means several steps backwards. This hidden message is being felt, even if many still find it hard to believe, accept or articulate. 


[1] King v. Burwell, 576 U.S. _____ (2015), available at http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf.
[2] Obergefell v. Hodges, 576 U.S. ______ (2015), available at http://www.supremecourt.gov/opinions/14pdf/14-556_3204.pdf.



Wednesday, June 24, 2015

BitLicense Now Official: New York's Bitcoin Regulation -- An Update

New York's Bitlicense is now officially effective today -- June 24, 2015 -- with the official publication of the regulation (see below) in the New York State Register's current edition just released. 

The final version has already been released, and with one change (companies won't have to run to state regulators to get approval for minor changes in their apps or code), it's the same as the second draft version released in late 2014.

I anticipate that companies seeking to comply will be engaged in quite a complex process, and quickly.


Eric Dixon, Esq. is available for consultation or comment to the news media at 917-696-2442.


Sunday, June 14, 2015

Voter Fraud Alert: New Legislation Planned In New Jersey

Democratic state legislators in New Jersey plan to introduce on Monday a new bill called the "Democracy Act" in an effort to combat falling voter turnout. But one provision for automatic voter registration upon receiving a driver's license is an absolute green light for non-citizens getting licenses to vote. 

UPDATED: If you think that fears of immigrants voting, or that same-day voter registration might lead to fraud, are the province of tin-foil-hat-wearing nuts in some Republican-neocon-tea party fantasy, just read these comments and then consider the source: New Jersey State Senator Ronald Rice, a Democrat who represents Newark.
"What I do know from my experience with voter fraud, is that when you have same-day registration, in my city and county, they bus people in," Rice said. "They bus in the dead and they bus in immigrants."
Senator Rice has a valid point. But his comments and concerns illustrate another trend. Election law changes and changes to "make it easier to vote" don't necessarily tip the balance of elections between the parties. They can tip the balance of elections within parties; that means, primary elections. And in most of the nation, where incumbents have "safe" seats in the legislatures or in Congress, the real elections are primary elections.

Moreover, voter registration affects local elections the most. That's because "packing" the rolls affects small races the most. The effect of invalid registrations gets diluted -- theoretically -- over larger areas and larger populations. In addition, these invalid voters will get to register in political parties, giving them an additional chance to affect primary elections.

Those primary elections, incidentally, include the primaries for party county committee and state committee races. Those party office elections are critical. In some states, it's those party committees which set the rules for how presidential delegates are awarded in those states' presidential primaries (winner-take-all versus proportional-awarding-based-on-popular vote).

[Earlier coverage: Here's an earlier report from the Newark Star-Ledger, following up its original story on Sunday, and some Democratic state legislative committee press release. The legislation will be posted when available.]

Returning to the issue of automatic voter registration for new drivers, note that such new drivers would be violating the oath on the voter registration form that they are citizens, but (1) no one is seriously enforcing that, and (2) having a readily-identifiable non-citizen population which can just as readily be identified and prosecuted for, say, false statements against the government (see title 18, United States Code, section 1001) means some conniving government agents can exercise quite a bit of undue power over some easily-threatened people.

After all, the power to prosecute and deprive one of liberty is perhaps the second greatest and most fearsome government power there is. (The first one? The power to send you off to war and likely to die.)

How would that power be misused? Like to "convince" people to vote a certain way, or not vote; you get the point.

In conclusion, I suspect these bills will not achieve their stated objective. (They may achieve their real objective, one no one dares speak of, which is to goose turnout towards certain candidates.) These type of bills often produce little in the way of enhanced turnout. This is because they increase the numbers of voters who are registered. As a result, what do you get?

Lower voter turnout, that's what. That's because turnout -- as a percentage of all registered voters -- will fall when you increase the number of voters who are registered (the denominator), because it's very hard to spark the interest of additional voters beyond those currently concerned citizens (the numerator). Voters who care, already vote. 

And voters who don't care, will sometimes take some money from unscrupulous campaign operatives to vote this way, vote that way, or otherwise engage in some nefarious act. So maybe you'll have a few more "straw voters," if all you care about is goosing turnout numbers.

Do you think that is a good thing for democracy?

Eric Dixon is a New York corporate lawyer who runs his own practice. He has successfully represented political campaigns for presidential candidates, and for state and local candidates in New York and New Jersey.

Friday, June 12, 2015

The Meaning of Official Documents, When Race And Gender Change On The Fly

Today we learned that the head of a Spokane, Washington NAACP chapter had a birth certificate identifying her as white, but she nonetheless identified as African-American. 

The legal issue is not what race or gender these people are. It is the meaning and purpose of the government documents issued. 

These documents are identification documents. They are issued so that the authorities -- and increasingly, any merchant performing a transaction -- can identify or verify the identity of the person. Yet other documents like birth certificates are meant to convey and report information about a person at birth -- and that means if someone was born male, the certificate should always read male even if the person undergoes gender reassignment surgery years later. Because the person was a male at birth. And because government documents are supposed to report objective facts -- even if unwanted -- instead of someone's fantasy or desire.

This is why driver's licenses report descriptive information on a person's name, date of birth, race, approximate weight, hair and eye color. It is an attempt to make it easier to identify and verify someone presenting the document, on the basis of relatively objective (although obscurable) data.

If present-day identification is the question, then matters as to current gender and race are raised. This is where Caitlyn Jenner (formerly the 1976 Summer Olympics Men's Decathlon Gold Medalist known as Bruce) presents the question of fact as to what gender she currently is. This is entirely separate from the question of what gender she would previously have wanted to be, or what gender "she" in fact was when "he" actually competed in the 1976 Montreal Summer Olympic Games.

Some people circulated a petition -- quickly rejected -- to remove Jenner's Gold Medal on the grounds of gender fraud. Interestingly, current Olympians undergo rigorous drug and genetic testing to weed out athletes who may be "more male" from the female competitors. (See this 2012 Time piece explaining the practice.)

In short, government documents are intended and must be kept intended for data reporting purposes. Self-esteem or image issues are not grounds for the alteration of objective data. 

Chaos: Ten Things To Remember When The Rule of Law Ends

No legal blog is complete without addressing what you must do, when the Rule of Law ends. Call it The End of Law. No matter the jurisdiction, no matter the cause, the question and challenge are the same: What do you do?

Assuming your loved ones are safe and secure, immediate physical survival has been achieved, but not guaranteed for long. The breakdown of civic order and The Rule of Law means that every assumption you have about civilization must go out the window. The benefits of post-modern civilization, the presence and concern of law enforcement, fire departments and paramedics, quickly vanish as those first responders tend to securing the safety of themselves and their own families. In an Anything Goes world, everything changes. So here's a quick checklist of items and issues to remember.

First, immediate physical safety must be assured in order to have both immediate and prolonged survival. I'm talking about staying alive. Whether it's shelter from life-threatening natural disaster or man-made chaos, you need a barrier between you and the danger. 

Second, depending on the situation, you'll need transport to a safer (you hope) place if your immediate location is neither secure nor tenable long-term. This requires first answering whether you can get out of your present location. Do you have a vehicle, and if so, how much fuel do you have right now? Then you have to think of your destination, and assess your chances of actually getting there at all. Fleeing a somewhat secure location in the hope of an assuredly-safe replacement carries the downside of getting exposed to mortal dangers. Now is a good time to ask: Do you have weapons? Do you know how to use them? You will have to assess your resources, and the odds of success against the risk of perishing.

In the case of a total breakdown of civilization, the benefits and conveniences of location in civilization are cruelly reversed. Cities become high-risk zones from which escape may become impossible and in which access to anything else needed for long-term survival may be very difficult. While needed staples may be present, the problem is large hordes of competitors. You'll have two problems: Getting what you need, and fighting off attackers who may easily seek to kill you for a tin of sardines. Remember this if you're thinking of staying in an urban area, or leaving a safe countryside for "the city" in search of something you think you need.

Notice what I have yet to mention: food, water, medicine. Those are somewhat longer-term concerns. Your ability to do without them will vary based on environmental and personal health conditions, and indeed they will become primary concerns soon, but only after immediate safety and survival have been achieved. 

Water becomes the first non-immediate concern once your immediate safety is assured. Is the water safe? You may not have the option to boil it. Drinking non-potable water carries numerous risks, but so does the risk of dying from thirst. If you have bleach, you can use that to disinfect water. The Environmental Protection Agency recommends six drops of bleach per gallon of water. 

Once you can turn to food, when you can pursue it, and to the extent you even have a choice, prioritize food with respect to four considerations: protein, perishability, vitamins and portability. Dairy and refrigerated products will spoil very quickly if they haven't already gone bad. Fruits and vegetables can also rapidly spoil but I would take them for their nutrients. Given their bulk relative to their nutrition, I would consume them quickly rather than store them. Other items, like nuts, pack more nutrition (and protein) for their size, and are a much better bet to store and carry. 

Medicine may be the toughest item to secure. Pharmacies and doctors will not be available and it is likely that pharmacies and drugstores will be a favorite target of looters. There is sure to be a black market for these and any commodity. Just remember: In The Age Of The End of Law, there won't be any consumer watchdog to turn to for help. It will be the ultimate in caveat emptor -- buyer beware. 

Once you can worry about amassing these basic resources, the questions become where to get them, and how to get them. Can you acquire them within your safe location or must you find them outside? In The Age Of The End of Law, institutions like banks and conveniences like ATM and even electricity may be functionally obsolete. Money, credit cards and even Bitcoin may be totally worthless under such dystopian conditions. The electronic devices of the Information Era will become the newest antiques, useless except as paperweights once the power shuts off and stays off. You may be reduced quickly to bartering physical commodities to get what you need, assuming it's even offered. You may be scavenging for the basics without any assurance of their quality or safety. 

Beyond that, start thinking about getting candles, matches, batteries and clothes. Candles provide light and some minimal warmth. In a winter scenario you may be in darkness up to 15-16 hours a day even in the middle latitudes. Batteries will power flashlights and may be the last resort for power. Look for a transistor radio. Anything digital may not work. The older the product the more likely it will work (what a paradox). As for clothes, your emphasis should be on two things: mobility, and protection from the elements. You may be reduced to walking indefinitely and over rough terrain or dangerous ruins. The natural elements may be as varied as anything found on our planet.

Start looking for chemicals and substances with multiple uses. That jar of bleach may have been very inexpensive in the market a few weeks ago; now it may be an indispensable disinfectant. Iodine is similarly very useful. And salt is an excellent food preservative and solvent. 

Finally, surviving in The End of Law requires some extreme changes to your way of thinking. In fact, thinking may be a fatal flaw. You may not have time to think, only to act and react. Instinct, not necessarily intelligence, may be critical.

Understand your primary -- maybe your only -- objective is simple. Survival is simple: Just don't die. So your mindset is just as simple. Act quickly, decisively and methodically. Emotions will only impede and delay you. Either could be disastrous. Catastrophes require an enhanced emotional intelligence that not everyone has. And you know what? Many people die in emergencies, disasters, war zones and the like, because of horrible judgment or an incapacity to respond properly to mortal dangers. 

Meet the challenge, or meet your Maker.  Let go of any assumptions about the past, how things should be and anything beyond the immediate horizon.  Survival is a here and now proposition.  And the more equipped you are to make the right judgments and act on them, the better your chances.

Eric Dixon is a veteran New York lawyer who describes himself as being in the business of judgment. 


Tuesday, June 9, 2015

Is A So-Called Nonprofit Group's Documents Public Records?

A client of mine is bringing a new and potentially groundbreaking lawsuit in state court in New Jersey, seeking production of certain documents from a nonprofit organization under the state's Open Public Records Act. 

More on that lawsuit, and an ongoing effort to reform the open-government laws in New Jersey, in this article from the Record of Hackensack, NJ. 

Saturday, June 6, 2015

Low Voter Turnout As A Good Thing

The accepted and common wisdom is that voter apathy, aka low voter turnout in elections, is really bad and bad for democracy and undermines our elections. Or whatever today's claim is.

These concerns are the stated reasons behind some "voting rights" litigation supposedly being funded by George Soros reported in today's New York Times. 

But here's where almost all of the commentary and "solutions" go wrong. And the party of the people talking doesn't matter; the Republicans are as equally clueless as the Democrats.

Right now, the most concerned citizens do vote. They vote regularly and consistently, in general elections but most particularly in primary elections. They are what is called in the business the "prime" voters or the "super primes." They're the ones campaigns concentrate fundraising and literature on. 

Who doesn't vote? The unconcerned, the uninformed (that being a function of being unconcerned), the indifferent and, often, the less intelligent.

There are few to no barriers to voting, beyond those of physical maladies where voters may be too sick to get out of their houses or medical facilities to vote. Here, increasing absentee or early voting is helping bring the ballots to the voters.

But all the effort on getting more voter turnout might either be a tired mantra by people who don't know what else to say -- having identified a problem but not a solution -- or an objective that is fraught with unintended consequences.

Do we as a society really want the uninformed, callously indifferent or malicious to be exercising their constitutional voting right as much, so they -- and not the informed, super prime voters of either party -- determine the outcome of elections? 

And before you think this is partisan, consider this: The same concerns hold true for so-called "closed" party primaries in states where you must register in advance of a party primary to "enroll" in that party. With primaries, do you want the weakest, least concerned voters outweighing the votes of the less numerous but much "more committed" party members?

These are among the questions to consider, on a policy basis, before accepting as an article of faith that declining voter turnout in elections is a "problem" and that increasing voter turnout is a desirable objective. 




Wednesday, June 3, 2015

Bitlicense Goes Live: Final Form Released

The Bitcoin community has experienced its first D-Day.

New York regulators just released the final version of "BitLicense" earlier today. The Bitcoin and digital currency community will be divided into two camps on this.

First, if you view Bitcoin as a technology and are limited to developing the underlying technology (what's called blockchain technology), then you do not need to apply for and receive regulatory clearance with Bitlicense. As I remarked months ago, the revised regulation adopted this change in perhaps the most material and meaningful progress made during the entire review and comment process.

Second, if you are in the business of exchanging digital currencies for one another, or with conventional government issued currency, you are probably covered and need approval.

Third, if you are in the business of holding any customer assets or funds in the form of a digital currency, you are probably covered and also need approval.

Since Bitlicense has an expansive long-arm definition of the term "New York person" anyone in a covered activity will be affected even if they do not operate in New York.

As a result, businesses in these sectors need to make immediate plans to attempt to apply and comply, or clearly withdraw from any covered activity touching New York State.

While the foregoing is not intended to be legal advice, I do provide legal and compliance advice (for a fee to paying clients) and time is already ticking.

I do believe that young companies desiring to have access to and compete for business in the lucrative New York market may find it worthwhile to apply for the Bitlicense.

Monday, June 1, 2015

The One Reason Why You Must Stop Working For Anyone Else

What is the central characteristic of the employer-employee relationship?

When you read the article below - adapted from the piece running on the website of the pro-entrepreneur Financial Policy Council - you will see why being an employee may be your personal dead end.

Here is the full link:
http://www.financialpolicycouncil.org/blogdetails.aspx?id=1096/Getting-Off-the-Employee-Treadmill:Part-Three

Hope For Better Policy In The Age Of The End of Law

Adapted from my latest article, published by the New York-headquartered think tank Financial Policy Council. The direct link is available below at:

http://www.financialpolicycouncil.org/blogdetails.aspx?id=1097/Hope-For-Better-Policy-In-The-Age-Of-The-End-of-Law

Thursday, May 21, 2015

Startups: When It's Time To Start Yours

Part two of an ongoing series.

Adapted from my pieces running on the Financial Policy Council website.


Monday, May 18, 2015

Startups: When To Start Your Own Business

Whether you are a lawyer, white-collar professional or in another industry altogether, there are times when you reach a crossroads and question whether you are better off (mentally, professionally, financially) starting your own business.

Here are some tips in that direction.  The first of an ongoing series, adapted from my recent post on the Financial Policy Council website.



Friday, May 15, 2015

Mob Rule: Rethinking The Problem With Our Elected Officials

A lot of people make a good living asking for money for their nonprofits to use supposedly fighting for a better and more ethical culture in our nation's and state capitals.

Blah blah blah.

Everyone seems to blame our elected officials, our political class, for the dysfunction. People "don't work together," everything is "partisan," and so on.

Blah blah blah.

Everyone is a crook, say some.

Blah blah blah.

But over the years, as the voices decrying these conditions seem to get louder (in some quarters), guess what? Popular participation in politics -- that is, through actually voting -- is on the decline. 

This brings me to the issue of the level of voting. This is a favorite target of the so-called, self-styled good-government groups, which exist -- make no mistake about this -- to provide a good living for their founders.

What if the problem in "politics" is the same as in "popular culture," where success is defined by sheer numbers and the ability to "sell" or "pander" to the greatest number of people sharing the lowest-common-denominator?

Unlike every other economic, academic or athletic endeavor where merit is the preeminent if not the sole criterion for success, and where achievement is recognized, the political world rewards the precise opposite.

In the political world where everyone has one vote and one voice, regardless -- or in some cases, in spite of -- their achievement, actual achievement is punished because achievers, by their nature, are a numerical minority and politics rewards the popularity contest which must cater to the lowest common denominator.

(Quick note: Read The Federalist Papers. Early American elections restricted the right to vote. Just consider whether there has been a correlation between greater enfranchisement and a debasement of the political and campaign culture.)

The "race to the bottom" in the political world is not a problem of the "political culture" or even of "ethics." It may simply be structural, a function of the fact that the electoral system rewards the basest, lowest qualifications for participation, namely, the ability to fog up a mirror, and levels the playing field to reduce those with the most "skin in the game" to numerical irrelevance.

So why would you be surprised when political campaigns and elected officials pander to this lowest-common-denominator (LCD), when the electoral structure -- and their very survival in politics -- require giving greater attention to this LCD?


Saturday, May 9, 2015

New York BitLicense: Why You Should Comply

See my recent discussion on the topic here

Saturday, May 2, 2015

Politicians Are NOT More Corrupt Than The Average Bear

Politics and indictments seem to go hand in hand. Why?

The headline gives it away -- but the answer will surprise you

It's not because politicians are naturally more corrupt. There are two reasons. 

First, elected and appointed officials -- and prominent business leaders and entertainers -- are "name" targets whose prosecution can make legal careers for the often-young-and-green prosecutors worried about ever getting a private-sector job which pays well. A prosecution of a faceless "nobody" does little or nothing for an ambitious prosecutor going on interviews. But a "name" scalp, a takedown of a big shot, can have a slingshot effect on a young lawyer's career and make him that much more appealing to employers and to their clients who will also be impressed. ("Hey, I just hired as my defense lawyer the guy who brought down Bernie Madoff!")

Second, elected and appointed officials are often subject to various freedom of information or "sunshine" laws which allow inquiring citizens access to all sorts of documents. The same type of access from private citizens is much tougher to get because you need a warrant or subpoena. 

Without the "open government" and sunshine/transparency laws, many questionable public-sector practices would go unnoticed.

Monday, April 27, 2015

Boycotts: Effective...And Legal

The economic weapon of the boycott has perhaps never, ever been as used nor as feared as it is today. Yet the boycott may remain a largely undiscovered, and definitely underutilized, cost-effective tool for social justice and economic warfare. Why more people don't engage in boycotts, either on their own or with groups, is puzzling.

Boycotts are effective tools to amass and deploy collective economic purchasing power to make statements and change corporate behavior. Best of all, boycotts are cheap: it costs virtually nothing to do a boycott!

Boycotts are similar in philosophy to another collective action, the use of group affinity -- ethnic, geographic, ideological -- to attract, retain and reward customers and the merchants who serve them. The major difference is that boycotts use coordinated group action, not to reward, but to punish merchants.

The philosophy of "bite the hand that hits you" was best executed, covertly and with devastating consequences, by a major insurance company about 20 years ago. The insurer gave millions in annual business to a particular New York law firm, and was hurt by new state legislation just enacted. But when that firm turned around and hired the very Governor who refused to veto that very same legislation, the insurer decided to take its very large book of business elsewhere. 

The law firm, the once-venerable Mudge Rose, closed shop soon afterwards. Later on, one of the partners of the dissolved firm tried to sue the client. Amazing. (Source: Wall Street Journal archives, http://www.wsj.com/articles/SB86313633544372500). 

Boycotts can also spur counter-measures, and sometimes the counter-reaction can be even more effective than the original boycott. The 2012 controversy over support by the family founders of the Chick-fil-A chicken sandwich chain restaurant for a nonprofit supporting traditional marriage spurred a boycott by same-sex-marriage activists, followed by a counter-boycott in which customers and certain groups apparently ramped up their patronage of the chain. It was reported that the chain's sales grew 12% in the year of the controversy, despite -- or is it because of -- the boycott. (Source: Huffington Post Online, available at http://www.huffingtonpost.com/2013/01/31/chick-fil-a-sales-2012_n_2590612.html)

Both examples show the potency of domestic, individual, granular citizen action as well as the consequences for businesses which offend or attack their clients and customers. So in a society where the "e-mob" can threaten more and more reputational (if not purely economic) terror proportionately with the greater and greater size of its target, why don't we see even more boycotts, as well as affinity counter-responses?

One possible explanation is that the term 'boycott' has negative connotations because its use by industry participants to act in concert, to collude or conspire to punish or exclude others in an industry is considered anti-competitive and illegal. Such practices are considered actions "in restraint of trade" and violate federal antitrust law (Sherman Act). They may even violate state antitrust laws and both federal and state civil rights laws. 

But did you know that boycotts by individuals are actually quite legal?  In fact, the federal government approves and encourages the boycott as an activist weapon of choice.

Skeptical? Just read the transcript of remarks at the May 6, 2014 State Department Daily Press Briefing by spokeswoman Jen Psaki, which includes the following passage:

QUESTION: The second question was whether State officials stay at hotels owned by the sultan of Brunei or other Brunei entities when they travel, and what your, I guess, broader take would be on the boycotts that have been happening of such hotels in Los Angeles.

MS. PSAKI: Well, a boycott is an acceptable way, of course, for private citizens to express themselves. We don’t take a position on this specific effort. It’s our understanding that the boycott specifically targets the Dorchester Collection of hotels, which has issued a statement that it does not tolerate any forms of discrimination of any kind. As such, the State Department has no specific restrictions prohibiting an employee from staying in a Dorchester hotel.

(Emphasis added.)(Full transcript available at http://www.state.gov/r/pa/prs/dpb/2014/05/225687.htm#BRUNEI)

The Federal Trade Commission also clearly states that individual businesses can engage in boycotts as well. The following passage comes right from the FTC's own website:

Any company may, on its own, refuse to do business with another firm, but an agreement among competitors not to do business with targeted individuals or businesses may be an illegal boycott, especially if the group of competitors working together has market power.


The FTC further clarified:

A business can always unilaterally choose its business partners.


It should be clear: People have the right to take their business away from -- in short, to punish --  merchants with whom they may disagree, and reward other merchants with whom they have an affinity (e.g., ideological, religious, ethnic). By extension, so do individual businesses acting alone in choosing with whom to transact. Individual choices are not the same as group action among businesses in refusing to transact with other targeted merchants unless certain actions or conditions are met, or at all, which actions are likely to attract the scrutiny of regulators and prosecutors looking for violations of either the Sherman Antitrust Act or any of a variety of civil rights and anti-discrimination laws.  Furthermore, any individual business should be aware as a practical matter that the greater its market power, the greater the likelihood that its behavior may be challenged legally by other market players or regulators. 

Nevertheless, choice in trade by customers is clearly a form of expressive speech, political speech even, and falls under the protections of the First Amendment. These actions should not be confused with the anti-competitive objectives of collusion among businesses to exclude competitors or attempted new entrants to a market. Individual economic choice should be seen as nothing less than Constitutionally-protected free speech.

Thursday, April 9, 2015

Overcriminalization, Not Overinvestigation

There is a good column on "overcriminalization" by the noted syndicated columnist George Will this morning. But Will misses the mark on some very relevant points.

He points out -- so does Harvey Silverglate whose seminal 2008 book "Three Felonies A Day" is cited -- that prosecutors often overcharge as a strategy to win cases (and induce defendants to take plea deals often requiring them to agree to a prosecutor's recommendation for a prison sentence of some sort) through what I will term a war of attrition.

However, Will totally ignores some major points. First, the problem with abusive prosecutorial over-zealotry is that it threatens to ruin its victims. A defendant who successfully argues his or her innocence likely does so at the cost of financial ruin, never mind emotional ruin.

Secondly, it seems that the zeal to prosecute is not the same as, and does not involve, the zeal to actually investigate. It would be good to see this investigative determination when it comes to complex financial and terrorism cases, wouldn't it?

Finally, no analysis of legal and prosecutorial behavior is complete without recognizing the much tighter legal labor market at all levels. The oversupply of lawyers from years and years of too many law schools with little to no distinction and equally undistinguished law graduates entering the legal job market 400 to 500 per year per school, each year, finally had its predictable consequence when the 2008-09 recession hit. Demand by paying clients for legal services has been flat by many accounts since then, leading to some amazing downward pressure on salaries from a gross oversupply of lawyers (although arguably, top legal talent is still hard to find - or harder to motivate) in the face of flat (at best) customer demand.

How does this impact overcriminalization? One result of this is that government lawyers -- and particularly prosecutors at all levels -- have to have become increasingly worried about their ability to get and keep private sector jobs. It is foreseeable that prosecutors would seek to become increasingly marketable, and to win the prosecutor-recruiting beauty contests by firms. In other words, prosecutorial decisions may have become increasingly driven not by justice, but by prosecutors' zeal to compete for private sector (i.e., defense lawyer) job openings.

In such a market, justice, never mind diligence in making charging decisions, is unlikely to get much consideration at all.



Wednesday, April 8, 2015

Law Firm Name Changes: Bad News Ahead

A law firm founder recently announced his retirement after decades running and growing the firm.

The biggest law firms in the world took and retained the surnames of their founders, years and sometimes decades after their retirement and then after their passing.

These law firms, and to a lesser degree other businesses like accounting and engineering firms, realized that the founders carried a brand name with their last names.

So why would a successful law firm change its name when its founder "retired"?

That's the question with the New Jersey law firm Wolff Samson, which has done just that.

The Samson there, firm founder David Samson, is reportedly under federal criminal investigation for matters pertaining to Bridgegate or the Port Authority of New York and New Jersey, or something else.

It is rumored -- just speculation -- that Samson could be indicted. (More likely, and my educated guess: A name change means the target knows what is coming, so retirement is a prelude to the revelation of a plea agreement, which will precede an eventual guilty plea to something or other.)

If any of that is likely, that would be the sort of bad news that might precipitate a law firm name change.

But Samson isn't just any partner.

He is a former New Jersey Attorney General, the highest law enforcement official in the state.

Removing his name has major significance. The type of significance that the Stalinist Soviets used to address, by erasing all historical evidence of disgraced or apostate former leaders.

And there is historical precedent in the clubby law firm arena. In the last decade, the securities class action law firm Milberg LLP used to be called Milberg Weiss Bershad Hynes & Lerach. That's until three of the name partners went to federal prison for racketeering conspiracy. And Milberg was no small firm; it was THE king of the hill in the securities class action lawsuit field.

So when a prestigious law firm dumps the names of its founders, you would not be wrong to at least suspect that bad news is waiting in the wings.

Friday, March 27, 2015

Official Comment on BitLicense 2.0: Progress, But Concerns Remain

The following official comment to the revised New York regulation, known as the "BitLicense," was submitted on behalf of certain industry participants by my office.

*****

To The Department:

This comment is submitted on behalf of Blockchain Technologies Corporation and its subsidiary entities which engage in the development of blockchain-related technologies and applications.

We are cautiously optimistic that the blockchain technology industry can work within and comply with the "BitLicense" regulation which was recently revised and resubmitted to the public for comment and review. Yet, valid industry concerns remain.

The revised regulation has made significant progress in recognizing the difference between digital currency (a more appropriate term than "virtual currency" which is used in the draft regulation) and the technology underlying it, and in further recognizing that regulation of non-currency uses would serve no public purpose while stifling a new wave of technological innovation.

On the other hand, the regulation threatens to impose serious compliance obligations on industry participants which hold, exchange or trade in digital assets such as Bitcoin.  These obligations are not expressly mandated. However, they are for all intents and purposes compelled by the regulation's requirements that companies have trained compliance personnel and systems for deterring money laundering, identity theft or identity fraud, and safeguarding any digital assets entrusted by customers.

We believe compliance with regulations designed to protect consumers and the general public are useful, certainly insofar as these regulations promise to encourage greater public awareness and use of Bitcoin (and other digital currencies) in commerce, and foster greater consumer and merchant adoption of digital currency as an additional means of exchange.  We further believe that a mature blockchain industry can and should welcome regulation, even if just to raise potential consumers' comfort level with the new technology.

We do, however, repeat our concern that the costs and demands of the initial application plus ongoing compliance requirements may drive less well-capitalized, but still valuable innovative industry players, out of New York. We fear such a development is likely to have an unintended consequence of reducing choice for New York consumers, including many small businesses struggling to attract and retain existing customers, as well as giving an advantage to industry participants in other states or offshore.

New York is the world's financial capital. There is no reason it cannot also be the world's Bitcoin capital. We urge further refinement of the BitLicense to reduce the burdens on smaller industry players while keeping its commitment to protecting consumers and fostering a free, equal and level playing field on which all industry members, both large and small, can compete fairly.

Sincerely,

Eric Dixon, Esq.
Eric Dixon LLC
116 West 23rd Street Suite 509
New York NY 10011
Phone 917-696-2442
EDixon@NYBusinessCounsel.com
http://www.NYBusinessCounsel.com/BitcoinLaw 

Tuesday, March 24, 2015

Gale Brewer Seeks Rent Mediation For Mom-And-Pop Businesses

Small businesses might face tougher rent increases if a New York City proposal is enacted.

That's because a proposed one-year rent increase cap and mediation will lead to landlords changing future leases governing their deals with tenants to account for what effectively becomes a government-mandated tenant-option to stay in a place and cap the increased rent.

The reason rents increase so much is that the typical commercial lease is at least ten years long. As real estate appreciates the rental value tends to also increase. In recent years the value of property has generally outpaced rent increases.

While the proposal seeks to protect small businesses, it fails to account for how landlords will adjust.

And the proposal utterly ignores the fact that tenants absolutely know for years that a lease is expiring. No tenant is caught unaware. What this is, plain and simple, is a giveaway to today's tenants with expiring leases.

Tomorrow's tenants will pay the price.

And so will all the customers who will pay higher prices on everything to make up for the landlords' lost revenue. After all, there is no cap on the expenses of a landlord.

See this link:
http://newyork.cbslocal.com/2015/03/24/manhattan-borough-president-seeks-rent-mediation-for-mom-and-pop-businesses/.

Monday, March 16, 2015

Double-Dipping Politicians: The Real Pigs

Election season isn't always a November end game, and in some places, municipal elections are in the spring. So it's time for the regular round of complaints about double-dipping and even triple-dipping elected officials who collect three paychecks as public servants.



The allegation from some quarters is that a public servant has time for only "one" job; therefore, getting paid for more than one job is somehow nefarious and (in the minds of opponents or those who simply don't let ignorance interfere with their speech) criminal.

The premises behind this allegation are disturbing. The first premise is that each job is a full-time job. That is untrue. Some public jobs are intended to be part-time, and the pay for those jobs reflects that fact. That part-time nature is further reflected in the fact that such officials are allowed to work other jobs. Think about the fact that most state legislators, county legislators and even municipal leaders in all but the largest cities are in fact part-time officials. 

Having more than one job is an economic necessity. This point is not disputed in today's economy -- except when it comes to public officials. 

The second premise, never stated because it would reveal the true nature behind the objection, is that people working more than one job somehow make too much money.  The reality is this: The objectors always feel, but dare not admit, that there is something wrong, something morally inferior, about anyone who makes one dollar more than they. The value component, what these people do to earn their paycheck(s), is not mentioned by objectors, because they lose on the value issue.

What's really behind the objection is envy. The objectors don't like that other people work harder and make more money. 

Just be careful about this point before you start pushing for laws to be changed to prevent people from holding more than one job. Maybe the real solution would be to pay public servants more, so they can afford to have "only" one job. And just maybe you'll have less danger of corruption by officeholders (like the recently indicted New York Assembly Speaker Sheldon Silver) who allegedly use their public office to illegally benefit their private outside business interests.

The real greed here is not by people who work at and perform multiple jobs. It is by the people who expect full-time work and full-time responsibilities from other people, but don't want to pay more than part-time salary. These are the people who want their service -- from public officials, from their doctors or lawyers or auto mechanics -- at a discount. They want to pay someone a part-time salary, modest at best, but have those people on call 24/7 because, well, because they work for us

These people make the worst clients and they also make the worst civic activists and neighbors.

They are the new moochers. And they are the real pigs at the trough.

Wednesday, March 11, 2015

Homewreckers: NJ Home Values Under Attack By "Affordable Housing" Court Ruling

Residential real estate values across New Jersey are at risk after an "affordable housing" decision handed down by the New Jersey Supreme Court Tuesday.


Affordable housing advocates applaud the ruling because it paves the way for activists and low-income homeowners (the group theoretically with standing) to challenge any municipality's alleged noncompliance with "its fair share of regional present and prospective need for affordable housing" in any trial level court, which in New Jersey is the Superior Court in each county.

Some municipalities also are happy because the ruling allows towns to demonstrate their compliance prior to and without being declared noncompliant.

Here's the problem: Who's going to be there to argue for the rights of existing homeowners whose property values are at risk?

Any town's housing plan can now be challenged, and soon. This means that judges in each county, and throughout the state, can upset a town's housing plan and by extension the residential real estate market in that town by halting or modifying certain development.

The effect on residential real estate is highly uncertain. But uncertainty is not good for the value of any asset, and here it is not good for real estate, not residential and not commercial. No owner knows what could be developed (or not), right around the corner.

Certain development enhances the value of nearby properties. Other development detracts from it. 

When the courts begin getting involved soon, the danger is that town zoning plans will be decided by judges hearing lawsuits brought by activist groups arguing for more low-income development, and municipalities arguing that they are in compliance with state constitutional guidelines and New Jersey's Fair Housing Act. 

Who's missing? That's right, there is no one to argue for the preservation of the property values of the existing property owners. And that silence, that absence, is likely to mean that property owners whose home values will be at risk will also be without a voice in many or all of those courtrooms. It is likely to mean those concerns will never be heard, and never considered, by any of those judges. 


Saturday, March 7, 2015

Menendez Prosecution: Explaining The Process

There are many sobering points about a potential criminal prosecution of Senator Robert Menendez (D-Hoboken). Here is a short list:

1. As of now, Menendez has not been charged with a crime nor has he been arrested. I urge readers to wait until all the facts come out. That means waiting until you see, and actually read, the government's charging documents filed with the federal court. Even then, understand you will be reading just cherry-picked facts. A much fuller picture (for better or for worse) will come out in the trial. 

2. Sometimes, there is no trial. But that will happen only if the charges (if they're ever filed) get dropped, or Menendez should plead guilty to a crime. Federal prosecutors rarely admit their mistakes, so don't hold your breath hoping this is one of those cases that get closed after charges are brought.   

3. Don't hold your breath waiting for Menendez to resign. His term expires at the end of 2018. And the trial, if there is one, will not be around the corner. There will be motions, requests for discovery, hearings and plenty of other action behind the scenes that will cause the trial to be postponed for months if not years. This trial may not occur until the summer of 2016, or later. 

4. Can we say right now what federal criminal charges would be brought? No! Absolutely not. We can only make educated guesses. There are reports suggesting the feds' inquiry into Menendez concerned whether he interfered with another federal inquiry into his friend Dr. Salomon Melgen. This would risk an obstruction of justice charge. There have been multiple reports about the value of the private jet trip which Menendez apparently failed to report. Sometimes these minor, administrative campaign finance reporting mistakes can be the basis for a criminal case! (One of the Bid Rig defendants here in Hudson County served nearly two years in prison for a rather technical and seeemingly minor delay in reporting a campaign contribution from the notorious Solomon Dwek, which he still insists was not a bribe.) 

There can be other "out of the blue" charges, based on the information that cooperators provide and which is believed credible by prosecutors.  Let's start with his friend Dr. Melgen. Dr. Melgen has reportedly been under investigation regarding his medical practice for at least two years. Press reports have concerned the use of Melgen's private jet, a trip (or trips) to the Dominican Republic, even allegations of favors involving underage prostitutes. Let's see what actually sticks. 

That last allegation is borderline funny. Who needs to go to the Dominican to get underage prostitutes? One can do that (or so I hear) right in Hudson County! Luisa Medrano (an infamous cooperating witness against former Guttenberg mayor David Della Donna) used to run that business out of her bars in the northern part of Hudson County. She avoided potentially lengthy jail time for sex trafficking of minors. She got probation! How did she do that? By finding a juicy "name" target at which to point an accusatory finger, and then selling that to the United States Attorney's Office.

And who ran that office at the time? Our current Governor, Chris Christie.

5.  In the criminal system, there's always one question: How much jail time is at issue? There is no way to know right now. It depends on the charges that are brought and which are ultimately proven at trial, or admitted to by the defendant. Even then, the government and defendant can negotiate on what a plea covers. There is plea bargaining, and then there is a practice known as fact bargaining. This is how jail time can get negotiated down, because the facts and scope of a crime to which one admits affect the assessment of the crime by the judge. Remember, the sentence is set by no one but the judge. The government can "make a deal" but it always must advise the judge of its recommendation. That's why there is this thing called a "5K1.1" letter, which is a government recommendation of a particular sentence length range. There are complex numerical-based federal sentencing guidelines that account for the severity of a crime and enhancing factors (which add time) and mitigating factors (which reduce it). 

This all becomes particularly important with public officials, because the federal sentencing guidelines treat elected officials' crimes much more stiffly than those of ordinary civilians. Yes, justice is NOT equal. The elected official status of public officials is an enhancing factor. So is the "leadership" role in any business. Remember this: the more accomplished you are, the higher profile you have, the worse you get treated and the greater risk you face in the federal justice system. Also be aware that the "name" status of any defendant is one which can have personal appeal for prosecutors. After all, they are human, they want to make their careers, and a "big name" case can make their career in the private sector. So elected officials, business owners, pro athletes, anyone with a profile, is almost by definition a good target. 

Remember this the next time you think the "rich and famous" get special treatment. They do! It just happens to work against them.

6.   That last point brings us to a key component of how the federal criminal justice system works. It is reliant (perhaps too reliant) on the witness testimony of people who almost always are trading testimony in return for leniency or absolution (i.e. a shorter jail term or none at all). This raises two questions. One is whether Dr. Melgen would be a witness against Senator Menendez. That question may be answered in any charging papers (so stay tuned). The second question is whether, down the road, Senator Menendez would be inclined to "spill the beans" against any sort of people as to whom criminal misconduct may be found. There is a powerful incentive as prison sentences for "cooperators" are often much shorter than those 

This is why, for many in the political world, the only question about Menendez is not the substance of any charges he may face; it will be whether he can and will "flip" on them. You'd better stock up on antacids if you're nervous.

7. Any federal felony sounds serious and they all are. But some are more serious than others. Obstruction is one thing. Bribery and fraud are something else and even more serious. Just this week, a former New York City councilman, Dan Halloran, was sentenced to ten years in federal prison for a bribery scheme in which Halloran was part of a scheme to sell the Republican nomination for New York City Mayor to a Democrat. Yes, you read that right. 

On the other hand, former Clinton Administration National Security Advisor Sandy Berger got probation and a fine for destroying official documents, which he secreted out of government buildings by stuffing them down his pants, in his socks and possibly in other places we don't want to explore. You will hear "corruption" and other horrible terms. Just don't rush to assume that Menendez is facing a decade or two in prison. 

8.  The final point is the human dimension. Someone under investigation, and definitely someone under indictment, will experience tremendous pressure from all sides. I have consulted with people who claim to have suffered multiple heart attacks while awaiting trial. This is a process whereby the government will use its leverage, including the pressure it can exert using all of its power at its disposal, to convince (or force) a defendant to "cry Uncle" and give up. 

From the people I've dealt with, both as released offenders and as government targets, and also from my personal experience with the government, one thing is certain. Resisting the awesome power of the government, and asserting your innocence, will definitely change you. The power to prosecute, indeed to jail you and basically affect the remainder of your life, is perhaps the greatest power the government can wield and also perhaps the power most susceptible to abuse. 

The people who stand up to the government deserve a measure of admiration. Some, to be sure, are delusional or irredeemably defiant. Others are stone-cold innocent, perhaps just in the wrong place or too close to the wrong people at the wrong time. The criminal justice process is not perfect, but it seems to winnow out the fakers and the frauds. Time will tell on this case as well.

Eric Dixon is a New York-based corporate lawyer and a member of the New York and New Jersey bars. He has represented public and private companies, corporate officials and elected government officials on various business and investigative matters over a 20-year career since graduating from Yale Law School in 1994. He can be reached at EDixon@NYBusinessCounsel.com.