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Sunday, January 30, 2011

Bronx Election Fraud: Dead Man on Ballot

The Bronx Conservative Party reportedly put a dead man on its general election ballot for State Senate, in an apparent new low in either absolute incompetence, or corruption warranting criminal investigation.

(It bears mentioning that New York State Conservative Party leader Michael Long reportedly referred the episode to the Manhattan District Attorney's Office.)

Some urban areas are prone to jokes about corruption in their political processes.  Dead people usually limit their post-mortem political participation to mere voting or signing of petitions.  The Bronx Conservative Party lowered the bar a notch, running for public office a candidate who was neither willing to run, nor breathing.  

In absolute seriousness, this episode reveals that, at a minimum, political parties have been able to run candidates for office without the named candidate consenting to so run.

Eric Dixon is a New York lawyer who handles election law matters.  Mr. Dixon may be reached at 917-696-2442 and via email at edixon@NYBusinessCounsel.com.

Saturday, January 29, 2011

Bankruptcy Looms For Mets, Wilpon


The attempt by the court-appointed receiver in the massive Bernard Madoff Ponzi scheme fraud, Irving Picard, to seek as much as $1 billion from the owners of the New York Mets (the Wilpon family), according to a New York Times report, has forced the Wilpons to seek minority owners for a 25 percent stake in the club.

Other reports and the ballclub's clear unwillingness to make material, monetary expenditures strongly suggest the franchise may already be insolvent.  In fact, Crime, Politics and Policy predicts that the New York Mets will soon be forced into bankruptcy.

(UPDATE:  Potential investors -- perhaps seeking publicity -- have already stepped forward within a day of the report.) 

This excellent article by the New York Post's Josh Kosman illustrates that both the Mets franchise and its affiliated SNY cable network are heaviily debt-ridden and, in at least one recent season, the Mets have actually lost money despite excellent attendance and a new ballpark, Citi Field. 

As Crime, Politics and Policy  reported back in October 2009 (with a hat tip to Bloomberg News in that earlier report), Picard estimated the Mets (through Mets LP) to have made an actual profit of about $47 million (measured as the excess of distributions over investments).  Picard now seeks not only the return of that real -- and entirely illicit -- profit (now the amount is estimated at $300 million, from about 100 entities connected to Fred Wilpon, his brother-in-law Saul Katz and other family members), but also additional monies.  (Many entities are commonly named in ways which hide the identification of the owners, and there is nothing nefarious or illicit about this practice.)

One of the principles Picard is following -- and which is customary for receivers seeking to recoup assets to distribute to crime victims -- is that all investors should be treated equally.  This means that if an investor lost money, but did not lose as much of his investment, proportionately, as the average investor/victim, the "lesser of a victim" ends up being subject to a "clawback."  If the average investor/victim lost, say, 80% of his investment and a particular investor/victim lost only 20% of his investment, the particular investor is on the hook.  This results in bonafide victims being sued for additional monies, but this is necessary to ensure absolute fairness.

Moving back to the Mets' financial condition:  Reading between the lines, one may surmise -- and I fully expect -- that the Mets' owners (the family of Fred Wilpon) have had to burden the franchise with debt in order to take out cash. In essence, this is like a leveraged buyout or "cash out" home equity loan (remember those?); in either case, a healthy asset is saddled with debt in order to make cash distributions.Many of these scenarios have ended badly in the past. Many people lost their homes -- and many others are still in a distressed situation -- for no other reason than having incurred too much debt relative to their ability to service the debt (i.e., make the payments of principal and interest).
Many perfectly healthy businesses have gone into bankruptcy, despite being profitable on an operating basis (that is, before accounting for the debt used to either buy the business or make cash payments -- that is, to siphon out cash -- to investors or lenders).

Addressing the issue of prospective investors/purchasers:  I cannot see how an investor agrees to Fred Wilpon's stated terms of a silent, maximum 25% partner.  Why be a silent partner, without control, and allow a man who was either duped by -- or criminally complicit with -- Madoff to exercise business judgment over your money?

I predict the only capital infusions in the near-future will be by investors who care more about ego and publicity for themselves.  Serious investors will wait until raw desperation creeps in.  Perhaps a baseball season with sub-2 million attendance, in a new ballpark where the bloom is already off the rose and which makes Mets fans wistful for Shea Stadium, will hasten the process.  A serious investor will strike when the value is lowest, and will purchase of a controlling stake (50%) or negotiate (and get)acquisition terms whereby management control will be part of the deal despite a capital investment for a distinct minority stake.  
Baseball fans -- that is, Mets fans -- generally have little regard for the baseball management acumen of the Mets' current ownership.  Many Mets fans seem to realize that the future health of the franchise, and its return to sustained on-field excellence, may depend on an ownership change.  Perversely, this segment of Mets Country will now be rooting for the Mets to do as poorly as possible in 2011 and thereafter, until there is an ownership change.

Eric Dixon is a New York lawyer (who formerly handled major corporate acquisitions and now handles investigative matters including cases of fraud and malfeasance) and a lifelong Mets fan.  Mr. Dixon can be reached for comment or consultation on this and other legal, strategic, business and political matters at edixon@NYBusinessCounsel.com and 917-696-2442.






Friday, January 28, 2011

Emanuel Stays On Chicago Ballot

Putting aside the merits or desirability of his candidacy, the Illinois Supreme Court correctly allowed Rahm Emanuel to remain on the Chicago mayoral ballot

Crime, Politics and Policy correctly analyzed this controversy earlier this week.

Eric Dixon is a New York election lawyer.  Mr. Dixon has represented dozens of candidates and political organizations on ballot access and other compliance and legal issues.  Mr. Dixon also handles investigative and strategic consulting matters for businesses, individuals and non-profit organizations.  Mr. Dixon is available for consultation at 917-696-2442 or via e-mail at edixon@NYBusinessCounsel.com.



 

Thursday, January 27, 2011

More Snow; More Investigations?

Will there be another federal grand jury investigating possible criminal wrongdoing if last night's near-blizzard isn't cleaned up on time?

New York City sanitation workers should be on their best behavior and make sure to work straight through their shifts without stopping.   Making a run for coffee could get you hauled before a federal grand jury and even indicted. 

A federal grand jury investigation into a possible criminal conspiracy relating to alleged concerted (and alleged to somehow be illegal) work slowdowns during the cleanup of last month's post-Christmas blizzard (20 inches) has reportedly stalled

(I disagree; this could be a complex investigation and one would hope prosecutors take the time to diligently research the facts, so it should be way, way too early to reach any conclusion.  For previous Crime, Politics and Policy coverage of the 2010 blizzard criminal investigation, click here.) 

New York's Central Park reports a storm total of 19 inches, pushing the winter-to-date total to over 55 inches.  (Normal winter snowfall is about 26.9 inches.) But last night's snow was wet, heavy and gluey, making for a tougher shovel.  (Yes, the author of this blog does his own damn shoveling.)

As this chart shows, New York has already exceeded its 2009-10 snowfall, and is fast approaching the all-time record of 75.6 inches (1995-96).  In fact, excluding 1995-96, the current winter's total is higher than every other winter since 1922-23, when 60.2 inches were recorded.  Moreover, average daily temperatures have been approximately four degrees below normal for about two months.  In addition, consider that the 55 inches have fallen in a span of 32 days (since December 26, 2010).  If you feel this has been a rough winter in and around New York City, these are the facts to support you. 

As Jimmy McMillan might say:  The snow is too damn high.


Eric Dixon is a New York lawyer and strategic analyst.  Mr. Dixon has extensive election law and compliance experience, and also follows weather and climate issues.  Mr. Dixon is available for comment or consultation via e-mail at edixon@NYBusinessCounsel.com and 917-696-2442.


Wednesday, January 26, 2011

Emanuel Should Stay On The Ballot

Rahm Emanuel should stay on the Chicago mayoral ballot, under a principle known as domicile.

Emanuel, former Obama chief of staff, was recently removed from the ballot, pending a stay and appeal. He was removed on the basis of having ceased to reside at his Chicago house upon resigning his Congressional seat to join the Obama Administration in January 2009. A Cook County appellate court (despite ruling to remove him from the ballot) recognized he still owned and in which family members and household items remained. He paid property taxes there and maintained his driver's license at that address. He leased out the house for a 22-month period to end on June 30, 2011. Indeed, that court recognized (see pages 15-16 of its ruling) that Emanuel was qualified to be an elector, that is, to vote in the mayoral election. Yet, he was ruled ineligible to be a candidate in that same election, on a decision that parses the difference between elected officials (Congressmen) and administration officials like Cabinet members (see page 22).

These facts indicate that Emanuel intended to return to that house -- in 2011, no less --and that his "departure" was intended to be brief and temporary. In short, under the principle of domicile (recognized by New York election law), Emanuel never intended to "leave" that house.

I draw a parallel to someone taking an extended vacation. Should someone who takes a vacation -- or a presidential cabinet position (an inherently short-term gig, or temp job) -- lose his residence?
The court distinguishes between domicile and residence. Perhaps legislative intent recognized this distinction, but it is more likely this loophole was never envisioned.

When residency (or domicile) requirements are so often circumvented by candidates looking for a favorable district in which to run, it seems a shame -- whatever you think of Emanuel as a politician -- to exclude a bonafide, apparently genuine Chicago homeowner from the ballot when so many others are evidently not bonafide long-term "residents" of the districts in which they seek election.

Either way, expect quick legislative action to remedy this problem.

Eric Dixon is a New York election lawyer. He can be reached at edixon@NYBusinessCounsel.com and 917-696-2442 for comment.

Obama's Enron Accounting

President Obama's State of the Union speech promises the illusion of fiscal sanity, without truly addressing the problems that obscene federal government spending over the last decade has created.

My concern is summed up well by this quote from Texas congressman Jeb Hensarling:

"It strikes me as too little, too late. After this huge inflation of spending, he's willing to level-fund it. If that's his idea of fiscal responsibility, this nation is in deep trouble."
Another concern is that such promises of fiscal restraint are often fulfilled, in practice, by the use of unfunded mandates to shift the fiscal burden to other parties.  That is the equivalent of major multinational companies creating special purpose entities -- often, offshore to evade tax reporting requirements -- to which unwanted assets and liabilities would be shifted.  Think:  Enron.

Eric Dixon is a New York lawyer and strategic consultant.  His opinions are neither legal advice nor representative of any client or organization with which he is affiliated.








 

 

Tuesday, January 25, 2011

What, No Financial Crisis Indictments?

Criminal indictments of people considered responsible for the current financial crisis are "unlikely."  

A New York Times report indicates that civil cases, but no criminal charges, are to be expected for the wrongdoing in connection with the subprime mortgage crisis, credit crunch and other financial disasters that occurred from, say, late 2007 to the present.

Eric Dixon is a New York lawyer and investigative consultant who advises businesses, individuals, nonprofits and political organizations on legal, strategic consulting and crisis management matters.  Mr. Dixon can be reached for comment or consultation at edixon@NYBusinessCounsel.com or by phone at 917-696-2442.


 

Sunday, January 23, 2011

The Government Wants Your Bodily Organs

A proposal being pushed by two Colorado state legislators would allow for the government to take your organs if you die, unless you opt out.  (Credit to WorldNetDaily for the report.) 

This proposal would serve as a form of presumed consent, in that you would be presumed by the government to have consented to "donate" your organs unless you specifically declined, or opted out.  This comes on the heels of a controversial New York City "organ harvesting" pilot program, and other previous, proposed New York legislation.

The practical implications -- and dangers to your life -- are staggering.  You could die so someone can steal your organs.

First, such a system would shift the burden to you to prove -- after you are dead -- that your wishes were against any donation.

Secondly, such a system assumes that your documentation for "opting out" would be in order, accessible and respected.  Ultimately, your last wishes being respected will depend on the willingness of others to obey the law and your wishes.  This presents an insufficient deterrent to violations of either the law or your or your family's last wishes.

Finally, any system making organ donation "automatic" raises the risk that people will be allowed to die in order to satisfy someone's zeal for a particular organ.  At the very least, there is the risk -- which you bear and which puts you in mortal danger -- that a hidden agenda, valuing you as a dead organ provider over a living, breathing person, would be paramount at the moment when life-or-death actions affecting your life would be made.

 

Jersey City Tells Residents: Raise Chickens and Bees

A strange government policy encouraging residents to raise chickens and bees may be a portent of a looming catastrophe or anticipated severe civil unrest.

The Jersey City, NJ policy (as reported by the Jersey Journal in Monday's editions) is so bizarre, it suggests that certain authorities expect or have reason to believe a serious crisis is about to occur.  The encouragement to raise farm animals and a dangerous (to the unskilled) insect supports the implication that major food shortages are around the corner.  But why???


From that implication, it logically follows that there would be either a major ecological disaster affecting food sources, or serious geopolitical events that would hinder, interfere or severely disrupt either the world monetary system or the transportation system, upon which our commerce and hence our food supply depend.

It further follows that these government officials -- that is, officials in the cosmopolitan outpost of Jersey City, NJ -- have some foreknowledge of the likelihood of these events.

Eric Dixon is a New York lawyer, strategic analyst and consultant.  Mr. Dixon provides legal advice, strategic consulting and crisis management services to individuals, businesses, nonprofits and political campaigns and committees.  Mr. Dixon can be reached for further comment at 917-696-2442 and via email at edixon@NYBusinessCounsel.com.

Tuesday, January 18, 2011

Homeless Invade Port Authority Bus Terminal

UPDATED 2/6/2011:  Port Authority now cordons off sections of the front entrances of each of its midtown bus terminal buildings after 1 am for the homeless.  At that time, the terminal becomes officially closed to all except those with bus tickets. 

The terminal officially opens at 5 am.  The overnight homeless population -- as counted in the front vestibule "bullpens" -- numbers about 25.  There is a homeless shelter one block away on West 41st Street, west of Ninth Avenue, where the remainder may go.

The overnight closing demonstrates that the Port Authority is willing to move out the homeless -- when it is for its own convenience.  The policy allows for a cleaning of the facilitites during the lowest-ridership hours.  It shows that, during the other 20 hours of the day, the stinking masses are totally welcome to befoul the facility because the bus terminal is "open to the public."

The same tolerance is in effect on the subways -- which never close.

It means New York City has -- at least in appearance if not in official policy -- reverted to the erroneous and ineffective policies of the pre-Giuliani days (before Bill Bratton implemented his "broken windows" theory) when Times Square was still teeming with street hookers and open-air drug markets, squeezee men roamed major intersections...and violent crime was much higher than it is today.

Original post:

New York's Port Authority Bus Terminal has gone retro -- in the worst way possible.

In a policy shift that harkens back to the days before Rudy Giuliani's "broken windows" theory, the Port Authority of New York and New Jersey (PANYNJ) has allowed dirty, unwashed, smelly and occasionally violent bums  homeless men and women (and one source swears, teenagers!).

New Yorkers who remember 42nd Street in the pre-Disney days, infested by hookers, drug dealers and solicitors for porn shops will recognize the deterioration.  Arguably, these are the "real" New Yorkers, the men and women who were here in the 1960s, 1970s and 1980s, whose view of New York was shaped by Death Wish, The Warriors and Escape from New York.

Tourists and relatively new New Yorkers -- that is, out-of-towners -- whose view of The City is shaped by Sex and the City have not caught on to the change. 

Upon being tipped, Crime, Politics and Policy has investigated and confirmed (in our opinion) the deterioration at the Port Authority Bus Terminal.  At numerous times of the day, the terminal is overrun by dozens of stinking, apparently homeless men and women.  Commuters now have to endure the real stinking masses.

Even worse, and more alarming, is the apparent indifference of the Port Authority police (that is, of the officers who remain and who likely are overburdened) and other authorities to the problem.  Most commuters also don't seem terribly annoyed -- not yet, anyway -- and this is the most dangerous signal of all.  Such indifference, bordering on tolerance, acts as an invitation for more homeless or panhandlers to come into the terminal and hassle, annoy and offend commuters and travelers.

The younger generation -- the under-30 set -- is woefully unprepared for this change.  This is the generation whose members have never encountered a New York City (that is, Manhattan south of 96th Street) is unsafe after sunset.  This generation, not remembering the years when 2,000 people were annually murdered in the City and violent crime was expected, is extremely vulnerable because its members never developed the hightened sense of awareness and fear which served as a protective mechanism even back in the early 1990s.

Notably, other transportation hubs -- Grand Central Station -- are not so afflicted.   There are signs of a similar situation at Penn Station, but the homeless there seem to be more physically segregated from the "gen pop" (that is, commuters) and hence not as much of an apparent problem.

Certain subway lines also appear to be afflicted by an invasion of homeless.  In particular, the subway lines that used to be called the Eighth Avenue IND -- the A, C and E lines -- are now reported to be consistently plagued by homeless, to the tune of one person per car, at any hour of the day, on a daily basis.

If the homeless explosion is one of appearance, it may stem from the lack of police enforcement.  This may be due to nothing more than manpower reductions, but another cause may be at work. 

Public employees at all levels are suffering (or believe themselves to be suffering) from salary freezes, benefit cuts and requirements to contribute to their own health care and other benefits.  Whatever the merits of such moves and putting aside the question of whether the workers are being adequately paid, or overpaid, for the work they are supposed to be doing, one fact is clear: such changes amount to a de facto pay cut. 

Combine that with threats of job cuts, budget cuts and benefit cuts, and you have a recipe for a tremendous drop in public employee morale.

In such an environment, will police officers "go the extra mile" to roust and confront the homeless in the most visible places in the City? 

City leadership needs to notice and act on this problem.  Tolerance of violent homeless sends a dangerous message to those of us who travel into the City for business, education or entertainment.  It also encourages business owners and managers to move to, or stay in, the suburbs.

Eric Dixon is a New York lawyer who handles election law, investigations and litigation stress consulting through his firm, Eric Dixon LLC.  Mr. Dixon is available for comment or consultation at 917-696-2442 and via e-mail at edixon@NYBusinessCounsel.com.

Christie's Insider Trading?

Did New Jersey Governor Chris Christie recently break the laws on insider trading?
 
Christie recently warned that rising health care costs might bankrupt the State of New Jersey. Within minutes, the size of two planned bond offerings was reduced by about half, suggesting a sharp drop in investor demand.

Now there's circumstantial evidence to suggest a possible avenue for illicit, illegal benefit: the job Christie's wife, Mary Pat, holds as a bond trader at the noted bond firm Cantor Fitzgerald.  Through that job, Mary Pat Christie may have access to price information for municipal bonds, the same type which suffered that deep price cut after her husband's scaremongering about New Jersey's impending bankruptcy.  Also, it is entirely plausible that Mary Pat knew about her husband's impending speech, and surmising the contents and the likely market reaction, could have been in a position as First Lady of the State to receive confidential information, and become a "tipper" through her Cantor Fitzgerald firm, or otherwise. 

The fact pattern brought to mind a prominent 2003 criminal prosecution of a former Goldman, Sachs Vice President (and financial news commentator) John Youngdahl for insider trading in U.S. Government Treasury bonds. Youngdahl ended up pleading guilty.

There is no evidence to suggest anything illicit has occurred, only disparate facts which show a possible avenue for communications (written or verbal) which could constitute insider trading.  In other words, if insider trading had occurred, these facts simply illustrate how one theory (among many) could be plausible.
These facts may not prove anything illegal, but they point to the appearance of impropriety and, just as disturbingly, the indifference to that appearance. 

This is a continuation of the theme of hubris demonstrated in the recent press conference where Governor Christie defended his absolutely indefensible decision to remain at DisneyWorld after the recent blizzard (this after taking off for the flight from Newark as the storm was already striking the state), and the Michele Brown loan.  It makes one question the basic organizational judgment of the Governor''s staff.  

Monday, January 17, 2011

Separate And Unequal: Christie on Autism Education

A popular "rock star" governor who sends his kids to private school is proposing special, county-wide schools for autistic children that will require many of them to be bused far from their hometowns, in a devious plan to encourage all but the poorest parents of autistic schoolchildren to flee the public special education system.

New Jersey Governor Chris Christie, who is considered a possible 2012 Republican presidential candidate (he doth protest too much), proposes each county have specialized schools for children with autism which would replace the current system in which each town (of which there are 566 in New Jersey) has its own special education program for autistic and other special needs children. 

Under the veneer of concern, I believe there is a Machiavellian (ohhh, that word is so McGreevey, so Jersey) plot to nudge special education children -- especially autistic children -- out of the public school system. This is an attempt to discourage parents of special education children from using public services, by making those services as unattractive as possible.  The ultimate objective is to save on expenses by reducing the number of children using the services.  

Even worse, this follows earlier proposals to get charter schools -- entirely for-profit institutions funded with public, taxpayer dollars -- involved in special education. 

The sum and substance of these proposals seems to be a concerted effort to divert public funds for private profit, using special education privatization and public school centralization as the means to that end.

Let's explain our theory on how the special education county centralization is really designed to work -- putting aside the platitudes and statements that we are discounting for the reasons stated above. 

With each county having its special school, watch for where the schools are actually located.  Compare that with where the special education students come from.  Expect there will be a difference, a significant distance, enough to cause inconvenience and enough to compel or induce parents of special needs students to leave the public school system.

For example, an autistic child in Fairfield (Essex County) could end up in a county-wide school in, say, a blighted area of Newark where some urban planning genius may think a new school is needed -- that is, new jobs for the construction of a new building.  An autistic child from Haddonfield (Camden County) could be sent miles away from his hometown...to Camden; maybe an autistic child from Holmdel (Monmouth County) gets sent to Asbury Park. An autistic child from Fort Lee (Bergen County) could be sent to, say, South Hackensack, or an autistic child from the tony waterfront of the Gold Coast in West New York or North Bergen (Hudson County) could be sent to a new school in the most high-crime area of Jersey City.  

You can almost hear the Christie Administration preparing the retort:  But we gave you a special school...what's your problem?!

The real problem, of course, will be the school's location, and the duration of the busing that an autistic child will have to endure to get to his special school that, ostensibly, is created for his benefit.  That child could be spending three hours a day on a school bus, instead of a five-minute walk or drive to his hometown's school.

If you're paying $10,000 in property taxes -- most of which go to public school costs -- how would having to bus your autistic child miles and miles to a county-wide school grab you?

There is little to nothing benign or helpful about this proposal.  This is an attempt to discourage parents of special education children from using public services, by making those services as unattractive as possible and inducing parents who have some capacity to pay private school tuitions (read: anyone above a state of being destitute) to avail themselves of those options.  Of course, such parents will still be required to pay their fair share of local property taxes ($10,000-20,000 in many towns), state income taxes and other various user fees, without having the audacity to expect anything back in return.

One could also suspect that the creation of county-wide schools would be meant as a method to diminish the scope of services -- and hence the manpower needs, patronage-dispensing abilities and political power -- of local/township school districts.  The political power would be redistributed to the counties, and you can bet there would be some control from the state.  View this as a redistribution of political power, not an elimination of political influence from the education of elementary school children and special needs children.  Far from it. 

Parents of autistic and other special needs children should be horrified by the practical, and unstated, implications of Christie's proposal.  Christie's message to parents of autistic and special education children is as follows:  Your tax dollars are welcome, but your kids' special needs problems are not our problem.

Eric Dixon is a New York lawyer who is also admitted to the Bar of the State of New Jersey.  Mr. Dixon is a highly-experienced corporate lawyer who specializes in, among other things, election law, securities law compliance, complex litigation and complex investigative matters.  Mr. Dixon can be reached at 917-696-2442 and via e-mail at edixon@NYBusinessCounsel.com.




 

Friday, January 14, 2011

New York City School Overcrowding Solution: "Birth Control"

New York City's new schools chancellor either has no respect for children, or a highly socially inappropriate sense of humor that calls into question her basic fitness for public service.


Just-appointed schools chancellor Cathie Black is quoted as having said, "Could we just have some birth control for a while?" in response to questions about school overcrowding.


School overcrowding has been a persistent New York City problem for decades, as the city continues to be beset by a growing school-age population and shifting demographics.


This gaffe comes on the heels of


  • a recently-announced pilot program for organ preservation (or "organ harvesting") providing for a second ambulance to respond to cardiac arrest 911 calls in case the patient does not survive,
  • the recent report last week that approximately 39 percent of New York City pregnancies end in abortion; and 
  • an atrocious City response to street cleaning and providing other essential sanitation and public safety services, which response was so poor it has sparked a federal criminal investigation.
Eric Dixon is a New York lawyer, litigation consultant and crisis management consultant. He can be reached for comment or consultation at 917-696-2442 or via e-mail at edixon@NYBusinessCounsel.com.


Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Thursday, January 13, 2011

Rock Star Christie Disses Conservative Base

New Jersey Governor Chris Christie effusively praised President Obama's call for civility in politics in the wake of the weekend Arizona assassination attempt of Congresswoman Gabrielle Giffords in which six people were killed and 13 wounded.

The shooting is a prime example of a situation which can and is being exploited for political purposes. That is, Democrats wishing to deter criticism of Obama Administration policies have a powerful weapon: the ability to impute the most immoral of motives to their opposition. And Republican Christie went along.

Strategically, a presidential contender may want to demonstrate electability in the general election by building broad support among various segments of the electorate. (Think John McCain.). However, one must not forget one's supporters, the base, if you will.

It is hard to oppose a call for civility in any time, but Christie was not asked to do that. Nor did he have to praise the call, which he did. Implicit in such praise is criticism of strident political opposition, whether from former candidates like former Arizona governor Sarah Palin, or well-known talk show hosts like Rush Limbaugh.

Christie did not need to make that criticism. He chose to.

The Saturday attack had nothing to do with political discourse -- but its setting allows for a quick presumption to that effect, and to the exploitation that has followed.  (Machiavelli would approve.)  Christie -- and virtually all other commenters -- owed it to us to say as much, in order to protect innocent people from becoming targets of an imputation of the vilest motives known to mankind.  But Christie did not do that; he failed.

This conscious failure -- this conscious avoidance -- allows for political opposition (on all sides) to continue to be demonized.  This failure subjects anyone engaging in political activities to assume, and suffer, the risk of such reputational damage.

This effect would be going according to plan, if your plan was to diminish the amount of political speech, political opposition and citizen participation in government affairs... as if someone wanted to remove the population's ability to scrutinize the government, or economic leaders, or the legal process.  From that, it logically follows that certain events will soon happen that ordinarily would demand popular scrutiny and sark popular outrage. 

As a lawyer and former U.S. Attorney, Christie can be expected to know the lawyer's primary purpose: to zealously represent his client. One cannot do that -- in fact, one is derelict and possibly committing professional malpractice -- if one allows his opponent to dictate the terms of the debate and the manner and tone of any criticism.

To apply this strategic analysis to a contemporary military strategy context: Such sentiments are of the nature of appeasement, submission, and ultimately, collaboration with the enemy.

Ask the Vichy French how that strategy worked out.

Applying those standards, it seems clear that Christie will not be an effective, or willing, advocate for conservative policies or for reform.

Tuesday, January 11, 2011

Arizona Shooting Sparks Moral Hazard

Some congressional leaders are proposing free speech restrictions in the wake of Saturday's attempted assassination of Arizona congresswoman Gabrielle Giffords (D-Tucson). 

These proposals are a transparent attack on the "right wing" or "Tea Party" movements, despite the fact that there are, at the very least, indications that the alleged shooter, Jared Lee Loughner, has had Marxist or Communist sympathies

Other criticisms of talk radio and political television shows are targeted at the content of speech, and laws aiming at the content of speech are almost always found to be constitutionally impermissible.  Some of the hysterical commentary all but suggests that Rush Limbaugh and other conservative talk show commentators (who are entertainers, first and foremost) were accomplices to the shooting and currently should be considered unindicted co-conspirators.
The risk of a new law providing for this should be obvious to those who recall the saying:  Where there is a will, there is a way.  (Or the old Soviet saying: Show me the man, and I'll show you the crime.)  Such a law can be used to silence -- or prosecute and even imprison -- political opponents based on the content of their speech.  The actual speech can even be innocuous; all that would be needed is a deliberate mischaracterization. 

Let's be clear: The stated purpose of the law would be protection of the public.

The real purpose of the law will be to silence the target of the law. 

There is another global risk to such laws.  Unlike the common law concept of the criminal law, which seeks to hold criminals responsible for their own actions, such free speech laws threaten to hold speakers criminally responsible (and very possibly under a "strict liability" standard) -- for the actions of others.  

It gets worse:  A speaker would be presumed to motivate and control the actions of others.  This presumption can lead to a moral hazard.  Wrongdoers who learn that they can escape responsibility for their own actions will not be deterred from repeating their crime.  Wrongdoers who can hand off the consequences of their actions to someone else may actually be encouraged to continue their bad behavior.


This is a recipe for a looming disaster: the investigation and virtually certain prosecution and imprisonment of innocent Americans for daring to participate in civic life and scrutinize, question or oppose the policies of their elected leaders. 

Legislators would do well to consider the long-ranging policy implications of their proposals, instead of seeking the quickest sound bite and trying to blame the opposition. 
 
Unlike this sheriff (who is following the bad example of former California state judge Lance Ito in enjoying his new publicity too much) they should learn it is better to remain silent and be thought a fool, than to speak and erase all doubt. 

Eric Dixon is a New York lawyer who offers legal advice, strategic analysis, crisis management and stress management in connection with complex legal problems, investigations and other sensitive personal, business and political matters.  Mr. Dixon has been practicing law since graduating from Yale Law School in 1994. Mr. Dixon cautions that this article is not legal advice. Mr. Dixon has handled election law and other matters for over two dozen political clients, and also handles corporate investigations, due diligence and sensitive matters including crisis management. Mr. Dixon is available for consultation or comment at edixon@NYBusinessCounsel.com and 917-696-2442.   




Sunday, January 9, 2011

Leftist Nut Jared Loughner?

Was the Arizona shooter a left-wing radical, maybe even a Communist?

There is anecdotal evidence and quotes from individuals in various news sources that support the inference that the alleged shooter in yesterday's Arizona assassination attempt on Congresswoman Gabrielle Giffords may have been a left-wing sympathizer, rather than any supporter of any of various "right-wing" causes. (As reported earlier, it took only hours for some elected officials and law enforcement officials -- all of whom should have known better -- to declare that political vitriol, bigotry and talk radio were to blame for the assassination attempt.)

An alternative news weekly, the Phoenix New Times, reports that one high-school classmate described Loughner as a "left-wing pothead."  Another Arizona Republic article includes a reference to him as a "goth" who always wore black, even on the hottest days (in Arizona, that's really saying something).   In the meantime, officials of some Tea Party organizations in Arizona rushed to deny any association with Loughner, correctly anticipating being a target of the blame game from various quarters.

The political blame game calls to mind the political tactic of the "false flag," which involves committing an act for the purposes of blaming it on political opposition and ultimately serving the ends of the responsible party.  Under this theory, it is plausible to view much of the "blame" going around as a form of disinformation.

From a lawyer's perspective, the complexity of such theories and the common, incredible deviousness -- and evil -- of the parties involved calls for a great deal of patience, emotional maturity and diligence in order to fully investigate the causes and ultimately reach the correct conclusion. 

Eric Dixon is a New York lawyer.   Mr. Dixon is available for comment at 917-696-2442 and via e-mail at edixon@NYBusinessCounsel.com.






Arizona Shooting Blame Game Begins

The rush by politicians to blame yesterday's shootings in Arizona on conservative political activists -- and not on the man who actually held the gun --  has begun.

An Arizona state senator, Linda Lopez, essentially blames the "Tea Party" (which any educated observer of American politics understands is by no means monolithic) for inciting the political climate in which yesterday's shootings/crimes occurred.



More disturbing is that some members of law enforcement are blaming the shooting, not on the 22-year-old suspect identified as Jared Loughner, but rather television and radio talk shows hosts and, by implication, their audience including anti-illegal immigration, Tea Party and other political activists. Pima County Arizona sheriff Clarence Dupnik, evidently speaking above his pay grade and forgetting that sometimes it is better to be quiet and be thought a fool than to speak and remove all doubt, connects the vitriol and bigotry in today's political climate to the tragic shootings. 

Consider the following civil liberties gem from Sheriff Dupnik:
"People tend to pooh-pooh this business about the vitriol that inflames American public opinion by the people who make a living off of that. That may be free speech but it's not without consequences."

Yesterday I warned that political activists should expect increased government scrutiny and even investigations in the wake of yesterday's tragic shootings of 20 people including Arizona congresswoman Gabrielle Giffords, in which (to date) six people were killed (including federal judge John Rell). The shameless, and utterly irresponsible, political opportunism that has followed is likely to drive such investigations as government authorities begin to respond to the already-building political pressures.

Political activists and community activists, including any people whose activity is limited to one issue (e.g., pro-life / anti-abortion activists), should consider reviewing their statements and activities, evaluating the company they keep, and consulting with qualified legal counsel to review their potential exposure to government scrutiny and to handle any government inquiries.

 
Eric Dixon is a New York lawyer who has been practicing law since graduating from Yale Law School in 1994. Mr. Dixon cautions that this article is not legal advice. Mr. Dixon has handled election law and other matters for over two dozen political clients, and also handles corporate investigations, due diligence and sensitive matters including crisis management.  Mr. Dixon is available for consultation or comment at edixon@NYBusinessCounsel.com and 917-696-2442.







Saturday, January 8, 2011

Arizona Shooting Will Spark Government Scrutiny of Political Activists

Political activists should review what they say, write and do, and the company they keep, after Arizona Federal District Chief Judge John Roll was among several people killed and Congresswoman Gabrielle Giffords (D-AZ) critically injured by a young gunman alleged and reported to be 22-year-old Jared Lee Loughner in what may be some sort of twisted political protest.   

This shooting calls to memory the recent prosecution and conviction of New Jersey blogger and former FBI informant Harold "Hal" Turner on charges of threatening to kill three federal district judges from Chicago.  Turner had been alleged to have said that the judges "deserved" to be killed for their ruling on a gun-rights issue, shortly after his questionable employment with the federal government apparently ended. 

There is likely no connection between any of Turner's rhetoric or statements -- however motivated -- and the incidents in Arizona today.  However, today's tragedy -- also, let's not forget, the most serious of crimes -- should be expected to increase government scrutiny of any political speech which can reasonably be viewed as inflammatory or incendiary.  It is natural and reasonable to assume that there may be other people bent on violence, including but not limited to copycats and those who simply would use this crime to inflict terror to further their cause. 

Political activists and community activists, including any people whose activity is limited to one issue (e.g., pro-life / anti-abortion activists), should consider reviewing their statements and activities, evaluating the company they keep, and consulting with qualified legal counsel to review their potential exposure to government scrutiny and to handle any government inquiries. 

Eric Dixon is a New York lawyer who has been practicing law since graduating from Yale Law School in 1994.  Mr. Dixon cautions that this article is not legal advice.  Mr. Dixon is available for consultation or comment at edixon@NYBusinessCounsel.com and 917-696-2442.  

Friday, January 7, 2011

Federal Prosecutors Move to Save Evidence of Snowstorm Conspiracy

Federal prosecutors may be helping innocent and wrongfully accused city workers establish their innocence and avoid criminal prosecution or other sanctions such as getting fired or suspended.

Federal prosecutors' request that sanitation and other city workers save all their communications (voice mails, e-mails, texts, etc.) about the snowstorm cleanup may help innocent workers exonerate themselves.  This evidence can help innocent people establish alibis, timelines and otherwise indicate that they could not have done certain things as alleged.  Of course, evidence can also be mistakenly analyzed and investigators can jump to conclusions without getting the full picture (or even a fair part of it).  One risk that prosecutors and investigators face -- and which can cause great frustration for innocent parties caught up in an investigation -- is the possibility of the "unknown unknown," the evidence which is missing and which is not even known to be missing. 

The request to save these voice mails and other messages is actually standard and good litigation practice; the government merely wants to make sure people are "on notice" not to destroy or alter evidence.  (The destruction of evidence that might be used in an investigation, if known to be relevant to an investigation, can lead to criminal charges of "obstruction of justice."  This is why subpoenas for evidence are crucial; they give recipients the notice of the investigation.

In other words, fellas, the message is this:  Stop shredding.  

In the universe of facts, you have "known" facts which you have, "unknown" facts which you don't have but know are out there, and "unknown unknown" facts whose existence is unknown to you. In a complex case --and a snowstorm conspiracy case could be potentially huge, involving hundreds of employees (thousands?) -- it is likely there will be unknown unknowns.

Whether the investigation itself is justified or merely an overreaction to political pressure (or driven by career ambitions of prosecutors looking for a "name" or "high-profile" case to use to get a promotion), there are certain common characteristics to many cases (whether civil or criminal).  One is that people who think they will be blamed for something start thinking about who else was involved...or who they can falsely accuse of having been involved. 

(Warning:  False accusations or false reports made to police officers, investigators or prosecutors or other government employees can result in criminal prosecution. Such statements, if made to federal employees, can result in one being prosecuted under Section 1001 of Title 18 of the United States Code.  That is the same section under which Martha Stewart was charged, convicted and sentenced to jail time in a Club Fed somewhere in West Virginia.)

False accusations, circumstantial evidence or even being in the vicinity of an allegedly illegal act (and thus having your name come up in an answer to any question) can result in you entering the sphere of the investigation.  This exposes you to the potential of being called as a witness, or being investigated to see if you have potential civil liability (in which case you get sued) or criminal liability (in which case you can be prosecuted and risk prison time according to the crime for which you are charged). 

City employees who have been contacted by investigators or who reasonably suspect they may be contacted by investigators -- or other employees who had a role in the snowstorm cleanup -- may want to consider consulting with a lawyer.

Eric Dixon is a New York lawyer who helps people handle the stress of being sued or otherwise involved in litigation.  Mr. Dixon comments often on current events and is available for comment at edixon@NYBusinessCounsel.com and 917-696-2442. 

None of the foregoing is legal advice and should not be used as such.   This article is for informational purposes only.    

Thursday, January 6, 2011

Falsely Accuse Someone, Go To Jail

Be careful what you wish for.


A New York weathercaster who allegedly made up an attempted rape accusation and described her attacker as a middle-aged Hispanic man is getting more attention than she wanted.


WABC weathercaster Heidi Jones was charged Wednesday with a misdemeanor for filing a false report. The bottled-blond, 37-year-old Jones told police she fought off an attacker while running in Central Park. Jones allegedly confessed to the false report when confronted by investigators at the WABC-TV studios.


Jones entered a plea of not guilty in Manhattan Criminal Court Wednesday.


According to prosecutors, Jones' motive was to get attention. Mission accomplished.


Lost in the press reports is that the police investigated and, based on the false accusation and report, could have stopped and arrested innocent men fitting her fake description. Implicit in her accusation is the belief that a pedigree of a middle-aged Hispanic man would constitute a believable lie. (For further analysis of this theme, see the previous Crime, Politics and Policy commentary.)


It is hard to view this accusation as anything less than ethnic prejudice. Worse, the context jeopardized the freedom and rights of innocent men who could have been wrongfully accused, wrongfully charged and wrongfully convicted based on the say-so, the lies, of a high-profile news media star.


Eric Dixon is a New York lawyer and strategic analyst who engages in crisis management and other matters. Mr. Dixon cautions readers that this article is not legal advice.  Mr. Dixon may be contacted for further comment through edixon@NYBusinessCounsel.com, or at 917-696-2442.

New Jersey Antibullying Law Will Bully and Hurt Kids Even More

Bullies who make false accusations will have a new weapon: a new anti-bullying law just signed into law today by New Jersey Governor Chris Christie (originally sponsored as A.3588, and previously criticized by Crime, Politics and Policy) that will have a huge, unintended and undesirable impact.

This is really bad news for New Jersey children. This law requires training for teachers on how to spot and stop bullying, and allows for the suspension and expulsion of those students found to be bullies.  While the intent of the law is clear, it will be ripe for exploitation by the very people whose bad behavior is the target of the law.

The problem is that this new law assumes there can and will be no false accusations. (That is, like New York WABC-TV weathercaster Heidi Jones, who was, in my opinion, appropriately charged criminally on Wednesday in Manhattan with a misdemeanor for filing a false report in which she claimed a Hispanic man tried to attack her in Central Park.)

The false accusations can themselves be a form of bullying. This law creates too much of a presumption of legitimacy for the accusation -- "it's true because I said so."

This law will not protect the true victims of bullying. Even if it has a deterrent value -- which I doubt -- the bullies can just move elsewhere and do their thing outside the schools.

But the real danger (and maybe the real reason why the law enjoyed so much support) is that the law makes all sorts of innocent children potential victims, because it gives schools the power to label, wrongfully, students as bullies and punish, ostracize or expel students it doesn't want.

A child of a political opponent of a town's leadership will be at risk. The bully label will become a new weapon of political retribution.

Special education students will be at risk. This law will give financially-strapped school districts an escape valve to get rid of students who are more expensive to teach, by labelling them bullies.

Parents will need lawyers on call to defend their kids against false accusations, exaggerations and school actions.

So how does any of this help the kids who are actually bullied?

It doesn't. But that was never the point of this legislation.

Eric Dixon is a New York lawyer. He can be reached at edixon@NYBusinessCounsel.com and 917-696-2442.

Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Housing To Fall Further: Here's Another Reason

Residential real estate values could drop even further in 2011 and beyond, depending on the outcome of an upcoming ruling in a Massachusetts court case on mortgage transfer requirements.

This ruling could make it harder for future mortgages to be packaged for securitization purposes.  This can trigger a negative "domino effect" in which mortgage underwriters (the banks which grant the mortgage) find it harder to sell off their underwritten (or granted) mortgages, and then have to hold on their books more of their issued mortgages as "mortgages held for investment."  

I would expect the ultimate effects to be an increased reluctance to issue mortgages based on the banks' perception of having higher risk, the risk being merely the risk of being unable to sell the mortgages off and thus having to retain the mortgages (and the underlying risk of not getting paid on them).  As banks get more risk-averse, they almost certainly will raise mortgage interest rates and other fees.  That means that borrowing costs for homebuyers will increase, and their purchasing power -- i.e., the amount of house they can buy -- will decrease.

The effect on home prices?  Down.

The effect on mortgage rates?  Up.

Say goodbye to those four-percent mortgage rates. 

(I mean, I don't gamble, but bet on these things happening)

Eric Dixon is a New York lawyer who helps people with legal and business problems through Eric Dixon LLC.  Mr. Dixon is available for comment or consultation at 917-696-2442 and via e-mail at edixon@NYBusinessCounsel.com. 


Wednesday, January 5, 2011

Can Congress Strip You of Citizenship?

Average Americans may be at risk of losing their citizenship, even if they were born here, because the federal government cannot or won't secure the borders.  This can become reality if Congress eliminates birthright citizenship which traditionally was believed sacrosanct under the Fourteenth Amendment.  (See today's New York Times for an interesting article related to the topic.) 

If birthplace is no longer sufficient to guarantee American citizenship, nothing would stop Congress from making new criteria to strip and then expel any "Americans" which future regulators may consider "undesirables."  This would almost certainly result in a new government agency because the process of determining alien or citizen parentage will be complex and also because the current agency with jurisdiction over immigration matters, the Department of Homeland Security, is demonstrably inefficient or outright incompetent in handling any matters under its purview. 

Would you trust DHS to evaluate your bonafides to be an American citizen when your child is born?  No, me neither.

Currently, all Americans born within our borders or subject to American jurisdiction (such as overseas armed forces bases) have American citizenship.  (Some scholars, including Yale Law School professor Peter Schuck, contend that the Fourteenth Amendment does not contemplate birthright citizenship.)  A persistent movement to end birthright citizenship in order to stop the problem of "anchor babies" sponsoring their illegal immigrant parents would require that the federal government evaluate newborns' parentage -- or other, as yet undetermined factors -- for citizenship status. 

There are many practical and legal problems to any such evaluation process.  Once the government gets the power to strip American-born citizens of their citizenship on any basis, there is little to stop additional bases from being used to make new determinations.  The drive to end birthright citizenship, despite its populist appeal, is actually very elitist in its effect.  A perfect example of an unintended consequence. 

There will be untold risks.  Once regulators and bureaucrats get involved, there is the danger of new and abusive regulations.  Just consider how the Transportation Security Agency has misused its discretion in screening or frisking airline passengers.  TSA abuse may be but a mild harbinger of the dangers of a new federal government citizenship registry. 

If these regulators get a hold of the power to strip you of your American citizenship and your "right" or expectation of being allowed to remain in this country, who can remain safe and secure in the knowledge that he or she won't be considered an undesirable in the future?

Eric Dixon is a New York lawyer and strategic analyst.  Mr. Dixon has been practicing law in New York since graduating from Yale Law School in 1994.  Mr. Dixon handles complex constitutional, legal and business matters for legal, strategic and political clients.  Mr. Dixon is available for comment or consultation at 917-696-2442 and via e-mail at edixon@NYBusinessCounsel.com.


 

Tuesday, January 4, 2011

Federal Investigation of NYC Snow Response

The New York Daily News reports that a federal criminal investigation into the response (and an alleged conspiracy to undercut or interfere with it) to the recent blizzard has begun.

Legal analysis begins with this question: When does one's failure to achieve a certain performance level become a criminal conspiracy? Such a legal standard will invite tremendous abuse. Not only will such a case turn employment into a "strict liability" job where workers could go to jail if their supervisor doesn't like their work (or skin color, etc.), but criminal conspiracy charges can connect one person's entirely lawful act (when viewed in isolation) to a larger criminal conspiracy. Entirely innocent people thus can be connected with a criminal enterprise and risk being criminally charged!


The liability exposure -- meaning the exposure to criminal charges -- can be widespread. Potentially, virtually every city worker involved in -- or having any responsibilities for city services -- could be a witness.

(Read previous commentary on the problem of selecting people to determine who has done a good job, and the strategic error of using threats to motivate workers who are already expecting pay cuts or layoffs.) 


Eric Dixon is a New York lawyer. Mr. Dixon may be reached at edixon@NYBusinessCounsel.com and 917-696-2442. This article is for informative purposes only and does not constitute legal advice.


Eric Dixon, Esq. 
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Motivating Public Employees

New Jersey Governor Chris Christie said that states need to "reexamine their obligations to public employees" in the wake of the poor snow removal after the Northeast blizzard last week.

Christie made his comments on Sean Hannity's radio program, syndicated nationally. (Link: http://www.seanhannityshow.com/)

This statement is a strategic mistake. It tells public employees that they should prepare for pay freezes, increased contributions for benefits such as health insurance, pay cuts, furloughs, any combination of the above, or even layoffs.

Given this message, how does one expect public employees to react? It seems that public employees are expected to do their jobs, altruistically or because it is "their job.".

Others already feel that public employees as a class are underworked and overpaid, and that some ought to be fired.

Regardless of how justified these beliefs are -- the basis for those beliefs is not the issue. The issue is how to motivate public employees to give 110 percent when the public good -- no, the public safety -- demands it.

Fiscal austerity presents a challenge. Employees will produce better if treated like partners and valued workers.

But if they are treated like the slaves in the galley of the Roman ships from the Charlton Heston classic "Ben Hur," ("Ramming speed!"), you can only whip them so much until they collapse.

If treated like enemies of the state, public employees may act the role.

Governor Christie, and other mayors and governors, need to think, and lead, strategically and talk diplomatically to produce results.





Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Criminal Investigation of NYC Sanitation Snow Removal Workers Is Off the Mark

The calls for punishment of unknown city workers who apparently didn't do their jobs well enough are leading to criminal investigations, according to one WCBS-TV report,  which may be as misguided and counterproductive as they are sham investigations designed to appease an angry electorate.

These calls for punishment, for retribution, for some sort of vengeance, all stem from an assumption that a stronger punishment will sufficiently deter public workers from doing less than their best job.  They arise from the core belief that workers can be motivated best by being made to feel pain and being threatened with more pain unless they comply or accede to the demands (or threats) that are being made upon them.

In other words, the beatings will continue until morale improves.

The mention of criminal investigations -- which support the inference that some city workers could be threatened with losing their freedom because someone else alleges, after the fact, that these workers were not sufficiently productive -- should make many people very uncomfortable.  

Criminal sanctions customarily were reserved for people who committed intentional bad acts.  Negligence or poor judgment should never be grounds for imprisonment. 

Threats of imprisonment because of poor, shoddy or incompetent snow removal results send a chilling message to public workers:  you can go to jail if we don't think you are doing your job well enough.

Such a standard is not merely unfair.  It poses a tremendous risk of abuse by those who would have the power to make this subjective determination.  

This is bad public policy, will make public workers less motivated and more inclined to shirk their duties, and ultimately result in the public receiving fewer needed services.  

Eric Dixon is a New York lawyer who offers legal advice and strategic analysis to business, individual and political clients through Eric Dixon LLC.  Mr. Dixon can be reached for comment or consultation at 917-696-2442 and via email at edixon@NYBusinessCounsel.com.