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Tuesday, September 27, 2011

Guilty, Without Criminal Intent

I recommend your reading this latest installment in a Wall Street Journal series on the federal criminal justice system and its effects on business and the society as a whole.

The growing tendency of legislators -- both in Congress and the states -- to criminalize actions, and even accidents, for which there was no criminal intent is an alarming trend that threatens to criminalize a lot of benign business activity, personal expression and pure accidents. 

There will be unintended consequences.  Down the road, the criminalization of non-crimes will increase the popular perception that those in prison were wrongfully investigated, wrongfully prosecuted and wrongfully convicted.  The problem is that bonafide criminals will then receive the same benefit of a reduced social stigma that the innocent and hapless prisoners deserve.  We will then have the stigmatization of the innocent, but reduced stigmatization, almost a reputational forbearance, for those who least deserve it.

In such a circumstance, the very notion of justice for all in an equal society will be undermined.


The Temptation of Chris Christie

The temptation for New Jersey's Governor Chris Christie to run for the 2012 Republican presidential nomination has never been stronger. Almost as strong as setting a few high plates of hamburgers, fettucini, cream puffs...ah, you get the picture.

This temptation, just like the edible variety, may give Christie a case of heartburn. And heartache. Here's why.

First, Christie may be like a lot of middle-aged women in nightclubs who (think they) look good when the liquor is strong and the lights are dim. But throw the lady under a shower, clean off the pounds of makeup, foundation and mascara, and you'll see that what you see, just ain't gonna be what you're gonna get.

(Somewhere I may owe Christie -- and plenty of women -- an apology for that analogy. But he should understand. We are both Mets fans. Chris, I will give you a whole bunch of running sessions for free, so you can get in shape for your real run. You only have to keep up with me.)

Under closer inspection, there can be no assurance that Christie can be the Republicans' darling nirvana, ready to energize and unify moderates and conservatives, Establishment patricians and Tea Party grassroots. (He could be, of course, but this likely requires others to implode.). But I think that no one on the planet right now would qualify as The One, ready and able to unify all segments of the Republican base while simultaneously appealing to enough independent and Democratic voters to reach 270 electoral votes.

Should Christie run, and not win the nomination, he may damage both his "brand" and his re-election standing back in Jersey. This risk grows if he runs, fails to win, and then Obama (or the Democratic replacement) wins it all.

On account of these risks, the politically-pragmatic Christie likely will wait as long as possible for a crescendo of support, and then jump in only when the nomination is all but handed to him on a silver platter.

This can happen, but first Republican voters and the establishment must accept that there will be no unifying consensus choice. The alternative and currently increasingly-unavoidable outcome is a potentially bruising primary.

There is precedent for success, though, by somewhat polarizing candidates who run the primary gauntlet. In 1980, there was a seven-man field including such party stalwarts as Senator Howard Baker and conservative darlings like Senator Philip Crane. The top two candidates and final two left standing brutalized each other, and then became running mates: Ronald Reagan and George H.W. Bush.

Most Republicans now consider Reagan the Next Man Most Likely To Be Put on Mount Rushmore.

So who's afraid of a primary?

Eric Dixon
@dixonstrategy

Under Investigation: What Do I Do Now?

In an article in today's New York Times on the practice of prosecutors undercharging defendants but threatening to charge additional crimes in order to induce (or coerce) a defendant to agree to a guilty plea to the original charged crime, one alarming statistic jumps out: Of all the federal criminal cases in federal district courts across the country, only about one percent result in acquittals. Nearly 90% of cases result in convictions through guilty pleas (even to only one of several charges, or to lesser charges upon plea bargaining and what is called fact bargaining) and the rest are convictions at trial.  About eight percent of cases are dismissed, but this number does not a significant number of investigated cases which never lead to any charges being filed.

Extrapolating the above data, the one percent of cases which result in acquittal at trial (and are not dismissed cases prior to trial) come from the approximately three percent of cases which do go to trial.  This suggests that going to trial is far from a slam dunk for the government, and that a good case in which the facts suggest reasonable doubt may end up with a defendant being found not guilty. 

Criminal defendants who honestly believe in their innocence should hesitate to be intimidated into pleading guilty to something they did not do, and should consider retaining someone (like myself) to help them with developing the mental toughness and training necessary to withstand the intimidation of a criminal investigation and trial.


The data above also mean that the best time to seek exoneration for someone who is under investigation is prior to the criminal indictment. This is most true in the world of "white collar" or non-violent crimes such as those involving financial misconduct, fraud, perjury, obstruction of justice, tax evasion and similar tax crimes, and other violations of regulatory agency rules which have been criminalized.


The downside is that the government controls the process, access to evidence including -- critically -- to exculpatory evidence that tends to negate the (assumed) guilt of the accused, and can use its resources to investigate and intimidate.


These facts make it critical that anyone potentially under government investigation hire lawyers and investigative lawyers who can understand potentially complex situations, complex legal theories of culpability, and analyze an incomplete set of facts and evidence to make educated guesses as to what probably happened or exists. The latter point is crucial when federal evidentiary rules require the government to turn over exculpatory evidence -- that is, as determined first by the government -- only months if not weeks before the trial. By this time, of course, one has already been charged, lost his or her reputation and often lost his or her employment. 

The lesson: If you are innocent, don't let yourself get pushed around.


I would welcome inquiries from anyone who needs, or knows someone who needs, advice or assistance in these situations.

Monday, September 26, 2011

Could Bloomberg Be Prosecuted For Re-election Campaign Finance Fraud?

Could New York Mayor Mike Bloomberg face federal criminal charges over his campaign finance activities in his last mayoral campaign in 2009?

City Hall News is reporting, via Twitter (@cityhallnews) and later in its Tuesday online edition, that indicted Bloomberg campaign operative John Haggerty's defense lawyers claimed today in opening arguments in Haggerty's criminal trial that Bloomberg and certain campaign staff members received immunity from criminal prosecution from Manhattan District Attorney Cyrus Vance's office in exchange for testimony before a grand jury.

If true, this is a development that can seriously undermine Bloomberg's remaining time in office.  His credibility has already been severely shredded by the bovine desire for a third term, the CityTime scandal, the blizzard fiasco, Cathie Brown...and on and on. (For further reading, see this.)  

The federal criminal exposure could be significant.  There are plenty of federal laws on the books which can be used -- justly or unjustly -- as the predicate for a prosecution.  There is precedent for criminal charges, successful prosecutions and substantial jail time for elected officials caught in campaign finance-related crimes; see this article on the six-year federal prison sentence for former New Jersey Assemblyman / Perth Amboy, NJ mayor Joseph Vas.

There is nothing to indicate that Bloomberg -- or others -- were granted immunity from federal prosecution.  A wise lawyer (such as myself!) may have recommended seeking such protection, particularly if there is a parallel although undisclosed federal investigation ongoing, unless that guarantee of legal protection was not considered to be necessary.  This would indicate a possible back-channel assurance from the Obama / Eric Holder Justice Department that there would be no criminal prosecution, and I'm not saying this happened, this is only a theory.

Of course, such a theory would leave a highly-prominent (and very juicy career-making target) Bloomberg subject to official federal criminal prosecution if there were a regime change in Washington that was willing to press charges.

Another point:  The government cannot force anyone to testify, whether before a grand jury or a regular trial jury. This is true even if the government grants one immunity from prosecution.  One can still refuse, and go to jail for contempt (see: Barry Bonds' trainer/childhood friend Greg Anderson).

It is believed that ordinary people rarely testify in any grand jury investigation unless they are clear victims or, as is more common, they are vulnerable to being prosecuted and the state exploits that vulnerability to induce a person to testify in exchange for immunity from prosecution.  In other words, if you aren't a victim and the state wants you to testify, failing to testify as the state asks may result in the person being threatened with being charged with a crime. (At the very least, a non-cooperative person who refuses to testify as ordered can expect to be thoroughly investigated as the government searches for something to use against the non-compliant person, something that is prosecutable, so that it may have leverage.)

That means that Bloomberg's seeking out and accepting immunity is a strong indication -- if not a flat-out bonafide certainty -- that Bloomberg had very possible criminal liability in connection with the financing of his last campaign, and was given the choice of testifying or being prosecuted.  And as defense attorney Raymond Costello said in court Monday, while John Haggerty got charged, the others got a "get-out-of-jail-free card."
What if Bloomberg is totally innocent?  If Bloomberg did not have liability, or simply felt that either the chance of being prosecuted, or the factual or legal bases for such a prosecution were so weak as to warrant ignoring any threat, all Bloomberg would have had to do was to refuse to testify.

Instead, Bloomberg chose to testify.  Whether there was a prosecution hammer over his head, Bloomberg chose to testify.

The bottom line fact is this: Michael Bloomberg would not have testified without receiving assurances from the District Attorney that he would not be criminally charged in connection with facts or events surrounding the Haggerty case. 

You can judge for yourselves what this means.

Eric Dixon is a New York lawyer who helps people handle the stress of investigations, including criminal investigations and prosecutions, and handles complex investigations and legal analyses including those in the course of attempting to exonerate the wrongfully accused.

Sunday, September 25, 2011

Grossest Things Kids Touch

There are plenty of nasty germs -- not to mention icky, disgusting things that aren't necessarily going to kill you -- on most surfaces that your school-age children touch.  Your kids are susceptible to catching bad colds (or worse), as well as serving as carriers (transmitters) of the microbes.

Here is a fun rundown of the 15 most dangerous places your kids touch.

Now, does Tony Shaloub's character in Monk seem over the top now?  I think that character is very aware of the dangers.  Being aware of risk is great. 

Friday, September 23, 2011

Christie Considering 2012 Run

According to Newsmax.com, New Jersey Governor Chris Christie is reconsidering his decision not to run for President next year, and should make a decision within days.

(Source: www.newsmax.com)


Eric Dixon
@dixonstrategy

17 NYPD Cops Indicted in Ticket Fixing Scandal

In New York City, there are two sets of rules: one if you "know somebody," and another for everyone else.

That's the conclusion of a Bronx grand jury which indicted 17 uniformed New York City police officers earlier this week for fixing traffic and parking tickets for friends and family.

The investigation by the NYPD Internal Affairs Bureau has also seen at least one uniformed officer attempt suicide.

Penalties could range from no-jail agreements (perhaps if defense lawyers can get charges reduced to misdemeanors) to several years in prison for felony charges. The formal charges and defendants have not been announced publicly.

This police misconduct hurts the Department's credibility and threatens to affect numerous other criminal cases in which the indicted officers were the arresting officer, investigating officer or supervising officer.

More developments should occur Monday.


Eric Dixon
@dixonstrategy

Wednesday, September 21, 2011

Following You By Tracking Your Cell Phone

The legal and practical concerns about government surveillance using cell phone technology are addressed very well in this article to appear in Thursday's edition of the Wall Street Journal.

One might think that electronic surveillance, using the so-called "stingray" device mentioned in the article, is replacing old-fashioned let's-go-follow-him surveillance of the type you might have seen 40 years ago on, say, Hawaii Five-O or Barnaby Jones.   In that case, there would seem not to be much controversy.  However, as cell phones have become such standard personal accessories that they may be considered virtually an appendage of a person, any tracking of cell phones or similar devices can be considered a "search" and the monitoring of them can be considered sufficiently intrusive as to implicate concerns -- or objections -- based on the Fourth Amendment prohibition against unreasonable searches and seizures. (Note the emphasis.)

As the article notes, there are pending bills before Congress to require that judges issue warrants for the use of the stingray mechanism.  The Congressional action is an appropriate check on the executive power (used through law enforcement agencies). 

Eric Dixon is a New York lawyer, strategic analyst and crisis management consultant who helps people cope with the stress of litigation and being under investigation.




Tuesday, September 20, 2011

Solyndra Execs Should Not Talk Before Congress

The beleaguered chief executive officer and chief financial officer at under-investigation Solyndra Corporation reportedly will invoke their Fifth Amendment rights against self-incrimination in scheduled testimony Friday before a House energy committee.

Solyndra, the company which received approximately $535 million in federal loans and then weeks ago declared bankruptcy, is under investigation by the federal government.

The Reuters news agency reportedly gained access to the letters from the executives' lawyers, which presumably alerted the subcommittee to the executives' intent to remain silent; CNBC has since also reported this story.

The executives' refusal to talk and to invoke their Fifth Amendment rights is a smart strategy. Frankly, it is the only strategy. These executives have nothing to gain by speaking in an environment where anything they say, and even the manner in which it is said, will be considered evidence and dissected for its potential in aiding a criminal prosecution of them.  Admittedly, this strategy will compromise or sacrifice their reputations, but the alternative is to give ammunition to a bloodthirsty mob.  Regardless of what is said, the content of their statements will assuredly be parsed and dissected for potential use in a prosecution.  At a minimum, there would be attempts to prove that any of their statements to the House committee were knowingly false and thereby prosecutable as false statements under Section 1001 of Title 18 of the United States Code which proscribes false statements to agents of the federal government.  (This was the statute under which Martha Stewart was successfully prosecuted.)

Although the investigation of Solyndra is in its infancy, it is a safe presumption that the top executives are already possible "targets" of an active federal criminal investigation. The word "target" means that the person to whom it is applied is considered a likely defendant.

In such a case, and definitely in a politically-charged investigation like this, no potential defendant owes anyone an explanation for remaining silent. The flames are too high and the mob too rabid at this point. Those factors will cause, rightly or wrongly, the investigation to produce scalps to justify a conclusion already reached. In all likelihood, no matter the official denials and invocation of the mantra of "presumed innocent until proven guilty," somewhere it has been decided that these executives are guilty -- that is, of something, some crime which as of yet cannot be declared, determined or proven.

Moreover, any testimony or other public statements that is made gives other prospective cooperating witnesses -- that is, others whom the government has successfully intimidated into "cooperating" with an investigation on the promise of getting a government recommendation for a more lenient sentence in exchange for their "substantial assistance" in the investigation -- material with which to fabricate a false yet plausible-sounding story as to what they did and said. 

Business failure by itself is not and should never be considered a crime. Investigations of business failures under the guise of protecting the public are really witch hunts designed to effect bad public policy, that is, that the government will use its prosecutorial power to determine what businesses succeed or fail.

The real misconduct, consisting likely of horrible business judgment but not necessarily any crime, was the government's decision to loan money to a company which apparently did not warrant loans from private banks. Pretextual investigations, in which the conclusion was first reached and the ensuing activities are performed merely to justify the subsequent prosecutions, should not now ensue because policymakers want to hide their mistake.

Eric Dixon is a New York investigative lawyer who works on complex matters, including those which involve government investigations.

Eric Dixon
Eric Dixon LLC
917-696-2442

New Jersey's New Energy Suppliers: Read The Fine Print

New Jersey residents getting solicited in the mail to switch energy providers should read the fine print in these mailings.  The details are so detailed, in fact, that you might want to call a lawyer.

The primary New Jersey public utility, PSEG, offers electricity at about 11.6 cents per kilowatt hour.  PSEG gets that electricity from other suppliers and actually encourages you to switch to an energy supplier of your own choice.  (Don't believe me?  Read your bill.  Carefully.)

One different supplier, Energy Plus, offers a savings of "up to 10%" on electricity.  But wait -- read the back of the mailing.  That savings -- which could be anything above zero and way less than 10% -- is only "[t]he initial rate that applies to your first month of service" and thereafter "[t]he Energy Plus rate is variable and therefore subject to change each billing cycle."  Adios savings.  I do not endorse Energy Plus.

A different supplier, Constellation Energy, is now pitching a 12-month fixed rate of about 10.15 cents per kilowatt hour.  Note that we are going into the non-peak electricity usage season, so electricity rates will drop.  Note that Constellation makes no offer on a variable rate -- which right now is probably in the ballpark of the PSE&G rate of close to 12 cents per kilowatt hour.

Why is it that a new company, just licensed in New Jersey, is able to offer a fixed rate of 9.84 cents per kilowatt hour?  

Consumers interested in price comparisons with their New York or New Jersey utility (Con Edison, LIPA, JCPL, PSEG) are welcome to contact me with questions about their bills via e-mail at ericdixonlaw@gmail.com.


  

Monday, September 19, 2011

Obama Scares Doctors Out of Medicine

President Obama's speech moments ago promised to pay doctors for "results." Such an approach will reduce quality health care and stifle most innovation.

Tying in doctor compensation to "results" is like measuring them on a won-lost percentage. It will make doctors look for the easiest wins and avoid the patients most likely to be "losses." This means only the healthy will get care, while the sick will find scarcer and less effective care as, ironically, their condition worsens. This is de facto health care rationing, by using market forces to reduce available care. Ironically, under the guise of efficiency, we will now have a health care system for the regular people which will achieve cost control by constructing barriers to health care.

This is health care rationing, a hop-skip-and-jump from euthanasia (let them die by withholding care) and denying care.

An emphasis on "results" will become a "bottom line" approach in which the lowest common denominator is used to measure doctor performance while ignoring the subjective and unique situations we all have as patients.

This emphasis on results will simply be horrendous.


Eric Dixon
Eric Dixon LLC
917-696-2442

Low Appraisals: Why Housing Is Going To Zero

Home price appraisal disputes are the latest issue gaining notoriety as economists try to determine why the housing price crash has not hit bottom, five years after the housing bubble burst.

Political observers are also becoming resigned to the lasting nature of the housing crisis and the effect it will have on the 2012 presidential election.

Unlike the years in the run-up towards the real estate bubble's apex, appraisals now are generally on the ultra-conservative side (that is, the "low" side).  Many buyers are having difficulty closing purchases because appraisals often don't support the original bank loan sought for the property.  (This is in addition to the myriad of other problems confronting buyers.)

During the halcyon real estate days -- that is, 2003-06 -- appraisers were pressured to increase their appraised values to support bank loans, as banks aggressively competed to underwrite mortgages which they then offloaded to other parties through securitizations of bundles of mortgages into mortgage-backed securities which ostensibly spread the risk of any one bad loan.  Some appraisers were blackballed for refusing to abandon their standards and insistence on using comparable home sales. 

Now, a strange reverse process is occurring.   Appraisers are reluctant -- or outright refusing -- to use comparable home sales because they argue that the age of the sale means that the current value is significantly less than the last reported comparable sale price.  For a different reason, banks are pressuring appraisers to ignore the traditionally strongest indicator of value, recent comparable home sales.  Before, the motive was to compete for loan underwriting.  Now, the motive is to reduce as much risk as possible.

One danger that is not yet perceived by most observers is the risk that the Department of Justice will soon use its prosecutorial power to convince appraisal and realtor industry groups to adopt uniform procedures for price appraisals.  One practical problem, however, is that certain properties are often distinguishable from "comparables," mostly because of location issues.  A particularly dynamic view of a nearby skyline or shoreline can vastly increase the appeal of a particular property. Buyers who appreciate this fact will validly bid a higher price; the problem is that the bank will not issue a mortgage for more than, say, 75-80% of the total value which it determines the property to have.  

Of course, another problem with Justice Department lawmaking is the deterrent effect it will have on all real estate activity.  Anything that discourages the issuance of mortgages will hurt the real estate market, and perhaps for years. 

This is no problem on an all-cash deal.  When a buyer is using "other people's money" or good old OPM for the purchase, however, the strings attached can be formidable. Uniform standards can help give appraisers and the banks which use them some comfort in assessing the approximate true value of  property, at the present or near past, and hence in assessing the true level of risk involved in a given mortgage.  However, the true issues and the true problems are the impossibility in forecasting future price movements and the high degree of fear that home prices will continue to decline significantly for at least the next few years.  No amount of regulatory oversight or prosecutorial monitoring will take care of these issues.

The only way for banks to totally guard against the risk of losses from mortgages they underwrite in the current climate is to avoid writing any loans at all. 

Buyers currently need downpayments of at least 20-25% of the value of the home.  But banks' desire to conservatively appraise values (which I do not necessarily oppose, to be clear) often mean that, as a practical matter, buyers need 50% of the home price in cash.

Buyers' continued inability to finance home purchases threatens to become the biggest factor causing prices to continue to fall.  Nevertheless, several other major factors (foreclosures in the pipeline, a glut of homes which buyers hope to place for sale, the general economy) also are weighing on prices.  Until all of these factors are resolved, the residential real estate market may be in for a prolonged decline.

Eric Dixon is a New York lawyer.







 

Wednesday, September 14, 2011

ABC Weather Gal Admits Fake Rape Attempt Claim

A mentally-unstable former ABC weathercaster has pleaded guilty to filing a false report in falsely claiming she was sexually assaulted in New York's Central Park last fall.

Jones will avoid jail time under the plea deal, but remains subject to civil lawsuits from any of a variety of people who can claim to have been victimized -- and who could have been sent to jail -- by her lie.  (Crime, Politics and Policy has followed this case since it broke last December.)

Heidi Jones, formerly of WABC-TV, told cops last fall she was attacked by an assailant she described as short and Hispanic and in his 30s or 40s. The fake claim led cops to personally escort Jones around town and to look for people matching Jones' made-up description.  In fact, one innocent man was stopped and his photo placed in an identification lineup.  

Jones' plea to two misdemeanor counts should result (if accepted by the sentencing judge) in a three-year probationary sentence and 350 hours of community service -- or about the approximate amount of police manpower spent investigating her lie. This sentence pales in comparison to the years-long sentences that would be all but certain for any defendant who, matching her fake description, could have been wrongfully investigated, wrongfully convicted and wrongfully imprisoned.

It is reported that at least one man was stopped and photographed during the course of the police investigation.  It is likely that many men matching that description, and particularly those in Central Park -- in other words, people like me who train for marathons in that park -- came under unwarranted police surveillance or interrogation.

Here is what is troubling. Jones came up with a description of a criminal that she thought was plausible; in other words, being a short, middle-aged Hispanic man in New York made you a likely perp. Moreover, she had no regard for the all-but-certain outcome of totally innocent men being surveilled and perhaps arrested, or jailed.  No matter to Jones; you see, this is about her suffering (never mind the cause for that).  It's self-centeredness gone haywire, but narcissism threatening to deprive another innocent of his liberty is not a victimless crime. 

The implication is that men fitting that description are deserving, appropriate targets of a false accusation. In other words, according to this utterly dehumanizing concept, being a man makes you guilty...of something! But if you are a short, middle-aged Hispanic man, you are more guilty? This is irrational reasoning, and intolerable when it threatens to deprive innocent men of their freedom. It is a symptom of a mental dysfunction, but that does not negate the fact that this knowing, intentionally false allegation is also a crime. 

The concept that an innocent person deserves to be harmed is repugnant in our civil society. People who willingly, or with reckless indifference, harm or place in harm's way the innocent show pathological, narcissistic tendencies which cannot go unpunished.

The Manhattan District Attorney's Office should be credited for not giving this media celebrity a pass on account of her journalistic status and her gender. This was a rightful prosecution that hopefully will have a deterrent effect.

As for Jones, her future looks very cloudy. Not only is she aging badly (she is only 37 but looks at least ten years older, see the photo in this article), she should subsequently be hit with a civil suit by any of a number of people who had encounters with the police (whose activities may have been entirely blameless) on account of her lie.

Eric Dixon is a New York lawyer and veteran marathoner who runs in Central Park and fits the false description referenced above.

Are Alpha Males Healthy? New Study Suggests Not Really

An intriguing new report points to higher blood cortisol levels in alpha males as an indication of greater stress levels and that alpha males may live better, but not necessarily longer.

As a middle-aged lawyer with plenty of life experience observing the stresses on others, I help people identify, handle and overcome various severe stresses in their personal and professional lives. These stresses can be legal -- caused by lawsuits or pending or threatened government investigations which threaten to ruin your business or cause you to be found guilty of a crime and jailed.  These stresses may also be regular life events...but such events invariably involve legal issues.

Many stresses people feel can be traced to a deception or series of deceptions to which one feels or suspects one is being subject.   I have confronted and successfully unmasked some serious deceptions and I believe I am very good at unwinding and revealing both the deception -- and the deceptor (or deceiver, if you prefer) -- that may be causing you undeserved pain and suffering.

I do not practice psychiatry.  I look for real, external problems in the world around you.  I look to identify them, and then work with you to solve them for you.  I help real people, real victims.  I do not work with -- and I seek to avoid -- crazy people.  If your problem is internal -- that is, mental, or between the ears -- and you suffer from psychiatric disorders (like narcissistic personality disorder, histronic personality disorder, obsessive-compulsive disorder, hallucinations, delusions of grandeur or other delusions, neuroses, psychoses, attention-deficit disorder or other disorders that are defined with a phrase ending in the word 'syndrome'), you may wish to see a medical professional

As a lawyer, you can be totally candid with me and have the assurance that (unless you plan to commit a crime or engage in fraud) your conversation will stay totally confidential.  I also take strong professional pride in maintaining the confidences of my clients and friends.   

Disclaimer -- since I am a lawyer and we disclaim everything.  I am only a licensed lawyer and not a licensed psychiatrist, acupuncturist or quack doctor.  This means that, purportedly, I am not crazy, since I believe all psychiatrists enter that field in order to indulge their compulsion to manipulate others while getting paid for it.

Eric Dixon has been a New York lawyer since 1995 and is a 1994 graduate of Yale Law School.  Mr. Dixon may be reached at edixon@NYBusinessCounsel.com.

Monday, September 12, 2011

Bloomberg Campaign Finance Fair Game in Haggerty Trial

The inner workings of Mike Bloomberg's campaign will be subject to examination by defense lawyers for indicted Republican campaign operative John Haggerty, whose trial for grand larceny in State Supreme Court will start next week.

The Manhattan District Attorney's Office had sought to preclude defense lawyers from probing issues relating to the Bloomberg campaign. These issues may be central to the question of the propriety of any of Haggerty's alleged acts and, hence, may be instrumental in the jury reaching a verdict in a criminal trial where Haggerty risks jail time.

About the author: Eric Dixon is a New York attorney who handles election law and ballot access matters for candidates, and sensitive legal matters relating to both government and private investigations.

Eric Dixon
Eric Dixon LLC
917-696-2442

Devils In Danger of Bankruptcy

The New Jersey Devils hockey club missed a key loan payment and risks bankruptcy, according to this New York Post report

The Devils become just the latest National Hockey League team to skate on thin ice, following the New York Islanders (which backed and lost a recent arena referendum -- which I criticized) and Phoenix Coyotes (a team which has no business not being in Canada under different ownership).   Low attendance, or more accurately, the unwillingness of hockey fans to pay $100 a seat in some markets, is a prime cause of the difficulties. The unsold seats are never in the "cheap" sections. However, blame should really go to the National Hockey League's salary cap/floor scheme under its current collective bargaining agreement, reached after its 2004-05 lockout, which mandates teamwide minimum salary payments.  The floor has doubled from approximately $23 million to about $47 million since the 2005-06 season.  This mandated increase alone accounts for most of these teams' reported losses.  

The Devils' missed payment -- some would say, "strategic default" -- could be a common, if not necessarily honest, business practice or tactic to try to induce lenders to renegotiate the terms of a loan.  

The Devils' missed payment (not technically a default) endangers the financial health of the operating company -- which has common ownership with the Devils -- that operates the showpiece Prudential Center in Newark.  The arena has received significant public financing, and the operating company previously withheld payments to the City of Newark.  The initial criticisms of then-challenger (and current Newark mayor) Cory Booker about public financing of a private arena have become increasingly validated, Booker's later support for the arena notwithstanding.

Many of the Prudential Center's tenants have been plagued by spotty, or downright low, attendance.  Eyewitness observations easily confirm a wide disparity between actual and announced crowd totals for all Prudential Center sports events: the Devils, the New Jersey Nets and New York Liberty, and even the now-defunct New Jersey Ironmen of the Major Indoor Soccer League. 

(In my opinion, the soccer club was just a way for the operating company to have more "event dates" to give low-show jobs to Newark residents to work an empty arena, and otherwise to pretend to be active.  The Ironmen claimed to have drawn about 4,000 fans per game; however, for one game I counted -- literally -- approximately 2,100 when the announced crowd was about 3,000.) 

The Devils' missed payment may be a negotiating tactic, or a sign of significant financial distress caused by overleverage.  In this economy, this should sound familiar.

Eric Dixon is a New York attorney who handles crisis situations and sensitive legal matters including investigations.  Mr. Dixon is also a former hockey season-ticket holder and comments regularly on the economics of professional sports.


Saturday, September 10, 2011

Show Trial for Haggerty? Cover-up For Bloomberg?

Are Manhattan prosecutors hiding something about New York Mayor Mike Bloomberg's political operation during his successful third-term re-election bid in 2009?  Are these prosecutors hoping to curry favor with a deep-pocketed soon-to-be-ex-mayor in order to advance their post-prosecutor legal careers?

These and other questions may be answered during an unusual, and very curious, criminal campaign finance trial of Republican campaign operative John Haggerty scheduled to begin this upcoming week in Manhattan Supreme Court. 

The charges against Haggerty are for grand larceny.  Allegedly, he charged the Bloomberg re-election campaign about $1.1 million for get out the vote efforts, but the money was paid to a state Independence Party account and then transferred to Haggerty. 

There is the implication -- and we'll see just how bluntly it is stated -- that Haggerty ripped off Bloomberg by either grossly overcharging his campaign, or under-delivering on the promised services.  However, there are myriad defenses that easily come to mind: the services are hard to quantify, their effectiveness (actually getting your presumed supporters to the polls) even harder to measure, the guy (Bloomberg) did win after all, and an eleventh-hour contract for election day services does by necessity imply a "fire drill" crisis for which a premium rate can be charged. 

Such "last-minute" or "emergency" attention does command premium prices.  It should almost be expected.  And I'm sure that if you call Bloomberg LP for a new database on an expedited basis, you'll get an expedited, super-high price quote.

One of the real questions is why it seems that there was no complaint from Bloomberg as to the overcharge until intrepid investigators dug into Bloomberg campaign finance filings made well after Election Day 2009.  It seems -- at least publicly, to be fair -- to wonder how valid any Bloomberg grievance (whenever it was made) really is.  Perhaps the Bloomberg campaign, however relieved for winning, was privately furious with the arrangement and/or the results but remained publicly silent.  This is both possible and plausible.  It would also be good strategy; there is little need to air dirty laundry publicly nor to get embarrassed. 

But other questions and possible explanations remain:  Was the Bloomberg campaign's professed indignation just a cover-up to hide their wink-and-nod complicity with an illicit deal? I'm sure that when investigators inquired of Bloomberg associates, they were met with the legendary Casablanca reaction of the corrupt detective -- "I'm shocked."  

There are other troubling issues.  This case seems to be an attempt to transform certain business behavior, done during a political campaign, into a felony.  Perhaps the only crime here was Haggerty's failure to use (or the Bloomberg campaign's, for that matter) a competent lawyer to draft his agreements with the Bloomberg campaign.  There ought to be some trepidation in bringing cases which, by being brought, transform civil administrative violations of the campaign finance law into felonies with criminal punishment looming. 

The political overtone to this investigation, prosecution and trial is most troubling.  Politics is intertwined in every aspect of the hard facts of the case.  However, politics also infects all the players.  The Manhattan District Attorney is an elected post.  The judges on New York State's Supreme Court -- before which this case is to be heard -- are also all elected.  Many of the judges' clerks are de facto political appointees.   This congruence of factors makes one question whether the outcome of this case will rest on the legal merits, the facts, or on a political favor that one owes to another.

Perhaps this entire investigation ought to have been handled by the U.S. Attorney's Office. 

Eric Dixon is a New York lawyer who investigates complex matters.  Mr. Dixon is also an expert election lawyer on matters of ballot access.   

Tuesday, September 6, 2011

Record Summer for NYC

New York City just finished a record-breaking climatological summer (June-July-August).

The National Weather Service confirms that Central Park registered its wettest summer ever with 25.23 inches of rainfall. More impressively, the record was set with below-average rainfall in June and July (6.28 inches). August saw nearly 19 inches fall, of which only 6.87 inches were attributable to Tropical Storm Irene.

Ironically, Irene-related rainfall was greater the farther away from its center, which passed over New York City.

Temperatures were above normal in all three months. July 2011 -- which saw a 104 degree day plus humidity on Friday, July 22nd -- was 3.7 degrees above normal.

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

Thursday, September 1, 2011

No Retrial For Barry Bonds

Federal prosecutors will drop three perjury charges against Barry Bonds on which jurors could not reach a verdict in a trial earlier this year.

Bonds was convicted of and awaits sentencing for obstruction of justice.

A link is available at http://www.mercurynews.com/breaking-news/ci_18797654?nclick_check=1 from the San Jose Mercury-News.

Perhaps this will save scarce federal resources for more pressing investigations. Although perjury and obstruction of justice are serious crimes, there are some instances where it seems the charged crimes are a pretext for the real motive behind an investigation; the motive may be star envy or other jealousy.

(Eric Dixon is a New York investigative lawyer.)

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

Einhorn Pulls Out of Mets Deal

The New York Mets are at least one step closer to bankruptcy.

The rumored deal between beleaguered Mets owners Fred Wilpon and Saul Katz, and hedge fund manager David Einhorn, is off after several attempts to restructure the outline of a deal.

Wilpon and the family's Sterling Equities LP business have been targeted in a clawback suit by the bankruptcy trustee for the former businesses of uber-crook Bernard Madoff. The trustee has at various times sought to reclaim between $300 million and $1 billion in net gains from Wilpon, family members and affiliates. This legal exposure -- in addition to any possible criminal liability -- threatens the Wilpons' ability to fund the Mets' ongoing operations.

A new investor will have to agree on the outline of a deal, do the customary business and financial due diligence, and finalize the deal. These steps may take long enough that it is doubtful they would be complete in time for the start of the free agency negotiating period in November.

The chances of Jose Reyes staying with the Mets have just declined.

(Eric Dixon is a New York lawyer and strategic analyst.)




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