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Friday, June 29, 2012

NJ Foreclosure Bill Veto Leaves Door Open For New Attack

In a temporary victory for New Jersey homeowners, Governor Chris Christie late Friday afternoon vetoed the odious Residential Foreclosure Transformation Act. However, a careful reading of the Governor's late Friday document dump shows that homeowners have every reason to fear that Christie will support this bill at a later time when politically convenient and when no one is watching.

Homeowners and taxpayer groups must remain on the highest alert -- here's why.  Christie's written comments explaining the vetoes of this and other bills, issued outside the regular appropriations process, make clear that the vetoes "are not a comment on the merits of these legislative initiatives." This language indicates that Christie may reconsider -- on the merits -- this horrible bill if resubmitted later in the 2012-13 legislative session.  New Jersey homeowners must remain very vigilant, and wary of the Governor, who may yet sign this bill and deliver to homeowners his own "drop dead" message closer to the 2013 election.

The basis for this concern is clear.  Given the opportunity to attack this bill and use his typically scathing commentary, Christie did not merely decline.  Christie took pains to clarify that he has not offered an opinion on this bill on the merits.  This is the type of language that makes one believe Christie may actually sign this bill (or a similar reincarnation) if passed -- and to do so closer to the 2013 election when it may become politically attractive to do so to get Democratic and progressive votes on the basis of such misguided compassion. (But compassion for homeowners? No.  This remains a constituency whose votes Christie is taking for granted.)  In addition, the timing of the veto and Christie's prior refusal to make any comments about the merits of this bill add to the evidence from which one may infer that Christie does not disagree with the bill's central concept of using taxpayer-guaranteed bond revenue to have the State purchase and convert foreclosures into 30-year deed restricted affordable housing or other social welfare centers.

This bill (Assembly bill 2168, Senate bill 1566) had been heavily and persistently supported by redistributionist Democrats looking to convert foreclosures into affordable housing and other uses for rehab centers, halfway houses and shelters. However, tea party and conservative groups including Americans For Prosperity and Eagle Forum, and this commentator, were stridently against the bill fearing its 30-year deed restriction after conversion could crash and then prevent any recovery in home prices. In addition, some Democrats in each house bucked party leadership. The bill passed the State Senate with the bare minimum necessary for a majority.

ObamaCare Tax Is Uniquely Coercive Mandate; Extortion By Any Other Name

The majority opinion by Justice John Roberts in NFIB v. Sebelius (the ObamaCare case) ignores the coercive nature of the ObamaCare tax.

Roberts, writing for a narrow 5-4 majority (with Justices Kennedy, Alito, Scalia and Thomas dissenting), argues that the individual mandate is constitutionally permissible because it is the result of the federal government's taxation power and right to encourage certain behavior such as the purchase of health insurance.  However, the ObamaCare tax carries a powerful disincentive for not buying: a tax penalty on purchasers with incomes over a set level.

The ObamaCare tax sets a new and alarming precedent.  All other taxes are levied on people because of their activity, what they do.  These taxes share the uniform characteristic of being avoidable should one simply avoid participating in the activity that triggers the tax (e.g., buying cigarettes).  This tax will be levied on people because of their inaction.  The tax thus seeks to have a compulsory effect, to induce upon pain of penalty the purchase of health insurance, even at a high or unaffordable price or any price, for that matter.  And as for its avoidability, the only ways to avoid the ObamaCare tax are to have household income below a certain threshold (to be determined), to leave the country, or to die. 

In essence, this is an oxygen tax -- if you breathe, you are subject to the tax.

Roberts' opinion is troubling because it turns the principle of enumerated powers on its head and gets it backwards.  Roberts writes at page 41 of the opinion that "[t]he Constitution does not guarantee that people may avoid taxation through inactivity." The implied meaning is that there is no Constitutional right to avoid taxation, period; further, it implies that taxation is a natural state of mankind to which we are subject.  Finally, it implies that the Founding Fathers' failure or oversight in not declaring an enumerated right to the people to avoid taxation through inactivity (meaning by extension that one may be taxed merely for existing or being) means that the State -- the federal government -- has the power to impose such a tax.  This is a backwards analysis. 

The concept of enumerated powers is one which limits the power of the federal government, such that it has only those powers enumerated in the Constitution, and everything else is a power reserved to the States or to the people.  It is a limiting principle and limits government power.  Roberts follows the reverse or opposite of this principle, implying that the lack of an enumerated power or right of the people to avoid a tax through inactivity necessarily subjects them to an expansive, virtually limitless power of the federal government.  Roberts thus uses the limiting concept to limit the power and rights of the people -- the very opposite approach to what the Founding Fathers intended.

So much for Chief Justice Roberts being an originalist and strict constitutionalist.

Eric Dixon is an investigative attorney and Yale Law School graduate who is admitted to practice in both New York and New Jersey.



Wednesday, June 27, 2012

Foreclosures Cause Only Temporary Price Drops For Neighbors

New Jersey legislators backing the ruinous, wealth destructive and discriminatory Residential Foreclosure Transformation Act -- one of the very worst pieces of legislation to pass any state legislature in a long time -- are dead wrong in trying to deal with the housing price crash.  The evidence comes from studies by the nation's various Federal Reserve Banks which conclude that foreclosures' adverse effects on surrounding properties' values are only temporary, and that (surprise, surprise) many state laws seeking to restrict, deter or prevent foreclosures are only worsening the housing crisis. 

Several studies surveyed by the Atlanta Fed in 2010 suggested that "foreclosed properties sell at a discount, likely because such properties are in worse condition...[and that] very nearby foreclosures appear to depress the sales prices of nondistressed properties although this effect decays rapidly in physical distance and time." In other words, the negative effect of foreclosures on the home prices of nearby homes is only temporary.  By contrast, New Jersey's Residential Foreclosure Transformation Act (which Governor Christie has yet to sign or veto) on surrounding home values will cause a permanent and extreme loss in property values, because that bill will allow the conversion of residential real estate into deed-restricted low-income or affordable housing or other properties for special social welfare uses, so that the properties cannot be converted back into "regular" residential real estate until 30 years after their conversion after being bought in foreclosure!

The Act passed the New Jersey State Senate Monday afternoon (21 for, 18 against, one abstained), and a similar bill passed the State Assembly hours later (45 for, 33 against, one abstained).  In each house, two Democrats joined the unanimous Republican caucus in voting against the bills.  The Assembly will consider the Senate version Thursday afternoon in its last session before the legislative summer recess.

Eric Dixon is an investigative attorney admitted to the Bar of New York and New Jersey, and is on the Board of Directors of the independent economic think tank the Financial Policy Council. 

Saturday, June 23, 2012

New Jersey's Foreclosure Bill Discriminates Against Minorities

The New Jersey Legislature is scheduled to vote on the Residential Foreclosure Transformation Act (A.2168 / S.1566) Monday. Governor Chris Christie, who rarely holds his tongue, has been strangely silent on this bill and may be willing to declare war on New Jersey homeowners and sign this bill in exchange for getting his budget (which is bigger than the Democrats') passed.

( UPDATE Sun. 6/24 8AM: The only press coverage this weekend is Sunday's article in the Northwestern New Jersey newspaper, the New Jersey Herald. )

But stranger than Christie's muted support is the support from most Democrats.  Many Democratic representatives come from districts which trend towards lower-income and working-class, minority populations.  Yet this Act stands to hurt minorities, the poor and the working class the very most.  While middle-class and upper-class suburban homeowners will risk major wealth destruction, the proportion of total wealth that poor homeowners stand to lose from the Act may be nearly 100%.  Poor and working-class homeowners --- many of whom are from minority, underprivileged backgrounds and worked their way up tirelessly into homeownership -- will be most vulnerable from this Act.

That's because the bill allows the state to swoop in and convert formerly private property falling into foreclosure into affordable housing. Assuming that the state will seek to "help" the greatest number of people asserting a "need" for "affordable" housing (translation: they want free housing paid for by you and me), the state should seek to buy up the greatest number of foreclosed properties.  Further assuming a finite amount of available funds, one would expect the state to concentrate on the cheapest homes which are in turnkey, move-in condition (and don't need rehabilitation).  It stands to reason the cheapest buys would be in the cheapest markets and neighborhoods, tending to be the areas most populated by the poor and minorities. 

The results of the Act will be to disproportionately affect poor and minority areas.  That is because the cheapest or most cost-effective conversion policy under the Act will concentrate foreclosure conversions in poor and minority neighborhoods.  The first result will be to concentrate new affordable housing in these areas -- with the perverse effect of displacing some poor and minority homeowners who struggled honesty to maintain their mortgage payments with other poor and minority homeowners who will be able to buy homes at a serious discount to their prior value.  The second result will be to concentrate halfway houses, rehab centers and other social welfare programs run by nonprofits -- and the often-undesirable people who use these services -- in these same poor, minority areas.

What does that do to home values in these poor, minority neighborhoods? Of course, it drives them down further, obliterating the remaining home equity of homeowners and throwing more and more in these communities well underwater on their mortgages. If this isn't a financial persecution of minorities, I don't know what qualifies as one.

Some Democrats will claim the Act will help the needy.  We already have heard about how all these nonprofit social welfare programs help the poor inner-city population, and that this Act will help those programs serve the needy.  This is nonsense. First, these programs exist -- for the profit of their organizers. People are making a living -- and a profit, thank you -- off these nonprofits. (Don't believe me? Just look at what happens when you remove the state grant money from these nonprofits. No one does any fundraising. This is a complete system of relying on government handouts.) And most often, these nonprofits get their funding, all their funding, from the federal government, state government or county government grants. Pure pork. Pure waste.  Any benefit to the community is incidental.  Then consider that these nonprofits will buy properties from the state, after which the home value death spiral will accelerate (as I've explained before in writing that the Act will be the greatest single manmade act of wealth destruction to ever hit New Jersey).

The Act will have a clear disproportionate and discriminatory effect upon minorities.  A discriminatory effect alone is sufficient to state a claim of a civil rights violation and make a constitutional challenge to a law.  The Act is legally suspect and constitutionally challengable.

The Democrats seem willing to sacrifice their inner-city loyal constituents to financial ruin in order for banks to make handsome fees from originating and servicing mortgages on converted foreclosures and for real estate agents to make commissions on sales. Note that the major banking and real estate lobbies support the Foreclosure Transformation Act.  But homeowner groups, taxpayer groups and the Tea Party are vigorously against it. 

It turns out that on this crucial legislation, the interests of minority homeowners and small business owners -- the bedrock of many working-class and poor communities -- are finding their strongest support in the Tea Party.  Not the Democrats. And not Governor Christie. Remember that in the 2013 New Jersey elections.

Eric Dixon is a New York lawyer, also admitted to practice in New Jersey.  Mr. Dixon has testified before the State Assembly Appropriations Committee against the Act.


Thursday, June 21, 2012

New Jersey Admits Foreclosure Bill Is Fiscal Disaster

The New Jersey Office of Legislative Services reports that the disastrous New Jersey Residential Foreclosure Transformation Act, up for a vote Thursday in the State Assembly (A.2168) and Monday in the State Senate (S.1566), will have an "indeterminate fiscal impact on the State and certain local governments."  Just as Steve Lonegan of Americans For Prosperity said in his testimony Monday before an Assembly Appropriations Committee.

I have previously written about the Act's potential to destroy homeowner wealth, and New Jersey Governor Chris Christie's apparent and suspicious refusal to announce the Act is dead on arrival.  I testified in opposition to the Act on Monday before the Assembly Appropriations Committee. Several Republican assembly representatives have been vocal in their opposition to the bill. 

Updates on these bills' status in the New Jersey Legislature will be provided as developments warrant.


Monday, June 18, 2012

NHL Plans To Take Over New Jersey Devils

As predicted by me in this blog months ago, the New Jersey Devils are facing possible bankruptcy and an imminent takeover by the National Hockey League due to its ownership's inability to service (i.e. pay) or refinance a staggering debt.

The Devils regularly lose money during their regular season operations and have common ownership with the Prudential Center.  The debt financing for the arena is also considerable.

If the NHL takes over the Devils, the NHL will then be running and financing two franchises, as the Phoenix Coyotes are  still under league control after the league bought the club out of bankruptcy in 2009.  The same fate awaits the Devils.

Stay tuned as developments warrant updates...



Friday, June 15, 2012

Obama's War on American Workers

The Obama Administration just made it harder for young Americans to get a job.

In a policy change just announced, the Obama Administration will stop deporting, and will grant work permits to, young illegal immigrants who came to this country illegally but who have since stayed out of trouble.

This gives a green light to employers to hire young illegals -- instead of young Americans.


Wednesday, June 13, 2012

Christie Hints At War On New Jersey Homeowners

Republican rock star Chris Christie is hinting he is ready to throw New Jersey homeowners under the bus to pander to "moderate" and liberal voters in that state, and elsewhere.

The New Jersey Governor's conspicuous refusal to offer any opinion on -- never mind promise to veto -- the pending, disastrous New Jersey Foreclosure Transformation Act strongly indicates he will sign this bill.  By so doing, Christie will destroy the remaining real estate equity of many New Jersey homeowners -- particularly the middle-class, working-class and first-generation homeowners -- stifle future value appreciation and condemn many to generations of holding mortgages whose remaining principal will in all likelihood remain above the new, artificially depressed values of their homes.  Many, if not most, New Jersey homeowners will be condemned to a form of real estate feudalism under which their homes will remain "underwater" and virtually unsaleable, while Christie and other political opportunists seek the votes of a permanent underclass of people waiting for, expecting and feeling entitled to the next government bailout.

The suspiciously short-on-details form letter -- the equivalent of a "screw you" letter -- from the Governor's office follows:
Office of the Governor
Office of Constituent Relations
Post Office Box 001
Trenton, New Jersey 08625-0001
 
GOVERNOR CHRIS CHRISTIE ELECTRONIC RESPONSE

June 13, 2012


Mr. Eric Dixson

Dear Mr. Dixson:
 
Thank you for writing to express your opposition to Senate Bill No. 1566 and Assembly Bill No. 2168, also known as the New Jersey Residential Foreclosure Transformation Act.  I appreciate hearing your views on this issue.

As you may know, A-2168 has been referred to the Assembly Appropriations Committee and S-1566 is in the Senate Budget and Appropriations Committee.  You may also wish to contact your legislative representatives to make them aware of your concerns.  If you are unsure of which legislative district you reside in or who your legislators are, you may obtain this information from the New Jersey State Legislative website, www.njleg.state.nj.us.  If this legislation passes both Houses of the Legislature, I will consider carefully all the comments received on this issue.  

Thank you again for writing.  Best wishes.
 
Sincerely,

Chris Christie
Governor

Privacy Notice: This e-mail address, e-mail message, and any attachment to this email message contains information that is privileged and confidential from the State of New Jersey, Office of the Governor.

(PS: Note how my name is misspelled.  Compare with the spelling in my original letter to the Governor, which now follows.)

ERIC DIXON'S ORIGINAL LETTER TO GOVERNOR CHRISTIE

To the Governor:

You should announce this legislation is dead on arrival.  Here's why.  

This legislation, the New Jersey Foreclosure Transformation Act (A2168/S1566, aka the Home Equity Liquidation Legislation), will be the biggest and worst means of wealth destruction ever to come out of Trenton (or at least, ever since the infamous Mount Laurel State Supreme Court decisions mandating that each municipality -- no matter its size or wherewithal -- provide low-income housing).  It will be the equivalent of a financial asteroid striking Earth, in this case smashing New Jersey homeowners.

Under the obligatory benign-sounding objectives tailored to be impervious to opposition, the Act will have the State use homeowners' tax dollars to convert neighbors' homes to low-income housing or housing for so-called "special needs" purposes (including shelters for the homeless and those with HIV/AIDS) and, even worse, to restrict their deeds so that such homes remain designated for low-income or special needs for 30 years.  The Act will create a new state agency to subsidize low and moderate-income buyers' home purchases (which is patently unfair to everyone else who bought equivalent homes on their own) and rent out other homes.  It will infuse de-facto housing projects and homeless shelters within suburban neighborhoods full of people who strove, scrimped and saved, permanently crashing for generations the values of the purchased properties as well as those of everyone else around them.  

The legislation will succeed in stabilizing neighborhoods -- after first destroying the values of all homes and ruining once-desirable suburban areas. Once ruined, the Act will stabilize the neighborhoods. Mission accomplished!

But it gets even worse. The damage will not be spread equally. Just look at who is most vulnerable to this wealth destruction. The Act has an escape clause that allows municipalities a 45-day window within which to purchase these foreclosed properties. Wealthy towns like Mendham (Governor Christie's hometown) likely will be able to buy and rescue any properties from such uses, and their residents will assuredly take all necessary measures to keep the projects and shelters out.  Rest assured, the "rich" won't be affected by this Act.  They'll make sure to buy out these foreclosures -- if they don't flee the state first.

However, many New Jersey towns do not have expandable tax bases.  Old and small towns, particularly in the northern and urban parts of New Jersey, have often maximized their property tax ratables because, well, God ain't creating more land. These towns also commonly have strained budgets. These towns, so often populated by the middle and working classes, would be hard pressed to rescue their neighborhoods from the character-destroying effects of this "foreclosure transformation act."  As a result, the remaining wealth of the first generation of homeowners, the responsible and hardworking neighbors among us who so often bought their homes "on their own" and whose modest wealth is often concentrated in their homes, will be extremely vulnerable to destruction.  

Again, as is so often the case with ruinous legislation, this Act targets for financial persecution our middle and working classes, and a large segment of our ethnic and racial minorities who, so far, have succeeded through hard work and prudent savings in making a foothold in suburbia.  These classes, representing some of our most industrious and self-sufficient citizens, would be the prime victims of an unprecedented wave of wealth destruction -- and all in the name of "helping" so-called "victims" of the housing bubble and foreclosure wave.

This Act sends a chilling and dangerous message.  This legislation will defeat the efforts of all the responsible homeowners who didn't try to "game" the system.  It will allow the state to choose your neighbors and, by dictating the price it will pay for foreclosures, to set the new value of your home.  If the Foreclosure Transformation Act is passed, state and local governments, not you, will determine how much your home is worth and who your neighbors will be. Make no mistake about it, the state will set its price for what it's willing to pay to buy a foreclosure.  And this will be done with the regard of the "poor" who supposedly "need" so-called "affordable" housing.  It won't be done with any regard for the home values of longstanding homeowners, who will suddenly face the danger of having undesirables in their midst. The Act will effectively confiscate the remaining home equity for most homeowners, which remains for most people their largest source of wealth. Worse, it will encourage a massive flight out of state as homeowners rush to sell, in turn threatening a new housing price crash.

Of course, the Act's proponents cite the altruistic motives of providing "affordable" housing to low-income residents and stabilizing neighborhoods. These are code phrases for turning bucolic neighborhoods into de facto "mixed" housing where newcomers -- already receiving numerous government subsidies -- will pay barely a fraction of what their new neighbors have and will pay for their mortgage payments. But then consider the specter of having drug users, the homeless and various other undesirables roaming your previously-pristine street, the street for which you sacrificed for years to get that special home, and you can imagine how quickly homeowners' peace of mind will be destroyed in addition to their wealth.

Two generations have been trained to believe it to be politically incorrect to talk about some people being undesirable neighbors.  However, everyone who rents or buys a home makes that exact judgment. People choose where to live and often strive to buy the best home they can afford.  Some areas are more desirable than others. Location plays a role, but so often it is also the "type" of people who are one's neighbors.  But there is one constant: a free people are allowed to select where they live. For better or worse, that is the essence of freedom.  There is nothing racist, sexist or classist in wanting to choose among whom to live.  This is a divine right, the essence of freedom.  For those of us who resisted or rebelled against the concept of arranged marriages, think how repugnant arranged neighbors will be. Conversely, the essence of a totalitarian regime is the state's control over where and among whom you shall live; come to think of it, that's what you face in prison, and indeed the Foreclosure Transformation Act will turn New Jersey from the Garden State into the Prison State.

Get ready for the Act's sponsors to demonize opponents, like me, who object to any government plan to dictate how much my home is worth and who my neighbors will be.  Expect the Act's supporters to impute the vilest of motives to those people who have the audacity to believe that being hardworking and striving to live in a neighborhood they consider nice means that they can choose where and among whom to live.  

The right to property was considered among the most sacrosanct by our forefathers.  This Act will destroy the right to property, by destroying and permanently depressing its value.  Worse than misguided efforts to redistribute wealth, this legislation will transfer it out of state.  Neighboring states' real estate will grow in value, as the value of New Jersey real estate crashes and people flee to new places where they can buy homes without fear that the government will suddenly plop de-facto housing projects or drug rehab centers next door. 

This is worse than eminent domain.  At least in eminent domain lip service is paid to the municipality's efforts to improve an area.  This Act asserts a desire to help the underclass, the homeless and other classes, with a depraved indifference to the rights of their new neighbors who will pay -- in every way imaginable -- for this misguided altruism.

Let's call this Act for what it is: a plan to destroy your home equity and mine. The asserted benefits, to others we already subsidize so they can live among us at a fraction of the cost we shouldered, are almost inconsequential.  This Act is nothing less than an open declaration of war upon the homeowner class, the middle class and the working class.  It is state-sanctioned economic warfare, and quite possibly even more ruinous than ObamaCare.


Eric Dixon

UPDATE 7/10/12: Two weeks after the veto, Christie's press office gets around to issuing to me a form letter response which explains the reason behind his June 29, 2012 veto of the Foreclosure Transformation Act (S.1566).  He objects to the bill on budgetary grounds. Notably, he makes no objection on policy grounds.  That is cause for concern should this bill be resubmitted.  And, once again, Christie's press office gets my last name wrong.  See for yourself.



Office of the Governor
Office of Constituent Relations
Post Office Box 001
Trenton, New Jersey 08625-0001

GOVERNOR CHRIS CHRISTIE ELECTRONIC RESPONSE

June 13, 2012

Mr. Eric Dixson

Dear Mr. Dixson:

Thank you for writing to express your opposition to Senate Bill No. 1566 (S-1566), also known as the New Jersey Residential Foreclosure Transformation Act.

Even though this legislation sought to appropriate state dollars, this bill was proposed outside of the Fiscal Year 2013 Appropriations Act.  Unfortunately, separating these bills from the Appropriations Act was a legislative attempt to circumvent the tough choices required to meet the constitutional obligation of passing a balanced budget.  Some legislators persist in the convenient thinking that a spending bill or a tax increase passed outside the budget is not really taxing and spending as usual.  This year, the bills passed by the Legislature outside the budget would have added more than $275 million of government spending for the coming fiscal year.  I am rejecting the Legislature's attempt to add hundreds of millions of dollars to the budget without identifying offsetting reductions as required by our State's Constitution.  Whether one feels this legislation is laudable or not, we can only spend the dollars for which we account.  For this reason, I vetoed S-1566 on June 29.

          These choices are not easy ones.  Years of fiscal irresponsibility from politicians from both parties led to New Jersey's economic downturn and when I took office, I promised to make the tough choices necessary to bring fiscal stability back to our State.  Our budget reflects these values and continues our return to fiscal discipline and controlled spending, while focusing on funding critical priorities that speak to the needs of all New Jerseyans.    

Please know that I am committed to sound fiscal policies that will continue to dig us out of this hole and get our state back on track.   It's what we need, what future generations deserve, and is my solemn pact with the residents and taxpayers of New Jersey to never return to the kind of reckless spending that devastated our state's economic health in years past.

Thank you again for writing.  Best wishes.

Sincerely,

Chris Christie




Monday, June 11, 2012

Corzine's Perjury Trap With MF Global Testimony

Fox's Charles Gasparino speculates on the possibility that former New Jersey governor / Goldman Sachs chief executive / MF Global chief executive Jon Corzine will be charged criminally with perjury (aka false statements, punishable under Title 18, Section 1001 of the United States Code) for his testimony before Congress last year about the events leading to the implosion of commodities trading firm MF Global.

Naturally, I warned of the risk Corzine faced, on the very day of his testimony.  

Sunday, June 10, 2012

Rajat Gupta Won't Testify In Insider Trading Case

In a surprising development, former McKinsey chief executive officer and Goldman Sachs director Rajat Gupta, on trial for insider trading, will not testify in his own defense, according to a letter from his defense lawyers to presiding judge Jed Rakoff Sunday night.

This is a stark change from Friday, when Gupta's lawyers asserted to Judge Rakoff that it was "highly likely" Gupta would take the stand in his own defense.

Perhaps Gupta reconsidered various factors, such as those I explained earlier, which defendants like himself must weigh when deciding whether or not to testify.


Saturday, June 9, 2012

Goldman Director Gupta Likely To Testify

A federal white-collar defendant testifying in his own defense is about as rare as a lunar eclipse. We're about to see one next week.

The attorney for Goldman Sachs director Rajat Gupta told Manhattan federal district judge Jed Rakoff yesterday that it is "highly likely" that Gupta will take the stand.  This is very rare.  Most defendants do not testify in their own defense.  Chalk one up for Gupta in either the guts category...or the hubris category.

Sometimes a defendant is his own best witness.  At the very least, a defendant who testifies -- and gets convicted anyway -- can avoid second guessing his or her own fear of testifying (which in reality is the fear of the hostile government cross-examination).  Such a defendant will go to federal prison but at least not be saying "I could've, I should've, and I didn't."  The ability to avoid self-doubt means something, given the government's success in prosecuting people

The standard advice to people who get investigated or prosecuted is to say nothing.  At least, not until it counts, before a judge and jury.  This way, your comments to investigators in interviews or "proffer" sessions -- which according to FBI policy are not recorded -- cannot be taken out of context, misinterpreted or misreported.  Just ask Martha Stewart.  (Note: You read this right.  This means a defendant has to assume the competence, accuracy, credibility and honesty of the government agent taking the notes of your statements.)

A defendant who testifies also gets to define himself or herself.  A defendant who is silent gets "defined," for better or (much more likely) for worse, by the witnesses chosen to take the stand by the government.  Some government witnesses are often not very credible characters.  You can imagine exactly how bad the government believes to be the people it chooses not to use as trial witnesses.

On the other hand, defendants who testify may get punished. A defendant who is found by the trial judge to have been less than credible, or to have lied on the stand, may receive two extra "levels" on the federal sentencing guidelines matrix.  More levels means more time.  The judge who found a defendant to have lied on the stand has the power to hand down a stiffer sentence to a convicted defendant.  These are all things to consider.

Eric Dixon is a New York investigative lawyer, political consultant, strategic analyst and radio talk show host. 


Friday, June 8, 2012

Fifth Avenue Preps for Puerto Rican Day Parade

Fifth Avenue doorman buildings facing Central Park customarily prepare for the annual Puerto Rican Day Parade like homeowners along the Gulf of Mexico prepare for an oncoming hurricane. Plywood covers the front doors, lobby windows and first-floor windows of these buildings, while sidewalk gardens are surrounded by protective moats.  As for the people -- and their pets -- most evacuate to the country, i.e., the Hamptons.  Or Bermuda.

Summer in Gotham is parade season, and there is no more festive nor more popular -- or infamous -- parade than the Puerto Rican Day Parade.  It is, however, time to recognize this particular parade's exaggerated and no longer warranted reputation for collateral damage to properties along its route.  The vast majority of paradegoers are civil, polite and just flat out proud.  It is a distinct minority that cannot handle its alcohol, and which gets out of control.  It is no different than the St. Patrick's Day Parade, which routinely features well-under-aged teenagers who are so drunk as to be virtually catatonic, or the Gay Pride Parade in which many revelers express libertine sexuality without requiring one ounce of alcohol to fuel their emotions.

It is time that the Fifth Avenue nouveau riche stops treating Puerto Ricans of this city like they were Hurricane Katrina.  

Friday, June 1, 2012

Johan Santana Throws No-Hitter For New York Mets

Johan Santana tossed the first no-hitter in the New York Mets' 51-season history Friday evening.

The accomplishment helps define a franchise.  The Mets have had great pitchers: Nolan Ryan, Tom Seaver, Jerry Koosman, Jon Matlack, Dwight Gooden, Bob Ojeda, Sid Fernandez, Ron Darling, David Cone, Bret Saberhagen, Al Leiter, Mike Hampton, Pedro Martinez, even young prospects who flirted with no-hitters like Octavio Dotel.  But none finished what Johan Santana started and completed tonight.


Lawyer Help Wanted Ad - New Jersey

So who's saying there's a recession in the legal profession?  I just saw this help wanted ad.

LAWYER WANTED - JUDGE OPENING

Governor of NE State w/ YouTube following seeks Assoc. Justice to hear arguments, write opinions. Must be team player, hardworking, creative. No courtroom exp. or constitutional background necessary. Morris County GOP a +.  Sal. + pension. If interested send resume to: C. Christie, Governor's Office, Trenton NJ.

Obama Closer To Recession

April jobs data were just released showing a paltry estimated 69,000 nonfarm jobs were created in April. Official unemployment went up from 8.1 to 8.2 percent. Even with the government's rosy assumptions, the numbers can no longer be massaged. This indicates the real truth on the ground is quite bad.

But you already knew that.

http://www.cnbc.com for more coverage.

Eric Dixon
@dixonstrategy

RINO New Jersey Judge Nominee Harris Voted Down

New Jersey Supreme Court nominee Bruce Harris was voted down in committee Thursday, killing his chance to be named to the state's highest court.

Harris was voted down 7-6 by members of the State Senate Judiciary Committee.  This is a major defeat for New Jersey Governor Chris Christie, who was optimistic that Harris would be confirmed as early as the morning of the hearing.

I testified in opposition to his nomination, not because of his personal background (really, who cares that he's a gay black man?) but because of both his lack of courtroom experience and the presence of many, many much more capable and accomplished attorneys in the State of New Jersey.

In short, Bruce Harris is not the best man for the position.

You can hear my testimony by clicking on this link (look for the 10:00 am, May 31st State Senate Judiciary Committee hearing and load the audio; as its the full Harris hearing it can be interesting, but my testimony and subsequent questioning starts at the 3:44 mark).   

FOR REFERENCE: My prepared remarks on the Harris nomination follow:

My name is Eric Dixon.  I have been a New Jersey resident and member of our State Bar since 1996.  I am here today to speak in opposition to the nomination of Mr. Harris.  My reason is simple: his professional credentials mirror my own, and I would never purport to be qualified to be a Supreme Court Justice.

Both Mr. Harris and I graduated from Yale Law School. He graduated in 1992.  I graduated in 1994.  Both of us became transactional attorneys.  But that's where the similarities end.  The differences in what we did with our education will show that Mr. Harris is not qualified to be a Supreme Court Justice.

During every stage of an attorney's career we have opportunities to get courtroom experience, whether it is through pro bono work or one's own business generation.  When I was a junior attorney doing public offerings and venture capital, I worked at firms which did not give me the chance to go to court; for that I had to take my own initiative.   During my career I have represented about two dozen candidates as an election lawyer – several of which I represented in court and won cases to keep them on the ballot.  I have investigated complex frauds, negotiated complex transactions and become an advocate and regular commentator on constitutional and policy issues. 

We don't hear Mr. Harris doing any of these things to develop courtroom experience or a constitutional philosophy. He is, according to my research, a cipher, saying nothing on the record on those issues. While I have more courtroom experience than Mr. Harris, I would never claim that I am prepared to be a judge, even if the Christie Administration considered me qualified. Bruce Harris is a smart and highly educated man, but he is not ready to sit on the Supreme Court.   

Other assorted coverage of the Harris hearings, my testimony and the Republicans' reaction to it:

Paul Mulshine's running blog and opinion column Thursday on NJ.com.

The Star-Ledger's running commentary, calling me out for giving the most novel opposition (see 2:13 note).