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Wednesday, October 31, 2012

The Obama/Christie Money Pit: FEMA as QE4 For Shore Rebuild

The New Jersey shoreline has been radically altered by Hurricane* Sandy. (* -- Let's see how the National Hurricane Center classifies this storm once it does its off-season storm analysis.)  Many beach towns have lost their boardwalks, and oceanfront homes and businesses have been wiped out.  Insurance will help -- but to varying degrees -- so homeowners and businessowners will still bear significant losses; no one will be made whole status quo ante.

While people are still recovering from a serious natural disaster, to which the Northeast (unlike those in the Gulf states or Carolinas) is unaccustomed, we must ask whether a mega-billion, fourteen-figure rebuild ($50 billion? $100 billion?) is the best use of our money to rebuild beaches, residences and businesses in areas where -- for decades -- scientists have warned of a geography-altering, life-threatening storm like this?

Why are we considering a bailout of the reckless?  Why, to rebuild in areas not meant for human habitation?

Let colonial history be our guide. In those times, people were forced to act rationally. They often perished if they did not. Historically, in colonial times, towns that got wiped out in flood zones or shorelines simply rebuilt...on higher ground!  You didn't have towns built in swamps, where inhabitants were endangered by floods, malaria, yellow fever and other mosquito-borne diseases.  Ports were built in harbors where ships were considered the safest from the ravages of the ocean tide and fierce storms. Buildings were constructed on solid bedrock so they couldn't be washed away by floods which would often leave the structure intact but wash away the soil under its foundation. Survivors rebuilt where they could, and chose new locations much more likely to survive. Earlier generations did not place themselves in harm's way, because they bore the entire risk of and responsibility for their losses in the next calamity.

People in the pre-altruistic age (before the 20th Century) grew up with a rugged self-reliance and concept of responsibility, rooted in a raw survival instinct and belief that others would neither be able nor inclined to come to their rescue. In those earlier times, survival of the fittest had a literal meaning far different from the current meaning that evokes the Ironman Triathlon. Reckless or stupid behavior was not often imitated, because its practitioners did not survive long enough to be emulated.

Today's generations have a religious faith in insurance, and failing that, in a government bailout if they are connected or favored enough. Then again, today's generations include the stubborn or the stupid, who believe that they can call first responders for aid in evacuating during the height of a hurricane -- i.e., putting others in life-threatening situations to escape one's life-threatening situation often of one's own making. 

So, as I type, President Obama is on his way to the New Jersey Shore to meet with Governor Chris Christie of New Jersey.  We assuredly will hear promises later today that the federal government will help rebuild, on the locations just obliterated, to restore the childhood memories of our youth.

But an update...Check out the comments from one old-time resident of Sayreville, NJ, which lies at the mouth of the Raritan River and which received a direct shot of the storm surge coming directly west from the Atlantic Ocean and into the funnel of Raritan Bay:
 "I think, Governor, we need to level this whole area," said Cody Buck, whose foundation was ripped out by the storm. "Turn it into soccer fields, we can't keep rebuilding.
The storm damage is not just on the Jersey Shore.  North of Sayreville lies Perth Amboy, whose waterfront neighborhood was decimated.  Across from Perth Amboy lies Staten Island, whose south shore likely will look considerably different in future maps. And directly across from Staten Island, across the Lower Bay of New York Harbor, are Coney Island and, to its east, the barrier peninsula of the Rockaways, all overrun by the Atlantic Ocean.

Our President, and perhaps the man who plans on being our Next Inevitable President, will have us indulge in the fantasy of the Time Machine, to take us back in time.  Naturally, they will use Other People's Money, billions of dollars borrowed from future generations.  The prudent, those of us who built safely inland, will pay the price for the recklessness of others who have -- for decades -- ignored scientists' warnings of The Big One, of how the Jersey Shore was grossly overbuilt with far too few evacuation routes and far too much building on sites situated barely above sea level and built on little more than quicksand and a prayer.  Therefore, we will have a new, mammoth government reconstruction, with new buildings, ports, dunes, levees, seawalls and windmills (can't leave out the green energy, can we!), which taxpayers will be forced (or resigned) to subsidize, all so our elected officials can get re-elected, favored businesses can reap windfalls, the reckless can indulge themselves in their daydreams of yesteryear, and others can be duped into believing we have an uptick in economic activity. The rest of us realize that Superstorm Sandy is going to be merely the next, latest and greatest excuse for redistributing wealth.  Taxes will go up.  Bond ratings will suffer.  Government budget deficits will skyrocket. Our insurance rates will continue to go up, courtesy of an industry that thrives by spreading the risk around so the responsible pay for the irresponsible, while those same insurance companies curtail their coverage and increasingly compel policyholders to go to court to seek enforcement of insurance policy contracts. When we have a $16 trillion national debt, what's a few hundred billion more, right?

Eric Dixon is a business and corporate attorney in New York and New Jersey. 

Saturday, October 27, 2012

Philadelphia Marathon Better Than New York City Marathon

As a veteran marathoner who has run the Philadelphia Marathon and New York City Marathon a combined nine times (with a personal best of 3:34 in 2003's Philly), I'll tell anyone that the Philadelphia Marathon is a vastly superior race.  That's why this year, I'm registered for both races (something I did just in case the weather for one is real bad), but I'm skipping New York's on November 4th and doing Philadelphia on November 18th, and here's why.

I get two more weeks to train. 

Philadelphia runs its race at 7 am sharp.  You can be done by 10am or 11am, and home in time for the afternoon football games.  New York makes you get there by 9am, it starts at 10am, and by the time you run and finish and then clear customs in Central Park after the finish (or whatever gauntlet they call it now), it's almost dark. New York blows your day, and neither the race nor the people are worth it. 

Philadelphia's weather is usually a little cooler and drier because it's the last Sunday before Thanksgiving.  For runners, this is prime running weather.  For spectators, it's football weather. 

Philadelphia has a nicer course, more scenic and fewer hills.  It is superior in every way.

New York has more potholes, and many more narrow streets.  That matters, because New York's race is designed for 15,000 runners.  When I first ran the New York City Marathon they had fewer than 19,000 runners start.  Now, it's over 40,000.  Absolute greed means the race route is much more clogged, particularly with slower runners and other runners -- usually foreigners -- who are there to sightsee, take pictures and wave, but all on the course and blocking the path of other runners who, ya know, are there to run and run for time.  Nothing like four guys from Peru, straddling the course, running in line (and blocking you), to frustrate you after months of training.  Or when these same four guys decide to run in unison while holding one flag, to really hold you up. 

I like Philadelphia.  It's a nice little unpretentious city, and the people are nicer. (Exceptions are the Eagles fans, but I give them credit; they care.) And to be frank, the young ladies handing out water are much more attractive.  I'm allowed to write that.

New Yorkers are jerks, and that city attracts and retains a tremendous amount of trash.  I mean, the Eurotrash.  These snooty bastards -- and their female golddigger moocher counterparts -- live off of the work of others, then come over to this continent to use us like a dog uses a tree, and worse, then they come up with the bridge-and-tunnel putdown.  Real New Yorkers don't do that.

There's less dog poop on the sidewalks in Philadelphia.  Maybe that's because the people are nicer and find company with, well, other people.  Many New Yorkers are so obnoxious that only a dog will tolerate them.

At mile 18 of the New York City Marathon, volunteers hand out PowerGel or some other sugary goo.

At mile 18 of the Philadelphia Marathon, volunteers hand out beer.  And it's a dark amber microbrew!  Better, you run past them again on mile 21 for a refill.  After you've run that far, you'll want a beer, anything other than tap water and the green stuff they now call Gatorade, but which isn't the real thing like the orange stuff they sold in the 1970s.

But the biggest difference between the races is that I can run the Philadelphia Marathon without getting covered in a sticky spray.  Here's the explanation. When I run New York, the race starts on the Verrazano Narrows Bridge. That means I have to go into Staten Island (which is bad enough).  But running the New York City Marathon means you'll deal with the first-mile occupational hazard known as the World's Longest Urinal.  Now, many years ago, I had to "go" before the race, and started asking around for the "World's Longest Urinal" (which race organizers had been promoting).  Couldn't find it. I made other arrangements.  But then, running across the bridge, I noticed hundreds -- no, thousands -- of racers (including some women!) urinating off the side of the Verrazano Bridge! 

Now, when you are spraying into the air, a few hundred feet above sea level, you have wind currents much stronger than those at the earth's surface.  The wind -- the breeze -- turns this moisture into an aerosolized spray and that gets blown around and back.  So unless you are in the middle of the road surface on either the top or bottom level of the bridge (and runners go on both the top and bottom levels), you stand an excellent chance of feeling a mist during your run across the Verrazano.  But now you know what that refreshing spray is.  It's the urine of a few thousand strangers!  Imagine taking a golden shower, and then running 25 miles until the end of the race.

There ought to be a new race slogan: Welcome to Urinetown! Next sink with running water and soap: 25 miles! Have a nice day!

Philadelphia has no such hazard.  The cops let you pee freely on Marathon Morning.  They're more concerned with real crime, like the vagrants along Benjamin Franklin Parkway.

So these are the reasons I'll be home next Sunday, waiting for the real race on Tuesday.

Eric Dixon is a veteran marathoner.




Friday, October 26, 2012

Obama's Ayn Rand Distortion

Imagine a lifetime of being a slave to negative peer pressure and feeling endless rejection in the pursuit of elusive acceptance from others who don't care about you.  That is the utopian fantasy President Obama alludes to in a recent interview, while distorting the capitalism-defending Atlas Shrugged author Ayn Rand.

In the new issue of Rolling Stone magazine, Obama is quoted as saying:

"Ayn Rand is one of those things that a lot of us, when we were 17 or 18 and feeling misunderstood, we'd pick up.  Then, as we get older, we realize that a world in which we're only thinking about ourselves and not thinking about anybody else, in which we're considering the entire project of developing ourselves as more important than our relationships to other people and making sure that everybody else has opportunity – that that's a pretty narrow vision."
Obama's directive for people to be outerdirected, to subordinate one's needs to those of others, makes a fatally flawed assumption that the "others" are likewise putting your needs ahead of theirs. This is a utopian fantasy that assumes -- no, it requires -- that everyone act in harmony. This ignores the essential flaws of human nature, flaws which are recognized most poignantly in our culture by our major religions and, in the United States, by a Constitution and developed rule of law which respects the rights of the minority and safeguards them against "the tyranny of the majority."  This perspective is incorporated into the mistaken belief (or a horribly Machiavellian deception to exploit "useful idiots") that "the government" and "the people" are one and the same, that the government is benevolent and can be trusted.

Moving the discussion from the political to the sharply personal, these words should resonate very negatively with anyone who remembers not being in the "cool" group or got rejected by a fraternity or sorority, if you've been an "outsider" or "newcomer."  You should feel chills running down your spine when reading Obama's comments. (Hint to the top achievers, the leaders in our society: many of you were outsiders precisely because of your achievement, and the raw envy it sparked in others.  This is you!)

Obama's comments are dangerous to us on a personal level, because he is all about pressuring you to spend a lifetime seeking the approval of others -- and getting a tremendous amount of rejection in the process.  So when Obama wants you to subordinate your desires, your ambitions, your wants -- and these are things you are entitled to pursue and shouldn't be made to feel guilty for aspiring to have -- what Obama is really saying, is this: You don't deserve that.  

You didn't build that.

You couldn't have done those things without us.

That isn't yours. (No, it's ours.)

Pay your fair share.

You need us.

You're NOTHING without us.

Accept these messages as gospel, and your reward will be lifelong misery.  But for the Machiavellian Obama and his acolytes who know the psychological manipulative techniques of Saul Alinsky, this is the recipe for making you so miserable (read: dirt poor AND unhappy) that you will do anything for relief from pain.  You'll be like a strung-out drug addict, always needing a psychological "fix."  You'll become -- and remain -- desperate, docile, obedient, and easy to control.

That, my friends, is the essence of power.  And this leads easy to tyranny and repression.

Understand this: Obama's mandate for people to subjugate their needs and wants to those of others does more than compel one's dependence upon the group; it makes one vulnerable to the "tyranny of the majority," to the malice and depravity of the group should it turn on you. Whereas the American model of Constitutional democracy protects individuals against the excesses and tyranny of both the mob and the state, the Obama philosophy makes people dependent on those who can easily abuse their power and strength in numbers to persecute disfavored minorities. 

It is appalling that this worldview is voiced by an African-American born into the 20th Century which not only saw America go through its civil rights movement, but also fight wave after wave of foreign repression and genuinely evil leaders: Hitler, Stalin, Mussolini, Franco, Pol Pot, Idi Amin, Khomeini, Qadhafi, Castro.  Nazism, Fascism, Communism, all were examples of government utopian philosophies gone horribly wrong when evil men gained power. 

Don't think that Obama ignores these lessons.  Obama is too intelligent to fail to realize the implications of his position. It's not that he doesn't understand.  He does -- and therein lies the problem. Obama is trying to instill groupthink, of reliance and dependence upon, and obedience to the group, above all other values. Yet as we approach Election Day, we must recognize that Obama's philosophy shows a depraved indifference to the plight of the truly disadvantaged and victimized, to the minorities among us, who would be the first to be preyed upon by a tyrannical, evil collective. 

Ever wonder why some minority groups (whether they be racial, ethnic or sexual orientation minorities, however you want to slice society) seem wedded to the hip of the Obama "progressive" worldview, even when economic and social conditions are deteriorating?  It's not ideological affinity.  It's psychological desperation, a collective groupthink where these groups are driven to beg.

Far from being truly compassionate, Obama's mindset indicates he would place the poor, the disadvantaged and exploited minorities, at the greatest risk of degradation, deprivation and enslavement.

When the wolves turn on the sheep and decide what they're having for dinner, Obama's philosophy is silent.  That's because the truth of the perspective must remain hidden, for it is too unpalatable to speak, and because its revelation would make continued obedience unlikely or impossible.  When individuals are expected to self-sacrifice for the group, the group's needs justify any harm on the individual.  So in Obama's worldview, if the wolves want to eat the sheep, Obama will turn on the oven and tell the sheep it's time has ended.

Does the reality behind the admonitions to "pay your fair share," and the fear behind ObamaCare's "death panels," now come into sharper focus?  When the individual must submit to the group, you stop owning even your own life.  That is the ultimate danger of Obama's philosophy.  He has no choice but to attack the philosophy of the libertarian Rand, because Rand exposes Obama's ugliest truth: that individuals will be sacrificed ruthlessly to serve the society and the state.

Eric Dixon is a corporate and investigative attorney in New York and New Jersey. Mr. Dixon regularly represents business and opinion leaders, public officials and political candidates in sensitive legal and investigative matters.  Mr. Dixon is also on the board of directors of the Financial Policy Council, an independent economic think tank.



Wednesday, October 24, 2012

How Foreclosure Relief Discriminates Against The Poor

The dreadful New Jersey Residential Foreclosure Transformation Act, revised from an earlier version that was vetoed by Governor Chris Christie earlier this year, is working its way through the New Jersey Assembly to threaten homeowner wealth once more.

The new bill passed the Assembly's Housing and Local Government Committee earlier today. It is one step closer to a full vote. But the new bill is no different from the old bill in that it threatens the meager homeowner wealth of the most vulnerable homeowners: minority, first-generation homeowners who may have strived the most for their piece of America.

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 adverse impacts of the Act will be felt disproportionately in 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 original Act.  Mr. Dixon regularly issues policy reports for the Financial Policy Council think tank, and has been published in RealClearMarkets.com and other outlets.

Islanders To Move To Brooklyn

Breaking -- as reported by NY Post --

http://www.nypost.com/p/sports/islanders/islanders_skate_to_barclays_in_brooklyn_s8QVci06EOnyL06hK4atnL


Did Solomon Dwek Help The Feds Jail Innocent People?

The reliability of government informants has long been questioned by lawyers, because informants need to implicate other people in order to get a recommendation for leniency -- that is, a shorter jail sentence or no jail sentence at all.  By extension, there is the temptation for government agents to use probably (or knowingly) false and perjurious witness and informant testimony as evidence to prosecute and jail juicy high-profile targets.
This issue arises again in the emerging and potentially blockbuster controversy surrounding former Monmouth County sheriff and former Monmouth County Republican Party chairman Joseph Oxley, whom New Jersey Governor Chris Christie has nominated to be a Superior Court judge.  Oxley has been in the news, because infamous government informant (or cooperating witness, in legal parlance) Solomon Dwek identified Oxley as someone who tipped him off about pending foreclosure sales.  Dwek's testimony and covert videotaping of dozens of New Jersey elected officeholders, candidates, rabbis and others in the Bid Rig investigation -- most of which occurred on Christie's watch while he was sitting United States Attorney in Newark, NJ -- led to more than 40 criminal prosecutions in which Dwek's credibility was a central issue.

So what's the difference between Dwek's testimony about those people, and his testimony about Oxley?  Good question.


Here's what Chris Christie had to say about this yesterday



"Let me tell you as someone who has read over the course of my career a lot of raw FBI data from cooperating witnesses. Sometimes it can be reliable and sometimes it can be absolute fiction. And I think it's unfair to put that type of fiction out into the public stream."

So how do the feds determine when someone is telling the truth, and when they are absolutely scamming them? Does it matter who or what is the target of the investigation?

 

Now, if the feds allowed for videotaping of these sessions, witnesses -- and defense lawyers -- could more easily defend themselves against charges and protect themselves against falling into agents' manufactured traps leading to perjury or false statement charges like the ones used to convict Martha Stewart. But FBI policy prohibits recording of witness interviews, so you have no defense if FBI agents claim you lied to them.  Therefore, the only source of information about Dwek's statements to FBI agents about Oxley is whatever is contained in the FBI's official Forms 302, which are compiled by investigating agents and which may conceal as much as they reveal.  But without videotaping, we cannot see and measure the accuracy of these claims -- that is, we cannot tell how accurate the reports are in conveying what Dwek really said.

Oxley is refusing to consent to the release of FBI files on him. Christie maintains that Oxley was cleared by investigators working under his successor as U.S. Attorney, Paul Fishman.  But New Jersey legislators led by Senator Raymond Lesniak are blocking the nomination.


This controversy raises the seminal question: Were innocent people investigated, prosecuted, convicted and imprisoned, on the strength of government debriefings of a man whom federal agents either knew or should have known to be -- at best -- inconsistently credible, and a serial, pathological liar at worst?


The answer may be hinted at by the words earlier this year of federal district court judge Jose Linares. 


Here are the words used by Linares to describe Dwek:



"A consummate defrauder and an extremely cunning liar."

Maybe the real question is, what did the U.S. Attorney's Office and federal investigators know?


And, are innocent people in jail for no reason?


Eric Dixon is a corporate lawyer who handles sensitive investigative matters involving the worlds of finance, business and politics, as well as sensitive personal matters.  



Tuesday, October 23, 2012

Crony Justice, New Jersey Style? Questions, Questions...

So is this why Chris Christie didn't run for President -- or why he wasn't selected to be Romney's Vice President? (Or maybe this is why Christie earlier declared he wouldn't serve in Romney's Cabinet -- as attorney general? -- because he suspects he would not survive confirmation?)
Consider the following: After bouncing two checks for a total of $50 MILLION, caught-dead-to-rights admitted felon Solomon Dwek -- the "moser" of Deal, NJ -- fingers a whole bunch of people as criminals in corruption, fraud, tax evasion, kidney brokering, etc. (Dwek would later try to claim he suffered from compulsive criminality to get a shorter jail sentence.) The United States Attorney's Office in Newark had to wade through all these Dwekian allegations. How did the NJUSAO determine whether Dwek was telling the truth? Did politics play a role in determining who got investigated, who got charged with a crime, and perhaps who is even in jail today?
The presently unfolding events surrounding now-Governor Christie's nomination of former county sheriff Joseph Oxley to be a judge on a county court may shed some light.  See the latest coverage including this article at http://www.nj.com/politics/index.ssf/2012/10/gov_christie_charges_dems_with.html.
Eric Dixon is a New York corporate lawyer who handles investigative matters.

Nor'easter or Hurricane Headed For New York?

A respected hurricane forecast model is predicting that current Tropical Storm Sandy will hit the New Jersey and Long Island coastlines early next week, either as a tropical system (possibly at hurricane strength) or as a nor'easter should it lose its tropical "warm core" characteristics before reaching shore.

Sandy is currently a 50-mph tropical storm a few hundred miles south of Jamaica and moving north.  Some models show Sandy curving out to the Atlantic and not threatening land (other than Bermuda) as it is predicted to interact with a baroclinic front (after which it would lose its tropical cyclone characteristics).

Eric Dixon is a lawyer, political activist and strategist, and described by friends as a weather nerd.



Hurricane Names and Exhausting The Alphabet

We are about to get another named tropical cyclone in the Atlantic.  A small swirl southeast of Bermuda is on the verge of being designated "Tony."  We are rapidly running out of "names" (here's the official National Hurricane Center list of names for 2012) for tropical cyclones in the Atlantic Basin. 

Many of these systems are, in my opinion, glorified thunderstorms swirling around a tight center and barely qualify as tropical storms.  (A storm gets a "name" when it has sustained winds of 39 miles per hour. Many systems, particularly in the far eastern Atlantic, are designated on the basis of satellite observations.)

After "Tony" there are only two more  names, Valerie and William.  After that, we go to Greek alphabet names.  In 2005, we had three Greek alphabet storms: Alpha, Beta and Gamma.


Jail Time For Failing To Predict Quake

Leave it to the legal savants in Italy to show the Western world how to use the legal system to encourage expert knowledge.

An Italian court has sentenced six seismologists and geologists, plus one government official, to six years in jail for their "failure to warn" of an impending earthquake in 2009 in which more than 300 people died.

This is an example of overcriminalization.  This movement is occurring in the United States as well; the difference is that "negligence" is now being transformed into the "criminal intent" which remains an essential element of most crimes.  This movement has opened the door for prosecutorial and judicial second-guessing of legitimate, good-faith judgments.  However, when courts and prosecutors seek to punish experts for what amounts to bad luck -- particularly in the earthquake-prediction game which is by no means clear science -- one can be sure of this different prediction: massive retirements by scientists, doctors, engineers and other experts with advanced knowledge in their fields who will rightfully fear that they will be held criminally accountable for "bad luck" or "acts of God" by courts seeking to inflict retribution on a mantra of "someone's gotta pay."

Eric Dixon is a corporate, business and investigative attorney who practices in New York, New Jersey and elsewhere.  Mr. Dixon is a member of the board of directors of the Financial Policy Council think tank.






Monday, October 22, 2012

Man On PCP Bites Off, Swallows Own Finger After Naked Carjack Try, Authorities Say

We know the economy is bad, but when people start doing the Atkins Diet on themselves, this is, um, "not optimal."

http://mobile.nj.com/advnj/db_102350/contentdetail.htm?contentguid=qDCuBq9D&storycount=980&detailindex=5&pn=&ps=

Eric Dixon
@dixonstrategy

Another East Coast October Snowstorm? What?

The Atlantic Coast could have another October Surprise.  Like last year's near blizzard on October 29th (four inches of heavy snow in New York City!), we could get another snow event.  What's bizarre is that the cause could be an emerging tropical storm -- not yet named because it hasn't developed (the next name is "Sandy") -- in the Caribbean that is forecast by some tracks to go close to the East Coast.  In that event, precipitation on the westernmost fringe of the system could fall as snow or ice.  Interior sections of the middle Atlantic states already see temperatures in the 30s at night, so frozen precipitation is not out of the question.


Thursday, October 18, 2012

Being A Moser Pays; Solomon Dwek Gets 72 Months

Federal informant Solomon Dwek, the man whose covert surveillance tapes snared dozens of New Jersey elected officials, rabbis and associates, got sentenced to 72 months in federal prison for his role in two mammoth bank frauds, each involving a bounced $25 million check.

The sentence, imposed by federal district court Judge Jose Linares, is a substantial downward departure from the nine-to-eleven year sentence range agreed upon between prosecutors and Dwek's lawyer.

Under federal guidelines, Dwek must serve at least 85 percent of the imposed sentence. As the sentence is less than 10 years he will be eligible for a minimum security prison camp. He may also receive psychiatric counseling and substance abuse counseling and may be able to get a further reduction on that ground, just like Charles Kushner.  Therefore, assuming a six-month halfway house period, Dwek could be home in less than five years.

The message of this sentence: service on behalf of the government pays. Make no mistake, this was not about "cooperation," because Dwek was caught so red-handed by the government that his admitting his own guilt, his cooperation was not necessary. This sentence was a reward for Dwek's success in ensnaring politicians and others in what became a landmark, high profile investigation that broke down the homestretch of the 2009 New Jersey gubernatorial campaign. In many respects, Solomon Dwek is responsible for Chris Christie defeating Jon Corzine in 2009.  Yet, it should be noted that the federal government elected not to charge Dwek for crimes stemming from his allegedly fraudulent procurement of rental cars in the Baltimore, MD area, acts for which Judge Linares revoked Dwek's bail.  These acts occurred while Dwek was ostensibly under the supervision of federal agents.  These acts call into question the wisdom of using troubled criminals like Dwek as cooperating witnesses, as such bad acts seriously undermine their credibility.

PS: "Moser" is the Yiddish word for informer. Among members of the Jewish faith, which has historically faced government persecution over several centuries, the concept of the informer as evil has a connotation different from the modern contempt some have for the government "snitch."  Among the Jewish faith, informing to the government has often been seen as having implications for the very survival of the Jewish people.



Wednesday, October 17, 2012

E-5. A-Rod Chases Women Instead Of Title

E-5. SERIOUSLY. Alex Rodriguez focused on getting to know some "honey trap" women during Game One of the American League Championship Series. By doing so, "A-Rod" publicly disrespected the entire baseball community -- and many of us who simply believe in "old school" ethics in the workplace. But the real problem for the baseball club is that there was no apparent public rebuke. Sometimes, misbehavior can be so craven, so deliberate, so disrespectful, that the power of embarrassment, of humiliation, needs to be applied, if only to show to the rest of the team that their seriousness of purpose (that is, it's about winning) is recognized.

Alex Rodriguez showed beyond all doubt that he cares only about himself. The problem is that within an organization, such an approach passes on the burdens of responsibility to others, to teammates. While everyone else is rowing the oars -- hopefully, at "ramming speed" -- this one prima donna is out there preening for the cameras and thinking about extracurricular activities. What a jerk!

Now, how to fix this? As I write, the Yankees trail a best-of-seven series three games to none. Their chances of advancing to the World Series are slim (but doable). However, the bigger issue is, incredibly, their future with a 37-year-old Alex Rodriguez tied up for another five years, who has declining production, has become injury-prone (as befits an athlete of his age) and who must certainly be considered a clubhouse cancer.  How does the franchise deal with its franchise enfant terrible?

(One possibility: Perhaps A-Rod is misbehaving on purpose in order to force a trade in the offseason, the $125 million or so remaining on his contract notwithstanding.  Other players -- Manny Ramirez, for one -- have been reputed to have become clubhouse cancers in order to induce their clubs to trade them.)

What should the team do in the immediate future? The Yankees need a serious clubhouse enforcer to get in A-Rod's face. Literally. As in, making him eat that baseball.  To do something physical like what Lawrence Taylor might have done 25 years ago (heck, he'd do it now!). Like hockey players used to do all the time...a generation or two ago. Someone on the Yankees needs to publicly embarrass A-Rod, perhaps intentionally in front of the fans and certainly these "ladies," and going smashmouth on him would NOT have been inappropriate. Perhaps a public emasculation is needed to finally get Alex Rodriguez to at least make a full attempt towards improving his own personal production and helping the team win.

Eric Dixon is a New York corporate attorney who is not a Yankees fan.

Monday, October 15, 2012

In Defense of Ballot Challenges Against Gary Johnson

The New York Times is out today with an opinion piece, presented as news, criticizing the Republican Party's efforts to knock Libertarian Party presidential candidate Gary Johnson off the ballot in several states. These efforts should be praised.

This is how politics is played. At least these ballot challenges are efforts to enforce the rules. (Heaven forbid!) Play by the rules, play hard. And in states like Michigan, at least the state Republican Party is trying to win! Those Republican state organizations are willing to put third party candidates to the test to see if they did in fact follow the rules; if they did, then they get on the ballot, see you in November, but if not, it's sayonara! And that's how it should be.

(Full disclosure: I am an election lawyer and help candidates with election law compliance and challenges to their petitions. Ballot challenges help my business. Candidates who want to break the rules do not help my business.)

In other states, the Republican Party gave a pass, not just to Gary Johnson, but to every third party candidate. In New Jersey, home of the purported conservative rock star Chris Christie, there are eight third party candidates on the presidential ballot. None were challenged by a Republican Party organization whose head, Governor Christie, was the Republican National Convention keynote speaker. In fact, the third row on the ballot in New Jersey will be occupied by a reputed white supremacist group. (Perhaps the state GOP thinks this group will take votes from Obama!)

Petition challenges are part of our political system. Far from being unfair, they are crucial to maintaining the integrity of the process and a level playing field for all aspiring candidates.  

Eric Dixon is a corporate and investigative lawyer in New York and New Jersey. Mr. Dixon regularly handles political matters including campaign finance and election law issues.

Monday, October 8, 2012

Strategies For Avoiding Jail: From RealClearMarkets

Last week's column on strategies for staying out of jail in an age of criminalized business was picked up by both the think tank Financial Policy Council and, on Friday, by the prominent financial news aggregator RealClearMarkets.com. (Here's the RCM link.) My article appears in the Research Reports category.

Crime As Mental Disorder: Total Dwek

Admitted master fraudster Solomon Dwek is claiming he is bipolar and has anxiety disorders, in an attempt to (defraud the court?) gain leniency at his upcoming sentencing on Thursday, October 18th for a $50 million ban fraud.

If this diagnosis is accepted, one must wonder whether Dwek was "bipolar" and suffering "anxiety" when he was talking with FBI agents at proffer sessions, debriefings with his FBI handlers while spending years making tapes, or testifying at trial.

These questions are sure to be raised by attorneys for some of the convicted and now imprisoned New Jersey politicians, rabbis and others who were prosecuted on the basis of Dwek's testimony and videotapes, as well as attorneys for the many creditors and real estate investors -- including members of Dwek's own family and synagogue in Monmouth County, NJ.  

In the meantime, Dwek's sentencing looms.  He has a recommended sentencing range of between nine and 11 years, according to the non-mandatory federal sentencing guidelines which his sentencing judge, federal district court Jose Linares, is free to depart from.  Dwek's lawyers are surely seeking a downward departure, a reduction, based on both his "substantial and extensive cooperation" with -- heck, his initiation of -- the government's investigations in Bid Rig as well as his mental condition. 

However, there is no guarantee that Judge Linares -- who has been a little harsh with some of his sentences for small-town politicians as to whom proof of guilt appeared fanciful, at best -- will not view Dwek's claim as the height of chutzpah, an insult to the court, and a remorseless, gutless attempt to avoid responsibility for massive criminality, at any cost.

Eric Dixon is a corporate and investigative lawyer who is admitted to practice in New York and New Jersey.

Friday, October 5, 2012

Workers Going To Sidelines, Wait For Election Result

JUST IN -- The official headline unemployment number dropped for the first time in years to under 8%, but underlying data are very troubling for the American economy.  Nonfarm payrolls "rose" less than expected, 114,000 in September (ahem, in seasonally adjusted numbers), or basically an amount that is covered by government estimates of the number of business births and deaths (the "birth/death" model).  And the largest sector of job growth is in part-time workers (up by more than 500,000), indicating that full-time jobs previously lost have now been replaced by part-time (or temporary) jobs.  Moreover, the U-6 employment figure which measures underemployment has remained steady, validating this indication.

A major mistake in the employment figures may come from the use of the birth/death model.  The birth/death model's flaws alone may account for the purported job growth. (Remember, we are five weeks before an election, and adjustments and corrections can always be done after the votes are counted.)  The birth/death model erroneously believes that a job is created every time an entity is incorporated or formed under a state's corporate law. However, this is demonstrably untrue. Many entities are formed by individuals to escape personal liability, and sometimes multiple entities are formed by the same person for purposes of limiting liability and asset protection. There's no job creation there. Moreover, businesses are measured to "die" through entity dissolutions or charter revocations. But these events are lagging indicators. Businesses that fail, that close down, rarely file documents to dissolve the legal entity until years after they stop operating. One reason is that failed businessowners are often seriously demoralized and ignore this process. The other and better reason is that, until a full financial winding down is done, well after the time the business stops operating, the entity should be maintained for precisely the asset protection reason cited above. But no matter what the reason, the phenomenon is the same, and the number of business deaths is thus both understated and lags true business closings by years!

By the way, if you go to page 11 of the actual government labor statistics report you'll see that non-seasonally adjusted figures show that the "civilian noninstitutional population" grew by nearly one million people more than the growth in employment on a year-over-year (September 2012 vs. September 2011) basis. In other words, the population growth is outpacing the growth of the economy. That is not good. No matter how you slice it.  

Eric Dixon is a New York corporate and investigative attorney, strategist and policy commentator.

Thursday, October 4, 2012

Helping Housing Market and Banks Without Stiffing Taxpayers

Last night's presidential debate was short on any substantive discussion of how to help the residential real estate market, in which the last decade's decline in value represents perhaps the greatest source of wealth destruction in this nation's history. Accordingly, I reprise my comprehensive solution to help both the housing market and the banking sector, while also not costing the taxpayer one penny.

(This article was originally published in the FPC Journal from the financial think tank the Financial Policy Council in May 2012.)

Eric Dixon is a New York corporate and investigative lawyer, and member of the Financial Policy Council's board of directors.
 

Tuesday, October 2, 2012

Staying Out of Jail When Business Becomes A Crime

When the government is increasingly populated by lawmakers and bureaucrats who hate capitalism and genuinely believe that business owners are criminals somehow "taking" things away from others, your liberty depends on your strategy for staying out of jail. Here is my latest piece, first printed on the Financial Policy Council's website earlier this afternoon.  The full article appears below.

Strategies For Staying Out of Jail In An Age of Criminalized Business, by Eric Dixon


The two worst things our government can do to someone are to conscript him for military service, and deprive him of his liberty.

Losing or being threatened with loss of liberty is an ordeal increasingly suffered by average, law-abiding Americans.  We have become a nation of "No," of the ever-present threat of criminal prosecution -- even, perversely enough, in an era of "yes" and permissiveness on someone else's dime.  The routine trip to the doctor's office comes with the warning that "false statements" on the insurance form can result in prosecution.  Anything you do that involves either your receipt of money, or ever-growing duties and responsibilities owed to customers, lenders, clients or the general public, now comes with the risk of being suspected, investigated and accused of a "crime."  As I detail later in this article, your "crime" may not be a substantive violation of the law but rather just a disputed interpretation of what you said -- or intended to say -- where your word goes against the word of the government agent whose credibility juries often assume to be impeccable.

This trend places our entrepreneurial, managerial, ownership and professional classes at the greatest risk.  There is a perfect storm of adverse crosswinds that converge to create this danger.  First, no one in America is more vulnerable to these type of accusations than the business community, as illustrated by the Department of Justice's statement that "business fraud" (in various forms) "remains one of the highest priorities" of the Department's Criminal Investigations Division.1  This subset of America is the most envied and targeted for "justice" --schadenfraude masquerading as "fairness."2 It is hard to imagine a greater disincentive to educational and professional achievement -- or a greater reward for sloth and envy.  This is clearly not a social or governmental attitude that made this nation great, or will allow it to enjoy an economic resurgence.
 
America's entrepreneurial One Percent suffers from a legally uncertain future, where yesterday's permissible behavior may become tomorrow's crime.  This group is increasingly viewed by "the street" with suspicion, envy and condemnation, and such emotions are fueled and encouraged by many in the public sector.  This legal uncertainty, coupled with growing condemnation, strongly deters productive, wealth-creating investment and encourages (if not requires) survivalist tendencies to hoard, secrete wealth in physical assets (e.g., precious metals, real estate) or even flee overseas.  Today, America's most productive classes must wonder what tomorrow holds, whether they will be free, or even where they will be.

On the premise that "the government" can and should control our behavior, legislators pass laws,  bureaucrats create new regulations, and government lawyers and judges have expanded their interpretation. As "legal" activity increasingly becomes "criminal," the risk of arbitrary, targeted government intimidation, investigation, prosecution and imprisonment grows with no check in sight.  Worse, emerging forces are pushing us towards prosecutions "for show" and not "for cause." Both populist political movements,3 and journalists question why more corporate executives have not been jailed, and demand more prosecutions.4   However, these cries ignore one critical fact: the number of financial crime prosecutions only reflects cases in which the charges actually brought involve the elements of financial fraud (e.g., securities fraud, bank fraud).  This number omits the cases brought when businesspeople are targeted, and any pretextual charge is used for a prosecution.  These are charges brought when evidence is insufficient for the target (that is, a person considered to be a putative defendant in a yet-to-be-brought criminal indictment) of an investigation to be charged with any business-related crime.  Justice Department statistics do not reflect the true extent to which the business community is targeted for investigation and intimidation, because they are engaged in business, or to which its members are charged with any non-business crime such as false statements, failing to file required tax forms, conspiracy or misprision (the failure to report an act which one allegedly knows to be a crime) when evidence of substantive criminality cannot be found.  When the ends justify the means, any criminal charge will suffice. The true scope of this problem may not be measurable at all, but can be indicated somewhat through cataloguing and examining each and every "white collar" criminal case brought by authorities (a mammoth project in which the author is presently engaged). Finally, these statistics also do not measure the many who are investigated but never charged.

As a business owner or someone with a high public profile, your livelihood may be affected by or depend on your credibility and reputation. This means when the government starts "investigating" you (i.e., looking for evidence to support , you are vulnerable to the popular (and incorrect) notion that silence is evidence of guilt.  The government will exploit this notion to pressure you to talk.  In an age of government "leaks" and totally irresponsible social media and the destruction of basic privacy, reputational threats pose an immediate risk of lasting financial harm to targets in the public eye.

Consider the case of former New Jersey state Assemblyman and Consumer Affairs Director Joseph Doria.  FBI agents raided his home one morning in July 2009 as part of the legendary Bid Rig corruption investigation. In full view of reporters and photographers, who undoubtedly received prior and improper notice of the raid, agents carried out cardboard boxes from Doria's home.  The implication of guilt was clear, the press fueled immediate corruption rumors and Doria swiftly resigned (under pressure from then-New Jersey Governor Jon Corzine) his state cabinet position. Only years later was it revealed that the boxes contained -- nothing but air. They were empty. The boxes were part of an apparent ruse, with no logical purpose other than to make Doria seem guilty.5  The reputational harm was done.

Once the government has made you its "mark," you must choose: Remain silent, and be thought a crook? Or speak, and remove the obstacle to investigators and prosecutors who have preordained your guilt and want to find (or create) evidence to support their conclusion?  If you talk, their trap can be sprung at any time. Once that happens, your freedom and future may depend more on the integrity of the agents investigating you instead of anything you actually say.  Business leaders like Martha Stewart have served jail time for nothing more than a false statement charge when evidence did not include any video or audio recording but only the notes of FBI agents interviewing her and recorded in a "302 report."6  You see, if and when you talk, the "evidence" against you will be the official record of what you say, and this means the FBI's 302 report. So If government agents come knocking, think twice about saying anything. Even if your lawyer is present (and certainly if he or she is not).  And particularly when you are innocent.  No one wants to lose his innocence and become presumptively guilty after talking (and totally vulnerable to being charged or pressured), no matter what you really say or what you have done.  Any conversation you have with any federal employee creates some risk of criminal prosecution which is greater than if you stay silent.  After all, remaining silent is the best defense against being charged with a false statement crime.7
 
You might think there's no problem with answering a few seemingly innocuous questions.  You may think you can talk your way out of any suspicion.  Don't do it! That could end up being the mistake of your lifetime.  But also know this: The authorities rarely have real questions. They are talking to you to size you up, measure your mental strength and whether they can intimidate or break you.  These trap interviews, with accusations in the form of questions, are designed to create discrepancies between your answers and other evidence they have, sometimes for the very purpose of creating proof for a false statements charge.  You may assume there can't be misunderstandings because there's a tape and you're willing to be taped.  Police departments routinely record interrogations and even traffic stops (although this is done much more to protect the police from misconduct allegations and potentially ruinous civil rights litigation).  But the Federal Bureau of Investigation has a policy against recording interviews of targets and subjects (that is, potential witnesses and defendants) of investigations.8  Why? Because without a tape-recording of what you actually said, it's much easier to be charged with a false statement. It's your word against the aforementioned FBI 302 report. Now, how do you plead?

Parsing the FBI's rationale for this policy reveals motives that should terrify achievers in our nation.  The FBI justifies its no-recording policy by claiming "the presence of recording equipment may interfere with and undermine the successful rapport-building interview technique which the FBI practices" and "perfectly lawful and acceptable interviewing techniques do not always come across in recorded fashion to lay persons as proper means of obtaining information from defendants."9 The FBI does acknowledge "there are many situations in which recording a subject's interview would be prudent," but suggests recordings be made in so-called positive instances such as "where and when it will further the investigation and the subsequent prosecution."10 (Emphasis added.) Despite the ability to use recorded interviews to exonerate people and thereby reallocate scarce resources to pursue other wrongdoers, the FBI believes recorded interviews are useful only to prove guilt.  The federal government thereby shows a depraved indifference towards those whom it has wrongfully convicted, wrongfully prosecuted or wrongfully harassed people.  It even supports an inference that the government is willing to investigate, prosecute and jail people whom it knows are innocent. In an age where business owners, managers and investors are increasingly envied, despised and targeted for ruin by those with dark political or personal antipathies, such government powers can be fearsome indeed.

What's an innocent person to do?  You need to recognize that although Government is Authority, your misplaced trust, your childish hope that Authority is both Fair and Benevolent, will be as rational -- and as risky -- as a blind roll of the dice.  As a successful, mature, rational adult, an achiever -- a Grown-up, for heavens' sake --  you must reject the easy way out of Obedience to The (Nanny) State As Mommy.  You must beat the impulse to surrender to your fears of confronting injustice in an imperfect world in which you must fight for your very freedom, the right to be left alone.  If you don't, you allow others to make the most critical decision for your future, and in every real sense, to control you.  Freedom requires you to fight.  This is part of the price for our freedom. 
 
In an era of increased visibility of financial crimes, a broadening of what business practices are termed criminal, and growing public demands for "accountability" of the business community, there is a surprisingly easy and cheap policy solution.  Federal legislation mandating that investigators and prosecutors tape-record all interrogations will be an inexpensive, cost-effective means of guarding against miscarriages of justice and entirely mistaken criminal indictments of innocent people.  Allowing hard-to-refute tapings of interrogations will remove the parade of false statements prosecutions and allow the authorities -- who always complain about scarce resources for investigations, compliance and monitoring -- the ability to recoup and redeploy resources towards criminal investigations involving violence and public safety: terrorism, weapons and narcotics offenses. 

Footnotes: 

1.  Federal Bureau of Investigation - Financial Crimes Report 2010-2011, available at http://www.fbi.gov/stats-services/publications/financial-crimes-report-2010-2011.

2.  This sentiment was demonstrated by the comment made by President Barack Obama to the chief executive officers of the nation's thirteen largest banks that, "My administration is the only thing standing between you and the pitchforks," ABC News report, April 3, 2009, available at http://abcnews.go.com/blogs/politics/2009/04/obama-to-banker/.

3.  The call for more criminal prosecutions of "Wall Street" is one of the most common demands voiced by the leftist and somewhat anarchist protest movement calling itself "Occupy Wall Street." See Bob Cesca, "Occupy Wall Street Isn't Anti-Corporation, It's Anti-Corporate Crime," Huffington Post, Oct. 27, 2011, available at http://www.huffingtonpost.com/bob-cesca/occupy-wall-street-isnt-a_b_1034418.html.

4.  Alex Klein, "How The Government Failed to Fix Wall Street," The Daily Beast, Oct. 1, 2012, available at http://www.thedailybeast.com/articles/2012/10/01/how-the-government-failed-to-fix-wall-street.html.

5.  Ted Sherman and Josh Margolin, "The Jersey Sting," (St. Martin's Press, 2011), at 287-290. 

6.  See Indictment, U.S. v. Martha Stewart, Peter Bacanovic, S1-03-Cr-717 (MGC), Southern District of New York, June 4, 2003 (four count indictment of Stewart). The 302 report is the Federal Bureau of Investigation's Form for Reporting Information That May Become Testimony (FD-302), memorializing the statements by a witness, subject or target of an investigation being questioned by federal agents.  See House of Representatives Report 112-546, Resolution Recommending That the House of Representatives Find Eric H. Holder, Jr.,  Attorney General, U.S. Department of Justice, In Contempt of Congress for Refusal to Comply With A Subpoena Duly Issued By The Committee on Oversight And Government Reform, at 16 ("Pursuant to the Committee's investigation, the Justice Department produced FBI reports of witness interviews, commonly referred to as `302s.'"), available at http://www.gpo.gov/fdsys/pkg/CRPT-112hrpt546/pdf/CRPT-112hrpt546.pdf.

7.  The statute at issue, Section 1001(a) of the United States Code, Title 18 (18 USC 1001), provides as follows:
(a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully—
(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;
(2) makes any materially false, fictitious, or fraudulent statement or representation; or
(3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry;
shall be fined under this title, imprisoned not more than 5 years or, if the offense involves international or domestic terrorism (as defined in section 2331), imprisoned not more than 8 years, or both. If the matter relates to an offense under chapter 109A, 109B, 110, or 117, or section 1591, then the term of imprisonment imposed under this section shall be not more than 8 years.
8.  "Electronic Recording of Confessions and Witness Interviews," Memorandum dated March 23, 2006 by Federal Bureau of Investigation, Office of the General Counsel (the "2006 FBI Memorandum"), available at http://www.nytimes.com/packages/pdf/national/20070402_FBI_Memo.pdf (reaffirming that existing policy against recording interviews would remain);  see also Harvey Silverglate, "Constructing Truth: the FBI's (non)recording policy," July 27, 2011, available at http://www.forbes.com/sites/harveysilverglate/2011/07/27/constructing-truth-the-fbis-nonrecording-policy/.

9.  2006 FBI Memorandum at 3.

10.  2006 FBI Memorandum at 3.

11. See Note 7.


Eric Dixon is a New York investigative and corporate lawyer who handles legal, business and strategic matters for business, political and individual clients.

Monday, October 1, 2012

Rescue For The Islanders?

A group of European investors may be interested in buying and keeping the perennially money-losing New York Islanders in the New York metropolitan area, according to this New York Post report. I have previously predicted that bankruptcy might be an option for the Islanders, who reportedly have lost upwards of $20 million a year since the 2004-2005 owners' lockout. Bankruptcy would be one means of Islanders' owner Charles Wang achieving some sort of sale of the franchise (which this report states is Wang's objective and one he is "quietly" pursuing) and getting rid of the financial albatross. (The Post report by Larry Brooks and Josh Kosman cites a claim of $40 million in annual losses, of which I am skeptical. The National Hockey League has locked out its players and claimed financial hardship. Connect the dots.) The problem is that the franchise, which was one of the National Hockey League's model franchises both on and off the ice as recently as, well, 30 years ago, may not be saleable at any price. The Islanders franchise assuredly has dropped in value during his ownership, and may be barely viable financially at the Nassau Coliseum due to lease terms that prevent the Islanders from having the ancillary revenue streams most teams now enjoy. Who would buy a franchise without having a plan for a new arena in which those ancillary revenue streams (like arena luxury boxes) are available? (Incidentally, the Post report refers to the possible interest of real estate developer Ed Blumenfeld in buying the club and building a new arena, and claims former Islander legends Bob Nystrom and Denis Potvin are advising him.) Otherwise the franchise may be unsaleable to all but the most-motivated purchasers whose acquisition may be based on non-business considerations. The European investor group, being advised by another Islanders legend, Pat LaFontaine, may qualify as serious hockey aficionados. But the $300 million cited sale price for the franchise (which assuredly includes the cable television rights to the Islanders which are now wildly overvalued) is simply for the birds. Eric Dixon is a New York corporate and investigative attorney, financial commentator and strategist. He is on the board of directors of the financial think tank the Financial Policy Council.