An uncomfortable issue for John McCain

pills.jpgThe hypocritical and unproductive nature of the government policy of drug prohibition has been a frequent subject on this blog (see here, here, here and here), so this Radley Balko post about Cindy McCain, John McCain’s wife, caught my eye:

. . .the problem with the hypocritical practice of letting politiciansí family members get off for drug crimes that land normal people in prison is that it doesnít seem to do much in the way of making them more sympathetic. It just hardens them into more militant drug warriors.

Read the entire post.

Can Schiller and Del Grande save Cafe Express?

cafe_express_logo.gifAt one time earlier this decade, the Cafe Express restaurants were among the best “upscale” fast food restaurants in Houston, perhaps anywhere. Then, in 2004, Wendy’s International purchased a majority stake in Cafe Express from the original owners, Lonnie Schiller and Robert Del Grande, who also own the popular upscale Houston restaurant, Cafe Annie.
Wendy’s promptly operated the Cafe Express restaurants like, well, like Wendy’s. No one would confuse their local Wendy’s with an upscale fast food restaurant. It became clear quickly that Wendy’s did not have a clue of how to manage an upscale fast food restaurant chain. Cafe Express suffered.
Reflecting that hope springs eternal, this David Kaplan/Chronicle article reports that Schiller and Del Grande have purchased Cafe Express from Wendy’s (hopefully at a BIG discount). It’s a different and more competitive market in the “upscale” fast food industry now than when Schiller and Del Grand sold to Wendy’s, so there is no certainly that Schiller and Del Grande will be able to infuse Cafe Express with its lost luster. But I’m pulling for them.

WinkingSkull.com

WinkingSkull.com.jpgCheck out WinkingSkull.com, a worthy counterpart to the Visual Medical Dictionary (noted earlier here) in better understanding anatomy and medical conditions.
Along those lines, did you know that “the bacteria count in the plaque on human teeth approaches the bacteria count in human feces?” (H/T Kevin, MD)
Still biting those fingernails? ;^)

Piling on Rosenthal

Rosenthal%20020208.jpgIt’s become fashionable around Houston to be critical of outgoing Harris County District Attorney Chuck Rosenthal. Frankly, much of the criticism is deserved. But given what Rosenthal has been going through in federal court over the past couple of days, one has to wonder whether the media firestorm regarding Rosenthal has reached the point that otherwise rational observers have taken leave of their senses.
Take this latest Chronicle article on the hearing over Rosenthal’s destruction of emails that he had been ordered to turn over in connection with a civil lawsuit in federal court. The Chron article, which is representative of the newspaper’s vitriolic coverage of Rosenthal’s political demise, calls the hearing a “contempt hearing” in which the judge could “hold Rosenthal in contempt, . . .[and] put the DA behind bars for six months.”
H’mm. I don’t think so.
Although the plaintiffs in the civil lawsuit are having a field day excoriating Rosenthal in court and in the media, I can’t see how the judge could hold Rosenthal in contempt of court, at least at this stage. The plaintiffs’ motion (see here) essentially requests that the judge hold Rosenthal in criminal contempt of court because of Rosenthal’s destruction of email evidence and failure to comply with the court-ordered procedure for reviewing the emails. The motion doesn’t call for Rosenthal to be held in civil contempt. There is no need for the court to take coercive action and Rosenthal would not be able to take any action to purge the contempt, anyway. The destroyed emails are gone for good and Rosenthal can’t do anything about that.
Thus, Rosenthal — who isn’t even a party to the civil lawsuit — is accused of criminal contempt, but he has been provided none of the protections that due process of law requires for a criminal defendant. Inasmuch as Rosenthal’s allegedly contemptuous conduct did not take place in the courtroom, the trial judge does not have the power to hold him in criminal contempt without a full-blown trial on the criminal contempt charges. Indeed, the trial judge cannot even be the judge in Rosenthal’s criminal contempt trial because the judge is a potential witness in that trial.
Likewise, the plaintiffs’ lawyer in the civil lawsuit cannot prosecute a criminal contempt case against Rosenthal. Rather, the contempt charge must be referred to the U.S. Attorneys’ Office, which then decides whether to prosecute Rosenthal based on an evaluation of the evidence and and the charges. If the U.S. Attorney decides to do so, then Rosenthal is entitled to the due process protections that any criminal defendant is entitled to receive, including notification of the specific charges, trial by jury, and confrontation of the adverse witnesses. The circus going on right now over in federal court doesn’t come close to fulfilling those Constitutional safeguards.
So, I don’t think Judge Hoyt is going to hold Rosenthal in criminal contempt and throw him in jail. Even if Judge Hoyt were to do so, the Fifth Circuit would likely stay the commitment order and eventually overturn it. The Chronicle and Rosenthal’s many other detractors can continue to revel in the lame duck DA being filleted in a public court hearing, but at least provide Rosenthal due process of law. We in Houston have already seen what happens to the unpopular public figures of the moment when those protections are ignored.

JÈrÙme Kerviel channels Tom Cruise

tom-cruise-acting%20crazy.jpgIn this clever Financial Times op-ed, John Gapper lucidly explains why the business world will always be dealing with risk-takers such as JÈrÙme Kerviel, the alleged ìrogue traderî at SociÈtÈ GÈnÈrale whose trades are responsible for the $7 billion plus hit that the bank took earlier this month.
According to Gapper, it’s because Kerviel went crazy like actor Tom Cruise, except there was a method to Kerviel’s madness. Although Kerviel’s trades were bizarre and risky, they had a certain crazy logic because traders have big incentives to risk everything for stardom:

In recent days we have witnessed two men taking leave of their senses. In one case, however, there was method to the madness.
The first is Tom Cruise, the Hollywood film star and devoted Scientologist. In a clip made for members of the cult-like religious movement, Mr Cruise can be seen laughing manically and claiming special powers to help the victims of road traffic accidents because of his faith. He seems utterly deluded.
The second is JÈrÙme Kerviel, the ìrogue traderî at SociÈtÈ GÈnÈrale accused of losing his bank Ä4.9bn. Mr Kerviel did not make money for himself by his trading. Instead, as Jean-Claude Marin, the Paris prosecutor, said this week: ìHe wanted to show that he was worth as much as the others around him. He truly believed that … everyone would recognize his financial genius.î
Crazy, right? That is what Mr Kervielís former bosses, most of whom are either out of a job already or soon will be, think. Rather than sticking to his assigned role as a lowly arbitrage trader, Mr Kerviel tried to become a star. ìI think that he is completely mad,î says one banker.
Well, not completely. Actually, there is a good argument that Mr Kerviel acted in a financially rational manner, although he broke both his contract and ñ allegedly ñ the law. He had as firm a grasp of superstar economics as Mr Cruise, one of the worldís best-paid film actors.
The basic principle of superstar economics, which applies to both entertainment and investment banking, is that a few people take most of the rewards. If you can establish yourself as a top talent either on screen or on a trading floor, you gain status and get rich.

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The never-ending City of Houston corruption probe

City%2Bof%2BHouston%2BSeal.gif.pngIt’s been a couple of years since I last blogged on it, and it’s been over two and a half years since the new defendants were first mentioned as potential targets in the probe, but the feds finally got around last week to indicting Andrew Schatte and Michael Surface, the principals in the Keystone Group who have made a living over the past decade or so managing big construction projects financed by the City of Houston and other municipalities. The press release on the indictment is here and a copy of the indictment is here. For unknown reasons, the U.S. District Clerk’s office did not post the indictment publicly until yesterday, which is about as long as it took for the Chronicle’s editorial staff to comment on the indictment.
The indictment alleges that Schatte and Surface bribed former City of Houston building services director Monique McGilbra to gain favor on a couple of big City of Housotn building projects for which they were competing. The feds allege that the bribes were both direct (not so big) and indirect (much larger), the latter of which were allegedly funneled through Garland Hardeman, McGilbra’s former boyfriend who Schatte and Surface hired to work with them in obtaining the contracts. McGilbra, who copped a plea back in 2005, will be singing like a canary for the prosecution in this case.
Not enough is known about Schatte and Surface’s defense strategy at this point to know what will be the most important issues in the case. However, one has to wonder why the U.S. Attorneys’ office — which has been investigating corruption in the City of Houston administration of former Mayor Lee P. Brown now for six years — waited for over two and a half years after McGilbra had fingered Schatte and Surface to bring the charges against the two? Similarly, when did the feds notify Schatte and Surface that they were targets of a criminal probe? If it was some time ago (as it would appear), then why was Surface serving on the Harris County Sports & Convention Corp board for the past two years while being the target of a federal criminal probe?
The feds need to wrap this matter up.

Protesting the absolute priority rule while wintering in Houston

totem%20pole%20013108.JPGThis Tom Fowler/Chronicle article reports on a retired commercial painter from Ohio is engaging in a rather novel protest of the absolute priority rule, the bankruptcy principle that prevents shareholders from receiving any value under a bankruptcy plan unless creditors either are paid in full or agree that the shareholders can receive something:

Calpine Corp.’s emergence from bankruptcy protection in the coming days will end a tough chapter in the history of Texas’ No. 3 power producer, but don’t expect applause from shareholder Robert Strouse.
The retired commercial painter from Ohio likely will continue his vigil in front of the company’s downtown Houston offices where he’s been protesting the bankruptcy plan for the past two weeks.
“They’d like me to go away, but I’m going to hang on as long as I can,” said Strouse, 62.
Strouse claims the company misled him about the price he could expect for his stock when Calpine emerges from bankruptcy ó a charge the company denies. [. . .]
Strouse said his quarrel with Calpine began last month after a phone conversation with an investor relations official. He said he was told his 5,000 shares probably would be valued at about $1.60 each under the company’s reorganization plan. That’s a far cry from the $5.12 each he paid for them in March 2004, but better than nothing, he figured, so he voted in favor of the plan.
The plan that came out of the bankruptcy court in December, however, wasn’t what he expected. It will cancel outstanding shares of common stock like his and replace them with warrants ó the right to purchase new Calpine stock ó but at a price likely higher than that at which the stock will begin trading.
“They lied to me, plain and simple,” Strouse said.

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The stadium ruse

Houston%20Dynamo%20stadium%20013108.gifSomething to think about in regard to the City of Houston’s latest stadium boondoggle.
Skip Sauer over at The Sports Economist notes this Rick Eckstein op-ed on the myth of economic benefits from the public financing of sports stadiums:

. . . [M]y colleagues and I studied media coverage of 23 publicly financed stadium initiatives in 16 different cities, including Philadelphia. We found that the mainstream media in most of these cities is noticeably biased toward supporting publicly financed stadiums, which has a significant impact on the initiatives’ success.
This bias usually takes the form of uncritically parroting stadium proponents’ economic and social promises, quoting stadium supporters far more frequently than stadium opponents, overlooking the numerous objective academic studies on the topic, and failing to independently examine the multitude of failed stadium-centered promises throughout the country, especially those in oft-cited “success cities” such as Denver and Cleveland.

Meanwhile, Houston is bidding on another Super Bowl (XLVI in 2012). Get those yachts lined up, folks.

The wisdom of U.S. Presidential campaigns

president-logos-2008.jpgMuch is wrong with U.S. Presidential campaigns. They last much too long, are far too expensive and the rhetoric is mostly mind-numbing.
However, for all its faults, the messy process does have a way of eliminating the candidates that need to be weeded out (see also here and here).
By the way, Megan McArdle has the New York City perspective on Giuliani’s withdrawal.

What time is it over there?

Clock-11892TCH.jpgWhen I’m going to be involved in telephone conferences with folks overseas, I am constantly wondering what time of the day it is for them. This website helps me.