The Kelleher legacy

Kellerher.jpgMitch Schnurman asks outgoing Southwest Airlines chairman and former CEO Herb Kelleher how he wants to be remembered:

“That I consumed more Wild Turkey and cigarettes than anybody else in the industry,” he quipped to reporters last week, after announcing that this would be his last year as chairman of Southwest Airlines.

As Schnurman notes, Kelleher’s fun-loving response dramatically underplays the revolutionary impact that this remarkable leader had on air travel, which he made affordable for millions of new air travelers. Read Schnurman’s fine column on Kelleher, which includes this beaut of an anecdote on why Kelleher agreed to the Wright Amendment:

My favorite memory of Kelleher was in late 2005, when the debate over the Wright Amendment was intensifying and moving to Washington. In the Senate hearing room, he lived up to the moment, saying that he had agreed to the 1979 Wright law in the same way the Germans accepted the end of World War I.
“In other words,” he told the senators, “with a gun to my head.”

Good news for Dr. Pou

Anna%20M%20Pou072407.jpgAn old saying in criminal defense circles is that a prosecutor could persuade a grand jury to indict a ham sandwich if the prosecutor is inclined to do so.
Fortunately, that was not the case in regard to former Houston area resident, Dr. Anna Pou (previous posts here). Dr. Pou served on the faculty of the University of Texas Medical Branch in Galveston from 1997-2004, where she was the Director of the Division of Head and Neck Surgery from 1999 to 2004. Kevin, M.D. has been doing a good job of tracking developments and comments regarding the case against Dr. Pou, and here is the link to the website that has been established to help raise funds for Dr. Pou’s defense.
Following on this recent post on developments in Dr. Pou’s case, a New Orleans Parish grand jury today declined to indict Dr. Pou for second-degree murder in connection with the deaths of several elderly patients in the horrifying aftermath of Hurricane Katrina. The decision ends a two-year long criminal investigation into Dr. Pou’s heroic treatment of patients at Memorial Medical Center in New Orleans, which was turned into a sweltering, powerless hellhole on Aug. 29, 2005 when the levees failed after the hurricane. Inasmuch as the hospital was not evacuated until several days after the storm, 24 out of 55 elderly and infirm patients died.
The case against this distinguished academic had all the earmarks of a political lynch mob from the beginning. It became quickly apparent that Dr. Pou’s arrest was the result of the highly questionable accusations of three employees of LifeCare Hospitals, the company that owned the hospital and whose top administrator and medical director didn’t even show up at the hospital during those chaotic days after Katrina. Inasmuch as the accusing LifeCare employees made no effort to evacuate the elderly and sick patients before or after the hurricane, it quickly became clear to any reasonably objective observor that they were attempting to divert attention (and perhaps prosecution) from their own appalling inaction.
But the facts didn’t matter to an elderly Louisiana attorney general named Charles Foti, who had campaigned on a plank of “cracking down on abuse of the elderly.” Foti engineered the arrest of Dr. Pou and two of her nurses while publicly referring to them as murderers, a charge that he repeated in an episode of 60 Minutes several months later. Although Dr. Pou’s lawyer had told Foti that she would surrender to authorities if an arrest warrant were issued for her, Foti had his investigators arrest Dr. Pou and haul her into Orleans Parish Prison on the evening of July 17, 2006, where she was booked on four counts of second-degree murder. Thankfully, the decision on whether to prosecute Dr. Pou was not Foti’s, but that of New Orleans District Attorney Eddie Jordan and the local grand jury, which was undoubtedly persuaded by the New Orleans coronor’s report that earlier this year concluded that no compelling evidence of homocide existed. But that did not stop Jordan from recently granting immunity to the two nurses who were charged with Dr. Pou in an effort to induce them to testify against Dr. Pou before the grand jury. Sheesh!
So, when does the investigation of the public officials begin who were responsible for attempting to organize this lynch mob?

A bully exposed

Spitzer072407.jpgAs noted in this post from a couple of weeks ago, more than a few folks are not losing any sleep over the fact that former crusading state attorney general and current New York Governor Eliot Spitzer is having trouble getting along with with his new playmates in Albany.
But now things are getting even more interesting. According to a report issued yesterday by Andrew Cuomo, Spitzer’s successor as New York AG (and perhaps as governor sooner than we thought), Spitzer’s aides used the state police to gather information about whether Spitzerís chief political rival, Joseph Bruno, improperly used state-owned aircraft for political purposes. To make matters worse, when the improper use of state police was revealed, Spitzerís communications director, Darren Dopp, concocted a false story as to why the aides sought the information. Although the Cuomo report concluded that the aidesí conduct was ìnot unlawful,î Spitzer suspended Dopp and conceded at a press conference that his administration had ìgrossly mishandledî the situation. And all this occurred despite the fact that Cuomo’s report was not thoroughly prepared.
Spitzer has a lot of experience in the area of “grossly mishandling” situations. OpinionJounal notes the same thing.
The irony of Spitzer’s plight has generated quite a few entertaining blog post titles around the blogosphere, the best of which are Ellen Podgor’s (she of “Busted for Yoga” fame) “Spitzer Spitzered” and Nathan Koppel’s “Spitzer Schadenfreude.” Seems as if Spitzer is redefining the bully pulpit.

“Pulling a Mackey”

Overstockcom.gifOverstock.com’s CEO Patrick Byrne is already a controversial character in business circles over his dubious demonization of shorting (earlier posts here and here) and his rather bizarre handling of Wall Street conference calls. But as this Gary Weiss post explains, Bryne has now outdone himself — he’s “pulled a Mackey.”

Steyn on reforming the criminal justice system

conrad_black%20072307.jpgCanadian Mark Steyn’s experience in blogging the Conrad Black trial gives him an interesting perspective in proposing several common sense reforms for the federal criminal justice system, most of which have been addressed in this blog over the years:

1) An end to the near universal reliance on plea bargains, a feature unknown to most other countries in the Common Law tradition. [. . .]
2) An end to the reliance on technical charges such as “mail fraud” and “wire fraud”, whereby you’re convicted not for the crime itself but for sending a letter or authorizing a bank transfer in the course of said crime. [. . .]
3) An end to the process advantages American prosecutors have accumulated over the years – such as the ability to seize a defendant’s funds and assets and deprive him of the means to hire good lawyers and rebut the charges. Or to take another example: Unlike the Crown in Commonwealth countries, in closing arguments to the jury the US government gets to go first and – after a response from the defence – last. This is an offence against the presumptions of English law: The prosecutor makes his accusation, the accused answers them. Every civilized legal system allows the defendant the last word.
4) An end to countless counts. In this case, Conrad Black was charged originally with 14 crimes. That tends, through sheer weight of numbers, to favour a conviction on some counts and acquittal on others as being a kind of “moderate” “considered” “judicious” “compromise” that reasonable persons can all agree on. [. . .]
5) An end to statute creep. One of the ugliest features of American justice is the way that laws designed to address very particular situations are allowed to metastasize and be applied to anything a prosecutor fancies. The RICO statute was supposed to be for mobsters and racketeers. Conrad Black is not a racketeer but he was nevertheless charged with racketeering. [. . .]
6) An end to de facto double jeopardy. Conrad Black is likely to wind up back in court to go through all the stuff he’s been acquitted of one mo’ time, this time in a Securities and Exchange Commission case. That would be a civil case, not a criminal one, and the US Attorney insists that the SEC is an entirely separate body. Oh, come on. The US Attorney and the SEC are both agencies of the US Government. They work in synchronicity. It’s not the same as Nicole Brown’s family suing OJ after the state’s murder case flopped. In this instance, two arms of the same organization are bringing separate cases on exactly the same matters. That’s double jeopardy – or, in fact, given the zealousness of the SEC, triple and quadruple jeopardy.

Steyn expands on these points, so read the entire post. And here is another proposed reform that should be added to the list.

Belly putters as Segways

Navel%20putter.jpgFor the first three days of this year’s British Open, Sergio Garcia used his new belly putter to sink seemingly every crucial putt to take a three-stroke lead into the final round. Through five holes of the final round, Garcia’s new-found putting stroke continued as he extended his lead to four strokes. But then, as Lawrence Donegan of The Guardian reports, the wheels of Garcia’s putting stroke suddenly careened into the nearest burn:

The first glimmer that the procession was heading for a few detours came on par-five 6th when he missed a four-foot putt for birdie, then barely holed the one coming back for par. The scores on the boards remained the same but the mood music had changed, from steady march to jazzy stagger. A poor approach shot to the back of the 7th green ended up costing him a shot and he dropped another at the next when he missed an eight-foot putt for par.

Which brings us to the best line that I’ve seen describing the probable result of Garcia’s fourth round putting collapse:

To [Garcia’s] credit he made a par at the next but, when he missed another short one on the 10th, shares in belly putters went the way of the Segway scooter.

By the way, my bet is that it’s just a matter of Garcia becoming comfortable with his belly putter before he wins a major tournament. He is a simply too good a ball-striker not to win at least one.
Also, did you notice how much more entertaining the British Open was in comparison to this year’s U.S. Open?

Debt really is cheaper than equity

transocean%20rig.jpgDealmaking in Houston is as hot as the downtown pavement these days. Last week it was the Plains-Pogo deal, and this week local offshore drilling firms Transocean Inc. and GlobalSantaFe Corp. are proposing an $18 billion merger deal that will create the largest offshore drilling contractor by a mile. The new company will have a market capitalization of $52 billion and will have a 145-rig fleet, which is more than twice as many rigs as the fleet of the next largest competitor.
The deal comes amidst an unprecedented period for deep sea drilling contractors. With crude-oil and natural gas prices maintaining at historically high levels, exploration and production companies have been willing to pay top dollar to be able to tap reserves that often are often deep under the ocean. As a result, offshore drilling contractors are enjoying intense demand for deepwater rigs, which has increased lease rentals dramatically. Not surprisingly, the stock prices of most of the publicly-owned drilling contractors have been soaring for the past year or so.
Transocean, which is the much larger company (a $32 billion market cap to GlobalSantaFe’s $17 billion), is actually the acquiring company in the merger. Transocean shareholders will end up with around 66% in the combined company, while GlobalSantaFe shareholders will end up with the other 34%. But the really interesting aspect of the deal is that the merged company is going to borrow a cool $15 billion (Goldman Sachs and Lehman Brothers are handling that debt vehicle) to spread among the shareholders of the two companies even as debt offerings generally are being downsized in most other markets. The merged company will use its first two years of free cash flow to reduce that debt.
Thus, the bottom line is that the companies are borrowing $15 billion, giving it to their shareholders, and then will take advantage of the hot drilling market to pay the money back quite quickly out of cash flow. Why not just use the cash flow over the next several years and give that to shareholders? Not sure, but I suspect that the structure of the deal will save the merged company a boatload of taxes over the next several years.

Dalrymple on Tony Blair

Tony%20Blair.jpgThe recent resignation of U.K. Prime Minister Tony Blair provides an opportunity for British psychiatrist and author, Anthony Daniels (who writes under the pen name of Theodore Dalrymple), to provide this interesting early appraisal of the Blair years:

There undoubtedly were things to be grateful for during the Blair years. His support for American policy in Iraq won him much sympathy in the U.S., of course. He was often eloquent in defense of liberty. And under Mr. Blair’s leadership, Britain enjoyed 10 years of uninterrupted economic growth, leaving large parts of the country prosperous as never before. London became one of the world’s richest cities, vying with New York to be the global economy’s financial center. Mr. Blair did inherit a strapping economy from his predecessor, and he left its management more or less to the man who succeeds him, Gordon Brown. Still, unlike previous Labour prime ministers, he did not preside over an economic crisis: in itself, something to be proud of.
But how history will judge him overall, and whether it will absolve him (to adapt slightly a phrase coined by a famous, though now ailing, Antillean dictator), is another matter [. . .]
Tony Blair was the perfect politician for an age of short attention spans. What he said on one day had no necessary connection with what he said on the following day: and if someone pointed out the contradiction, he would use his favorite phrase, “It’s time to move on,” as if detecting contradictions in what he said were some kind of curious psychological symptom in the person detecting them.
Many have surmised that there was an essential flaw in Mr. Blair’s makeup that turned him gradually from the most popular to the most unpopular prime minister of recent history. The problem is to name that essential flaw. As a psychiatrist, I found this problem peculiarly irritating (bearing in mind that it is always highly speculative to make a diagnosis at a distance). But finally, a possible solution arrived in a flash of illumination. Mr. Blair suffered from a condition previously unknown to me: delusions of honesty.

Check out the entire op-ed. It’s worth the time.

Dr. Pou’s defense goes on the offensive

Anna%20M%20Pou072307.jpgThe state’s threat to prosecute Dr. Anna M. Pou for murder is a sad reflection of the incompetence in the Louisiana state government that permeated the preparations for and the aftermath of Hurricane Katrina. After almost two years now of legal limbo, Dr. Pou’s defense team is fighting back:

Dr. Anna Pou – the physician arrested in the deaths of four patients at a New Orleans hospital after Hurricane Katrina – filed suit against the Louisiana Attorney General on Monday, accusing him of using her arrest to fuel his re-election bid.
The suit, filed in state court in Baton Rouge, also seeks to force the state to provide a legal defense for Pou against civil lawsuits filed by families of three of the patients.
Last year, State Attorney General Charles Foti claimed Pou and two nurses killed four people with a ëëlethal cocktail” at Memorial Medical Center during the chaotic conditions after the August 2005 storm. The four were among at least 34 who died at the sweltering, flooded hospital in the days following Katrina. Pou, who is free on bond, has not been formally charged. A New Orleans grand jury is looking into the case.
Foti had Pou arrested, ëëcalled an international press conference the next day to announce the arrest, made extra judicial comments totally contrary to the Rules of Professional Responsibility, and culminated the week’s activity with an attorney general fund raiser to showcase his ëachievements’ in the arrest of Dr. Pou and the two nurses,” the suit says.
Foti was not immediately available for comment . . .

Go Dr. Pou!

The latest point shaving scandal

basketball-section.jpgWith the news from Friday that just-resigned National Basketball Association referee Tim Donaghy bet on NBA games that he officiated over the past couple of seasons, we have been deluged with media predictions over the weekend that the “integrity of the game” has been compromised and that this is a huge problem for the NBA.
Frankly, my reaction was quite similar to that of Captain Renault’s in Casablanca after the Nazis ordered him to close down Rick’s — “I’m shocked, shocked to find that gambling is going on in here!” (exclaimed while picking up his winnings).
In short, I don’t think the fact that an NBA referee was on the take will affect the entertainment value of the NBA one iota, and Dave Berri’s Sports Economist post explains why. My sense is that the biggest problem that the NBA will face in this entire episode is (1) explaining why the league office did not suspend Donaghy when it learned that he had a gambling problem and was somewhat of a loose cannon, and (2) if Donaghy, in an effort to obtain a more favorable sentence, starts fingering other point shaving referees. But as this NY Times article explains, NBA referees are already monitored closely, so the risk that a widespread point shaving problem exists among referees is unlikely.