The Smart Money

betting-069-06.gifAs Captain Renault — Claude Rains’ character in Casablanca — might say, “I’m shocked, shocked that there is betting on sporting events!:”

The Brain Trust [is] a shadowy cabal of gamblers who wager enormous amounts of money on sports events, using a supercomputer and a SWAT team of injury and weather experts to take advantage of minor discrepancies in the point spreads set up by the Vegas linemakers. Itís a multimillion-dollar business ó and legal ó but thereís a wrinkle: they like to bet hundreds of thousands of dollars per game, and whenever the casinos sniff out betting syndicates like the Brain Trust, they show them the door in a heartbeat. Thatís because in addition to risking huge losses each week, the bookmakers are forced to adjust their betting lines ó sometimes by two or three points for a football game ó whenever the ìsmart moneyî wades in, since they desperately need other customers to bet the other side to balance their action and stand a chance of making money.

The foregoing excerpt is from this NY Times book review of Michael Konik’s new book, The Smart Money (Simon & Schuster 2006). As Konik notes, the Brain Trust attempts to manipulate the point spread on sporting events in the same way that hedge funds and currency speculators attempt to move the stock market on certain stocks and currencies. Capt. Renault would almost certainly be playing.

The Poston Congressional hearings?

Postons3.jpgThis previous post reported on the strange case of Houston-based lawyer and former sports agent, Carl Poston, who is currently serving a two-year suspension levied by the National Football League Players’ Association from representing any NFL players. I thought the suspension pretty much ended that story, at least until coming across this ESPN.com article:

New York Giants linebacker LaVar Arrington is tentatively scheduled to testify before Congress this week at a hearing involving his former agent.
Arrington, a three-time Pro Bowl player; NFL Players Association general counsel Richard Berthelsen; and a law professor were on a “tentative witness list” e-mailed to The Associated Press on Tuesday by House Judiciary Committee press secretary Terry Shawn. [ . . .]
The Subcommittee on Commercial and Administrative Law has scheduled an oversight hearing for Thursday to examine the NFL Players Association’s arbitration process. Lawmakers will be looking into the NFLPA’s suspension of Arrington’s former agent, Carl Poston, stemming from his handling of a contract the linebacker signed with the Washington Redskins near the end of the 2003 season.

Now, I recognize that a post-election Congress is the Washington, D.C.-equivalent of professional golf’s “silly season,” where members of a lame duck Congress are passing time until the new Congress is sworn in early next year. But still, can’t our elected officials find something more noteworthy on which to hold a Congressional hearing than a relatively small, not-very-well handled contractual matter between two private parties?

The Bobby Maxwell Lawsuit

rig120606.jpgThis NY Sunday Times article reports on the lawsuit of former federal government oil and gas auditor Bobby L. Maxwell, who is suing Kerr-McGee Corporation in Denver federal court for underpayment of oil and gas royalties to the federal government on oil and gas wells producing on federal lands. Under an obscure federal statute that rewards private citizens who expose fraud against the government, Maxwell and his counsel stand to recover as much as $15 million if they ring the bell in the lawsuit, which is scheduled for trial on January 16.
Although I know nothing about the particulars of the Maxwell case other than what is reported in the article, underpayment of oil and gas royalties is not uncommon. Indeed, when I am retained by royalty owners in a reorganization case of an oil and gas company, my standard advice is for the royalty owners to hire an experienced oil and gas auditor to conduct at least a review of the debtor’s royalty payments. When an oil and gas company starts having financial problems, scrimping on royalty payments is not an unusual occurrence.

Controversial Justice

William Wayne Justice.jpgLongtime Eastern District of Texas U.S. District Judge William Wayne Justice has long been one of most controversial federal judges and, thus, one of the best-known in Texas. The 86-year old Judge Justice was recently back in the news as the first honoree of the Morris Dees Justice Award, named for the famed Alabama civil rights lawyer, which prompted this profile from the Chronicle’s Janet Elliott.
Judge Justice is the quintessential activist federal judge, so he is not the most popular fellow in all quarters. Maybe he should have been in the legislature, but it’s hard not to admire a judge who at 86-years of age still handles a full court docket and chooses to be activist in cases that promote desegregation in education, equal educational opportunity and prison reform. The legislature has never done a particularly good job of dealing with those issues, anyway.

Bainbridge Cubed!

s_bainbridge_5_x_7.jpgA month or so ago, Clear Thinkers favorite Stephen Bainbridge took some time off from blogging while revamping his blog site.
Now, he’s back. And he’s tripled!:

Professor Bainbridge’s Business Associations Blog
Professor Bainbridge’s Journal (Politics, Religion, Culture, Photography, and Dogs)
Professor Bainbridge on Wine

While the Weary case is dismissed, the SWAT danger continues

Swat icon.jpgIn the right move, Texans’ offensive lineman Fred Weary’s criminal case was dismissed yesterday by Harris County Court at Law Judge Pam Derbyshire, who commented from the bench that Weary did not use enough force against police officers during the Nov. 14 incident to justify either the charge or, presumably, being Tasered.
Meanwhile on the police overreaction front, this Pokerati series of posts chronicles the latest Dallas SWAT team “success” — breaking into and destroying several of the city’s underground poker rooms. Pokerati has firsthand accounts of Dallas SWAT teams swooping into the poker rooms, breaking windows, kicking down doors, and charging with assault weapons drawn into peaceful gatherings of “dangerous” Texas Hold ‘Em enthusiasts. I’m sure everyone in the Metroplex is sleeping more restfully now that these evil card sharpies are behind bars.
As former Cato Institute policy analyst Radley Balko shows in this Cato study, small municipalities frequently misuse SWAT squads for routine police work, which has led to an increasing number of botched raids resulting in injury or even death to innocent citizens. The Dallas poker raids were only the most recent example of unnecessary and dangerous SWAT unit deployments; this earlier post reported on one in a Houston suburb. Police overreaction is dangerous enough when it occurs in the spur of the moment as in the Weary case. But the risk of innocent citizens being harmed goes off the charts when SWAT teams are unnecessarily deployed to break up peaceful gatherings of people engaging in harmless activities.

Piling on in the Slade case

Priscilla Slade5.jpgThis Chronicle article reports that the criminal case of former Texas Southern University president Priscilla Slade does not appear to be moving toward an amicable resolution:

The Harris County District Attorney’s Office is investigating suspicions that former Texas Southern University President Priscilla Slade may have lied to the grand jury.
Prosecutor Donna Goode sought today to unseal Slade’s grand jury testimony so that Slade’s former assistant could review it for inconsistencies.
If conflicts are found, Slade could be charged with aggravated perjury.

Slade already faces an effective life prison sentence if convicted on felony charges of misapplication of fiduciary property, so why seek an additional ten years on an aggravated perjury charge? Slade attorney Mike DeGeurin suggests that the prosecution wants to use the grand jury testimony in preparing witnesses who would not otherwise have access to the secret testimony.
Meanwhile, Slade faces a possible February 16, 2007 trial date in what is shaping up to be one of the ugliest white collar criminal cases to take place in Harris County District Court in a long while.

Liberty and Justice for all?

prison13.jpgThe chronically overcrowded and abysmal condition of the Harris County Jail has been a frequent topic on this blog (most recently here), so this Bill Murphy/Houston Chronicle article from over the weekend caught my eye because it concerned the changing views of one of the formerly toughest sentencing judges in the Harris County District Courts:

State District Judge Michael McSpadden once believed that long sentences would deter drug sales and drug use.
But after more than two decades hearing felony cases in Harris County, the former prosecutor is calling on the governor and Legislature to reduce sentences for low-level drug possession.
“These minor offenses are now overwhelming every felony docket, and the courts necessarily spend less time on the more important, violent crimes,” he recently wrote to Gov. Rick Perry.

Continue reading

Handicapping the competition for the Texas Fifth Circuit Judgeships

Fifth Circuit.jpgDavid Lat of AbovetheLaw.com does a good job here of analyzing the various candidates for the two “Texas” Fifth Circuit Court of Appeals judgeships that will be opening soon with Judges Patrick Higginbotham and Harold DeMoss taking senior status. Houston judges George C. Hanks, Jr. (First Court of Appeals), Jennifer W. Elrod (190th District Court), Jane Bland (First Court of Appeals) and U.S. District Judge Lee Rosenthal are on the short list, as is former Houstonian, Texas Supreme Court Chief Justice Wallace Jefferson. This should be quite a competition, so stay tuned.

Perverting Justice

Perverted Justice Map.gifAn organization called Perverted Justice — a so-called “Internet Watch” group — goes around the country and induces men to correspond with what they think are minor boys via email, instant messenging and chat rooms. However, the minor boys are really Perverted Justice operatives, who then turn over the evidence of solicitation to police authorities while notifying the news media about the impending arrest of the men for soliciting sex over the Internet with people they thought were underage boys. In turn, the police enjoy the publicity and allow the news media to tag along to video the arrest for the 10 o’clock news.
This past Sunday, a well-regarded 56-year old prosecutor, Louis Conradt, Jr.. of the North Texas town of Terrell killed himself as the police were knocking on his door to arrest him in a Perverted Justice-inspired sting operation. Of course, a Dateline NBC camera crew was outside Conradt’s house when Conradt killed himself.
Although there is forensic computer evidence that Conradt had communicated over the Internet with other minor boys, there is no evidence that he had ever actually met any of the boys. Conradt clearly needed help for a personal problem, but that therapy did not include having a camera crew show up on his front porch to film the most humiliating moment of his life. What Conradt did is shameful, but what Perverted Justice, the police and the Dateline NBC reporters did to Conradt is much worse than the crime that they contend that their actions are attempting to deter.