Following up on this earlier post on the sad case of Jamie Olis, the sentence is in — 24 years. Here is the NY Times article on the sentencing.
Update on the Jamie Olis sentencing
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Daily Archives: March 25, 2004
D&O insurers cannot unilaterally rescind
In the wake of recent corporate scandals, several directors-and-officers (“D&O”) insurance carriers have sought to rescind policies that were allegedly purchased on the basis of misrepresentations. This WSJ article ($) reports on a recent decision out the Eastern District of Pennsylvania holding that Aegis Bermuda Insurance Co. must pay the defense costs for several directors and officers involved in litigation over the collapse of Adelphia Communications. Although Adelphia’s bankruptcy temporarily prevents Aegis Bermuda from taking legal action to rescind the policy, the court nevertheless held that the insurer was required to continue paying legal fees until a judgment permitting recission was obtained:
“‘Insurance carriers do not function as courts of law,’ U.S. District Judge Michael M. Baylson wrote. ‘If a carrier wants the unilateral right to refuse a payment called for in the policy, the policy should clearly state that right. This policy does not do so.'”
Thanks to the 10b-5 Daily for the link to the WSJ article.
The Players Championship
The favored religion of the IRS — Scientology
This Logos post entitled “The chosen people of the IRS?” points to this New York Times article that reports on a California case that has uncovered a rather remarkable preference that the Internal Revenue Service has granted to the Church of Scientology.
Apparently, Scientology parents are allowed to deduct the cost of religious education as a charitable donation under an officially secret 1993 IRS agreement despite a 1989 Supreme Court decision prohibiting such a deduction. In the original case, the Ninth Circuit ruled against the plaintiff’s request for a deduction for the cost of Jewish religious education, but when it did so, one of the judges suggested an alternative approach:
“Why is Scientology training different from all other religious training?” Judge Barry D. Silverman wrote in his opinion, adding that the question would not be answered just then because the court was not faced with the question of whether “members of the Church of Scientology have become the I.R.S.’s chosen people.” Judge Silverman then recommended litigation to address whether the government is improperly favoring one religion.
“If the I.R.S. does in fact give preferential treatment to members of the Church of Scientology – allowing them a special right to claim deductions that are contrary to law and disallowed to everybody else – then the proper course of action is a lawsuit to put a stop to that policy,” Judge Silverman wrote.
So, the plaintiffs filed another lawsuit, and during the course of discovery in that case, a subpoena was issued for a copy of the “secret agreement”, but both the IRS and the Church of Scientology resisted producing it. Stay tuned.
As an aside, actor and director Steve Martin hilariously spoofed the Church of Scientology and its heavily Southern California clientele in his underrated comedy from several years ago, “Bowfinger.”
Calpers: Seperate audit from other services
When it blew up in late 2001, Enron was paying Arthur Andersen at a rate of about $1 million per week for various professional services, including audit services. Although the final chapter is yet to be written, a good case can currently be made that one of the primary reasons for the demise of Andersen in the wake of the Enron scandal was the firm’s compromising of its auditing integrity for the benefit of Enron as a key customer of Andersen’s other professional services.
Now, this interesting CFO Magazine story relates how the California Public Employees’ Retirement System (Calpers) is opposing Freddie Mac’s reappointment of auditor PricewaterhouseCoopers because the company has used PwC for non-audit services. This is a result of a new Calpers policy of withholding votes from audit committee members at companies that allow auditors to perform non-audit work.
The pension fund is also withholding its votes from director Michelle Engler, wife of former Michigan governor John Engler. The former Governor Engler is an executive at Electronic Data Systems Corp., which is a large vendor of Freddie Mac. The pension fund asserts that this business relationship between Freddie Mac and EDS could impair Mrs. Engler’s objectivity.
In the small world department, I hired Mrs. Engler in her first job as an attorney out of law school when I was running a downtown Houston law firm back in the 1980’s. Michelle was a fine lawyer and is a great person, and Calpers would be well-advised to adopt a more flexible position to keep conscientious and bright people such as Michelle on the boards of companies in which Calpers invests. Knowing Michelle, she would recuse herself from any action that the Freddie Mac board might take in regard to EDS, anyway.
Thanks to the BusinessPundit for the link to this article.
Imports are good
This David Wessel column in the Wall Street Journal ($) makes some good points on the value of imports. Inasmuch as that value is often misrepresented during a political season, Wessel observes:
Let us now praise the virtues of imports.
Consider the clothes Americans buy for the four million babies born each year in the U.S. The typical family with a young child spends about $500 a year on those cute T-shirts, blue jeans and tiny socks. That’s $2 billion a year.
Not so long ago, the U.S. had a ceiling on imports of baby clothes. That limit was lifted for most countries in 1998, and for China at the beginning of 2003. Imports of baby clothes more than doubled between 1997 and 2003, notes Ed Gresser, who labors to make the case for free trade for the centrist Democrats’ Progressive Policy Institute. Wholesale prices at the ports dropped 28%.
Consumers saved. In the same years, the consumer-price index for all items rose 15%. But the retail price of infant and toddler apparel of all sorts fell 5.2%. Had the price of baby clothes increased as much as the price of everything else, parents would have had to spend about $400 million more to buy as many baby T-shirts, blue jeans and socks as they did last year.
Imports are the consumer’s best friend.
You wouldn’t know that to listen to public debate: Exports equal jobs. Exports are good. Imports kill jobs. Imports are bad. We must accept imports because only then will others take our exports. Imports are a necessary evil.
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Politicians don’t find the appeal to consumers a winner, though. As one Bush administration official confides, it’s like telling a textile worker whose job has moved abroad: “Imports allow you to stretch your unemployment check further at Wal-Mart.”
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The case for free trade is flimsy without remembering that Americans are consumers as well as workers. It is as consumers that Americans benefit the most. Paying lower prices because of imports is as much of a benefit to American families as getting a raise, even though it never feels as good.
During this political campaign, your “demagogue antenna” should turn on anytime you hear a politician arguing against free trade. In the vast majority of circumstances, such drivel is directed at persuading a narrow interest group for political gain. As Mr. Wessel points out above, everyone else loses.
Professor Balkin on Supreme Court review of Pledge of Allegiance case
Professor Jack Balkin, Knight Professor of Constitutional Law and the First Amendment at Yale University, posts this interesting overview and analysis on the issues involved in the U.S. Supreme Court case — Elk Grove Unified School District v. Newdow — in which Dr. Newdow, an atheist, argues that government officials’ use of the phrase “under God” in the Pledge of Allegiance violates the Establishment Clause of the United States Constitution. Professor Balkin predicts that the Supreme Court will figure out a way to leave the words in the Pledge for primarily political reasons. Although Professor Balkin is much more knowledgeable on these issues than me, I still am not sure about that. With Justice Scalia’s recusal, I think there is a real chance of a 4-4 deadlock on the Court, which would leave in place the Ninth Circuit opinion that government officials’ use of the phrase in the Pledge violates the Establishment Clause.
On a related note, this transcript is now available of a very interesting and informative disucssion that the Pew Forum hosted last week on the Newdow case, featuring Doug Laycock and Jay Sekulow.
David Warren on the assassination of Sheikh Ahmed Yassin
This typically insightful David Warren piece puts the recent Israeli assassination of Sheikh Ahmed Yassin into perspective within the Byzantine political landscape of the Middle East. Here are a few excerpts, beginning with the moral question:
On the moral question, whether it was right for the Israeli prime minister, Ariel Sharon, to order the assassination of Sheikh Ahmed Yassin, there is no difference from the question whether it would be right to assassinate Osama bin Laden. Bin Laden co-founded Al Qaeda, Yassin founded Hamas. These are organizations which exist for the express purpose of killing people; Qaeda being committed to killing “Crusaders and Zionists” plus bystanders; Hamas more specifically Jews plus bystanders. The question is not whether one should do it, but how.
The Israelis calculate Sheikh Yassin cost them 377 dead and 2,076 maimed — including only a handful in military uniform. He was known to personally order the hits, and he ordered hundreds of them, both through Hamas and affiliates; culminating in last week’s attack on the Israeli port of Ashdod, in which terrorists very nearly succeeded in blowing up large stores of toxic industrial chemicals. That was also the first successful “vengeance operation” (I use Al Jazeera’s terminology) mounted from inside Gaza, since the Israelis succeeded in fencing the territory — a “heritage moment” in Hamas propaganda. Yassin is the reciprocal Israeli heritage moment.
And then the pragmatic issue:
The Israelis are calculating that the advantages of disrupting the management of Hamas, which actually delivers the terrorism, outweigh the disadvantage of providing them with a recruitment tool. Most seasoned observers of the Middle East would guess they got it right. It is certainly the calculation the Bush administration has made, in going after Qaeda’s senior management; and it appears to be working — preventing more terrorist hits than it inspires.
And finally the political analysis:
Strange to say (and I can hear the guffaws of my numerous if inattentive leftwing readers) the assassination was a typically moderate act. Note [Ariel Sharon] killed Sheikh Yassin, and not Yasser Arafat, though the latter is also up to his ears in innocent Israeli blood, and the IDF know where to find him.
The unbelievable truth is that Mr. Sharon is trying to advance the “peace process”, by giving Arafat’s Palestinian Administration a leg up on Hamas, before their inevitable civil war. For despite all its butchery, even Arafat ‘s Fatah is the slightly more accommodating party. The only thing that keeps Fatah and Hamas together is their common target of Israel; with Israel removed, they become two scorpions in a bottle. There are big risks in weighing in so decisively, but even bigger ones if Hamas succeeds in its ambition of ruling Gaza after the Israeli departure.
The Green Machine
It was noted in this earlier post that it is allergy season in Houston. As this Chronicle story relates, that means everything outside is covered with the green film of pollen. For some, though, there is a silver lining:
For Bill Lawrence, the green film on your hood is the color of money.
“We like to be people-friendly,” said the president and chief executive of Bubbles Car Wash. “But I’ll be honest. We love pollen. Nothing makes your car look worse than being covered in green and yellow dust.”