Skilling gets some scratch

U.S. District Judge Sim Lake approved an agreed order that allows ex-Enron CEO Jeff Skilling to receive what could be approximately $1 million in annual interest earnings off a portion of the $66 million in assets that Judge Lake froze earlier pursuant to the Enron Task Force‘s request. Here is Judge Lake’s freeze order in the Skilling case.
As part of the deal that led to the agreed order, Skilling will abandon his appeal of Judge Lake’s earlier freeze order that granted the Task Force’s motion to freeze about $55 million of Skilling’s liquid assets, his River Oaks home in Houston, and a Dallas condo.
The judge’s new order allows $3.7 million from the frozen assets to be applied to a margin debt balance and also states that, if Skilling is convicted, the government could seek forfeiture of what remains of the $23 million funds in trust that one of Skillings’ law firm holds to defend Skilling in criminal and various civil lawsuits.
Skilling has pleaded not guilty to 35 charges in a 57 page indictment that accuses him and former Enron chief accountant Richard Causey of a wide range of securities fraud, false statements, insider trading and conspiracy charges. The Task Force alleges they lied and schemed to pump up Enron’s stock price to enrich themselves at the expense of the company and its shareholders. Defense lawyers for Skilling and Causey are expected to defend the cases primarily on the grounds that all of the deals that Skilling and Causey approved at Enron were were reviewed by numerous outside lawyers, consultants, and accountants who approved the deals.

Cubs down Stros

Mark Prior — the best young pitcher in baseball today — beat the one of the best pitchers of all-time on Monday night as the Cubs easily beat the Stros at the Juice Box, 7-2.
Still rehabbing from an injury, Prior dominated the Stros over five innings, giving up five hits, no runs and striking out eight. The Stros were able to eke out of couple of meaningless runs in the bottom of the ninth after Prior was long gone.
Meanwhile, the Cubs knocked the Rocket around pretty hard, pounding out 10 hits and five runs in Clemens’ five frames. Todd Walker was a one man wrecking crew for the Cubbies, cranking out two homers and a triple among his four hits. Alas, the loss was Clemens’ first of his magical season.
The biggest news of the rather listless evening for the Stros was Jimy Williams‘ move of the second best hitter in baseball — Lance Berkman — from fifth to third in the batting order (Bags was moved to fifth in the order). Although this should have been done weeks ago, the fact that the notoriously stubborn Williams did it at all is tantamount to a breakthrough in diplomatic relations between the Israelis and the Palestinians.
The Stros really need Wade Miller to step up in the Tuesday night game against Carlos Zambrano, who is one of the best pitchers in the league this season. Tim Redding takes on Greg Maddux in the Wednesday game, and Roy O goes against Glendon Rusch on Thursday.

The Saudi paradox

Michael Scott Doran is Assistant Professor of Near Eastern Studies at Princeton University and Adjunct Senior Fellow at the Council on Foreign Relations. In this Foreign Affairs article, Professor Doran analyzes the political paradox that confronts the leaders of Saudi Arabia:

Saudi Arabia is in the throes of a crisis, but its elite is bitterly divided on how to escape it. Crown Prince Abdullah leads a camp of liberal reformers seeking rapprochement with the West, while Prince Nayef, the interior minister, sides with an anti-American Wahhabi religious establishment that has much in common with al Qaeda. Abdullah cuts a higher profile abroad — but at home Nayef casts a longer and darker shadow.

In this Washington Post op-ed, Thomas Lippman, a former Washington Post correspondent in the Middle East, is an adjunct scholar at the Middle East Institute, frames the conflict in the following fashion:

Saudi forces will win their gun battles with the terrorists. The greater challenge before the House of Saud is to satisfy the aspirations of the majority — and maintain their security and economic ties with the United States — without further inciting the religious extremists whose rhetoric gives cover to the terrorists. The task is especially difficult because the royal family’s sole claim to legitimacy is its role as the upholder of Islam. To the extent that the regime embraces social progress that can be depicted as un-Islamic, and especially if it appears to do so at the behest of the United States, the backlash could elevate the violence of the past year into a full-scale insurrection.

Hat tip to Craig Newmark for the links to these insightful pieces.

The intersection of intelligence and politics

Herbert E. Meyer served during the Reagan administration as special assistant to the director of Central Intelligence and vice chairman of the CIA’s National Intelligence Council. In this Wall Street Journal op-ed, Mr. Meyer points out that intelligence is a nation’s radar in time of war. America’s radar is currently broken and Mr. Meyer observes that President Bush’s prospects for re-election may depend on how fast he moves to repair it. In noting President Bush’s failure to replace George Tenet and infuse fresh blood into the CIA during the first four years of his administration, Mr. Meyer quotes former Reagan Administration CIA chief, William Casey:

“When you get elected president, you must move fast to put your own people at Justice and CIA. In different ways, these are the two bureaucracies that can destroy a presidency.”

Mr. Meyer then summarizes well the intelligence failures of the CIA during the Bush Administration:

The 9/11 attacks were themselves the worst intelligence failure in our country’s history, caused largely by the CIA’s inability to penetrate al Qaeda, to track the 9/11 terrorists themselves as they traveled the world to plan their deadly mission, and then to share whatever information the agency did collect with the FBI. And whatever may turn out to be the truth about Iraq’s weapons of mass destruction — whether they were destroyed or moved to Syria or Iran before Saddam Hussein’s overthrow — it’s obvious that the CIA failed to provide an accurate assessment of what U.S. forces would find in Iraq when they got there.
In addition, the CIA failed to project Saddam Hussein’s war strategy — to melt into the population and then launch guerilla attacks rather than fight our army head-on in the field — failed to project the sorry state of Iraq’s physical infrastructure including its oil pipelines and electric grids, and failed to accurately project the edgy, not-very-grateful attitude of Iraq’s political factions. And whatever may be going on with Ahmed Chalabi, the CIA’s clumsy efforts to discredit him through leaks to selected news organizations have made the president himself collateral damage.
One other intelligence failure, which has received less attention than these but which may turn out to be the most serious of all, has been the CIA’s failure to draw an accurate picture of the prewar links between Iraq and al Qaeda. While the CIA claims that Saddam Hussein and Osama bin Laden had no more than an arms-length relationship, journalists including Stephen Hayes and Laurie Mylroie have uncovered an overwhelming volume of information which, when you pull the pieces together into a pattern, make a persuasive case that Iraq and al Qaeda worked closely together in the months and years leading up to 9/11. And as the information confirming this linkage has piled up, the CIA has obstinately refused to reconsider its judgment, preferring instead to trash the journalists who have so obviously run circles around its own collectors and analysts.

Mr. Meyer notes that this institutional CIA obstinancy is reminiscent of an earlier episode during the early stages of the Reagan Administration:

This is an eerie replay of what happened in the early 1980s, when the CIA bureaucracy insisted — in the face of all experience and common sense — that the Soviet Union had nothing to do with the attempted assassination of the Pope. When journalists including Claire Sterling and Paul Henze uncovered powerful evidence of Soviet involvement, the CIA tried to discredit the journalists rather than consider their information and its horrifying implication. It took a special ad hoc team of agency officials pulled together by Casey over the “intelligence professionals” objections — a word that doesn’t begin to describe the Operations Directorate’s behavior; this was the nastiest, most vicious episode of CIA infighting I’ve ever seen — to finally figure out what really happened.

What exactly is the CIA’s problem? Mr. Meyer provides this insight:

During the Clinton administration, both parts of the CIA (collecting information and interpreting that information into patterns) were allowed to degrade. George Tenet has worked hard to improve the agency’s collection capabilities; if our espionage service is in good shape a decade from now (it takes a long time to rebuild a spy service) he will deserve much of the credit.
The big failure — and the real source of all the failures in these last few years — lies in the agency’s abysmal analytic skills. What’s happened, very simply, is this: The dot-connectors got shoved aside and were replaced by bureaucrats, such as Mr. Tenet himself and his key deputies. Think for a moment of our country’s great scientific research labs, such as the Salk Institute, Cold Springs Harbor Labs or Rockefeller University. Each one, and others like them, are headed by world-class scientists with proven track records of success (often with Nobel prizes to prove it) and who have now reached that stage in their careers when they can put aside their own research to manage teams of scientists who will make the next breakthroughs. Because these leaders have themselves succeeded so brilliantly, they have superb judgment on whom to hire, which projects to back and which to set aside — that priceless, unquantifiable gut feel for where the big payoff lies — what equipment to purchase and how to structure the organization itself.
It’s the same with intelligence. You cannot have a first-class intelligence service unless you put at the very top of it men and women with proven records of success at spotting patterns, at seeing where the world is going and what the next threats are likely to be long before they become visible. Intelligence isn’t org charts; it’s people. Get the right ones in place and all the organizational problems somehow get resolved. Indeed, the one quality all our great CIA directors have shared — Allen Dulles, John McCone, Bill Casey among others — is this remarkable talent for spotting patterns and connecting the dots.

Mr. Meyer’s recommendation for Mr. Bush?:

In light of today’s terrorist threat, President Bush might want to take a page from President Reagan’s playbook. When he named Bill Casey to head the CIA, his orders were to get control of the agency — fast — and to turn it from a lumbering bureaucracy whose judgments and predictions often were flawed into a razor-sharp operation that was playing offense.

Read the entire op-ed. Regardless of the outcome of the upcoming Presidential election, a long-term bipartisan plan to improve America’s intelligence gathering and analysis needs to be devised and implemented.

Methodist: “Docs, time to choose”

This earlier post reported on the controversial decision of Baylor College of Medicine earlier this year to sever its long ties with The Methodist Hospital and switch its teaching hospital relationship to St. Luke’s Episcopal Hospital. That news rocked the medical community in and around Houston’s famed Texas Medical Center.
Well, it looks like Methodist is upping the ante on Baylor. This Chronicle story reports on Methodist’s move to create a special corporation that will employ doctors effective July 1. The corporation may force Medical Center doctors to decide between Baylor and Methodist, which — as noted earlier here — has been a major issue since Baylor ended their historic relationship.
Apparently, that difficult choice has already been put to Baylor doctors who are Methodist division chiefs. The physicians have been asked to stay and told they cannot maintain practices at St. Luke’s or a new clinic that Baylor plans to build.
In creating the new physicians’ organization along with a previously announced research institute, Methodist will allow be able to hire physicians and scientists on the condition that they do not work for Baylor. Texas hospitals typically create such physician organizations because of the state law that forbids hospitals from employing doctors in order to lessen the pressure that a hospital’s financial conditoin would impair doctors’ medical decisions.
Methodist’s new organizations turn up the heat on the festering issue that has loomed since the breakup of the historic partnership — that is, whether Baylor faculty members will elect to remain at Methodist rather than relocate to St. Luke’s. As noted here, a group of Baylor faculty publicly opposed Baylor’s decision to split from Methodist on those grounds. More than 1,000 doctors currently practice at Methodist and approximately 300 of them are currently Baylor faculty members.
H’mm. Any bets as to when the first “tortious interference with contractual relations-type” lawsuit will emerge from this brewing controversy?