A big part of my law practice is writing briefs, so lawyers often ask my advice on how to write a good brief. I always pass along three key rules:
1. Read the court’s rules for brief writing and then follow them.
2. Tell a good story in your brief.
3. Don’t use footnotes.
If you violate rules 1 and 3, then this is what could happen.
Hat tip to Appellate Law and Practice blog for the link.
In a surprising development, Houstonian Eric Andell, a former deputy undersecretary under fellow Houstonian Rod Paige at the Education Department, a former Harris County district and appellate court judge, and probably the most popular Democrat in local political circles, pleaded guilty to charging the federal government about $9,000 for personal travel in which he conducted personal business and worked as a visiting judge while still employed in Washington. He faces up to one year in prison and has agreed to reimburse the federal government for the improper charges. Mr. Andell will be sentenced July 29 in Washington.
Former Tyco International CEO, Dennis Kozlowski, is on trial for a second time in New York City for allegedly looting Tyco. Mr. Kozlowski’s first trial, in which he did not testify, ended in a hung jury.
In the second trial, Mr. Kozlowski has decided to testify. According to this NY Times article, the following is a part of the cross-examination of Mr. Kozlowski about conversations he had with a now-deceased former director whom Mr. Kozlowski said approved a $25 million bonus that was missing from his 1999 tax returns:
“You did not notice $25 million was missing from your W-2?” asked [prosecutor] Ms. [Ann] Donnelly in an incredulous manner.
“That is absolutely correct,” Mr. Kozlowski replied. “I did not.”
Don’t miss this interesting Wall Street Journal ($) article on the extraction of natural gas from the Barnett Shale formation, which contains 27 trillion cubic feet of natural gas (enough to supply all gas-heated homes in the U.S. for more than five years) and happens to be located directly underneath Fort Worth.
Drillers hide the unsightly drilling equipment from homeowners by using horizontal drilling techniques, which drill straight down before gradually bending and running parallel to the surface. So, often a well that is drilling a productive zone under a piece of propery is located over a mile away from the property. The article reports that there are now over 90 rigs drilling natural gas wells around the Fort Worth metropolitan area.
Following on this progression of damaging public disclosures over the past several months, American International Group Inc. announced yesterday, as this NY Times article reports, that the company has decided to delay for a third time the publication of its annual report. The cause for the delay is that AIG management and nervous PriceWaterhouseCoopers LLP auditors continue to wrangle over the financial implications of accounting errors that now are expected to reduce AIG’s net worth by over $2.5 billion, which is about 3% of the company’s net worth. That’s about a billion more in losses than previously predicted.
As one would expect, there appears to be a fair amount of disagreement over what accounting issues should be acknowledged in the annual report between AIG and its longtime auditor PricewaterhouseCoopers, which is already girding for the inevitable lawsuits from AIG investors over its failure to uncover the improper accounting and the company’s allegedly defective internal controls. Since the Sarbanes-Oxley legislation was passed in 2002, auditors and management are required to sign off on the adequacy of a company’s internal controls, the lack of which at least partly contributed to the accounting scandals that led to the demise of Enron Corp. and WorldCom Inc.
Although the incessantly bad public disclosures are troubling for AIG long term, the market appears to have stabilized for the time being with regard to AIG’s stock price. Although AIG’s stock price has fallen almost 30% since February 14 (it opened at $72 on that date), the price has been meandering around $51 since mid-April. The price was was down $.71 in yesterday’s trading.
Meanwhile, the Lord of Regulation is moving on to another scene in his vast landscape of business corruption as several financial institutions confirmed that they have received letters from the Lord’s office in connection with an investigation into mortgage-lending practices. The Lord’s civil-rights division is in the early stages of an investigation into possible discriminatory practices in determining interest rates and fees charged on mortgage loans, which was prompted by recent public disclosures showing that certain minorities are more likely than are whites to be given high-cost sub-prime loans. Lenders say that the difference in interest rates reflects underwriting factors, such as income and credit records.
Recently, my wife pulled me to the new Farrelly Brothers’ (Dumb and Dumber, Kingpin and There’s Something About Mary) movie, Fever Pitch, which billed itself as a chick flick disguised as a sports movie. Or, as ESPN’s Bill Simmons explains in this absolutely hilarious article on the movie, a “Spork Flick.”
Mr. Simmons recently attended Fever Pitch with his father because the film was billed as a funny spork flick, but he realized after enduring the movie that it was really just a straightforward chick flick:
Here’s the plot for “Fever Pitch” in one sentence: Guy loves the Red Sox, meets Drew Barrymore, tries to love them both, nearly loses her because of the Sox, decides to give up his season tickets next to the Red Sox dugout because he loves her, she stops him just in time, and they get back together and end up making out on the field after the first Red Sox championship in 86 years. The end.
Mr. Simmons goes on compare the movie with other chick flicks (don’t miss his analysis of My Best Friend’s Wedding), and then reveals that the key to success of a chick flick is hitting on the top ten generic themes of chick flicks, a couple of which are the following:
4. If you’re dating someone who is passionate about something, he will absolutely give that up for you because all men change once they fall in love. Especially if you have a nice apartment.
5. You can have only three friends: A smart friend who’s pretty in a quirky way, a calculating beauty who’s morally corrupt and an overweight girl who doesn’t say much. You can only hang out with these people all at once. If there’s anyone in your life who doesn’t fit one of those three categories, get rid of them.
Trust me on this one — read the entire article. Hat tip to Craig Newmark for the link.
These days, it seems as if a new interesting revelation from one of the big U.S. accounting firms occurs every few hours or so.
This CBS Marketwatch snippet reports this morning that KPMG LLP fired Richard Smith, a senior executive who had headed its tax-services division as it promoted questionable tax shelters over the past decade, and also canned two partners — David Brockway of Washington, D.C. and Michael Burke of Los Angeles — who had sat on the firm’s 15-member board. As these previous posts over the past year reflect, KPMG is enduring some serious heat in various governmental investigations of its involvement in the tax shelter sales effort.
Until the tax shelter probes, Mr. Smith had been a rising star at KPMG. He became a partner at KPMG in 1995 and was named the chief of the firm’s tax-services unit in 2002. However, as the tax shelter probes came to light in February, 2004, KPMG had said Mr. Smith was being reassigned to take on the dreaded “different practice responsibilities.”
Such purges usually indicate that indictments in such cases are on their way. Stay tuned.
I’m as much of a baseball stathead as the next guy, but I must admit that it never occurred to me to compile the creative statistics that are featured on this imaginative new blog — Plunk Biggio.
The blog is “dedicated to Craig Biggio and his (probably unintentional) Quest to break the all time major league career record for getting hit by pitches.”
Hat tip to the always alert Charles Kuffner for the link.
Although such matters are notoriously unpredictable, the SCOTUS blog — the premier U.S. Supreme Court blog — reports that observors of the oral argument earlier today on Arthur Andersen’s appeal to the Supreme Court of its witness tampering conviction unanimously reported that the Justices appeared to favor Andersen’s side of the argument strongly. In particular, Justice Scalia expressed incredulity at the government’s position:
“You want criminal liability to attach to that?” Justice Scalia asked, referring to Andersen in-house lawyer Nancy Temple’s email. “You want somebody to go to jail?”
Here is the Washington Post report on the argument.
As noted earlier here and here, there are several characteristics of the structure of American International Group Inc. that are similar to the structure of Enron Corp. In particular, both companies’ business is largely dependent on its customers’ trust and, as Enron showed us in dramatic fashion, once that trust is lost, a company structured in such a manner can literally collapse in a very short period of time.
On face value, this report from yesterday regarding the Lord of Regulation‘s investigation into whether AIG wrongly pocketed tens of millions of dollars in insurance premiums that should have gone to the New York state workers’ compensation fund is probably not any more damaging to the public’s trust in AIG’s finances than any of the dozens of other revelations that have occurred in regard to AIG and Berkshire Hathaway in connection with that investigation over the past couple of months.
However, in what can only be described as an astounding revelation in this morning’s Wall Street Journal ($) article, AIG’s general counsel in 1992, E. Michael Joye, informed AIG’s senior management — including former CEO Maurice “Hank” Greenberg — that the company’s accounting treatment with regard to the insurance premiums was illegal. Even more interestingly, Mr. Joye resigned from AIG (or was forced out) later that same year over problems relating to accounting issues.
To top it all off, according to the WSJ article, Mr. Joye provided to the Lord of Regulation a copy of his memo to AIG management about the insurance accounting issue, and then AIG waived its attorney-client privilege regarding Mr. Joye’s memo and the accounting issue to allow Mr. Spitzer’s office to proceed with its investigation into the issue. AIG’s board is allowing this highly unusual level of cooperation with the Lord of Regulation because of its realization that the Lord has the board over a barrel: if the AIG board were to assert such basic rights as the attorney-client privilege, then the Lord of Regulation would almost surely issue an indictment that would have a potentially cataclysmic effect on AIG’s various insurance licenses.
On the other hand, if AIG’s senior management forced Mr. Joye out because of his calling out of questionable or illegal accounting practices, then that would reflect a serious defect in AIG’s internal controls in that an advocate of adhering to legal requirements was canned rather than rewarded. Inasmuch as a similar defect in internal controls allowed Enron’s Andrew Fastow to profit wildly from Enron’s apecial purpose entities while serving as Enron’s CFO, this latest revelation about AIG sure is starting to sound familiar, isn’t it?
By the way, the WSJ’s ($) article on AIG’s ultra-exclusive New York area golf club — Morefar — makes it sound as if getting an invitation to play Augusta National is easy in comparison to getting one to play Morefar.