Daily Archives: September 19, 2005

Kozlowski and Swartz sentenced

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Kozlowski and Swartz3.jpgFormer Tyco International executives L. Dennis Kozlowski and Mark Swartz were led away from a New York City state courthouse in handcuffs today after New York state Justice Michael Obus sentenced them to serve 8 1/3 to 25 years in prison and pay a total of about $240 million in restitution and fines for being convicted of corporate fraud and conspiracy for looting Tyco of more than $150 million. Prior posts on the conviction of Messrs. Kozlowski and Swartz are here and here.
Under New York law, defendants generally are eligible for parole based upon their minimum sentence, but can earn one-sixth off that time for good behavior and other good deeds while in prison. Accordingly, Messrs. Kozlowski and Swartz could serve as little as about 7 years so long as they are good boys in prison. However, it looks like the men will serve hard time because the New York State Department of Correctional Services generally assigns prisoners to maximum security prisons who have more than six years until they are eligible for parole. Although the Department has leeway to modify that policy according to the circumstances of individual cases, don’t bet on that sort of discretion in cases involving former corporate executives — just ask Jamie Olis.
Update: Ellen Podgor has typically insightful comments on the Kozlowski and Swartz sentencings over at the White Collar Crime Prof Blog. In addition, Professor Bainbridge provides a good overview of the policy considerations emanating from draconian sentences of business executives, and makes a particularly good point that such sentences do little to deter the Kozlowskis of the world, but could very well deter the type of creative risk taking that generates beneficial economic activity.

Texan fans in full revolt

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reliant stadium 4.jpgThe Texans firing of offensive coordinator Chris Palmer this morning did little to quell the anger of Texan fans over yesterday’s debacle, one of whom emailed me as follows:

“The biggest joke of all is leaving the roof open. On Friday, I got an e-mail telling me that the roof would be open and that I should stay hydrated during the game. I couldn’t believe they were sending out a heat related medical advisory on a stadium that has air conditioning. During the first year of the new stadium, management said it was going to keep the roof open in order to have an advantage over the teams that didn’t practice in the Texas heat. So, yesterday, the Texans — whose bench is on the sunny side of the field — sat there and baked. The Steelers had air-conditioned benches (Texans not) and sat in the shade. Moreover, the Texans lost whatever home field advantage we might have had because half of the seats were emptied by people seeking refuge from the sun. What a bunch of Braniacs.”

Key hint to the Texans’ front office — the only thing worse than an angry fan is an angry fan who is also hot and sweaty after boiling in the sun for three hours.
Looks like it’s going to be a long season, folks.

We don’t really need this

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Rita.gifRita.jpgTropical Storm Rita is preparing to enter the Gulf of Mexico, and current predictions have it headed toward the Texas Gulf Coast by the end of the week. This is not good news, particularly for the oil and gas industry’s Gulf operations, which have stablized at reduced production levels in the wake of Hurricane Katrina, but are producing at far below usual levels. Here is a download of a handy map of oil and gas interests in the Gulf of Mexico.
With gasoline inventories still low and a substantial portion of Gulf of Mexico oil and gas production remaining shut-in, another hurricane in the Gulf is not what the doctor ordered for the economy. This EIA Daily Report from this past Friday reflects just how precarious oil and gas production is in the Gulf at the present time. If Rita strengthens as expected over the warm waters of the Gulf, then we could experience a real double whammy of damage to Gulf oil and gas production, not to speak to the usual damage to the Texas Gulf Coast that results from such a storm. Hat tip to Calculated Risk for the links to the map and the EIA report.
Update: The latest National Hurricane Center projection has the storm headed straight for the West Beach of Galveston Island. Batten down the hatches!

Close Encounter of the Human Kind

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patients.jpgAbraham Verghese, M.D., is the Joaquin Cigarroa Jr. Chair and Marvin Forland Distinguished Professor at the University of Texas Health Sciences Center in San Antonio. After volunteering at the Houston shelters during the relief effort for the Hurricane Katrina evacuees, Dr. Verghese’s story of meeting the first hurricane evacuees that were sent to San Antonio resonated with me because it is similar to many conversations that I have had over the past couple of weeks with various evacuees:

Hesitantly, I asked each patient, “Where did you spend the last five days?” I wanted to reconcile the person in front of me with the terrible locales on television. But as the night wore on, I understood that they needed me to ask; to not ask was to not honor their ordeal. Hard men wiped at their eyes and became animated in the telling. The first woman, the one who seemed mute from stress, began a recitation in a courtroom voice, as if preparing for future testimony.

Read the entire unvarnished account. Also, check out this Bob Herbert NY Times piece that relates how the corporate owners of the hard-hit Methodist Hospital in east New Orleans responded to the flood after the hurricane by sending emergency relief supplies to the hospital. Unfortunately, the owners sent the supplies to the airport where FEMA officials confiscated them and sent the supplies elsewhere. Along those same lines, here is the story of a volunteer doctor during the relief effort who a FEMA official ordered to stop treating a patient because he was not registered with FEMA.
Finally, here is a helpful FactCheck.org compilation of stories relating to who knew what when in regard to Hurricane Katrina.

Do you ever feel this way?

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frustration.jpgTheodore Dalrymple is probably best known for his weekly columns in The Spectator and his essays in the American quarterly City Journal. He is a psychiatrist working in an inner city area in Britain where he is affiliated with a large hospital and a prison. His columns report on the lifestyles and ways of thinking of Britain’s growing underclass, and in his book, Life at the Bottom, he warns that this underclass culture is spreading through society.
In his latest City Journal piece, Mr. Dalrymple expresses the frustration that he feels in responding to the various pooh-bah theories that seem to abound these days:

In Australia recently, I shared a public platform with an educationist, who had won awards for social innovation in the field of education for disadvantaged minorities. I was looking forward to what she had to say.
I was soon in a towering rage, however. She uttered some of the most foolish cliches of radical education theory, now about 40 years old—theories that I had fondly thought were now behind us, . . .
Halfway through my own reply, however, I suddenly became bored. Why do I spend so much time arguing against such obvious rubbish, which should be both self-refuting and auto-satirizing the moment someone utters it? Why not just go and read a good book?
The problem is that nonsense can and does go by default. It wins the argument by sheer persistence, by inexhaustible re-iteration, by staying at the meeting when everyone else has gone home, by monomania, by boring people into submission and indifference. And the reward of monomania? Power.

Read the entire piece. Hat tip to Craig Newmark for the link to Mr. Dalrymple’s latest.