Daily Archives: August 1, 2006

The story behind the arrest of Dr. Pou

Posted on by
1

Anna M Pou2.jpgAs noted in this previous post, the arrest in Louisiana of former University of Texas Health Science Center professor and physician Dr. Anna Pou on wrongful death charges for her actions in attempting to save lives during the chaotic aftermath of Hurricane Katrina is an egregious example of prosecutorial misconduct.
As is typical in such cases, word is now filtering out about the real motivations for the prosecution. Not only is an elderly Louisiana attorney general who campaigned on a plank of “cracking down on abuse of the elderly” at the center of the dubious decision to arrest, this NY Times article reports that Dr. Pou’s accusers are three employees of LifeCare Hospitals, the company that owned the facility where 24 out of 55 elderly patients died in the aftermath of Katrina and whose top administrator and medical director didn’t even show up at the hospital during those chaotic days. It turns out that the accusing LifeCare employees didn’t make any effort to evacuate the elderly and sick patients, either. Does this have the smell to you of someone attempting to distract attention (or perhaps avoiding prosecution) from their own indiscretions?
Dr. Kevin Pho of Kevin, M.D. is doing a good job of keeping up with the reactions and commentary around the web to the case against Dr. Pou and the nurses. The case against Dr. Pou is the other side of the same coin that the government flips when it criminalizes risk-taking by businesspersons, so stay tuned to developments in this troubling prosecution.

Hope for Sanity in Sentencing of Business Executives?

Posted on by
Reply

Although just one case, at least one federal judge has concluded that the resentment and scapegoating that has driven the criminalization of business during the post-Enron era has gone too far.

In this thoughtful sentencing memorandum relating to the conviction of former Impath, Inc. president Richard P. Adelson on conspiracy and fraud charges. U.S. District Judge Jed Rakoff began and concluded his decision — which is ably dissected by Harlan Protass here, Doug Berman here and here and Ellen Podgor here — with the following comments:

This is one of those cases in which calculations under the Sentencing Guidelines lead to a result so patently unreasonable as to require the Court to place greater emphasis on other sentencing factors to derive a sentence that comports with federal law. . .

To put this matter in broad perspective, it is obvious that sentencing is the most sensitive, and difficult, task that any judge is called upon to undertake. Where the Sentencing Guidelines provide reasonable guidance, they are of considerable help to any judge in fashioning a sentence that is fair, just, and reasonable. But where, as here, the calculations under the guidelines have so run amok that they are patently absurd on their face, a Court is forced to place greater reliance on the more general considerations set forth in section 3553(a), as carefully applied to the particular circumstances of the case and of the human being who will bear the consequences. This the Court has endeavored to do, as reflected in the statements of its reasons set forth at the time of the sentencing and now in this Sentence Memorandum prompted by the dictates of Rattoballi. Whether those reasons are reasonable will be for others to judge.

Along the same lines, Ellen Podgor asks all the right questions in regard to the disappointing Second Circuit decision upholding the absurd effective life sentence of former WorldCom CEO, Bernie Ebbers, while Larry Ribstein chimes in with a new SSRN paper, The Perils of Criminalizing Agency Costs. In a related post, Professor Ribstein rams home the essential point:

. . . criminalizing this business practice is not the answer. There is little doubt that the combination of regulation, civil liability and markets can solve — indeed, probably already has solved — any problems here. In fact, criminal charges are so patently not the answer that I suspect that one big effect of this scandal will be a reexamination of the whole issue of criminalizing agency costs.

Meanwhile, Jamie Olis and his family continue their long wait for justice, while three UK bankers bide their time in Houston far away from their families and friends while facing the daunting decision of whether to risk asserting their innocence against the prospect of a long prison sentence if they are convicted within the cauldron of hate that exists in Houston to anyone who had anything to do with Enron.

As Sir Thomas reminds us “do you really think you could stand upright in the winds [of abusive prosecutorial power] that would blow” if that power were to set its sights on you?

What now is the more serious danger to justice and the rule of law? Out-of-control prosecutors and abusive prison sentences for businesspersons? Or the results generated from the risk-taking businesspersons?

Those dang baseball expectations

Posted on by
1

Brad Lidge3.jpgpettitte12.jpgPeople who follow baseball love to talk about possible trades of players, particularly when the hometown club isn’t doing well, as is the case with the Stros this season. That’s certainly been the case in Houston over the past couple of weeks as almost anyone with even a passing interest in the Stros has been talking about who the club should jettison to jump-start the team for another pennant drive. Fans’ emotions regarding those trade talks were not helped when former star-turned-human reliever Brad Lidge blew another save over the weekend, traumatizing Chronicle sports columnist John Lopez, among others.
Then, Chronicle sports columnist Richard Justice wrote yesterday that an unnamed baseball executive told him that Stros owner Drayton McLane had directed Stros GM Tim Purpura to get anything he could in trade for Lidge after the latest blown save. That rumor was quickly followed by an ever more troubling one that the Stros had supposedly even offered star pitcher Roy Oswalt in trade talks. And, then — presto! — in the end, the trade deadline passes and the Stros stand pat and don’t do anything. I doubt that McLane ever said such a thing about Lidge to Purpura or that Roy O was ever seriously a subject of trade talks, but the gossip nevertheless got people’s juices flowing.
Beyond how this type of social interaction binds a community and is one of the reasons that a Major League Baseball club can be a positive force for a city, what’s particularly interesting about these discussions is how they reveal people’s expectations about their baseball club. As I noted in this post from several weeks ago, those expectations are a funny thing given that they color our view toward the club regardless of whether the expectations are based in fact. That’s one of the reasons why I tend to rely on statistical analysis of players’ performance a great deal. Going through that analytical process helps me avoid relying on player myths or dubious generalities about teams. My sense is that Stros GM Purpura does the same thing, which comforts me.
The recent controversy over Lidge is a case in point. Lidge is having a miserable season — his earned run average currently stands at 5.77 and his runs saved against average (“RSAA,” defined here) is an atrocious -7, meaning that he has pitched well-below an average National League pitcher so far this season (a precisely average NL pitcher’s RSAA would be zero). To make matters worse, Lidge has given up seven home runs — usually at a key point in the game — in a little over 48 innings after giving up only five in almost 71 innings last season and eight in over 94 innings in the 2004 season. And yes, people have not forgotten the emotional trauma of that whole Pujols affair in the playoffs last post-season. After the two straight seasons in which Lidge had a total of 40 RSAA (26 in 2004 and 14 in 2005), Lidge has fallen so far that I don’t think it’s a stretch to say that most Stros fans wouldn’t have minded McLane and Purpura exiling him to, say, Kansas City, regardless of what crumbs could be recovered in trade.
Meanwhile, in the hand-wringing over what to do about Lidge, virtually nothing has been said about Stros lefthanded starter, Andy Pettitte, who has been much worse than Lidge this season. After having arguably the best season of his career last season, Pettitte has really stunk it up this season, currently meandering along at a 5.18 ERA and a -12 RSAA. He has given up an astounding 21 home runs in just over 139 innings after giving up only 17 in over 222 innings last season, and he has saved over 40 fewer runs for the club this season than he did at the same stage of last season (Lidge, in comparison, has saved only about 17 fewer runs this season than at the same stage last season). And just to punctuate how bad Pettitte has been, the Stros are paying him almost $16.5 million smackeroos for stinking up Minute Maid Park, while the Stros pay Lidge a relatively modest $3.975 million.
My point? While it’s clear than Pettitte has been a much bigger reason for the Stros’ troubles this season than Lidge, nary a word was mentioned over the past several weeks about trading Pettitte. Now, maybe Pettitte’s performance and contract made him untradeable, but he is coming off the best season of his career in 2005 and it’s not unreasonable to think that a veteran lefthanded starter could still help a potential championship club such as the Mets in the post-season. And certainly the Stros were incentivized to unload some of Pettitte’s enormous salary, so you would think that a deal would not have been beyond the realm of possibility. We probably won’t ever know whether Pettitte’s name came up in trade negotiations before this season’s trading deadline, but it’s clear that he wasn’t even on the radar screen of the fans’ discussions about trades — Lidge was almost the total focus.
So, the Stros fans clearly preferred to trade the cheaper, younger pitcher with more upside potential who has pitched better over the past three seasons and not dropped off this season as much as the aging veteran who is being paid far in excess of what his performance this season justifies. Let’s just say that I’m glad Drayton McLane and Tim Purpura are making these decisions and not the fans.
By the way, as noted in this previous post, Stros management was prudent to stand pat. The Stros have a boatload of payroll coming off the books after this season, which allows the club to address needs in attempting to re-sign Oswalt and bringing in some additional hitters, which has been a chronic weakness that this club has had trouble addressing ever since the club gave Bagwell and Hidalgo the big contracts around 2000. Now that the club will finally be in a financial position to address those needs after this season, it would not have made sense to make a trade at this juncture that might have decreased the club’s flexibility this coming off-season.
Lidge and Pettitte’s career and season statistics are below, and the abbreviations for the stats are here:

Continue reading →