Daily Archives: August 23, 2006

The lucrative sacrificial lamb market in college football

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lamb.jpgAlthough I enjoy most college sporting events, I have long maintained that the structure of major-college football in the US is fundamentally flawed (related post here). Along those lines, this NY Times article reports on a lucrative market that has evolved from the NCAA’s regulation of major college football — less successful football programs selling the opportunity to be a sacrificial lamb to the more successful programs:

The University at Buffalo football team went 1-10 last season and did not score a touchdown until the fourth game. For nearly a decade, it has been considered one of the worst teams in college football.
Buffalo is just the kind of opponent some of the nationís top-ranked teams are looking for ó and are paying rapidly rising prices to play this season. The Bulls will travel this coming season to play Auburn, a national title contender, and Wisconsin, a perennial Big Ten Conference power. Although Buffalo appears destined to be humiliated, the university will receive a $600,000 appearance check for each game.

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Barbaro continues to beat the odds

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barbaro eating roses3.jpgThis NY Times article continues its excellent coverage of the recovery of Kentucky Derby champion Barbaro from a life-threatening injury suffered in the Preakness Stakes (previous posts here). The article does a good job of explaining the tremendous resources that are being deployed to attempt to save the horse’s life, which could still have great financial value if the horse can recover sufficiently to be leased as a stallion for breeding purposes.
Although Barbaro’s health is still at great risk, the thoroughbred no longer needs the sling that was used immediately after surgery to keep weight off the horse’s legs and the epidurals that he required for pain have not been necessary for several weeks. Moreover, Barbaro is now being walked outside each day in a field and being allowed to graze. As a result, the horse is appearing to become stronger by the day. Stay tuned.

Quattrone walks, but what about Andersen?

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frank quattrone.jpgFormer CSFB investment banker Frank Quattrone’s ordeal came to a close yesterday as the Court in the criminal case against him approved a deferred-prosecution agreement under which the charges will be dropped in a year and Mr. Quattrone was not required to pay a fine or admit any wrongdoing.

Thus, apart from the enormous cost of the prior litigation and having this talented businessman out of work for the past five years, at least Quattrone can now get back to his career and, as Peter Lattman notes, recover $120 million that he has coming to him.

But the same cannot be said for Arthur Andersen, which was prosecuted out of business under similar circumstances as Quattrone.

Just as Mr. Quattrone was never charged any criminal offense related to investment banking, Andersen was not prosecuted for providing fraudulent accounting services to its client, Enron.

Rather, appealing to the dynamics of resentment of wealthy and powerful business interests in the aftermath of Enron’s demise, Quattrone and Andersen were both indicted for obstruction of justice and witness-tampering related almost entirely to a single email that Quattrone and Andersen in-house counsel Nancy Temple sent reminding employees of each organization to clean up there files in accordance with each company’s document retention policy.

Instead of undertaking the difficult task of proving that either Quattrone or Andersen were really involved in any fraudulent acts, prosecutors in both cases portrayed the emails as a criminal cover-up. Then, without basis, the prosecutors liberally “suggested” in inflammatory public statements and during trial that Quattrone and Andersen were involved in fraud.

The prosecution of Quattrone was costly, but that cost pales in comparison to the economic damage that the Justice Department caused in prosecuting an American accounting institution and its 30,000 employees out of business. Despite that, similar misguided prosecutions continue.

This is simply not a rational deployment of the prosecutorial resources of our criminal justice system.