This earlier post noted the 180 that the Enron Task Force has recently taken in regard to defunct accounting firm Arthur Andersen. After demonizing the firm, gutting it with a misguided prosecution, and alleging that a number of the firm’s former partners were co-conspirators in several Enron-related prosecutions, the Task Force is now embracing several former Andersen partners as prosecution witnesses in its upcoming legacy trial against former key Enron executives Ken Lay, Jeff Skilling, and Richard Causey. In short, after putting Andersen out of business as an accomplice of the evil Enron, the Task Force is now contending that Enron duped Andersen just like everyone else.
On the heels of that development, David Duncan, the former Andersen partner-in-charge of the Enron account at the time of the company’s demise, earlier this week requested — without opposition from the Enron Task Force — that U.S. District Judge Melinda Harmon allow him to withdraw his previous guilty plea under this cooperation agreement for allegedly obstructing the federal investigation of Enron. Duncan had testified — albeit ineffectively — during the Andersen trial in 2002 as a Task Force witness against Andersen, and has been awaiting sentencing ever since.
Meanwhile, the Task Force also requested dismissal of its criminal case against Andersen after publicly stating that it was prepared to retry the case just a couple of weeks ago. As a result, the Task Force will not be providing an “Andersen annuity” for Andersen defense attorney Rusty Hardin after all.
Phil Gramm, comedian
This CNN article reports that former Texas senator and presidential candidate (for about 15 minutes) Phil Gramm cut the crowd up yesterday while testifying as a witness in the public corruption trial of former Illinois Governor, George Ryan.
While running for President in 1996, the Gramm campaign paid a rather large “fee” to a Chicago-based “consultant” who turned around and funneled the money to Ryan’s daughters and two aides while Mr. Ryan was serving as Illinois Secretary of State. Prosecutors allege that the consulting fee was Mr. Ryan’s requirement for endorsing Mr. Gramm in the Illinois Presidential Primary that year. Asked by prosecutors whether he would have approved of the payments to the Ryan daughters and aides if he had known about them, Mr. Gramm replied that he would not have approved of them, explaining:
“It’s sort of like the difference between love and prostitution,” the folksy former Texas senator testified, drawing gasps and laughter from spectators at a hearing with the jury out of the room. “You don’t pay people to like you.”
By the way, a Gramm aide also testifed that, when questioning a Ryan aide about the unusually large size of the proposed “consulting fee,” the Ryan aide told him:
“That’s the way we do things in Chicago.”
Hat tip to the ever-alert Ellen Podgor for the link to the CNN article.
Sony BMG’s bad idea
Sony BMG‘s decision to implement a copyright-protection plan without telling anybody is shaping up to be one of the costliest decisions that the company has ever made.
Earlier this month, a computer-security researcher publicly revealed that some of Sony BMG’s CDs secretly install a program known as a “rootkit,” which is difficult to detect or remove from a computer and which can act as a back door for a malicious programmer to take remote control of a computer. Just to make matters worse, researchers shortly thereafter identified at least two viruses that were designed to take advantage of holes created by the code for the rootkit. Scrambling to respond to the developing disaster, Sony BMG last week announced that it was recalling and replacing the 4.7 million discs containing the program and that it stopped using the controversial software.
Attempting to pin down Atta in Prague
Edward Jay Epstein (previous post here) is the author of a new book on Hollywood, The Big Picture (Random House, 2005), and is in the process of writing a book on the 9/11 Commission. In this fascinating Opinion Journal piece, Mr. Epstein explains the maddening difficulties of tracking down the truth of whether 9/11 hijacker Mohamed Atta met with an Iraqi intelligence agent in Prague during April, 2001. Particularly interesting is the following excerpt, which describes Czech intelligence agent Jiri Ruzek’s troubling experience in dealing with the American intelligence community:
Spitzer drops another misguided prosecution
Following the decision to drop his dubious prosecution (or was that persecution) of Theodore Siphol in regard to alleged improper trading of mutual funds (here, here, here and here), New York Attorney General Eliot Spitzer dropped similar fraud and larceny charges against Paul Flynn, a former executive at Canadian Imperial Bank of Commerce who had been accused of aiding hedge funds in improper mutual-fund trading.
Interestingly, spokespersons in Mr. Spitzer’s office defended the decision to drop the charges against Mr. Flynn on the grounds that his indictment on criminal charges was merely a small part of the better good — i.e., the Lord of Regulation’s campaign to overhaul the mutual fund industry and extract over $3 billion in fines, restitution and fee cuts from those evil capitalist roaders. Besides, nine of the 11 people facing criminal charges from Spitzer’s office related to the improper trading had pleaded guilty, so that’s a pretty good batting average. Don’t need to get greedy in chocking up another one against Mr. Flynn.
H’mm. Sounds to me as if Mr. Spitzer is using the criminal justice system to extort settlements from companies and individual defendants through headline-grabbing threats of business destruction and prison time. Plus, the publicity from these public crusades is cheap advertising for the “Spitzer for Governor” campaign.
Isn’t such conduct more deserving of a criminal investigation than many of the matters that Spitzer pursues?
By the way, this Peter Elkind puff piece in the current edition of Fortune magazine at least provides some interesting personal background on Mr. Spitzer. Mr. Elkind is a co-author of Smartest Guys in the Room about the Enron scandal. Hat tip to Adam Shpeen for the link to the Spitzer article.
A Big Ad
My two teenage boys recommended the link for this Carlton Draught (an Australian beer) commercial, I think because they want an easy link to it for their friends. Maybe the friends will read a few other posts while they here, so what the heck. Besides, the commercial is pretty darn impressive. Hat tip to Adrianne Truett for the link.
USA Today scoops the majors in analyzing the Enron Task Force’s legacy case
Is it just me or does anyone else find it odd that this USA Today article is doing a better job of covering the prosecutorial abuse that is taking place in the Enron-related criminal cases than supposedly more thorough national newspapers such as The New York Times and The Wall Street Journal?
Following up on this post from over the weekend, the USA Today article notes the utterly absurd and abusive tactic of the Task Force in fingering about 100 unindicted co-conspirators in its legacy case against former key Enron executives Ken Lay, Jeff Skilling and Richard Causey. The transparent purpose of the tactic is twofold:
First, to suppress exculpatory testimony in favor of the defendants from the unindicted co-conspirators, all or whom have declined to testify under their Fifth Amendment privilege out of fear of being indicted; and
Second, to have the testimony of the Task Force’s own witnesses about the alleged hearsay statements of the unindicted co-conspirators introduced into evidence as an exception to the hearsay rule. Not surprisingly, most of the Task Force’s witnesses are “cooperating witnesses” — i.e., former Enron executives who attempting to reduce their prison time by testifying against the defendants pursuant to plea bargains with the Task Force.
Of this tactic, the USA Today article notes the comments of Stanley Twardy, a former U.S. attorney who is now a defense lawyer in Connecticut, that “‘extremely rare’ for a case to have as many unindicted co-conspirators as [the Lay-Skilling-Causey] case does. It’s unusual to have them at all outside of drug and Mafia cases.”
As noted in this other post from over the weekend, the Task Force’s tactic has already resulted in a grave injustice in the Nigerian Barge case, where four Merrill Lynch executives are now serving prison terms because large amounts of exculpatory testimony for the defendants never came into evidence at trial. To avoid the same injustice from occurring in the Lay-Skilling-Causey trial, Judge Sim Lake should give the Task Force a deadline in which to indict any of the unindicted co-conspirators against whom the Task Force has a viable case, and then grant immunity from prosecution for all of the remaining unindicted co-conspirators. Only with such key testimony will the jury be able to sort out the truth of the Task Force’s allegations that the defendants engaged in criminal wrongdoing at Enron. Without such testimony, the jury will be deliberating on nothing more than the Task Force’s fictional screenplay of the defendants’ role in Enron’s demise.
Repairing the MARS platform
This earlier post noted the extensive damage that Hurricane Katrina caused to the MARS floating production platform in the Gulf of Mexico, which generates about 220,000 barrels of oil and 220 million cubic feet of natural gas daily when operational. Following up on that story, this Tom Fowler/Chronicle article reports on the delicate repair operation that will be taking place this week on the MARS platform. Essentially, the process involves removing a damaged rig from the platform, but the damaged rig is so ensnared with other equipment on the platform that removing it could cause even more damage to the equipment on the platform. Another story on the repair operation from the Baton Rouge Advocate is here. It’s this type of cost of doing business in the oil and gas industry that tends to get overlooked amidst the bright lights that shine on this grandstanding.
Disassembling the case against DeLay
This earlier post noted the weak nature of the indictment against former House Speaker Tom DeLay, although the Republican outrage over the indictment rings somewhat hollow. But following up on the thought about the dubious basis of the indictment, former chairman of the Federal Election Commission, Bradley A. Smith, does the best job that I have seen to date of disassembling the case against DeLay in this Wall Street Journal ($) op-ed:
To summarize, the theory against Mr. DeLay goes something like this: Corporations made legal contributions to TRMPAC; and then TRMPAC made a legal contribution of this soft money to the RNSEC, which, as required by federal law, kept the funds in a separate account. The RNSEC then used an account containing individual contributions (hard money) to make otherwise legal contributions to 42 candidates for state or local office in Texas, including seven who may have been specifically recommended to them by Mr. DeLay and others. Somehow this series of legal transactions constitutes money laundering.
2005 Weekly local football review
After beating the spread in the past three games, the 1-9 Texans took a dive in front of a national television audience in the ESPN Sunday night game as their nightmare season continued. This one was over in the second quarter as the Chiefs sliced and diced the Texans defense to take a 24-7 lead before Texans QB David Carr iced it for the Chiefs by throwing an interception TD in the waning moments of the first half to give the Chiefs an insurmountable 31-7 lead. Although the Texans’ defense was non-existent, Carr was particularly bad, as was star WR Andre Johnson, who looked like a petulant jerk for most the game. The Rams come in next week for their confidence-building session against the Texans, and then its off to Baltimore and Tennessee for back-to-back road games. My oh my, this is a really bad football team, every bit as awful as the horrifying Oilers teams of the Bill Peterson era. The Texans sure could use Sid Gillman and Mike Holovak.
