The Talented Mr. Munitz

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munitz1.jpgAlmost thirty years ago, the University of Houston Board of Regents was faced with a difficult decision — replacing longtime UH president Philip G. Hoffman.
President Hoffman was the quintessential tough act to follow. The unusual administrator who was respected by faculty, administrators, and regents alike, President Hoffman sheparded UH during the era from early 1960’s to the late 1970’s as the university transformed from a sleepy city college into Texas’ first dynamic urban university. An example of President Hoffman’s influence is the fact that, when he took office in 1962, UH was admitting its first minority student and, when he retired as UH president in 1977, UH had become Texas’ most fully-integrated state university by far. Other accomplishments during his tenure included reorganization of UH’s administration into that of a major university, completion of the university’s first real master plan for campus development, implementation of the initial stages of the University of Houston System of campuses, and overseeing the rise of UH’s athletic teams into national powers.
munitz2.jpgSo, given President Hoffman’s accomplishments and stature, the UH Board really needed to make a splash in naming his replacement. Their choice? 35 year-old wunderkind, Barry A. Munitz.
Mr. Munitz was an interesting choice. Hired a year or so earlier as Vice-President and Dean of Faculties at UH’s central campus, the young Mr. Munitz and his glamorous wife cut a sophisticated and trendy swath through UH social circles. The theory behind Mr. Munitz’s appointment was that he represented the new wave of college administrator who encouraged ties between the business and university communities.

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More on the black hole that is Metro

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metroraillogo4.gifIn the “could-it-possibly-be-any-worse” department, this Rad Sadlee/Chronicle article reports on the just-released external audit of Houston’s Metropolitan Transit Authority. It’s not a pretty picture:

Comparing Metro’s numbers for fiscal years 2001 and 2004, the audit shows a 29 percent rise in operating costs, to $304 million, and a 36 percent increase per passenger boarding. On the income side, Metro’s annual report shows fare revenue has hovered around $46 million a year since 1995.
The report says ridership slipped 5 percent in the three years, from 100 million yearly boardings to 95 million, despite a one-year bump in 2004 when 5 million boardings on the new MetroRail line offset the loss of 3 million on buses. Most of the loss was on local and express routes, with Park & Ride numbers holding steady.

This less-than-inspiring performance is after Metro plunked down $325 million to construct the underutilized 7.5 mile Red Rail Line from downtown to Reliant Park and Metro’s announcement from a little over a month ago that the agency plans to spend another $104 million on the Red Line — less than three years after completion of the project — to double the number of trains and fix problems caused by construction errors. Then, as if to jolt into perspective the economic absurdity of all of this, Metro and public officials recently announced a modified public transit plan in which Metro puts up $676 million (in addition to the $325 million already spent on the Red Line) in return for an additional $1 billion in federal matching funds. Given how poorly Metro has invested public money to date makes the details of how Metro intends to spend that additional money almost an afterthought, but Anne Linehan over at blogHouston.net and Tory Gattis at Houston Strategies have done a good job of analyzing that issue. By the way, blogHouston.net’s compendium of Metro posts that Ms. Linehan and Kevin Whited have prepared is the flat-out best resource on the web to track what Metro is doing.

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Sometimes these things get overlooked on holiday weekends

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TD3.gifInasmuch as my utterly unprofessional opinion is that the Houston area is going to be hammered by a hurricane this season, just a note to let you know that Tropical Depression 3 has just formed in the Atlantic. Current projections have the storm crossing the Yucatan of Mexico, entering the Gulf of Mexico, and heading towards the upper Texas coast, where current forecasts have it reaching the coast by Wednesday morning or so. While over the Gulf, the depression is likely to intensify into a tropical storm if it survives the journey. While satellite imagery and forecast models indicate weakening, upper level conditions over the Gulf support strengthening.
One thing to note during the hurricane season is that computer models do a better job of predicting the track of a storm than its intensity, where an experienced forecaster’s gut reaction often is better than the computer models.
Frankly, a not-too-powerful storm would be welcomed in the Houston area right now as the area is suffering from a combination of typical hot summer tempuratures and a mini-drought over about the past 45 days.

Create your own traffic jam

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traffic jam.jpgWith the microsimulation of road traffic, you can now create your own traffic jam in the comfort of your home.

Let’s see, how can we blame Enron for this?

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enron_logo2.jpgOne of the enduring myths of this era of criminalizing business practices is that Enron’s energy trading policies were one of the primary causes of California’s power crisis during the early part of this decade.
Well, with Enron gone, that myth is not going to hold up this time around if what James D. Hamilton predicts comes to pass:

California may again offer the nation a useful illustration this summer of how not to deal with an energy crisis.
California Energy Blog last month passed along the warning from the Federal Energy Regulatory Commission that the southern half of our state is in “the worst electricity supply situation in the entire country.” I’m not worried about it, though, because I know that the California Energy Commission has been working for five years to come up with a plan.
And here it is, in all its glory: the fifth annual installment of the flex your power now! campaign. In the Commission’s own words, here’s how it works:

Pitch in this summer, California. When you hear the “Flex Your Power NOW!” alert, immediately conserve energy. Learn more about what to do when you hear the alert.

But the really cool thing is the “Conserve-O-Meter”. Go ahead, I’ll wait here while you check it out.
And thus we continue in the great tradition of California regulators, who seek with great diligence, earnestness and, dare I say, ingenuity, to try to balance supply and demand every day by telling each one of us exactly what we need to do. As long as we all maintain the proper spirit and check up on the Conserve-O-Meter as the day progresses, I’m certain that all Californians can be counted on to do the right thing, ensuring the equality of supply and demand as a result of conscientious attention to civic duty.

No fan of Lerach

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Lerachenrondocs150ap4.jpgIn this NY Times op-ed, Joseph Nocera tees off on the lead Enron class action securities fraud plaintiffs’ lawyer, William Lerach, who has his share of troubles these days (noted here and here). After noting Larry Ribstein’s compliment of Mr. Lerach’s complaint against Enron and its investment banks (although I suspect that’s not all Professor Ribstein observed to Mr. Nocera regarding Mr. Lerach and securities fraud class actions), Mr. Nocera lays the wood to Mr. Lerach:

While I have no way of knowing whether Mr. Lerach is innocent of the charges he may soon face – or whether the investigation is politically inspired – I do know that Mr. Lerach is hardly a candidate for canonization. For much of his career, he made his living playing a dirty game.
He would watch for the stocks of companies to drop, especially volatile high-technology stocks that missed their earnings estimate, and then he would round up a small shareholder like Mr. Lazar and race to the courthouse to be first in line to file a suit seeking class-action status. And then, usually with little else to go on, he would essentially torture the company with discovery motions and deposition requests and legal filings until it finally settled to make him go away.
And he was so gleeful about it! And so taunting! And so vindictive! He sued 3Com five times. Intel, too. He would tell executives of the companies he was suing, “I’m going to take away every penny you own.” Once when Alan Shugart, the C.E.O. of Seagate Technology, which was being sued by Mr. Lerach, started a campaign against “abusive litigation,” Mr. Lerach sent him a note that said, “Dear Al: More is coming.”
John Doerr, the Silicon Valley venture capitalist, has called Mr. Lerach “a cunning economic terrorist.”

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Justice O’Connor replacement information

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Sandra Day O'Connor.jpgWith Supreme Court Justice Sandra Day O’Connor’s resignation announcement this morning, the SCOTUSblog provides the following handy profiles of some of the leading replacement candidates:
Fifth Circuit Court of Appeals Judge Edith Hollan Jones, who is also the subject of an earlier background post here and Larry Ribstein’s choice;
Judge Janice Rogers Brown of the D.C. Court of Appeals;
Fifth Circuit Judge Edith Brown Clement
Attorney General Alberto Gonzales
Moreover, if President Bush elects to dip into the pool of candidates to replace Chief Justice William Rehnquist, this post and this post from earlier this year profile the likely candidates.
Finally, SCOTUSblog also provides The Supreme Court Nomination Blog, which provides more in-depth analysis of the positions taken and decisions written by some of the prominent candidates.

Piling on Merck

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Merck.gifTexas attorney general Greg Abbott announced yesterday that he has filed a lawsuit against Merck & Co. in state court alleging that the company bilked Texas out of about $170 million in Medicaid payments by misrepresenting the safety of its Vioxx painkiller. Although a flurry of personal injury lawsuits have been filed against Merck throughout the country after the company pulled the Vioxx drug late last year, Texas is apparently the first state to file such a suit against the company.
A one-time popular arthritis drug, Merck voluntarily withdrew Vioxx from the market last fall after a study of cancer patients correlated use of the drug with an increased risk of heart attack and stroke. As is typical in such situations, the numerous private lawsuits that have been filed against Merck allege that the company knew of potential problems with Vioxx, but disregarded them and marketed the profitable drug anyway.
Greg Abbott is one of the genuine good guys in Texas politics, but he is wandering far afield with this latest salvo against Merck. As Dr. Rangel has noted here and here, lawsuits such as this follow a troubling pattern of attempting to feed off of the sensationalism and publicity of a side effect of a new and popular drug. It’s not at all clear that Merck did the right thing in pulling Vioxx off the market, but the mainstream media and plaintiffs’ personal injury lawyers have seized on the company’s removal of the drug from the marketplace by drumming the theme that Vioxx is an excessively dangerous drug that could kill you. Not mentioned in such propaganda is the fact that there are plenty of other medications on the market that have side effects that are more common and worse than those of Vioxx, but those drugs remain on the market for patients who are willing to risk the side effects of the drugs to obtain the benefits from them.
As one doctor observed in the Wall Street Journal awhile back, given the known side effects of aspirin, that drug “probably couldn’t gain FDA approval today.”

Prosecution witness tampering in the Skilling – Lay criminal case?

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I was at the Federal Courthouse yesterday for a late morning hearing and decided to stick around and pop into an early afternoon status conference in the government’s biggest Enron-related criminal case — that is, the case against former Enron chairman Ken Lay, former Enron CEO Jeff Skilling and former Enron chief accountant Richard Causey. As with my decision to attend this earlier hearing, I’m glad I decided to stick around. What appeared to be a routine status conference turned out to be anything but.

Midway through the conference, U.S. District Judge Sim Lake announced from the bench that he had received an ex parte motion from the defendants that had been filed under seal. Without revealing the contents of the motion, Judge Lake stated that he had concluded that the defendants had established a prima facie case of entitlement to the relief that they were requesting in the motion, which he disclosed was the right to subpoena under Fed. R. Crim. P. 17(c) all evidence relating to communications between the Enron Task Force and the 15 former Enron employees who have pled guilty under plea arrangements with the Enron Task Force.

Judge Lake stated that he would first review all documents and records produced in camera and then turn over to both defendants and the prosecution copies of all documents and records that are relevant to the issues raised by the motion.

As a clearly unsettled Enron Task Force prosecution team looked on, Judge Lake went on to authorize the defendants specifically to issue subpoenas for evidence of all communications with the Task Force to the 19 attorneys who have represented the 15 former employees in negotiating their plea arrangements with the Task Force.

When the Task Force prosecutor raised a flustered objection to the ruling and requested an opportunity to respond to the defendants’ ex parte motion, Judge Lake summarily overruled the objection and stated that he was persuaded by the defendants’ motion that the relief was justified. Chronicle Enron reporter Mary Flood’s article on the status conference is here.

So, the $64,000 question is this — what on earth is in the ex parte motion of Messrs. Skilling, Lay and Causey that would prompt Judge Lake to grant this rather extraordinary relief without so much as a response from the Enron Task Force?

Although the motion remains under seal and is not available for public review, my speculation is that the motion is focused on the Enron Task Force’s dual tactics of threatening potential defense witnesses in the Enron-related criminal trials with indictment if they testify and bludgeoning former Enron employees to enter into plea arrangements under which they would provide favorable but false testimony in prosecutions of other Enron-related defendants.

That speculation is supported by recent revelations in connection with Enron-related criminal cases. First, several key defense witnesses in the Nigerian Barge case declined to testify on Fifth Amendment grounds because the Task Force had fingered them as targets of the Enron criminal investigation. Then, former Enron Broadband engineer Lawrence Ciscon dramatically testified earlier in the ongoing Enron Broadband trial that Enron Task Force prosecutors had repeatedly threatened him and had fingered him as a target of an indictment in attempting to dissuade him from testifying on behalf of the five Enron Broadband defendants.

Moreover, former Enron Broadband co-CEO Ken Rice testified falsely during the prosecution’s case-in-chief in the Broadband trial after entering into a plea arrangement with the Task Force, and that false testimony was followed by testimony from another witness that she felt threatened by the Task Force in connection with her testimony regarding Rice’s false testimony.

Finally, the Task Force has set a dubious record by naming 114 co-conspirators in the Skilling-Lay-Causey case, which is just another transparent attempt to chill potential defense witnesses from testifying during the upcoming trial in that case.

Consequently, watch this development closely. The Enron Task Force has been quite successful in the court of public relations in painting anyone having anything to do with Enron as a criminal.

However, in actually having to prove its allegations in court (as Professor Ribstein notes in this post from yesterday), the Task Force has been far less successful and now it appears that at least one federal judge is openly skeptical of the tactics that the Task Force has been using to deter defense witnesses from testifying and to generate dubious testimony under plea arrangements.

That government prosecutors believe that they cannot prevail in their prosecutions of Enron-related criminal defendants without engaging in such troubling tactics is more strong evidence that the government’s policy of criminalizing business transactions has gone seriously awry.

Kenny Rogers and Benny Hinn compete in public snit contest

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Kenny Rogers.jpgTexas Rangers pitcher Kenny Rogers and television evangelist Benny Hinn were in intense competition yesterday over who could have the most outrageous public snit of the month and perhaps the year.
First Rogers:

Rogers shoved two cameramen before the Rangers’ game against Los Angeles on Wednesday in a videotaped tirade that included throwing a camera to the ground and threatening to break more.

benny.jpg

“Kenny is having anger issues right now,” Rangers general manager John Hart said. “I don’t know what’s going on inside. We’re responding to something that’s very unusual.”
Rogers, who missed his last start with a broken pinkie he sustained during an outburst earlier this month, lashed out at the cameramen as they filmed him walking to the field for pregame stretching. He wasn’t scheduled to pitch and was sent home by the club following the incidents . . .
The 40-year-old left-hander first shoved Fox Sports Net Southwest photographer David Mammeli, telling him: “I told you to get those cameras out of my face.”
Rogers then approached a second cameraman. He wrestled the camera from Larry Rodriguez of Dallas-Fort Worth television station KDFW, threw it to the ground and kicked it.
The 6-foot-1, 210-pound pitcher saw two other cameramen who were recording from the Rangers’ dugout and walked toward them. He did not make contact with the men, who were backing away.
“I’ll break every … one of them,” Rogers said before he was escorted to the clubhouse by catcher Rod Barajas.
The Rangers sent Rogers home about an hour later . . .
Texas lost eight of nine entering Wednesday night’s game.
Rogers, who leads the team with nine wins, has refused to talk to reporters all season. He has also boycotted most media since a report before spring training that he threatened to retire if he wasn’t given a contract extension.

But as impressive as Rogers’ snit was, Hinn is not backing off. Unimpressed with the number of Nigerians who attended his latest crusade, Hinn went ballistic on the disrespectful Africans:

Whatever disappointment he felt on the first and second days of the miracle crusade, Hinn kept to himself – but he opened up with anger on the final day.
“Four million dollars down the drain,” he shouted into the microphone from the huge rostrum.
He said that he had been assured by the local organising committee that at least six million people would attend the crusade – but the total turnout was only around one million. As a result, he realised that all the mega public address equipment he had flown in from the US was not needed.
He also complained about some claimed expenditures, the charges imposed on pastors who attended his day-time seminar, and journalists who sought to cover the crusade.
He then announced publicly that he would not provide any more funds, and that the local organisers should pay all outstanding bills from the collections they made on the first two days.

Winner of the snit contest to be announced in a few days. Hat tip to Chris Elam for the link to the Hinn article.