July 2009

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  Thirty-eight years ago today my Dad, Alvin Wisenberg, died. He was a great Dad who left his children many memories to cherish throughout the years. One of the greatest memories for me was attending “The Game Of The Century” in the Astrodome on January 20, 1968, between UCLA and the University of Houston. Each team was undefeated at the time. UCLA, featuring Lew Alcindor (later Kareem Abdul-Jabbar), was ranked Number One in the nation. The University of Houston, featuring Elvin “The Big E” Hayes, was ranked Number Two. UCLA had a 47 game winning streak going into the game.

One of my father’s clients gave him four mid-court tickets to the contest. The game was already being hyped as “The Game Of The Century.” I’ll never forget walking into the Dome with my Dad. He stopped me while we were still outside, put his hand on my shoulder and said, “Son, you may not want to get too excited about this. Most of these things that are billed as ‘The Game Of The Century’ turn out to be pretty one-sided.” Then we went into the Dome and watched the most exciting live sporting event I have ever witnessed. The mighty Houston Cougars beat the UCLA Bruins 71-69. It was the second biggest crowd in basketball history and the first nationally televised college basketball game. I remember quite a few things about that game. Halftime entertainment was provided by Jay & The Techniques, singing their hit “Apples, Peaches, Pumpkin Pie” and their follow-up “Keep The Ball Rolling.”

Two other adults attended the game with us; my Uncle Avrohm Wisenberg and his best friend Harold Raizes. I don’t think I had met Harold Raizes before, but he instantly struck me as kind and distinguished.

I would come to know Harold Raizes fairly well over the ensuing years. I became friends with his daughter Francine and would visit her home on Valkeith Drive. At that house I was invariably given a warm welcome by Harold and his wife Sonia, and had many pleasant conversations with both of them. Harold and I often talked about politics, and these sessions typically ended with Harold patiently and genially explaining to me why I didn’t know what I was talking about.

As I grew older I also learned that Harold Raizes had an impeccable reputation in Houston as a successfull and honorable businessman. And it wasn’t hard to see why. If memory serves me correctly, he owned President’s First Lady Health Spas and MacGregor Bowling Lanes, among other enterprises. He treated friends, customers, business associates, and strangers with respect and fair dealing. He was an object lesson in what it means to be an ethical businessman. As Francine’s husband, Daniel Karchem, once said: “My father-in-law Harold Raizes is my hero for being an honorable man. Dad is representative of the many decent people who show up every day and do a good job and the right thing, because they care.”

Over the years I would see him less and less. On those rare occasions when we did see each other we would usually get around to discussing the magnificent game of the century. Word reached me last week of Harold Raizes’s death, which was unfortunately preceded by a long illness. My Uncle Avrohm died almost 20 years ago, and, as noted, my father died 38 years ago today. Now all of the men, the adults, who witnessed that memorable game with me are gone. The memories they made and the legacies passed on to their children remain. Our hearts go out to Harold’s wife Sonia, to his daughters Carolyn, Sherry, and Francine, and to all of the son-in-laws and grandchildren.

The Houston Chronicle obituary can be found here. As Harold’s wife Sonia told the Chronicle: “Kindness permeated his entire being.”

WSJ’s Opinion Journal carries this editorial today on U.S. Representative and Ways and Means Chairman Charlie Rangel’s various ethical shortcomings related to unreported income on House financial disclosure forms and apparent homestead tax exemption shenanigans. The editorial focuses on Rangel’s hypocrisy in wanting to add an income tax surcharge because “it is the moral thing to do.” But it raises a more important question to me. Who is investigating Rangel for federal criminal violations, and, if not, why not? Apparently Rangel neglected to report over $75,000.00 in rental income over a multi-year period on his House financial disclosure forms. The income is from a Dominican Republic yacht club villa that Rangel owns. The motive may have been Rangel’s need to keep his annual reported income under $175,00.00 to avoid losing his eligibility for his rent-controlled residence in Harlem.

Maybe it it was all a mistake. I really don’t wish a white collar criminal investigation on anyone, but what makes Charlie so special? DOJ has not hesitated to prosecute Congressional staffers and mid-level federal officials for relatively picayune failures to disclose income on their financial disclosure forms. And Rangel’s disclosure problems are not an isolated event. The developer of the yacht club also converted Rangel’s mortgage to an interest free loan. WSJ says that this appears to be a violation of the House ban on gifts. And Rangel apparently listed both DC and Harlem residences as homesteads in order to save on taxes.

Here is a situation where the U.S. Attorney’s Office for the District of Columbia or DOJ’s Public Integrity Unit should already be investigating. Here is a situation where the failure to initiate an investigation is most certainly a political act.

Full disclosure: I represent and have represented witnesses, subjects, and targets in investigations carried out by the Public Integrity Unit. This is not about the line attorneys in that unit. It is about how political the new Administration is going to be in the way that it investigates and does not investigate public corruption in Washington and around the nation. An omission, as well as an indictment, can be a political act.

Here is the criminal complaint filed against Peter Cammarano III, Mayor of Hoboken. Cammarano was arrested as part of last week’s massive federal public corruption round-up in New Jersey. The complaint strikes me as pretty weak, given that Cammarano was engaged in electioneering at the time of the alleged bribe. Hobbs Act prosecutions are harder to win in the context of election campaigns. The complaint quotes liberally from tape-recorded conversations. It will be interesting to to hear the tapes in full should Cammarano go to trial, as he indicates he will.

The Washington Post editorializes here for a compromise in the U.S.-Switzerland cold war over UBS’ reluctance to release more names of purported American tax cheats to IRS and DOJ. I understand the Swiss position. It’s tough to be a grown up nation in the 21st Century when a key segment of your economy is devoted to facilitating tax fraud…..Andrew Cuomo is talking to Chuck but in a nasty way, according to this WSJ article. In a Friday letter, the New York AG threatened to sue Charles Schwab & Co. for fraud in connection with its marketing of auction-rate securities. Cuomo is open to a settlement, however, if Schwab buys back the securities from its investor clients. Schwab adamantly denies wrongdoing. Cuomo’s letter provides examples, allegedly supporting his fraud theory. They look pretty weak to me. Let’s see if Andy is as tough on recently departed Auto Task force Chief, and Democratic Party mega-money raiser, Steven Rattner. Fox News reported on his departure, here, last week…..Meanwhile, in the surprise of the century, Neil Barofsky, “the special inspector general overseeing the government’s financial rescue program,” reports that many of the banks receiving TARP money have used those funds for things other than lending! The uses include, investing, repaying debt, and buying other banks. About 80% of the banks spent at least some of their TARP funds in connection with new lending. Barofsky’s report comes out today, according to this Washington Post article. I have an idea to increase employment and reduce waste and fraud. Every company should be required to hire its own special inspector general at inception. Then, after the first special inspector general’s report is issued, the company should be forced to fire the special inspector general on trumped-up charges. We can keep a lot of people employed this way, and generate plenty of news stories about waste and abuse. We should also make every person hire a special inspector general at birth. Then we can ignore virtually every warning the special inspector general gives us and later suffer the consequences. Oh wait–I’ve already done that with Mom and Dad.

James B. Stewart of the Wall Street Journal has no sympathy here for UBS, the Swiss Government trying to protect it, or super-wealthy American taxpayers who parked cash in secret UBS accounts in order to defraud the IRS. The particular tax program that got UBS into trouble was implemented while the bank was purportedly cooperating with the IRS. Stewart implies that UBS, in refusing to turn over more depositor names to the United States, is reneging on a prior agreement. That isn’t true. UBS agreed to turn over some names as part of its plea deal with the United States, but the parties agreed to disagree regarding more extensive disclosures. Stewart also exaggerates the U.S. banking system’s privacy protections. Federal grand juries have virtually unfettered power to subpoena U.S. bank accounts and, in many cases, can order the banks not to disclose the subpoena to the customer whose accounts are being examined. Still, it is hard to argue with Stewart’s basic point. The customers at issue were specifically targeted by the bank as part of a scheme to help Americans dodge U.S. tax payments. If a small African or Latin American country, rather than Switzerland, was aiding and abetting its bank’s refusal to cooperate with such an important American tax fraud investigation, it is difficult to believe that we would be witnessing this much U.S. hand-wringing.

Marc Dreier was sentenced to 20 years imprisonment yesterday by U.S. District Judge (SDNY) Jed Rakoff. The government had asked for 145 years. Dreier’s attorney, Gerald Shargel, requested 10 to 12 years for his client. With good time, Dreier should do about 17 years and be released at the age of 76. His children, now teenagers, will then be in their mid-thirties. Sobering numbers for those caught up in securities fraud and securities fraud investigations. When the SDNY prosecutors threaten you with life imprisonment if you don’t plead guilty and cooperate, you’d better believe they mean business. Dreier’s case is different since he pled guilty early on and had no higher-ups to implicate. It is unclear from the Wall Street Journal story here whether Judge Rakoff granted a downward variance, but I assume that he did. It is impossible to imagine such a “light” sentence under the old mandatory Sentencing Guidelines regime. This is not meant as a criticism of the sentence. Just a reminder that, even in the age of Booker-Gall-Kimbrough, the odds of receiving a substantial term of imprisonment are high for those who roll the dice, go to trial, and lose.

Here is disgraced attorney Marc Dreier’s letter to the Court, attached as an exhibit to his lawyer Gerald Shargel’s outstanding Sentencing Memorandum. Dreier concedes that he deserves and will receive a substantial term of imprisonment. He tries to explain what led him into a life of white collar crime. Hat tip to Tom Kirkendall at Houston’s Clear Thinkers for posting on this.

Jerry Markon of the Washington Post writes here on Judge Sonia Sotomayor’s seeming preoccupation with the factual details of the trial record. This is most unusual in an appellate jurist, although not necessarily a bad thing. Experts disagree. University of Pittsburgh law professor Arthur Hellman calls it an ”odd use of judicial time” and bemoans Sotomayor’s “carpet bombing” approach to opinion writing. Former Clarence Thomas clerk Dan Himmelfarb praises Sotomayor’s “extraordinarily thorough” opinions. Finally, Washington DC criminal appellate attorney Adrienne Urrutia Wisenberg, letterofapology’s favorite expert, admires Sotomayor’s “tenacious trial lawyer’s personality.” The article is based on analysis of Sotomayor’s opinions in 46 Second Circuit split decisions. This accompanying piece contains excerpts from some of Sotomayor’s opinions, with links to the full opinion for each excerpt.

The Washington Post’s Zachary A. Goldfarb reports here that Lori A. Richards, longtime Director of the SEC’s Office of Compliance Inspections and Examinations, is resigning after 14 years on the job. Richards’ Office reviewed Madoff’s operations in 1999, 2004, and 2005, without uncovering his Ponzi scheme.

Last week’s Post carried this outstanding piece by Goldfarb on former Office of Compliance Inspections and Examinations attorney Genevievette Walker-Lightfoot. Walker-Lightfoot was hot on Madoff’s trail in 2004, raising and/or trying to ask several pertinent questions about Madoff’s activities, before she was re-assigned to other duties. Walker-Lightfoot’s supervisors at the time were Mark Donohue and his boss Eric Swanson. Swanson later married Madoff’s niece. The SEC’s Inspector General, H. David Kotz, claims to be currently looking at ”all the circumstances surrounding the SEC’s various examinations of Mr. Madoff, including the 2004 examination.” Stay tuned.

Here is Justice Scalia’s majority opinion in Melendez-Diaz v. Massachusetts. This is one of the 2008-2009 Supreme Court Term’s great decisions, applying the Confrontation Clause to lab reports.file://C:\Documents and Settings\Administrator\My Documents\Caselaw Crawford\Melendez-DIaz.pdf