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Friday, January 29, 2010

Riley's Anti-Gambling Crusade Reaches a Frightening, and Comical, Level

Governor Bob Riley's Anti-Gambling Task Force attempted to raid two gaming facilities early this morning, but so far, has been turned away. That's because state troopers assigned to the task had a slight problem--they were trying to invade private property without search warrants.

Troopers reportedly tried to raid the Country Crossing facility near Dothan and VictoryLand near Montgomery. But without search warrants, they have not been able to accomplish much.

According to a report published just before noon today by the Dothan Eagle, troopers were leaving the Country Crossing site. Attorneys for Country Crossing issued a written statement to troopers:

The written statement, delivered at 11:15 a.m. Friday, has the word “Stop” in all capital letters and includes the following message:

“You are trespassing and do not have permission to be here or anywhere on the Country Crossing development, property including, but not limited to, all internal roads and parking areas. Unless you have a valid search warrant, you are trespassing. You are hereby being instructed to leave the premises immediately.“

The statement was handed out to all troopers currently on site at Country Crossing. That number has been estimated at about 50.

A judge in Alexander City issued an order blocking an attempted raid at VictoryLand.

Jim Parkman, an attorney for Country Crossing, said the attempted raids posed a number of legal and public-safety concerns. Writes the Dothan Eagle:

Attorney Jim Parkman said Friday morning that gambling is a misdemeanor and that authorities must see it being committed before they can act.

“On a misdemeanor if you do not see it committed, you have no grounds to do anything,” said Parkman from his Birmingham offices. “They see nothing going on in the building, so they can’t seize anything. That was my first concern, to preserve the property.”

Parkman said after viewing the tape of the raid at White Hall, and considering the tactics used by the task force, Country Crossing had to shut its doors Friday morning to preserve their equipment and their operations.

“Our number two concern is for the safety of all citizens. If they do like they did in White Hall, with a stampede of officers with guns raised, somebody could have severe problems, maybe even a heart attack. We didn’t want that to take place. We felt like we had to get everybody out.”

How much is all of this costing taxpayers? The Dothan newspaper has tried to come up with an answer:

Those on site for the parade of trooper cars and state vehicles down U.S. 231 at 4 a.m. Friday, said they counted 135 vehicles in the caravan, including two huge public safety tactical vehicles. About 30 of those left around 8 a.m.

The Eagle has placed a call to the Alabama State Trooper’s office in Montgomery, in an attempt to get an estimated cost and accurate manpower numbers for the attempted raids on both Country Crossing and VictoryLand in Shorter.

The paper has previously asked for cost figures on the first attempted raid on Country Crossing, Jan. 5 The governor’s press office never emailed a response on the cost.

“With the economy the way it is, they are burning a minimum of $4,000 an hour. From the time they got the word to meet,” Parkman said, “and for something they could have handled differently. And they had the same number of troopers at VictoryLand. I did try to call trooper office here in Birmingham to see if anybody was working. I thought I was going to have to go to Dothan and wanted to see how fast I could drive.”

And keep in mind, Riley's troops were burning an estimated $4,000 an hour on a mission that had no chance for success because troopers did not have search warrants.

Alabama citizens should rest comfortably knowing that a Republican administration is putting their tax dollars to good use.

Thursday, January 28, 2010

Alabama Civil Rights Icon Could Not Outlive "Employment Terrorism"

James Armstrong, a central figure in the civil-rights movement, died a few weeks back in Birmingham.

Armstrong, a barber by trade, was best known for his role in a six-year lawsuit that helped end formal school segregation in the Deep South. Armstrong lived to see integrated schools in his native Alabama. But he could not outlive "employment terrorism," a tactic that was used against civil-rights activists in the 1950s and '60s--and still is being used today.

What is employment terrorism? It's a term we use to describe the tactics of corporate and governmental interests who cheat people out of their jobs for daring to stand up to social injustice.

How do we know it still exists? My wife and I both have been the victims of it.

I was cheated out of my job at the University of Alabama at Birmingham (UAB) in May 2008 (after 19 years of service) because I dared to write a blog that was critical of the George W. Bush Justice Department, particularly its handling of the Don Siegelman case. My wife was cheated out of her job at Infinity Property & Casualty Corporation in October 2009, apparently because we had filed a lawsuit against unethical debt collectors.

We figured this vile tactic was relatively new--perhaps something that started in the dark, twisted mind of Karl Rove and his associates. So an article by Stefan Kertesz, one of James Armstrong's regular customers, stopped us in our tracks.

Kertesz writes about the difficult road Armstrong and others faced in trying to end school segregation:

Armstrong's 1957 lawsuit to allow his children to enter Graymont Elementary dragged on for six years. As his first two kids aged, his two youngest, Dwight and Floyd, joined the case. All other plaintiffs had to drop out as they were fired from their jobs. But Armstrong owned his shop. A steady flow of customers allowed him to stay in the case until he won. That's why the shop's chairs, one of which sits in the Civil Rights Institute, are so important.

Mrs. Schnauzer and I were stunned when we read that. We had no idea that some of those who fought on the front line of the civil-rights struggle, had been fired from their jobs--simply for standing up for what was right. We were even more stunned to think that, for all of the progress our nation has made in terms of social justice, this kind of evil still is going on today.

To be sure, the challenges my wife and I now face are minor compared to what James Armstrong and others battled some 50 years ago. Kertesz writes movingly about the spirit that carried Armstrong and others to higher ground:

Part of Armstrong's durability was that he transformed every adversity into strength. Chuckling, he credited Gov. George Wallace and Connor for the civil rights movement's success:

"Thank God for George Wallace. Thank God for Bull Connor. Because they didn't do nothin' but encourage us to keep strong . . . That's that. That's the way I take it, and so both of them gone, and you didn't stop anything!"

For a middle-aged white man raised by immigrants who fled persecution, one of my questions has always been how people survive painful experience and grow to the point of helping others. My parents and my patients have taught me lessons about these things.

But Armstrong went one better: He not only survived adversity to the point of helping others, he thrived on beating it. Grit and humor, and faith, shined through every story he told. And he was one hell of a barber.

A thank you to Stefan Kertesz for educating us about the civil-rights movement. And an extra big thank you to James Armstrong for blazing a trail that contains unfinished business.

Will we someday look back and say, with a chuckle, that we are grateful people like Karl Rove, Leura Canary, Alice Martin, and others helped push us toward justice in America?

May a can-do spirit help us complete the task that James Armstrong so bravely helped to start.

Schools Are Resegregating Along Municipal Boundaries in Alabama and Beyond

The development of city school districts is resegregating American schools along racial lines imposed by municipal boundaries, according to a recent report. Jefferson County, Alabama, home to Birmingham, was prominently cited in the study, which was published in the journal of the American Bar Foundation.

Author Erica Frankenberg could not have picked a better place than Jefferson County to conduct such a study. Frankenberg says parts of the South has predominantly county-based school systems, which made it possible to achieve racially balanced districts. But that has become difficult in areas such as Jefferson County, which has 30-some municipalities. Writes Frankenberg:

The integration these countywide districts have engendered is being threatened by municipalities that withdraw from the countywide school district to form separate, small school districts while, in other areas, this pattern of metropolitan fragmentation of school districts has already occurred. Such is the case in the Birmingham, Alabama, metropolitan area, where there are 10 municipal school districts that have broken away from the Jefferson County school system, beginning in 1985. Although the South has made significant gains in desegregating schools since the 1954 Brown decision, these gains are being undone and in some states, such as Alabama, high levels of segregation still exist.

Retired U.S. District Judge U.W. Clemon was involved in desegregation efforts as a lawyer in the 1960s. He agrees that Birmingham-area schools have resegregated today. Reports The Birmingham News:

Clemon argued during those desegregation efforts against allowing cities to break away from the Jefferson County school system to form their own systems. He said Friday it was the prospect of court-mandated integration that drove the process.

"In my view, it was very clear that the reason for the creation of those new school systems was to avoid the obligation to desegregate," Clemon said.

Frankenberg says similar trends are seen in other areas of the country. But she is particularly interested in her native Alabama:

Frankenberg, who is from Mobile County, said she chose to use Jefferson County as an example of the trend, in part, because of the county's history of segregation and the court-ordered desegregation that came in the wake of the U.S. Supreme Court's landmark Brown v. Board of Education of Topeka decision in 1954. She said the increasing number of school systems in the county provided an opportunity to study the impact of fragmentation over time without the addition of charter schools, which could complicate the study.

In Jefferson County, Frankenberg writes, suburban residents "have demonstrated a distinct preference for protecting white privilege in K-12 education."

One way white privilege is protected is through housing costs. A classic place to see that is in southeastern Jefferson County, where the cities of Mountain Brook and Irondale come together.

Mountain Brook often shows up on lists of the 10 wealthiest cities in the United States, and it established a municipal school system in 1959. Mountain Brook schools are highly regarded and overwhelmingly white.

Irondale is a middle-class area, filled with attractive homes, but it has remained part of the Jefferson County school district. Its students are zoned to Shades Valley High School, which enjoys a solid reputation but has a substantial minority student population--30 to 40 percent would be my guess.

A house hunter can find a lovely home in Irondale for, say, $150,000. You can see virtually the same house one street over, in Mountain Brook, and you will discover that the asking price is probably $350,000--or more.

The euphemism you hear in the Birmingham real-estate game is that cities such as Mountain Brook, Vestavia Hills, and Homewood have "good schools." That means they have overwhelmingly white schools, and many home buyers are willing to pay hugely inflated prices to live in those areas.

The cost of white privilege? In terms of home prices, I'd say it ranges from $100,000 to $300,000. That's how much more you have to pay to live in a city with "good schools."

Another euphemism, "local control," often is used to explain the need for city school districts. Frankenberg isn't buying that one, and neither are we:

Frankenberg notes that communities splitting off from the county system have said they wanted more local control over schools, and the courts have largely supported that notion, allowing the separation in all but one case, Pleasant Grove. . . .

Frankenberg writes that the creation of separate school systems "has the same effect of maintaining segregation--to a large extent--of black and white students in the Birmingham area."

We submit that it's not about "local control." It's about the ability to control the racial makeup of school systems--with escalating housing prices being a key factor that attract white families and keep black families out.

We've come a long way since Brown v. Board of Education. But Frankenberg's study indicates we have a long way to go.

Wednesday, January 27, 2010

Why Can't the Press Ask a Few Simple Questions of Riley's New Gambling Czar?

For seven-plus years now, Governor Bob Riley has treated the citizens of Alabama as if they have the combined intellectual capacity of a stump. Alabama's mainstream press has been Riley's enabler in this effort--and it still is going on.

The latest example came with news that Mobile County District Attorney John Tyson Jr. is the new commander of Riley's anti-gambling task force. One of Tyson's first steps was to hint that VictoryLand owner Milton McGregor might have committed obstruction of justice by hiring a private investigator to follow Riley's previous anti-gambling czar, David Barber. The PI, of course, spotted Barber winning a jackpot at a Mississippi casino, leading to the czar's ignominious resignation.

We have reports today that security is being beefed up for Tyson, Barber, and others connected to Riley's anti-gambling crusade. Apparently, Alabamians are supposed to believe that pro-gambling forces are such bogeymen that they are putting officials' lives at risk. We also have a report that Tyson is a colossal hypocrite, one who previously has received campaign support from gambling interests.

Why isn't the Alabama press asking some obvious questions about all of this?

First, consider what we know about obstruction of justice. Our research indicates that, in the vast majority of cases, it is a federal matter. The general subject is covered under Title 18, Chapter 73 of the U.S. Code.

One expert provides an excellent overview of a fairly complex area of federal criminal law:

Obstruction of justice is the frustration of governmental purposes by violence, corruption, destruction of evidence, or deceit. It is a federal crime. In fact, it is several crimes. Obstruction prosecutions regularly involve charges under several statutory provisions. Federal obstruction of justice laws are legion; too many for even passing reference to all of them in a single report.

The general obstruction of justice provisions are six: 18 U.S.C. 1512 (tampering with federal witnesses), 1513 (retaliating against federal witnesses), 1503 (obstruction of pending federal court proceedings), 1505 (obstruction of pending Congressional or federal administrative proceedings), 371 (conspiracy), and contempt. In addition to these, there are a host of other statutes that penalize obstruction by violence, corruption, destruction of evidence, or deceit.

Obstruction of justice, in a general sense, does exist under Alabama law. But references to it are sprinkled in a "hodge podge" fashion through parts of the Code of Alabama, and none of the statues appear to remotely apply to the McGregor matter.

Code of Alabama 13A-8-194 deals with obstruction of justice by use of false identity. That appears to have nothing to do with the McGregor issue. Code of Alabama 13A-10-2 deals with obstruction of governmental operations, but it focuses on cases where someone tries to prevent a public official from performing a government function. Did McGregor or his PI do that? We see no sign of it.

Under Alabama law, obstruction of justice seems to be an umbrella term for a number of offenses under Chapter 10 of the criminal code. These include offenses such as perjury, bribing a witness, intimidating a juror, impersonating a peace officer, etc. Again, we have no indication that McGregor or his surrogates engaged in any of these activities.

The press could have cleared things up greatly by asking a few simple questions of Mr. Tyson. What would have happened? Here is how we think it might have gone down:

Reporter: What specifically did Milton McGregor do that would constitute a crime under Alabama law?

Tyson: "Ah . . . ummm . . . (shuffle of feet)

Reporter: What Alabama statutes would apply in the McGregor case?

Tyson: Well . . . ahhh . . (shuffle, shuffle)

Reporter: Isn't obstruction of justice usually a federal matter?

Tyson: Yes . . . well . . . ummm . . . (tap dancing commences)

Reporter: If it's usually a federal matter, what authority would you--as Mobile County DA--have over this case?

Tyson: Gosh . . . it's hard . . . to say . . . (breaks into soft-shoe routine)

Reporter: And oh, by the way, have you ever accepted campaign funds from pro-gambling interests?

Tyson (to Riley, standing nearby): Governor, may I be excused . . . my tummy hurts.

Unbelievably, Tyson is sticking to his guns in today's news reports--and still no one is asking him any questions. Writes The Birmingham News:

Tyson, reached at his office in Mobile, said he would not comment on the specific nature of the threats or on security issues. But Tyson did reiterate a statement he made Monday after Riley appointed him to succeed Barber.

"I said Monday that when (gambling magnate) Milton McGregor hired a private detective to follow Mr. Barber it came close to an obstruction of justice in my view. The same applies in this situation.

"Anyone found to have made threats against law enforcement officials in an attempt to somehow stop them from carrying out their duties are engaging in an obstruction of justice at a minimum, and I intend to immediately look into the matter," Tyson said.

Maybe I've watched too many Barnaby Jones episodes, but it's my understanding that a private investigator tries not to be detected by the subject of his surveillance. After all, that's why they call him a PRIVATE investigator.

But we're supposed to believe that Milton McGregor's PRIVATE investigators are walking right up to task force members and threatening them? Doesn't that sort of defeat the purpose of being a PRIVATE investigator?

I just went out into our backyard to ask one of our stumps about this situation:

"Hey Stumpy," I said, "do you really think a private investigator would blow his cover by threatening the person he is tailing?"

"Gee, I don't know," Stumpy said. "I'm a stump and all, but that seems pretty hard to believe."

"Why do you think Bob Riley expects the people of Alabama to believe it?"

"Good grief, you want me to explain the goofy stuff that goes on this state? Can't you see I'm just a stump? If you've got hard questions like that, you'll have to ask Chucky the Ground Squirrel. I saw him over there digging a new hole just a little while ago."

Chucky apparently had business to tend to underground, so I came back in the house, shrugging my shoulders. My stump was stumped--and so was I.

Paul Minor and the U.S. Supreme Court's "Corporation" Ruling

Want evidence that our justice system is broken at multiple levels? Consider the Paul Minor case in Mississippi now that we have Citizens United v. FEC, the recent U.S. Supreme Court ruling that opened the floodgates for corporate money to flow into our political system.

Here at Legal Schnauzer, we've known for a long time that the Minor case is a travesty, with prosecutors gaining convictions only because a corrupt federal judge issued bogus jury instructions. And the U.S. Fifth Circuit Court of Appeals recently muddied the waters by throwing out the convictions on bribery but maintaining the ones for fraud.

Minor's attorneys have filed a motion for reconsideration with the Fifth Circuit. The motion should be granted posthaste, particularly now that the nation's highest court has essentially endorsed what Paul Minor was alleged to have done.

The crux of the prosecution's case against Minor was that the Gulf Coast attorney provided favors for state judges Wes Teel and John Whitfield in exchange for favorable rulings. But now we have the U.S. Supreme Court essentially saying that, even if the charges against Minor were true, his actions are protected by the First Amendment.

In other words, Minor was convicted for doing what our system encourages him to do.

The irony of the Citizens United ruling was not lost on Abbe Lowell, one of Minor's attorneys. In fact, Lowell supplemented Minor's motion for reconsideration with new argument based on Citizens United. In a letter to the clerk of the Fifth Circuit, Lowell states:

Pursuant to Federal Rule of Appellate Procedure 28(j), Paul Minor notifies the Court of the Supreme Court's recent decision in Citizens United v. FEC, No. 08-205 (Jan. 21, 2010). That decision clarifies that the jury instructions in this case, which allowed the jury to convict the defendants of honest services fraud for campaign contributions made with only an intent to influence and without any quid pro quo, violate the First Amendment.

Minor already had an overwhelmingly strong appeal. But now the John Roberts-led U.S. Supreme Court has stepped in to essentially say that trial judge Henry Wingate's jury instructions violated Minor's First Amendment rights.

Moral of the story: What right-wing judges giveth, right-wing judges can taketh away.

Here is Lowell's full letter to the Fifth Circuit. He's essentially telling the Fifth Circuit, "We know you got it wrong, and now the U.S. Supreme Court agrees with us." Touche:

Mr. Charles R. Fulbruge III
Clerk of Court
U.S. Court of Appeals for the Fifth Circuit
600 S. Maestri Place
New Orleans, LA 70130-3408


Re: United States v. Paul S. Minor, No. 07-60751


Case Argued on April 1, 2009 Before Judges Garwood,
Benavides and Haynes


Dear Mr. Fulbruge:


Pursuant to Federal Rule of Appellate Procedure 28(j), Paul Minor notifies the Court of the Supreme Court's recent decision in Citizens United v. FEC, No. 08-205 (Jan. 21, 2010). That decision clarifies that the jury instructions in this case, which allowed the jury to convict the defendants of honest services fraud for campaign contributions made with only an intent to influence and without any quid pro quo, violate the First Amendment. In the context of campaign contributions, the Court held that the government's interest in preventing corruption or the appearance of corruption, is limited to quid pro quo corruption. (Slip op. at 43.) The fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt: Favoritism and influence are not . . . avoidable in representative politics . . . . It is well understood that a substantial and legitimate reason, if not the only reason, to cast a vote for, or to make a contribution to one candidate over another is that the candidate will respond by producing those political outcomes the supporter favors. Id. at 43-44 (quoting McConnell v. FEC, 540 U.S. 93 (2003) (Kennedy, J., concurring and dissenting)). Reliance on a generic favoritism or influence theory . . . is at odds with standard First Amendment analyses because it is unbounded and susceptible to no limiting principle. (Id. at 44.) Ingratiation and access . . . are not corruption. (Id. at 45.)

The jury instructions in this case allowed Mr. Minor to be convicted for making campaign contributions with the intent to influence official actions by the judges he supported, without their being a quid pro quo, and even if the jury found the judges rulings legal and correct. In doing so, the instructions transformed protected First Amendment contributions made to influence elected officials to follow their judgment, rather than betray it, into a crime. That is constitutional error of the greatest magnitude, which requires the honest services convictions be reversed as part of the pending proceedings before this Court.


Respectfully submitted,


Abbe David Lowell

Tuesday, January 26, 2010

Is Alabama Being Run by a Bunch of Sociopaths?

Recent reports about Alabama Governor Bob Riley and his threats toward those who oppose him hit close to the bone here at Legal Schnauzer.

My wife and I know what it's like to be targeted by those who have ties to Riley. I was cheated out of my job as a state employee, after 19 years of service at the University of Alabama at Birmingham (UAB), and evidence strongly suggests that someone connected to Riley targeted me because of my blog.

Now we have a report today that Mobile County DA John Tyson is the new head of Riley's anti-gambling task force. And Tyson is hinting that VictoryLand owner Milton McGregor might have obstructed justice when he hired a private investigator to track previous task force commander David Barber.

Has Tyson lost his mind? If so, perhaps he will fit in with an administration that seems to attract folks who show signs of being disturbed.

I've had close encounters with people connected to Riley, so I have firsthand knowledge on this subject. William E. Swatek, the disgraced attorney who started our legal woes, is the father of Dax Swatek, who ran Riley's 2006 campaign.

Bill Swatek has a 30-year history of ethical violations in the legal profession, which we have chronicled in the following posts:

An Alabama Portrait of Sleaze in the Age of Rove, Part II

An Alabama Portrait of Sleaze in the Age of Rove, Part III

We soon will be starting a series of posts that will feature many of the documents from Bill Swatek's extensive file with the Alabama State Bar. It will provide direct evidence of how a dirtbag lawyer is allowed to operate in Alabama--and he has strong ties to Bob Riley.

As for my personal situation, evidence strongly suggests that my "termination" at UAB has Riley/Swatek fingerprints all over it. By virtue of being governor, Bob Riley serves as ex oficio president of the University of Alabama Board of Trustees. Do you think it would be hard for someone to go through the governor to cheat a UAB employee out of his job? I don't think so either.

Here's what's eery about Riley's "warnings" to those who might "get too close to the families." I received plenty of warnings before I was fired, including one specifically threatening my job. My guess is that a check of Google records, as part of my upcoming lawsuit against the University of Alabama Board of Trustees, will show that those anonymous threats came from someone associated with Riley.

Experience has taught me that threats are part of "business as usual" for those close to Riley. And after viewing the alarming tape of Riley's warnings, I think it's reasonable to ask this question: Is the Alabama governor's office populated by a number of sociopaths?

We've written several times about antisocial personality disorder, the formal term for sociopathy. The disorder boils down to a lack of empathy for others, and Riley's videotaped "warning," to our untrained ears, sure hints at some disturbing stuff.

Let's consider a few insights we can glean from the Riley tape--along with what we know about his time in public office:

* Riley hints that he is troubled because he thinks someone is "following" law-enforcement officers who serve on his anti-gambling task force. Why is this a problem? Is there something unlawful about it? (We now know that Riley has appointed John Tyson to help spread this message, even though there appears to be no basis for it in law.)

* Then we learn what really seems to be bothering Riley: That someone is getting "too close" to "the families," apparently a reference to his children and their families.

* Isn't it interesting that Riley is hypersensitive about his family, but he has no history of showing concern for the families of others? For example, governor, what about my family? Being cheated out of my job at UAB has put my family at grave risk. Does that weigh on your mind? What about the family of Don Siegelman, your one-time opponent for the governor's office? Having to face bogus federal corruption charges surely has been an unspeakable strain on Siegelman's family. Do you care about that, governor?

* Riley indicates that his family members deserve some sort of special protection, that they should somehow be "off limits." Perhaps the governor should have thought about that before he ran for public office. Perhaps Riley's children and their families should have thought about that before they reportedly benefited personally from their connections to public resources.

* Riley hints that he is going to take action against those who get "too close" to his family members, and we can assume such action would involve state resources. Wouldn't it be a crime for a governor to use state resources on a personal matter--to help carry out a personal vendetta? This is alarming stuff, and Riley's tone hints that he already has done this kind of thing.

WSFA reporter Eileen Jones has performed an admirable public service. She has recorded evidence that shows, for all Alabamians who care to pay attention, what our governor is really like.

Sadly, John Tyson has joined the Riley team, and it's hard to figure what he's thinking with his hints about obstruction of justice regarding Milton McGregor. My guess is that Tyson simply is trying to throw a scare into McGregor because nothing McGregor has done appears to come close to obstruction of justice. Our research indicates that obstruction of justice generally is a federal matter, so even if McGregor had committed such an offense, it isn't clear how John Tyson would have authority to do anything about it.

Tyson is a Democrat who ran for attorney general in 2006 and lost to Troy King. Apparently, Tyson has decided that he can advance his political fortunes by sucking up to Bob Riley. Sad. Tyson would not be the first Alabama Democrat who seemingly has sold his soul to the Rileys. (See Jones, G. Douglas.)

Hope Tyson enjoys his time with the Riley crowd. I've thought for a long time that there are some disturbed people around the current administration. After viewing the WSFA report, I don't think there is any doubt about it.

Why Did Paul Bryant Jr. Liquidate Fraud-Tainted Company?

According to public documents, Alabama Reassurance was a highly successful company, with more than $238 million in admitted assets at the end of 2006.

So why did company executives, who include University of Alabama trustee Paul Bryant Jr., indicate near the end of 2007 that they intended to merge Alabama Re into its parent company (Greene Group Inc.) and then liquidate it? Why did they indicate that Alabama Re essentially would be replaced by a new entity, Alabama Life Reinsurance Company?

Did this curious move have something to do with the fact that Alabama Re was seriously tainted by insurance fraud? Did Alabama Re executives sense that--in the wake of Enron, WorldCom, and other business scandals--the environment was about to turn nasty in the late 2000s for companies with fraudulent business practices?

The most recent public information about Alabama Re comes from the Alabama Department of Insurance report on the company in 2006. This item from page 68 of the report provides insight about Alabama Re's future:

Company management represented that, as of September 14, 2007:

"Alabama Reassurance Company, Inc. has no insurance liabilities and is in the process of surrendering its licenses. When this is accomplished Alabama Reassurance Company, Inc. will be merged into Greene Group, Inc. and then liquidated.

Alabama Life Reinsurance Inc. is now an Alabama licensed life insurer with two assumed reinsurance treaties (North American Life and Securities Life) in force. There are no plans to add any other insurance or reinsurance business."

Sounds like Alabama Life Reinsurance plans to keep a low profile, doesn't it? Wonder why that is?

Could it be that executives at Greene Group Inc. fear the environment isn't ripe for their kind of activities? Consider this item from mainjustice.com about the Obama administration's concerns regarding financial fraud:

Late last year, President Barack Obama signed an executive order that created an interagency task force to fight financial crime. The Attorney General said the Financial Fraud Enforcement Task Force is the “cornerstone” of the Justice Department’s efforts to combat mortgage fraud, securities fraud, financial discrimination and Recovery Act and rescue fraud.

“To those who see victimization of others as an avenue to wealth, take notice: If you fabricate a financial statement, if you propagate an investment scheme, if you are complicit in an act of financial fraud, you are writing your ticket to jail,” Holder said.

Is the Department of Justice serious about going after financial fraudsters? Mainjustice.com indicates the answer is yes:

The fiscal year 2010 DOJ budget signed into law last month includes funds for 43 positions in U.S. Attorney’s offices to help combat financial fraud. Congress set aside $7.5 million in the budget for U.S. Attorney’s offices to pursue bankruptcy, mortgage fraud, affirmative civil enforcement and other white collar crimes.

The U.S. Attorney’s offices received $2.4 million through the fiscal year 2009 omnibus budget to fight economic crimes, according to a DOJ spokesperson. Congress allocated an additional $10 million to the U.S. Attorney’s offices in the fiscal year 2009 supplemental budget to fight financial fraud, the spokesperson said. The supplemental funding does not expire until fiscal year 2011. DOJ was able to hire 76 new Assistant U.S. Attorneys to handle financial fraud cases with the fiscal year 2009 funds, according to the spokesperson.

Did Paul Bryant Jr. and his colleagues at Greene Group Inc. see this coming? Is that why Alabama Re is no more?

We don't pretend to be experts on business liquidation, but our research indicates it usually occurs when a company needs to be rehabilitated or is on the verge of becoming insolvent. Neither of those seemed to be the case with Alabama Re.

And it's not like Greene Group Inc. is getting out of the insurance business altogether. But with Alabama Life Reinsurance, the company appears to be taking a much lower profile than it had before.

It's undisputed that Alabama Re engaged in fraudulent activity in the 1990s and that a protector in the Clinton Justice Department called off an investigation of the company after a conviction had been obtained in the Allen W. Stewart case in Pennsylvania. It's likely that the company still had protection under the pro-business Bush DOJ from 2000 to 2008.

But the company decides to liquidate in late 2007? How convenient. Is liquidation a fine method for hiding and/or destroying evidence of fraudulent activity?

We would suggest that Obama's financial-fraud fighters might want to sift through the remnants of Alabama Re. And they might also want to check the activities of another entity with close ties to Paul Bryant Jr.

That would be the University of Alabama at Birmingham (UAB), which Bryant helps run as a member of the UA board of trustees. We've already seen signs that UAB is skittish about the Obama administration's plans to get tough on health-care fraud.

Perhaps Alabama's largest employer should be skittish, considering that it engaged in a massive fraud scheme that reportedly totaled some $600 million and got away with barely a wrist slap from the Bush DOJ.

Is the Obama DOJ serious about tracking down financial fraudsters? If so, here's a tip: Do some sniffing on Paul Bryant Jr.'s trail. Public documents indicate that where "Bear Jr." goes--whether it's his personal business activities or at the universities that he helps oversee--fraud is likely to follow.

Monday, January 25, 2010

Caught on Tape: Bob Riley Issues Threats Like a Mafioso

Alabama Governor Bob Riley, sounding like a character from one of the Godfather movies, recently issued a clear threat to those who oppose him--and perhaps to those who cover his administration. A Montgomery television reporter was there to capture it all on tape.

Eileen Jones, of station WSFA, interviewed Riley about reports that a private investigator hired by VictoryLand's Milton McGregor had caught a key member of the governor's team gambling at a casino run by the Mississippi Choctaws. That led to the resignation of David Barber, head of the Governor's Anti-Gambling Task Force.

In a story that aired Friday night, Riley complained that pro-gambling forces have been conducting surveillance on law-enforcement officials who serve on the task force. Riley then issued what the reporter called a "warning," one he would not explain.

"Don't get too close," Riley said. "And don't you get too close to the families. Because all of a sudden then, everything changes."

Asked if he cared to elaborate, Riley said, "Nope."

Was Riley also directing his warning toward journalists who might actually dare to investigate the actions of his administration and family members? Sure sounds that way.

You can view the entire report at the link below. The segment about the threat begins at about the 2:08 mark:

Governor and McGregor at Odds

It's unclear what "families" Riley is referring to. But it appears to be a reference to his three children--Rob Riley, Minda Riley Campbell, and Krisalyn Riley Crye--and their families.

Glynn Wilson, of the Locust Fork News-Journal, reports on a new YouTube post that spotlights the Riley threat. It's unclear who posted the video, but they raise a number of questions about Riley's family members. Wilson highlights some of the key points in the video:

Bob Riley is a political thug, according to the committee to impeach Riley, and has been a threat to Alabama since he took office 7 years ago.

Why doesn’t he want anyone to get close to his families?

-Son In Law Bob Campbell's Law Firm, Bradley Arant, before Riley took office, billed the State of Alabama just under $7,000. Since Riley has been in office they have billed the State of Alabama more than $4 million.

-Daughter Krisalyn works for a marketing firm employed by the Choctaw Indians in Mississippi. Yes, those are the same Indians who gave $13 Million to his campaign for Governor in 2002.

-His Son In Law Bob Campbell represents both the Indians and the Task Force to shut down gambling and has already spent $1 million of our tax dollars.

-His son Rob also got a $25 Million NO BID contract from Alabama to represent the state in a lawsuit vs. ExxonMobil, which was found guilty by a jury of ripping off the taxpayers by millions of dollars in oil and gas royalties for wells in the Gulf of Mexico.

The YouTube video appears to be a portion of the WSFA report captured from a television screen. You can check out the video below:

Does MA Vote Signal That Arrogance and Stupidity Are Taking Over?

In the wake of Republican Scott Brown's victory last week in Massachusetts, some TV talking heads hinted that Americans are blaming President Barack Obama for the dreadful U.S. economy. Others hinted that Americans wonder why Obama has not already solved the numerous messes he inherited from George W. Bush.

That raises this question: Has the United States become an ungovernable nation of impatient, whiny, self-obsessed, misinformed nitwits? We are starting to think the answer might be yes.

Not that there's anything wrong with criticism of Obama. We've criticized the president, mainly for having his priorities out of whack. In our view, he should have discredited the Republican "brand" by pushing for investigations of likely Bush-era crimes and then tackled difficult issues such as health-care reform.

We like to think our criticism is constructive and based somewhat in reality. But to blame Obama for the economy? To suggest that he should undo eight years of Bush incompetence in roughly one year? Makes me wonder about the future of our country. And it makes me think of a couple of op-ed pieces I read a few weeks back.

Many Americans born after World War II seem imbued with the notion that our country is blessed with an unendingly bright future.

Recent opinion pieces by two prominent writers indicate that America's halcyon days might be coming to an end--and the Scott Brown vote adds fuel to that fire. Why could America be in trouble? The twin plagues of arrogance and stupidity seem to be raging across the land, raising this question: How long can a country thrive when its populace is too proud and too clueless to notice the warning signs all around?

Neal Gabler deals with arrogance in a piece titled "One Nation, Under Illusion." David Brooks, of the The New York Times, unwittingly drives home the stupidity point with "What Independents Want."

In a stunning development, Gabler dares to tell the truth about the American people:

The hoariest and most oft-repeated cliche in American politics may be that America is the greatest country in the world. Every politician, Democrat and Republican, seems duty bound to pander to this idea of American exceptionalism, and woe unto him who hints otherwise. This country is “the last, best hope of mankind,’’ or the “shining city on the hill,’’ or the “great social experiment.’’

Gabler, a progressive, even takes Jimmy Carter to task for once saying that we needed a “government as good as the American people.’’

Carter was speaking when Watergate was fresh, and government had been disgraced, but still. The fact of the matter is that whenever anything really significant has been accomplished by our government, it is precisely because it was better than the American people.

Want proof? Gabler digs into history to provide plenty of it:

Think of World War II, America’s entrance into which was strenuously resisted by the populace until Franklin Roosevelt carefully laid the groundwork and Pearl Harbor made it inevitable. Think of civil rights, which Lyndon Johnson pressed despite widescale opposition, and not just in the South. Even then it took more than 100 years. Or think of the current health care debate in which Americans seem to desire some sort of reform, just not a reform that would significantly help people in dire need, while the Obama administration is pushing to provide that assistance. In the end, government has inspired Americans far more than Americans have inspired their government. They are too busy boasting.

When Americans aren't too busy boasting, they are too busy being stupid. Consider what Brooks has to say about "suburban independents," a bunch he says controls our political destiny. In fact, several reports have indicated that "independent" voters helped swing the Massachusetts election for Ted Kennedy's U.S. Senate seat.

Brooks says these voters are "herds of cats who find out what they think through a meandering process of discovery." What an insult to cats. And as the proud owner of two adorable and smart cats, I take great offense.

How stupid are suburban independents? Less than a year after Barack Obama's election, on the heels of the George W. Bush debacle, they already were unhappy with Democrats. Writes Brooks:

The first thing to say is that this recession has hit the new suburbs hardest, exactly where independents are likely to live. According to a survey by the National Center for Suburban Studies at Hofstra University, 76 percent of suburbanites say they or someone they know have lost a job in the past year.

So suburban independents want to solve the unemployment problem by turning to Republicans, the very crew that caused the economy to implode in the first place? Makes a lot of sense.

Want more evidence of stupidity in the suburbs? Consider this from Brooks:

The second thing to say is that in this time of need, these voters are not turning to government for support. Trust in government is at its lowest level in recent memory. Over the past year, there has been a shift to the right on issue after issue. According to Gallup, the percentage of Americans who believe that there is too much government regulation rose from 38 percent in 2008 to 45 percent in 2009. The percentage of Americans who want unions to have less influence rose from 32 percent to a record 42 percent.


So the Einsteins in the suburbs think the mortgage and banking crises that sparked our economic woes were caused by excessive regulation and powerful unions? Who knew?

Perhaps I'm being too hard on suburban independents. After all, I used to be one of them. In 1976, I cast my first presidential ballot for Jimmy Carter--and I am proud of that. But starting in 1980, I fell for the Reagan "shining city on a hill" malarkey and voted Republican in three straight presidential elections. Only when I approached my mid 30s did I come to my senses, voting for Bill Clinton in 1992 and going straight Democrat ever since.

Essentially, I was a political dimwit in my 20s and early 30s. I didn't live in the suburbs for most of that time, but I was a product of that environment. And I was too busy trying to build a career and catch the occasional date to be bothered with staying informed. Unfortunately, like many of today's clueless suburbanites, I didn't have the decency not to vote. Makes me think maybe we should raise the voting age to 35.

I guess I can cut myself some slack for finally coming out of my daze. But Reagan's cowboy capitalism has had 30 years to erode the fabric of our society. How much longer can we move forward in a Gipper-induced stupor? As Gabler writes, arrogance and stupidity can extract a high price:

None of this would make much difference if the self-congratulation was just harmless bragging. But there are consequences. A country that believes it is the greatest in the world is also less likely to be constrained by that world. One could argue that the Iraq war was a direct result of a sense of national infallibility. So was our willingness to torture, our reluctance to admit our mistakes in Afghanistan, our culpability in the global recession, and our foot-dragging on global warming. Such a nation is also less likely to introspect or to strive for true greatness because it believes its greatness has already arrived.

Will 2010 be the year that America begins to turn back in a healthier direction? The Brown vote in Massachusetts indicates that the answer probably is no. But Gabler suggests Americans need a wake-up call to start the healing process from unfettered cowboy capitalism. And the healing cannot begin too soon:

A nation that brooks no criticism, a nation that feels it is always better than any other, a nation that has to be endlessly flattered and won’t face the truth, a nation whose people think they possess some special moral exemption and wisdom, a nation without humility is a nation spoiling for calamity.

We’ve been living in a fool’s paradise. The result may be a government that is as good as the American people, which is something that should concern everyone.

Friday, January 22, 2010

Private Investigator Nailed Riley's Anti-Gambling "Czar"

It's not often that we get to say, "I told you so," so we mustn't let those moments pass.

With that in mind, it's a special pleasure to report that a private investigation led to the recent resignation of David Barber, the head of Alabama Governor Bob Riley's Anti-Gambling Task Force.

Milton McGregor, owner of VictoryLand near Montgomery, said he hired a private investigator, who caught Barber playing a slot machine at a Mississippi casino. Barber won a $2,300 jackpot in late December at the Golden Moon casino in Philadelphia, Mississippi. When confronted about his activities, Barber resigned from the governor's task force.

Reports the Mobile Press-Register:

"I knew he was going there. I knew what took place in Mississippi," McGregor told the Press-Register. "I wasn't out to destroy David Barber. He destroyed himself."

McGregor and other Alabama casino owners are waging a high-stakes battle with the Riley administration over the legality of electronic bingo machines, which have been seized in raids led by Barber's task force.

When we first reported on the Barber story earlier this week, we had this to say:

The Barber story leaves several questions unanswered:

* How did Barber's winnings come to public attention? I don't know much about gambling, but I assume that it normally doesn't become news when someone wins a $2,300 jackpot. Is it possible that pro-gaming interests in Alabama conducted a private investigation and caught Barber in the act? Is that what caused Barber to turn in his resignation letter? If so, I have the utmost admiration for the pro-gaming interests. That's the kind of hardball you have to play against Republican hypocrites. When will the Democratic Party ever learn that lesson?

Turns out our speculation was on target. And we do admire McGregor's willingness to fight back against the hypocrites in the Riley administration.

We also had this question in our original report:

* At exactly which casino in Mississippi was Barber playing? That has not been reported, to my knowledge. Was it a Mississippi Choctaw casino? Was Barber, indeed, patronizing a casino run by the group that helped put Bob Riley in office?

McGregor answers that question for us, too. Barber was at a casino operated by the Mississippi Choctaws, the outfit that reportedly spent $13 million to help get Bob Riley elected governor over Democrat Don Siegelman in 2002. Golden Moon is part of the Choctaws' expansive Pearl River Resort.

And that raises other questions: Was David Barber doing more than just gambling when he visited the Mississippi Choctaw resort? Was anyone with Barber while he was at the facility?

Here's a curious section from the story about McGregor and the private detective:

McGregor claimed that he put that chain of events into motion by getting word to Riley through an intermediary that he had proof that Barber was gambling. He said he gave Riley a Jan. 15 deadline to disclose Barber's activity or else he would disclose it himself.

Riley announced Barber's resignation on Jan. 15. The news sent shock waves across the Alabama political landscape, and earned national headlines.

"I found it amusing but disgusting. I detest hypocrisy," McGregor said. "You'd be surprised what you can find out by monitoring somebody. It doesn't take long."

Riley's office vehemently denied McGregor's account.

"Milton McGregor is a liar," said Jeff Emerson, communications director for Riley.

Why is Riley's spokesman so sensitive about the notion that McGregor contacted the governor's office through an intermediary? Could it be that McGregor has obtained information about someone in the anti-gambling movement besides David Barber? Was the "outing" of Barber just the appetizer before the main course?

And McGregor tosses in this tantalizing cryptic message: "You'd be surprised what you can find out by monitoring somebody. It doesn't take long."

Hmmm, methinks the "rest of the story" could get mighty interesting.

Thursday, January 21, 2010

Debt Collectors Try to Hide Their Sleazy Business Practices

Debt collectors are a slippery bunch. They will try to collect money from you, even though they have no proof that you owe it. When you sue them for rampant violations of the Fair Debt Collections Practices Act (FDCPA), they will threaten you, bully you, and stonewall your efforts to collect evidence of their wrongdoing.

Mrs. Schnauzer and I sued Pennsylvania-based debt collector NCO and Birmingham-based law firm Ingram & Associates for multiple FDCPA violations over a debt we allegedly owed to American Express. Since then, we've gotten quite an eyeful of the tactics debt collectors (and their lawyers) will use to hide their unsavory activities.

Join us on a brief trip down "Debt Collector Pathology Highway," a road that many American consumers are traveling these days. And our travelogue won't even include a stop at the "Cheat the Debtor's Wife Out of Her Job" roadside bar, which we visited in a recent post.

First, lawyers for NCO proposed that we join them in a "Stipulated Confidentiality Agreement." (See the full document below.) Among these lawyers was the one (Bryan Shartle) who, after our recent depositions, told one of our attorneys that our case was "the weakest FDCPA case he had ever seen," he would seek to have it dismissed with costs charged to me, and I would be imprisoned if I could not pay the costs.

You probably will not be surprised to learn that I instructed our attorneys to tell Mr. Shartle & Co. that they could take their confidentiality agreement and stick it in a certain body orifice.

What was the purpose of the confidentiality agreement? This item sums it up:

A Party to this Agreement may designate materials as “CONFIDENTIAL” to the extent that the Party, through counsel, believes such materials are confidential because they include: confidential business or technical information; trade secrets; proprietary business methods or practices; or personal information regarding plaintiffs or any of Defendant’s current or former agents or employees.
The first thing you notice is that this proposal is one-sided. We don't have any "trade secrets" or "proprietary business methods" to hide. And we could not care less about whatever personal information the defendants think might cause us embarrassment.

In other words, the proposed agreement is designed totally to protect the defendants--and that's because they have something to hide. It does nothing for us--and that's because we don't have anything to hide.

The second thing that occurs to you is that the main point of the agreement probably is to keep me from blogging about the defendants' dirty deeds. In other words, if they turn over information that shows how they cheated us, they certainly do not want other consumers learning about it through reading Legal Schnauzer.

Defendants should be concerned about that--particularly because they clearly were violating the law. I do, indeed, intend to write about every aspect of the case on this blog. That's something scoundrels of all types should keep in mind these days--technology now allows regular folks to spread word about various misdeeds around the world. And scoundrels might be surprised to learn that some blogs, like this one, have a pretty wide readership.

It's always paid to conduct business in an honest fashion. But it's particularly true now that the Web allows most anybody to become an investigative journalist. Apparently word about that has not gotten to outfits like NCO and Ingram & Associates. And it probably never occurred to them that some of their targets really are investigative journalists.

My understanding is that courts will sometimes fashion confidentiality agreements--and if that happens, so be it. But we are not blindly agreeing to a one-sided document. And we strongly suspect that defendants want to declare material as "confidential" when it is not.

That seems clear from their answers to our discovery. Here are a few key items we have requested in discovery:

* All documents and communications regarding our account between the defendants, NCO and Ingram & Associates;

* All documents and communications regarding our account between the defendants and the original creditor, American Express;

* All documents and communications regarding our account between the defendants and any third parties;

* Any contracts and other agreements between the defendants;

* Any contracts and other agreements between the defendants and American Express;

* All e-mails between defendants, and with any third parties, regarding us and our account;

* Training materials used by the defendants.

So far, defendants have refused to turn over all of this information, and I imagine we will have to file a motion to compel with the court. I don't pretend to be an expert on discovery matters, but it seems pretty clear that we are entitled to receive all of this information. It also seems clear that defendants are withholding it because it reveals the unlawful and sleazy business practices they use--not only with us, but probably with hundreds of thousands of other consumers.

Recall, that defendants' proposed confidentiality agreement wanted to protect only materials that were "trade secrets," "technical information," "proprietary business methods," etc.

The training materials are the only item that could be considered proprietary. And if they reveal that the companies intentionally train their employees to violate the law, it goes directly to the heart of our case.

Despite defendants' stonewalling efforts, we have received some fascinating information from them. In fact, NCO turned over information that absolutely proves our case against them--and proves that Ingram & Associates acted in a fraudulent manner in our case. In some instances, NCO makes statements that directly contradict statements made by Ingram & Associates. How delightful.

It's good stuff, and those documents will be coming soon. But first, let's take a look at the proposed confidentiality agreement, the one we hope currently resides in a deep, dark place.

As you read this, you might recall our friend Bryan Shartle. If our case is, indeed, "the weakest FDCPA case he's ever seen," why is his client, NCO, so concerned about keeping items confidential. Methinks Mr. Shartle, like so many other members of his "profession," is full of horse manure:


NCO Confidentiality Agreement

Paul Bryant Jr. and Alabama Reassurance: A Portrait of Fraud

We have established that a company owned by University of Alabama trustee Paul W. Bryant Jr. was involved in a massive insurance-fraud scheme that led to a 15-year prison sentence for a Pennsylvania lawyer.

But several intriguing questions remain: How did the lawyer, Allen W. Stewart, come to pick Bryant's company as a conspirator? Of all the insurance companies in the country, why did Stewart choose Bryant's company, Alabama Reassurance, to help him carry out a fraudulent scheme?

And here is a fairly recent development: Alabama Re was liquidated in late 2007, with a new company (Alabama Life Reinsurance Company) more or less taking its place. Why was that action taken? We will ponder that question in a moment.

But first, let's think about why Allen W. Stewart might engage the services of Alabama Reassurance. Stewart is in federal prison and not readily available for interviews. But his actions indicate he knew something about Alabama Re that made him think the company would be receptive to a fraud scheme? Is that because Alabama Re had engaged in fraud schemes before? And because the U.S. Department of Justice decided to call off an investigation of Alabama Re in the late 1990s, has the company engaged in fraud schemes since then?

We don't have clear answers to those questions. But we do have a 2006 report from the Alabama Department of Insurance (DOI) that provides considerable insight into how Alabama Re conducted business. And it ain't a pretty picture.

After reading the 77-page document, you are tempted to say, "Gee, what a fly-by-night outfit." But that might give fly-by-night outfits a bad name.

First, let's consider a few peculiarities about Alabama Re. At the end of 2006, the company had "admitted assets" of $238,028,220. Is it housed in a major, multi-story building? Nope, it's in the Bryant Bank headquarters in Tuscaloosa, on McFarland Boulevard.

You might think a company would need quite a few employees to help manage more than $238 million. But you would be wrong. Alabama Re has two full-time employees--President Scott Moore Phelps and Vice President/Actuary William Rodney Windham. They are joined on the board of directors by Paul Bryant Jr., president of Greene Group Inc.; Allen Wayne May, a Tuscaloosa veterinarian; and Sam Moore Phelps, a Tuscaloosa lawyer.

Alabama Re apparently is a decidedly low-tech operation, paying little attention to basic business practices. Reading the DOI report, you picture two guys wearing green eye shades, hunched over their desks in a basement, surrounded by shoe boxes full of money that are covered in cobwebs.

The DOI takes Alabama Re to task for all kinds of shortcomings and violations of the Code of Alabama. In fact, the report devotes 14 pages to noting how the company could better handle its operations. One gets the impression that the good folks at Alabama Re don't much care what the Department of Insurance thinks.

Here are just a few of Alabama Re's "best practices," areas that the DOI said needed major attention:

* Risk of water damage to computer center;

* The backup tape log has a success rate of less than 50 percent;

* No formal records-retention policy;

* No computer-security policy;

* No emergency response procedures;

* No business contingency plan;

* No anti-fraud plan; and

* Daily backups stored at off-premises location.

Some corner lemonade stands probably have better business procedures than Alabama Re. And yet, the company is not a small-time operation. A 1997 report by the U.S. Department of Health and Human Services, Assistant Secretary for Planning and Evaluation (ASPE), ranked Alabama Re among the country's top 50 reinsurers.

It's joined on the list by such stalwarts as Swiss Re Life Company of America (No. 1), Lincoln National Life Insurance Company (No. 2), and Reliastar Life Insurance Company (No. 3)--not to mention such impressive names as Transamerica Occidental Life (No. 7), the Equitable Life Assurance Society (No. 23), John Hancock Mutual Life (No. 27), and Underwriters at Lloyd's of London (No. 32).

I wonder how many of those companies have two employees. If you are going to conduct business in a shady fashion, is it wise to have only a few people who know about it?

Interestingly, Alabama Re is no more, at least not in its original form. As of late 2007, according to the DOI report, the company was merged into Greene Group Inc. and liquidated. A new company, Alabama Life Reinsurance Company, was formed. It has two assumed reinsurance treaties--with Security Life Insurance Company of America and North America Insurance Company of Texas.

The statute of limitations on crimes associated with the Allen W. Stewart case almost certainly has passed. With the liquidation of Alabama Re, any evidence of ongoing irregularities might be gone with the wind, too.

As we've reported in previous posts, Alabama Re had a protector in the Clinton Justice Department of the late 1990s. And that protection almost certainly stayed in place during the pro-business George W. Bush era from 2000 to 2008.

With the economy starting to implode, and public unrest building over multiple major business frauds, did the executives of Alabama Re see a Democratic administration on the horizon? Is that why they thought late 2007 might be a good time to liquidate Alabama Re?

Something tells me it's not a coincidence that Alabama Re was dissolved in late 2007. Something also tells me that federal investigators might want to keep an eye on the activities of Alabama Life Reinsurance Company.

Wednesday, January 20, 2010

Debt Collectors Leave Fingerprints at the Scene of the Crime

My wife and I filed a lawsuit in July 2008 alleging multiple violations of the Fair Debt Collections Practices Act (FDCPA) associated with a debt we allegedly owed to American Express.

Strange events started happening on my wife's job at Infinity Property & Casualty Corporation in June 2009, just as discovery issues began to heat up in our lawsuit. The strangeness reached a head on September 25 when my wife--we call her Mrs. Schnauzer (MS) here--was fired under mysterious circumstances.

Could someone connected to the defendants in our case--NCO and Ingram & Associates--have caused my wife to be cheated out of her job? Have things gotten so bad in our "justice system" that someone can lose her job simply for trying to seek redress in court? Did someone knowingly violate my wife's civil rights under 42 U.S. Code 1985 (2), which specifically prohibits such actions?

We've been studying fingerprints left at the scene of the crime, and the answers to those questions appear to be yes.

Actually, the circumstances surrounding MS's termination are not all that mysterious. Lawyers for NCO and Ingram & Associates had tried all kinds of threats in an effort to get us to drop the lawsuit. But it became clear in mid September that those threats weren't going to work, and defendants were going to have to turn over information in discovery.

That's when my wife's supervisor at Infinity gave her a written warning for being "tardy," even though he had asked her some three months earlier to move her start time from 9 to 9:30 a.m. in order to help better serve California customers. She had always arrived well in advance of the 9:30 start time, and her supervisor had never given her oral notice of a tardiness problem, as required by the company handbook.

My wife disputed the written warning, indicating that she was going to take the matter to human resources. Her supervisor then said he was "fine," stating that he had left the document in his drawer. In other words, he indicated that there was no official warning after all, and everything was fine. A few days later, MS was fired.

Infinity's failure to follow its own policies regarding alleged tardiness indicate the grounds for my wife's termination were bogus. In fact, the company's incompetence in the whole matter is almost laughable.

The written warning also charged that MS had taken several unscheduled absences on Mondays, hinting that she was abusing sick leave. In fact, all of those days were scheduled and approved vacation days, and the company eventually admitted in writing that the charge was baseless. But it upheld my wife's termination anyway!

What fingerprints point to debt collectors in the cheat job my wife experienced at work? Let's consider just a few:

* We had long been concerned that someone connected to our various legal issues might try to cheat MS out of her job. For that reason, we had been unusually secretive about her place of employment; her own sister did not know where she worked. But one of the first questions we had to answer in discovery for the lawsuit was a simple one: Where do you work? We were reluctant at first to answer the question, but we figured the court would frown on delay over such a basic question. So we answered it. That meant the defendants, and their lawyers, were pretty much the only people outside our household who knew where my wife worked.

* NCO is represented in our case by Lloyd Gray & Whitehead, a Birmingham law firm with strong connections to Infinity Property & Casualty. How strong are the connections? Here is just one example: Erin E. May, an attorney in corporate litigation at Infinity Property & Casualty, used to work at Lloyd Gray & Whitehead. (See document below.)

* Erin May apparently is sensitive about her ties to Lloyd Gray & Whitehead--at least when it comes to our case. MS raised the issue in a deposition a few weeks back. Consider this exchange, taken from the transcript, with Wayne Morse, attorney for Ingram & Associates:

Q: Okay. But you think there was pressure on you in Infinity because Erin May is a former associate at Lloyd Gray & Whitehead. Is that . . .

A: I think . . . well, according to her Facebook page, she's still close friends with someone that works there, I don't recall the name, somebody.

We had checked Erin May's Facebook page several times, and it appeared to be quite active, with several hundred friends. When we went back to check it after the deposition, it was gone. It's still gone, as I write this post.

Does that mean Erin May caused my wife to be fired at Infinity? Nope. But it does mean there are ties between the defendants in our lawsuit and my wife's former employer. And it means someone isn't real anxious to have those ties known.

We have more information about connections between the defendants and Infinity Property & Casualty. But for now, let's close with this document--Erin May's profile from LinkedIn. I found it originally by doing a simple Google search, and it was available to the public. It now appears to be available only to LinkedIn members. Again, someone appears to be sensitive about public documents that show connections between Infinity and Lloyd Gray & Whitehead:

Erin May--LinkedIn

Massachusetts Vote is a Rejection of "Look Forward, Not Backward"

In the wake of reports last night that Republican Scott Brown had won Ted Kennedy's U.S. Senate seat in Massachusetts, several TV talking heads traced the upset to Democratic Party wrangling in December over health-care reform.

We would suggest that the seeds of last night's fiasco for Democrats were planted much earlier than that--on January 11, 2009. That's the date that ABC's George Stephanopoulos asked President-Elect Barack Obama about the possible appointment of a special prosecutor to investigate crimes of the George W. Bush administration.

Obama replied by saying that he was inclined to "look forward as opposed to looking backwards," indicating that he was willing to give Bush criminals a free pass. It was that show of weakness, buttressed by similar statements that Obama has made since then, that many Massachusetts residents probably remembered as they went to polling places yesterday.

We suspect that Obama's refusal to take a principled stand on matters of justice was the No. 1 reason Democrats lost a seat that Kennedy had held for almost half a century.

And how's this for irony? The Democratic candidate, Martha Coakley, is known as a tough prosecutor, someone who definitely is willing to look backward to ensure that justice is done. It has been widely reported that Coakley ran a poor campaign. But Robert Parry of Consortium News, in a column criticizing CNBC's Chris Matthews' coverage of the Massachusetts race, said Coakley had some definite strengths:

Matthews dispensed with the serious stuff. He had little interest in mentioning Coakley’s history as an aggressive prosecutor, her central role in winning settlements from contractors of Boston’s infamous Big Dig project and from Wall Street firms that engaged in deceptive practices, including $60 million from Goldman Sachs to settle allegations that it promoted unfair home loans.

In other words, Coakley does not believe in letting bad guys get away with their misdeeds. But how can she succeed in an environment where the president, from her own party, indicates that's exactly what he intends to do?

Obama repeated the "look forward" nonsense last April when it looked like Spanish prosecutors might target Bush officials for sanctioning torture at Guantanomo Bay. Said the president: "I'm a strong believer that it's important to look forward and not backwards, and to remind ourselves that we do have very real security threats out there," said Obama. "So I have not had direct conversations with the Spanish government about these issues."

Here's how Sam Stein, of Huffington Post, summed up the administration's approach:

The non-committal response is consistent with the president's stance on domestic efforts to launch an investigation into the possible illegalities of the Bush years. The White House still has not taken a position on Sen. Patrick Leahy's proposed truth and reconciliation commission for such a task.

How serious are Bush crimes, the wrongs that Obama wants to gloss over? Scott Horton, of Harper's, reported on Monday about the possible homicides of three prisoners at Guantanomo in 2006.

In a piece titled "The Crime of Not Looking Backward," Glenn Greenwald cites Horton's work, noting that new evidence suggests detainees were tortured to death, and that was covered up to look like suicides. Greenwald goes on to note that Obama's "look forward" approach looks absurd in the face of such events:

Incidents like this dramatically underscore what can only be called the grotesque immorality of the "Look Forward, Not Backwards" consensus which our political class--led by the President--has embraced. During the Bush years, the United States government committed some of the most egregious crimes a government can commit. They plainly violated domestic law, international law, and multiple treaties to which the U.S. has long been a party. Despite that, not only has President Obama insisted that these crimes not be prosecuted, and not only has his Justice Department made clear that --at most--they will pursue a handful of low-level scapegoats, but far worse, the Obama administration has used every weapon it possesses to keep these crimes concealed, prevent any accountability for them, and even venerated them as important "state secrets," thus actively preserving the architecture of lawlessness and torture that gave rise to these crimes in the first place.

Greenwald went on to note health-care reform, almost presaging last night's election results in Massachusetts:

Every Obama-justifying excuse for Looking Forward, Not Backwards has been exposed as a sham (recall, for instance, the claim that we couldn't prosecute Bush war crimes because it would ruin bipartisanship and Republicans wouldn't support health care reform). But even if those excuses had been had been factually accurate, it wouldn't have mattered. There are no legitimate excuses for averting one's eyes from crimes of this magnitude and permitting them to go unexamined and unpunished. The real reason why "Looking Forward, Not Backwards" is so attractive to our political and media elites is precisely because they don't want to face what they enabled and supported. They want to continue to believe that it just involved the quick and necessary waterboarding of three detainees and a few slaps to a handful of the Worst of the Worst. Only a refusal to "Look Backwards" will enable the lies they have been telling (to the world and to themselves) to be sustained. But as Horton's story illustrates, there are real victims and genuine American criminals -- many of them -- and anyone who wants to keep that concealed and protected is, by definition, complicit in those crimes, not only the ones that were committed in the past, but similar ones that almost certainly, as a result of Not Looking Backwards, will be committed in the future.

Obama took office at a stunningly dangerous, and serious, moment in our history. But he has repeatedly given the impression that he is not serious about fundamental matters of justice. We suspect that is a major reason Martha Coakley went down to defeat last night in Massachusetts.

For more than 40 years, starting with Richard Nixon, Republican governance has personified corruption. But Democratic administrations--first Bill Clinton's and now Obama's--have allowed the Republican brand to remain untarnished.

The Reagan and George H.W. Bush presidencies probably were almost as corrupt as Nixon's. The George W. Bush presidency almost certainly was worse. But our three most recent corrupt GOP administrations have not been held accountable. That has caused many Americans to view the modern Republican Party as a legitimate governing option--when its numerous dirty deeds have shown that it is not.

What if Democrats, over the past 20 years or so, had exposed the ugly truth about the GOP? Only the nuttiest of right-wingers would have voted for Scott Brown--and Martha Coakley would have won in a landslide.

Democrats are like a boxer who has his opponent in trouble, staggering in a corner, but refuses to throw the knockout punch. That allows the opponent to come back and win every time. And that process probably started last night in Massachusetts--perhaps ending with massive Democratic losses in November.

It didn't have to be that way--and perhaps Obama still has time to change course. But he had better hurry.

Let's revisit January 11, 2009, and the "look forward, not backward" issue. Here' show Think Progress reported it:

The top question on Change.gov’s “Open for Questions” feature last week asked whether President-elect Obama will appoint a special prosecutor to “independently investigate” the “greatest crimes” committed under Bush. The inquiry, submitted by Bob Fertik of Democrats.com, has received over 22,000 votes. Today, ABC’s George Stephanopoulos asked Fertik’s question to Obama:

Q: The most popular question on your own website is related to this. On change.gov it comes from Bob Fertik of New York City and he asks, ‘Will you appoint a special prosecutor, ideally Patrick Fitzgerald, to independently investigate the greatest crimes of the Bush administration, including torture and warrantless wiretapping.’

OBAMA: We’re still evaluating how we’re going to approach the whole issue of interrogations, detentions, and so forth. And obviously we’re going to be looking at past practices and I don’t believe that anybody is above the law. On the other hand, I also have a belief that we need to look forward as opposed to looking backwards. … My orientation is going to be moving forward.

Let's ponder what we learn from that segment: Roughly 10 days before Obama was to take office, the No. 1 question on the minds of his constituents was investigation of possible Bush-era crimes. How did Obama respond to that concern? He blew it off.

Roughly one year later, Massachusetts voters had a chance to support a candidate that Obama had endorsed. How did they respond? They blew her off.
The moral of the story? You reap what you sow, Mr. President. Are you paying attention?

Tuesday, January 19, 2010

Riley's Ties to Criminals Hit the National Spotlight

With all of Bob Riley's recent buffoonery on gambling issues, it's easy to forget that the story really begins with the Alabama governor's ties to criminal figures.

Rebecca Abrahams helps remind us of that with a piece at Huffington Post titled "Governor Bob Riley Gambling With Alabama Politics."

Our recent focus has been on Riley's efforts to shut down the electronic-bingo pavilion at the new Country Crossing development near Dothan. But Abrahams notes that Riley's obsession with gambling in Alabama stems from his associations with convicted felons--specifically disgraced GOP lobbyists Michael Scanlon and Jack Abramoff.

Can you imagine the stink that would be made if former Democratic Governor Don Siegelman had ties to unsavory characters such as Scanlon and Abramoff? But the somnolent, right-wing Alabama press tends to ignore the fact that Scanlon used to be Riley's press secretary when the governor was a U.S. Congressman. And the Alabama press ignores all together Riley's well-documented ties to Abramoff.

Perhaps it takes a reporter with a national perspective to provide clarity on the criminals who helped put Riley in the governor's mansion in the first place. Abrahams is that kind of reporter, and she writes:

During his 2002 campaign, Riley viciously attacked former Alabama Governor Don Siegelman's state lottery proposal to fund schools and create jobs. But why wouldn't Riley want the stream of revenue from legalized gambling coming into Alabama?

Country Crossing Casino developer Ronnie Gilley has gone to battle with Riley's Task Force and told the Montgomery Advertiser, he believes the Governor's crackdown on gambling suggests ulterior motives to eliminate competition for the Mississippi Choctaw Indian casinos.

Is Gilley on target? Abrahams writes that the answer probably is yes:

Gilley may not be too far off. According to a 2002 US Senate Indian Affairs Committee report, disgraced lobbyist Jack Abramoff boasted the Choctaw tribe spent $13 million to elect Riley in 2002. The report states Abramoff told William Worfel, the former Vice Chairman of the Coushatta Tribe of Louisiana, that Mississippi Choctaw Chief Phillip Martin spent the money to protect the Choctaw's gaming enterprise.

"to get the governor of Alabama elected to keep gaming out of Alabama so it wouldn't hurt . . . his market in Mississippi."

Just how sleazy was Michael Scanlon? And how closely tied to Scanlon was Riley? Writes Abrahams:

The report further notes, convicted lobbyist Michael Scanlon, Bob Riley's former congressional press secretary, received $4.5 million over two years to protect the Choctaw's gaming interests through the scheme known as "Operation Orange."

Records show in October 2002, Scanlon sent $500,000 to Riley during his gubernatorial campaign. The funds were filtered through the Republican Governors Association and the Republican National State Elections Committee. Documents indicate the funds were increased to $600,000 when Riley received payment.

Clearly Scanlon benefited from the Mississippi Choctaw casino revenues and since millions were spent to elect Riley, there's no way the Governor could ever allow gambling in Alabama, which is only an hour away from the Mississippi Choctaw casinos.

It's hard to imagine the picture getting much uglier. But it does, thanks to former Riley cabinet member Bill Johnson:

Riley continues to deny such allegations despite recent charges by his former cabinet member Bill Johnson that hid did accept money from the Choctaws during his gubernatorial election.

Johnson, a Republican candidate for Governor, says in 2002, Riley's Chief of Staff Dan Gans, told him that he was coordinating the Mississippi Indian contributions for Riley's campaign. Johnson says it wasn't until the Governor formed his anti-gambling task force and began raiding bingo halls across the state that he began to realize that outside money could be influencing public policy in Alabama.

"I knew about the Abramoff stuff and knew about Mike Scanlon when the Congressman (Riley) was wrapped up in all of that but it never seemed like it was getting close to the Governor until it started to become quid pro quo."

Hmmm, quid pro quo. That's a term we've heard associated with the Siegelman prosecution. It means a "something for something" agreement that helps constitute a criminal charge of bribery.

The public record shows such an agreement clearly was not in place in the Siegelman matter. But a former member of Riley's cabinet has voiced concerns that such an agreement was in place between Riley and the Mississippi Choctaws--that he would accept campaign support in exchange for protecting the tribe's market share by keeping legalized gambling out of Alabama.

Rebecca Abrahams paints a disturbing picture of "politics as usual" among Republicans in Alabama. Bob Riley took office with the help of convicted felons, and seven years into his governorship, he still is taking official actions that appear to be based on an unlawful relationship with Mississippi Choctaws.

Pathetic Alabama newspapers aren't likely to cover the story. But Rebecca Abrahams has shown that Huffington Post will.

Are Tim Tebow and His Mother Sending the Wrong Message on Abortion?

University of Florida quarterback Tim Tebow and his mother, Pam, will be featured in a 30-second commercial during the Super Bowl in February. The Christian group Focus on the Family is behind the ad, and it is expected to send an anti-abortion message.

Details about the ad are sketchy, but it apparently will chronicle Pam Tebow's 1987 pregnancy. After getting sick during a mission trip to the Philippines, Pam Tebow ignored a recommendation by doctors to have an abortion and gave birth to Tim, the fifth child she'd had with her husband, Bob.

We have to wonder if the Tebows, in their desire to share their faith, are instead sending a dangerous message.

Pam Tebow's difficult pregnancy was covered in a 2007 article titled "Coaching Character," by Suzy A. Richardson of the Gainesville Sun. Writes Richardson:

In 1985, the family moved to the Philippines, where they lived as missionaries, sharing their Christian faith with the island's natives and building a ministry.

"It wasn't always easy, but it was a wonderful time for our family," Pam said. "We learned a lot--you always learn a lot when you visit a Third World country. You grow in appreciation for everything you have."

As the couple reached out to families across the island, they prayed to expand their own.

"We started praying for Timmy by name, and then we got pregnant so we just felt like God had a special plan for him," she said.

The pregnancy, however, was troubled from the outset:

Just before her pregnancy, Pam fell into a coma after contracting amoebic dysentery, a bacteria transmitted through contaminated drinking water. During her recovery, she received a series of strong medications. And even though she discontinued the regimen when she discovered the pregnancy, doctors told Pam the fetus had been damaged.

Doctors later told Pam that her placenta had detached from the uterine wall, a condition known as placental abruption, which can deprive the fetus of oxygen and nutrients. Doctors expected a stillbirth, Pam said, and they encouraged her to terminate the pregnancy.

"They thought I should have an abortion to save my life from the beginning all the way through the seventh month," she recalled.

Pam Tebow said she sustained the pregnancy because of her faith:

"We were grieved," she said. "And so my husband just prayed that if the Lord would give us a son, that he would let us raise him."

In her seventh month of pregnancy, Pam traveled to the country's capital, Manila, where she received around-the-clock care from an American-trained physician.

For the next two months, Pam--steadfastly praying for a healthy child --remained on bed rest.

And on her due date--Aug. 14, 1987--Pam gave birth to Timothy Richard Tebow, who she described as "skinny, but rather long." "We were concerned at first because he was so malnourished, but he definitely made up for it," she said, between laughs. Today Tim, now 20, stands at a solid 6'3" and 235 pounds.

We have a pro-choice stance on abortion rights here at Legal Schnauzer, believing that Roe v. Wade was correctly decided and should remain the law of the land. The Tebow ad apparently does not touch on the political and legal aspects of abortion--at least in an overt way. We have no problem with those who seek to encourage alternatives to abortion. We particularly support those who seek to address the issues that often lead to unwanted pregnancies in the first place.

The Tebow ad, while it has a heart-warming ending, sounds like it will send some dangerous messages. We can think of a couple:

* Ignore your doctors' advice, and everything will turn out OK--The doctors' advice in the Tebow story apparently was based on sound medical judgment. Are the Tebows sending a message of "your faith can override a doctor's opinion that you don't want to hear"? Sounds that way to us.

* The outcome of one pregnancy is more important than the well being of four children you already have--Again, it's hard to ignore the heart-warming aspects of the Tebow story. And it's even more dramatic when Tim grows up to win the Heisman Trophy, lead Florida to national championships, and become a role model and all-around swell guy. But Pam Tebow's decision could have left her four other children without a mother. We are pro choice, and we believe such a choice correctly rested in Pam Tebow's hands. But we suspect the complexities presented by troubled pregnancies will be lost in a 30-second commercial.

And then there is this question: Is it a good idea to pray for a pregnancy while you are on a mission trip in the Philippines? Pregnancies can't always be planned, of course, and they can be difficult even in developed countries. But wouldn't it be wiser to try to get pregnant either before or after you've taken a mission trip to a country with poor sanitation systems and limited medical resources? Is God supposed to always bail us out when we make unwise decisions?

Perhaps the biggest question is this: Thirty-second Super Bowl ads sell for between $2.5 million and $2.8 million. A Focus on the Family spokesman says funds for the ad came from "very generous and committed friends."

Could that money have been better spent? How much might it have helped adoption agencies or foster-care organizations?

Pam Tebow, then a married mother of four, hardly is the typical woman facing a question about abortion; her pregnancy was wanted. But numerous reports indicate that most women who seek or consider abortion are unmarried and facing a pregnancy they did not plan or want.

If we really want to reduce the abortion rate in the United States, addressing the problem of unwanted pregnancy almost certainly is the way to do it.

The Tim Tebow ad apparently will not touch on that at all.