Monday, October 13, 2008

The Palin Principle: Going After Someone's Job is Stupid

The report from an Alaska legislative panel about Sarah Palin's efforts to have her former brother-in-law fired as a state trooper is filled with fascinating information.

But here is a nugget that really jumps out: How in the world was having Trooper Mike Wooten fired going to make the Palin family safer?

Investigator Stephen Branchflower raises this issue in the report. "Assuming that Trooper Wooten was ever inclined to attack Governor Palin or a family member, logic dictates that getting him fired would accomplish nothing to eliminate the potential for harm to her or her family."

Branchflower seems to be saying that the Palins weren't really concerned about their safety; they were interested in vindictiveness. And that's a subject I have some firsthand experience with here at Legal Schnauzer. In fact, it's pretty clear that someone connected to my former employer, the University of Alabama at Birmingham (UAB), pulled the same stunt on me that the Palins tried to pull on Wooten.

So let's take a closer look at this business of going after someone's job.

From everything I've read, it appears that Trooper Wooten is not a particularly nice guy. With that in mind, here is the conversation Sarah Palin should have had with her sister: "Your ex-husband is a jerk, so get the best divorce attorney you can find and go after his sorry butt in court. But as governor, I can't get involved in your case.

"And by the way, try to develop better taste in men. Next time around, try to find a snowmobile champion like my guy Todd. And if he's not enough to satisfy ya, find yourself a dreamboat on the side like Brad Hanson. Whew, makes me sweat just thinking about him. Anyway, that's been my plan, and has it worked out for me? You betcha!"

What about the people who went after my job? Evidence suggests it was Alabama Republican operatives who have ties to Karl Rove (and also Governor Bob Riley and U.S. Attorney Alice Martin). And we established in a recent post that Rove and his acolytes aren't nearly as smart as they have been portrayed.

For example, what did the "mini Roves" hope to accomplish by costing me my job? Was it supposed to keep me from blogging? Actually, I now have more time for blogging. And more importantly, I have way more time to conduct research for my blog--because I wasn't conducting "research" at work, which was the bogus charge UAB trumped up. With more time on my hands, I've uncovered all kinds of information at our local courthouses and libraries that I never would have learned if I still had a job. This information provides important clues as to why I was terminated and who was behind it--and Legal Schnauzer readers will be learning about it in the days and weeks ahead.

So by firing me, the "mini Roves" gave me the time and the tools to help expose their schemes. Like I said, they aren't the sharpest knives in the drawer.

And here's another sign that the "mini Roves" are stupid: By going after my job, they came on my turf. I've worked at UAB for 19 years, so I have a pretty good idea how the place works, particularly in the areas of external affairs, development, alumni affairs, media relations, etc.

So when my supervisor (Pam Powell) and her supervisor (Dale Turnbough) start acting outside the norm for them, accusing me of things I haven't done, I know something is up. And it has to be driven by the two people in the chain of command above them--Vice President for Development, Alumni, and External Affairs Shirley Salloway Kahn and President Carol Garrison.

Let's follow the clues. If you scan the profile of Shirley Salloway Kahn at the link above, you will notice her primary interest--raising money. More than anything else, her job is to find people with money and get them to give some of it to UAB.

Folks in higher education like to talk about their high-minded "tripartite" mission--teaching, research, and service. But I've been around UAB for 19 years, and I know it's no different from any other organization--money talks. And when someone gives lots of money to UAB, they hold extraordinary influence over folks like Shirley Salloway Kahn--and Carol Garrison, for that matter.

So who has given lots of money to UAB recently? Well, to pick a project at random, let's consider the Hazelrig-Salter Radiation Oncology Facility, currently under construction on Birmingham's Southside.

Click on the link above and notice the folks who have given big bucks for this project. Then ask yourself this question: If one of those folks went to Dr. Kahn and said, "Shirley, I would be a whole lot happier about giving money if you would do backflips down I-65 at high noon," how would Dr. Kahn react? My guess? It would take her about two minutes to get on her gym suit and start stretching.

That brings us to three lines of inquiry we will be examining regarding my termination at UAB:

* The Alice Martin Line--Evidence will show that Alice Martin, U.S. attorney for the Northern District of Alabama, did UAB a favor by pretty much whitewashing massive research fraud at the university. And a settlement agreement in the case gives Martin extraordinary authority to reopen an inquiry on research fraud at any time. She has a proverbial gun cocked, loaded, and pointed at UAB's collective head. Would this cause UAB to return a favor for our corrupt federal crime fighter? Hmmm.

* The University of Alabama System Line--At least one member of the University of Alabama Board of Trustees, which oversees UAB, has reason to be extremely grateful to the U.S. Justice Department. That's because the DOJ chose to look the other way when his company was implicated in a major insurance fraud case a few years back in Pennsylvania. Also, a member of the University of Alabama System Office has connections to the Business Council of Alabama (BCA), the group headed by Bill Canary, of "my girls are going to take care of Don Siegelman" fame. Would either of these UA elites be willing to do a favor for the DOJ or the BCA? Hmmm.

* The UAB Donor Line--This is my favorite. And that's because I've unearthed a specific donor who seems to be an intriguing fellow. In addition to having given one of the largest individual gifts in the history of UAB, he has connections to Gov. Bob Riley and his son Rob Riley (shazam!), Riley confidant Dax Swatek (double shazam!!), and the gaming industry (triple shazam!!!). Heck, he even has ties to the oil industry (quadruple shazam!!!!).

And get this: Public records indicate the guy's personal and professional lives are trainwrecks. His driving record is, shall we say, "interesting." So much so that he's the defendant in a criminal case that is scheduled to be tried in less than two months. He recently went through a divorce that apparently was so juicy the file was sealed. And he and a business partner are defendants in a lawsuit that raises questions about whether they provided a proper accounting for the estate of one of Birmingham's most famed businessmen.

This donor might be a life-threatening menace behind the wheel of a vehicle, but would UAB's higher ups do him a favor on behalf of his political and business cronies? Hmmm.

Geez Louise, this donor alone will provide months of material here at Legal Schnauzer. I could even smell a book coming out of this. We're talking about a treasure trove for inquiring minds.

So hold onto your hats and ponder this question: Are some folks close to Sarah Palin wishing they had left Trooper Mike Wooten and his job alone? My guess is yes.

Will some folks in Alabama be wishing they had left Legal Schnauzer and his job alone? We'll find out.

Developing a Fan Base in an Unlikely Place

Legal Schnauzer apparently is developing a fan base in a place I never would have expected to find one--Briarwood Christian High School in Birmingham.

Folks who've followed the blog from the early days know that I suspect Briarwood Christian, a ministry of Briarwood Presybyterian Church, has played a curious role in the legal travails that have beset my wife and me.

Here's the most troubling thing about it: At least a few people in the Briarwood leadership--particularly Head Football Coach and Dean of Students Fred Yancey and chancellor Byrle Kynerd--know the school's actions have caused my wife and me considerable hardship. Do they care? I've seen no signs of it.

Has Briarwood's leadership exhibited a Christian response to our situation? I'm hardly a Biblical scholar, but one of the general themes of the New Testament seems to be this: We should try to treat others as we would like to be treated--and when we bring harm upon others, we should try to make it right.

The role Briarwood apparently has played in our legal woes is summarized here and here. Here is a brief overview: Fred Yancey and his wife, Sharon, used to be our next-door neighbors. In December 1998, days after Briarwood had won its first state championship, they moved to a house on the school's campus, and we wound up with Mike McGarity (and his substantial criminal record) as our new next-door neighbor. The sale of Yancey's house seems to have been done in a peculiar, "under the table" way. It was not listed with the Birmingham MLS (even though a real-estate agent was involved), it was not advertised as for sale in any major publication, no for-sale sign ever was in the yard, and the Yanceys never said a word to us that they were moving. (And we had always been on good terms with them; we considered them to be very good neighbors.)

Evidence suggests that Briarwood engineered the real-estate deal as a way to keep the highly successful Yancey as its football coach. As far as I know, there is nothing wrong with that. But in essence, Briarwood hand-picked our new neighbor--the house apparently was not on the open market--and they picked a guy with a lengthy criminal history, who stole almost 400 square feet of our property, filed a bogus lawsuit against me, assaulted me, and eventually caused me to lose my job at UAB.

Actually, I don't think McGarity directly had anything to do with me losing my job at UAB. That almost certainly happened because McGarity's lawyer, William E. Swatek, and corrupt Shelby County Judge J. Michael Joiner repeatedly cheated me. And when I started this blog to expose their criminal activities, Alabama's Republican machine kicked into gear and cheated me out of my job.

Bill Swatek and Mike Joiner, more than anyone else, are responsible for the hardship we've experienced. And they each have children who graduated from . . . Briarwood Christian School. Hmmm.

I've seen no sign that anyone in Briarwood's leadership gives a rip about this kind of injustice. So imagine my surprise, and delight, when I learned that at least one person at Briarwood--a student apparently--does care about how the school treats its neighbors.

I've received several anonymous comments from the student in recent days, and I put them up where he (I assume it's a he) posted them--at posts related to Briarwood. Most of those posts are fairly old, so it's doubtful that many readers have seen the comments. I would like to share some of them with you.

I've always assumed that private, Christian schools are monolithic places--where everybody thinks pretty much the same way. But my new correspondent illustrates the danger of making such assumptions.

Let's take a look at his thoughts:

I am a student at Briarwood Christian High School and I find this very interesting. Any student at Briarwood can tell you that ever since Fred Yancey has come to Briarwood, there has been way too much emphasis placed on Briarwood football and not enough on the actual academics. I look forward to reading more about your dealings with Briarwood. Keep it up.

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I am a Briarwood student and I find your dealings with Briarwood and the lawsuit that they were involved in very interesting. Keep up the good work and continue to investigate this. I am for finding any corruption in ANY institution and stamping it out. Thanks!

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I am a student at Briarwood Christian high school and I find your blog very interesting. I had the very same reaction as you when Briarwood lost. I really feel like Briarwood has placed WAY TOO MUCH emphasis on their football program at the expense of their academics program . . . and their morals.

Briarwood have clearly shown that they are more interested in winning football games, and raking in the cash that comes with winning football games, than they are in doing what's right.

You hit the nail on the head! This is exactly their mindset. It is really amazing how they spend so much of their money on their football program.

How are the adults at Briarwood going to "mold kids for a lifetime" when they themselves don't know how to do the right thing?" Amen to that, brother. Amen. I love your blog and I will be telling my fellow students at Briarwood about it!

Well what do you know, maybe we could start a Legal Schnauzer club at Briarwood Christian School. I could go to the library and have readings, just like real writers do. Wouldn't that be cool?

Sunday, October 12, 2008

Rove a Genius? Not Hardly

Two myths have permeated American political life over the past eight years or so.

One is that Karl Rove is a genius. The other is that Rove has spawned an army of "mini Roves" who are also geniuses.

Matt Taibbi pops the bubble on myth No. 1 with a biting piece in Rolling Stone. I can do the honors on myth No. 2.

Taibbi's primary point is that Rove has taken over John McCain's presidential campaign, and the choice of Sarah Palin as vice president is Exhibit A:

But after the surprising nomination of Palin — a move that fairly stank of Rovian thinking, with its 10-megaton brazenness, its blunt anti-intellectualism and its naked courting of Rove's beloved electoral cattle, the evangelicals — Rove seemingly let it slip in a Fox broadcast that he did have inside info, saying during the teen-pregnancy flap that Palin was "carefully vetted. . . . They knew all of it." An anonymous Republican source soon told a Washington newspaper that Rove had a consistent, "medium"-size role with the McCain campaign.

Taibbi goes on to list numerous examples of Rove's influence on the McCain campaign and summarizes their impact:

One is tempted to call this brilliant tactics, except that it isn't brilliant, any more than pointing a gun at a Korean store owner is a "brilliant" way to make $135. One of the most remarkable aspects of Rove's career is the way the media consistently respond to being lied to, pissed on and manipulated by Rove: They stroke his already swollen gonads even more, hailing him as a singular political genius.

Taibbi then points out that no one has seen Rove's "genius" in action quite like former Alabama Governor Don Siegelman. And Taibbi shows how Siegelman's prosecution on bogus corruption charges was covered with Rove's fingerprints. This is hardly brilliance, Taibbi argues, and he notes Rove's reluctance to testify about the case under oath before Congress:

Rove is not a genius, or even very clever: He's totally and completely immoral. It doesn't take genius to claim, as Rove ludicrously did last fall, that it was the Democrats in Congress and not George W. Bush who pushed the Iraq War resolution in 2002. It doesn't take brains to compare a triple-amputee war veteran to Osama bin Laden; you just have to be a mean, rotten cocksucker.

Taibbi's language gets a bit colorful there, but he hits the nail squarely. I've seen mean, rotten behavior from numerous "mini Roves" here in Alabama. I can't begin to cite all of the examples, but let's consider just a few that show that they are in fact stupid, not smart.

I suppose there is such a thing as a "smart" crook--the jewel thief who carefully cases his target and cleanly pulls off the heist. That doesn't describe the "mini Roves" I've encountered. Let's consider some principles a smart crook probably follows and show how the "mini Roves" butcher them:

* Know your target's strengths--In my experience, people with journalism training (like yours truly) are not the smartest people around, and they certainly are not the wealthiest. But they generally know how to do at least two things: (1) Find information; and (2) Present it in a fairly understandable fashion. Had the "mini Roves" done their homework, they might have noticed my background in journalism and decided to pick another target. But they seemed shocked--shocked, I tell you--when I started a blog and began to chronicle their corrupt activities. With just a little brainpower, they could have seen that coming. And they've compounded their stupidity by taking all kinds of steps to try to shut down my blog. As we will show in the coming days and weeks, that has only caused the doo-doo at their feet to get deeper and deeper.

* Don't assume your target is stupid or weak--The "mini Roves" clearly thought I wasn't capable of figuring out the actual law in my case and that judges were cheating me. And I feel certain they didn't think I would have the cajones to fire my lawyers and take over my own case when it became clear they were playing along with corrupt Shelby County Judge J. Michael Joiner. Also, the "mini Roves" didn't consider that modern technology makes valid legal information more readily accessible than it used to be, and technology (as in blogs) makes it easier for someone to tell a story, even if the mainstream media ignores it.

* Know your target's "life situation"--The "mini Roves" had every reason to know that my wife and I don't have children. But they didn't process that information very well. Without kids in the picture, we had the time--and the energy--to fight like wolverines when we realized people were trying to cheat us. Also, the "mini Roves" didn't size up Mrs. Schnauzer very well. They might have assumed she was the timid, retiring type who would not want to join a fight. They were way off base on that. Mrs. Schnauzer has a "Serbian temper," and a strong sense of right and wrong to go with it, and she had no qualms about joining the fray. Without that kind of support from the lady of the house, I would not have been able to fight back--and Legal Schnauzer never would have happened.

Rove & Co. will win some battles, mainly because a lot of Americans are disengaged from public life. But will Rove & Co. win the larger war? I don't think so.

As Taibbi so colorfully puts it, Rove knows he has the support of his "electoral cattle." But even cattle start to get alarmed when they realize they are being led to the slaughter house.

Are America's cattle waking up? Barack Obama's surge in the polls indicates that some of them are. And that might not be good news for King Karl and his Gang That Couldn't Shoot Straight.

Bits and Pieces for $50, Alex

Are Indictments Coming in Bush DOJ Scandal?
David Iglesias, former U.S. Attorney in New Mexico, says the answer to our headline question might be yes.

The appointment of special prosecutor Nora Dannehy is ominous for Karl Rove and others who apparently engineered the firings of nine U.S. attorneys, Iglesias says.

Dannehy's appointment signals the investigation no longer is a civil matter to "blithely ignore," Iglesisas writes. And while "follow the money" was the phrase that helped break Watergate, Iglesias expects "follow the e-mails" to be the key to breaking the DOJ scandal.

Birmingham Lawyer Turns to Growing Pot
If your legal career isn't going so hot, maybe growing pot is a good alternative. That evidently was the thinking of Birmingham lawyer Daniel Pinson Rosser, who was arrested the other day on charges that he helped mastermind the largest indoor marijuana-growing operation in Alabama history.

The pot was growing in a northeast Birmingham warehouse, using a sophisticated hydroponic system in which plants are grown in water, without dirt. This produces pot that sells for four times the price that traditionally grown marijuana will bring.

Authorities said the system uses intense heat lamps to simulate sunlight and can produce $1 million worth of pot a year.

Rosser, who was suspended from law practice, apparently decided that growing uber-pot sure beats filing motions and dealing with clients.

Financial Woes Overshadow Justice Scandal
Are scoundrels who corrupted the U.S. Justice Department lucky, in a sense, that our financial system has gone into near collapse?

Probably so, says Toledo Blade columnist Marilou Johanek. She says the recent report on the firings of nine U.S. attorney got buried in a hyperactive news cycle:

AT ANY other time, what happened in the U.S. Justice Department last week would have been big news. At any other time, when internal reports by Justice Department call for more investigation into a case of unethical, if not criminal, conduct on the part of lawmakers and the White House, the administration would have a lot of explaining to do.

But the Bush Administration got lucky. As its Treasury and Federal Reserve chiefs warned that the sky was falling and the economic crash and continuing tumult on Wall Street made them seem prophetic, the Justice Department released a nearly 400-page scalding indictment of the administration over the controversial firings of several U.S. attorneys in 2006.

It was an overlooked bombshell in breaking news cycles preoccupied with financial crisis, rescue plans, presidential politics, and a vice presidential debate.

The Justice Department report is more troubling than many of the other big stories of the moment, Johanek writes:

Turns out the real reason some of the top federal lawyers were removed from the job, according to the Justice Department report, was that either the U.S. attorneys had the audacity to prosecute Republicans or because they failed to aggressively prosecute Democrats.

Either way, their behavior ticked off well-connected GOP politicians who had come to expect a politically loyal Justice Department. A couple of calls from powerful New Mexico Republican officeholders helped push former U.S. attorney David Iglesias out of a job. Evidently, the top New Mexico prosecutor was remiss in his duty to produce criminal charges against Democrats in the run-up to the 2006 election.

Another U.S. attorney in Missouri lost his post over a petty complaint from Republican Sen. Christopher Bond, and still another was bumped to make room for a protégé of White House political adviser Karl Rove. There was a pervading culture of partisanship/loyalty-above-all-else in the department, recalled one of the fired attorneys.

“Not only were my colleagues and I not insulated from politics — as we should have been in our jobs as prosecutors — but we were fired for the most partisan reasons,” Mr. Iglesias said.

What does this mean for the future of our republic?

Scandal-weary Americans may be inclined to dismiss yet another administration disgrace, but what happened at the Justice Department is too big a deal to ignore.

We’re supposed to be a country that requires “equal justice under the law,” not tainted justice under political consideration. But that’s what we had under shameless administration zealots like Mr. Rove and Mr. Gonzalez.

The former administration officials allowed the most invaluable assets of the Justice Department — its integrity and independence — to be jeopardized for political ends. They permitted wholesale politicization of the department, as one commentary put it, “by subjecting new hires and sitting U.S. attorneys to rigid ideological litmus tests. . . . ”

Before the next administration takes over, Americans need firm assurance that the rule of law will be applied fairly by the Justice Department. Never again can there be partisan allegiance required of incoming professionals, or political criteria that outweigh the legal and ethical.

The impartial administration of justice in this nation, its very credibility, was nearly destroyed by the tyrannical ambitions of a few. How’s that for big news almost buried?

The GOP and Wachovia Give Birmingham the Shaft
It seems like yesterday that Birmingham was a proud banking center, mainly because of our "Big Four" banks--AmSouth, SouthTrust, Regions, and Compass.

As of 2004, Birmingham had four banks in the nation's top 50, and only New York city had more banks make that list.

Just four years later, Birmingham's banking industry is in disarray, its image battered, largely because of deregulation pushed by John McCain, Phil Gramm and their Republican brethren.

The biggest jolt to Birmingham banking came in 2004 when Charlotte-based Wachovia gobbled up SouthTrust. Another jolt came in 2006 when AmSouth merged with Regions.

What has been the fallout? In recent days, we've learned that Wachovia is teetering and probably will be gobbled up by Wells Fargo. Who knows what that means for Birmingham? But it probably isn't good.

How tight has Wachovia been with the Republican Party. Facing South, the blog of the Institute for Southern Studies, reports that Wachovia made an $8 million bailout loan to the National Republican Bailout Committee. This came as Wachovia was denying credit or freezing assets of consumers, small businesses, and institutions. It also came as Wachovia was in the middle of a buyout deal backed by U.S. taxpayers.

Chris Kromm, of Facing South, has been leading the reporting on the Wachovia/GOP lovefest, and it is a story worth following.

Here is the bottom line in our neck of the woods: A bank that strongly subsidized GOP political activity has given Birmingham a world-class screwjob. And yet the GOP's presidential candiate, John McCain, leads Democrat Barack Obama by some 20 points in the latest polls.

Can anyone explain that one? Are Alabamians completely out to lunch?

Friday, October 10, 2008

Inside the Ugly World of Alice Martin and the Bush Justice Department

If I were granted one early Christmas wish for 2008, it would be this: That all Americans read "The Curious Case of Alex Latifi," the superb article written by Lynda Edwards in the October issue of the Journal of the American Bar Association (ABA).

What would happen if, between now and November 4, all Americans read, and grasped the importance of, the article:

* Democrat Barack Obama would be elected president in a landslide; and

* An Obama administration, in conjunction with Congress, would move quickly and decisively to ensure that the criminals who infiltrated our Justice Department over the past eight years are held accountable.

For the sake of our country, both of those things desperately need to happen. And Edwards' story is the kind of behind-the-scenes reporting that shows just how bad things have really been in the Bush DOJ.

(By the way, many Democrats are filled with angst that an Obama administration would let Bush criminals off the hook. In a recent op-ed piece for The Wall Street Journal, famed Harvard law professor Alan Dershowitz actually endorses the idea of a "get out of jail free" card for corrupt Bushies. For a well-reasoned counter to Dershowitz' nonsense, check out Lawrence Velvel's blog.)

Not surprisingly for those of us who live in or near Birmingham, Edwards' poster child for corruption is Alice Martin, U.S. attorney for the Northern District of Alabama.

Edwards' story is about a man, Alex Latifi, who sees his flourishing business intentionally ruined by federal officials, largely because he is a Democrat of Iranian descent.

It's a grim, ugly story. But Edwards still manages to find moments of hilarity. You have the star government witness who stole more than $12,000 from Latifi and admitted to altering and sabotaging company files and computer records. And my favorite is the DOJ official, who when asked for comment, tells Edwards she should not be writing about the case because "it's weird! It's an anomaly! It's a weird anomaly!"

Regular readers know I've had my own unfortunate encounters with Alice Martin, and my research indicates she or people close to her are behind my termination at UAB. (Much more on that coming soon.) So a number of scenes from the ABA Journal story cut close to the bone here at Legal Schnauzer:

*Consider this quote from Martin: "If KBR or Halliburton committed an illegal act in my jurisdiction in Alabama, I would have prosecuted them." This implies that Martin pursues cases regardless of the political implications. I've written numerous posts based on firsthand experience, including this one, that show this statement is pure, unadulterated rubbish.

* And get this gem from Martin: "This is actually more painful than a root canal because at least the dentist gives you Novocain. I don't know Jill Simpson, I have never met Karl Rove or been in the same building with him, to my knowledge. When I ran for elective office, I got some names of consultants from Bill Canary. I couldn't afford Bill."

And who did our gal Alice wind up with as a campaign manager when she ran for a seat on the Alabama Court of Criminal Appeals in 2000? Why, none other than Dax Swatek, one of Canary's right-hand compadres and a central character in our Legal Schnauzer story because his father, Bill Swatek, filed the bogus lawsuit in Shelby County that started my "road to legal perdition."

And get this: I wrote in detail about the Alice Martin/Dax Swatek connection on this post, dated February 18, 2008.

Notice the first comment on that post: "Nut case yours is comong (sic)."

Obviously, this individual has a slight problem with grammar and spelling. It's also obvious that he's not happy with the content of my post, and he intends to do something about it. In short, he shows signs of being a sociopath.

And here's an interesting note: According to testimony at my UAB grievance hearing, my former boss (Pam Powell) initiated an investigation of my computer usage at work on Jan. 21. (An investigation, by the way, that showed I had never once used my computer to work on my blog.)

Less than a month after that, a helpful correspondent tells me mine "is coming." Sounds like somebody knew something was up, doesn't it? And gee, given that the post in question was about Dax Swatek and his ties to Alice Martin, I wonder who my "helpful correspondent" might have been.

Is there reason to believe that Alice Martin and Dax Swatek had something to do with my termination at UAB? Is there reason to believe they enlisted the help of one or more influential people at UAB to get the dirty deed done? Do I have some evidence that suggests the identity of said influential people? Will Legal Schnauzer readers find out who those folks are and what really went down with my firing?

The answer to all of these questions is, to quote Sarah Palin, "You betcha."

Thursday, October 9, 2008

Will Financial Crimes of the Bush Era Be Uncovered?

The nation's attention has been riveted in recent days on an economic crisis that largely was caused by the deregulation favored by George W. Bush and other conservatives.

But the Bush administration has visited another kind of financial calamity upon Americans, one that has mostly floated under the media radar--at least until now.

While grotesque greed and mismanagement created the need for the recent $700 billion bailout, another kind of mess has occurred on the Bush watch. We are talking about criminal behavior by financial kingpins, and some of it has been actively covered up by the Bush administration.

Is there reason to think these financial crimes might someday come to light? Perhaps. And the first clue might come with an obscure news story that made the rounds yesterday.

It's a story that, in a roundabout way, even has connections to my termination at UAB. More on that in a bit.

But first, here are the basics: Associated Press reported that Charles "Chuck" Rosenberg, U.S. attorney for the Eastern District of Virginia, is stepping down after two years in his post. Rosenberg informed President Bush of his decision in a letter dated September 30, and the U.S. attorney's last day will be October 22.

Why would Rosenberg step down with just a little more than two months left in the Bush administration? That remains a mystery; Rosenberg doesn't even mention that he wants to "spend time with his family."

But let me take a crack at explaining what might be going on and why it could be important.

Who is Chuck Rosenberg? He played a central role in dropping an investigation of a massive fraud case, one of the worst financial crimes of the past eight years. David Maguire, the veteran federal prosecutor who uncovered the case, described crimes that were "far worse" than those of Arthur Andersen, the accounting giant that collapsed in the wake of the Enron scandal.

And the case involved big names and even bigger money. At the heart of the investigation was General Reinsurance, a subsidiary of Berkshire Hathaway, the investment empire overseen by billionaire Warren Buffett. Joining Buffett on the Berkshire Hathaway board of directors is Microsoft founder Bill Gates.

General Reinsurance, known as "Gen Re," had become entangled in a mess that could become a headache for the world's two richest men. But evidence suggests the Bush administration did not want that to happen. And Chuck Rosenberg is the guy it chose to make the problem go away.

What was at stake in the Gen Re investigation and why did the Bush administration want to shut it down? Marisa Taylor, a reporter for McClatchy Newspapers, has written an excellent account of the case. The U.S. House Judiciary Committee has looked into the matter, and Corporate Crime Reporter has a strong overview of that angle.

Here are the basics of the case: It starts with Reciprocal of America (ROA), an insurer based in Richmond, Virginia. ROA was supposed to avoid insolvency by socking away vast surpluses collected from policyholders' premiums and passing risk to giant reinsurance firms such as Gen Re.

But ROA did not accumulate the surplus required by law. And regulators discovered the company was $450 million in the hole.

How did this happen? ROA's surplus began to erode in the late 1990s when medical-malpractice awards shot up. Under duress, company executives asked Gen Re to assume millions more in risk.

Gen Re agreed to the deal but treated it as a "side" or "unenforceable" transaction. Prosecutors allege that the two companies conspired to falsely inflate ROA's surplus and hide its losses from regulators.

What was the fallout? More than 80,000 lawyers, doctors, and hospitals lost their malpractice coverage. Many of them faced bankruptcy.

How did the Bush administration ensure that the Gen Re case would be covered up? Follow this game of musical chairs:

* Paul McNulty, the U.S. attorney who had overseen the case, was "promoted" in November 2005 to become deputy attorney general under Alberto Gonzalez;

* The Bush administration brought Rosenberg from Texas (where else?) to replace McNulty;

* Rosenberg pulled Maguire off the case and replaced him with Michael Gill, who was imported from--guess where?--Texas;

* Gill pulled the plug on the Gen Re investigation.

What does Rosenberg's resignation mean? That remains unclear. But it could signal that, in the wake of our worst economic crisis since the Great Depression, federal officials might begin to take a closer look at financial crimes. It might even mean that someone is prepared to take a closer look at the reinsurance industry in general and the Gen Re case in particular.

How could this have any connection to my termination at UAB? More on that coming soon.

Wednesday, October 8, 2008

Being a Democrat Made Alabama Businessman a Target

Notes from prosecutors in the Bush Justice Department indicate an Alabama defense contractor was targeted because he is a Democrat.

Alice Martin, U.S. attorney for the Northern District of Alabama, launched a four-year investigation of Axion Corp and its owner, Alex Latifi, in 2003. Latifi eventually was acquitted on charges that he violated federal arms-export laws. But while preparing for trial, his lawyers were stunned by the first entry in the lead investigator's official notebook.

"It said Latifi was a Democrat and gave $30,000 to a Democratic politician's charity for abused children," said Jim Barger, an associate at the Birmingham law firm Baker, Donelson, Bearman, Caldwell & Berkowitz.

The revelation comes in "The Curious Case of Alex Latifi," an investigative report by Lynda Edwards in the October issue of the Journal of the American Bar Association (ABA).

We noted in a previous post that the ABA Journal article shows that Martin and her prosecution team wanted to ruin Latifi's business, even if he was innocent of the charges against him.

Edwards goes behind the scenes to show how a prosecutor in the Bush Justice Department carries out a politically motivated prosecution. How insanely sloppy and bogus was Alice Martin's case? Consider:

* The prosecution's chief witness, former Axion secretary Elizabeth Lemay, had been fired from the company in February 2004 for stealing $12,730. She admitted on the witness stand that she had altered and sabotaged company files and computer records;

* The court received letters on behalf of another scheduled witness--from her husband, her doctor, and a psychologist--saying she was too mentally unstable to testify;

* A government attorney for an agency that helped search for evidence against Latifi was barred from the courtroom for threatening and bizarre behavior toward the defense;

* The fundamental charge against Latifi was that he had sent a classified drawing to a Chinese supplier. But at trial, a government witness was asked to examine the drawing in question and determine if he saw any noteworthy stampings. "On the bottom left," he replied, "it does say 'unclassified.'"

In other words, prosecutors charged Latifi with sending a classified document to a foreign supplier, but they never noticed that their own exhibit showed the document was clearly marked "unclassified."

That's not the only moment of black comedy in Edwards' story. When she contacted Department of Justice spokesman Dean Boyd, he said, "You should not be writing about this case! It's weird! It's an anomaly! It's a weird anomaly!"

The aftermath of the Latifi case might not be so amusing for Alice Martin & Co. A federal judge has awarded Latifi $364,000 in legal fees. Latifi has sued to obtain Martin's e-mails, memos, and phone records regarding the case. And the U.S. Office of Professional Responsibility is investigating charges that the Latifi case was an improper and abusive prosecution.

Tuesday, October 7, 2008

Will Alabama Republicans Steal More Elections?

Evidently it was not enough that Republicans apparently stole the 2002 gubernatorial election in Alabama. That's the one where votes for Democratic incumbent Don Siegelman mysteriously disappeared in the middle of the night in Baldwin County, giving Republican challenger Bob Riley a narrow "victory."

Evidently it's not enough that GOP plans to take over the Alabama Legislature in 2010 include prosecutions of state legislators that appear to be politically motivated. Democrat Sue Schmitz recently saw a hung jury in such a case brought by U.S. Attorney Alice Martin.

Now we learn that Governor Riley's office apparently is trying to purge rolls of likely Democratic voters.

A 2005 opinion from the Alabama attorney general named 28 felonies--which add up to about 70 crimes if each of the degrees of the offenses is counted--that have by statute or appellate decision been defined as crimes of moral turpitude, which strip someone of his voting rights.

Riley, who serves as court-appointed chief of Alabama elections, in 2007 created a list of more than 400 felonies that would lead to loss of voting rights. Riley's list includes everything from terrorism and homicide to starting a brush fire and drug possession. The governor's office gave its list to Election Systems & Software, a company hired to create a voter-registration database for the state.

Griffin Sikes Jr., legal director for the Alabama Administrative Office of Courts (AOC), said the governor had no legal authority to classify so many crimes as crimes of moral turpitude. Sikes said the governor's office had assured him for months that the shorter list was being used, but he recently discovered that was not the case.

Polls show John McCain with a wide lead over Barack Obama in Alabama, so the presidential race is not likely to be affected by the controversy. But several "down ticket" races--Congressional races and state appellate court races--could be affected.

"I think a lot of damage has been done to a lot of people," said Joe Turnham, chairman of the Alabama Democratic Party. "We have less than three weeks now to find the people who have been disenfranchised and get them back on the rolls."

Monday, October 6, 2008

So Much for Ethics in the Bush Justice Department

Prosecutors in the Bush Justice Department wanted to ruin an Alabama defense contractor's business, even if he was not guilty of criminal charges against him, according to a new report in the Journal of the American Bar Association (ABA).

Reporter Lynda Edwards writes about "The Curious Case of Alex Latifi," in the October issue of the ABA Journal.

The story focuses on Alice Martin, U.S. attorney for the Northern District of Alabama who launched a four-year investigation of Huntsville-based Axion Corp. and owner Alex Latifi. The case involved allegations that Latifi violated federal arms-export laws by falsifying a report and sending a classified drawing of a Black Hawk helicopter part to a Chinese supplier.

Latifi was acquitted of all charges after a seven-day trial in October 2007, but his once-thriving business was in tatters. That, Edwards reports, was the goal of prosecutors all along.

Attorneys for Latifi report grossly unethical behavior by prosecutors during the case. Lead defense counsel Henry Frohsin recounts asking prosecutors if they would drop a related charge if handwriting experts declared the signature a forgery. According to Frohsin and his associates, a member of the prosecution team replied, "We don't care if Latifi is innocent. Our goal is to put him out of business."

The ABA Journal originally attributed the quote to Martin. In a correction on its Web site, the Journal says the quote should have been attributed to Assistant U.S. Attorney David Estes.

Martin, however, made little effort to deny that the comment captured prosecutors' mindset during the Latifi case. Reports Edwards:

When asked later by telephone (about the) statement, there is utter silence for a long moment.

"If you know someone is a bank robber," Martin said carefully, "then you want to put him out of the business of robbing banks, no matter what."

How did Martin and her team "know" Latifi was a "bank robber?" What kind of evidence did they have to support that conclusion? Edwards summarizes:

The trial was potholed with crazy. The government's key informant was a fired company secretary convicted of stealing from Axion and forging Latifi's signature. She said on the witness stand she sabotaged Axion records. The judge excluded a top government fraud attorney from court for bizarre conduct. The drawing at issue was marked both "unclassified" and "uncontrolled." China owns Black Hawk helicopters and can examine the part anytime it wants.

So why did Martin bring the case?

Some observers say it has to do with race and international politics. Latifi is a naturalized citizen born in Iran. The Bush administration had labeled Iran part of its "axis of evil," and that might have helped make Latifi a target.

Other observers note the case might have been driven by Martin's ambition for higher office. Edwards quotes Wendy Wysong, a Washington, D.C. lawyer who prosecuted arms-export cases while at the U.S. Commerce Department. "She says in 2004 the obscure field of law became the hot, starmaking field for U.S. attorneys," Edwards writes.

Whatever the motivations behind the prosecution, it has turned into a mess for the government. U.S. District Judge Inge Johnson called the prosecution's case "sloppy" and awarded almost $364,000 in legal fees under the Civil Asset Forfeiture Reform Act.

More funds could be coming Latifi's way. He has sued to obtain Martin's e-mails, memos, and phone records regarding the case. He is suing under the Hyde Amendment, which allows exonerated defendants to seek compensation from federal officials if the prosecution was "vexatious, frivolous or in bad faith."

Finally, defense lawyers have filed a complaint against Martin with the U.S. Office of Professional Responsibility, claiming she brought a political and baseless prosecution against Latifi.

Sunday, October 5, 2008

Why Are Newspapers Struggling?

I recently attended a retirement party for a friend who worked at The Birmingham News.

My friend worked at the paper for 43 years, so he was pretty much ready to retire. But he wound up leaving the paper a bit earlier than he had planned. That's because the News offered a buyout package to certain employees. My understanding is that about 85 employees received the offers, and my friend couldn't afford to pass it up.

I enjoyed the retirement party, and it gave me an opportunity to get my first gander at the inside of the News' swanky new digs in downtown Birmingham. I saw only a portion of the first floor, but the building looks like a huge improvement on the old building where I spent 11 years toiling for the late, great Birmingham Post-Herald.

As I ate my cake and drank my punch, I wondered: Why is this newspaper in such a less-than-stellar financial position that it is offering buyouts to veteran employees?

The News is our fair city's only daily newspaper, so it pretty much enjoys a monopoly on the market.

When numerous newspapers folded back in the 1970s and '80s, the explanation was that TV news had made afternoon papers obsolete and only a handful of cities were big enough to be "two-newspaper towns."

Now it seems that some cities aren't big enough to have even one thriving newspaper. So you have to ask: Why is that?

Newspaper types have been wringing their hands at professional gatherings for years, trying to figure out what ails their industry.

Many articles have been written about the problems facing newspapers, and one of the best ones I've seen recently, titled "The Demise of the Washington News Bureau," is written by John McQuaid at American Prospect.

McQuaid notes that Newhouse News Service recently announced that it would shut down after Election Day. This hits close to home here in Birmingham because Newhouse's Advance Publications is owner of The Birmingham News.

And Newhouse is not alone in tightening its national belt. McQuaid reports that newspapers in San Francisco, San Diego, Des Moines, Pittsburgh, Hartford, Toledo, Houston, Salt Lake City, Montana, Wyoming, and Maine have all cut back or eliminated Washington coverage in the past two years. Even the Chicago Tribune is considering cuts at its Washington bureau.

This is a disturbing scenario. At a time when we need more watchdogs in Washington we are getting fewer.

I'm sure there are multiple reasons for the gradual implosion of the newspaper industry. But one reason stands out in my mind, particularly here in Birmingham.

The one thing that a major newspaper can do better than any other form of media outlet is to report. And I'm talking about serious reporting--investigative, hard-hitting, fearless, insightful--without regard to political oxes that might be gored.

This is an area where The Birmingham News, in spite of its recent Pulitzer Prize, has come up short.

Yes, the News won journalism's biggest prize for its reporting on the Alabama two-year colleges scandal. But consider the stories the paper has either ignored or given only passing attention:

* The abusive practices of federal prosecutors in Birmingham (Alice Martin) and Montgomery (Leura Canary);

* The apparent railroad job and wrongful conviction of former Governor Don Siegelman;

* The connections between the Siegelman case and a similar case in neighboring Mississippi involving attorney Paul Minor;

* The dirty-money trail that helped funnel $13 million from Jack Abramoff to Governor Bob Riley's campaign;

* The stain gambling interests have placed on the Republican party in Alabama and throughout the Deep South;

* Efforts by GOP presidential nominee John McCain to hide the Abramoff-Riley connection;

* The deleterious effect Karl Rove has had on Alabama government, particularly in our state courts which he helped shape in the 1990s.

* The grotesque corruption in Shelby County, which is just south of Birmingham and represents our state's area of most rapid growth. This should be an area of enlightenment, but it is run like a banana republic--or worse.

We're just getting warmed up with this list. But serious reporting on these kinds of topics would make The Birmingham News an indispensable read. But by failing to address these and other important subjects, the News has made itself dispensable. And its recent buyout of veteran employees reflects that.

I have personal experience with the News' approach to reporting. Hannah Wolfson, the newspaper's UAB beat reporter, contacted me several weeks ago about my termination at the university after 19 years of service.

My impression is that Ms. Wolfson recognized it as an important story and wanted to treat it that way. And it's not an important story necessarily because it involves me. But it is important for at least the following reasons:

* UAB receives more than $400 million a year in federal research funding, and part of its grant proposals is a requirement to abide by federal law and avoid discriminatory practices. My case is just one example of UAB failing to live up to its obligations.

* I've become aware of several other instances of unlawful behavior by UAB toward its employees, and one of them has international implications. In fact, it is apparent that the university's human-resources problems go way beyond my case.

You will be reading about these other cases here at Legal Schnauzer. But you probably won't be reading about them, or my case, in The Birmingham News.

Why? My guess is that some editor up the line torpedoed Ms. Wolfson's story idea, probably because it would have cast an unfavorable light on some of the paper's favored Republicans.

As leaders of our community's only daily newspaper, editors of the News have that kind of power. But when they wonder why their bottom line isn't so hot, they should look in the mirror.

And when they wonder where their readers have gone, they might look at Web sites like Harper's.org, Raw Story, and Locust Fork World News & Journal. That's where real Alabama news, important stories The Birmingham News ignores, is being reported.