Tuesday, September 30, 2008
The bill, which is in the Congressional Record with Sen. Feingold’s introductory remarks, would require customs agents to have reasonable suspicion before searching the contents of laptops or other electronic equipment and sets a probable cause requirement in order to obtain a warrant, while allowing customs agents to hold on to the equipment pending a ruling on the warrant application. Besides subjecting laptop examinations at border crossings to the judicial process and ending indiscriminate ransacking of data, the legislation would ban profiling based on the traveler’s ethnicity, allow the traveler to witness the process, limit the time that officials can hold the traveler’s equipment and provide for compensation for damages to a traveler’s computer. The bill limits its protection to citizens and legal residents of the US.
Monday, September 29, 2008
If enacted, the program will establish 12 congressional clerkship positions for recent law school graduates to serve an equal number of members in both the House and the Senate. Clerks will receive the same pay and equivalent benefits as a first year law clerk serving in the U.S. District Court for the District of Columbia. Modeled on the federal judicial clerkship program, the congressional internship program will provide new law school graduates with an understanding of the legislative process, judicial appointments and constitutional amendments. House Report 110-831, issued with the House bill, states the background and need for the legislation:
Users can track this and other bills on Open Congress, a free, open-source, non-profit and non-partisan web resource designed to make Congress more transparent. For more on this resource, see About Open Congress.
Judicial clerkship programs have long provided the judiciary with access to a pool of exceptional young lawyers at a relatively low cost, while providing these clerks with invaluable insight into the functioning of the court system. Congressional Clerkships would expose young lawyers to the functions and operations of the Federal legislature.
The White House, many administrative agencies of the Executive Branch, the Administrative Office of the United States Courts, the Federal Judicial Center and the United States Sentencing Commission, all operate parallel clerkship or fellowship programs. The Congress is without a similar program.
Click here for bills sponsored by Sen. Schumer’s, where you can see his bill, which recently became law, designating the US Court House at 225 Cadman Plaza East in Brooklyn as the "Theodore Roosevelt United States Courthouse". Click here for bills sponsored by Sen. Clinton.
Sunday, September 28, 2008
Corporations . . . organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition . . . or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation . . . and which does not participate in, or intervene in . . . any political campaign on behalf of (or in opposition to) any candidate for public office.The ban dates to 1954 when Sen. Lyndon Johnson proposed it in the 83rd Congress without any legislative history. A bill in the 110th Congress, H.R. 2275, seeks to “restore the Free Speech and First Amendment rights of churches and exempt organizations by repealing the 1954 Johnson Amendment”.
There is also an effort, today, September 28, by the Alliance Defense Fund (ADF) called the "Pulpit Initiative" (explained in an ADF Executive Summary) to challenge restrictions on the ability of churches to endorse or oppose political candidates. Pulpit Freedom Sunday directly challenge IRS regulations prohibiting political activity by churches and seeks to “reclaim pastors’ constitutional right to speak freely and truthfully from the pulpit”.
This year, the IRS has published a FAQ on the ban on political activity by 501(c)(3) organizations. The ban was upheld in Branch Ministries v. Rossotti, 211 F.3d 137 (D.C.Cir.2000) where a church in Binghamton, NY published a letter challenging candidate Bill Clinton's stance on abortion, homosexuality and sexual abstinence outside of marriage. After investigating, the IRS revoked the tax-exempt status of the church. The church sued the IRS but the district court ruled that the IRS had the authority to revoke the church's tax-exempt status. The Circuit Court upheld the lower court ruling.
The Pulpit Initiative faces opposition as three former IRS officials have sent a letter calling for an IRS investigation of the ADF attorneys under the professional standards for tax attorneys.
Thursday, September 25, 2008
Organizations such as Rock the Vote and Student Association for Voter Empowerment (SAVE) have been active in getting students to register to vote and leading advocates for youth election protection. This past summer, student members of SAVE worked with members of Congress to introduce the Student VOTER Act of 2008 that will require states to designate federally funded institutions of higher education as agencies for the registration of voters in federal elections and to provide mail voter registration application forms to students when they register for their courses.
Wednesday, September 24, 2008
“Any determination of the Secretary with regard to any particular troubled asset pursuant to this Act shall be final, and shall not be set aside unless such determination is found to be arbitrary, capricious, an abuse of discretion, or not in accordance with the law.”A report in Jurist discusses alternate proposals including Sen. Dodd’s proposed legislative changes which address transparency of the process, lack of court oversight and the absence of help for homeowners with troubled mortgages.
The current crisis presents challenges to policy makers and to most observers who may have little understanding of why it happened and what it means for everyday people. Understanding the crises requires knowledge of terms like subprime mortgages, mortgage backed securities, collateralized debt obligations, credit default swaps, short-selling, leveraging and other terms unfamiliar to most. Bloomberg Law helps define these terms:
Subprime Mortgage Loan: A first or second lien residential mortgage loan made to a borrower who has a history of delinquency or other credit problems.
Mortgage-Backed Security: A debt instrument with a pool of real estate loans as the underlying collateral. The mortgage payments of the individual real estate assets are used to pay interest and principal on the bonds.
Collateralized Debt Obligation: A structured debt security backed by a portfolio consisting of:
- Secured or unsecured senior or junior bonds issued by a variety of corporate or sovereign obligors.
- Secured or unsecured loans made to a variety of corporate commercial and industrial loan customers of one or more lending banks.
Credit Derivative: An OTC derivative designed to transfer credit risk from one party to another. By synthetically creating or eliminating credit exposures, they allow institutions to more effectively manage credit risks. Most credit derivatives entail two sources of credit exposure: one from the reference asset and the other from possible default by the counterparty to the transaction. Taking many forms, some of the more popular structures for credit derivative products include credit default swaps, total return swaps, and credit-linked notes.
Credit Default Swap: A credit derivative transaction in which two parties enter into an agreement, whereby one party pays the other a fixed periodic coupon for the specified life of the agreement. The other party makes no payments unless a credit event, relating to a predetermined reference asset, occurs. If such an event occurs, the party will then make a payment to the first party, and the swap will terminate. The size of the payment is usually linked to the decline in the reference asset's market value following the determination of the occurrence of a credit event.
Short Sale: Selling a security that the seller does not own but is committed to repurchase eventually. Investors use short sales to capitalize on an expected decline in the security's price.
The BLS Library collection has a number of books to help understand the basics of the crisis:
Subprime Mortgage Credit Derivatives by Laurie S. Goodman
Call # G2040.15 .S825 2008
Subprime Mortgages: America's Latest Boom and Bust by Edward M. Gramlich
Call # HG2040.5.U5 G73 2007
The Handbook of Mortgage-Backed Securities by Frank J. Fabozzi
Call # HG4655 .H36 2006
The Securitization Markets Handbook: Structures and Dynamics of Mortgage- and Asset-Backed Securities by Charles Austin Stone and Anne Zissu
Call # HG4655 .S76 2005
Introduction to Structured Finance by Frank J. Fabozzi
Call # HG4028.A84 F33 2006
Credit Derivatives: a Primer on Credit Risk, Modeling, and Instruments by George Chacko
Call # HG6024.A3 C739 2006
Prof. David Reiss has provided this useful bibliography:
Greed, Fraud and Ignorance: A Subprime Insider’s Look at the Mortgage Collapse by Richard Bitner (LTV Media 2008)
Greenspan's Bubbles: The Age of Ignorance at the Federal Reserve by William Fleckenstein (McGraw-Hill 2008)
Subprime Mortgages: American's Latest Boom and Bust by Edward M. Gramlich (Urban Institute Press 2007)
The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash by Charles R. Morris (Public
The Subprime Solution: How Today’s Global Financial Crisis Happened, and What to Do about It by Robert J. Shiller (Princeton, forthcoming August 2008)
Financial Shock: A 360 Degree Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis by Mark Zandi (FT Press forthcoming 2008)
Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis by Paul Muolo and Mathew Padilla (Wiley 2008).
Prof. Reiss, Associate Dean Michael Gerber, Prof. Edward Janger and Prof. Roberta Karmel will lead the discussion in a Town Hall Meeting "Meltdown, Bailout and Transformation: A Week on Wall Street" on Thursday, Sept. 25, 4:00pm to 5:30pm in the Moot Court room on the 7th floor.
Wednesday, September 17, 2008
In 2005, Congress passed and the President signed Public Law 108-447 to establish Constitution Day. Section 111(a) of that law reads:
Following the law’s passage, the Education Department issued a “Notice of Implementation of Constitution Day and Citizenship Day on September 17 of Each Year,” 70 Fed. Reg. 29727 (May 24, 2005). The notice applies to educational institutions receiving federal funding from the Department of Education. Today’s Proclamation by the President about Constitution Day reminds us “celebrate our Constitution and reaffirm our rights and responsibilities as citizens of this great Nation”.
The head of each Federal agency or department shall—
(1) provide each new employee of the agency or department with educational and training materials concerning the United States Constitution as part of the orientation materials provided to the new employee; and
(2) provide educational and training materials concerning the United States Constitution to each employee of the agency or department on September 17 of each year.
(b) Each educational institution that receives Federal funds for a fiscal year shall hold an educational program on the United States Constitution on September 17 of such year for the students served by the educational institution.
The debates from the 1787 Constitutional Convention may appear to be historic abstractions. Yet those same issues live on today when once again the nation is in debt, the money being printed continues to lose value, large population centers are at odds with small towns, and unchecked powers are concentrated in a unitary executive. Constitution Day needs to be more than a symbolic gesture to history. It is an opportunity to debate a broad range of contemporary issues that call for great compromise. The CQ Researcher offers some suggestions:
Is the Bipartisan Campaign Reform Act constitutional? (2002, 1st Amendment/Freedom of Speech)
Is the government misusing the USA Patriot Act? (2003, 4th Amendment/Search and Seizure)
Should there be a national moratorium on executions? (2001, 8th Amendment/Cruel and Unusual Punishment)
Should Congress ban so-called partial-birth abortions? (2003, 14th and 9th Amendments)
Should public libraries use filters to block obscenity and pornography on the Internet? (2001, 1st Amendment/Freedom of Speech)
Should the federal government fund faith-based groups as proposed by President Bush? (2001, 1st Amendment/Religion: Establishment Clause)
Should colleges be allowed to use race as a factor in admissions? (2003, 14th Amendment)
Should gay marriage by legally recognized? (2003, Article IV/Privileges and Immunities Clause)
Did the president act responsibly in seeking authority to pre-emptively strike Iraq? (2002, Article I/War Power)
Tuesday, September 16, 2008
The second part of the two part article will address regulations (45 CFR Part 88) proposed by the Department of Health and Human Services (HHS) to protect health care workers from being coerced into violating their religious beliefs by providing medical services that they object to on religious grounds. The proposed regulations seek to set a standard for enforcing “conscience clause” laws enacted in response to Roe v. Wade, 410 U.S. 113 (1973). Congress has enacted several such laws, starting with the 1973 Church amendment (42 U.S.C. 300a7) passed shortly after Roe v. Wade and most recently the 2004 Weldon amendment (Sec. 508(d) of Public Law 110-161, 42 U.S.C. 238n). See the Congressional Research Service Report The History and Effect of Abortion Conscience Clause Laws. The idea of the conscience clause is to protect doctors and other healthcare providers (such as pharmacists) who refuse to perform abortions or fill prescriptions for emergency contraception from discrimination. When first proposed, the regulations had language defining abortion as the termination of a pregnancy from the point of conception so that any form of contraception, including the "morning-after" pill and IUDs, that interfere with the implantation of a fertilized egg would have been categorized as a form of abortion. That language was removed from the proposed regulations which are in a 30-day comment period ending September 25 at email@example.com. A public comment submission form is online. Posted comments to the Provider Conscience Regulation are available at regulations.gov, a direct link to the conscience clause comment site.
See the BLS Library catalog for additional reading on emergency contraception including When Sex Counts: Making Babies and Making Law by Sherry F. Colb (Call #KF3760 .C65 2007) and Governments Worldwide Put Emergency Contraception Into Women's Hands: A Global Review of Laws and Policies by Erica Smock (Call #HQ766.5.U6 G68 2004).
Thursday, September 11, 2008
In this conversation, Prof. James Fanto talks about his recent article, A Social Defense of Sarbanes-Oxley, 54 N.Y. L. Sch. L. Rev. 517 (2007), which was part of a symposium called Corporate Governance Five Years After Sarbanes-Oxley: Is There Real Change? Prof. Fanto teaches courses on banking, corporate, and securities law, corporate finance, and comparative and international corporate law and governance. His extensive writings include other articles on Sarbanes-Oxley and many other corporate law topics and are listed on his Selected Works web page.
In this conversation, Prof. Fanto considers the impact of the current financial crisis on public and corporate views of the need for regulation of publicly traded companies and the benefits that have resulted from enactment of the Sarbanes-Oxley Act of 2002. He argues that this legislation is a reassertion of social values of professionalism against a socially destructive ideology of self-interest that marked the corporate world at the turn of the last century.
Wednesday, September 10, 2008
In this conversation, Prof. Ernest Badway talks about recent changes in the DOJ guidelines, the Principles of Federal Prosecution of Business Organizations, discussed in the prior posting on this site. Prof. Badway, who teaches Securities Fraud: Criminal and Regulatory Enforcement this semester, is a partner at Fox Rothschild, LLP and practices in the areas of securities litigation and regulation, white collar criminal defense, and business litigation. He has recently written on the topic in an article entitled “Is the McNulty Memorandum Morphing into the Filip Letter?” in the ABA’s White Collar Crime Newsletter. He has also written two earlier articles on the DOJ guidelines:"Aggressive Corporate Crime Approach Offers Little Protection," New Jersey Law Journal (March 24, 2008) and "Is the McNulty Memorandum Fool’s Gold?" New Jersey Law Journal (March 03, 2008).
Thursday, September 4, 2008
Advancing defense costs to individuals facing indictment or investigation for matters relating to their employment has become standard practice. It ensures employees that they that they can pay for an adequate defense. In the much-publicized KPMG prosecution, seventeen of the partners from the global accounting firm were prosecuted for creation of illegal tax shelters. The pre-trial defense costs for each individual defendant averaged $1.7million. The DOJ in its negotiations with KPMG to avoid prosecution used the Thompson Memo to pressure KPMG to consider departing from its long-standing policy of paying legal fees and expenses of its personnel in all cases and investigations. The employees of KPMG were subsequently indicted and moved for dismissal, claiming federal prosecutors in Manhattan threatened to indict the accounting firm if it didn't assist the government in its probe of employees caught up in a tax evasion investigation. Castigating the government for applying pressure on the firm to cut off reimbursement of attorney fees after the employees were indicted, Judge Kaplan on June 26, 2006 wrote a blistering opinion in U.S. v. Stein, 435 F.Supp.2d 330 (S.D.N.Y.2006), agreeing with the defendants that the Thompson Memo, and the manner in which the prosecutors used it, violated the defendants’ Fifth Amendment substantive due process rights and their Sixth Amendment right to counsel. In December 2006, the Thompson Memo was replaced with the McNulty Memo which allowed prosecutors to consider a company’s fee advancement policy only where the circumstances indicate that it is “intended to impede a criminal investigation”.
On the same day the new guidelines in the the Filip Memo were announced, the Second Circuit Court of Appeals affirmed the dismissal of the indictment against most of the defendants in the KPMG case. Whether the KPMG case motivated the new guidelines or the pending Attorney-Client Privilege Protection Act of 2008 that would forbid federal prosecutors and civil enforcement lawyers from requesting any communications protected by the attorney-client privilege or work product doctrine, the DOJ has decided to revise the Principles which have been criticized for encroaching on the attorney-client privilege and work product doctrine.
• Cooperation will be measured by the extent to which a corporation discloses relevant facts and evidence, not its waiver of attorney-client privilege or work product;
• Federal prosecutors will not demand the disclosure of non-factual attorney work product or core attorney-client communications as a condition for cooperation credit;
• Federal prosecutors will not take into consideration in evaluating cooperation whether a corporation has (i) advanced attorneys’ fees to its employees; (ii) entered into a joint defense or common-interest agreement;
or (iii) retained or sanctioned employees involved in alleged wrongdoing.
There are at least two significant limitations to addressing the problem of government interference with the attorney-client privilege or work product doctrine through a revision of DOJ’s Principles. First, unlike the proposed Attorney-Client Privilege Protection Act, the Principles do not apply to the SEC or other federal regulators. Second, the Principles do not have the force of law, but would require corporations to rely on self-policing by DOJ.
An editorial in today's Los Angeles Times urges passage of the legislation to insure that future administrations cannot easily overturn the new guidelines and to preserve the attorney-client privilege to "any federal investigation or criminal or civil enforcement matter."
For material on the attorney-client privilege, consult SARA, the library catalog, for items such as Internal Corporate Investigations, Barry F. McNeil and Brad D. Brian, editors (Call No. KF1416 .I58 2007) and volume 3 of The In-house Counsel's Essential Toolkit, ABA Committee on Corporate Counsel (Call No. KF1425 .I64 2007)
Tuesday, September 2, 2008
The Arizona-based Alliance Defense Fund (ADF), a conservative Christian non-profit organization with the stated goal of "defending the right to hear and speak the Truth through strategy, training, funding, and litigation" filed an Article 78 Petition on behalf of Sen. Marty Golden (R-Brooklyn), Sen. Serphin Maltese (R-Queens) and Assembly Republican Minority Leader James Tedisco (R-Schenectady). Alleging that Paterson overstepped his authority because New York law does not allow for same-sex marriages, the suit claimed that the issue is for the NY State Legislature. In 2006, the NY Court of Appeals ruled in Hernandez v. Robles, 7 N.Y.3d 338, 855 N.E.2d 1, 821 N.Y.S.2d 770, that New York law does not permit same-sex marriage and that there is no constitutional right to same-sex marriage. Other plaintiffs included Conservative Party chairman Michael Long and Duane Motley of New Yorkers for Constitutional Freedoms which claims to be New York State's only full time Christian Lobby Organization.
On May 14 of this year, Gov. Paterson issued the directive to state agencies to allow for gay married couples to have access to the same rights and privileges as heterosexual couples based on a ruling in Martinez v. County of Monroe, 50 A.D.3d 189, 850 N.Y.S.2d 740 (4th Dept. 2008). That case involved a Monroe County couple, one of whom sued Monroe Community College after the school refused to provide health insurance for her partner whom she married legally in Canada. The court ruled the plaintiff had to be awarded health insurance by the college because of the state's policy of recognizing marriages performed elsewhere.
The ADF and the Governor’s office had no immediate response to the ruling. A list of New York State statutes and regulations that use the terms “spouse,” “husband” and “wife” was prepared by the Association of the Bar of the City of New York and the Empire State Pride Agenda Foundation in 1,324 Reasons for Marriage Equality in New York State.