Thursday, May 28, 2009
Baton Rouge, Louisiana

A SUPREME COURT APPOINTEE FROM LOUISIANA?

FAT CHANCE!

Before the President made his choice this week for a new nominee to fill the coming vacancy on the United States Supreme Court, the White House undertook a nationwide search. There were parameters. The pick was certain to be a woman. But by even the widest stretch of standards to be met by any nominee, one thing was pretty clear from the start. No judge serving on the Fifth Circuit Court of Appeals in New Orleans was given the slightest consideration.

It’s true that the Fifth Circuit is heavy laden with Republican appointees. But that has not been a major stumbling block for the new President so far. His most recent major appointment, the new Ambassador to China, went to Republican Governor John Huntsman, who had set up an exploratory committee to run against President Obama in 2012. And the final choice made on Tuesday of this week, Court of Appeals Judge Sonia Sotomayor, was initially appointed to the federal bench by President George H. W. Bush.

Being a federal court of appeals judge has become almost a prerequisite to ascending up to the Supreme Court. Every present judge on the Court was elevated from the federal court of appeals system. So one would think the three women on the Fifth Circuit Court of Appeals, all from either Louisiana or Texas, would have been given a perusal review. No way, say the close court watchers. Their qualifications or lack thereof, speak for themselves.

The chief judge is one Edith Jones, who received international notoriety a few years back when she ruled that a fellow named Calvin Burdine, convicted of murder and sentenced to death row, received a fair trial even though his court appointed lawyer slept through a good bit of the trial. A sleeping attorney didn’t’ seem to bother Jones, who wrote in upholding the conviction that “we cannot determine whether the defense counsel slept during a critical stage of Burdine’s trial.” So, according to Jones, it’s OK to nap a bit during a trial if you are representing a defendant who could be (and in this case was) given the death penalty. Just pick and choose when you doze off.

Her colleague on the Fifth Circuit, Judge Priscilla Owen, also has a colorful and controversial list of questionable decisions. Times Picayune columnist James Gill outlined a litany of dubious rulings in a recent column, when he cited one example of Owens “setting on a case so long that a quadriplegic kid’s respirator failed before he could collect a dime of the $30 million awarded by a jury against Ford Motor Co. several years earlier.” Former US Attorney General Alberto Gonzales, once a colleague of Owens on the Texas Supreme Court, described one of her opinions in a parental consent case as “an unconscionable act of judicial activism.”

And then there is Judge Edith Clement. She was in the hunt to move up to the nation’s highest court back in January of 2006. Clement was reportedly a close friend of Laura Bush, and some odds makers had her at the top of the potential candidates’ list. NBC news even broke in to regular programming to state the Clements was the choice. But then her record on the Fifth Circuit was put under the political microscope.

Press reports immerged where Clement was called everything from a “Secrecy Freak” to a “Closet Fascist.” News articles also appeared questioning her judgment in taking free trips (called junkets for judges) paid for by conservative foundations who fund lawsuits that could end up in Clements’ court.

The New Orleans Times Picayune wrote a blistering editorial concerning the veil of secrecy Clement insisted upon in her trials. In one such case that, as many of you know, I followed quite closely, Clement dropped a curtain around the whole trial with gag orders, secrecy in picking jurors, allowing the withholding of critical evidence, and even preventing the press from writing anything about the jurors. Of Clements’ rulings, the Times Picayune had this to say: Clement “took the unprecedented step of suggesting that the media call her to get permission before publishing anything about the jurors. The idea of the media or any citizen having to ask the government for permission to exercise free speech is patently un-American.”

So with the labels of secrecy freak, closet fascist, and ruling in a way that is “patently un-American,” Clements’ hopes and chances of breaking into the first team line up of the Supremes quickly crashed and burned.

The Fifth Circuit regularly leads all appeals courts throughout the country in its decisions being over turned by the U.S. Supreme Court. In an expose’ of the Fifth Circuit’s recent rulings, the Times Picayune quoted both Justices on the Supreme Court as well as prominent law professors who regularly lambasted verdicts handed down in New Orleans. University of Houston law professor David Dow said it seems clear that the Supreme Court “has lost confidence in the Fifth Circuit’s handling of capital cases.” And recently retired Justice Sandra Day O’Conner was equally blunt in criticizing the Fifth Circuit saying it was “paying lip service to principles of jurisprudence, and that often the Fifth’s reasoning “has no foundation in the decisions of this court.”

It’s a shame for those who have to deal with the Fifth Circuit that its standing is so soiled, and that the reputation of some of its members has degenerated to the point of such serious criticism. During the civil rights era, Louisiana federal judges like John Minor Wisdom, J. Skelly Wright and Albert Tate were held in high regard nationally. Their work was admired and quoted in the nation’s best law schools. But with such a mediocre judicial stature today, Louisiana won’t be in the running for one of its own to move up to the nation’s highest court.

Federal court watchers have a name for federal judges who lack the scholarship, the temperament, the learning, and are simply in the wrong occupation. They are called “gray mice.” It seems pretty obvious that the Fifth circuit Court of Appeals is full of such critters. Unfortunately, there is not much, short of impeachment, the discipline system can do about them. But the court’s continuing incompetence places one more stain on the reputation of Louisiana.
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“Whoever undertakes to set himself up as a judge of Truth and Knowledge is shipwrecked by the laughter of the gods.”
-Edmund Burke

Peace and Justice

Jim Brown


Jim Brown’s weekly column appears in numerous newspapers and websites throughout the south. To read past columns going back to 2002, go to www.jimbrownla.com.

Thursday, May 21, 2009
Baton Rouge, Louisiana

STANFORD AND MADOFF HAD ACCOMPLICES:
THEIR VICTIMS!

There are three things you should learn early in life. Don’t play poker with a guy named Slim. Don’t buy a Rolex form a guy on the street who’s out of breath. And don’t put your money in some exotic investment where the returns are just “too good to be true.” And to see who didn’t follow these rules, just take a look at the Stanford Group and Bernie Madoff.

The Stanford Group, headed up by higher roller Sir Robert Stanford, was a major investment player in Louisiana. Of the $9 billion raided by Stanford in the U.S. and more than 100 other countries, $2 Billion came from Baton Rouge and Lafayette alone. But when all was said and done, the whole financial portfolio was nothing more than a Ponzi scheme, where early investors get paid with the proceeds of later investors.

Stanford financial advisers told potential clients they were selling CDs in the Bank of Antigua. `The money, according to the sales pitch, was that the funds would be placed in mainly easily sellable financial instruments, all to be monitored by a team of more than 20 analysts and audited by regulators on this exotic Caribbean island. Instead, the knighted boss “black boxed” the portfolio, shielding it from independent oversight, and steering a major portion of the funds into hard to sell real estate investments and private equity funds.

Financial advisers, being paid by individuals to manage their money, were tempted with a direct conflict By Stanford. These advisers could pocket 1% yearly commissions on all funds directed to Stanford. So who was looking out for the client?

Surprisingly, Both Stanford and Bernie Madoff were able to carry on their schemes longer because of the downturn in the economy. Many investors liquidated their stocks and bonds but stayed with Stanford and Madoff because these investments were, in many cases, the only performing assets.

And here is what’s really surprising. Many investors had no idea they were even invested with Madoff and Stanford. Their financial advisors didn’t bother to tell them.
Old Bernie wowed his clients by patiently explaining his financial theory of a “split-strike option conversion” trading strategy. The idea, according to Madoff, was to buy a few dozen blue-chip stocks and hedge them by selling out-of-the-money put options. Sure, this has a hint of incomprehensibility that maybe you want in an investment methodology. But that’s just the point. If you don’t understand all this financial gobbledygook, you have no business investing in the first place.

But how could Stanford and Madoff sucker so many investors into their schemes? Many investors were seeking them out, with little hard sell involved. Well it was easy. They just needed the right environment. And the right environment is us-you and me. It’s the same reason why so many Louisianans buy lottery tickets. (As this column is being written, the Powerball jackpot stands at $170 million.) We all want a sense of elation at the possibility that lots of money will come fast. Right away. Not a slow and steady process, but through luck or connections or financial nimbleness.

The Stanfords and the Madoffs know from experience that even “sophisticated” investors take shortcuts. Quantitative analysis? Not necessary. “Hey, we know folks who have been with Bernie for years and done quite well. That’s good enough for us.” Here is what Barron’s Financial News wrote about Madoff in 2001. “Madoff’s investors rave about his performance-even though they don’t understand how he does it.”

One important lesson learned from both the Stanford and Madoff scandals is that you cannot trust the financial regulators to protect you. There have been rumors about both of these guys for years, with specifics being given to the SEC. Yet nothing was done. You have to look out for yourself. That means assuming the responsibility of carrying out several important checks. I leaned these lessons well as an insurance regulator.

First, know who you are dealing with. How long has the company or individual been in business? Ask them candidly about any SEC or other regulatory violations and whether they were sanctioned or fined. You can check this yourself by going to the website of the Financial Industry Regulatory Authority (FINRA) to check on any black mark on your advisor’s record.
What is their track record of investment returns? How can you be sure that your money is protected from fraud? If investments are to go out of the country, who does the monitoring? What about insurance? Is your investment advisor bonded to cover any fraud or misspending? (The same goes for your insurance agent by the way). And you know those monthly and yearly reports you receive in the mail summarizing you r investments. Don’t just toss them away. Look them over, and then keep them in an organized file so you can track by month and year just what kind of performance you are receiving.

It may be smart not to lump all your investments with just one firm or financial adviser. The problem here is that you have to “get involved” in your personal financial decisions so that you have the proper mix in your investments. Your best defense may be a healthy dose of skepticism. In any business decision, rarely does a smart person just take anybody’s word. You check it out. Unfortunately, many of the financial losers did not follow this simply premise when picking a financial adviser.
The good news is that Stanford and Madoff are aberrations. Madoff allegedly defrauded his own family, close friends and a number of charities he was supposed to be supporting. The vast majority of financial investors look out for their clients. The lesson here is to be less trusting and a bit more cautious. And keep your financial goals reasonable. Be a bit more respectful of simple and long-term success.

There is rarely any reasonable chance to make a quick buck. Probably the quickest way to double your money is to fold it in half and put it back in your pocket. Even Slim will agree with that strategy.

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"I'm tired of hearing about money, money, money, money, money. I just want to play the game, drink Pepsi, wear Reebok."
Shaquille O’Neal

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers and websites throughout the South. You can read all is past columns and see continuing updates at www.jimbrownla.com.

Thursday, May 14, 2009
Baton Rouge, Louisiana

FREEDOM OF CHOICE
IN MOTORCYCLE HELMET DEBATE

One of the hottest issues in the current session of the Louisiana Legislature, meeting at the state capitol in Baton Rouge, is the repeal of a law that currently mandates the wearing of a safety helmet when riding a motorcycle. Proponents of the repeal site “freedom o choice” concerns, saying it should be an individual decision as to whether to wear or not wear a helmet. They say there should be no role for government to play in this decision. And I sure agree that the issue is one of freedom of choice (But read on.)

You have really missed a thrill if you have never ridden a motorcycle on a back country road on a fall day as the leaves are changing and the breeze is blowing in your face. I’ve tasted the good vibes of such breezes on many occasions and have ridden a “bike” most of my live. A Kawasaki off road 250cc in my early Ferriday days after college, an Italian bike at Tulane Law School to get around New Orleans, and a BMW 11500GS as I grew older. The GS was the best bike I ever had. And boy, did I have visions of riding all over the world.

The BMW could do it all. I thought one day I just might circumnavigate the globe taking on all types of tough and challenging terrain. Crossing a swollen river in some remote South American jungle, or triumphantly conquering the unforgiving heat and sands of the Egyptian deserts while in route to Cairo. Or how about even competing in the Paris-Dakar or Baja 1000, on this BMW that has been pegged as the fastest all around on road, off road bike in the world? Oh all right. Maybe a bit too much to take on, but you get my drift. There just is something special about a challenging ride on a good motorcycle.

But you know what? I always wore a helmet. And for one simple reason. You are an absolute idiot if you do not. And if you think otherwise, just take this test.

Find a large immovable object like a large oak tree or a brick wall.
Stand about 30 paces away from this large immovable object
Run as fast as you can towards this large immovable object
As you get close to this large immovable object place your hands to your side, put your arms to your side, and put your face up, continue running as fast as you can.
Notice how it feels when you hit this large immovable object while you were running as fast as you could.
Most people can run about 15 MPH (24 KMph)You are still in first gear with most motorcycles.
With many motorcycles you can't get them out of first gear at this speed.Think about how this impact would feel if you were going 4 or 5 times faster

So how did you do on the test? See where I am coming from?

But what about the “freedom of choice” argument? Isn’t that a personal decision where government should have no say so? Why should any government entity tell an individual what to wear when no one else is involved? But that’s the catch. There is someone else involved! And it’s you and me and our right to “freedom of choice.” You see, a large number of motorcyclists have minimum required insurance or no insurance at all. Louisiana only requires at $10,000 dollar policy, the lowest amount in the country.
Most states required a minimum of $25,000.
So here is what happens. A motorcyclist gets into a serious wreck, doesn’t have on a helmet, receives major head injuries, and the cost of medical care is astronomical. Head injury is the leading cause of death in motorcycle crashes. Riders who don't wear helmets and who experience a crash are 40 percent more likely to sustain a fatal head injury. If there is a minimum insurance policy involved, the $10,000 barely covers the ambulance and initial basic care cost of getting to the hospital. If there is a brain injury, and there often is when no helmet is worn, the costs could run up to a $1 million or more. Many such injuries require medical care for the rest of the patient’s live.

The injured rider must then turn to Medicaid or the charity hospital system for continuing care that often lasts for years. And guess who pays? That’s right. You and me as taxpayers. We have to pay the bill for the irresponsible rider who suffers the injuries, then passes the cost on to us. So isn’t our “freedom of choice,” not to be burdened with someone else’s irresponsible behavior, being infringed upon?

Louisiana Governor Bobby Jindal, who does not ride motorcycles, has come out in favor of repealing the present law. Upon taking office, Jindal terminated Col. Jim Champagne, the aggressive Director of the La. Highway Safety Commission. One of their differences was Champagne’s insistence to oppose any loosening of the motorcycle safety laws, particularly the requirement to wear a helmet.

One option might be considered to protect the taxpayer’s “freedom of choice.” If a motorcyclist wants to ride bareheaded, raise the insurance requirements on this “free spirit” to $500,000. For those who wear helmets, leave the requirement as is. That way, there would be funds available to pay for the massive medical costs involved when a rider receives a head injury.
So yes, keep your right to choose. But allow me the same freedom not to be saddled with the cost of your mistake. Either pay up with high insurance limits, or use some common sense and wear a helmet. Either way, I want my freedom of choice too.

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“What do you call a cyclist who doesn't wear a helmet? An organ donor.” ~David Perry

Peace and Justice.

Jim Brown

You can read all Jim’s columns going back to 2002 by going to his website at www.jimbrownla.com.

Are New Orleans Saints Worth the Price?

Thursday, May 7, 2009
Baton Rouge, Louisiana

A HIGH PRICE TO KEEP THE SAINTS!

The plan seems to be “Keep the Saints at any price.” Proposals at Louisiana’s state capitol to give millions of dollars a year for decades to come is steamrolling through the legislature. Governor Bobby Jindal says the deal will “save hundreds of millions of dollars, while making what will be an incredibly successful investment “ in the state. Even the state’s largest newspaper is all a goggle, calling the proposal a “win-win-win-win situation.” But how good a deal really is it? Considering the state’s precarious financial situation with huge cuts coming in education and health care, it has to be one heck of a deal for anyone to send out cheers and accolades.

Start with the premise that any aid to Saints owner Tom Benson is even necessary at all. No other professional football team receives any state funds. Not one. And New Orleans is not all that small of a market. Teams like the Buffalo Bills and Green Bay Packers operate in similar or smaller television markets and do quite well without any state funding.

The Saints will receive $6 million in direct funding, and this is being embellished as a reduction of what the state is paying them now. But there is much more the Saints will receive that is every bit as valuable as direct payments. $85 million will come out of the state treasury to upgrade the Superdome. But the upgrades greatly benefit the Saints and mean significantly more profit. Most of the money will go towards building new luxury boxes and new club lounges, all which mean more high priced tickets for the Saints to sell. The state pays the cost, and the Saints get the income.

The there is the agreement for the state to lease office space in a downtown office building adjacent to the Dome being purchased by the Benson interests. This is one of the more questionable parts of the purposed agreement. Right now, the state has offices scattered throughout New Orleans to service a cross section of citizens needing state help. All these offices are to be consolidated in one of the busiest parts of New Orleans where parking is both expensive and scarce for both state employees and taxpayers who need to go there for help.
The state is to lease more than 320,000 feet at $24 dollars square foot, which is one of the highest rental rates in the state today. Knowledgeable realtors in New Orleans will confirm that in today’s market, when a potential renter is willing to lease as much as 320,000 square feet, a deal could be made to obtain top office space for rent in the $13 dollar a square foot range. So the state is basically paying the cost of the building the Benson group is buying. If buying the Dominion Tower was such a good deal, the state should have opted to buy the building itself. After all, Gov. Jindal’s mentor, former Gov. Mike Foster, made the case that the state should build and own buildings for state employees, and proceeded to do so all over downtown Baton Rouge.

But what about all these projections of how much the economy in New Orleans will be positively impacted, with millions more in tax revenue. Figures are being wildly thrown around with little study indicating a $500 million economic impact, and a University of New Orleans study, quoted in a Times Picayune editorial, estimated some $22 million in state revenue is produced by the Saints. Here’s the fallacy. Any such study assumes that all of the dollars spent at Saints games are dollars that are new to the region’s economy. Most dollars spent going to the Dome are dollars that would have been spent on other leisure activities in the area. There are numerous choices as to how to spend leisure dollars. Going to a football game is just one such choice.
Job creation is also part of the hard sell to make this proposed Saints deal more attractive. The Times Picayune concludes that the Saints provide almost 4,000 full and part-time jobs. But the major numbers of jobs are part-time, intermittent positions with low wages and few benefits. Hawking hot dogs and beer or cleaning up after the fans go home is not a sure fire route to prosperity.

The Brookings Institution did a recent 500 page study titled Sports, Jobs and Taxes. They concluded that professional sports teams “realign economic activity within a city’s leisure industry rather than adding to it. Professional sports,” they write, “are not a major catalyst for economic development.” They are saying, in effect, that all the public subsidies accomplished was to help shift spending from other forms of entertainment to stadiums like the Dome, with little net employment gain or significant increase in new tax dollars.

A later report by Brookings found that numerous other studies have all concluded the same thing. “Independent research by a number of independent groups has uniformly found that there is no significant positive correlation between sports facility construction and economic development.” Consultants, often hired by team owners who say otherwise, according to the Brookings study, “are peddling snake oil.”

Right now, the State of Louisiana gives the Saints $23 million a year as a direct subsidy. But Saints owner Tom Benson is no fool. He’s not about to give up such a good deal for much less in the future. So what will he actually receive? $6 million direct from the state, plus an estimated additional $6 million benefit annually from the new luxury suites he can sell, all part of the $85 million in improvements to the dome. He then gets a new office building with high rents guaranteed by the state. In addition, the Saints gain an additional $2.5 million in rentals from the adjoining office mall and the adjacent parking garage.

So all in all, the Saints end up with a new contract guaranteed through 2025 that seems to be every bit as attractive as the contract they have right now. A deal worth more than $20 million dollars paid for with state funds. The city of New Orleans does not put up a penny. Yet no other NFL state or city scratches the surface of giving such a hand out. God bless old Tom Benson. He once again has made off like a bandit, and cut himself one heck of a deal.

Finally, the argument is made that there is an intangible value to New Orleans and the state to have the evening sports news talk about “The New Orleans Saints” as if to entice future visitors to come on down to the Bayou State. Oh yes. When you hear about The Green Bay Packers or the Cincinnati Bengals, doesn’t that just make you want to pack your bags and head for Green Bay or Cincinnati?

Look, most of us are Saints fans, and want the team to stay in New Orleans. But it all comes down to priorities. The state is facing major short falls in many critical areas. The Saints are a luxury and nothing more. Responsible legislators need to look closely at just how important a football team is to Louisiana, and at what price. Right now the price is high; maybe too high. But don’t worry about the Saints. They are just coasting along on the fast train of state subsidies and a singin’ ”Loot, Loot, Loot for the Home team.”

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“The pride and the presence of a professional football team is far more important than 30 libraries.”
-Art Modell, owner of the Cleveland Browns

Peace and Justice.

Jim Brown

You can read more of Jim’s writings along with all past columns by going to his website at www.jimbrownla.com.