BeldarBlog

NY appellate court throws Gunga Dan vs. CBS lawsuit out of court in its entirety

Just before last Christmas, in my most recent post about Dan Rather's much-publicized lawsuit against CBS, I explained that CBS' lead lawyer — my former law partner Jim Quinn — was operating under an unfortunate set of circumstances, as a result of which it was virtually certain that the case wouldn't shed any further or more definitive light on the Ra^thergate saga:

The problem ... — as I noted at length when Rather first filed his case, here ["The complaint that Sonnenschein's New York office has filed on Dan Rather's behalf ... is a nicely buffed and polished piece of garbage"] and here ["individual decision-makers within CBS may have overwhelming vested interests in ensuring that the facts are not thoroughly probed in court"] — is that Quinn's hands are effectively tied by the fact that his client was spectacularly gutless in its dealings with the psychotic prima donna who for so long occupied its anchor chair. Quinn's defense for CBS News won't be that Rather and Mapes and their entire team were incompetent, biased frauds who committed the worst kind of journalistic malpractice to change the outcome of a presidential election and then, when caught, tried to cover it up. CBS had ample, compelling, even glorious "good cause" to fire Rather no matter what time term remained on his contract or what other terms it contained to guarantee his preeminence at the network.

But CBS didn't do that. Instead, it convened the Thornburgh-Boccardi Panel, whose ultimate report was far from a bare-knuckled or clear-eyed assessment of the culpability of Rather and CBS News' top brass. CBS News eased Rather out, rather than immediately throwing his sorry butt on the street.

And now, instead of defending itself against Rather by using the awesome mechanisms of the law to prove, once and for all, the essential truths of Ra^thergate — including the indisputable fact that the Killian memos were pathetically obvious forgeries — CBS News' defense is not that Rather is a crazed scoundrel and a national disgrace, but that CBS fully performed its contractual obligations to Rather.

When I wrote that, Quinn had already persuaded the trial judge in New York state court to throw out major portions of Rather's claims without letting them go to a jury trial. New York procedural law permitted Rather to appeal that partial victory by CBS, and for CBS to cross-appeal the trial judge's refusal to throw out the rest of the case. Today, the intermediate New York appellate court, known as the Appellate Division (First Department), turned the trial judge's knockdown into an outright knockout — agreeing with Quinn (and Weil Gotshal & Manges partner Mindy J. Spector and associate Yehudah L. Buchweitz) that all of Rather's claims must be thrown out without a trial.

The 19-page opinion is dry and dull, which I'm sure is exactly what CBS and its lawyers preferred. After its introductory paragraphs, it contains essentially nothing about Bush, the Killian Memos, or the Ra^thergate controversy. Instead, the appellate court systematically demolished each of Rather's contract and tort claims, one after another, on what appear to be solid if unexciting grounds compelled by prior New York state-law precedents. At bottom, the appellate court concluded that it is indisputable that CBS lived up to its contractual obligations, and likewise indisputable that Rather couldn't show any damages of a sort recognized by New York law.

(Prof. Reynolds again justified his net moniker when he linked Volokh conspirator Jim Lindgren's post on the ruling with the summary "Loser Loses Again." Yes, that's it, in exactly three words.)

Rather's lawyers will doubtless seek rehearing in the Appellate Division, and when that is refused, they'll seek further review by the top appellate court in the New York state-court system, the New York Court of Appeals. I haven't read all of the briefing that led up to today's decision, and the briefs attacking and defending it haven't been drafted yet, but my educated guess at this point is that today's ruling will almost certainly hold up.

Thus (probably) ends the only lawsuit that could, under different circumstances (i.e., if CBS hadn't been so gutless), have given Dan Rather the thorough-going and definitive public crucifixion that he so richly deserved. I'm certainly not displeased to see my former colleagues so decisively win this case even before it went to trial, and I'm happier still that Rather undoubtedly spent a decent-sized fortune on paying his own lawyers. But as with the near-contemporaneous SwiftVets controversy from 2004, I'll always wish there had been an opportunity for the underlying facts to have been thoroughly and methodically probed through the civil justice system — by well-resourced and highly motivated parties, well-represented by superb counsel, each armed with the power to compel the production of documents and testimony, all under oath and in the harsh disinfecting glare of open court proceedings. John Kerry never made good on his or his surrogates' threats of litigation, and the target of Rather's malice, President Bush, would never have sued Rather, Mapes, or CBS even if their conspiracy had succeeded in tipping the election.

Sound arguments can be made that — my appetite for courtroom combat notwithstanding, and my belief that the civil justice system could have produced numerous significant "Perry Mason moments" in both — it's for the best that these two national controversies largely remained political, rather than spilling over into the courts. In any event, as the current publicity over Roman Polanski's re-arrest and possible extradition proves to all who have any moral compass whatsoever, there's a portion of the American public, mainly on the American left, who will essentially ignore even a sworn in-court confession by a monster who drugged and then raped (vaginally and anally) a child. Similarly, not even Rather or Kerry 'fessing up under oath could have persuaded some, or perhaps most, of the Bush-haters, because they long since had stopped being amenable to any evidence or any rational argument.

End legislative malpractice by amending the Constitution

From University of Tennessee constitutional law professor Glenn Reynolds, aka InstaPundit, an item with which I fiercely agree (ellipsis his):

DAVID POST: Should Lawmakers, Um, Read the Laws They’re Voting On?

Sounds like something you’d ask in a third-grade civics class. But an odd editorial in today’s Washington Post takes to task “a group of well-meaning professional activists — and, so far, over nearly 60,000 online petitioners” who have demanded that members of Congress sign a pledge “never to vote on any bill unless they have read every word of it.” While the activists “have a point,” the Post concedes, their “proposal would bring government to a standstill.”

That’s not a bug, it’s a feature ....

Every time I deal with a federal statute in the context of giving legal advice to a client — which is an utterly basic function of being a lawyer — I have to actually read and then understand the statute. My failure to do so would be malpractice per se — something absolutely indefensible, something never excusable under any circumstances. As soon as I admitted or it was otherwise proven that I didn’t read and understand the statute, the only question in a malpractice case would be the size of the damage award against me.

But if that’s an utterly basic function of being a lawyer who merely advises private clients on how the law may or may not apply, shouldn’t it be an even more basic function of a law-maker, a legislator, who creates the laws that apply to an entire country?

By no means am I saying that all legislators therefore must be lawyers. (They certainly already have staff lawyers to help them if they need or want such help.) But if an educated layman, with careful and close study, still can’t parse through the language of a bill and figure out what it does, and how it does what it does, then that says something awful and disqualifying about the legislator, the bill, or both.

A simple pledge, though, would be about as credible and enforceable as Obama’s promises that health care reform won’t add a single dime to the budget — which is to say, a cruel and illusory farce capable of taking in only the most simpleminded and naïve.

Accordingly: I would genuinely support a Constitutional amendment which required every Congressman and Senator, upon casting every vote, to swear under penalty of perjury — with existing perjury criminal penalties, PLUS instant disqualification from office — that he or she had read every word of everything he or she voted upon. Not just a summary (although they could read summaries too, if they chose) or a recommendation (again, fine as a supplement, but not as a replacement). Enforcement to be by a mechanism where 10% of either chamber’s members could indict and prosecute any member of either chamber for an alleged violation, trial to be held within 30 days on national TV, finder of fact to be a jury of 51 randomly selected voters (one from each state plus the District of Columbia), conviction and expulsion (without appeal) to be based on a simple majority vote.

For a bullet-proof practical defense — and indeed, perhaps even a prophylactic "safe harbor" provision written into the amendment or its enabling legislation to guard against unfair and untrue accusations — every legislator only needs a video camera to record him or her with an over-the-shoulder view of the text he or she is reading and the pages he or she is turning, perhaps with a side-shot of the notes he or she is taking too.  The videos can be posted on C-SPAN or YouTube along with congress.gov.

Note well: This is, and should be, a completely non-partisan "good government" issue. But I'm relatively sure which party's politicians would bitch and moan the loudest and fight the hardest.

You know you're an SOB when ...

Funniest quote I've read in the Houston Chronicle in some time:

“It doesn't matter if you have a snowsuit on — if you're touching customers, they're touching you — they're a sexually oriented business,” Geffin told the judge. “You can call yourself a restaurant, you can call yourself an ice cream truck, but if your drawing card is topless dancers, you're an SOB, and you have to comply with the rules.”

Ice cream trucks actually do good business in Houston in August even without snowsuits or topless dancers. The tips may not quite match up, though.

Of course, this injunction hearing is all just another boring day at the office for State District Judge Randy Wilson. I'm reasonably sure he hasn't asked for the litigants to arrange a "premises view" on-site during business hours: The Harris County Civil District Courts' budget contains no money for dry-cleaning judicial robes to get the glitter and make-up off.

Assistant Harris County Attorney Geffin is probably right, of course. But trying to enforce these particular laws is like trying to bail the oceans using a tea-cup. (Or, perhaps, a DD-cup.) Although I've never been there, I'm told that this particular strip joint entertainment venue is outside the City of Houston, well away from churches, schools, or family neighborhoods, and indeed that it's quite literally out in the middle of the woods. One has to wonder whether the Sheriff and Harris County Attorneys don't have other, more (ahem) pressing matters to investigate and prosecute with their limited resources.

"Sotomayor & Associates" ... meh, who cares?

Nothing has happened since May 26 to make me change my initial take on Pres. Obama's nomination of U.S. Circuit Judge Sonia Sotomayor to fill Justice Souter's seat on the Supreme Court. (That take, in short, was this:  Obama would never nominate anyone of whom I approved, and Judge Sotomayor, if confirmed, will vote the same way as Souter has, but be no more effective than Souter was (and perhaps less so) at swaying the Court's swing vote, Kennedy, in close cases. Republicans should use every opportunity to demonstrate how disastrous it is for the country and the Constitution to have liberal Democrats like Obama in a position to pick politically liberal and judicially activist SCOTUS Justices. But expecting to defeat Sotomayor's nomination is unrealistic unless something big and new comes up from her past, and I'm very grateful Obama didn't nominate someone who'd be much more effective.)

Now it appears from a NYT story that between 1983 and 1986, on behalf of some friends or friends of friends, Sotomayor wrote a few wills, incorporated a few businesses, or helped skim the closing documents for a few condo sales under the exaggerated firm name of "Sotomayor & Associates" while she was really a full-time employee of the Manhattan D.A.'s office or another law firm.

I agree with my blogospheric friend and fellow lawyer Andrew McCarthy that it doesn't take a sophisticated legal analysis for anyone, lawyer or layman, to recognize that claiming to be "Sotomayor & Associates" — when you really don't have any associates — is stupid and misleading.  It ought not be done. (On this topic more generally, see also Eric Turkewitz, Jim Lindgren, Glenn Reynolds, John Steele, and the Washington Times,)

I very, very seriously doubt, however, that lawyer Sotomayor's transgression in exaggerating the size of her firm ever actually misled anyone. As small potatoes go, this one is pea-sized or smaller. And as misrepresentations with disastrous public consequences go, this one is utterly microscopic in comparison with, for example, almost any one of Obama's presidential campaign promises, or his own claims to have had significant experience to prepare him for that office.

(Personal disclosure: My own solo law firm — likewise an unincorporated sole proprietorship whose name is only a d/b/a (albeit one duly registered with Harris County) — is carefully designated "Law Office of William J. Dyer" on my letterhead, pleadings, website, and elsewhere to avoid implying more than one regular place of business, more than one lawyer, or any incorporated status that would potentially limit or complicate my personal liability for debts of the law practice. It's a traditional name, but terribly stuffy and boring. I'd rather simply use "Dyer Legal" to correspond with my business internet URL, but the State Bar of Texas — for reasons that are entirely opaque and directly contrary to the square holding (at footnote 12 & accompanying text) of at least one federal district court opinion adopted by the Fifth Circuit — considers that to be an impermissible "trade name" which might mislead the public into thinking that I'm making some representation about the quality of my legal services as compared to other lawyers, which Texas lawyers are forbidden to do. I think state bars in general, including my own, have historically done pathetically bad jobs of preventing genuinely misleading information about lawyers and their services from being spread in the marketplace. I also think that they've almost completely defaulted in their obligations to instead ensure that meaningful and accurate information — information which would help promote informed consumer decisions, and which would tend to drive out misinformation — is constantly available to the public in usable forms. There ought to be no commercial market for an advertising-sponsored legal information-gathering and -distributing service like Avvo.com, for example, because state bars, individually or (better) collectively, ought to have already done all that and more, and have done it much better, via the internet. Which is to say, on this set of legal ethics/public interest issues, I'm a self-interested, grumpy curmudgeon, but not entirely a traditionalist. I do care about these issues, in other words, but I don't think they matter much in the context of the Sotomayor nomination.)

POTUS as the Great Defender of the Faith

Did you have the same reaction that I did back in 2001 when — in an official speech specifically directed to the Christian world during one of his trips to the Middle East, a speech whose official theme was "A New Beginning" — President George W. Bush firmly rejected the constitutional separation of church and state, and instead proclaimed that his official duties included the defense and promotion of one religion (emphasis mine):

So I have known Christianity on three continents before coming to the region where it was first revealed. That experience guides my conviction that partnership between America and Christianity must be based on what Christianity is, not what it isn't. And I consider it part of my responsibility as President of the United States to fight against negative stereotypes of Christianity wherever they appear. (Applause.)

Except ...

That was actually today, not 2001. It was President Obama, not President Bush. And it was Islam, not Christianity.

It's fine for an American President to try to understand, respect, and avoid giving unnecessary offense to Muslims, in or outside of America. But pandering to them is unseemly. And pretending that "fight[ing] against negative sterotypes of Islam wherever they appear" is "part of [the] responsibility [of the] President of the United States" is grotesque. Did our self-proclaimed former professor of constitutional law actually read this speech before he delivered it from his teleprompter? If he did, then that raises the question: Has he actually read his present job description, or the rest of the Constitution and its amendments?

---------------------------

UPDATE (Mon Jun 8 @ 7:40pm): As commenter K~Bob mentioned below, Houston-based talk-radio host (and AM Operations Manager for Clearchannel AM stations KTRH, KPRC, and KBME) Michael Berry, guest-hosting for Mark Levin on his syndicated national radio show last Friday, twice referenced and read approvingly from this post on the air. Mr. Berry was kind enough to phone me today and also to send me a link to a podcast of the broadcast, for all of which I'm genuinely grateful!

Beldar's initial take on the Sotomayor nomination

Elections have consequences and, as he's prone to remind us, Obama won. I firmly believe that the President of the United States has the right to choose who he wants as his nominees to the Supreme Court, and that the Senate, in its advice and consent role, ought to confirm those nominees unless they're objectively unqualified. Of course that is not the rule Obama, Biden, or Clinton followed as senators; but notwithstanding their perfidy, and the fact that such perfidy is more typical of their party than of the GOP, I still think the GOP senators did the right thing when, for instance, the Senate approved President Clinton's nomination of Ruth Bader Ginsburg by a vote of 96 to 3 in 1993. And yes, of course John Roberts ought to have been confirmed as Chief Justice by at least that kind of margin, and yes the Dems who voted against him are unprincipled hyper-partisan bastards. So what else is new?

(An aside, apropos of very little: When I was puttering around my father's house during a visit to my hometown in January, I happened upon an unbound issue of the Texas Law Review — specifically, Volume 57, No. 6, dated August 1979. It was on my non-lawyer father's bookshelf — and it's certainly the only legal periodical to be found anywhere in the house — because it contains my one and only published law review article (or, more technically, my "student note" that I wrote as a second-year law student and new member of the Review). I hadn't looked at that issue, though, since some time in the early 1980s, and I had quite forgotten that one of the lead articles in that issue was entitled "Ratification of the Equal Rights Amendment: A Question of Time." The author? Ruth Bader Ginsburg, then a professor at Columbia Law School.)

In any event, there's never been any chance that President Obama would nominate a replacement for Associate Justice David Souter of whom I would thoroughly approve, or mostly approve, or even much like. Nor has there ever been a realistic chance that someone with the minimal objective qualifications could be effectively filibustered, much less defeated in an up-or-down confirmation vote, given the current composition of the Senate. As a practical matter, the most that conservative GOP senators could realistically hope for is to nudge whoever Obama nominated out onto some long and slender limbs during her confirmation hearings — possibly generating some pithy sound-bites that can legitimately become grist for the public mill when the GOP asks the American public again in 2010 and 2012, "Do you really want the Democrats to have such a free hand in putting this kind of person onto the federal bench?" And that's still a goal that's definitely worth pursuing, especially if the GOP members of the Judiciary Committee can treat their own rampant and chronic cases of "senatoritis" (that is, making speeches rather than actually asking pithy and comprehensible questions which will genuinely probe the nominee's beliefs and judicial temperament).

Based upon what I know of her so far, in U.S. Circuit Judge Sonya Sotomayor, Obama seems to have passed the "minimum objective qualifications" bar. This is no surprise, no more than the fact that this is a blatantly racist and sexist selection made to appease the Democratic Party's loathsome identity politics. However, Karl Rove made a good point on one of the Sunday talking head shows this weekend when he pointed out that the Obama Administration can't possibly have vetted her (or any of the other finalists) nearly as thoroughly as the Bush-43 Administration had vetted Roberts and Alito, so I reserve the right to change my opinion if some significant disqualifying facts pop out now that she's under everyone's microscope.

Beyond that, my main reaction to the Sotomayor nomination is actually a sigh of relief. This is guesswork on my part, mind you. But from what I know of them, my strong gut hunch is that either of the other two purported "finalists" whose names had been floated in the press — newly confirmed U.S. Solicitor General Elena Kagan or U.S. Circuit Judge Diane Wood of the Seventh Circuit — had significantly greater potential to become extremely effective in influencing Mr. Justice Anthony "Sweet Mystery of Life" Kennedy. (Indeed, the potential nominee I feared the most, and for that very reason, was Obama buddy Cass Sunstein, who I think would have absolutely owned Anthony Kennedy within his first six months on the Court.) Had Obama chosen someone likely to become particularly influential with Justice Kennedy, that could have made a significant, and oftentimes outcome-determinative, difference on some substantial portion of the very close decisions on the Court over the next several years, even if we assume that the new junior-most Justice will mostly vote as we expect Justice Souter would have done. I don't think Justice Souter has been especially effective in influencing Justice Kennedy, however, and I don't have any reason to believe that Judge Sotomayor, if confirmed to the SCOTUS, will be either.

Supermax prisons' no-escape record doesn't answer concerns about moving Gitmo terrorists onto U.S. soil

I'm already very tired of hearing the stupidest new talking point of the mainstream media: "Why worry about bringing terrorists from Gitmo to the mainland U.S., when we've never had a single escape from a federal 'Supermax' prison?" Duh. This is the sort of 9/10/01 thinking, the sort of "treat global terrorism like a domestic law enforcement problem," that is going to get people killed.

The risk isn't just, or even primarily, that the terrorists will escape, or that they'll misbehave while in custody, although those are indeed considerable risks that ought not be dismissed out of hand. Nor is the risk just, or even primarily, that being on U.S. soil will strengthen the prisoners' potential legal claims and defenses — although that's a considerable risk, too.

Rather, the most serious risk is that the same type of terrorist organization that mounted a simultaneous four-plane multi-state flying bomb assault on the Twin Towers and the Pentagon on 9/11/01 would welcome the opportunity to assault any holding facility on American soil, or whatever community was closest thereto, in an attempt to force the captured terrorists' release. Simply put, friends and neighbors: Any holding facility for radical Islamic terrorists on American soil would be a target and a potential "rescue mission" for which al Qaeda or its like would delightedly create dozens or hundreds of new "martyrs" from among their own ranks.

Right now — as has been continuously true since the first prisoners were shipped there after we began operating against the Taliban in Afghanistan — these terrorists' would-be "rescuers" can't assault Gitmo without first getting to Cuba and then defeating the U.S. Navy and Marine Corps at sea, on land, and in the air. That's not the kind of fight they want; those aren't the kind of logistical hurdles they can ever overcome. Keeping all the captured terrorists at Gitmo, in other words, has played directly to our strongest suit as a nation — our superb, unparalleled, and highly professional military strength as continuously projected in a place of our choosing without risk of collateral casualties among American civilians.

But once the scene shifts to American soil, we lose virtually all of that combination of power and flexibility, and surrender back to the terrorists all the advantages upon which they regularly depend. Getting into the U.S., or using "sleepers" already here? In a fight against some local sheriffs or prison guards armed mostly with revolvers and tasers (perhaps supplemented with shotguns or even a few assault rifles, but no heavy weaponry at all)? With the fighting to take place in or even near any American population center? Can the Obama Administration possibly be so stupid as to forfeit all of our own advantages, and give all of the terrorists' advantages back to them? Can they do that for no better reason than to placate the idiots on the Hard Left who still have failed to heed the warnings on those Viagra/Levitra commercials? (Their hard-ons for George W. Bush have lasted now for substantially more than four hours — indeed, for more than eight years! — but they're still not seeking immediate medical, which is to say, psychiatric, attention.) I'm very afraid that the Obama Administration's answer to these questions may remain: "Yes we can!" (Followed by, "Shut up! We won.")

If instead you distribute the current Gitmo prisoners among many American locations, you still forfeit all of the advantages of Gitmo, while simply multiplying the number of potential targets that we have to protect, and without significantly diminishing the potential propaganda rewards to their would-be terrorist rescuers from even a single assault. Their international publicity coup would be about the same — humiliating the "Great Satan" again on its own soil — whether they sprang two prisoners or two hundred. And for that matter, their PR purposes don't require them to actually succeed in the rescue attempt, just to get a lot of non-terrorists killed too.

As for why domestic history with merely criminal organizations isn't instructive: The Mafia, or the Colombian drug-lords, or whatever other allies there may be of those who've been successfully held in Supermax and other American civilian prisons, generally aren't willing to engage in mass suicides to free their incarcerated compadres. Nor are they inclined to try to kill thousands of American civilians in the process of effecting a rescue. "Terrorism" is a sideshow for them, a temporary and small-scale means to generate financial profit. And while they have money and access to at least paramilitary weapons, they don't have the kind of rogue state support (think Iran and potentially North Korea) that may be available to our enemies in the Global War on Terrorism — ummm, errr, Global War on Man-Caused Disaster-Creators.

Security for the terrorists now being held at Gitmo, in short, isn't just a question of "keeping them in." It's necessarily a question of keeping them where they can't get to others and others can't get to them — or anywhere remotely close to them.

OMG! Like, before he was 30, Obama was a law review editor! ZOMG-OMG!!1!

From the New York Times:

Many American presidents have been lawyers, but almost none have come to office with Barack Obama’s knowledge of the Supreme Court. Before he was 30, he was editing articles by eminent legal scholars on the court’s decisions.

I'm sure the ghost of William Howard Taft, who'd been a judge on the U.S. Court of Appeals for the Sixth Circuit before he became POTUS, and who later (between 1921-1930) became the Chief Justice of the United States, is duly impressed that for one year in the early 1990s, Barack Obama edited law review articles about Supreme Court decisions. I'm sure the ghosts of Richard M. Nixon (No. 3 in his class at Duke Law and a name partner in a major New York law firm) and Gerald Ford (top quarter of his class as a scholarship student at Yale Law) — or for that matter, Bill Clinton (Yale Law grad, former regular faculty member at the University of Arkansas Law School) — are all just overwhelmed by the thought that a part-time non-tenure track lecturer who taught seminar classes in the basement at Chicago Law School, and who allowed his own law license to become inactive in 2002 (but who nevertheless continued to permit his part-time law firm to hold him out to the public as "of counsel" until 2004), is now going to pick the next member of the SCOTUS.

Almost every law review editor edits "articles by eminent legal scholars on the [Supreme C]ourt's decisions." Law reviews publish more stuff about SCOTUS decisions than about everything else put together. Obama, having interrupted his education for several years between college and law school, was unusually old to be a law student and, thus, unusually old to be a law review editor. By comparison, I was editing manuscripts by eminent legal scholars on the Supreme Court's decisions when I was 21, which made me a bit younger than the average law review editor. Big deal.

Besotted nitwits. In next Sunday's edition of the NYT: "Obama learned to tie his own shoes (with hardly any knots!) before he was eleven!" Surely he is The One!

Why I celebrate Chrysler's petition for Chapter 11 reorganization

Count me as one person entirely unsurprised to read that representatives of the Obama Administration were making outrageous and improper threats to the Chrysler bondholders whose refusal to capitulate ended up in Chrysler's Chapter 11 filing. White & Case bankruptcy lawyer Tom Lauria gave a radio interview to Detroit talk radio host Frank Beckman, portions of which are transcribed here, in which he said:

One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under the threat that the full force of the White House Press Corps would destroy its reputation if it continued to fight. That’s how hard it is to stand on this side of the fence.

Beckman: Was that Perella Weinberg?

Lauria: That was Perella Weinberg.

And Obama himself actively participated in the shakedown:

Peter A. Weinberg and Joseph R. Perella are part of a band of Wall Street renegades — “a small group of speculators,” President Obama called them Thursday — who helped bankrupt Chrysler.

That, anyway, is the Washington line.

In fact, Mr. Weinberg and Mr. Perella, with sparkling Wall Street pedigrees, are the epitome of white-shoe investment bankers. And their boutique investment bank, a latecomer to Chrysler, played only a small role in the slow-motion wreck of the Detroit carmaker.

But now the two men, along with a handful of other financiers, are being blamed for precipitating the bankruptcy of an American icon. As Chrysler’s fate hung in the balance Wednesday night, this group refused to bend to the Obama administration and accept steep losses on their investments while more junior investors, including the United Automobile Workers union, were offered favorable terms.

In a rare flash of anger, the president scolded the group Thursday as Chrysler, its options exhausted, filed for bankruptcy protection. “I don’t stand with those who held out when everyone else is making sacrifices,” Mr. Obama said.

Chastened, and under intense pressure from the White House, the investment firm run by Mr. Weinberg and Mr. Perella, Perella Weinberg Partners, abruptly reversed course. In a terse statement issued shortly before 6 p.m. Thursday, Perella Weinberg Partners announced it would accept the government’s terms.

It was too late.

What made Perella Weinberg ultimately give in, when others like Oppenheimer Funds refused? One word: Vulnerability (emphasis mine):

Representatives for Perella Weinberg, which is advising the government on a wide range of banking issues, initially defended the firm’s decision to rebuff the government’s offer.

(Recall that I blogged on March 26 of this year about the odd fact that Obama's chief of staff, Rahm Emanuel, had earned somewhere between $16-$20 million in something between two and three years as an investment banker at Wasserstein Perella & Co. when the Clinton Administration went into exile in 2001, even though Emanuel had zero education, training, or experience as an investment banker or any sort of businessman. And yes — that's the same Perella; he'd moved on to Morgan Stanley by the time Emanuel was at Wasserstein Perella & Co., but it's such a small world, isn't it?)

Glenn Reynolds and Ed Morrissey note the White House press corps' silence — which might be read to imply acquiescence — about being used as part of this threat. And I agree that that's an interesting facet of the story.

The bigger story, however, is that the Obama administration is engaged in a colossal abuse of power whose magnitude far exceeds a mere subversion of the White House press corps. Barack Obama has become Guido, the thug who everyone knows has not only a nasty habit of, but a nasty taste for, breaking kneecaps. And the beneficiary of his current shakedowns are the United Auto Workers.

Obama is counting on the fact that many, probably most, Americans don't know or care about basic principles of corporate finance. But the fact is that all investments — stocks, bonds, notes, commercial paper, CDs, demand deposits, mutual fund shares, whatever — are legal contracts whose very nature is defined by the way they structure and allocate risk of default and prospect for profit.

On the simplest level, for example, in general, people who buy equity in a business, typically by purchasing shares of its common stock, have the greatest potential upside if the business is profitable because they're buying a percentage interest in it, and if the pie keeps getting larger, so too will their slice of the pie. Someone who instead merely loans money to that business — by buying, for example, notes or bonds or debentures that are, at bottom, fancy IOUs — generally forgoes that upside potential, and instead takes only a promise for repayment plus some specified and limited amount of interest. But in general, those who invest by loaning money to businesses also have less risk, because in bankruptcy proceedings — again, speaking on the broadest of terms, and as a general rule — creditors who are owed money by the bankrupt company's estate are ranked, and then paid or otherwise accommodated, before any equity owners (shareholders) get anything. And as a consequence, it's very typical for creditors to get pennies on the dollar, perhaps plus some shares of equity in a reorganized "new" post-bankruptcy company, while the shareholders have been wiped out completely.

And among creditors, there are also rankings. Those who've insisted upon and gotten collateral for their loans — making them "secured creditors" — generally forewent higher interest rates in exchange for the pledge of that collateral. Those who have no collateral, but merely a general, unsecured claim for repayment, are "unsecured creditors." They relied only on the company's general credit-worthiness and, to a lesser extent, the better treatment that even general unsecured creditors get in bankruptcy as compared to equity holders.

I repeat, this is all basic to the entire system of business investments. If these core principles are disturbed, there will be no more capital markets — no ability to buy shares of stock or corporate bonds, no way for growing companies to expand by selling equity or taking on debt.

What the Obama Administration has been trying to do, however, has been to cajole or — it's now becoming more clear — threaten people who carefully bargained for less risk, and who thereby had to settle for lower rewards all along, into voluntarily forfeiting the protections they bought and paid for in the event of the underlying business' insolvency. Primarily through Chrysler's pension and retiree health-care obligations, the UAW is a creditor of Chrysler, but one whose position is less favored by the bankruptcy laws than the investors (debt holders) represented by companies like Oppenheimer Funds or Perella Weinburg. Unlike the UAW, their clients negotiated, bought, and paid for the rights not to have to have to make the same "sacrifices" that equity holders or general unsecured creditors would be compelled to make under the bankruptcy laws. But Obama insists — on pain of presidential demonization and worse — that these so-called "renegades" and "speculators" (who've actually been guilty of nothing other than greater prudence) make those sacrifices anyway, and that they do so specifically in order to benefit the UAW!

This goes beyond populism or pro-unionism. Barack Obama is engaged in an assault on not just the entire system of business in the free world, but on the American rule of law upon which it is founded. And that, gentle readers, is why I celebrated Chrysler's Chapter 11 filing. Instead of backroom deals made through strong-arm tactics, whatever happens now will take place under the disinfecting sunlight of the United States Courts. And that will, in turn, help frustrate Barack Obama's scheme.

Oh, I fully expect that even in bankruptcy court, the Obama Administration will continue to work hard to tilt the playing field to favor the UAW and to disfavor everyone else. It will continue to at least try to call most of the shots as Chrysler struggles toward a reorganization plan. And it's not inconceivable to me that Obama will try to enlist Congress' cooperation — custom "tweaks" of the Bankruptcy Code — in an effort to do so.

But it's going to be harder for the Obama Administration to continue making these unconscionable threats now that there is at least some due process structure that must be followed. And while the federal government is frequently involved in one way or another in bankruptcy proceedings, I can confirm to you from personal experience that it doesn't always get its way there. (But that's a long story I'll save for another day.)

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UPDATE (Sat May 2 @ 8:00pm): As has often been disclosed elsewhere on this blog and on my professional website, although bankruptcy court litigation has been only an occasional part of my practice, I was a litigation partner at Weil, Gotshal & Manges from 1989-1991. WG&M has long represented General Motors; I did trivial amounts of work for GM when I was at WG&M; and WG&M will likely be its bankruptcy counsel when and if GM also files for Chapter 11 protection. Oppenhemier & Co. was also a WG&M client when I was there, and I represented it from time to time on non-bankruptcy related matters. But I don't currently represent anyone with an actual or potential interest in either the Chrysler or (potential) GM bankruptcies, and my current practice mainly focuses on representing small businesses — some of whom are debtors and some of whom are creditors, but all of whom respect and abide by the rule of law that Barack Obama is trying to undermine.

UPDATE (Sat May 2 @ 8:45pm): Count the usually sane Steven Pearlstein of the WaPo as one of those blood-thirsty fans who are cheering Guido the Kneecapper from the galleries (emphasis mine):

The creditors are right when they say that Obama offered a sweetheart deal to Chrysler's employees and retirees, who as unsecured creditors would have stood in line behind banks and hedge funds in a liquidation and would probably have received nothing. It's also true, as the unhappy creditors point out, that it was the above-market wages and benefits negotiated by the United Auto Workers that helped to bring Chrysler to the brink of bankruptcy in the first place.

But those arguments are really beside the point. If the U.S. government wants to lend billions of dollars to help save the jobs, pensions and health benefits of hundreds of thousands of workers, that is certainly its prerogative. And it doesn't have to extend the benefits of that bailout in equal measure to the banks and hedge funds that stupidly lent $6.9 billion to finance a highly leveraged buyout of a long-troubled automaker.

Shorter version: Screw the law, screw your contracts, screw what's fair and who's to blame — we won. Now Pappy Obama is gonna give and give to the UAW, using a combination of tax dollars (just a bit), deficit spending (quite a bit), and money that, by law and all the rules upon which our business system was built, should go to people who loaned money to Chrysler when no one else would, but on terms that were supposed to protect them from this kind of thuggery.

Disgusting. And tragic.

UPDATE (Sat May 2 @ 11:30pm): Megan McArdle asks a good question and makes a good point, but you'll have to decide for yourself whether they're naïve or merely rhetorical (h/t InstaPundit):

[W]hen did it become the government's job to intervene in the bankruptcy process to move junior creditors who belong to favored political constituencies to the front of the line? Leave aside the moral point that these people lent money under a given set of rules, and now the government wants to intervene in our extremely well-functioning (and generous) bankruptcy regime solely in order to save a favored Democratic interest group. [That's exactly the moral point Pearlstein, quoted above, honestly but eagerly discarded and then defecated upon. — Beldar]

No, leave that aside for the nonce, and let's pretend that the most important thing in the world, far more interesting than stupid concepts like the rule of law, is saving unions. What do you think this is going to do to the supply of credit for industries with powerful unions? My liberal readers who ardently desire a return to the days of potent private unions should ask themselves what might happen to the labor movement in this country if any shop that unionizes suddenly has to pay through the nose for credit. Ask yourself, indeed, what this might do to Chrysler, since this is unlikely to be the last time in the life of the firm that they need credit. Though it may well be the last time they get it, on anything other than usurious terms.

The reason I think they might be simply naïve is that unless the Obama Administration's desires and efforts are indeed checked by the disinfecting sunlight of the bankruptcy court and the rule of law, not even someone permitted (contrary to law) to lend money to Chrysler on usurious terms will do so. If the federal government can get away with stripping your creditors of all of their contractual protections — collateral-smatteral! hah! — to effect a massive transfer of wealth from them to the government's current favorites, then it doesn't matter if you're paying 50% or 150% interest per annum: No one will lend any money on any terms.

I'm wondering if Ms. McArdle (who I adore as a fine writer and a fine thinker, a libertarian economist of the first rank) is still laboring under the delusion that the Obama Administration gives a rat's patoot over the "long term" or the "integrity of the marketplace" or the "rule of law." Her point is entirely valid, just as it would have been entirely valid to lecture John Dillinger on how he and his loved ones would ultimately be better off living in a society whose would-be bank robbers restrained their inclinations and instead worked hard and invested for the long term. But valid doesn't mean effective, and that argument wouldn't have worked on Dillinger. It won't work on Guido the Kneecapper Obama either, because there are still massive amounts of loot yet to be redistributed from those who've earned it to those who merely want it (and can be relied upon to vote a straight Democratic ticket).

Doesn't Ms. McArdle understand? Obama won. If he and his friends at the UAW had any care for the long term and the national good, they wouldn't have methodically killed the golden goose that was supposed to fund all those pension and health care obligations in the first place.

NYT again misreports maximum potential penalty that could have been sought against surviving Somali pirate

U.S. Magistrate Judge Andrew J. Peck of the United States District Court for the Southern District of New York has ruled that the surviving Somali pirate captured by the U.S. Navy after attempting to hijack the M/V Maersk Alabama, Abduwali Abdukhadir Muse, will stand trial as an adult. In so doing, Judge Peck credited testimony yesterday from New York City Detective Frederick Galloway, who — according to the New York Times — "who went to Africa as part of an investigative team." Detective Galloway testified that

Mr. Muse, after giving different ages, said he had been untruthful, apologized and said he was “between 18 and 19.”

“He also said, ‘I’m sorry for lying to you,’” Detective Galloway testified. “He said, ‘When I pray again, I’ll ask Allah to forgive me for lying to you, and I won’t lie to you again.’”

Judge Peck rejected as "incredible" contrary testimony given by Muse's purported father (through an interpreter and via a telephone hookup to Somalia) to the effect that Muse is only 15 years old. As for suggestions that Muse was merely a passive follower of the other pirates, the NYT story reports:

Disputing his father’s portrayal of his son as an unwitting dupe, prosecutors say Mr. Muse conducted himself as the leader of the pirate gang, and was the first among them to climb aboard the Maersk Alabama on the morning of April 8 in the Indian Ocean off of Somalia.

He fired his gun at the captain, Richard Phillips, who was still on the bridge, and then entered the bridge with two other armed pirates, and demanded money, the complaint said.

In fact, the Department of Justice's sworn criminal complaint filed against Muse is considerably more damning as to Muse's overall role in these events than the NYT's summary. According to the complaint(caps in original):

MUSE entered the Bridge, and told the Captain to stop the ship. MUSE, who conducted himself as the leader of the Pirates, later demanded money from the Captain. MUSE and two other Pirates, each of whom was armed with a gun, then walked with the captain to a room on the Maersk Alabama that contained the ship's safe. The captain opened the safe and took out approximately $30,000 in cash. MUSE and the two other Pirates then took the cash.

And the complaint likewise disputes previous press suggestions that Muse had "effectively surrendered" by boarding the USS Bainbridge before Navy SEAL snipers shot and killed his co-conspirators (italics mine):

On April 12, 2009, MUSE requested and was permitted to board the USS Bainbridge. The other three Pirates continued to hold the Captain on the Life Boat. On the USS Bainbridge, MUSE continued to demand for himself and the other Pirates safe passage from the scene in exchange for the Captain's release. In addition, MUSE received medical treatment.

Muse wasn't surrendering, in other words, and hadn't "withdrawn from the conspiracy," but was instead continuing to convey threats that his co-conspirators would kill Captain Phillips unless all of the pirates, including Muse, were released and guaranteed their continued freedom.

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This NYT story — like every other mainstream media report I've seen since the attempted hijacking and hostage-taking — again incorrectly claims that life imprisonment is the most severe penalty available for any of the crimes with which Muse could be charged. As I wrote last week, 18 U.S.C. § 1203(a) provides that "if the death of any person results, [hostage-taking] shall be punished by death or life imprisonment." The statute doesn't require that the defendant himself have committed the homicide, nor that the victim of the homicide be one of the hostages. Rather, as with many state felony murder laws, all that section 1203(a) literally requires is that the hostage-taking have resulted in "the death of any person" for its violation to become a capital crime punishable by death. The criminal exposes himself to this penalty by taking part in a crime which ends up getting anyone killed as a result, even if it's an innocent bystander killed by accident, or even if it's one of his accomplices and co-conspirators who's killed in a justifiable homicide by law enforcement officers.

Hostage-taking in violation of section 1203(a) is indeed one of the five counts with which Muse has now been charged. However, the DoJ did not see fit to include in the charging language for that count an allegation that the hostage-taking resulted in the "death of any person," so Muse appears to be at risk for nothing worse than a life sentence as the case presently stands.

Section 1203(a) is not a complicated or long statute, and it's simply inconceivable that the prosecutors were unaware that it permits capital punishment when the hostage-taking has resulted in the "death of any person." So we must assume that the decision not to to charge the crime in a manner that would permit the death penalty under section 1203(a) was a deliberate one.

Such decisions fall within the general realm of "prosecutorial discretion." Because prosecutors are responsible not only to do what's right but to do justice, not every crime that could be charged should be charged. And one may argue with a perfectly straight face that Muse's relative youth (even if, by his own admission, he wasn't below the age of 18) and poverty-stricken life, plus the fact that only bad guys got killed, were enough in the way of mitigating factors to justify the prosecutors' decision not to seek the death penalty. Were I in their shoes, I probably would have been inclined instead to leave that to the jury to decide. But I am not accusing these prosecutors of having abused their discretion; and indeed, in other respects, the complaint is commendably robust.

But I do think that the mainstream media ought to truthfully report that the death penalty could indeed have been sought by the Obama Administration. This isn't quite the "Wag the Dog" scenario I've been predicting. But Obama's spinmeisters have been quite aggressive in seizing this as an example of "Obama as Tough Father Figure." It's bad practice, but unfortunately common (verging on universal), for the mainstream media to aid and abet Obama in such exaggerations, and this is simply another example of that.

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UPDATE (Wed Apr 22 @ 11:45am): It's hard to overcome the defendant's own confession as to his age in the best of circumstances, but from another report of yesterday's hearing, this time from the NY Daily News (h/t Althouse), we see that there were further problems with the defense team's contention that Muse is a minor (italics mine):

The judge called Muse's father, who said the suspect was his eldest son, born in November 1993, making him just 15.

Pressed further, the father said his fourth-born son was born in 1990 — and the judge ruled his testimony was not credible.

Muse's court-appointed lawyers said they will appeal the age ruling and also want to see if he's subject to Geneva Convention rules on international prisoners.

They said he was shackled and blindfolded for eight days and had not been given pain medication for his hand in 24 hours.

"He is extremely young, injured and terrified," said lawyer Deirdre von Dornum.

To which my first reaction is: Poor (probably intercontinental) wood-shedding of the father by defense lawyers? If your witness' story depends on the proposition that time flows backwards when you get close to the equator, he may have some credibility problems.

The initial "appeal" of the age ruling will be not to the Second Circuit, but rather to the United States District Judge under whose authority Magistrate Judge Peck is proceeding. Unless they can come up with a lot of new and better evidence to cast doubt on the defendant's admission to the NYC police detective, though, along with an explanation for why they didn't have that evidence yesterday (which may be less problematic, given the international nature of the case and their very recent engagement), defense lawyers are very unlikely to win that appeal. District judges tend to be pretty deferential to their magistrates' fact-findings.

Statements to the press like Ms. von Dornum's tend to blow up in lawyers' faces when the prosecution shows videotape of the "extremely young, injured and terrified" defendant threatening a hostage with an AK-47. By overplaying their hand, his lawyers are ultimately doing their client no favor. But a companion article, quoting a criminal defense lawyer not part of Muse's team, shows just how tone-deaf defense lawyers can be (italics mine):

"You've got an 18-year-old kid who has no education. He's as poor as they come, and he got caught up with these pirates," veteran defense lawyer Martin Geduldig said.

"In a sense, he's as much a victim as anybody else," said Geduldig, who is not involved in Muse's defense.

Friends and neighbors, any lawyer who makes that argument will forfeit all credibility with the jury and judge. If that's the best argument you've got, you should probably get your client's consent to plead him guilty on the best deal you can get, and then hope for whatever marginal sentencing leniency you may can find in the discretion of the court, if there's any to be found. Argue mitigating circumstances as hard as you can; but don't go over the top, which is where you are when you claim your client is "as much a victim" as the guy he shot at repeatedly, robbed at gunpoint, kidnapped and took hostage, beat up, and repeatedly threatened with death as part of a crime spree stopped only by the precision marksmanship of three Navy SEAL snipers.

UPDATE (Wed Apr 22 @ 1:30pm): And now the AP reports that Muse's mother insists that he's actually 16, but "'wise beyond his years' — a child who ignored other boys his age who tried to tease him and got lost in books instead." And the AP, once again, ignores the capital punishment angle.