Legal Briefing: Was SEC's Goldman Suit Political?
A daily look at legal news and the business of law:
SEC's Goldman Politics Were Not Really So Scandalous
In the wake of the Securities and Exchange Commission's decision to sue Goldman Sachs (GS) for fraud, many Republicans accused the agency of playing politics, using the suit to motivate the passage of financial reform legislation, and asked the SEC's Inspector General H. David Kotz to investigate the suit's timing. Although the IG has not yet released his report, he testified before Congress that the agency's suit was politically timed, but not in relation to financial reform legislation, or indeed, any legislation, reported the Wall Street Journal.
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Instead, Kotz suggested the timing of the suit was a classic publicity move. On the same day the suit was filed, the SEC released a report by Kotz castigating the agency for missing the R. Allen Stanford Ponzi scheme. The report, however, got buried by the publicity attending the Goldman suit.
The implications of the two charges of politics are very different. The original tale suggests a multi-branch governmental conspiracy to advance the Democrats' agenda. The other suggests an embattled agency trying to make itself look good. And if PR is all it was about, that's not much of a scandal, particularly given the governmental politicization standard set by the Bush Administration.
At this point, Kotz isn't ready to make even that charge stick; he told Congress "I can't give you a conclusion right now, but [the timing] was suspicious."
GMAC Mortgages Flawed Nationwide
The growing scandal of GMAC trying to foreclose on homes without playing by the rules may double in size. GMAC has claimed the problem was limited to 23 states, but people in other states are finding "flawed and forged documents," too, reports the Washington Post. How bad is the problem? The Texas and Iowa attorneys general are investigating, reports Bloomberg, so we should find out. The bottom line for now is: If the bank foreclosing on you is GMAC, run -- don't walk -- to check out the papers in your file. And if it's not GMAC, do it anyway. Advocates claim many banks are doing the same things.
Delinquent Harrisburg Authority Tries to Make Good
As Pennsylvania's capital contemplates bankruptcy -- in part because it's liable for the debts of the Harrisburg Authority -- the Authority has begun taking steps to make good on its debt, reports Bloomberg. Meanwhile, the Authority's bond insurers aren't waiting around. Earlier this month, they sued the Authority and the city, hoping to force a property tax increase or other measure to generate the revenue to make the payments.
Justice Wants Judge To Leave "Don't Ask Don't Tell" in Place
Judge Virginia A. Phillips recently ruled the military's "Don't Ask Don't Tell" policy against gays serving openly in the military is unconstitutional. Now the Obama Administration has asked her not to enforce that ruling, reports Main Justice. Even though President Obama, himself, opposes the military's policy, the Justice Department objects to the judge's ruling against it, claiming that it's right of the Executive Branch's to set the policy. That's some argument: The Executive Branch has the right to implement an unconstitutional policy, your honor, so back out of our business.
Another Homophobic Pastor Accused In Gay Sex Scandal
Megachurch pastor Eddie Long has been sued by three young men who allege he used jewelry, cars and cash to lure them into sexual relationships. The accusations of sexual predation are horrible in their own right, but are also deeply ironic and painful because Bishop Long has long preached against gay people and gay marriage. In 2007 the Southern Policy Law Center described him as "one of the most virulently homophobic black leaders in the religiously based anti-gay movement." Long has denied the charges, as did former pastor Ted Haggard -- who faced similar charges a few years ago -- initially. Incidentally, Haggard has defended Long.
And in the Business of Law:
Debt-burdened lawyers in the Justice Department are going to get a little federal help with their student loans, reports the Blog of the Legal Times.
Fed up late briefs from NJ firm Langton & Alter, a judge has imposed a standing $500/day fine for any future lateness, reports the New Jersey Law Journal. The firm claims to be overwhelmed with work but unable to find any qualified lawyers to hire. Given the mass attorney layoffs in recent years, that claim doesn't pass the straight-face test.
Legal blogs written by firms are a good investment, according to the firms, reports Above the Law. Perhaps that's not surprising; a well done blog allows the firm to demonstrate its knowledge and skill -- which can be a substantive marketing tool. But one blogging attorney told ATL the real benefit of blogging isn't new business, it's that blogging disciplined him to keep up on the latest legal developments, making him a better lawyer. Interestingly, most blogs are maintained by only a small handful of firms -- 5% of the AmLaw 100 firms account for 49% of the AmLaw 100 blogs, ATL notes.
