Trust Fund Baby Gov. Eliot Spitzer a Spoiler Rich Kid Says Majority Leader

Bruno calls Spizter out in todays NY Post:

"Let's face it, this is a fellow who grew up having anything that he pleased, being able to say anything that he wants to say," Bruno said of Spitzer, whose father is a wealthy real estate developer.

"That's how he grew up. So it's kind of hard for him sometimes to relate to the average person, the common person..."

Eliot Spitzer takes a perverse pride in being hated by businessmen because it allows him to burnish his populist credentials. But as shown in ‘Spoiling for a Fight’ he is terribly insecure about being considered another bratty trust fund baby and frequently overcompensates with tough guy talk and threats (“I’ll call my daddy!”). Unlike Bloomberg, who earned the money he used to enter politics, Spitzer had to rely on daddies money to win the race for attorney general.

A Sordid Past

By abusing his ability to criminally incite firms Spitzer was able to force them to negotiate settlements while his office illegally leaked documents and Nifonged the firms in the press. For someone without scruples, it’s easy work given that the firms he attacked didn’t have any choice but to deal with him. Besides the WSJ, the MSM was content to portray the rich publicity hound as some kind of class warfare hero, conveniently ignoring his consistent failures to score a real conviction. His term as AG was undoubtedly harmful for the consumers he claimed to represent who now bare the burden of the higher costs of regulation.

Supreme Court to take up Gambling and Money Laundering Case – The Government Should Lose This One

The Supreme Court has decided to hear a case involving the money laundering of gambling proceeds. What it boils down to is that the government doesn’t want to have to prove its case to the establish standard and has thrown up the red herring of accounting issues.

The governments view in US vs Santos, is that gambling and money laundering are two separate crimes. The 7th Circuit ruled in favor of the defendants and wisely considered the money laundering, “integral or constituent elements of the underlying gambling offense” and not a separate offense.

The governments petition claims that unless there is a reversal of the decision it, “poses serious obstacles to effective enforcement of the money laundering statute. It removes a large class of routinely-prosecuted cases from the statute's reach.”

So the government will have less control over the voluntary transactions of its citizens - what’s the downside?

The 7th Ciruits judgement in favor of Santos on relied heavily on the precedent in United States v. Scialabba. Specifically, Scialabba held “that the word ‘proceeds’ … denotes net rather than gross income of an unlawful venture,” id. at 478, “otherwise the predicate crime merges into money laundering (for no business can be carried on without expenses) and the word ‘proceeds’ loses operational significance.”

That makes sense.

The government appeal doesn’t. It argues that since it’s hard to tell proceeds from profit, especially in a criminal enterprise, they shouldn’t have to do it. The 7th Circuits response to that argument was to suggest they bring that “solid policy point” up with Congress.

Lets hope the government loses this one.

Links:

Article on Supreme Court taking the case

Rulings and Case Information

Justice Denied – The War On Business

The State conducts the trial. The State determines what evidence will be allowed. The State then instructs the jurors how to decide the case, leaving no room for them to determine if a law is just or logical.

Without the discretion of informed juries to reign in abusive prosecutions and unjust laws the jurors are a mere rubber stamp of the structure the State has presented. In other words, the jurors simply agree that the evidence approved by the State meets the standards of the crime set by the State - not a very high bar.

The Enron Pattern Continues

The prosecutions pattern of attacking business should be clear. The State will load up the charges on a near innocent underling with everything from Section 1001 violations to jay walking so the underling is facing 100+ years in prison even if they beat the majority of the charges. Once they have the gun to his face, a sweetheart deal is offered for full cooperation All the patsy has to do is testify that the Boss was fully responsible for any and all crimes committed. Since white-collar prosecutors generally won’t have other evidence, they need an insider to have any case at all.

A witness for the prosecution will have the threat of prison over his head until the end of the trial thereby ensuring his continued cooperation. The quid pro quo is complete when the prosecutors get their man and the witness redeems his get out of jail free card.

How the Prosecutors Get Their Man – Tactic 1: Blocking Exculpatory Evidence

The prosecution can control what the jurors know by blocking potentially exculpatory evidence from being presented. This technique was abused and tragically underreported during the Enron trial when a record number of unindicted co-conspirators were named. The threat of criminal prosecution of the unindicted co-conspirators ensured none would testify for the defense. This prevented most of the witnesses that could clear Skilling and Lay from getting on the stand, making the State’s case a lay-up and the jury clueless as to what they missed.

The technique of blocking exculpatory evidence was used again in the Joseph Nacchio case. The former Quest CEO was accused of insider trading for selling stock while apparently knowing that the finances of the firm were in trouble. Ignoring the fact that CEO’s are NEVER openly bearish on their own stocks, Nacchio had knowledge of secret government projects which, if they came through, would justify the optimistic projections made to investors. In a Kafka like twist, the government declared the contracts too secret to be revealed in court leaving Nacchio without his main defense.

Spitzer Goes Low Brow

His newest brainless proposal – regulating violent video games and movies – shows the dearth of political ideas in his administration. His number one campaign promise - to reform the budget - recently failed miserably and took his ratings down substantially.

In other Spitzer news it’s only a matter of days before he reverts to his old habits and threatens Raoul Felder with criminal indictment.

Lord Black Prosecutors “Inept” - Conrad Black Trial

Peter Worthington’s latest column in one quote, “I'm not saying the prosecutors are incompetent, but they don't seem to have anything of substance to show criminal acts."

They should have spent less time posing for glamour shots and more time preparing for the case. Patty Fitz was smart enough not to take this turkey on personally and he didn’t leave the rookies much to work with.

Conrad Black Trial - The Non-Competes: A Summary

1. Approved by the board

2. Approved by the auditors

3. Approved by an independent audit committee

4. A 5 minute search on Edgar brings up the full disclosure in the SEC filings:

Also, as required by CanWest as a condition to the transaction, Ravelston, Hollinger Inc. and Messrs. Black, Radler, Boultbee and Atkinson, entered into non-competition agreements with CanWest pursuant to which each agreed not to compete directly or indirectly in Canada with the Canadian businesses sold to CanWest for a five year period, subject to certain limited exceptions, for aggregate consideration received by Ravelston and the executives of Cdn. $80 million ($53 million) paid by CanWest in addition to the purchase price referred to above, consisting of Cdn. $38 million paid to Ravelston, Cdn. $19 million paid to Mr. Black, Cdn. $19 million paid to Mr. Radler, Cdn. $2 million paid to Mr. Boultbee and Cdn. $2 million paid to Mr. Atkinson.

Talk about full disclosure – you cannot be anymore clear than that.

Prosecution Goes Fishing – Conrad Black Trial Update

Patty Fitz Goes Fishing

The prosecution still hasn’t lost hope of finding evidence against Lord Black. They are scraping the bottom of the barrel to find something, which means that their book deals and private practice offers are in jeopardy:

Prosecutors in Conrad Black's trial are about to finally get their hands on 13 boxes of documents from Lord Black's office in Toronto after nearly two years of legal wrangling…the inventory includes: “Musings,” “Barbara Black Sundries 2002-2003,” “Brascan Share Options,” “CIBC Stock Options,” “CIBC Pledge of Shares to Duncree 2004,” “Tax Information 2005,” “Entertaining Hotels etc.” and “Interview Requests 2005.”

Prosecution Struggling

Prosecutor Julie Ruder continues to flounder. Check out this dud that’s supposed to show Lord Black abused his flight privileges:

“Was there any company policy requiring Conrad Black to use company planes for his personal vacations?” Ms. Ruder asked him. Mr. Creasey replied: “No.”

Awful redirect. It’s nice to see Creasey remember something, but is Julie trying to insult the intelligence of the jurors with these silly questions?

The Betting Markets - Short Lord Black Contracts

This chart from FT Predict shows just how weak the case is against Black is. The odds of Conrad Black being convicted of all charges fell 20% in a week - the longer this trial goes on, the more obvious it becomes the prosecution doesn't have a case.

Prosecutors Case Falling Apart in Black Trial – Intrade Conrad Black Betting, Still No Volume

If there were any volume on the Sell side of Intrade’s BLACK.GUILTY.ALL contracts I would recommend shorting it to the ground. Presently there is no Intrade volume so I’ve been selling the Conrad Black BLACK.GUILTY.ALL contracts at ftpredict.com

So far in this trial we’ve learned:
1. The foundation of the prosecutions case, the non-competes, were approved by the board. Forget reasonable doubt, the state hasn't been able to show that any crime was commited.

2. The prosecutions star witness Creasey is a complete buffoon – and their other star witness is an admitted felon. Read the comical description of the clowns the State is putting on the stand. It ends, “It wasn’t that he made himself look like an idiot, but that he made any prosecutors who’d depend on such a witness look like idiots.”

3. There was nothing wrong with Black’s flights since they “…followed Hollinger's long-established policy for using the jet.”

They appeared costly because of the accounting that was used, the Chicago Tribune explains:

Creasey charged Black and Hollinger for the Bora Bora flight according to its operating cost, per flight hour, for the entire year of 2001. Using his methodology, if the plane had cost $5 million to operate in 2001 and had only been used for one hour, the cost of that one flight would have been $5 million, Greenspan noted.

4. “Hell hath no fury like a bureaucrat scorned.” – NBAT

CBC ran an ominous article on Thursday suggesting that Conrad Black should be more humble or else the State might get REALLY mad. Having unaccountable bureaucrats with vendettas determine what is legal based on how pliable the defendant is cannot be healthy for the justice system. Just like the Enron prosecutors, the prosecutors here are likely hoping to use Black’s scalp to get a real job in the private sector when this thing is over.

“Most people joined the staff of the government offices because the salary and the pension offered were higher than what they could expect to earn in other occupations. They did not renounce anything in serving the government. Civil service was for them the most profitable job they could find.” - Mises

March Non-Farm Payroll Estimates

Economists' consensus: 120,000
CME Auction Market participants' consensus: 121,600
ADP: 106,000

NY Posts Crudele nails NFPs- The only sure bet is this: no matter what the number, the idiots will be on TV saying how great it is for the country.

*****UPDATE:

NFPs Actual: 180,000

Conrad Black Update - Intrade Betting Still Not Active

The best coverage of the trial continues to be the Toronto Life Conrad Black Trial Blog.

Dealing a blow to the prosecutions case it was revealed today that the Board approved all the payments to Black. No deception was necessary, making the fraud charges less likely to stick. This hasn’t been reflected on the intrade.com yet where the contracts have almost no volume.

Ftpredict.com has been more active on the Conrad Black contracts and I’ve been shorting the Black Guilty All contacts there. A summary of the charges can be found here. This prosecution is a joke and they’ve loaded on 17 charges, no way they’ll nail all of them. So far Black is winning this one.

The Totonto Star has an amusing article about both teams performing to help sway the jury:

On Monday, for instance, Black's lawyer Ed Genson, who uses canes to walk and rides a motorized scooter to court, leaned against the witness box as he questioned a newspaper executive whose Kentucky-based company had purchased a number of newspapers from Hollinger International Inc.

Seeking to introduce a document into evidence, he asked Edward Siskel, an assistant U.S. attorney, whether he wanted to review the paperwork and held it out. When Siskel didn't look up from his computer Genson took a few unsteady steps toward the prosecutors' table.

A colleague appeared to nudge Siskel and he jumped up and walked over to Genson.