Archive for May, 2010
Wednesday, May 26th, 2010

The Justice Department is seeking to resolve two lawsuits, offering a $1.3 billion settlement to female and Hispanic farmers who have alleged the Agriculture Department discriminated against them, the Associated Press reported late Tuesday.

In the 1990s, a group of African-American farmers successfully sued the Agriculture Department, alleging discrimination against them in the awarding of government loans and other assistance. The farmers received more than $1 billion under a 1999 class action settlement with the government and could get another $1.15 billion under a deal Congress is expected to vote on this week. Hispanic and female farmers have sought similar settlements for their discrimination claims, but have been stymied in court where judges rejected class action status for the Hispanic farmers case — Guadalupe L. Garcia Jr. v. the Secretary of Agriculture — and the female farmers case, Rosemary Love v. Thomas Vilsack.

According to the AP, the Justice Department has offered to reach out to the affected groups and offer awards of up to $50,000 per claimant.

“We have made significant progress on addressing USDA’s civil rights record and look forward to providing substantial relief to Hispanic and women farmers in an expedited manner,” Agriculture Secretary Tom Vilsack said in a statement to the AP.

In a statement issued Wednesday, Stephen Hill of Howrey LLP, lead counsel in the Hispanic farmers suit, said the case is “far from over.”

“While we applaud the government’s beginning settlement discussions there is much more to be considered before this can be presented to those who have suffered this discrimination,” Hill said. “The Justice Department’s proposal serves to highlight the inequities being faced by Hispanic farmers as the government insists on treating groups that suffered the same discrimination differently.”

Hill also criticized the proposed process for awarding claims, saying it would cut out many eligible farmers.

“The government, which after all perpetrated the discrimination, now seeks to be the sole administrator of the settlement process,” Hill said. “That simply does not make sense.”

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Wednesday, May 26th, 2010

Rep. Lloyd Doggett (D-Texas), who leads the Texas House Democrats, recommended that President Barack Obama nominate a U.S. magistrate judge to be the U.S. Attorney for the Northern District of Texas, The Dallas Morning News reported Wednesday.

Jeff Kaplan (Dallas Bar Association)

Jeff Kaplan, who is a Dallas-based U.S. magistrate judge, received the unanimous support of the Texas House Democrats. But the White House has not contacted Republican Texas Sens. John Cornyn and Kay Bailey Hutchison about the nomination, according to the newspaper.

Earlier this month, Cornyn expressed frustration with Democrats for opposing his candidate to lead the Northern District of Texas U.S. Attorney’s Office: Assistant U.S. Attorney Sarah Saldana.

The Republican senator said he is “willing to go to the mat” for Saldana, which could keep Kaplan stalled in the Senate if he is nominated.

The Senate Judiciary Committee traditionally waits for home state senators to return “blue slips” — a piece of paper that senators use to signal their approval or disapproval of nominees — before it proceeds on presidential nominations. Cornyn, who also sits on the panel, could withhold his blue slip, delaying action on Kaplan.

Kaplan has served a U.S. magistrate judge since 1994. He received his bachelor’s from the Vanderbilt University in 1978. Southern Methodist University awarded him a law degree in 1981.

Before he became a magistrate judge, Kaplan was a member of the Fifth District Court of Appeals in Dallas, a state appellate court. He also spent time as a lawyer in private practice, working on civil and appellate cases. His wife, Barbara A. Kennedy, is a partner in the Dallas office of Shannon, Gracey, Ratliff & Miller LLP.

Read more about Kaplan here.

Wednesday, May 26th, 2010

The House passed legislation Tuesday that would pay the travel and moving expenses of families of FBI agents killed in the line of duty.

The measure is named for FBI Special Agent Samuel Hicks, who was killed in a shooting in Pennsylvania in 2008. The Senate passed the bill last week and the House cleared the measure for the president late Tuesday.

According to the FBI Agents Association, the bill is intended to help the families of FBI agents return to their home community after an agent is killed in action. The FBI Agents Association currently reimburses families for those relocation costs.

“Families of law enforcement officers, such as FBI Agents, should not have to worry that the pain of losing a loved one in service to our country will be compounded by an inability to return to their support networks,” said Konrad Motyka, president of the association, in a statement after the bill’s passage. “Helping those families relocate to areas where they have family support and established roots can help these families cope with their losses.”

The Congressional Budget Office estimates that the bill would have applied in about 80 cases over the past 10 years about will cost less than $1 million per year going forward.

For more on the bill, see this write-up on The Washington Post’s Federal Eye blog.

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Wednesday, May 26th, 2010

Senate Judiciary Committee Republicans urged Attorney General Eric Holder on Wednesday to reassess the Justice Department’s decision not to appoint a special counsel to examine allegations that the White House promised Rep. Joe Sestak (D-Pa.) a job in the administration if he agreed not to challenge Sen. Arlen Specter (D-Pa.)

Assistant Attorney General Ronald Weich wrote in a letter to Rep. Darrell Issa, the ranking Republican on the House Oversight and Government Reform Committee, that the DOJ could investigate the allegations with its own prosecutors. But Weich didn’t indicate whether it was probing the matter.

Sestak has said repeatedly that the White House promised him a job if he did not oppose Specter in the Democratic primary for Senate. Specter switched to the Democratic Party last year in an attempt to salvage his political career. Last week, Specter lost to Sestak in the primary.

The White House has not disputed a discussion with Sestak about a job. But spokesman Robert Gibbs insists that nothing inappropriate occurred.

“This controversy deserves full investigation, as well as public confirmation that steps are being taken to preserve records consistent with prior investigations of alleged White House wrongdoing,” Republican Sens. Jeff Sessions of Alabama, Orrin Hatch of Utah, Charles Grassley of Iowa, Jon Kyl of Arizona, Lindsey Graham of South Carolina, John Cornyn of Texas and Tom Coburn of Oklahoma wrote in their letter to Holder.

This is the first public request from the panel’s Republicans for the DOJ to appoint a special counsel.

Issa, who also sits on the House Judiciary Committee, has repeatedly prodded the White House on the alleged job offer, calling on the DOJ in April to appoint a special prosecutor to look into the allegations.

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Wednesday, May 26th, 2010

A Walt Disney Company employee and her boyfriend were arrested in an FBI undercover operation Wednesday for their part in an insider trading scheme.

(Walt Disney Company)

Bonnie J. Hoxie, an assistant to the head of corporate communications at Disney, and Yonni Sebbag were arrested and charged with wire fraud and conspiracy to commit securities fraud and wire fraud. If convicted, the pair face up to 20 years in prison. The Securities and Exchange Commission also filed a civil complaint against the two.

According to the criminal complaint, in March Hoxie and Sebbag sent an anonymous letter to several hedge funds offering inside information on the company’s quarterly earnings report set to be released in May. The letter gave an e-mail address as a contact. Several hedge funds sent the letter to U.S. Attorney’s office for the Southern District of New York and the FBI, which set up an undercover operation.

In late March and early April, several FBI agents posed as hedge fund traders and e-mailed the address offering to buy the information.

Three days before the earnings announcement, Hoxie and Sebbag allegedly sent the agents a copy of the Disney executive’s talking points, according to the complaint. On the day of the announcement, the pair also sent the agents a heads-up on what Disney would announce as the earnings per share. Three days later, the FBI arranged to meet with defendants and gave them $15,000 in payment for the tips.

The Wall Street Journal also noted an interesting tidbit: after the couple received the money, Hoxie insisted Sebbag buy her a $700 Stella McCartney handbag and a pair of Stella McCartney shoes from Neiman Marcus. No word on the color.

Read the criminal complaint here. See the SEC’s complaint here.

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Wednesday, May 26th, 2010

James O’Keefe, a conservative filmmaker, and three other activists pleaded guilty Wednesday to misdemeanor charges that they entered the offices of Sen. Mary Landrieu (D-La.) under false pretenses, the Associated Press reported.

O’Keefe entered the plea in federal court in the Eastern District of Louisiana and was sentenced to three years probation, 100 hours of community service and a $1,500 fine.

Robert Flanagan, Joseph Basel and Stan Dai were also charged in the case. All three also entered guilty pleas Wednesday and were sentenced to two years probation, 75 hours of community service and $1,500 fines. Flanagan is the son of William J. Flanagan, the acting head of the Western District of Lousiana U.S. Attorney’s office in Shreveport.

According to a January affidavit from when the group was arrested, Flanagan and an accomplice entered Landrieu’s New Orleans office and said that they were repair technicians from the telephone company and needed to fix problems with the phone system. O’Keefe was stationed inside the reception area and was holding a phone to record Flanagan and Basel talking to Landrieu staffers. The affidavit says they tried manipulated the telephone system at the reception desk and then went to another office in the building to access the main telephone system. The group was arrested and charged with entering federal property under false pretenses for the purposes of committing a felony.

Those charges were later downgraded to misdemeanors.

O’Keefe was in the news last year for his part in making secret videos in several offices of the community organizing group ACORN (Association of Community Organizations for Reform Now).

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Wednesday, May 26th, 2010

(Creative Commons)

A House committee has decided not to ask the Department of Justice to investigate baseball star Sammy Sosa for perjury, the New York Times reported Wednesday.

Sosa testified before the House Oversight and Government Reform Committee in 2005 that he never used performance-enhancing drugs. In fact, Sosa had tested positive on a drug test in 2003. The committee opened an investigation into steroid use in baseball in 2005 and several major players, including Sosa, Jose Canseco and Rafael Palmeiro testified before the panel.

“After a review of the matter, we will not be taking any action,” Jenny Thalheimer Rosenberg, a spokeswoman for the panel, told the NYT.

The Justice Department opened two criminal probes as a result of the investigation. Miguel Tejada, who plays for the Baltimore Orioles, pleaded guilty last year to lying to congressional investigators about his knowledge of steroid use. He was sentenced to one year of probation.

The Justice Department also investigated Roger Clemens. A federal grand jury in Washington D.C. is currently weighing whether to charge Clemens with lying to congressional investigators. The Clemens investigation is being handled by D.C. Assistant U.S. Attorney Daniel P. Butler and Steven J. Durham, the chief of the Fraud and Public Corruption Section in the D.C. U.S. Attorney’s office.

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Wednesday, May 26th, 2010

Sen. Herb Kohl (D-Wis.) urged regulators Wednesday to adopt conditions before approving Comcast Corp.’s blockbuster bid to take a majority stake in NBC Universal.

The acquisition would “combine two media powerhouses …[and] give the nation’s leading cable TV company control over one of the four main broadcast television networks” and a “treasure trove” of programming, Kohl said in a letter to regulators.

The deal has the potential for “serious anticompetitive and anti-consumer effects,” he said.

Comcast’s vice president for government communications, Sena Fitzmaurice, said in a statement responding to the letter: “This partnership is pro-competitive, pro-consumer and in the public interest…We expect a thorough and expeditious regulatory review and that any conditions will not unduly burden either Comcast or NBCU’s businesses.”

In Kohl’s letter, addressed to Assistant Attorney General Christine Varney and Federal Communications Commission chairman Julius Genachowski, Kohl outlined three areas of concern.

The first affects Comcast’s rivals. Cable and satellite providers need access to NBC programming, but a combined Comcast-NBC would have the incentive to raise NBC’s rates for other providers, he said.

The second affects competition on the content side. The deal, Kohl said, would hurt independent programmers who compete with NBC content but need access to the Comcast distribution platform.

The third area of concern, Kohl said, involves the nascent market for watching television online. The combined company would have the incentive to stifle video on the internet in order to keep the medium from emerging as a viable competitor to cable services.

In order to address his concerns, Kohl asked the agencies to require Comcast to offer NBC programming at non-discriminatory rates and promise not discriminate against other content in favor of NBC’s.

Comcast has suggested it would subject itself to such requirements in order to win approval of the deal.

Kohl also suggested that Comcast should divest its stake in Hulu, an online television service of which NBC is part owner.

Kohl, who chairs the Senate’s antitrust subcommittee and was the letter’s only signatory, held a hearing on the deal in February.

updated at 4:36 p.m. to include comment from Comcast

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Wednesday, May 26th, 2010

Solicitor General Elena Kagan, who is President Barack Obama’s Supreme Court nominee, sought the presidency of Harvard University, The New York Times reported Tuesday.

Kagan, who was the dean of Harvard Law School from 2003 to 2009, discretely campaigned to be the next president of the university when Lawrence Summers stepped down in 2006. Law school professors and students thought she was a finalist for the job.

Historian Drew Gilpin Faust was ultimately selected for the post in 2007. Several hundred law students with “I ♥ EK” T-shirts held a party after Summers’ successor was named.

“Sometimes, you win by losing,” Kagan told her supporters at the party as her voice broke up, according to The Harvard Crimson. “All of you have made me feel like a real winner today.”

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Wednesday, May 26th, 2010

The American Lawyer profiles serial False Claims Act whistleblower Joseph Piacentile.

Piacentile, a doctor in New Jersey, has played a part in several major qui tam cases against medical and pharmaceutical companies and is believed to have earned at least $17 million in whistleblower awards. While some in the qui tam community love the doctor and praise his work rooting out fraud, others are not so complimentary.

Piacentile was convicted of Medicare fraud and tax fraud in 1991. He’s also known for conducting his own investigations and surreptitiously recording conversations and phone calls to use as evidence. That tactic can sometimes complicate cases, said James Sheehan — a former Assistant U.S. Attorney for civil programs in the Eastern District of Pennsylvania and now the New York State Medicaid inspector general — who worked on two cases with Piacentile. Undercover recordings are often difficult to get accepted as evidence in court.

Still whether they agree with Piacentile’s tactics or not, supporters say Piacentile gets the goods that more traditional law enforcement sources cannot.

The False Claims Act empowers people to find fraud and go chase it down,” said Mitchell Kreindler of Kriendler and Associates PC, a former lawyer for Piancentile. “The [Federal Bureau of Investigation] is not an insider [either]. We want to empower citizens just like law enforcement.”

Read the full profile here.

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