Tuesday, July 27, 2010

Rod Blagojevich Lawyer Says U.S. Proved 'Nothing'

Rod Blagojevich’s lawyer scoffed at prosecutors’ case against the former Illinois governor, who is accused of trying to trade official acts for campaign cash, saying several times in closing arguments, “give me a break!”

“I had no idea that in two months of trial, they would prove nothing,” Sam Adam Jr. told jurors today at the federal court in Chicago.

The attorney’s two-hour oratory was interrupted frequently by prosecutors’ objections and U.S. District Judge James Zagel’s admonitions. The judge said he will instruct jurors tomorrow on the laws they are to apply in deliberations.

Blagojevich, 53, conspired with his brother and co- defendant Robert Blagojevich and members of his inner circle to profit from his office, an attorney for the U.S. said in closing remarks yesterday. The brothers face as long as 20 years in prison if found guilty of the most serious charges.

The twice-elected Democrat was arrested in December 2008 and later indicted for linking official acts, including the selection of President Barack Obama’s Senate successor, to campaign contributions and personal favors.

He was removed from office for abuse of power by the state’s Legislature in January 2009.

Assistant U.S. Attorney Reid Schar today spoke in rebuttal after Adam’s closing, telling jurors that Blagojevich and the people around him were corrupt.

‘He’s Not Stupid’

“He’s not stupid. He’s very smart. He didn’t get elected governor two times by accident,” Schar said.

The trial started with jury selection on June 3 and prosecutors rested their case against the siblings after slightly more than five weeks of testimony.

Jurors also heard recorded conversations obtained by the Federal Bureau of Investigation through court-approved wiretaps, in which the governor, his brother and close advisers discussed both pending initiatives --including the Senate seat appointment -- and fundraising.

Prosecutors allege that after Illinois union leader Tom Balanoff approached the governor to relay Obama’s preference that presidential adviser Valerie Jarrett be selected, Blagojevich and his inner circle began discussing what he could get for himself in exchange.

“That man wasn’t selling any Senate seat,” Adam told the jury. “The president-elect sent emissaries to him.”

Adam told jurors what they overheard in the secretly recorded conversations were the overtures of a political negotiation, not a crime.

‘The Tapes!’

“You can infer what’s on Rod’s mind from those tapes,” the lawyer said, and “whether or not he’s trying to extort the president of the United States.”

“He wasn’t trying to extort,” Adam said. “How do you know? The tapes!”

The lawyer returned to his opening theme that the former governor was surrounded by duplicitous insiders who were smarter than he was.

Blagojevich has “horrible judgment” about people, Adam said.

“So you get the blame everyone else argument,” Schar said in rebuttal. Noting that Blagojevich has a law degree and is a former state prosecutor, Schar said the ex-governor has more knowledge of criminal law than most people.

“Somehow, he is the accidentally corrupt governor?” he asked.

Adam was initially allotted 2 1/2 hours for his closing statement. His commentary was interrupted several times by prosecutors’ objections to the accuracy of his remarks and by Zagel’s corrective comments.

‘Like a Show’

“It’s beginning to look more like a show,” Zagel said of Adam’s performance. Later, while the jury was out, the judge said the lawyer “can be precise without giving up the loud voice, the whispering and the hand-gestures.”

“This is not a corrupt man. He’s never been corrupt, he isn’t corrupt and we should be victorious at the end of the day,” Adam told reporters outside the courthouse.

The governor’s closing was preceded by almost two hours of discussion between Zagel and attorneys for both sides concerning whether Adam could tell the jury about people the government mentioned during the trial and didn’t present as witnesses.

Zagel turned down the request, telling the governor’s lawyers that if they insisted on telling the jury about absent witnesses, he would be compelled to tell the panel that those same witnesses could have been called by the defense.

“I think the defense has an upward hill to climb,” Chicago-Kent College of Law professor Richard Kling said after hearing today’s closing arguments.

“There were, I think, legitimate objections the government was making,” he said. “Mr. Adam was arguing based on things that weren’t in the evidence.”

The case is U.S. v. Blagojevich, 08-cr-00888, U.S. District Court, Northern District of Illinois (Chicago).

By Andrew M Harris, aharris16@bloomberg.net

Source: Bloomberg.com

Cities and Counties Can Use Contingency Lawyers, Calif. Justices Rule

The California Supreme Court on Monday carved out an exception to a quarter-century-old ruling that banned cities and counties from hiring private counsel to handle public-nuisance suits on a contingency fee basis.

In a unanimous ruling, Chief Justice Ronald George held that such hirings are acceptable as long as the government lawyers retain complete control over all critical decision making.

"Such control of the litigation by neutral attorneys," George wrote , "provides a safeguard against the possibility that private attorneys unilaterally will engage in inappropriate prosecutorial strategy and tactics geared to maximize their monetary award."

Justice Kathryn Mickle Werdegar wrote separately, saying that while she supported the court's decision, she questioned "whether public attorneys under all foreseeable circumstances will be able to exercise the independent supervisory judgment the majority concludes is essential."

San Francisco City Attorney Dennis Herrera, whose city is one of 10 hoping to get several manufacturers to abate lead paint on public and private buildings, called the ruling "a major win for consumers because it gives public law offices like mine a fighting chance to take on powerful, well-funded wrongdoers like Big Tobacco and corporate polluters."

Philip Curtis, a partner in Arnold & Porter's New York office who represented Sherwin-Williams Co., expressed disappointment.

"Today's ruling upends the fundamental legal principle that no attorney wielding the government's police power should have a financial interest in the outcome," he said in a prepared statement. "The scales of justice should not be tipped by a profit motive."

Santa Clara County initiated the suit 10 years ago when it sued Atlantic Richfield Co. and eight other manufacturers to cover the costs of removing lead paint from all buildings within its borders. Nine other counties and cities, including San Francisco and Oakland, joined in.

Burlingame's Cotchett, Pitre & McCarthy was hired as private counsel by the government entities, as were Boston-based Thornton & Naumes, Motley Rice of Mt. Pleasant, S.C., and San Francisco product liability lawyer Mary Alexander. If successful, they would be entitled to recover any unreimbursed costs from the recovery and a fee of 17 percent of the net recovery.

Santa Clara County Superior Court Judge Jack Komar tossed the suit based on his reading of People ex rel. Clancy v. Superior Court , 39 Cal.3d 740, which the California Supreme Court issued in 1985.

In 2008, however, San Jose's 6th District Court of Appeal reversed, finding that the fee agreements left total control of the litigation within the hands of the government lawyers.

The Supreme Court agreed on Monday, saying that its ruling in Clancy "was unnecessarily broad and failed to take into account the wide spectrum of cases that fall within the public-nuisance rubric."

"There is no indication," George wrote, "that the contingent-fee arrangements in the present case have created a danger of governmental overreaching or economic coercion."

Proper agreements, he added, must provide that the government lawyers "retain complete control over the course and conduct of the case," have veto power over any decisions made by outside counsel and that a government attorney "with supervisory authority" must be personally involved in overseeing the litigation."

Because the agreements in the current case don't meet all those standards, George remanded for further proceedings.

San Francisco lawyer William Stern, who heads Morrison & Foerster's consumer class action practice and was not involved in the suit, said in a prepared statement that the ruling is a "game changer" for many areas of class action litigation.

In its own way, the Washington, D.C.-based Institute for Legal Reform agreed, saying in a statement that the ruling will "further burden the state's ability to create jobs and emerge from its worst economic situation since the Great Depression."

"California needs more jobs, not more lawsuits," institute President Lisa Rickard said.

By Mike McKee

Source: Law.com

Friday, July 23, 2010

CEI: California's Brown the worst AG

California Attorney General Jerry Brown is the worst current state attorney general, according to a group that promotes free enterprise and limited government.

Brown topped a list of six attorneys general -- all of them Democrats -- who received criticism from the Competitive Enterprise Institute. Hans Bader wrote in his report, released Thursday, that the office was designed to have limited power but that is not the case anymore.

Brown's office did not immediately return a message seeking comment.

"In recent years, many state AGs have increasingly usurped the roles of state legislatures and Congress by using lawsuits to impose interstate and national regulations and extract money from out-of-state defendants who have little voice in a state's political processes," Bader wrote.

Bader also authored a similar report in 2007 that profiled who it felt were the 10 worst state attorneys general in recent history. That report named Connecticut Attorney General Richard Blumenthal the worst.

CEI ranked the AGs on what it felt were ethical braches, selective applications of the law, fabricating law, usurping legislative powers and predatory practices.

The report slams Brown for not defending a state law that prohibited gay marriage.

"Absurdly, Brown claimed that Proposition 8 somehow violated the state constitution-even though it is actually part of California's constitution," Bader wrote.

Brown initially agreed to defend it but flip-flopped before a deadline.

Goodwin Liu, a law professor at the University of California and President Barack Obama's pick to fill a vacancy on the U.S. Court of Appeals for the Ninth Circuit, said it was "extraordinary for the chief law enforcement officer of the state to decline to enforce a law-even on the grounds that it is unconstitutional."

Bader also says Brown's environmental lawsuits block energy projects in the state and aim to regulate other states.

"Brown has engaged in this kind of green activism without regard to the effects on the state's economy," Bader wrote. "In 2008, he threatened to sue to block a proposed water bottling plant in Northern California unless its effects on global warming were evaluated.

"Nestle wanted to bottle water from three natural springs that supply McCloud, a depressed former lumber town about 280 miles north of San Francisco that badly needs jobs... Shortly after Brown's threat, Nestle cancelled the project and the 100 jobs the plant would have created evaporated along with it."

Brown is currently running for governor against former eBay CEO Meg Whitman.

Much like the 2007 report, Bader's main issue with Blumenthal is his involvement in the 1998 Tobacco Master Settlement Agreement. CEI has long opposed the MSA, which it says prevents fair competition in the tobacco market.

Bader calls Blumenthal "a left-wing idealogue." Blumenthal is running for U.S. Senate this year.

"As the federal appeals court with jurisdiction over Connecticut observed, had the tobacco company executives entered into a similar settlement without the collusion of the attorneys general, 'they would long ago have had depressing conversations with their attorneys about the United States Sentencing Guidelines,'" Bader wrote.

"By getting a state official such as Blumenthal to sign their settlement, the tobacco companies were able to claim that the cartel was exempt from antitrust laws under a loophole known as 'state action' immunity, which exempts many state-recognized cartels under the generous assumption that state officials would not sign off on a cartel unless it promoted the public interest."

The report says Blumenthal steered $65 million in fees to his own allies and the associates of former Gov. John Rowland, later convicted of corruption in an unrelated matter.

Oklahoma Attorney General Drew Edmondson, a candidate for governor, is ranked third.

"Edmondson appears to have had no problem with accepting money from out-of-state lawyers, wealthy special interests, and even felons," the report says.

"He has violated state ethics rules and campaign laws. And he has steered lucrative government contracts to lawyers who give him donations (such as generous contingency fees for lawyers that give them up to $250 million simply for bringing copycat lawsuits that mimic pending lawsuits brought by other trial lawyers, and give the lawyers up to 50 percent of what the state recovers)."

Fourth is Rhode Island Attorney General Patrick Lynch, who recently ended his campaign for governor. He has reached his term limit as AG.

The report criticizes the unsuccessful lead paint litigation for which Lynch hired plaintiffs firm Motley Rice.

"At the end of the day, Lynch's lead paint lawsuit achieved nothing, other than waste thousands of hours of attorney time, and give Rhode Island a reputation for having a bad legal climate - a big disincentive for businesses to move there and create jobs," the report says.

Fifth is longtime West Virginia attorney general Darrell McGraw. McGraw is well known for hiring campaign contributors to represent the State in litigation.

He is also known for a 2004 settlement with Purdue Pharma worth $10 million. More than $3 million went to lawyers hired to represent the State, and McGraw doled out the rest.

Eventually, the federal government wondered where its share was. The lawsuit claimed the state's Medicaid program, largely funded by the federal government, was defrauded. The federal Medicaid agency has withheld millions of dollars in funding as a result.

"Had the settlement been paid back into the state treasury rather than doled out to McGraw's friends, it might have resulted in the state receiving as much as $30 million in federal matching funds," Bader wrote.

Sixth is Vermont Attorney General William Sorrell for introducing the idea of making tobacco companies retroactively liable for the state's Medicaid bills.

"With the playing field suddenly tilted against them, the tobacco companies settled soon after Sorrell sued them under the revised law," Bader wrote.

"Wealthy trial lawyers got a big cut of the loot from that lawsuit, and smokers ended up paying the tab. Almost a decade later, Sorrell's law remains an extremely dangerous precedent for other businesses whose products can be alleged to have an ill effect on public health."

By Reach John O'Brien, jobrienwv@gmail.com

Source: Legalnewsline.com

No ruling after hearings on Ariz. immigration law

Two federal court hearings in Phoenix have ended without a ruling on whether the state's new immigration law should take effect amid a flurry of legal challenges against the crackdown.

The second of two hearings Thursday concluded without U.S. Judge Susan Bolton issuing a ruling.

The afternoon hearing focused on whether state law is trumped by the federal government's constitutional authority to set immigration policy.

During the morning hearing, Bolton said she's required to consider blocking only parts of the law, not the entire statute as some plaintiffs had requested.

The law requires officers, while enforcing other laws, to check a person's immigration status if there's a reasonable suspicion that the person is here illegally.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

PHOENIX (AP) — A judge held two hearings in a courtroom packed with spectators and top Arizona officials Thursday on whether the state's new immigration law should take effect amid a flurry of legal challenges against the crackdown.

Arizona Gov. Jan Brewer attended the second hearing, as did the U.S. Attorney for Arizona, Dennis Burke.

Judge Susan Bolton did not issue a ruling at the end of the first hearing.

During the afternoon hearing, Justice Department attorney Edwin Kneedler argued that state law is pre-empted by the federal government's constitutional authority to set immigration policy.

Bolton repeatedly questioned Justice Department lawyer Edwin Kneedler to explain how specific provisions intruded on federal authority. "Why can't Arizona be as inhospitable as they wish to people who have entered the United States illegally?" she said.

Kneedler said the requirements to check on immigration status set a mandatory policy that goes beyond what the federal government requires and would burden the federal agency that responds to immigration-status inquiries.

Attorney John Bouma, who represents Brewer, said the federal government wants to keep its authority while turning a blind eye to illegal immigrants.

"You can't catch them if you don't know about them. They don't want to know about them," he said.

During the morning hearing, Bolton told lawyers for the American Civil Liberties Union that she's required to consider blocking only parts of the law, not the entire statute as they had requested.

ACLU attorney Omar Jadwat said the law's provisions are supposed to work together to achieve a goal of prodding illegal immigrants to leave the state. He called it unconstitutional and dangerous.

Most of the controversy about the law centers on provisions related to stops and arrests of people, new crimes related to illegal immigrants, and a requirement that immigrants carry and produce their immigration papers.

Other parts of the law getting little attention deal with impoundment of vehicles and sanctions against employment of illegal immigrants.

Bouma told Bolton that those challenging the law haven't demonstrated that anyone would suffer actual harm if it takes effect, and that facts — not conjecture — must be shown.

"In Arizona we have a tremendous Hispanic heritage. To think that everybody that's Hispanic is going to be stopped and questioned ... defies reality," Bouma said. "All this hypothetical that we're going to go out and arrest everybody that's Hispanic, look around. That's impossible."

Jadwat said the new law creates a state immigration system that goes beyond the limits that federal law puts on local officers and will be costly for the federal government to assist in determining the immigration status of a large volume of people.

"The state has no authority to create its own immigration classification," Jadwat said, adding that the state is glossing over the complexities of federal immigration law.

Defendants include various county officials from throughout the state, most of whom sent lawyers to the hearing. Cochise County Sheriff Larry Dever was there in person, sitting at the front of the courtroom.

Dever's county is on the Arizona-Mexico border and he knew a rancher who was killed in March on his sprawling border property by a suspected illegal immigrant, possibly a scout for drug smugglers.

The killing of Robert Krentz in many ways set the stage for the new Arizona law to pass, with politicians calling for action amid border violence.

The law is "intended to have a significant effect on illegal immigration," Dever told The Associated Press. "I wish I could step up to the podium and help out."

Outside the courthouse, opponents gathered in prayer before the hearing started and carrying paper doves attached to plants representing olive branches, a symbol of peace.

Sarah Fox, a 64-year-old Phoenix nurse, said the new law takes the country's economic problems out on immigrants, who she believes are being used as a scapegoat.

"It's morally wrong," she said. "I'm getting old and I don't have many years left to speak out against what is wrong."

Supporters of the law waved signs, some reading "Illegal is illegal," and clutched American flags.

Debbi MacNicol, a 55-year-old Phoenix psychiatric nurse who carried a gun on her hip and wore a T-shirt that read "Don't Tread on Me," said she supports the law because she fears Mexico's drug war will spill over into Arizona.

"It wasn't as much an issue until it started putting our lives at risk," she said.

The law requires officers, while enforcing other laws, to check a person's immigration status if there's a reasonable suspicion that the person is here illegally. It also bans people from blocking traffic when they seek or offer day-labor services on streets and prohibits illegal immigrants from soliciting work in public places.

Since Brewer signed the measure into law in April, it has inspired rallies in Arizona and elsewhere by advocates on both sides of the immigration debate. Some opponents have advocated a tourism boycott of Arizona.

It also led an unknown number of illegal immigrants to leave Arizona for other U.S. states or their home countries and prompted seven challenges by the Justice Department, civil rights groups, two Arizona police officers, a Latino clergy group and a researcher from Washington.

Justice Department lawyers contend that local police shouldn't be allowed to enforce the law because, in part, it's disrupting the United States' relations with Mexico and other countries.

Attorneys for Brewer argue that the federal government based its challenge on misconceptions of what the law would do and that Washington's inadequate immigration enforcement has left the state with heavy costs for educating, incarcerating and providing health care for illegal immigrants.


Source: Google News

Tuesday, July 6, 2010

For some area lawyers, the pressure is too much

Veteran attorneys say stress can lead to depression, substance abuse, crime.

Horace Hutson admitted to stealing $20,000 from a client.

Philip Rothschild faces charges in three separate cases involving unwanted contact with his ex-wife. He's already pleaded guilty to forcible touching and trespassing.

And Lauren Dillon was charged with driving while intoxicated after a Buffalo police officer said he saw her try to enter the wrong lanes of the Skyway.

Reports of embezzlement, trespassing and drunken driving are nothing out of the ordinary, but what makes these cases unusual is the occupation of the people accused of these crimes.

All are lawyers.

In fact, over the past 16 months, at least 15 current or former local lawyers — including one judge — were charged with, convicted of or sentenced for a crime.

Most of the attorneys were accused of financial crimes or drinking and driving.

"I think we're held to a higher standard, but the fact of the matter is we're human," said Michael J. Flaherty Sr., a lawyer and immediate past president of the Erie County Bar Foundation, which provides assistance to lawyers in need.

Disciplinary records show there hasn't been an increase in recent years of attorney disbarments, suspensions and censures in Western New York.

But drinking too much or attempting to steal money from a client may be a response to the intense stress lawyers face, veteran local attorneys said.

"There's a lot of competition out there, so there's a lot of pressure out there," Erie County District Attorney Frank A. Sedita III said.

For one thing, lawyers regularly are confronted with other people's high-stakes problems.

Their clients are dealing with business failures, audits, divorces, custody battles, serious injuries, the death of a loved one or a criminal charge — and the lawyer is expected to do something about it, said James G. Milles, a University at Buffalo law professor who is teaching a class this fall on ethics.

"People go to lawyers at the most difficult time in their lives," Milles said.

At large firms, lawyers must worry about performing enough billable work, while lawyers running their own shop worry about winning and retaining enough clients.

This is only more difficult during tough economic times, when companies are looking to cut their legal costs and fewer people have enough money to hire an attorney.

Many firms are using paralegals to do work long performed by lawyers, Flaherty said.

And this area is home to the UB Law School, which produces a couple hundred prospective lawyers each year even as the population stagnates.

There were 4,013 registered lawyers in Erie County at the end of 1999, according to the state Office of Court Administration, or 4.22 lawyers per 1,000 county residents.

At the end of 2009, there were 4,918 lawyers in the county, or 5.41 per 1,000 residents.

"There's an overabundance of lawyers in Western New York," said John V. Elmore, a lawyer and former chairman of the Attorney Grievance Committee of the 8th Judicial District.

This stress can produce anxiety and, if left untreated, lead to depression, said Dan Lukasik, a local attorney who has a national reputation for his work with lawyers who have depression.

Lawyers are on average twice as likely to suffer from depression as members of the general public, Lukasik said, pointing to recent research, though they may be reluctant to seek help.

The stress can lead to mistakes.

For other lawyers, this stress can lead to substance abuse.

Sedita and others said lawyers don't seem to drink as much as they did years ago.

But several said greater numbers of all drivers, not just lawyers, are charged today with DWI because the law is stricter and police have cracked down on this crime.

Many of the cases found through a search of The Buffalo News archives and interviews with the Erie County District Attorney's Office and local police agencies were alcohol-related, including six DWIs.

The DWI case that received the most attention, because of the subsequent coverup that brought down State Supreme Court Justice Joseph G. Makowski, involved Anne E. Adams, a former prosecutor.

Adams enlisted Makowski and her own doctor in a fraudulent scheme to avoid a DWI charge.

Adams pleaded guilty last year to several charges, but her 15-day sentence was overturned on appeal last month.

Makowski resigned after admitting filing a false affidavit — he claimed Adams appeared sober when he saw her shortly before her arrest — and agreed to never again serve as a judge.

Others weren't DWIs, but occurred at bars or following a night of drinking.

Lawyer John P. Liberti, well known for his TV ads, is accused of injuring an off-duty corrections officer in a March 23 fight at the Town Ballroom, according to the DA's office.

Liberti was charged with third-degree assault, a misdemeanor, and harassment, and is scheduled to return to City Court on Aug. 25, according to court records.

And John P. Duffy was disbarred and sentenced to 2 and a third to 7 years in prison last year after his guilty plea in a fatal hit-and-run and attempted accident coverup from October 2008.

Duffy's attorney later admitted that his client had had about four drinks during the evening, but he insisted Duffy wasn't drunk when he hit and killed a Hilbert College student.

A number of lawyers were accused of crimes that related to their professional work, notably the misuse of client money.

Lawyers often are entrusted with clients' money, and this responsibility can lead to temptation, Sedita said.

It can be too easy for a lawyer to commingle the money in a law firm account with the money in a client's account, or to "borrow" money from a client's account with the intent to pay it back before anyone notices.

"They do have access to other people's money," said Michael Mohun, a Wyoming County lawyer and former chairman of the 8th Judicial District's Attorney Grievance Committee. "It's a crime of opportunity."

In recent cases:

• Alan E. Fielitz resigned as a lawyer and was sentenced in March 2009 to weekends in jail following his guilty plea to grand larceny after he was accused of stealing $102,000 from six clients over 11 months.

• Horace Hutson was sentenced in April to six months in jail following his guilty plea to grand larceny. Hutson was accused of improperly using $20,000 from a client's guardianship account.

• And Robert L. Goods, a Williamsville real estate attorney, was accused of swindling $522,974 from a national mortgage company, an area physician and a Hamburg woman.

He pleaded guilty last month to grand larceny, was disbarred and will be sentenced Sept. 27.

Data show area lawyers aren't getting into trouble in high numbers in recent years.

Between 2005 and 2009, an average of about five lawyers per year in the 8th Judicial District were disbarred or resigned while under investigation by the district's Attorney Grievance Committee.

Similar numbers of lawyers were suspended or censured each year in the district, which has 5,877 registered attorneys.

Several organizations work to help lawyers before they get to the point where they need a lawyer of their own.

The Appellate Division, 4th Department, offers a diversion program for lawyers who can show that their alleged misconduct occurred at a time when they struggled with addiction.

The Bar Association of Erie County runs a program known as Lawyers Helping Lawyers, through which lawyers who have overcome a substance abuse problem counsel lawyers who are wrestling with an addiction, said Scott M. Schwartz, the association's president.

And the Erie County Bar Foundation provides assistance to lawyers who are struggling with addiction, a serious illness or student-loan debt load.

If lawyers don't seek help and they end up accused of a crime, they can't expect special treatment from prosecutors and judges now, defense attorneys said, if they ever could before.

"Once a lawyer crosses that line, I don't look at him as a lawyer anymore — I look at him as a defendant," Sedita said.

By Stephen T. Watson, News Staff Reporters, watson@buffnews.com

Source: Buffalonews.com

High Noon in Pahrump, Nev.: Sheriff Arrests the District Attorney

Like a scene from a Western movie, the two top lawmen here are settling their scores in public.

In May, a Nye County sheriff's deputy arrested the district attorney. The sheriff, Tony De Meo, alleges that the D.A., Robert Beckett, was misusing public funds.

According to Mr. De Meo, public money had gone to supporting the local cheerleading squad, led by the D.A.'s wife, and to make a family friend's car payments. No charges have been filed, in part because Mr. Beckett, the D.A., refuses to charge himself.

Meanwhile, Mr. Beckett appointed a special prosecutor to investigate possible abuses of power by the sheriff's office and other public officials. Mr. Beckett claims that arresting him was part of an effort to sabotage his re-election. Mr. Beckett ended up running last among five candidates in the Republican primary.

The special prosecutor filed felony charges against the sheriff's deputy, David Boruchowitz, who had arrested the D.A.

Mr. Boruchowitz was also the sheriff's informal press liaison. And after he was summoned to lock himself in the corrugated metal county jail, he sent out a press release with his own mug shot announcing he had been arrested. A judge later rejected the charges, contending Mr. Beckett didn't have the power to appoint a special prosecutor. So Mr. Beckett refiled the charges himself.

Nye County occupies a vast stretch of desert, twice the size of New Hampshire, that runs from the California border up through the middle of Nevada. Most of the county is so desolate that for years the military conducted atomic testing here. Its sparse local economy includes a gold mine and a dairy farm, as well as seven brothels (legal in parts of Nevada), whose fees finance the county's ambulance services.

But in the past two decades, the county's largest town, Pahrump, 45 minutes from Las Vegas, nearly quadrupled in population, to nearly 40,000, and the local government struggled to keep up with the proliferation of houses and mini-malls strewn across the desert.

Mr. De Meo, the sheriff, and Mr. Beckett, the D.A., haven't gotten along in years. Mr. De Meo complains that his department arrests people who never get prosecuted. Mr. Beckett contends that some of the sheriff's cases aren't solid.

"I've often said they need a mother to stop the fighting," said Mr. Beckett's wife, JoDee Beckett. "It's like two little boys."

The public row has already derailed much of the county's criminal-justice system. The cases against Mr. Beckett and Mr. Boruchowitz got bogged down because nearly all of the other local legal figures had some connection to the two suspects. The district court's two sitting county judges both recused themselves, as did a justice of the peace. The state attorney general couldn't get involved because one of its lawyers is running for district attorney.

On June 20, the Nevada Supreme Court shipped a judge from a town several hundred miles away to appoint a special prosecutor to review the cases against Mr. Beckett and Mr. Boruchowitz.

Defense attorneys have seized on the rift between the D.A. and sheriff. One defense attorney representing a murder suspect wrote in a legal filing: "A review of the Internet reveals that Nye County is the laughing stock of the known universe."

Public officials in Nye County have frequently been accused of misconduct. A look back at the year 2009 by the local newspaper, the Pahrump Valley Times, found two bribery cases, the arrest of a former county commissioner for alleged securities fraud and attempts to recall public officials.

When Mr. Beckett ran for re-election this year, his political baggage was already weighing him down. Two years earlier, he came under public scrutiny after flipping two cars in a single day—including one owned by the county. He pleaded guilty to a misdemeanor for reckless driving. Friends begged him not to run.

"I tried to explain to everyone what happened," he says. "Next thing you know, they want your head on the wall."

Later, the county decided to conduct an audit of the D.A.'s bad-checks unit. State law allows these units to work out payment plans rather than charge people with a crime.

Mr. Beckett's bad-checks unit was well known in the county. The D.A. can collect fees of up to 10% of the check's value that can be used for administrative costs and to establish programs to deter bad-check writing or to assist crime victims. The law governing bad checks specifies the money is to be deposited in a county treasury, but Mr. Beckett says he got permission from the county to keep the money in a separate account.

"Bank of America was a lot more convenient, and they have a branch at Albertsons [supermarket] near the office that doesn't charge fees," Mr. Beckett explained.

The sheriff maintains that was illegal.

Mr. Becket says he used the account as a kind of Santa Claus fund for the junior rodeo or the softball team. "People would come to us and say, 'Bob, we're broke. The kids have no programs they can participate in.' I said, 'Well, OK. Maybe I can sponsor your program, but you have to give us something back.'"

In return, he would often get to display a banner promoting his program to deter bad checks, he says. Mr. Beckett says that aggressive marketing made it more effective. He contends that it was legal to spend the money that way.

The sheriff says the fund spent about $6,000 on the cheerleading squad run by Mrs. Beckett, among many other uses the sheriff deemed illegal. Mr. Beckett contends he gave to various community programs and did not favor family members.

But county officials say that when they wanted to audit the fund, Mr. Beckett stalled. On April 21, Mr. Beckett missed a meeting with the auditor. Later that day, Mr. Boruchowitz obtained a warrant to search the D.A.'s office, located just down the hall from the sheriff.

Two weeks later, Mr. Boruchowitz arrested Mr. Beckett.

The special prosecutor is now tasked with sorting out all the conflicting legal claims that have drawn in most major public figures in the county.

Chief Deputy District Attorney Kirk Vitto said he's concerned "the sideshow will take over the circus."


Source: WSJ.com

Monday, July 5, 2010

Back Channels: Panther case dismissal needs explanation

A former employee calls Justice hostile to race-neutral, equal enforcement of the law.

For more than a year, Attorney General Eric Holder has failed to adequately explain why his Justice Department dropped a slam-dunk voter-intimidation case against the New Black Panther Party.

His department's answers to inquiries have been incomplete and unsatisfactory. Career attorneys involved in the case have not been available for questioning, even when subpoenaed.

Now, one lawyer is speaking up - and making damning allegations against the Justice Department.

J. Christian Adams, who was a Justice Department voting-rights lawyer until he resigned last month, is scheduled to testify before the U.S. Commission on Civil Rights on Tuesday. At issue are the events of Election Day 2008 in Philadelphia.

Here's how a Justice Department complaint filed in January 2009 described those events:

Samir Shabazz, head of the Philadelphia chapter of the New Black Panther Party, and party member Jerry Jackson were "deployed" in front of a Fairmount Avenue polling place in "military style uniforms."

Shabazz brandished a nightstick. He "pointed the weapon at individuals, menacingly tapped it [in] his other hand, or menacingly tapped it elsewhere." Both Shabazz and Jackson leveled "racial threats and racial insults at both black and white individuals," and they "made menacing and intimidating gestures, statements, and movements directed at individuals who were present to aid voters."

The two men, the party, and its national chairman were named in the complaint. Since none responded, the case was all but won.

However, in May 2009, the Justice Department dropped claims against all but Shabazz, who was merely ordered not to take a weapon to a Philadelphia polling place through 2012.

U.S. Rep. Frank Wolf (R., Va.), a Philly native, has repeatedly called for an explanation. The Civil Rights Commission has held hearings on the case. In May, Assistant Attorney General Thomas Perez told the commission that the case had been re-reviewed, and the evidence deemed insufficient to proceed.

"That claim is false," Adams, the former Justice lawyer, wrote in the Washington Times last month. "If the actions in Philadelphia do not constitute voter intimidation, it is hard to imagine what would, short of an actual outbreak of violence at the polls."

Adams wrote that the dismissal of the case "was motivated by a lawless hostility toward equal enforcement of the law." As for the re-review, "the lawyers who ordered the dismissal ... did not even read the internal Justice Department memorandums supporting the case and investigation."

What's "most disturbing," Adams wrote, is "the open and pervasive hostility within the Justice Department to bringing civil rights cases against nonwhite defendants on behalf of white victims. Equal enforcement of justice is not a priority of this administration. Open contempt is voiced for these types of cases.

"Some of my coworkers," Adams continued, "argued that the law should not be used against black wrongdoers because of the long history of slavery and segregation. ... Incredibly, after the case was dismissed, instructions were given that no more cases against racial minorities like the Black Panther case would be brought by the [Justice Department's] Voting Section."

In a follow-up article for the website Pajamas Media on Monday, Adams cited other cases, in Texas and Connecticut, showing the department's "hostility toward race-neutral enforcement of the civil rights laws."

The Justice Department fired back last week, saying in a statement that " ... it is regrettable when a former department attorney distorts the facts and makes baseless allegations to promote his or her agenda."

I understand that some view the Panther incident as an unimportant blip on a historic election day. I get not wanting to make too much of an insignificant gang of thugs. But the message the Justice Department sends about hate groups and equal enforcement is important.

One of the department's own, Christopher Coates, said in January, "America is increasingly a multiracial, multiethnic, and multicultural society. For such a diverse group of people to be able to live and function together in a democratic society, there have to be certain common standards that we are bound by and that protect us all. ... For the Department of Justice to enforce the Voting Rights Act only to protect members of certain minority groups breaches the fundamental guarantee of equal protection. ..."

The remarks of Coates, a former ACLU lawyer, were reported by National Review Online when he stepped down as Voting Section chief. In his piece Monday, Adams suggests that Coates, who also worked on the Panther case, was transferred because of his "race-neutral enforcement" of the law.

Coates is still with the department, so he won't be with Adams at the witness table Tuesday. But the attorney general should be.

By Kevin Ferris, Inquirer Columnist

Source: Philly.com

As oil gushed, BP quickly hired lawyers, scientists and experts to fight lawsuits

In the immediate aftermath of the Deepwater Horizon disaster, BP publicly touted its expert oil cleanup response, but it quietly girded for a legal fight that could soon embroil hundreds of attorneys, span five states and last more than a decade.

BP swiftly signed up experts who would otherwise work for plaintiffs, shopped for top-notch legal teams and presented volunteers, fishermen and potential workers with waivers, hoping they would sign away some of their right to sue. Recently, BP announced it would create a $20 billion victim-assistance fund, which could reduce court challenges.

But the lawsuit frenzy came anyway.

So far, an estimated 250 court claims may have been filed against BP. More come each day. Florida Gov. Charlie Crist has tapped Steve Yerrid — one of the so-called "dream team'' lawyers in Florida's landmark tobacco suit — to assemble a new legal crew to provide advice. Counties and cities are getting lawyered up as well.

Robert J. McKee, attorney with the Fort Lauderdale firm of Krupnick Campbell Malone, was surprised by how quickly BP hired scientists and laboratories specializing in the collection and analysis of air, sea, marsh and beach samples — evidence that's crucial to proving damages in pollution cases.

Five days after the April 20 blowout, McKee said, he tried to hire a scientist who has assisted him in an ongoing 16-year environmental lawsuit in Ecuador involving DuPont.

"It was too late. He had already been hired by the other side,'' McKee said. "If you aren't fast enough, you get beat to the punch.''

At the same time it was bolstering its legal team, BP America's chief operating officer for exploration and production, Doug Suttles, downplayed the flow rate of the oil leak, which had been discovered just the day before near the wreckage of the Deepwater Horizon rig.

"The rate we're seeing today is considerably lower, considerably lower than what was occurring when you saw the rig on fire,'' he said on NBC Nightly News.

Three days later, McKee mustered a team of scientists collecting samples on the Louisiana barrier islands. At the time, the law firm and its partners didn't even have clients. Now, Krupnick Campbell is working with seven other Gulf Coast firms that represent aggrieved businesses, fishermen and residents from the Texas-Louisiana border to Key West.

A BP spokesman said the company doesn't comment on lawsuits and "won't be giving running commentaries'' on the number of court actions it's facing.

• • •

In Florida, BP has hired Akerman Senterfitt, the state's largest law firm. Halliburton Energy Services, which pumped the cement casing into the well before it failed, has hired Broad & Cassel. Cameron International, which manufactured the failed blowout preventer, signed up Greenberg Traurig. All three firms are among the biggest political players in Florida's capital.

Transocean, owner of the Deepwater Horizon rig, has yet to announce the Florida firm it has hired.

Right after the explosion, Transocean persuaded some rig workers to sign waivers saying they weren't injured. Also in the early days after the spill, BP officials offered fishermen and prospective workers liability waivers. That prompted Florida Attorney General Bill McCollum to warn citizens: "Do not sign waivers.''

In contrast to some of its residents, the state of Florida wants to avoid lawsuits right now.

McCollum has devoted three full-time attorneys to manage the legal response and advise a state economic recovery task force. They're working with two former attorneys general, Bob Butterworth and Jim Smith, as well as Crist, a former attorney general who tapped Tampa lawyer Steve Yerrid to be his legal adviser.

Yerrid plans to assemble a team of pro-bono legal advisers, many of whom worked alongside him in the state's successful lawsuit against Big Tobacco in the 1990s, which earned the state $11.3 billion plus billions more in attorneys' fees.

One of the members of Yerrid's past and future legal teams, Fred Levin, has already filed a racketeering lawsuit against BP on behalf of Pensacola Beach condominium residents. Yerrid said the state has different issues than its private citizens and will hold its fire.

"Right now is not a time for lawsuits for the state,'' Yerrid said.

The grounds for the suits and potential suits run the gamut: federal pollution and environmental laws, general maritime law, international treaties, public-nuisance codes, and even state and federal racketeering laws. In Florida, fishermen can take advantage of a 2-week-old Florida Supreme Court ruling in a St. Petersburg crabber's lawsuit that expands the right to sue polluters under the Pollutant Discharge Prevention and Control Act.

The state has two main laws to help collect damages: the state pollutant act and the federal Oil Pollution Act.

The state law clearly specifies the amount of environmental damages it can receive. The Florida Department of Environmental Protection has been gathering samples that would be the basis for environmental challenges and fines.

The federal oil pollution law allows governments to collect lost tax revenues and the cost of increased governmental services as a result of a spill. Crist's budget and policy chief, Jerry McDaniel, and state economists are gathering data to show the effects the spill will have on the Florida's economy and collections of sales, property and hotel-room taxes.

Brian O'Neill, a lead attorney in the 1989 Exxon Valdez oil spill case, said the Gulf Coast states and residents should realize it will take years to clean the waters, the marshes and the beaches. Three years after the Alaska spill, salmon stocks started to return, he said, but the herring population was "exterminated'' in Prince William Sound.

Exxon spent $2 billion and cleaned up just 8 percent of the oil, he said. And the oil never left.

"You're going to have to wait years to figure out what happened and what is happening,'' O'Neill said. "The oil goes where you don't expect it. You will clean a beach and the oil will just come back in a few months or a year. The beaches could be oiled and oiled again.''

And the fight against the oil company could take decades.

"Exxon has shown you can stiff those you hurt and tie them up in court for 21 years and nothing bad happens to you,'' he said.

"You hope BP won't do that.''

• • •

St. Petersburg crabber Howard Curd is worried. His blue- and stone-crab fishing grounds in Tampa Bay were damaged when a phosphate freighter and two fuel barges collided near the Skyway Bridge, leading to $50 million in damages. The case was finally settled in 2004, just before Hurricane Frances blew out a retaining wall at a phosphate pit that spewed acidic water into the bay and killed off blue crabs and stone crabs, Curd said.

The fertilizer company, Mosaic, persuaded a trial court and an appeals court that Curd and other fishermen couldn't sue because they didn't own the seafood that was potentially killed, so they weren't technically damaged.

Finally, six years later, the Supreme Court on June 17 reversed lower-court opinions and said Curd and other fishermen could sue. Curd now has to prove damages in court. The ruling in his favor arrived just in time for Florida's 23,422 commercial and charter fishermen who could use the new ruling to press pollution claims against BP.

But the court was silent on others who depend on the water for the livelihood — such as seafood restaurants and fish houses. But they could likely sue under the new ruling as well, say Curd's attorneys, Andra Dreyfus and F. Wallace Pope.

Curd said crabbing in the bay is only bouncing back now, but the BP spill is already depressing seafood sales even though the oil is nowhere near the western coast of the peninsula.

He's prepared to sue BP, but harbors no illusions about facing a big corporation in court.

"They've got all the money, and all the attorneys and all the experts on retainer. It really doesn't cost them anything,'' Curd said. "It's like it's cheaper to pay their attorneys and fight in court then paying the money to people they hurt and doing the right thing.''

By Marc Caputo, Times/Herald Tallahassee Bureau, mcaputo@MiamiHerald.com

Source: Tampabay.com

Sunday, July 4, 2010

Mortgage fraud case is bogus, Broward cops' lawyers say

A group of current and former Broward police officers surrendered Thursday to federal authorities on mortgage fraud charges. Their attorneys asserted they did nothing wrong to obtain millions in home loans.

Lawyers representing seven current and former police officers and an FBI agent charged in a $16.5 million mortgage fraud indictment said Thursday they did nothing wrong, and that two brokers who arranged the loans were to blame for falsifying records.

Attorney Michael Walsh, representing the accused ringleader, former Plantation officer Joseph Guaracino, said his client was an active investor who brought in the others to buy dozens of properties during the real estate boom. They submitted truthful information to qualify for the loans, he said.

``What Joe and the other cops did was legitimate,'' Walsh said after a Fort Lauderdale bond hearing for most of the 13 defendants charged in the indictment that was unsealed Wednesday. ``We know what we submitted, and the records were clean. We can't say what the mortgage brokers did, exactly -- except they committed the fraud.''

Walsh and other defense lawyers said the U.S. attorney's office is building the controversial case on the words of mortgage brokers Matthew Gulla of Davie and Rene Rodriguez Jr. of Plantation, who are cooperating with prosecutors.

The two brokers surrendered Wednesday and were granted bonds. Their lawyers, Howard Greitzer and Fred Haddad, declined to comment.

Guaracino boasts on his website that he is the president and founder of the Home Buyers Group and has ``purchased, remodeled and resold over 100 million dollars in residential property.'' According to the indictment, he located properties and negotiated the sales of at least 38 of them in Broward and Palm Beach counties on behalf of the seven other current and former law enforcement officers.

Collectively, the officers are charged with conspiring with mortgage brokers, attorneys and others to submit false income records, job descriptions, bank statements and loan applications to dupe lenders in South Florida and elsewhere from 2004 to 2007.

But their real goal -- disguised by the false paperwork -- was to rent the properties and then sell them, thereby ``realizing substantial profit,'' the indictment states.

Guaracino, his brother, Dennis Guaracino Jr., and John Velez, all former Plantation officers, surrendered Thursday and were granted bail. The Guaracinos each pleaded not guilty, while Velez's arraignment was delayed until July 20.

Two other Plantation cops, Daryl Radziwon and Casey Mittauer, along with Lauderhill officer Joseph LaGrasta, also surrendered and were granted bond by U.S. Magistrate Lurana Snow. Radziwon pleaded not guilty, while the others will be arraigned July 20.

Also surrendering Thursday were prominent Fort Lauderdale lawyer Steven Stoll, a mortgage broker who owned a title company, and Boca Raton lawyer Stephen Orchard, who worked with Stoll. They were granted bond, and also will be arraigned July 20.

At the bond hearing, prosecutors Laurie Rucoba and Pat Sullivan told the judge that two of the defendants had received ``intimidating'' letters from an anonymous source and that someone had rummaged through the garbage can of a Florida Department of Law Enforcement agent who investigated the case.

Snow, the magistrate, ordered the defendants not to contact each other, possible victims or government witnesses.

On Friday, two other defendants, Plantation police officer Joseph DeRosa and FBI agent Robert DePriest of Plantation, will surrender.

DePriest, coordinator of an FBI hazardous-materials team, normally would be placed on administrative leave without pay after being indicted. But in this instance he will be able to keep his job with pay while the case is pending because FBI supervisors believe he broke no laws, sources said.

His lawyers, Jon Sale and Jayne Weintraub, declined to comment.

According to the indictment, DePriest was among the buyers recruited by Guaracino who qualified for loans by providing phony information to lenders.

DePriest is accused of supplying ``false and fraudulent statements'' on a ``uniform residential loan application'' to secure a mortgage for a $545,000 home in the 100 block of Southwest 101st Avenue in early 2005. He said that it would be owner-occupied and his primary residence -- untrue statements, according to the indictment.

He is also accused of preparing and using ``false rental income'' from his actual primary residence and other properties to qualify as a borrower.

DePriest is also accused of committing the same offenses when he applied for another loan to buy a second home in the 9600 block of Northwest 10th Court, including ``material omissions'' such as ``the failure to list the complete assets and liabilities of the borrower.''

Among the omissions: the other rental property he had purchased in Plantation.

BY JAY WEAVER, jweaver@MiamiHerald.com

Source: MiamiHerald.com

Small town, big Clean Water Act problems

The stench and unbearable sight of the solid waste that occasionally flowed through Smuther's Ravine on the Edwards Family Farm in the tiny Sierra foothill town of Colfax ruined the farm's lettuce crop and very nearly financially ruined the city celebrating its centennial this year.

The cash-strapped burg of 1,500 people averted the worst Thursday when a scheduled hearing before a federal judge sympathetic to the farmer's plight was canceled. Instead, settlement talks restarted in court between Colfax and the farmers, Allen and Nancy Edwards.

Attorneys said it will be weeks before an agreement is reached to settle claims the city violated the Clean Water Act numerous times by allowing untreated waste to leave its sewage plant upstream of the Edwards farm. Talks could still collapse.

Colfax is only the latest polluter to run afoul of the historic Clean Water Act, which was passed in 1972 and empowered regular people like the Edwards to file "citizens lawsuits" when it appeared government regulators were ignoring problems.

Polluters are required to pay the attorneys fees of the prevailing party, putting cities, large industrial companies and even Amish farmers in financial jeopardy. Critics, including Damien Schiff, an attorney with the politically conservative Pacific Legal Foundation in Sacramento, say that provision alone generates more lawsuits than "would otherwise be brought."

Schiff said that successful lawsuit have been filed for violations that regulators deemed too trivial to pursue.

"There are definitely abuses," Schiff said.

Colfax City Manager Bruce Krantz is even more blunt, describing the attorneys arrayed against his town as "ambulance chasers."

Allen Edwards says he sued Colfax only as a last resort. He said years of fruitless negotiating to fix the city's outdated sewage plant prompted him to hire San Francisco's Lawyers for Clean Water Inc. to file a lawsuit in 2007. The two sides settled the lawsuit in 2008 with the city agreeing to pay the Edwards $130,000 and additional $320,000 in attorney fees and expenses.

But the Edwards were back in court early this year accusing Colfax of more than 4,000 violations of the settlement agreement and Clean Water Act. The city admits to a few violations, but has until now argued that the Edwards are demanding too much.

Krantz said most of the allegations target the city's failure to properly keep the Edwards updated on the sewage plants upgrade.

With an annual operating budget of $1 million, the city said it was prepared to file for bankruptcy if the judge sided with the Edwards demands for a $2 million fine and hundreds of thousands of dollars more in attorney fees. In the meantime, Krantz said Colfax was left with little choice but to fight the allegations. He posted a letter on the city's Web site complaining to residents about the Edwards' lawyers' demand for $186,000 in new attorneys fees.

In particular, Krantz was upset that the lawyers were billing San Francisco rates of $550 an hour instead of lower Sacramento rates of about $300 hour. He complained that Colfax residents' sewer fees have tripled in recent years to more than $100 a month in part because of the lawsuit.

"It's a game," Krantz said before the scheduled hearing Thursday. "Because their demands are so high, we are forced to defend ourselves. We can't just write a check for $2 million."

For his part Allen Edwards said that all he wants is a creek devoid of untreated waste. He's convinced the sewage plant can be made safe. He defends the hiring of the San Francisco firm because he said very few lawyers operate in the specialized field of Clean Water Act litigation.

"Instead, they have built up huge legal fees fighting instead of trying to fix the problems," he said. "If the city honors its settlement, we can have our lives back."

The Edwards retired to his family's 520-acre Colfax property in 1997 after building a house along the creek. Allen Edwards said a city engineer assured him that sewer plant upstream dumped only treated water into the creek. But Allen Edwards soon discovered with his nose and eyes that claim was far from true.

He said he lost a burgeoning lettuce business because new regulations arising from the California e. coli spinach crisis prohibits growing crops near polluted water. He grows trees for timber on most of the rest of the property.

Allen Edwards said he wished he didn't have to sue, but had no choice because of regulatory inaction.

That's exactly why the Clean Water Act was enacted, its supporters claims, because state and local regulators fail to hold polluters accountable.

J. Scott Sexton, an attorney for three coal companies in Virginia, settled a Clean Water Act lawsuit for $75 million last month that accused several other companies of illegally dumping waste into several mines. Sexton said the lawsuit was necessary because regulators refuse to hold the polluters responsible.

The settlement, he said, "likely signals a new era for enforcement of Clean Water Act standards within the coal industry."

Meanwhile, environment groups recently filed the largest Clean Water Act lawsuit in history when they sued BP for $19 billion for fouling the Gulf of Mexico.

By PAUL ELIAS Associated Press Writer

Source: San Jose Mercury News

Thursday, July 1, 2010

Defense attorney: Alleged spy couple infiltrated 'cocktail parties'

The Cambridge couple accused of being Russian spies waved and nodded at their two children today in a Boston courtroom, where their lawyers said they wanted the federal government to move swiftly to prove they are agents living under false identities.

Donald Heathfield and Tracey Lee Ann Foley wore prison garb, handcuffs, and leg shackles when they were escorted into US District Court.

US Magistrate Judge Jennifer Boal asked the couple's new lawyers how she should address them, given that the FBI alleges Heathfield is using the name of a dead Canadian infant and Foley's real name is allegedly unknown.

"Donald Heathfield,'' said Peter Krupp, who is now representing the man who graduated from the Kennedy School of Government at Harvard in 2000 and allegedly claimed ties to top former US officials.

But Foley's attorney, veteran Boston defense attorney Robert Sheketoff, said he will use the identity federal prosecutors are using in court records – Defendant Number 5.

"I am going to take the position 'Defendant Number 5,''' Sheketoff told the magistrate judge.

The couple has hired Krupp and Sheketoff to represent them and they are no longer being represented by the federal public defender's office.

At the request of the attorneys, Boal ordered the couple to remain held without bail and set a new hearing for July 16 where federal prosecutors will be forced to demonstrate that Heathfield and his wife are Russian spies whom the FBI has followed for about a decade.

Boal is currently mulling a defense request that Heathfield and his wife be allowed to meet in the courthouse lockup so they can talk about the custody for their two sons, Timothy, 20, and Alex, 16. The couple are under court order not to speak with each other while the case is pending.

But Krupp told Boal the conversation is needed.

"There are obviously custody issues related to their kids that they have to deal with,'' Krupp said in court.

Late this afternoon and without any further public court hearing, Heathfield and his wife were allowed to spend about an hour together in the courthouse lockup -- with their attorneys present -- where they apparently talked about the future of their children.

"We appreciate that the US Marshals Service accommodated us,'' Sheketoff, Defendant Number 5's attorney, said this afternoon. "Because there were children involved.''

When Foley arrived, she looked around the courtroom and exchanged smiles with her two sons. When her handcuffs were removed, she gave them a brief wave, which they returned. Their father did not make direct eye contact when he was brought into the courtroom but later gave them a stern nod that was also returned.

The children were accompanied by a woman who works in Krupp's office and both declined comment before and after the hearing.

The hearing, before a packed courtroom, was brief. Afterward, Sheketoff and the federal prosecutors declined comment.

Krupp, however, said his client and his client's wife were guilty only of being parents who lived in Cambridge and went to parties in the neighborhoods.

"My client and his wife right now are worried about their kids,'' Krupp said. "I read the complaint affidavit in terms of facts alleged against my client and his wife. It's extremely thin. It essentially suggests that they successfully infiltrated neighborhoods, cocktail parties and the PTA. My client looks forward to facing the charges.''

By Jack Nicas and Alex Katz, Globe Correspondents, and Shelley Murphy and John R. Ellement, Globe Staff.

Source: The Boston Globe

Judge Hears Arguments on Health Overhaul Challenge

For the first time since President Obama signed the health care law, the federal government faced off in open court Thursday against one of the 21 states that are seeking to invalidate the law by challenging the requirement that most Americans obtain insurance.

In a two-hour hearing before a federal district judge here, Justice Department lawyers argued that the Commonwealth of Virginia did not have legal standing to challenge the law, and that it could not, in any event, win its argument that Congress had exceeded its constitutional authority.

Judge Henry E. Hudson, who was appointed by the first President George Bush, questioned both sides aggressively and said he would rule within 30 days. The judge predicted that the challenges to the health care law “will at some point in time define the outer boundaries” of federal regulatory power.

Virginia’s lawsuit, filed by Attorney General Ken T. Cuccinelli II with the support of Gov. Robert F. McDonnell, is one of more than 15 legal challenges to various components of the health care law. Both Mr. Cuccinelli and Mr. McDonnell are Republicans.

Filed immediately after the measure was signed, the Virginia case is the first to reach oral arguments on a motion by the Justice Department to dismiss the lawsuit. If Virginia survives that challenge to its standing to sue, a second hearing in October, on the state’s motion for summary judgment, will put Judge Hudson in position to decide the constitutional merits.

Twenty other states, led by Attorney General Bill McCollum of Florida, a Republican who is running for governor, have joined in a similar lawsuit in federal district court in Pensacola, Fla. The first oral arguments in that case are scheduled for September. Two other cases, one in Michigan and one in California, have hearings scheduled for this month.

A ruling this month in Virginia would have no direct impact on the other cases, but Judge Hudson’s reasoning could be taken into consideration by his counterparts in other states.

Assuming the cases are allowed to move forward, the attorneys general hope the United States Supreme Court will ultimately strike down the health care law and, in the process, clarify the limits on Congress’s authority to regulate interstate commerce. Their central argument is that the Commerce Clause of the Constitution cannot be interpreted to allow government penalties on Americans for refusing to buy a product, or as Virginia’s lawsuit puts it for “an absence of commerce.”

“We’re saying you can’t draft someone into activity so you can regulate him,” Virginia’s solicitor general, E. Duncan Getchell Jr., told Judge Hudson.

Mr. Getchell said the Justice Department’s defense of the law “evinces a hostility to federalism.” He called the law “a radical, radical claim of power” that, if upheld, would allow the federal government to require citizens to buy most any commercial product in the name of advancing the national interest.

Ian H. Gershengorn, a deputy assistant United States attorney general, countered that the insurance requirement fitted well within the Supreme Court’s parameters for Congressional regulation of interstate commerce. A choice not to obtain coverage, he said, is not inactivity, as Virginia and the other state plaintiffs claim, but an active decision to pay for future medical care out of pocket. Because many Americans cannot afford the cost of surgeries and hospitalization, their choice to go uninsured shifts the uncompensated cost of their care to hospitals, taxpayers and commercial policyholders.

“What Congress did,” Mr. Gershengorn said, “is regulate the way that people who consume health care will ultimately pay for it. The appearance of inactivity here is just an illusion.”

Because the health care law would impose an income tax penalty on those who do not obtain insurance, the Justice Department is also defending it as a constitutional exercise of Congress’s power to levy certain taxes.

That placed Mr. Gershengorn in the politically awkward position of insisting that the penalty was in fact a tax, although Mr. Obama and leading Democrats in Congress have asserted vigorously that the measure is not a tax increase.

Conversely, Mr. Getchell, representing Republican elected officials, found himself arguing that it was merely a penalty. If the law worked ideally, he said, everyone would obtain insurance and no revenue would be raised, meaning it could not be a tax.

Mr. Cuccinelli, who attended the hearing, has said he chose to file a separate lawsuit rather than join the Florida case because Virginia has unique circumstances. In March, it became the first state to enact a law intended to nullify the federal law by declaring that no resident could be required to obtain health insurance. The law took effect on Thursday.

The Justice Department’s court filings contend that Virginia cannot “manufacture its own standing” to challenge a federal law simply by passing a statute seeking to nullify an act of Congress. In court, Mr. Gershengorn also said the state had no authority to sue because the individual mandate, as the insurance requirement is called, imposes “no concrete injury” on states and does not take effect until 2014.

In an interview, the state’s secretary of health and human resources, Dr. William A. Hazel, said the state’s nullification law and the court challenge reflected public distaste in Virginia for the health care overhaul. Without citing examples, he said that hostility toward the law in Richmond had prompted something of a wait-and-see approach for preparing to carry it out.

“It’s like anything,” Dr. Hazel said. “If everyone felt there was an overwhelming mandate for health system reform, clearly you would be eager to move. In our case, we know there are issues to be resolved. It causes us to stop and pause and say, What can we do that’s consistent with what Virginians want?”

By Kevin Sack

Source: NYTimes.com