the law and economics of gov. contracts
Federal Ban Doesn't Hurt WorldCom Much By Griff Witte Washington Post Staff Writer Friday, October 24, 2003; Page E01 In the nearly three months since federal authorities suspended WorldCom Inc. from receiving new and renewed contracts because of its ongoing accounting troubles, U.S. agencies have granted the telecommunications giant more than $100 million worth of government work through a little-known waiver process. Federal officials said most of the waivers were needed to extend existing contracts. But the waivers have inflamed WorldCom's competitors and upset congressional critics, who say the government waited too long to suspend the company and now is not properly enforcing the ban. To those critics, the government's handling of WorldCom's contracts is evidence of an unhealthy mutual reliance: WorldCom is by far the government's biggest telecommunications provider, and the government is WorldCom's most lucrative customer. I'm angry about this. There is a codependence there, said Rep. John E. Sweeney (R-N.Y.), who was at the forefront of efforts to suspend the company this summer. WorldCom is very adept at playing the old inside-the-Beltway game. They've got friends in high places. Executives at WorldCom, which now operates under the name of its long-distance subsidiary MCI, said the company won the work by providing high-quality service, not by pulling strings. It can be disruptive and costly for the government to switch carriers after initial contracts are awarded, they said. When you are providing the kinds of service and the levels of service that MCI is providing, it is hard to come to a grinding halt, said Jerry Edgerton, WorldCom's senior vice president of government markets. Under terms of suspension, government agencies can honor current contracts with a suspended company. But to award new contracts or extend existing ones, officials need to supply a compelling reason the suspension should be waived. Federal agencies waived the WorldCom suspension on at least seven contracts, six of which involved extension or adding orders to existing contracts. The seventh is a new contract that would replace a previous contract with WorldCom. The Defense Information Systems Agency, which manages the Defense Department's communications, has invoked waivers on five contracts. For one, under which WorldCom supplies systems that support military and intelligence activities, agency officials asserted that not renewing the company's contract would cause great harm to the national security of the United States and potential danger to its citizens and warfighters. Other agencies have cited more prosaic reasons for sticking with MCI. The Armed Forces Retirement Home said switching from MCI might hinder residents' ability to stay in touch with friends and family, while the Social Security Administration argued that, without MCI, approximately 250,000 calls from the public per day would have gone unanswered until transition to an alternate service provider was completed. Additional waivers could be in the works. The Justice Department, has asked, despite the suspension, that it be allowed to consider WorldCom when it awards a major new telecommunications contract at the beginning of 2004. Rep. Albert R. Wynn (D-Md.) said the waivers make him question how seriously government officials take WorldCom's suspension. People are kind of just looking the other way and going on with business as usual. It's unbelievable, Wynn said. WorldCom was suspended from receiving new contracts on July 31, a little more than a year after it revealed a scandal that would eventually involve the improper accounting of $11 billion. The scandal helped push the company into Chapter 11 bankruptcy protection. Edgerton said the company held daily conference calls in the summer of 2002 with its government customers to alleviate any concerns. WorldCom provides telecommunications services to a long list of government agencies that includes the Federal Aviation Administration, NASA and the FBI. Revenue from government work totals more than $1 billion a year. Although that is only 6 percent of the company's total revenue, government business as a great overall impact on the company's well-being. Had the government barred WorldCom from new federal contracts soon after the company filed for Chapter 11 protection, it could have set off a cascade of cancellations by large commercial clients, Edgerton said. Instead, the government stuck with WorldCom, and the company now hopes to emerge from Chapter 11 by year-end. One of the things that got us through the last year was that the government was willing to continue to do business with us, Edgerton said. In the months after WorldCom disclosed its accounting problems, the State Department awarded the company a $360 million, 10-year contract. The Defense Department commissioned it to build a wireless network in Iraq. The House of Representatives signed a $17 million contract extension just
law and economics of caspian sea oil
[stumbled on this looking up some info on the WTO for groups getting ready for Cancun] http://law.vanderbilt.edu/journal/34-03/Faraz.htm Vanderbilt Journal of Transnational Law The Caspian Sea Legal Regime, Pipeline Diplomacy, and the Prospects for Iran's Isolation from the Oil and Gas Frenzy: Reconciling Tehran's Legal Options with its Geopolitical Realities To this day, no one has come up with a set of rules for originality. There aren't any. [Les Paul]
the law and economics of K St.
http://www.washingtonmonthly.com/features/2003/0307.confessore.html To this day, no one has come up with a set of rules for originality. There aren't any. [Les Paul]
law and economics of war rents
Conflict Jostles Contracting Sector D.C. Law Firms, Clients Hurry To Alter Services, Insurance By Carrie Johnson Washington Post Staff Writer Saturday, March 22, 2003; Page E01 William A. Roberts III, a longtime government contracts lawyer in Washington, said his phone started ringing Wednesday night. Clients that help the Defense Department and other federal agencies support troops overseas have called with questions about everything from insuring expensive machinery in the Middle East to computing hazard pay for contract workers near the line of fire. We've gotten a rash of questions tied to what's going on in Iraq, said Roberts, a partner at Wiley, Rein Fielding LLP and a former assistant to the Navy's general counsel. Just as New York's legal community can be roiled by upheavals on Wall Street, Washington's law firms often feel the shift of major government initiatives. Helping clients secure government work, protecting clients' interests when policies shift and protesting when things don't go their clients' way -- for instance, when a rival wins a lucrative contract -- has long been a mainstay of Washington's legal community. The Iraqi war has already changed the government contracting environment. For example, the Defense Department, citing the need to move supplies quickly, has waived many strict procurement rules. The waiver, which is permitted during national emergencies, enabled the government to bypass some competitive bidding requirements and other contracting rules. W. Stanfield Johnson, a senior partner at Crowell Moring LLP, said this will make it difficult for clients to protest contract awards and will reduce the amount of bid protest work handled by Washington firms. In addition, the government has been asking contractors to quickly alter their contracts so they can provide war-related goods and services. Lawyers say they have been reviewing a flurry of these revisions, because clients want to make sure there will not be disputes when they try to get reimbursed. Contract workers who find themselves near harm's way can be entitled to hazard pay, which essentially means bigger paychecks from employers because of staffers' proximity to the war. The government reimburses contractors for the higher pay rate in some circumstances, depending on the contract, legal experts said. Some lawyers say they are fielding inquiries from clients about how to calculate the payments using complicated Defense and State department formulas. Contracts with the government generally spell out the kind of insurance that companies need to provide for employees who work near combat areas. But sometimes getting insurance coverage for machines used to repair and test costly equipment, such as tanks or electronic weapons systems, can't be done until a contractor knows just where the equipment will be stationed, said Roberts. That can lead to last-minute scrambling by contractors and lawyers as the assets move into position. Others say their clients are more focused on the next phase of the war. James J. McCullough, a partner at Fried Frank Harris Shriver Jacobson in Washington, said his clients are calling with questions about how to get on the short list of contractors that will be considered to handle rebuilding efforts in Iraq. His short answer? Make sure they communicate what they can do with military decision makers early and often. For the handful of U.S. law firms with offices in the Middle East, simple things such as conducting a client meeting became a challenge this week. David Pfeiffer, a partner at Bryan Cave LLP who is working out of Kuwait City, said a session with the National Bank of Kuwait was interrupted several times Thursday by the sounds of incoming missiles from Iraq. The citywide sirens were blaring, Pfeiffer, a graduate of Georgetown University, said in a telephone interview yesterday. It's a very shocking sound that completely dominates every room. Bryan Cave has offices in Saudi Arabia and the United Arab Emirates, as well as in Washington. Pfeiffer said some clients want to know how they can alter their operations in the region now that access to seaports, among other things, are hard to come by. But for the most part, he said, the issues he's dealing with this week are the same that occur with any business disruption, albeit a more dramatic one. Researcher Richard S. Drezen contributed to this report.
law and economics redux
No case for Iraq attack say lawyers Michael White and Patrick Wintour Friday March 7, 2003 The Guardian Tony Blair last night faced fresh pressure to abandon the threat of war against Iraq when 16 eminent academic lawyers warned him that the White House doctrine of pre-emptive self-defence has no justification under international law. Not only do all the UN security council's existing resolutions on Iraq - including 1441 passed unanimously in November to enforce disarmament on Saddam Hussein - fail to provide such authority, there are currently no grounds for passing a new one to give the clearly expressed assent to a war that Mr Blair still seeks, the lawyers declare. In a letter sent to Downing Street and published in today's Guardian, the signatories - specialists who include James Crawford, Whewell Professor of International Law at Cambridge, and Vaughan Lowe, Chichele Professor at Oxford - also take a sideswipe at the prime minister for saying that he and President Bush would ignore an unreasonable veto in the security council. Noting that Britain itself has exercised the veto 32 times since the UN was founded in 1945, the 16 say the prime minister's assertion that in certain circumstances a veto becomes 'unreasonable' and may be disregarded has no basis in international law either. The 16 do leave themselves some wriggle room by pronouncing their verdict on the basis of information publicly available so that a major disclosure of Iraqi non-compliance with the UN weapons inspection - or other subterfuge - might change their stance. But US-UK dossiers have so far failed to persuade wary voters. Not content with telling Mr Blair that a second resolution is legally necessary as well as politically vital if Downing Street is to stem growing dissent among Labour and Liberal Democrat MPs, the lawyers, mostly British-based but of many nationalities, add a further sting. A decision to undertake military action in Iraq without proper security council authorisation will seriously undermine the international rule of law, they say. Of course, even with that authorisation, serious questions would remain. A lawful war is not necessarily a just, prudent or humanitarian war. That amounts to a blanket thumbs-down. The letter's signatories include six leading international lawyers from Oxford, three from Cambridge and three from the London School of Economics. Also among them are Professor Phillipe Sands, a member of Cherie Blair QC's Matrix chambers who teaches at University College London, and Professor Pierre-Marie Dupuy of the Sorbonne. The substance of the letter, however, is certain to be disputed by other senior lawyers. Some argue that, if 1441 is not deemed strong enough, resolution 678, passed in 1990, will be deployed by the US and UK to justify an attack. Mr Blair, himself a lawyer, again insisted he will only act in a manner consistent with international law when cross-examined by European young voters in an MTV TV debate yesterday. Some senior ministers have been alarmed that legal opinions circulated within the cabinet challenge the legality of the looming scenario for war, not least the prospect of a US-led reconstruction of a post-Saddam Iraq. It would be illegal, Whitehall lawyers say, without direct UN authority. The warning from legal advisers shown to ministers, including foreign secretary Jack Straw and Clare Short, the international development secretary, makes it clear why Britain has been pushing a reluctant US to bring the UN into running a post-war regime as soon as possible. Ministers and officials are acutely aware of the problem which has led to informal talks with UN officials to draft options. But they fear that Mr Blair is not pressing Washington hard enough. This adds to pressure to delay military action, now expected in the second half of March. In the MTV debate, Mr Blair implicitly acknowledged the problem when he stressed that Iraqi oil supplies would be placed under UN supervision, though he pointedly drew attention to Iraq's outstanding debts and contracts to France and Russia. Some Blairites say the debts explain the two states' attitude to war. Equally significantly Mr Blair appeared to admit that either - or both - could veto the resolution now being redrafted to win wavering security council resolutions. If there was a veto applied by one of the countries with a veto, or by countries that I thought were applying the veto unreasonably, in those circumstances we would (go ahead), he said. Aides later stressed that Mr Blair still expects to win the second resolution. A further sign of planning jitters emerged yesterday from a secret session at Westminster, where a UN official told the Commons international development committee that its financial resources for a proper humanitarian operation in Iraq are totally inadequate. Ross Mountain, director of UN humanitarian affairs, told MPs that 470,000 tonnes of food were available, with most Iraqis probably
law and economics
[New York Times] February 5, 2003 Economic Woes Hit Law Firms By JONATHAN D. GLATER Law firms, commonly seen as islands of security and stability to their employees, are proving vulnerable to the turbulence in the economy. Squeezed between their clients and their own lawyers' wage demands in tough times, some firms are collapsing under the pressure. Big corporate clients are battling to keep costs down, while the firms' costs for lawyers, staff and technology are rising. At the same time, partners are often unwilling to accept declining pay, and they defect. There are more firms working on radically restructuring, said Lisa Smith, who leads the merger and consolidation practice at the consulting firm Hildebrandt International. She said her business was busier than ever advising law firms trying to avoid collapse, adding that there had recently been a number of desperate last-ditch efforts at mergers intended to stave off law firm implosions. We're seeing a rash of them right now, she said. The most spectacular collapse came last week, when partners at Brobeck, Phleger Harrison, a prominent San Francisco Bay Area firm, decided to wind down the firm's business. On Monday, Skjerven Morrill, a 67-lawyer firm in San Jose, Calif., specializing in intellectual property law, announced that it would dissolve. In December, Hill Barlow, a 107-year-old Boston law firm, said it would dissolve after a group of real estate partners indicated that they planned to defect. This is not the first time that lucrative work for big companies and investment banks has dried up. But gradual changes in the practice of law have made law firms more vulnerable today than they have been in years, according to lawyers and their consultants. Many firms have become highly specialized and do not have, for example, the bankruptcy business to carry them until the economy picks up again. Law firms' problems generally become evident early in the year as partners learn how much money they made the previous year and how much they will probably make in the coming year. If both figures are declining, some partners invariably begin to look for greener pastures; several partners jumped ship from Brobeck over the last year after the firm's decline became apparent during 2002. They'll jump for money, said Ward Bower, a principal at Altman Weil, a consulting firm that advises law firms. Twenty years ago, they wouldn't. That injects volatility into the marketplace. At Hill Barlow, a group of real estate lawyers announced their intention late last year to join another firm, said Robert A. Bertsche, a former partner. There have been times when one department has been stronger and another department has been weaker, he said, but partners would remain loyal. They were different times. And maybe they were different people. When partners defect, Mr. Bower said, the firm still faces leasing and personnel costs, but with fewer lawyers to bring in revenue, squeezing profits. The weak economy has the same effect, driving down compensation and leading more partners to abandon ship, Mr. Bower said. Firms that relied heavily on slipping sectors of the economy - technology companies, in Brobeck's case - have found the climate particularly harsh. Brobeck shed nearly a third of its lawyers last year, before deciding last week to cease operating as a single firm. Conventional wisdom held that law firms could weather economic downturns by relying on business lines like bankruptcy and civil litigation that tend to increase in bad times. But in the late 1990's, not all firms kept their staffs or their clientele balanced, leaving them without bankruptcy lawyers to subsidize the stock-offering gurus whose work is now less in demand. The countercyclical practices for the most part are not evenly distributed, Mr. Bower said. Firms with big bankruptcy practices, like Weil, Gotshal Manges of New York - which is representing Enron, among others - are very busy. But other firms with little bankruptcy expertise are experiencing a tough year, he said. Law firms generally carry more debt today as well. Brobeck, for example, is reported to have had tens of millions of dollars in debt, and that obligation was a significant factor in the decision to wind down, partners said last week. In statements, Brobeck's lawyers also attributed the firm's demise to the failure of merger negotiations with a larger firm, Morgan, Lewis Bockius, which has big offices in New York, Philadelphia and Washington. Such merger efforts are more often evidence of a firm in trouble than the cause of its difficulties, Ms. Smith, the consultant, said. A more likely culprit is the steady increase in law firms' costs. The prices of long-term leases have increased, and some firms, like Brobeck, planned on space for many more lawyers than they have. Brobeck shrank to about 500 lawyers last week from 900 lawyers in 2000. In addition, the cost of computers and other technology used by firms has
Re: Re: law and economics redux
On 1/30/03, andie nachgeborenen [EMAIL PROTECTED] wrote: When I was clerking on the federal district court in Chicago, there was an insurance dispute . . . whether the insurer would pay under a director's and officer's liability policy for the defense of a firm that had pleaded guilty to a criminal antitrust violation and, as part of the settlement of a interstate transportation of stolen property (a custimer list) against two officers, paid a lot of money to the gov't. I drafted the opinion, referring to the firm as a beehive of criminal activity, talking about the general atmosphere of criminal disregard of the law, and referring often to the criminal liability and criminal violations. It may be interesting that you neglect to report how/why this characterization was important (or, indeed, even relevant) to the decision at hand compared with whether the wrong at issue (even if: a crime) was/wasn't a covered occurrence as the policy defined that (or whatever was its like) term. It was a summary judgment motion, granted in part, denied in part, they settled, and then the firm asked the judge to _withdraw her published opinion_ (with this language). She said, I don't issue advisory opinions.
law and economics redux
Hide and Seek By Russell Mokhiber and Robert Weissman For corporations, reputation is everything. If they lose it, they stand to lose everything. See Andersen, Worldcom and Enron. If they can keep their dirty laundry out of the public eye, all the better. They do this by destroying incriminating documents, by lying, by covering up. If they are caught red-handed by the cops, there's another way -- plead guilty or negotiate a deferred prosecution agreement and ask the government not to publicize the agreement. We've always suspected that these kinds of secret settlement side deals are happening, but never could put our finger on it. Until earlier this week, when we attended a media nosh at the Washington Legal Foundation. That's the group that takes out ads in the New York Times ripping into the Justice Department for prosecuting corporate criminals. The title of the session: Is Creative Enforcement of White Collar Criminal Laws in the Public Interest? The message that the corporate-funded think tank wanted to get out, as one paper put it: criminalizing business judgment could stagnate the U.S. economy. In the question-and-answer session, we asked the distinguished panel of white collar crime defense lawyers whether they could name a recent criminal prosecution of a corporation that should not have been brought because the theory of enforcement was too creative. Ira Raphaelson, a former federal prosecutor, and now a white collar defense attorney at O'Melveny Myers, said he had one, but couldn't talk about it. What do you mean, you can't talk about it? I promised my client that I won't talk about it, he says. It was a criminal prosecution and it's on the public record, right? Yes, but I'm not going to tell you any more about it. Was the case settled? Yes, he says. Did the Justice Department notify the press that the case was settled? No, he says. The company completed the negotiations. A lot of money was paid. I could tell you about the case, but it would be to the detriment of my client, so I won't, he says. Raphaelson said that the case involved a corporation that was charged with crimes under the collective knowledge doctrine. That's a doctrine that holds that a corporation can be held criminally liable for the collective knowledge of its employees -- even though no one individual has sufficient knowledge to hold that individual culpable. Raphaelson said that use of the collective knowledge doctrine is on the increase. And that's a bad thing, he says. So, it's a good thing that the Justice Department didn't publicize the case, because it would make the Department look bad. Raphaelson said that there have always been these kind of side deals between the government and defense attorneys not to publicize a case. There are settled criminal cases that the government and the defense attorneys agree not to talk about in public, he says. There always have been these side deals. If there is a prosecution that is a bad prosecution that is settled, and I have a side deal with the prosecutors not to talk about the prosecution, I'm not going to talk about it. In my case, the government put out no press release. There was no publicity to the case. Lanny Breuer, the former special counsel to President Clinton and currently a partner at Covington Burling, agreed with Raphaelson that such a secret settlement practice exists. There is this kind of practice of keeping information about criminal cases out of the press, Breuer said. Breuer says he's seeing it increasingly with deferred prosecution agreements. That's where the government will tell a defendant -- if you are a good boy for a year, the charges will be dropped. The criminal slate will be wiped clean. The U.S. Attorney's Manual says that a major objective of deferred prosecutions -- also known as pretrial diversion -- is to save prosecutive and judicial resources for concentration on major cases. Deferred prosecution agreements were never intended for serious corporate crime cases. But that's where they are increasingly being applied. Hardly anybody knows about them, Breuer said. In fact, these are settled very quietly. Lawyers find out through the rumor mill about these settled cases that have no publicity, they'll be tipped off to it, and they'll start digging in the court records to try and find them. Breuer said that a defense attorney will go into the Department of Justice and say -- okay, we can't prevent you from giving this to the press, but we are going to say nothing, and we're hopeful that you will say nothing. And often they don't. Justice Department spokesperson Bryan Sierra confirmed that the Department doesn't always put out a press release announcing a criminal settlement -- even with a major corporation. Sierra, who called our line of questioning relatively stupid, said that we decide when to make public announcements and reporters like yourself have to check with court documents. If a defense attorney and a
Re: law and economics redux
When I was clerking on the federal district court in Chicago, there was an insurance dispute involving whether the insurer would pay under a director's and officer's liability policy for the defense of a firm that had pleaded guilty to a criminal antitrust violation and, as part of the settlement of a interstate transportation of stolen property (a custimer list) against two officers, paid a lot of money to the gov't. I drafted the opinion, referring to the firm as a beehive of criminal activity, talking about the general atmosphere of criminal disregard of the law, and referring often to the criminal liability and criminal violations. It was a summary judgment motion, granted in part, denied in part, they settled, and then the firm asked the judge to _withdraw her published opinion_ (with this language). She said, I don't issue advisory opinions. It's in the F.Supp. 2d., Richardson Electronics v. some or other insurance co. jks If they are caught red-handed by the cops, there's another way -- plead guilty or negotiate a deferred prosecution agreement and ask the government not to publicize the agreement. We've always suspected that these kinds of secret settlement side deals are happening, but never could put our finger on it. Until earlier this week, when we attended a media nosh at the Washington Legal Foundation. That's the group that takes out ads in the New York Times ripping into the Justice Department for prosecuting corporate criminals. The title of the session: Is Creative Enforcement of White Collar Criminal Laws in the Public Interest? The message that the corporate-funded think tank wanted to get out, as one paper put it: criminalizing business judgment could stagnate the U.S. economy. In the question-and-answer session, we asked the distinguished panel of white collar crime defense lawyers whether they could name a recent criminal prosecution of a corporation that should not have been brought because the theory of enforcement was too creative. Ira Raphaelson, a former federal prosecutor, and now a white collar defense attorney at O'Melveny Myers, said he had one, but couldn't talk about it. What do you mean, you can't talk about it? I promised my client that I won't talk about it, he says. It was a criminal prosecution and it's on the public record, right? Yes, but I'm not going to tell you any more about it. Was the case settled? Yes, he says. Did the Justice Department notify the press that the case was settled? No, he says. The company completed the negotiations. A lot of money was paid. I could tell you about the case, but it would be to the detriment of my client, so I won't, he says. __ Do you Yahoo!? Yahoo! Mail Plus - Powerful. Affordable. Sign up now. http://mailplus.yahoo.com
the law and economics of winnie the pooh
http://www.fortune.com/fortune/articles/0,15114,404206,00.html
