Corruption Alleged At Oakland City Hall

(News) — Wed, 27 Aug 2008 12:30:57 -0700

The City of Oakland fired its controller to retaliate for her reports of City Administrator Deborah Edgerly's illegal payroll practices, including double dipping, paying ghost workers and nepotism, Larae Brown claims in San Francisco Federal Court.

Brown says she found out in 2006 that the city's cash balance had been overstated by $172 million, that 77 of 111 funds were in the red, and that the city was spending restricted bond money illegally.

She says she reported this to city Treasurer Bill Noland, who told her "that he had taken up her concerns to Edgerly and that Edgerly would neither act to correct the matters reported by Brown, nor would she permit the Oakland City Council to be so informed. The City Budget Director confirmed that the report of Edgerly's response to Noland was accurate."

Brown says she also complained that city police officers were being paid for days they didn't work, paid for vacation and work on the same days, and that officers on workers comp were also getting holiday pay.

In response, she says, Police Chief Wayne Tucker told her that Edgerly would not allow her to send out a memo correcting this, and would not correct the illegal double dipping.

She claims she was not allowed to stop the overpayment of more than 22,000 hours of unearned overtime to city workers who also collected vacation pay for those hours.

She claims Edgerly approved $10,000 bonus checks to herself and Noland without approval from the mayor or City Council. And she claims that Edgerly had relatives on the payroll who were paid though they did not show up for work.

After that complaint, Brown says, "access to the payroll system was taken from Brown and her staff, preventing Brown from investigating and reconciling anomalies in City's payroll accounts."

Brown says she presented these complaints to City Auditor Courtney Ruby, who hired an outside auditor to investigate. Two days later, she says, Edgerly fired her, through Noland. She says she was fired "in reprisal for her complaint to the city auditor about Edgerly's malfeasance."

She demands $5 million in compensatory damages, and punitive damages. She is represented by John Burris of Oakland.

Katrina Victims Say Chase Manhattan Cheated Them

(News) — Tue, 26 Aug 2008 11:11:00 -0700

Chase Manhattan Mortgage Corp. cheated homeowners of interest on settlements for property damaged by Hurricanes Katrina and Rita, according to a class action in Orleans Parish Court.

After the hurricanes the plaintiffs received settlement checks for property damages, written jointly to them and to their mortgage lenders, Chase Manhattan or Chase Home Finance. The plaintiffs endorsed the checks and sent them on to Chase. They say that Chase "did not place any portion of the settlement proceeds drafts in an interest bearing account," and that Chase has not "ever paid to plaintiffs the interest generated by the settlement proceeds", in violation of Louisiana law. Instead,

Chase Manhattan "converted and otherwise misappropriated the settlement proceeds for their own use and for their own benefit," the complaint states.

Plaintiffs demand damages for unjust enrichment and conversion. They are represented by Kevin Oufnac with Kahn Gauthier Swick.

Court approves bid for Steve & Barry's

(News) — Mon, 25 Aug 2008 08:34:34 -0700

A U.S. Bankruptcy Court judge on Friday approved a $163 million acquisition of discount clothing chain Steve & Barry's.

BHY Holdings LLC, an affiliate of investment firms Bay Harbour Management and York Capital Management, said earlier this week it had won a bid to buy Steve & Barry's for $168 million. A company representative was not immediately available to discuss the court's decision or say why the purchase price had changed.

The deal went before U.S. Bankruptcy Court Judge Allan Gropper in New York on Thursday and Friday. The acquisition is expected to be completed Monday.

Steve & Barry's LLC, based in Port Washington, N.Y., filed for Chapter 11 bankruptcy protection in July after ambitious growth plans were hurt by slower spending by consumers and the credit squeeze.

Under the terms of the deal, the new owners will acquire nearly all the assets of Steve & Barry's and keep the majority of it 276 stores open. The new ownership said it will decide within a week which stores will close based on their profitability.

Bay Harbour does have experience in purchasing distressed companies and turning them around. The firm bought retailer Barneys New York out of bankruptcy before selling it to Jones Apparel Group Inc. And its holdings include the former Aladdin Casino, which is now operating on the Las Vegas strip as the Planet Hollywood Resort and Casino following a rebranding.

Lone accountant takes on IRS and wins

(News) — Sat, 23 Aug 2008 08:34:00 -0700

It took seven years, but Charles Ulrich did something many people dream about, but few succeed at: He beat the IRS in a tax dispute.

Not only that, but tax experts say potentially millions of other taxpayers could benefit from his victory.

The accountant from Baxter, Minn., challenged the method the IRS has used for more than 20 years to tax shares and cash distributed by mutual life insurance firms to their policyholders when they reorganize as public companies.

A federal court recently agreed with his interpretation.

"There's a tremendous amount of money at stake," said Robert Willens, a New York City-based tax analyst at Robert Willens LLC. "Tens of thousands of people could be in line for a refund."

Don Alexander, an IRS commissioner in the 1970s and now a tax attorney in Washington, said while it's not unusual for individuals to take on the agency, "most of them lose."

Alexander called it "quite a significant case."

The dispute arose when more than 30 mutual life insurance companies became publicly traded corporations in the late 1990s and earlier this decade, in a process known as "demutualization."

Mutual companies are owned by their policyholders, so the companies provided stock and cash to compensate them for the loss of their ownership interests when they went public.

Russian oil tycoon's parole bid rejected

(News) — Fri, 22 Aug 2008 08:35:00 -0700

A Russian court rejected jailed oil tycoon Mikhail Khodorkovsky request for parole on Friday.

The judge said Khodorkovsky was ineligible for early release from a sentence for tax evasion and fraud because he had refused to undertake professional training at his prison, which specializes in sewing, and because of an incident in which he flouted prison rules.

Khodorkovsky reacted by shaking his head as the decision was announced in the courtroom in the Siberian city of Chita.

Khodorkovsky — who headed the Yukos oil company and was once Russia's richest man — has spent almost five years in jail. He was sentenced in 2005 to an eight-year term and has been eligible for parole for the past 10 months.

Khodorkovsky's parole hearing was seen as a test of new President Dmitry Medvedev's commitment to reforming the judiciary.

The prosecution of the oligarch was widely viewed as an attempt to silence a Kremlin opponent and consolidate control over Russia's strategic energy sector.

The charges and subsequent demand for huge back taxes led to the effective renationalization of Yukos, which was taken over by the state oil company Rosneft.

Khodorkovsky also faces new charges of embezzlement and money laundering, brought in June against both the former billionaire and his business associate Platon Lebedev.

Chicago group challenges Illinois public school funding

(News) — Thu, 21 Aug 2008 08:37:22 -0700

The Chicago Urban League on Wednesday filed a lawsuit insisting that Illinois' current school funding scheme be declared unconstitutional in violation of the Illinois Civil Rights Act of 2003. CUL challenges the state's method for raising and distributing education funds to local school districts, which it claims results in "constitutionally inadequate educational opportunities for hundreds of thousands of Illinois public school children." CUL asserts that the state's public school funding scheme is "fatally flawed" because it relies too heavily on local property taxes, therefore reinforcing past discrimination and ensuring that certain school districts have "no capacity to raise the revenues they desperately need to close the funding gap," explaining:

the continuous and unmitigated harm that results each year from the state's persistent failure to meet its constitutional obligation to treat all students equally, regardless of race or ethnicity, to provide all Illinois students with access to equal education opportunity and to provide a system of schools offering a "high quality" education, is irreparable and unconscionable.

CUL President Cheryle R. Jackson said:

Our children, especially African Americans and Latinos, have been left behind because of poorly funded schools while their white counterparts in wealthy communities are thriving. Their basic right to a quality education is being denied. Through our litigation and civic engagement around this issue, we want to make sure no more children are given a second-class education.

Last year, the US Supreme Court ruled on New Mexico's public school funding system, and found that the US Department of Education is permitted by statute to refer to the number of students in a school district as well as the per-student expenditures in school districts when determining whether a state "equalizes expenditures" among public school districts.

Class Sues Apple Over iPhone 3G

(News) — Wed, 20 Aug 2008 08:42:01 -0700

Apple computer advertised its iPhone 3G model as "twice as fast for half the price" of the previous model, but the phone's Internet connection is slower than advertised and is plagued with dropped calls, a class action claims in Federal Court.

Jessica Smith says that "immediately after purchase Plaintiff soon noticed that her Internet connection, receipt and sending of email, text messages and other data transfers through the device were slower than expected and advertised. Plaintiff was familiar with the speeds at which the previous iPhone operated. The defective iPhone 3G appeared to connect to the 3G standard and protocol less than 25% of the time. Additionally, plaintiff experienced an inordinate amount of dropped calls."

Plaintiffs are represented by Haydn Trechsel.

Forest Service Tramples Law In National Forests, Groups Say

(News) — Tue, 19 Aug 2008 08:51:22 -0700

The U.S. Forest Service ignored potentially serious environmental consequences when it rezoned Southern California's four national forests to allow more road-building and motorized off-road vehicle recreation, the Center for Biological Diversity and five other groups claim in Federal Court.

At state are Los Padres, Angeles, San Bernardino and Cleveland National Forests - more than 3.5 million acres of public land in Southern California that includes the Big Sur coast south of Monterey Bay, snow-covered mountain peaks in the San Gabriel, San Bernardino and San Jacinto Mountains and the Mojave and Colorado Deserts. The hardwood and conifer forests, not suitable for timber production, are home to a wealth of sensitive, rare and unique vegetation, all of which allegedly are threatened by the impending construction of miles of roads and dangerous outdoor recreation activities.

Plaintiffs say the Forest Service and the Department of Agriculture violated the National Environmental Protection Act, by not preparing an adequate environmental impact statement on the effects of the rezoning plan on sensitive species and wildlife, and did not consider alternative management approaches.

The plaintiffs demand an injunction stopping the Forest Service from going ahead with the plans, and ordering the Forest Service to prepare a legal and adequate environmental impact statement and revised plans for the forests. Plaintiffs are represented by Erin Tobin with Earthjustice.

Anti-Castro militant to stand trial for US immigration violations

(News) — Mon, 18 Aug 2008 08:39:12 -0700

The US Appeals Court for the Fifth Circuit ruled Thursday that anti-Castro militant Luis Posada Carriles will stand trial in the US for alleged immigration violations, effectively blocking extradition efforts by Cuba and Venezuela. Both countries say that the US is bound by international treaties, including the International Convention for the Suppression of Terrorist Bombings and the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, to hand over Carriles, but the US has so far refused to do so. Carriles, a Venezuelan-born Cuban citizen, is wanted in both Cuba and Venezuela on terrorism charges relating to the 1976 bombing of a Cuban airplane.

Carriles was arrested in 2005 for illegally entering the US and had been under the custody of immigration officials until his release on bail in April 2007. Cuba criticized Carriles' release, and accused the US of violating international anti-terrorism treaties by freeing him and dismissing charges against him. Also in April 2007, Venezuela announced plans to challenge the US before the Organization of American States and other international bodies for refusing to prosecute or extradite Carriles for the terrorist bombing. The US government has cited the UN Convention Against Torture as justification for denying Cuban and Venezuelan requests to extradite Carriles, asserting that Carriles could face torture in those countries.

Labor groups file election law complaint against Wal-Mart

(News) — Fri, 15 Aug 2008 08:35:43 -0700

The AFL-CIO and three other labor groups filed a complaint with the Federal Election Commission on Thursday, alleging that Wal-mart Inc., the largest employer in the US, violated federal election laws by forcing employees to attend meetings where political and presidential campaign issues were discussed. According to a report by the Wall Street Journal , the labor groups Change to Win, WakeUpWalMart.com, Americans Rights at Work, and the AFL-CIO filed the complaint based on Wal-Mart meetings which were intended to convince lower-level department heads that electing a Democratic president would make it easier for workers to unionize, which in turn could lead to lower salaries and violations of privacy. According to the labor organizations, federal regulations allow companies to promote voting for a presidential candidate to high-level managers but not to lower-level managers and department heads.

At issue is the Employee Free Choice Act, which would require a company to recognize a union as soon as a majority of a company's employees signed cards saying they want to organize a union. Democratic Party presidential candidate Barack Obama supports the legislation, while Republican Party presidential nominee John McCain does not. In June, the US Supreme Court ruled that a 2000 California law that prohibits employers from using certain funds they receive from the state to influence union elections is unconstitutional. Previously in 2006, the US Court of Appeals for the Ninth Circuit upheld the California law, ruling that it was neither preempted by the National Labor Relations Act nor rendered unenforceable by the US Constitution's Supremacy Clause.