Baker & McKenzie UBS Memo Takes Center Stage

SFL here.

Come on folks -- David needs to focus on his trial, and a bunch of nudnick commenters force him to change his comment policy. Oy.

Meanwhile, the UBS saga unfolds on multiple fronts, in addition to Judge Gold's courtroom. In Senate testimony yesterday, a Baker & McKenzie tax memo took center stage:

According to a 180-page list of exhibits released by the Permanent Subcommittee on Investigations, a UBS memo dated July 4, 2000, shows that the Swiss bank relied on outside legal counsel from Baker & McKenzie when setting up offshore asset vehicles and insurance plans to aid U.S. clients. (The UBS memo citing legal advice obtained from Baker & McKenzie can be seen on PDF pages 178 and 179.)

The memo, which was signed by UBS financial planning and wealth management employees Jonathan Bourne and René Sonneveld, explicitly states that the firm was consulted when setting up such schemes.

It also appears that UBS is arguing some sort of abstention doctrine before Judge Gold:

Branson said that UBS views the John Doe summons filed by the IRS in federal court in Miami as a dispute between the IRS and the Swiss government, which can best be resolved through diplomacy rather than litigation that is neither "proper nor productive."

UBS is being advised by Wachtell, Lipton, Rosen & Katz litigation partners John Savarese, Ralph Levene, and Martin Arms. Eugene Stearns, chairman of Florida firm Stearns Weaver Miller Weissler Alhadeff & Sitterson, is serving as local counsel to UBS along with litigation partners Ana Barnett and Gordon Mead, Jr. (Stuart Gibson, senior litigation counsel with the Justice Department's tax division, is the lead lawyer for the government.)

What is with the Swiss and diplomacy? Also, when is litigation ever "proper or productive"?

Welcome to America!

New Comment Policy

While I am in trial and while SFL is graciously and very ably filling in, I have enabled comment moderation because people are out of control with the personal attacks. If you see a comment you would like removed, please email me and I will take it down as soon as I am able. I do not like moderating comments, but I won't allow the blog to be used to anonymously pick on people. Sorry.

IRS Targeting All Dancing Race Car Drivers?

SFL here -- David is still busy doing something involving the 6th Amendment and government lawyers who tape attorney-client conversations and forget to tell anybody about it.

So let's get on to the important stuff.

The "target" theme appears to be what Roy Black is running with in the Helio trial, according to this Herald report:

But the defense team countered the prosecution's case was fueled by the IRS' drive to target the 33-year-old celebrity.

''They have come up with a fiction,'' Castroneves' attorney, Roy Black, said in his opening statement, saying his client's tax obligation was legitimately deferred until May.

''When he won Dancing with the Stars [in 2007], that made him an even bigger target to the IRS,'' Black said.

Very interesting.

All I know is if 2008 winner Brooke Burke takes up racing, she darn well better have her taxes in order.

Picking A Replacement for Judge Hurley

Hi folks, yes it's me, and yes I'm still here.

David recently posted a list of the JNC for the SD FL, who are charged with recommending a replacement for Judge Hurley now that he is going senior status:

Kendall Coffey (Chair) Georgina Angones Reginald Clyne Gonzalo R. Dorta Al
Dotson Philip Frieden John Genovese Evelyn Greer Jillian Hasner Manny Kadre
Chuck Lichtman Richard Lydecker Tom Panza Luis Perez Danny Ponce David Prather Dennis Richard Justin Sayfie Chris Searcy Steve Zack.

I think the list is pretty solid, what do you all think?

Back when Bush was President, Senator Hatch had this to say about the judicial nominating process:

It seems to me that the only way to make sense of the advice and consent role that our Constitution's framers envisioned for the Senate is to begin with the assumption that the President's constitutional power to nominate should be given a fair amount of deference, and that we should defeat nominees only where problems of character or inability to follow the law are evident.

In other words, the question of ideology in judicial confirmations is answered by the American people and the Constitution when the President is constitutionally elected. As Alexander Hamilton recorded for us, the Senate's task of advice and consent is to advise and to query on the judiciousness and character of nominees, not to challenge, by our naked power, the people's will in electing who shall nominate.

To do otherwise, it seems to me, is to risk making the federal courts an extension of this political body. This would threaten one of the cornerstones of this country's unique success – an independent judiciary.

We must accept that the balance in the judiciary will change over time as Presidents change, but much more slowly. For the Senate, to do otherwise is to ignore the Constitution's electoral process and to usurp the will of the American people. To attempt to bring balance to courts in any other way is to circumvent the Constitution yet again, without a single vote of support being cast by the American people.

Makes perfect sense to me.

Then why, as Washington Monthly notes, was Hatch a signatory to this letter to the President just signed by all 41 Republican Senators:

President Barack Obama should fill vacant spots on the federal bench with former President Bush’s judicial nominees to help avoid another huge fight over the judiciary, all 41 Senate Republicans said Monday.

In a letter to the White House, the Republican senators said Obama would “change the tone in Washington” if he were to renominate Bush nominees like Peter Keisler, Glen Conrad and Paul Diamond. And they requested that Obama respect the Senate’s constitutional role in reviewing judicial nominees by seeking their consultation about potential nominees from their respective states.

“Regretfully, if we are not consulted on, and approve of, a nominee from our states, the Republican Conference will be unable to support moving forward on that nominee,” the letter warns. “And we will act to preserve this principle and the rights of our colleagues if it is not.”

In other words, Republicans are threatening a filibuster of judges if they're not happy.

Oy. So where does that leave us here in South Florida?

SFL post

SFL here, tending bar.

[DOM edit -- Sorry SFL, I decided to take out the section you wrote up about my trial. I try not to blog about my ongoing trials...]

For more fun government facts, take a look at the previously-secret John Yoo Justice Department memos that explain how the United States should treat its citizens during wartime:

"The current campaign against terrorism may require even broader exercises of federal power domestically," Justice Department officials John Yoo and Robert Delahunty wrote White House counsel Alberto Gonzales in the Oct. 23 memo.

"We do not think that a military commander carrying out a raid on a terrorist cell would be required to demonstrate probable cause or to obtain a (search) warrant," they said.

The U.S. Supreme Court has held that the Constitution's Fourth Amendment ordinarily requires a probable cause and a warrant to execute a search. However, the memo said those requirements "are unsuited to the demands of wartime."

Furthermore, it said, "First Amendment speech and press rights may also be subordinated to the overriding need to wage war successfully."

"The government's compelling interests in wartime justify restrictions on the scope of individual liberty," it said. The Justice Department under Bush had fought a lawsuit which sought to make the memo public.

Oh well, past is past!

New Helio Photo Posted!

SFL here, reporting from inside Judge Graham's crowded courtroom with this exclusive photo of jury selection in the Helio Castroneves trial.

Ok ok, here's an actual story from The Indy Channel on what's going on:

"I wish I could be in a racecar, because I'm in control. Here, I'm not in control at all," Castroneves said. "I trust the people that are handling all of my business."Defense attorneys said they will try to show that an off-shore shell corporation involved in the case, Seven Promotions, was operated by Castroneves' father, not Helio.The trial is expected to last up to four weeks. Several luminaries are expected to testify at the trial, including Roger Penske, Jimmie Johnson and Rep. Jack Kemp.

Interesting, the bolded language -- that's what I always tell my clients when we are contemplating a trial vs. settlement (well, except for the race car bit).

And Jack Kemp? Man, this guy is bringing the firepower!

Helio trial begins today

I'm sure I can count on SFL to post some good coverage and pictures while I am in trial.

--David Oscar Markus
www.markuslaw.com
305-379-6667

Bankruptcy Judges To Modify Mortgages?

SFL here, still foolin' around in the big house....

Mortgage crisis? Really, I hadn't noticed.

But apparently, I am advised, there may be some sort of problem:

President Obama’s proposal to address the rising tide of home foreclosures calls for legislation to allow bankruptcy judges under Chapter 13 to modify the terms of home mortgages when families run out of other options.

The legislation stalled in the House and the Senate for the past two years because of opposition by Republicans and the lending industry. But by 2012, one in every nine homeowners will have lost a home to foreclosure, according to a Credit Suisse Securities analysis. Has the foreclosure landscape changed sufficiently to break the back of the determined opposition?

I see some hotshot law professor from Yale thinks this is a bad idea:

First, the proposal would swamp bankruptcy courts. There are only about 300 bankruptcy judges, and they are already busy with an increasing number of bankruptcies. Clearing millions of new mortgage cases will take a long time and thus have little immediate effect on the foreclosure crisis. In addition, the flood of new cases would delay the resolution of business bankruptcies, to the detriment of the economy.

Professor -- have you been to state court recently? These cases have to be adjudicated somewhere -- why not put them in the hands of those who are expert at valuing assets and determining fair market value?

Also -- aren't there more bankruptcy judges than all federal district judges combined? It's actually 368, btw, but who's counting.....

And the "flooding" Professor Schwartz talks about is not likely to be a permanent condition, as the initial wave of cases is absorbed. Hey, this "scholar" even agrees with me:

But “a more neutral analysis of this is to think back to 2005, about the time bankruptcy law got changed,” said bankruptcy scholar Robert Lawless of the University of Illinois College of Law. “There were two million filings that year, and the system did handle those. There weren’t any reports of major problems.”

Well, there will likely be major problems no matter what we do, the question is which approach gets out of this situation faster and more efficiently.