Archive for November, 2007

Feedback on LawReader Article on former gubernatiorial aides advice

Friday, November 30th, 2007

Mr. Jim Smith a former Kentuckian who now lives in Tucson, Arizona sent the following comments about the  LawReader feature story published Nov. 24, wherein five former aides to Ky. Governors gave some suggestions to Gov. –elect Steve Beshear on things to consider in managing his new office.
 -Many thanks for sharing this one.  This one was extremely interesting and offered some great insights from the various experiences.  I first met Don Mills during the Wilson Wyatt for U. S. campaign in ’62 and then got to know him quite well in the Breathitt administration when he served as Press Secretary. 
 I agree with the observation that Breathitt’s first legislative session left much to be desired, but the second session became a hallmark session with considerable leadership from the governor and significant bills passed.  It proved that there can be strong leadership and legislation in areas that require minimal funding such as strip mining, civil rights, etc., and, of course, education.  Of course, it is interesting to note that the week after the general election in 1962, Breathitt spots appeared on TV that said little more than “Hi, I’m Ned Breathitt and I am running for governor.” 
At that point Breathitt was Personnel Commission and known by very few voters across the state.  One year of promoting name identification and campaigning changed that.  Likewise, it is always interesting that not much more than a year before Carter ran for president, he was a little known Governor of Georgia.  Still remember the TV clip on CBS the night that Carter accepted the nomination in ’76 of him appearing as the “mystery guest” on What’s My Line” just over a year earlier and they did not even blindfold the panel because none of them knew who he was.
 Cattie Lou was certainly an “institution” in state government and campaigns for many years.
 Thinking of those who have advised governors reminds me of a story in the Louisville Times a day or two before Wendell Ford was inaugurated which had some great descriptive adjective and terms about the appearance, experience, and various qualities of those who would advise the new governor.  Field McChesney was among them.  The story described him as the “owlish looking adviser to the governor.”  Field saw Doc Beauchamp in the hallway and asked Doc if he thought he resembled an owl.  To which Doc, in his deep, gravely voice replied, “A hoot or a screech.”
-Jim Smith-

High Stakes for Regulated Industry in Supreme Court Pre-emption Cases

Friday, November 30th, 2007

A concerted effort by the business community to have federal law preclude, or “pre-empt,” state personal injury laws and other regulations has arrived en masse at the U.S. Supreme Court this term. 

Marcia Coyle The National Law Journal November 30, 2007 

The justices have agreed to decide five pre-emption cases that involve products liability, transportation of dangerous substances, labor and other areas, and they have asked the U.S. solicitor general for his views on a sixth case seeking review. 

First out of the argument box will be Riegel v. Medtronic Inc., No. 06-179, on Dec. 3. It asks if a provision in the Medical Device Amendments to the federal Food, Drug and Cosmetic Act forecloses state law tort suits claiming injury from the design, manufacture and labeling of a medical device that was granted premarket approval by the Food and Drug Administration. 

While the Riegel case focuses on a specific statutory provision, pre-emption scholar Catherine Sharkey of New York University School of Law said, “More broadly, I actually think the Court is poised to begin to fashion a kind of framework for pre-emption jurisprudence. Almost every scholar and litigant calls it a muddle, a mess.” 

Muddle or mess, the high court’s pre-emption cases bear “broad consequences for all regulated industries,” which generally prefer uniform, national regulation over varying state regulations, said Mark I. Levy, chairman of the Supreme Court and appellate practice at the Washington office of Atlanta-based Kilpatrick Stockton. Cases such as Riegel, he said, are device-specific, but some raise recurring issues, such as whether there is a presumption against pre-emption and, if so, when it applies and how strong it is, and how much deference courts should give to the federal agency’s position. 

But they also have broad consequences for consumers and states with strong consumer protection laws, said Arthur Bryant, executive director of Public Justice (formerly Trial Lawyers for Public Justice). “The fact is industry has been pushing to expand federal pre-emption for the past 25 years as a wholesale, get-out-of-jail-free card,” he said. 

Charles Riegel, who has since died, sued Medtronic because of serious injuries he suffered when a balloon catheter unexpectedly burst during a 1996 angioplasty. He alleged that the catheter was defectively designed, manufactured and labeled. Medtronic successfully moved for summary judgment, later affirmed by the 2nd U.S. Circuit Court of Appeals. 

Medtronic relied on an express pre-emption provision in the federal Medical Device Amendments — Section 360k(a). The company argued that the FDA’s grant of PMA of the catheter established federal requirements that pre-empt any state requirements different from, or in addition to, the federal requirements. State law tort liability, it said, would create those types of state requirements and were pre-empted under 360k(a). 

In the high court, Riegel’s widow, represented by Allison Zieve of Public Citizen Litigation Group, argues that the justices have relied repeatedly on the presumption that a federal statute does not pre-empt the historic police powers of the state absent a finding of Congress’ “clear and manifest intent” to do so. The language of 360k(a), said Zieve, displays no such intent. 

In an earlier pre-emption decision concerning the Medical Device Amendments (Medtronic v. Lohr), Zieve also argues that the justices held that, to pre-empt a state law claim, that claim must correspond to some device-specific federal requirement and the state law must have been developed “with respect to” devices. The PMA process, she argues, does not impose design-specific or labeling requirements, and even if it did, state common law duties correspond — not differ or add — to them. 

Public Justice’s Bryant, who, along with AARP, a number of state attorneys general and others, supports Zieve, noted that the Medical Device Amendments of 1976 were Congress’ response to the Dalkon Shield products liability fiasco. 

“Congress concluded consumers needed far more protection from defective and dangerous medical devices,” he recalled. “Industry is arguing here that, because of that, Congress eliminated the rights of medical device victims to hold companies accountable. It would be laughable on its face if you didn’t have so many courts buying into it.” 

Medtronic, represented by Theodore B. Olson of Los Angeles-based Gibson, Dunn & Crutcher, disagrees with Zieve’s characterization of the PMA process. That process, he contends, is a rigorous one that “culminates in a set of device-specific design, manufacturing and labeling requirements to which the manufacturer must adhere in order to market its device.” 

Olson argues that a jury verdict for Riegel would have “the same practical effect as a New York regulation requiring Medtronic to design, manufacture and label the Evergreen Balloon Catheter in a manner different than that approved by the FDA.” Those substantive, device-specific requirements — whether imposed by common law or regulation — are pre-empted by Section 360k(a), he tells the Court. 

“If the plaintiffs are right about the PMA process, why would Congress have bothered to put in this elaborate pre-emption scheme?” asked Alan Untereiner, a partner at Washington’s Robbins, Russell, Englert, Orseck, Untereiner & Sauber who represents the Chamber of Commerce as amicus supporting Medtronic. “The FDA issues device-specific regulations for a handful of devices, but the express pre-emption provision is deliberately broad.” 

An important twist in the case may be the position of the FDA. Until 2004, the agency took the position there was no pre-emption of state law tort claims, but changed its position that year 

 

Citing Statistics, Giuliani Misses Time and Again

Friday, November 30th, 2007

(His)…statements are incomplete, exaggerated or just plain wrong 

 

MICHAEL COOPER – The New York Times – November 30, 2007

In almost every appearance as he campaigns for the Republican presidential nomination, Rudolph W. Giuliani cites a fusillade of statistics and facts to make his arguments about his successes in running New York City and the merits of his views. 

Skip to next paragraph Discussing his crime-fighting success as mayor, Mr. Giuliani told a television interviewer that New York was “the only city in America that has reduced crime every single year since 1994.? In New Hampshire this week, he told a public forum that when he became mayor in 1994, New York “had been averaging like 1,800, 1,900 murders for almost 30 years.? When a recent Republican debate turned to the question of fiscal responsibility, he boasted that “under me, spending went down by 7 percent.? 

All of these statements are incomplete, exaggerated or just plain wrong. And while, to be sure, all candidates use misleading statistics from time to time, Mr. Giuliani has made statistics a central part of his candidacy as he campaigns on his record. 

For instance, another major American city claims to have reduced crime every year since 1994: Chicago. New York averaged 1,514 murders a year during the three decades before Mr. Giuliani took office; it did not record more than 1,800 homicides until 1980. And Mr. Giuliani’s own memoir states that spending grew an average of 3.7 percent for most of his tenure; an aide said Mr. Giuliani had meant to say that he had proposed a 7 percent reduction in per capita spending during his time as mayor. 

Facts and figures are often the striking centerpieces of Mr. Giuliani’s arguments. He has always had a penchant for statistics — his anticrime strategy as mayor was built around a system known as Compstat that closely tracked crimes to focus law enforcement efforts. On the campaign trail he often wields data, without notes, with prosecutorial zeal to hammer home his points. 

But in recent days, both Mr. Giuliani’s Republican rival Mitt Romney and Democrats have accused him of a pattern of misleading figures and have begun to use the issue to try to undercut his credibility. 

An examination of many of his statements by The New York Times, other news organizations and independent groups have turned up a variety of misstatements, virtually all of which cast Mr. Giuliani or his arguments in a better light. “He’s given us a lot of work up until now,? said Brooks Jackson, the director of Annenberg Political Fact Check, which is part of Factcheck.org, a project of the Annenberg Public Policy Center of the University of Pennsylvania that has corrected statements by candidates in both parties. 

Aides to Mr. Giuliani dismiss questions about his use of statistics as nitpicking, arguing that no one can dispute the big points he makes by using the statistics: that crime dropped significantly during his tenure, say, or that he worked to restrain spending in New York. 

“The mayor likes detail, and uses it frequently on the campaign trail in ways the other candidates don’t,? said Maria Comella, a spokeswoman for Mr. Giuliani. “And at the end of the day, he is making points that are true.? 

Mr. Giuliani is not alone in citing statistics in a questionable way. Last month, Senator Hillary Rodham Clinton, Democrat of New York, said that financing for the National Institutes of Health had decreased under President Bush; it has increased. Senator Barack Obama, Democrat of Illinois, said the national debt had doubled under President Bush; it has not. 

But with Mr. Giuliani running so strongly on his record, statistics have taken on a central role in his campaign. 

In recent days, Mr. Giuliani seems to be taking greater care to be precise. 

At the Republican debate on Wednesday night, he was careful when referring to crime statistics in Massachusetts during Mr. Romney’s term as governor, which had been the subject of a debate over the weekend. And at a “Politics and Eggs? breakfast on Monday in Bedford, N.H., he took greater care to describe his record on cutting taxes. 

Last weekend, speaking about his belief in supply-side economics, Mr. Giuliani said, “I lowered, argued for lowering, and got the hotel occupancy tax lowered by 33 percent. And I was collecting $200 million more from the lower tax than the city had been collecting from before I was mayor from the higher tax.? 

In fact, the increase in revenues from the hotel occupancy tax was just over a quarter of what Mr. Giuliani asserted — the city’s hotel tax revenues grew by roughly $58 million during his term, according to the city’s Independent Budget Office — and a booming economy, as well as the reduction in crime Mr. Giuliani helped produce, probably played a part. 

Factcheck.org has reported that the Giuliani campaign exaggerated when it boasted on its Web site that “Mayor Giuliani increased the police force from 28,000 to 40,000,? noting that most of that increase came from his merger of the Transit and Housing Police Departments with the New York Police Department, a transfer of more than 7,000 existing officers to the department. 

The campaign argues that giving housing and transit police officers jurisdiction beyond the city’s public housing and subways gave the city more flexibility to fight crime. It said that it usually notes the effects of the merger when describing the size of the police force, and said it would change a post on its Web site to mention the merger when citing the increase. 

And the group also found that Mr. Giuliani erred at a Republican debate when, while calling for tort reform, he said that 2.2 percent of the nation’s gross domestic product “is spent on all these frivolous lawsuits.? That statistic, the group reported, came from a study that pegged the cost of all civil claims at 2.2 percent of the G.D.P., without judging whether the cases had merit or not. 

Skip to next paragraph Even some people who support Mr. Giuliani’s proposals say he risks undercutting his own arguments when he relies on imprecise or questionable statistics. 

In a recent radio advertisement by the campaign about his health care proposal, Mr. Giuliani repeated another false statement that he had been using on the campaign trail. In the advertisement Mr. Giuliani, who has had prostate cancer, asserted that his chances of surviving prostate cancer in the United States were 82 percent, while his chance of surviving in England would have been only 44 percent. His point was that the American health care system is far superior to England’s government-run system, which he refers to as “socialized medicine.? 

The figure came from an article written by one of Mr. Giuliani’s health care advisers, but was soon discredited: the source of the research that was used to derive the statistic said that its data had been misused. The Office for National Statistics in Britain said that the true five-year survival rate was 74.4 percent — still lower than in the United States, but by a much smaller margin. Mr. Giuliani stood by the statistic, however, and kept using the advertisement, though it has since gone off the air. 

Ramesh Ponnuru, a senior editor at National Review magazine, said Mr. Giuliani’s plan “may be the best of the Republican health care plans.? 

“The trouble is that the exact statistic he used was misleading,? Mr. Ponnuru said in a recent interview, elaborating on a blog post he wrote. “It became an argument about the statistics, and he dug in and defended it when he was wrong.? 

Another radio advertisement that Mr. Giuliani ran over the summer stated that as mayor he “turned a $2.3 billion deficit into a multibillion-dollar surplus.? 

That was also misleading. According to independent fiscal monitors, Mr. Giuliani did have to close a $2.3 billion deficit in his first budget, and did accumulate a multibillion-dollar surplus during his tenure. But by Mr. Giuliani’s last full fiscal year in office, the city was spending more than it was taking in in revenues, and Mr. Giuliani ended up spending almost all of the surplus to balance his final budget. 

Last weekend, questions about Mr. Giuliani’s use of facts moved front and center in the campaign. Mr. Giuliani charged that “violent crime and murder went up? in Massachusetts while Mr. Romney was governor. The number of reported killings did go up in those years, but the state’s overall rate of violent crime went down, according to statistics compiled by the Federal Bureau of Investigation

Mr. Romney accused Mr. Giuliani of having “a real problem with facts,? and aides circulated a statement calling Mr. Giuliani’s crime statistics “about as accurate as his prostate cancer survival numbers for England.? 

“He has now done this time and again, making up facts that just happen to be wrong, and facts are stubborn things,? Mr. Romney said. 

Frank Luntz, a Republican strategist who once worked for Mr. Giuliani, said he doubted that the issue would hurt him politically. 

“When he talks about New York, people see it,? Mr. Luntz said of Mr. Giuliani, “and they feel it, and if a number isn’t quite right, or is off by a small amount, nobody will care, because it rings true to them.? 

The Rich, the Right, and the Facts. Deconstructing the Income Distribution Debate

Friday, November 30th, 2007

An outstanding discussion of economics that is supported by real data.
 
Paul Krugman – Nov. 30, 2007 – The American Spectator                                 
During the mid-1980s, economists became aware that something unexpected was happening to the distribution of income in the United States. After three decades during which the income distribution had remained relatively stable, wages and incomes rapidly became more unequal. Academic researchers soon began arguing vigorously about the causes of the growth in inequality: was it global competition, government policy, changing technology, or some other factor? What nobody, whatever his or her political stripe, questioned was the fact that there had been a dramatic change in income distribution.
During 1992 this genteel academic discussion gave way to a public debate, carried out in the pages of the New York Times, the Wall Street Journal, and assorted popular magazines. This public debate was remarkable in two ways. First, the conservative side displayed great ferocity in presenting its case and attacking its opponents. Second, conservatives chose to take an odd, and ultimately indefensible, position. They could legitimately have challenged those who have called attention to the growing dispersion of income on the grounds that nothing can, or at any rate should, be done about it. But with only a few exceptions they chose instead to make their stand on the facts to deny that the massive increase in inequality had happened. Since the facts were not on their side, they were forced into an extraordinary series of attempts at statistical distortion.
The whole episode teaches us two lessons. At one level, it is a sort of textbook demonstration of the uses and abuses of statistics. This article reviews that lesson, tracing out how conservatives tried to distort the record and why they were wrong. But the combination of mendacity and sheer incompetence displayed by the Wall Street Journal, the U.S. Treasury Department, and a number of supposed economic experts demonstrates something else: the extent of the moral and intellectual decline of American conservatism.
I begin with a review of the basic data, followed by an assessment of the three kinds of conservative attacks on the simple facts about growing inequality: (i) efforts to deny the facts, through a mixture of confused statistical arguments; (ii) claims that the growth record of the Reagan years outweighs or negates any apparent increase in inequality; (iii) claims that income mobility makes comparisons of the income distribution at a point in time meaningless. A final section tries to put some perspective on the whole debate.

Some Basic Facts

There are some non-official sources that provide evidence for growing inequality of income in the United States. For example, Fortune has long carried out annual surveys of executive compensation; and since the mid-1970s compensation of top executives has risen far faster than average or typical wages, a process entertainingly discussed by Graef Crystal in his In Search of Excess. Surveys carried out by the University of Michigan have also shed useful light on income distribution, in particular on the dynamics of income over time. There is also anecdotal evidence: Tom Wolfe noted the soaring demand for apartments in Manhattan’s “Good Buildings” well before academics had started to take the growing concentration of wealth seriously, and indeed his Bonfire of the Vanities arguably tells you all you need to know about the subject.

What the Census Shows

Most academic studies on the distribution of income in the United States rely on Census data, compiled from the Current Population Survey. These data have certain limitations, to which I will turn in a moment. But as a starting point, the Census numbers have one great advantage: they are not controversial. In all the mud-slinging of the income distribution debate, nobody has yet accused the Census of bias or distortion (although that may come next).
Figure 1 shows a picture that ought to be part of the consciousness of anyone who thinks about trends in the U.S. economy since the 1970s. The figure shows the rate of growth of income at selected points in the income distribution over several different periods.
The income distribution is measured in percentiles. For example, the first set of bars shows the rate of growth of income of the family at the 20th percentile (the top of the bottom quintile). The choice of percentiles ranging from 20 to 95 means excluding the real extremes. Some very important developments are missed by these exclusions, especially at the top. But this picture still gives us a useful baseline.
The three periods chosen are 1947-73, 1973-79, and 1979-89. The first period represents what Alice Rivlin has called the “good years” the great postwar boom generation. The remaining two periods show the “seventies” the period from the business cycle peak of 1973 to that of 1979 and the “eighties” from the 1979 peak to the 1989 peak.
What do we see in the figure? First, the 1947-73 numbers show what real, broad-based prosperity looks like. Over that period incomes of all groups rose at roughly the same rapid clip, more than 2.5 percent annually. Between 1973 and 1979, as the economy was battered by slow productivity growth and oil shocks, income growth became both much slower and more uneven. Finally, a new pattern emerged after 1979: generally slower income growth, but in particular a strong tilt in the growth pattern, with incomes rising much faster at the top end of the distribution than in the middle, and actually declining at the bottom.
In some of the conservative critiques I will describe below, apologists claim that the 1980s represented a normal process, that there was nothing unusual or distressing about the rise in inequality. As the discussion gets a bit complicated, it will be useful to retain the basic image of Figure 1: “good” growth looks like an all-American picket fence; growth in the 1980s looked like a staircase, with the well-off on the top step.

The CBO Numbers

The Census numbers shown in Figure 1 tell a pretty clear story. Nonetheless, it has been apparent for some time that the story is incomplete, because it fails to give a full picture of gains among families with very high incomes.
Census numbers are of little use in studying high-income families, for two rea sons, one major, one minor. The main problem is the arcane technical issue of “top-coding.” The questionnaires on which the Current Population Survey is based do not ask for precise incomes; instead, families are asked to place their income within a series of categories, of which the highest is “over x,” currently $250,000. This means, of course, that the Census data give no information about changes in the fortunes of families with incomes high enough to be above that top number. The minor problem is that Census data do not count one important source of income for high-income families: capital gains.
It is precisely because Census data are weak when it comes to very high incomes that those who use that data usually look no higher than the 95th percentile; that is, the bottom of the top 5 percent. Over the period 1947-73, when everyone’s income went up at about the same rate, the weakness of Census data at the top end didn’t matter much. But it became obvious during the 1980s that incomes were rising even faster among the very well off than at the 95th percentile.
One might have guessed this simply from Figure 1: Since the available data show that the higher you go in the income distribution, the bigger the gains, one might reasonably suppose that the same is true for the unavailable data. One might well expect to find that inequality within the top 5 percent has risen, implying larger gains at, say, the 99th percentile than at the 95th.
One could also guess that income was growing especially rapidly at the top from less formal evidence. Notably, Graef Crystal’s executive compensation numbers suggested a tripling of the compensation of the compensation of CEOs relatively to ordinary workers, and virtually every social observer has noted an apparent explosion of affluence at the top. All that was lacking was hard statistical evidence.
Work by the Congressional Budget Office fills the gap. The CBO is charged by the House Ways and Means Committee with estimating changes in the incidence of federal taxation, to provide the supporting appendices for that committee’s mammoth annual publication, the Green Book. To do this, the CBO has developed a model that pools Census and IRS data. This model allows the CBO to bypass the problem of top-coding, and also allows incorporation of taxable capital gains.
Figure 2 shows the CBO estimates for the gains in income at different parts of the income distribution over the period 1977-1989. (Ideally, we would use 1979-89. Unfortunately, for reasons having to do with its original mandate to focus on tax incidence, the CBO did not do an estimate for 1979.) Here, the data are presented a little differently from those in Figure 1. We are shown changes in, say, average income for families in the bottom quintile, rather than for the individual family at the top of that quintile, and the numbers show the percentage change over the period as a whole, rather than annual rates of change. But the picture is clear: there were truly huge income gains at the very top. In particular, the top 1 percent of families saw their incomes roughly double over a twelve-year period. That’s a 6 percent rate of growth, which means that for the very well-off the 1980s really were a very good decade not only compared with the slow growth lower down in the distribution, but even compared with the postwar boom years.
There is one other important point to be learned from the CBO numbers: how well-off the well-off actually are. The usual story still told by conservatives is that the so-called “rich” are not really all that rich. Conservatives often point out that, according to Census numbers, in 1989 it required an income of only $59,550 to put a family in the top quintile, an income of only $98,963 to put it in the top 5 percent. The implication is that we are essentially a middle-class society, with only an insignificant handful of people rich enough to excite any concern about ill-gotten gains.
But the CBO numbers paint a different picture, because they let us look higher up the scale. According to the CBO, to be classified in the top 1 percent a family of four needed a pre-tax income (in 1993 dollars) of at least $330,000. The average income of four-person families in the top 1 percent was about $800,000. We are no longer talking about the middle class.

The “Krugman Calculation”

It is a remarkable fact that incomes have soared so much at the top of the U.S. income distribution. But is it important? Until recently, most economists thought not; growing poverty might be an important social issue, but the fact that some people are very rich was only a social curiosity.
My own contribution to this discussion was to point out that there is a sense in which the rise in incomes at the top is in fact a major economic issue, and to offer a shorthand way of conveying that point: the now infamous “Krugman calculation” that 70 percent of the rise in average family income has gone to the top 1 percent of families.
Let’s begin by recalling that typical incomes grew very slowly during the 1980s. For example, even if one uses a revised consumer price index that shows lower inflation than the standard index, one finds that median family income the income of the family at the midpoint of the income distribution in 1989 was only 4.2 percent higher than in 1979. That is, median family income rose at only about a 0.4 percent annual rate. And many measures of real wages for typical workers show a decline during the 1980s.
Now one would have expected incomes in the U.S. to grow more slowly than in the good years before 1973, because of the productivity slowdown. Productivity growth in the U.S. economy fell from about 3 percent annually during the postwar boom to about 1 percent annually after 1973; and ordinarily productivity growth determines real income growth.
But although productivity growth is slow, it is not negligible. We are a substantially more productive country now than we were in 1979. So why isn’t the typical family significantly better off? Where did the productivity growth go?
The proximate answer is that average incomes went up relative to the median income. Figure 3 shows average versus median family income from 1979 to 1990. It turns out that from 1979 to 1989, average family income rose 11 percent, just about exactly what one would have expected given 1 percent productivity growth. So there is no problem with the accounting.
The rise in average income relative to median should not be a surprise, given Figures 1 and 2. That is exactly what one would expect to see when incomes become more unequal, because when incomes at the top of the scale are rising faster than the average, incomes farther down must correspondingly grow less rapidly than the average. In an arithmetic sense, we can say that most of the growth in productivity was “siphoned off” to high-income brackets, leaving little room for income growth lower down. I emphasize that this is only an arithmetic point: it says nothing about the economic forces at work, in particular whether something else could or should have happened.
When I say that growth was “siphoned off” to high-income families, however, who am I talking about? Are we talking about two married schoolteachers, whose $65,000 income is enough to put them into the top quintile? Or are we talking about Donald Trump?
Figure 2 ought to suggest to you that we are not talking about those schoolteachers: the really big income gains were not near the bottom of the top quintile, but at its top. Indeed, according to the CBO’s numbers the share of after-tax income going to the ninth decile families between the 81st and 90th percentiles actually fell slightly between 1977 and 1989. So all of the siphoning went to families in the top 5 or 10 percent. And given Figure 2, one might well suspect that the bulk went to the top 1 percent.
To get a sense of this and, to be honest, to help attract attention to a trend that I thought had been neglected I proposed the following thought experiment. Imagine two villages, each composed of 100 families representing the percentiles of the family income distribution in a given year in particular, a 1977 village and a 1989 village. According to the CBO numbers, the total income of the 1989 village is about 10 percent higher than that of the 1977 village; but it is not true that the whole distribution is shifted up by 10 percent. Instead, the richest family in the 1989 village has twice the income of its counterpart in the 1977 village, while the bottom forty 1989 families actually have lower incomes than their 1977 counterparts.
Now ask: how much of the difference in the incomes of the two villages is accounted for by the difference in the incomes of the richest family? Equivalently, how much of the rise in average American family income went to the top 1 percent of families? By looking at this measure we get a sense of who was “siphoning off” the growth in average incomes, accounting for the fact that median income went up so little.
The answer is quite startling: 70 percent of the rise in average family income went to the top 1 percent.
What does this tell us? Since the 1970s median income has failed to keep up with average income or, to put it differently, the typical American family has seen little gain in spite of rising productivity. So when we speak of “high income” families, we mean really high income: not garden-variety yuppies, but Tom Wolfe’s Masters of the Universe.
Wealth distribution. Wealth the assets that families own and income are different though related things. Wealth is typically much more concentrated than income: current estimates are that the 1 percent of families with the highest incomes receive about 12 percent of overall pretax income, while the wealthiest 1 percent of families has some 37 percent of net worth. Precisely because wealth is so concentrated, it is difficult to measure accurately from sample surveys: a random survey of a few hundred or even a few thousand people will contain only a handful of really wealthy people. Nonetheless, researchers at the Federal Reserve Board have tried to use sophisticated sampling procedures to deal with this problem. For some time their surveys have shown that average wealth was rising much faster than median as in the case of income distribution, a sure sign of growing inequality. In March, 1992 they released a working paper that showed a sharp increase in the concentration of wealth even since 1983, with the share of the top 1 percent of families rising from 31 to 37 percent.
Recently, several academic researchers (Claudia Goldin and Brad DeLong of Harvard, together with Edward Wolff of New York University) have put together long-range historical estimates on wealth distribution. They suggest that the concentration of wealth in the U.S. reached a trough in the late 1970s at a level not seen since the nineteenth century, then surged rapidly back to 1920s levels. The point is that the wealth numbers confirm the general picture of a dramatic and rapid increase in economic inequality in the U.S.

Political Implications

Rising inequality need not have any policy implications. Even if you would prefer to have a flatter distribution, other things equal (and not everyone even shares that goal) what should we do about it? Few people in America would currently support a policy of wage and salary controls (although Claudia Goldin has noted that World War II wage controls seem to have produced a long-term narrowing of wage differentials). One might use growing inequality as an argument for restoring some of the progressivity of the tax system; but most of the growth in inequality has come from changes in pre-tax income, not from regressive tax policies. An honest conservative like Herbert Stein is willing to say “Yes, inequality has increased, but I don’t think that calls for any policy response.”
Nonetheless, many conservatives were furious when the income distribution story surfaced in early 1992. Above all, the story made the editors of the Wall Street Journal and the Bush administration see red.
The reason was pretty clear. Supply-siders like Robert Bartley, the Journal‘s editorial page editor, believe that their ideology has been justified by what they perceive as the huge economic successes of the Reagan years. The suggestion that these years were not very successful for most people, that most of the gains went to a few well-off families, is a political body blow. And indeed the belated attention to inequality during the spring of 1992 clearly helped the Clinton campaign find a new focus and a new target for public anger: instead of blaming their woes on welfare queens in their Cadillacs, middle-class voters could be urged to blame government policies that favored the wealthy.
So the dismay and anger of conservatives was understandable. The response from the administration, the Journal, and other conservative voices was, however, inexcusable: instead of facing up to the fact of rapidly growing inequality under conservative rule, they tried to deny the facts and shoot the messengers.

The Conservative Response: 1 Denial

The Number of Families. When the New York Times published a story reporting my estimates on the impact of rising inequality, the initial response of a number of conservative economists (including staffers at the Council of Economic Advisers) was to do a different calculation: to ask what share of the growth in total rather than average income went to the top 1 percent. Let’s call it the “CEA calculation.” This is a very different number, because the number of families in the U.S. grew substantially between 1977 and 1989, as the last of the baby boomers grew up. So total income went up, not by 10 percent, but by about 35 percent. Naturally, the share of this much larger rise that accrued to the richest was a good deal smaller, 25 versus 70 percent. This revised number was widely circulated in Washington as a refutation of the number published in the New York Times; indeed, I have been told that one major news magazine almost ran a gleeful story on the Times‘s blunder, but at the last minute was warned that I was right and the CEA was wrong.
What’s wrong with the CEA calculation? Remember the questions we are trying to answer: why didn’t the typical American family see much increase in income even though productivity rose substantially, and who was reaping the benefits of rising productivity? If you think about it for a minute, you’ll see that using income growth numbers that include sheer growth in working-age population gets us completely away from those questions. Consider, for example, what happened to the bottom 20 percent of the income distribution. Average income among these families fell 10 percent over the CBO period but their numbers went up about 25 percent, and their total income therefore rose about 15 percent. So the CEA calculation has the bottom quintile sharing in economic growth, even though average family income in that group went down!
The CEA also distributed a memo presenting a hypothetical numerical example, too complicated to reproduce here. Its point was that if the labor force were to receive a large influx of inexperienced workers, the experience of the median worker might decline; in that case, stagnation in median income might mask rising wages for a worker with any given degree of experience, and a “Krugman calculation” would erroneously suggest that only the very well-off had gained. The memo was right in principle. As anyone who has looked at labor force and wage data knows, however, the real facts look nothing like the contrived example: the growing inequality of wages represents increased dispersion in wages for workers with given characteristics, not a change in the mix.
The Size of Families. The next issue fits awkwardly into this scheme, since it involves an honest difference of opinion between myself and the CBO, and does not in the end make much difference. This is the question of how, if at all, to deal with the declining size of families in the U.S.
As noted above, the CBO likes to measure, not raw family income, but “adjusted” family income (AFI), measured in multiples of the poverty line. Adjusted family income has been rising faster than income itself, because families have been getting smaller. From 1977 to 1989, AFI grew by 15 percent compared with 10 percent for the raw number.
When you do a Krugman calculation using AFI instead of raw income, the result looks a little bit less extreme: the top 1 percent get 44 instead of 70 percent of the increase. This is still pretty impressive; but is the correction appropriate?
The CBO likes to use adjusted family income because they view it as a better measure of the material standard of living: a family with one child will be able to afford things that a family with three children and the same income cannot. Fair enough. But it seems to be stretching the usefulness of the concept when the decision of U.S. families to have fewer children is considered to be a form of income growth (what would the Republican platform committee say?).
Indeed, the number of hours worked by the typical American family actually rose during the 1980s. So if we are asking why family incomes didn’t rise along with productivity, we should if anything be discounting the slight rise in income for the fact that families were working harder to get it. The CBO’s adjustment goes in the opposite direction. Or to put it another way: the adjusted family income measure helps explain why so many families are able to afford VCRs, but misses the reason why they feel worse off than their parents.
All this is relatively minor, however. With or without the family size adjustment, the data confirm a radical shift of income to the top 1 percent.
Capital Gains. Many conservative commentators including Paul Craig Roberts, Alan Reynolds, Representative Richard Armey, and the editorial page of the Wall Street Journal have bitterly attacked the CBO for including capital gains in its estimates of income. They charge that this inclusion overstates the income of the rich in several ways: it includes one-time sales as if they were persistent income; it counts capital gains on assets held by the rich, but ignores the non-taxable gains of middle-class families on their houses; it counts as income the inflation component of capital gains. And all of these commentators have claimed that the CBO’s capital gains estimates are the basis of the conclusion that the rich have done better than you or me.
There are answers to each of these criticisms: asset sales must take place sometime; capital gains on houses are much smaller than the critics imagine; the inflation component has fallen with the rate of inflation, so that if anything the rate of growth of income at the top is understated. The main point, however, is that excluding capital gains from the CBO numbers makes very little difference. With capital gains included, the CBO shows the share of income ac- cruing to the top 1 percent rising from 7 to 12 percent between 1977 and 1989, and shows this group receiving 44 percent of the rise in adjusted family income. Without capital gains, the shift is from 6 to 10 percent, and the share of the rise is 38 percent. Although the CBO does not report this, we can guess that a “Krugman calculation” excluding capital gains would still yield a number in excess of 60 percent. In other words, the capital gains issue is a complete red herring.
Can You Be Too Rich? When the Federal Reserve wealth study came out, it was immediately attacked by Alan Reynolds in the Wall Street Journal, as well as by Republican Congressman Richard Armey. Reynolds’s main argument was that the study, based on a survey of 3,000 families, could not be reliable about the top 1 percent, since thirty families is too small a sample. This was an interesting reaction, since the Fed study carefully explains that they used a two-stage procedure and that their estimates were based on over 400 families in the top 1 percent. In fact, the study is written in the form of a working paper on statistical methodology, and the issue of sample size is raised immediately. One can only conclude that Reynolds did not bother to read the study before attacking it.
Rep. Armey, whose results were reported by Reynolds and Paul Craig Roberts in several columns, took a different tack. By careful search through a previous Fed study, he found what he took to be a significant fact: the average wealth of families with incomes above $50,000 rose more slowly over the period 1983-89 than overall average wealth. He claimed that this fact showed that wealth distribution had actually become more, not less equal. He apparently failed to notice that the size of the “over $50,000″ group had increased over the period, from 17 to 20 percent of the population. Suppose that I told you that the average SAT scores of the top 20 percent of students today are lower than those of the top 17 percent a few years ago. Would you worry, or would you simply point out that the extra students I added to the sample obviously dragged down the average?
The wealth dispute was a minor part of the distribution controversy, but it was revealing about the desperation, unscrupulousness, and sheer lack of competence of today’s conservatives.

The Conservative Response 2: Taking Credit For Growth

The second line of conservative defense has become a familiar one: they claim that the growth record of the Reagan years shows that supply-side policies produce gains for everyone, and that it is destructive to worry about or even to notice the distribution of income.
Look again at Figure 3. It is clear that from the recession year of 1982 to the business cycle peak in 1989, median income rose substantially (12.5 percent, versus 16.8 percent for average income). If you use these years as the basis of comparison, the lag of median behind average income doesn’t look very important. The question is whether these are really the right years to compare.
If there is one really solid contribution of macroeconomic theory to human know- ledge, it is the distinction between the business cycle and long-term growth. Long-term growth is achieved by expanding the economy’s productive capacity; recessions and recoveries represent fluctuations in the degree to which that capacity is being utilized. It is a bad thing to be in a recession, and a good thing to recover, but one should never confuse the rapid growth that takes place during a recovery with an improvement in the economy’s long-term performance: once the economy is near capacity, growth is bound to slow down. Moreover, recessions and recoveries depend far more on the Federal Reserve than on the administration in power, and happen to Republicans and Democrats alike. That is why a sensible assessment of economic trends involves comparing business cycle peaks or, even better, asking what has happened to the level of income associated with any given unemployment rate.
It is therefore ironic that supply-side ideologues, who originally crusaded against the traditional Keynesian focus on the business cycle, now rest their claims for success entirely on the business cycle recovery from 1982 to 1989. But of course they must, for their program failed to produce any acceleration in long-term growth.
The rise in median income from 1982 to 1989, Robert Bartley’s “seven fat years,” represented almost entirely a transitory business cycle recovery, which reached its inevitable limit at a level only 4 percent above the 1979 peak. And the subsequent recession, which is no more George Bush’s fault than the 1980 slump was Jimmy Carter’s, has probably dropped median income back to within less than 4 percent above the 1980 level.
The basic proposition that the “Krugman calculation” was meant to convey is that income inequality has been increasing so rapidly that most families have failed to get much benefit out of long-term growth. This proposition stands. One need not take seriously the efforts by supply-siders to chop the past fifteen years into little slices, and claim the good ones while disclaiming the bad ones.

The Conservative Response 3: Income Mobility

America is not a static society. People who have high incomes one year may have lower incomes the next, and vice versa. In the two hypothetical villages that I described earlier, one would not necessarily suppose that the same people (or their children) occupied the same positions in 1977 and 1989. And economic welfare depends more on the average income you earn over a long period than on your income in any given year. So there are some risks in drawing too many conclusions about the distribution of economic welfare from statistics on the distribution of income in any one year.
There are two ways in which income mobility the shuffling of the economic deck that takes place as families move up or down the income ranking could offset the proposition that inequality has increased sharply. First, if income mobility were very high, the degree of inequality in any given year would be unimportant, because the distribution of lifetime income would be very even. I think of this as the blender model: whatever the current position of the bubbles in your Mixmaster, over the course of a few minutes each bubble will on average be halfway up.
Second, if income mobility had increased over time, this could offset the increased inequality at each point in time. An increase in income mobility tends to make the distribution of lifetime income more equal, since those who are rich have nowhere to go but down, while those who are poor have nowhere to go but up.
Unfortunately, neither of these possibilities actually characterizes the U.S. economy. There is considerable income mobility in the U.S., but by no means enough to make the distribution of income irrelevant. For example, Census data show that 81.6 percent of those families who were in the bottom quintile of the income distribution in 1985 were still in that bottom quintile the next year; for the top quintile the fraction was 76.3 percent. Over longer time periods, there is more mixing, but still not that much. Studies by the Urban Institute and the U.S. Treasury have both found that about half of the families who start in either the top or the bottom quintile of the income distribution are still there after a decade, and that only 3 to 6 percent rise from bottom to top or fall from top to bottom.
Even this overstates income mobility, since (i) those who slip out of the top quintile (say) are typically at the bottom of that category, and (ii) much of the movement up and down represents fluctuations around a fairly fixed long-term distribution. Joel Slemrod of the University of Michigan has provided a useful indicator that suggests how persistent high incomes tend to be: the average income of families whose income exceeded $100,000 in 1983 was $176,000 in that year; their average income over the seven-year period ending in 1985 was $153,000.
Nor is there any indication that income mobility increased significantly during the 1980s. Table 1 shows some evidence from a study by Greg Duncan of the University of Michigan on transitions over a five-year period into and out of a somewhat arbitrary but reasonable definition of the “middle class”. This middle-class category shrank in the 1980s, so that middle-class families became more likely both to rise and to fall; but correspondingly fewer poor families moved up or rich families down into the middle class. (Vanishingly few poor fami- lies became rich or vice versa). The overall picture suggests little change in mobility.
Income mobility might in principle be an important offset to the growth in inequality, but in practice it turns out that it isn’t. That did not stop conservatives from trying to use it as a debating point.

The Hubbard Study

In June the Treasury’s Office of Tax Analysis, under the direction of Glen Hubbard, an economist on leave from Columbia, released a report claiming that there is actually huge upward mobility in the U.S. In particular, it claimed that 86 percent of individuals who started in the bottom quintile in 1979 had moved out by 1988, and indeed that an individual who started in the bottom quintile was more likely to end up in the top quintile than to stay where he was.
But this report was based on what we may charitably call a strange procedure. Here’s what Hubbard’s report did: it tracked a group of individuals who paid income taxes in all ten years from 1979 to 1988, and compared their incomes not with each other but with those of the population at large. The restriction to individuals who paid taxes in all years immediately introduced a strong bias toward including only the economically successful; only about half of families paid income taxes in all ten years. This bias toward the successful was apparent in the fact that by the end of the sample period the group contained very few poor people and a lot of affluent ones: indeed, only 7 percent of the sample were in the bottom quintile by the sample’s end, while 28 percent were in the top quintile. More important, by comparing the sample with the population at large rather than with each other, the report essentially treated the normal tendency of earnings to rise with age as representing social mobility. The median age of those whom the study classified as being in the bottom quintile in 1979 was only twenty-two.
Kevin Murphy, a labor economist at the University of Chicago, neatly summed up what the Treasury study had found: “This isn’t your classic income mobility. This is the guy who works in the college bookstore and has a real job by his early thirties.”

Income Gains

We have finally come to the last, and perhaps most effectively confusing, conservative argument.
Let’s give the fact first: families who start out with high income on average have low or negative income growth over the next decade, while families who start out with low income on average see their incomes rise rapidly. This is true in both the Urban Institute and the Treasury data. In the Urban Institute’s numbers, families in the bottom quintile in 1977 saw their income rise 77 percent by 1986, while families in the top quintile saw their income rise only 5 percent. The editorial page of the Wall Street Journal, Paul Craig Roberts, and others have seized upon this kind of number as evidence that the poor actually did better than the rich in the 1980s. Let me call this the “WSJ calculation.”
The WSJ calculation seems striking; but on reflection it is completely consistent with the conclusion that the U.S. has rapidly growing inequality. It shows only that there is indeed some income mobility but nobody denied that. And it is no more a sign that supply-side policies helped the poor than the fact that very few people win the lottery several years in a row.
Unfortunately, it is hard to explain this without a numerical example: Imagine an economy in which in any given year half of the families earn $100,000 and the other half earn $200,000. And imagine also that this economy fits the blender model, so that a family that starts in the bottom half has a 50 percent chance of being in the top half ten years later, and conversely.
Now do the WSJ calculation. Families that start in the bottom half begin with $100,000; ten years later, on average they have $150,000, so they gain 50 percent. Families that start in the top half begin with $200,000; ten years later, on average they also have $150,000, so they lose 33 percent.
But has the distribution of income gotten more equal? No: it is unchanged. All that we see is the familiar statistical phenomenon of “regression toward the mean.” Essentially, the initially rich have nowhere to go but down, the initially poor nowhere to go but up. So if the income distribution were stable, any income mobility would inevitably produce the WSJ result; and it is not surprising that we still get it even when income inequality is rising.
If income mobility were as high as in this example, of course, the income distribution at a point in time wouldn’t matter very much. But as we have already seen, income mobility isn’t that high: most poor or rich people stay that way. So we have enough income mobility to make the WSJ calculation seem right, but not enough to change the real story that inequality is rising.
If you want a more concrete image, think of it this way. In any given year, some of the people with low incomes are just having a bad year. They are workers on temporary layoff, small businessmen taking writeoffs, farmers hit by bad weather. These people will be doing much better in a few years, so that the average income of people who are currently low-income will rise a lot looking forward. But that does not mean that people who are persistently poor have rising incomes; they don’t. Perhaps the most revealing way to show what is wrong with the WSJ calculation is to do it in reverse, as Isabel Sawhill of the Urban Institute did. In her data, families who were in the top quintile in 1977 had experienced an 11 percent fall in income by 1986. But when she instead looked at families who were in the top quintile in 1986, she found that they had experienced a 65 percent gain! Conservatives like to emphasize income mobility, because they can evoke the historical image of America as a land of opportunity, an image that has always been partially if not completely true. But when all is said and done, mobility in the 1980s was neither increasing, nor high enough to make any difference to the overwhelming picture of growing inequality.
The growth in income inequality in the United States since the 1970s is hardly an inconspicuous part of the economic landscape. On the contrary, it is apparent in virtually every economic statistic, and colors nearly everything about our national life. You may accept this trend or deplore it, but one might have thought that nobody could seriously deny it.
The surprise lesson of the income distribution controversy, then, is what it says about today’s conservative mind-set. It turns out that many conservatives, for all their anti-totalitarian rhetoric, have Orwellian instincts: if the record doesn’t say what you wish it did, hide it or fudge it.
There are substantive issues about income distribution. Nobody really knows all the reasons why incomes at the top have soared while those at the bottom have plunged. Still less is there a consensus about what kinds of policies might limit or reverse the trend. But it seems that many conservatives not only don’t want to discuss substance: they prefer not to face reality, and to live in a fantasy world in which the 1980s turned out the way they were supposed to, not the way they did.

FIGURES



Figure 1: Distribution of Income Gains, 1947-89

Percentile/years         % Annual Increase (to nearest tenth)
   20
      1947-73            2.6%
      1973-79            0.4
      1979-89           -0.3
 
   40
      1947-73            2.7
      1973-79            0.4
      1979-89            0.3
 
   60
      1947-73            2.8
      1973-79            0.7
      1979-89            0.6
 
   80
      1947-73            2.7
      1973-79            0.6
      1979-89            1.1
 
   95
      1947-73            2.5
      1973-79            1.1
      1979-89            1.6 



Figure 2: Increases in Income, 1977-89

Percentile          % increase, 1977-89
0-20                 -9%
20-40                -2
60-80                 8 
80-90                13
90-95                18
95-99                24
100                 103



Figure 3: Average vs. Median Income, 1979=100

 
1979
   Average          100
   Median           100
 
1980
   Average           97
   Median            97
 
1981
   Average           95
   Median            94
 
1982
   Average           95
   Median            93
 
1983
   Average           96
   Median            94 
 
1984
   Average           99
   Median            96
 
1985
   Average          102
   Median            97
 
1986
   Average          106
   Median           102
 
1987
   Average          107
   Median           103
 
1988
   Average          108
   Median           103
 
1989
   Average          111
   Median           104
 
1990
   Average          108
   Median           102
 


TABLES

Table 1: Percentages of families making transitions from:

                              Before 1980    After 1980
Middle income to low income   8.5%           9.8%
Middle income to high income  5.8            6.8
Low income to middle income   35.1           24.6
High income to middle income  30.8           27.6

 

 

CPA Shows How to Get Part of your 2007 Tax Refund in December Instead of Waiting till next May.

Thursday, November 29th, 2007

Nov. 29, 2007 – Accountant shows an ingenious method of handling your Fed. Withholding.

The following story was published in a No. Ky. Bar Association Publication.

Have you usually received a tax refund from your 1040 around May 1st.?  Why not receive the money now-before the end of the year? Don’t wait for five or six months. Cash is King or Queen.

December is the month to perform tax planning.  Project your 1040 position.  Sit down and accumulate all of your information and calculate your tax position.

 If you are expecting a tax refund, go to your Human Resources Department and change your Federal withholding for December only.  Your pay check for December will be a lot more.  Consult your tax advisor because there is a risk you may owe  next April 15th.

Once you receive the higher net paycheck in December invest the money and let it work for you now.

Now is the time to act.

Gary Jennings, CPA, Esq. CVA

Mountjoy & Bressler, LLP.

New York Court Rules a 40% Contingent Fee to Lawyers Defensible

Thursday, November 29th, 2007

What the courts recognize is that a fee agreement is not unconscionable simply because it can produce a big fee

By ANEMONA HARTOCOLLIS  New York Times November 29, 2007
A 40 percent contingency fee negotiated by a Manhattan law firm retained by the widow of a real estate developer involved in a multimillion-dollar estate dispute was not “unconscionable on its face,? an appeals court ruled yesterday.

The court said that “at first blush,? the 40 percent fee — worth about $42 million — that was claimed by the law firm, Graubard Miller, from Alice Lawrence, the 83-year-old widow of the real estate developer Sylvan Lawrence, “might arguably seem excessive and invite skepticism.?

But a majority of the five-member panel of the court, the Appellate Division of State Supreme Court in Manhattan, ruled that whether the fee was reasonable should be determined at a trial, based on a further exploration of the discussions that led to the fee agreement and the difficulty of the case.

In a dissent, one justice, James M. Catterson, called the fee “exorbitant.? He said that the retainer agreement was signed when a $60 million settlement offer was already on the table.

The estate was settled just five months later for more than $100 million, the judge said, meaning that the law firm’s fee was almost equal to the additional amount it won.
Mark Zauderer, a lawyer for the firm, said in a telephone interview that Graubard Miller was delighted with the decision, which was issued in response to Mrs. Lawrence’s appeal of two decisions in Surrogate’s Court.

Mr. Zauderer said that the fee had been justified by the law firm’s success in winning about $115 million for Mrs. Lawrence against Seymour Cohn, her husband’s brother, business partner and executor — against an adversary who, he said, was “extremely wealthy and well defended.?

“What the courts recognize is that a fee agreement is not unconscionable simply because it can produce a big fee,? Mr. Zauderer said. “You have to look at the value rendered to the client.?

Leslie Corwin, Mrs. Lawrence’s current lawyer, said there was a “strong possibility? that she would seek to have the Court of Appeals hear the case.

Mr. Lawrence died in 1981. At the time, he and his brother owned “more than 90 commercial buildings and parcels of real estate,? the dissent said. Mrs. Lawrence wanted to sell them. Mr. Cohn, who died in 2003, opposed her.

“This is now the third time a court or a judge has affirmed the right of the Graubard firm to be paid a well-earned fee in which it got a tremendous result in a highly complex case,? Mr. Zauderer said.
 

John D. Meyers, KBA Director for CLE Announces CLE Opportunities

Wednesday, November 28th, 2007

Nov. 28, 2007
Don’t miss an opportunity to earn live CLE credits learning about timely topics through the KBA Teleseminar program!  Learn from the convenience of your home or office – all you need is a telephone!  The following seminars will be offered in December:

December 3 — 2007 Fiduciary Litigation Update (LIVE REPLAY); 1:00-2:00 p.m. EST; 1.0 CLE Credit

December 10 — Top Issues in Small Business Bankruptcies (LIVE REPLAY); 1:00-2:00 p.m. EST; 1.0 CLE credit

December 11 — Fourth Quarter Estate Planning Update; 1:00-2:00 p.m. EST; 1.0 CLE credit

December 12 — Ethical Issues for Estate Planners; 1:00-2:00 p.m. EST; 1.0 Ethics credit

December 18 — DNA and the Duke Lacrosse Case: Lessons Learned & Uses in the Courtroom; 1:00-2:00 p.m. EST; 1.0 CLE credit

December 18 — 2007 Attorney Ethics Update Part 1 (LIVE REPLAY); 1:00-2:00 p.m. EST; 1.0 Ethics credit

December 19 — 2007 Attorney Ethics Update Part 2 (LIVE REPLAY); 1:00-2:00 p.m. EST; 1.0 Ethics credit

Registration is $59 per registrant per program; $49 for each additional listener in the same office.  Visit our website for more details: www.kybar.org

For detailed program descriptions and registration information, please visit:
http://www.kybar.org/Default.aspx?tabid=316

Live Webcasts and Webinars from LegalSpan this December and January

Webcast

Federal Rules of Evidence (Part I)
Monday, December 3, 2007, starting 10:00 AM.-12:15 PM
This webcast will be broadcast LIVE over the internet on Monday, December 3, 2007, starting 10:00 AM. You may access this event from anywhere with an established internet connection. 
Price:  $125.00
For more information or to register, visit http://www.legalspan.com/kybar/catalog.asp?ItemID=20071018-272095-134204

Webinars

How to Work as a Contract Lawyer (1.0 CLE Credit)
Thursday, December 6, 2007 at 4:00 PM to 5:00 PM Eastern Time. 
Price:  $60.00
For more information or to register, visit http://www.legalspan.com/kybar/catalog.asp?ItemID=20070905-272095-163446

Cut Online Costs Fast! Cost Effective Tips for Legal Research (1.0 CLE Credit)
Wednesday, January 9, 2008 at 2:00 PM to 3:00 PM Eastern Time. 
Price:  $60.00
For more information or to register, visit http://www.legalspan.com/kybar/catalog.asp?ItemID=20070905-272095-163503

Aides to Ten Kentucky Governors Offer Advice to Gov. Elect Steve Beshear

Wednesday, November 28th, 2007

Nov. 24, 2007- Suggestions for Gov. Elect Steve Beshear from Former Gubernatorial Aides
 

Introduction

 

Fontaine Banks, Aide to Governors Bert Combs and Edward Breathitt 1959-1967 – Brereton Jones 1992-1996

Stan Billingsley -   Admin. Asst. to Gov. Edward Breathitt l966-67

James L. Deckard -  Aide to Gov. Ernie Fletcher  2005-2007

Cattie Lou Miller – Aide to Gov’s. Bert Combs,  Edward Breathitt, Clements, Carroll, Collins, Brown, Wetherby, Ford – 1947 thru 1996

Don Mills – Aide to Gov. Edward T. Breathitt  1963-1967, and Gov. John Y.Brown  1979- 1983

                         The LawReader Grey Beard Project  
                                          INTRODUCTION
LawReader has asked a number of former Gubernatorial Aides to offer their thoughts to Gov.-elect Steve Beshear, on things he might consider in setting up and managing the Office of Governor.   – These comments will be delivered to the Governor Elect.  -
The participates in this LawReader project, have been tested in the service of ten different Governors. (Clements, Wetherby, Combs, Breathitt, Brown, Ford, Collins, Carroll, Jones, and Fletcher.) We hope the new governor takes the time to peruse these comments as we believe there are nuggets of wisdom here that may be of benefit to him or any future governor.Critics of Gov. Ernie Fletcher have opined that one of his first mistakes was in ignoring the institutional experience of persons the press called “grey beards?. There is a lot of grey hair among the former gubernatorial aides who have contributed to this LawReader project.  A lot of that grey hair was earned in the trenches of the Governors Office.
LawReader appreciates the participation of the former gubernatorial aides who have participated in this project. 
We particularly appreciate the comments of Cattie Lou Miller.  We do not believe any Kentuckian has served more governors, and no one has ever served a governor so well.
We have presented the comments in alphabetical order of the authors name. 
FONTAINE BANKS – Frankfort, Ky., Aide to Governors Bert Combs and Edward Breathitt 1959-1967.
I was Chief of Staff to Governor Bert Combs and Edward Breathitt serving  in the Governor’s Office for eight years. The time frame was l959-1967. I also served as Deputy Secretary of Human Resources under Governor Collins and Secretary of Human Resources  under Governor Brereton Jones.The most important challenge to the Governor-elect is the method of choosing the top leaders of his Cabinet.  He must take the time and evaluate the individuals under consideration for appointment.
The key positions in his Cabinet are:

  1. Chief of Staff
  2. Secretary of the Governor’s Cabinet
  3. Secretary of Finance
  4. Director of the Budget.

If the Governor is successful in choosing the right people his administration will be successful.
The second most important factor is the development of the biennial budget. The process will be time consuming, but is an extremely important factor to the success of the administration.
Another important factor is the Governor’s plan to develop a public relations program. Under Governor Combs, we developed a program called “take government to the people?.  Each Cabinet assigned staff to go with the governor to locations in Kentucky where he worked to hold “court? for 1 or 2 days. Anyone could register and talk to the Governor. This gave the Governor a chance to see and talk to the people. This was a very, very successful program.
Cordially, Fontaine Banks, Jr.  Frankfort, Ky.
 

STAN BILLINGSLEY, Carrollton, Ky. -Admin. Asst. to Gov. Edward Breathitt l966-67Pleasae permit me to make the following suggestions:

 

1)      Executive Branch Ethics Commission:
      The Executive Branch Ethics Commission has demonstrated over the last two  years a partisan bent. They have unilaterally enlarged their jurisdiction to include monitoring the conduct of Commonwealth Attorneys and the Attorney General.  All current members were appointed by Gov. Fletcher, and it will be two years before a majority of the commission can be appointed by the new administration.  The Governor should take advantage of provisions of
KRS 11A.015.
This statute allows the governor to issue an executive order that would remove Commonwealth Attorneys and the Attorney General from the jurisdiction of the EBECWe also suggest that the Governor pursue the creation of a Prosecutors Conduct Commission that would do for prosecutors what the Judicial Conduct Commission does for the judiciary.

 

 2)    Criminal Sentencing Reform:  UK College of Law Professor Robert Lawson is one of the great natural resources of the Commonwealth of Kentucky. He has published a comprehensive study of current mandatory sentencing laws, that have taken away from the judiciary the discretion of setting sentences, and effectively given that power to prosecutors.  Prosecutors by use of their power to decide which charges to file, and which to plea bargain, have greatly restricted courts in their sentencing function.  The result has been a dramatic increase in Kentucky’s prison population.       The Corrections budget has increased by $42 million dollars since 2006. For 2008 the budget submitted by Gov. Fletcher for Corrections will rise to $392,686,300.   The continued increase in funding for prisons, is restricting the ability of the state to adequately fund education needs.  Prison construction cannot keep up with the increase in new state prisoners, and the state for the last decade has placed excess prisoners in County Jails, creating a real crisis for counties.   Something is wrong when we ignore relatively inexpensive supervised probation solutions for non-violent offenders and build prisons and mandate longer sentences. The Governor should meet with Professor Lawson and work towards implementing some of his suggestions.  See the Lawson studies at: CORRECTIONS: TOUGH ON CRIME PHILOSPHY by ROBERT G. LAWSON   Discussion of the effect of Tough On Crime sentencing policies on the public- and CORRECTIONS: TURNING JAILS INTO PRISONS-BY ROBERT G. LAWSON – Collateral Damage from Kentucky’s War on Crime

 

3)     Ethics Code for Governors Executive Office Staff:
We suggest that the Governor impose a simple ethics code for all members of his executive office, that mandates respect for the law, particularly the Merit System. The example should be made from the top down that the Merit System laws are not to be ignored by this administration.

 

4)    Adoption of Conflict of Interest protocols for appointment of Special Justices of Supreme Court.
We suggest the Governor publish a protocol which sets out the procedure for the appointment of Special Justices of the Sup. Ct. when cases personally involving the Governor are to be heard by the Ky. Sup. Ct., and two Justices have recused themselves.  That protocol would remove the Gov. from the taint of packing the court that is to hear any case concerning the Governor in a personal matter.

 

5)   Policy for Restoring Civil Rights to Felons:
We suggest the Governor change the policy of the last administration which greatly restricted the restoration of civil rights to felons. 

 

 6)  Control of Pardon Powers:
The Governor should declare a policy that he will not pardon any member of his administration charged with a criminal offense, until they have at least confronted a jury.  

 

7) Adopt Meet the Public Days:Governor Breathitt successfully created a practice where he appeared around the state every several days each month, and invited citizens to call on him. Top aides and Cabinet Representatives often attended and were assigned to review any complaints or issues raised at these meetings.

 

8)      Caution in Appointments to Task Forces:
The outcome of any task force (i.e. criminal justice) can be determined by the interests of the appointed members.  We have seen a criminal justice task force that was captured by police/prosecutor members because their interests were weighted against members of the judiciary, public defenders, and law professors.   More members were appointed from the police/prosecutor interests, and every vote taken was controlled by their group thereby ignoring the proposals of the parties who actually deal with sentencing issues for example.  Remember that the makeup of a task force may determine in advance the work product of the task force.

 

9)            Buy Kentucky
The Beshear campaign pledged to takes steps to see that Kentucky businesses would be favored over out of state vendors if they offered similar quality service and products.  One thing that could be done to make that program a reality is to create an office that provides education and information on how to correctly negotiate the extremely complex bid process in place in Kentucky.  The current vendor interface is so difficult that small vendors simply can’t afford to participate.  Each Cabinet Secretary and the heads of all Boards and Commissions should be required to make an public annual report to the Governor on their efforts to assist Kentucky vendors in participating with state government.

 

Stan Billingsley is the Senior Editor and Chairman of the Board of LawReader, Inc. He has served in the Ky. Legislature (1974-75), and retired from the judiciary after 23 years as a District Judge and Senior Status Circuit Judge. He is the author of several law books. In l995 he was selected by the KBA as the Outstanding Judge in Kentucky.

 

 

JAMES L. DECKARD, Frankfort, -  Aide to Gov. Ernie Fletcher  2005-2007 I’ve been lucky enough to call Frankfort home for quite some time now.   As you and the First Lady know from your previous time here, it’s an easy place to make lifelong friends, and more than a few enemies.   It’s also a remarkable mix of small town life, government, and ready access to our commonwealth’s urban centers.  It does seem, at times, to be populated with an inordinate number of people who see in every mirror a future Governor staring back at them.             And while many in your new administration have been close to the big chair, there is nothing like the view from that singular seat.  The ready access to facts and data is astounding.  The ability to call upon any number of groups or individuals, whether inside or outside government, is without limit.  But so, it seems, are the number of individuals willing to invoke your name for their own designs.             Within the next few days, the Capitol building will be occupied with some new, and not a few old, faces whose primary focus will be on bringing their best efforts to make our shared Kentucky a better place.  Many, however, will be looking over your shoulder to measure the drapes for the next governor’s race. But, that is nothing new.  You have a strong reputation as an able attorney, and you are to be commended for some adroit early steps in surrounding yourself with capable people of good experience.            No one can predict the moments that will transcend the politics in your coming term as Governor.  For my time there, those extraordinary moments often came when least expected.  Unparalleled is my recollection of a television news crawl during an early Sunday morning cartoon in August of 2006, with news that an outbound flight from Bluegrass Field was no more, and being humbled within minutes by not only the courage and efficiency of our first responders, but the families grieving together as one. 

Earlier that year brought my informal medical education from Doctor Fletcher, then acting as patient, when I learned more than I ever expected to know about gallstones, bile ducts, pancreatitis, E. coli, sepsis, blood clots and Coumadin. 

 

And I am still in awe at witnessing every quiet moment when the family of a fallen Kentucky Guardsman, one of our State Troopers, or even a Supreme Court Justice, is presented a triangular folded flag with an official, yet whispered, condolence.             I encourage you to get out into the far reaches of the Commonwealth as often as possible, no matter what your official staff driven schedule may require.  Sometimes it seems that the weight of the dome of the Capitol itself is squarely on the shoulders of Kentucky’s First Family. 

 

But it is in places like Marion, Tompkinsville, Maysville, Whitesburg and Hyden where true perspective can be gained, and a better appreciation for what being “Governor? means.  Kentuckians want to see their Governor, in their towns and villages.  And, all of those that surround and travel with a Governor should know, if they don’t already, that it’s not about them.             Able hands around the Capitol will assist with your message, and with pressing it through the filter of the Frankfort media.  It seems any fair perspective on accomplishment and legacy must come in hindsight.  And with a little help from the messengers.             I’ve found it possible to have many friends in the press corps, but to feel their blade on occasion as well.  As Governor Fletcher said during his remarks on election night, “High office brings distinction, but also trouble?.  Best of luck, Governor. 

 

Jim Deckard serves as Executive Director of the Kentucky Bar Association.  He was General Counsel to Governor Fletcher from June 20, 2005 to February 28, 2007.  Previously, he served as Chief of Staff and Counsel to the Chief Justice of Kentucky, and was in private law practice in Nashville, Tennessee.  Jim lives in Frankfort with his wife, Mandy, and their two sons, Levy (5) and Henry (2). 

 

 CATTIE LOU MILLER, Horse Cave, Ky. – Aide to Gov’s Earle Clements, Lawrence Wetherby, Bert Combs, Edward Breathitt, John Y. Brown, Wendell Ford, Julian Carroll, and Martha Layne Collins. To Gov. Elect Steve Beshear:   Congratulations and best wishes!If you asked for suggestions, I’d say:

 

Early and often, tell your appointees they work for the public and must always meet the highest standards of honesty. Governor Edward T. Breathitt took time in his first cabinet meeting to tell us he expected everyone to live up to strong ethical standards. He said, “Think through your decisions, because, whatever you do, we don’t want any scandals in this administration.?  He emphasized that theme many times while he was governor, and wonderfully enough, in his entire four years no scandals occurred.

Ban free trips and gifts.

 

Tell newcomers there’s no such thing as a secret in Frankfort. The paperwork that carries out their decisions passes through many hands, is seen by many eyes, and is sniffed by many noses. Sooner or later, the details of every unseemly decisions stares back from the morning paper.

 

Provide copies, and require everyone from cabinet secretaries to division directors to read the State Constitution and the Statute chapters on purchasing, contracting and the Merit System.

 

Sidestep the pitfall of winter’s first big snow. Many administrations rush to bring in new appointees, including highway officials and the county highway foreman. Sometimes however, no one tells the new people (especially in Franklin County) about a snow plan or who’s to send out the snow plows and sand truck s ahead of morning traffic.  After fender benders and gridlock, there’s very little rosy that first snowy Capital city-except, of course, some very red faces in might high places.

 

Lots of luck and best regards,  Cattie Lou Miller

 

Cattie Lou Miller, the first woman to serve in the cabinet of a Kentucky governor, came to state government in l947 as secretary to Gov. Earle C. Clements and continued as secretary to Gov. Lawrence W. Wetherby.
She worked a year as assistant to Gov. Bert Combs, a year as assistant to Wendell H. Ford, and a year as chief administrative assistant to Gov. Edward T. Breathitt.
She was commissioner of the Dept. of Public Information (Combs and Breathitt administration), commissioner of the Dept. of Personnel (Ford administration and early in Gov. Julian Carroll’s administration), commissioner of the Department of Finance Administration in the administrations of Gov. John Y. Brown and Gov. Martha Layne Collins.
Earlier, Ms. Miller left Frankfort the day before Gov. A.B. Chandler arrived (1955) and returned the day after he left (1959).
Later Gov. Julian Carroll appointed her executive director of the State Board of Claims and the then-new Crime Victims Compensation Board.
She retired from full-time state posts in l986 with a still remembered civic-center party given by Gov. Collins.  Ms. Miller remained a member of the Ky. Retirement System Board until she retired from that post in l996 after 24 years as an employee-elected member.
Ms. Miller was a member of six state campaign headquarters staffs: Clements, Wetherby, and Combs for Governor, and Clements campaign, the Clements and Wetherby campaign, and for the Alben W. Barkley for U.S. Senate campaign. 
Ms. Miller lives in her hometown of Horse Cave.

 

 DON MILLS, Lexington, Ky. – Aide to Governor Edward T. Breathitt  1963-1967, and Governor John Y. Brown  1979- 1980  Shortly after I joined state government as press secretary to the late Gov. Edward T. Breathitt in 1963, I learned that you never put anything into a memorandum to another official that you didn’t want to read about it the next morning in the newspapers.
 
    Members of the present administration could have learned from that wisdom when they freely and often sent recorded messages through their BlackBerrys, a type of cell phone, to one another concerning the hiring and firing of state employees, particularly merit employees.  Hopefully, the new members of this administration will heed that advice, quash an inquiry by the new attorney general and avoid breaking the law.
 
    Gov.-elect Steve Beshear, as all governors of the past, faces a quick and upcoming legislature in early January. He will be judged on the program and quality of bills that he pushes and passes, including enabling legislation for his casino plan.  And he must present a budget, which was mostly written by the outgoing administration, rather quickly, to reflect the emphasis of the new governor and to catch any lines or figures that would be misleading as far as he is concerned.
 
    During all this time he and his aides must work on the inaugural celebration, the big dances that follow, the planned Holiday parties and all the other social events that mark every new administration
 
    When Breathitt was inaugurated, his budget had been largely prepared by the friendly Combs administration.  But very little ?new money? was available for his tight budget — the same problem, if not more so that Beshear faces. Breathitt put his “new money? into teacher and education programs. His other legislation lacked meaning and quality because of the shortness between election and the legislature.  So Breathitt got mixed reviews by the press on his first session.
 
    The second legislative session was quite different.  Having made a pledge not to increase taxes, as Beshear has done, Breathitt looked instead at what really was needed for Kentucky — a strong civil rights bill, a tough, new strip-mine bill, legislation covering air and water pollution, traffic safety and a host of other bills that were enacted with very little cost involved to the taxpayers and which won Breathitt nationwide praise
 
    The new governor-elect could get revenue help from the casino gaming bill.  But it must first pass a GOP-dominated  Senate, then be approved by voters in the 2008 General Election. Revenue could begin to trickle into the state coffers through gaming licenses shortly thereafter.  But any real revenue could be two years down the road along with a lot of “ifs.?  Meanwhile, the state, in all likelihood, faces a fiscal crisis.
 
    I also had the opportunity to work as chief administrative assistant to Gov. John Y. Brown.  His administration stood out for the inclusion of women and African-Americans not only in his Cabinet but in administrative positions as well. He made a real effort to include both on the scores of boards he named.
 
    Any governor and his aides must be open to the public and press. You never fib to a reporter or you will be in deep trouble. If something goes wrong in the administration, like an employee stealing funds or equipment missing,  you are better off  calling a press conference to announce the problem, rather than trying to hide it or waiting for a reporter to write about it. These are simple matters but a cover-up can be deadly to any administration.
 
    Gov.-elect Beshear is fortunate in that he is 63-years-old.  He should have no further political ambitions, such as running for the U. S. Senate or even being elected president.  So, he can serve out his full eight years with only one main priority — making the best governor this state has ever had.  He will be judged, accordingly.
 
Don Mills formerly has served as the Editor of the Lexington Herald-Leader, and as a member of the Ky. Public Service Commission.
 
 
 

Med Mal lawyer gets sued by his client and by defendant.

Wednesday, November 28th, 2007

Nov. 28, 2007 – Andy Wolfson in the Courier Journal, reports a medical malpractice case from Louisville,  in which the surgeon turned attorney was sued by his client, and by the physician he sued for the client.  Both claims against the experienced  Tennessee attorney Laurence Dry were successful.

This demonstrates the danger of hurrying a case when the statute of limitations is looming.  This is not the first example we have seen at LawReader where  an attorney filed the medical malpractice lawsuit before he had an independent expert medical opinion in hand in order to beat the statute of limitations.

We recommend that when that million dollar case comes in the front door, if the statute of limitations is about to run out, that you either immediately get an expert opinion in writing, or decline the case.

Wolfson reports that the plaintiff’s attorney said he had an oral expert opinion but the expert denied this.  Therefore we had a he said and expert said situation, and the attorney lost that one.  So get your medical expert witness opinion in writing!

Wolfson reported in part:

Dry was found on one hand to have botched a medical malpractice case “so good he couldn’t lose it” and on the other hand to have filed a case “so bad he never should have taken it.

A Jefferson Circuit Court jury found last month that Dry, of Oak Ridge, Tenn., should pay $80,000 for filing a groundless lawsuit against Dr. John R. Johnson, a prominent surgeon who is director of the Norton Hospital Leatherman Spine Center.

Dry, himself a surgeon-turned-attorney, paid the judgment last week.

Dry’s insurer already had paid $750,000 in March to settle a legal malpractice claim brought against him by his former client, John Conley, who had sued Johnson and other doctors for allegedly causing him to lose most of his vision during back surgery.

Conley, who now is legally blind, claimed Dry bungled his court case, which was dismissed.

Johnson’s lawyer, Lee Sitlinger, said the bizarre outcome “reiterates the fact that attorneys have obligations to our clients as well as to the people we sue, particularly professionals.”

Johnson, the chairman of the University of Louisville School of Medicine’s orthopaedic surgery department, said the case shows that lawyers must thoroughly explore their claims before suing doctors.

Dry’s theory was that Conley’s blindness was caused because Johnson and another back doctor used two incompatible blood-control products during the procedure. A packaging insert with one of the products warned that it hadn’t been tested to see if it could be used safely with the other, said W. Kennedy Simpson, who later became Dry’s lawyer.

But despite a rule requiring lawyers to find a medical expert supporting their claim before suing for malpractice, Dry and Rowe failed to do so before suing Johnson and others on Nov. 1, 2001, according to court records.

Dry said he came into the case late, and with the statute of limitations about to expire, had no choice but to do most of his research after filing the complaint.

But one of the expert witnesses he claimed he found later to support his theory insisted in a deposition for Johnson’s case that he had said no such thing. The other expert witness had Alzheimer’s disease and couldn’t be interviewed, Sitlinger said.

With no experts, Dry and Rowe decided the case had no merit and they dropped out of it in November 2004, according to court records. It eventually was dismissed.

But Johnson, the orthopedic surgeon, had spent two years defending himself. And Conley, blind and unable to work, was left without compensation for his impairment.

No probable cause

Conley and his wife sued Dry and Rowe, claiming that they overlooked what the Conleys said was the real cause of his injury — the alleged failure of an anesthesiologist to check the position of his head, to ensure there wasn’t pressure on his eyes as he lay face down through seven hours of surgery.

Hillary Clinton Leads All Republicans in Latest Survey/USA Poll

Monday, November 26th, 2007

The latest SurveyUSA poll shows Hillary Clinton has increased her level of support in Kentucky in the past month and now leads all Republican challengers in Kentucky.

 

SurveyUSA. Nov 9-11-2007 – Margin of Error 4.2%

 

Nov. 9-11 Results:
Clinton (D) 48%       10/12-14 results (47%)
Giuliani (R) 44%      10/12-14 results (45%)

 

Clinton (D) 54%       10/12-14 results (50%)
Romney (R) 39%      10/12-14 results (41%)

 

Clinton (D) 55%       10/12-14 results (49%)
Huckabee (R) 36%   10/12-14 results (39%)

 

Clinton (D) 48%       10/12-14 results (45%)
McCain (R) 47%      10/12-14 results (49%)

 

ONLY FIVE SERVICE STATIONS IN KENTUCKY OFFER E-85 ETHANOL GASOLINE

Monday, November 26th, 2007

LawReader – Nov. 26, 2007-
The EPA (Environmental Protection Agency) lists only five Kentucky service stations that offer ethanol gas. Only three of these stations offer ethanol to the public.
We do not have a clue as to why this gasoline and ethanol mixture known as E-85 has not caught on in Kentucky.  The mixture is 85% gasoline and l5% ethanol.  The EPA says there is a substantial reduction in green house gases discharged into the atmosphere when E-85 is used as compared to 100% gasoline.

City Name Address
Frankfort Kentucky – Motor Pool Private 368 Warsaw Street
Hopkinsville Max Fuel Ft. Campbell Blvd
Lexington University Kentucky N3 Agricultural Sciences North
Murray Murray State University private 200 Transportation Building
 Paducah Pugh J. Midway 6801 Cairo Road

2005 Bankruptcy Reform Act Backfires on Lenders.

Monday, November 26th, 2007

Lenders who sought tougher law on bankruptcy now facing foreclosures which are making the national housing slump, and subprime lending problems worse.

 

Nov. 26, 2007 – Businessweek Magazine published an article last week by Christopher Farrell.  In the article the author discusses the harm that the Federal Bankruptcy Act of 2005 has done to make the real estate foreclosure problem larger than it might have been.

 

The new Bankruptcy law was endorsed by lenders who wanted to make it harder for households to get out from under their consumer debt.  The result has been more people are being forced to walk away from their homes, leaving lenders holding the bag.

 

Perversely, a law intended to help the financial industry may be damaging the housing sector, creditors and borrowers alike. “It doesn’t matter what you think of the purpose for the new bankruptcy law. The timing is bad. “ says Susan M. Wachter, professor of real estate at the Wharton School of Business.

 

The old bankruptcy law, in effect since l978, was considered extremely housing-friendly. Most distressed borrowers favored filing under Chapter 7, essentially cheap, quick debt liquidation. In practice, most got to keep their homes, while the rest of their property and assets were sold off to pay a portion of unsecured debts such as credit-card and medical bills. When the assets ran out the remaining loans were cancelled-although some debts were off limits, like student loans and child support.  Future paychecks could go to mortgage payments. 

 

By contrast the new law was designed to protect creditors. For one thing, only low-income borrowers can file for Chapter 7, which wipes out debtrs. The amended law pushes more people into Chapter 13, which forces housholds to accept 3-5 year repayment plans on all debts-secured and unsecured.

 

In other words, they’re trying to make payments on car, credit card, medical and other bills that used to be discharged in Chapter 7u.   That makes meeting the mortgage more onerous.  Filing for Chapter l3 temporarily halts foreclosure proceedings, but the protection only lasts as long as the borrower is making mortgage payments.

 

Under the old law, the average cost of filing for Chapter 7 was about $800 to $1,400 in attorney and other fees.  It is estimated that the cost is now up to $1,400 to $2,400 to file.

 

Another problem: Under current law, bankruptcy courts don’t have the option of reducing the payments on the mortgage for a primary residence. That means anyone who took out a subprime loan is stuck, unless they want to walk away.

 

Recent bills introduced into the newly controlled Democratic House and Senate would allow judges to adjust unaffordable mortgages downward. 

 

That change, if Congress adopts it, could transform bankruptcy into a more practical option when dealing with mortgage lenders.

 

Nevertheless, the current law is making the housing slump worse.  Without these amendments, it could take a lot longer than many expect for the economy to regain its footing

Kentucky Law School Sued

Monday, November 26th, 2007

PADUCAH, Ky. (AP) — The students of a private western Kentucky law school have filed a $120 million class action lawsuit against the school’s administration, claiming the school is being mismanaged and that accreditation is unlikely. Students at the American Justice School of law filed the lawsuit in U.S. District Court on Nov. 17. 

The suit claims the school’s top two administrators have engaged in criminal activity that includes racketeering, conspiracy and abuse of their offices “to enrich themselves at the expense of the students.” In addition to the $120 million in damages, the suit seeks a restraining order to prevent the school from filing bankruptcy, a full accounting of financial records and other action to protect students. 

Tom Osborne, a local attorney who resigned as the school’s board chairman earlier this month, filed the suit on behalf of himself and the students. Paul Hendrick, the school’s founder, dean, president and majority stockholder is listed among the defendants. Also listed are Wayne Shelton, stockholder and chairman of the board of directors and Jarrod Turner, assistant dean and minority stockholder. 

The school, which opened in 2005, has about 200 students. The suit claims Hendrick and Turner worked together to delay distribution of student loans for living expenses so they could invest the funds and earn interest. It also claims they applied for student loans up to $20,000 without the student’s knowledge. 

The suit says the students are being harmed because they’ve taken out large loans to cover the cost of the school, but that receiving a law degree from the school is remote because it has not been accredited by the American Bar Association. The school applied for accreditation over the summer but was denied. 

Joseph Ardery, an attorney for the school, said the school “will reply appropriately” to all allegations. Hendrick declined comment on the lawsuit, but said he is confident the school will receive provisional accreditation next year and full accreditation no more than three years later. 

See which corporations are really supporting our troops.

Monday, November 26th, 2007

Sears Corporation has a policy of supplementing the salaries of a National Guardsmen who have been called to active duty in Iraq and Afganistan.  They are paying the difference in salary ,of their employees who have been called up, and are receiving less pay in the military than they earned while working at Sears.  

 

Other employers have signed pledges of support for their employees, to assist them in making the transition from the military back to civilian life.

 

We suggest you check out the employers who are supporting our troops.  Go to:

http://www.esgr.org/ 
 

They have a long list of Kentucky companies that are likewise helping support the troops.

 

Perhaps you might want to consider which merchants you will patronize in the future based on their support for our military.

These Statutes Make up the Heart of the Ky. Merit System

Saturday, November 24th, 2007

We invite all new officials and managers in the Beshear administration who will assume office in January, to take a minute and review the essential statutes that make up the Ky. Merit System.  One may assume with a high degree of certainty that the press and the public will be closely reviewing any actions of this administration which suggest that the Merit System is not being followed.

 

The Merit System is Created by Chapter 18A of the Kentucky Revised Statutes
 

See:  CHAPTER 18A STATE PERSONNEL  
 
The following statutes make up the heart of the Kentucky Merit System:
 

KRS 18A.140 Prohibition against discrimination and political activities.
 

(1) No person shall be appointed or promoted to, or demoted or dismissed from, any
position in the classified service, or in any way favored or discriminated against
with respect to employment in the classified services because of his political or
religious opinions or affiliations or ethnic origin or sex or disability. No person over
the age of forty (40) shall be discriminated against because of age.
 

(2) No person shall use or promise to use, directly or indirectly, any official authority or
influence, whether possessed or anticipated, to secure or attempt to secure for any
person an appointment or advantage in appointment to a position in the classified
service, or an increase in pay or other advantage in employment in any such
position, for the purpose of influencing the vote or political action of any person.
 

(3) No employee in the classified service or member of the board or its executive
director or secretary shall, directly or indirectly, pay or promise to pay any
assessment for political purposes, or solicit or take any part in soliciting for any
political party, or solicit or take any part in soliciting any political assessment,
subscription, contribution, or service. No person shall solicit any political
assessment, subscription, contribution, or service of any employee in the classified
service.
 

(4) No employee in the classified service or member of the board or its executive
director shall be a member of any national, state, or local committee of a political
party, or an officer or member of a committee of a partisan political club, or a
candidate for nomination or election to any paid public office, or shall take part in
the management or affairs of any political party or in any political campaign, except
to exercise his right as a citizen privately to express his opinion and to cast his vote.
 

Officers or employees of the classified service may be candidates for and occupy a
town or school district office if the office is one for which no compensation, other
than a per diem payment, is provided and the election is on a nonpartisan basis.
 

 

KRS 18A.095 Rights of executive department employees.
(1) (a) The provisions of this section shall not apply to employees commissioned
pursuant to the provisions of KRS 281.770.

(b) Dismissals, demotions, suspensions, and other penalizations of these
commissioned employees, and appeals relating thereto, shall be governed by
the provisions of KRS 281.771 and 281.772.
(2) A classified employee with status shall not be dismissed, demoted, suspended, or
otherwise penalized except for cause.

 

KRS 18A.005 Definitions for chapter
 

KRS 18A.010 General purpose of KRS 18A.005 to 18A.200 — Total number of employees limited
 

KRS 18A.020 Records of Personnel Cabinet subject to open records law – Employee access to personnel files
 

KRS 18A.032 Applicants to and eligibles for the classified service — Examination –Placement on and removal from registers — Certification for employment
 

KRS 18A.037 New system of job classification and compensation
 

KRS 18A.111 Probationary periods for classified service — Initial and promotional.
(1) Except when appointed to a job classification with an initial probationary period in
excess of six (6) months, and except as provided in KRS 18A.005, an employee
shall serve a six (6) months probationary period when he is initially appointed to the
classified service. An employee may be separated from his position, reduced in
class or rank, or replaced on the eligible list during this initial probationary period
and shall not have a right to appeal, except as provided by KRS 18A.095. The
employee may be placed on an eligible list but shall not be certified to the agency
from which he was separated unless that agency so requests. Unless the appointing
authority notifies the employee prior to the end of the initial probationary period
that he is separated, the employee shall be deemed to have served satisfactorily and
shall acquire status in the classified service.
(2) An employee who satisfactorily completes the initial probationary period for the
position to which he was initially appointed to the classified service shall be granted
status and may not be demoted, disciplined, dismissed, or otherwise penalized,
except as provided by the provisions of this chapter.
 

 

KRS 18A.113 Lay-off rules — General
 

KRS 18A.120 Basis for hiring for classified service — Exception — Credit for sick leave.
(1) Except as hereinafter provided, all hiring for the classified service shall be on the
basis of competitive examinations and certification by the cabinet in accordance
with the provisions of KRS 18A.005 to 18A.200.

 

 

 KRS 18A.095 mandates that the procedures for dismissal or suspension of covered employees shall be conducted in the same manner as provided by KRS 281.771 and KRS 281.772.  These two statutes spell out the Due Process that is provided to Merit System Employees.
 

KRS 281.771 Charges against commissioned employees — Procedure — Hearing.
(1) For the purposes of this section, the term “commissioner” means the commissioner
of the Department of Motor Vehicle Regulation.
(2) An employee commissioned pursuant to the provisions of KRS 281.770 shall not be
dismissed, demoted, suspended, or otherwise penalized except for cause.
(3) Any person may prefer charges against a commissioned employee.
(4) A charge shall be:
(a) In writing;
(b) Filed with the office of the commissioner;
(c) Signed by the person making the complaint; and
(d) Set out with clarity and distinction.
(5) (a) The commissioner shall review the charges.
(b) If the commissioner determines that there is probable cause, he shall file
charges against a commissioned employee whom he believes is guilty of
misconduct that justifies his removal or discipline.
(6) Within five (5) days of the filing of the charges, the commissioner shall:
(a) Personally deliver a copy of the charges to the commissioned employee; or
(b) Send a copy of the charges to the commissioned employee by certified mail,
return receipt requested.
(7) Within five (5) days of receipt of the charges, the commissioned employee may:
(a) Demand an administrative hearing; or
(b) Admit the truth of the charges in whole or in part.
(8) If the commissioned employee admits the truthfulness of the charges, the
commissioner shall dismiss, demote, suspend, or otherwise penalize the employee
as warranted by the seriousness of the charges.
(9) If the commissioned employee denies the charges and demands a hearing within the
time specified in subsection (7) of this section, he shall notify the commissioner in
writing.
(10) Upon receipt of the demand for hearing, the commissioner shall arrange for an
administrative hearing before a trial board to be constituted as provided in KRS
281.772. The hearing shall be conducted in accordance with KRS Chapter 13B.
(11) (a) If the commissioner has probable cause to believe that a commissioned
employee is guilty of misconduct, he may immediately suspend the employee
from duty, or from both pay and duty, pending trial.
(b) If an employee is suspended, he shall not be returned to duty or be paid until a
final order is rendered by the trial board.
(12) After hearing the charges, the trial board shall fix the punishment of a
commissioned employee found guilty of one (1) or more charges, by:
(a) Reprimand;
(b) Suspension for a period not to exceed six (6) months;
 (c) Reducing the grade if the commissioned employee’s classification warrants it;
(d) Combining any two (2) or more of the punishments;
(e) Reducing the monthly salary of the commissioned employee by not more than
twenty percent (20%) for not more than six (6) months; or
(f) Dismissing him from the service of the department.
Effective: July 15, 1996
History: Amended 1996 Ky. Acts ch. 318, sec. 204, effective July 15, 1996. — Created
1994 Ky. Acts ch. 317, sec. 2, effective July 15, 1994.
 

KRS 281.772 Trial board for hearings on charges against commissioned employees — Right to hearing — Appeals.
(1) For the purpose of hearing charges against any commissioned employee, there is
created a trial board, which shall consist of the commissioner and a panel of ten (10)
commissioned employees appointed by the commissioner. The commissioner shall
designate from the panel not less than three (3) nor more than seven (7) members to
hear charges against any commissioned employee. Hearings before the trial board
shall be conducted in accordance with KRS Chapter 13B.
(2) The commissioned employees appointed to the trial board shall:
(a) Fulfill the duties of the board in addition to their other duties; and
(b) Be reimbursed for travel and necessary expenses pursuant to the provisions of
KRS 18A.200.
(3) (a) A defendant may, for cause, challenge the right of any member of the trial
board to hear charges against him.
(b) If the other members of the trial board determine that the challenge is
justifiable, the trial board member in question shall be:
1. Excused from hearing the charges, and
2. Replaced by another member of the trial board.
(4) The rights conferred upon a commissioned employee by this section shall not accrue until he has been employed for a period of one (1) year.
(5) No commissioned employee is entitled to a hearing as provided in this section
unless his suspension is for more than twenty (20) days, or his pay is reduced more
than ten percent (10%); but if the employee receives more than twenty (20) days
suspension or a reduction in salary of more than ten percent (10%) within a period
of one (1) year, he shall have the right to a hearing.
(6) The dismissal, demotion, suspension, or other penalization of a noncommissioned
employee shall comply with the provisions of KRS 18A.095 and 18A.100.
(7) Any commissioned employee found guilty by the trial board of any charge under the
provisions of KRS 281.771 shall have the right to appeal to Franklin Circuit Court
in accordance with KRS Chapter 13B.
 

Penalties
The penalties for violation of the merit system code subjects the violator to prosecution for a misdemeanor offense, for forfeiture of office, and loss of the right to be a state employee for five years.
KRS 18A.990 Penalties.
(1) Any person who willfully violates any provision of KRS 18A.005 to 18A.200 or of
the rules shall be guilty of a misdemeanor, and shall upon conviction be punished
therefor with a sentence of from thirty (30) days to a maximum of six (6) months in
jail.
(2) Any person who is convicted of a misdemeanor under KRS 18A.005 to 18A.200
shall, for a period of five (5) years, be ineligible for appointment to or employment
in a position by the Commonwealth, and if he is an officer or employee of the
Commonwealth, shall forfeit his office or position.
(3) Any officer or employee of the classified service who willfully violates any of the
provisions of KRS 18A.140 shall forfeit his office or position, and for one (1) year
shall be ineligible for any office or position in the Commonwealth’s service.
Violation of KRS 18A.140 shall constitute a misdemeanor subject to a sentence of
from thirty (30) days to a maximum of six (6) months in jail.
Effective: July 15, 1982
 

Former Ky. Chief Justice Samuel Steinfield dies at 101

Saturday, November 24th, 2007

Samuel Steinfeld, a former chief justice of Kentucky’s highest court and Jefferson County attorney, died Thursday at Jefferson Manor. He was 101.

Steinfeld was elected in 1966 to the Kentucky Court of Appeals, then Kentucky’s highest court.

Steinfeld was born Feb. 15, 1906, in Louisville and graduated in 1924 from Male High School, where he was a track star. He graduated from the University of Louisville law school, which his father had attended and where he would later send his son, in 1928, then joined his father’s law firm, Gifford & Steinfeld, where he’d been working since 1922.

He became a partner in Steinfeld & Steinfeld with his father in 1935, and practiced there until 1966. Son James is now the third-generation partner in the Steinfeld legal practice.

Steinfeld served on the Court of Appeals from 1967 to 1975 and became chief justice in 1972.

As chief justice, he reported to the General Assembly that an intermediary court was needed to ease the volume of cases heard by the Court of Appeals and the resulting backlog.  That suggestion was adopted in 1975 by an amendment to the Ky. Constitution which was approved by the electorate.

Steinfeld officially retired from the bench the same year but continued to serve as a special judge in Jefferson Circuit Court until 1985 as well as in some appointments in U.S. District Court.

He also taught some courses at UofL’s law school, where he had been active for decades in alumni associations, including as a trustee and president of the alumni association and the Law Alumni Foundation.

Besides his son James, Steinfeld is survived by a daughter, Helane Grossman, and a sister, Thelma Isaacs.

The graveside service will be private. Herman Meyer & Son Funeral Home is handling arrangements.

9th. Circuit Ct. of Appeals Suggests New Way to Challenge Federal Electronic Spying Secrecy Laws which Restrict Civil Actions

Saturday, November 24th, 2007

Bob Egelko, San Francisco Chronicle Staff Writer  November 24, 2007
Despite their latest court setback, challengers of President Bush’s electronic surveillance program have another arrow in their quiver – a section of the same law that Bush spurned when he first ordered wiretaps six years ago.
The Ninth U.S. Circuit Court of Appeals in San Francisco decided an important issue in the administration’s favor Nov. 16 when it ruled that an accidentally released government document, purportedly showing wiretaps of an Islamic charity on the government’s terrorist list, was so sensitive that even a lawyer’s recollection of it couldn’t be used in court.
Without such evidence, the charity can’t show it was harmed by the surveillance program. Ordinarily, that would leave it with no grounds to sue over the program’s legality.
But rather than dismissing the suit, the court returned the case to U.S. District Judge Vaughn Walker in San Francisco and said he should decide whether Congress created an alternate route to challenge secret surveillance – a 1978 law regulating wiretapping of suspected foreign terrorists and spies.
That law, the Foreign Intelligence Surveillance Act, was prompted by a post-Watergate congressional investigation that found federal spy agencies had for decades conducted surveillance of political dissidents as well as security risk suspects.
The law requires federal agents to get a warrant for searches or electronic surveillance in espionage and foreign terrorism cases. It also allows federal judges to review, behind closed doors, people’s claims that they have been the victims of illegal eavesdropping.
The appeals court told Walker to look at whether the now-defunct charity, the Al-Haramain Islamic Foundation, could use that provision to have a judge look at the document that purportedly showed the government had wiretapped its phones.
Walker’s conclusion about whether the charity can invoke the 1978 law to keep its suit alive could determine whether any court has the power to decide the legality of the surveillance program that Bush ordered after the terrorist attacks of Sept. 11, 2001.
“It’s our gateway to litigating the merits” of the program, said attorney Jon Eisenberg, who represents Al-Haramain.
If courts decide that the 1978 law can be used to challenge an entire surveillance program, he said, Congress will have the power to rein in a president’s use of the “state secrets” defense, which the Bush administration has often employed to seek dismissal of lawsuits related to national security.
The prospect of such restrictions alarms Justice Department lawyers. In papers filed with the appeals court, they argued that the closed-door hearings authorized by the 1978 law had a narrow purpose – resolving disputes over evidence gathered by electronic surveillance for prosecutions in spying and terrorism cases.
A broader interpretation of the law, opening the door to civil suits by surveillance targets seeking to overturn the entire program, would raise “serious constitutional questions” and interfere with “the president’s ability to protect vital military and intelligence secrets from public disclosure,” government lawyers said.
The Al-Haramain suit is one of more than 40 surveillance-related cases that a judicial panel transferred last year to Walker, an appointee of former President George H.W. Bush.
The suits were all prompted by President Bush’s acknowledgement in December 2005 that he had authorized the National Security Agency in 2001 to intercept phone calls and e-mails between Americans and foreign terrorist suspects without judicial approval.
Bush said the 1978 law’s requirement of warrants for electronic surveillance was too cumbersome in the post-9/11 world and interfered with his constitutional powers in wartime. Congress amended the law in August to allow the surveillance to continue, with limited court review, at least through February 2008.
Some of the pending lawsuits challenge the legality of the program, and others accuse telecommunications companies of illegally sharing their networks and records with the government. The Al-Haramain case is unique because the government inadvertently released a document to the charity in 2004 that reportedly showed it had been wiretapped.
The charity returned the document after federal officials learned of their error, but a judge in Oregon allowed Al-Haramain’s lawyers to testify about its contents from memory to establish the charity’s right to sue.
That ruling became more important in July when a federal appeals court dismissed the only other challenge to the surveillance program that had reached the appellate level. The court said the plaintiffs in that case – lawyers, academics and journalists who believed their overseas communications had been monitored – had no standing to sue because they lacked evidence of surveillance. The plaintiffs have appealed to the Supreme Court.
The implication was that only a plaintiff with evidence of surveillance – such as Al-Haramain – had the right to challenge the program. But on Nov. 16, the appeals court in San Francisco barred the charity from making any use of the secret document, including its lawyers’ recollection of it.
The court said the charity lacks standing to sue unless the 1978 law, with its closed-door hearings, trumps the government’s power to insulate its secrets.
“We believe (the 1978 law) applies and that Congress had this very situation in mind,” said Ann Brick, an American Civil Liberties Union lawyer who represents the plaintiffs in another case before Walker. “Congress set up a procedure in which the secrecy of the evidence is preserved, thus (there is) no harm to national security, and yet the court can adjudicate the merits of the controversy.”
Government lawyers argued that only people who are being prosecuted for espionage or terrorism crimes, and claim the evidence against them was obtained by illegal surveillance, have the right to a hearing on secret evidence. The 1978 law wasn’t intended to be used as a launching pad for civil suits challenging programs that involve state secrets, the lawyers said.
It’s a difficult issue, said Derek Shaffer, executive director of the Stanford Constitutional Law Center. The group is not involved in the Al-Haramain case but has filed arguments supporting another suit, pending before the Ninth Circuit, on behalf of customers of AT&T who accuse the company of collaborating in the Bush administration’s surveillance program.
Shaffer said the Justice Department has a strong argument that Congress wasn’t thinking of civil cases when it passed the 1978 law. On the other hand, he said, courts should remember that Congress enacted the law in response to revelations of decades of unchecked, politically motivated domestic surveillance.
“If all this is beyond inquiry, we will never have a meaningful system of checks and balances,” Shaffer said. If courts conclude they lack the power to decide whether the surveillance program is legal, he said, they will convey “an important lesson about a blind spot in our system of government.”

Aides to Ten Kentucky Governors Offer Advice to Gov. Elect Steve Beshear

Friday, November 23rd, 2007
                The LawReader “Grey Beard? Project  
 SUGGESTIONS OF FORMER GUBERNATORIAL AIDES TO GOV. BESHEAR
Introduction
Fontaine Banks, Aide to Governors Bert Combs and Edward Breathitt 1959-1967Brereton Jones 1992-1996
Stan Billingsley -   Admin. Asst. to Gov. Edward Breathitt l966-67
James L. Deckard -  Aide to Gov. Ernie Fletcher  2005-2007
Cattie Lou Miller – Aide to Gov’s. Bert Combs,  Edward Breathitt, Clements, Carroll, Collins, Brown, Wetherby, Ford – 1947 thru 1996
Don Mills – Aide to Gov. Edward T. Breathitt  1963-1967, and Gov. John Y.Brown  1979- 1983
 

                         The LawReader “Grey Beard? Project  
                                          INTRODUCTION
 Nov. 24, 2007LawReader has asked a number of former Gubernatorial Aides to offer their thoughts to Gov.-elect Steve Beshear, on things he might consider in setting up and managing the Office of Governor.  These comments will be delivered to the Governor Elect.  -

The participates in this LawReader project, have been tested in the service of ten different Governors. (Clements, Wetherby, Combs, Breathitt, Brown, Ford, Collins, Carroll, Jones, and Fletcher.) We hope the new governor takes the time to peruse these comments as we believe there are nuggets of wisdom here that may be of benefit to him or any future governor.Critics of Gov. Ernie Fletcher have opined that one of his first mistakes was in ignoring the institutional experience of persons the press called “grey beards?. There is a lot of grey hair among the former gubernatorial aides who have contributed to this LawReader project.  A lot of that grey hair was earned in the trenches of the Governors Office.

LawReader appreciates the participation of the former gubernatorial aides who have participated in this project. 

We particularly appreciate the comments of Cattie Lou Miller.  We do not believe any Kentuckian has served more governors, and no one has ever served a governor so well.

We have presented the comments in alphabetical order of the authors name. 

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FONTAINE BANKS – Frankfort, Ky., Aide to Governors Bert Combs and Edward Breathitt 1959-1967.

I was Chief of Staff to Governor Bert Combs and Edward Breathitt serving  in the Governor’s Office for eight years. The time frame was l959-1967. I also served as Deputy Secretary of Human Resources under Governor Collins and Secretary of Human Resources  under Governor Brereton Jones.The most important challenge to the Governor-elect is the method of choosing the top leaders of his Cabinet.  He must take the time and evaluate the individuals under consideration for appointment.

The key positions in his Cabinet are:

  1. Chief of Staff
  2. Secretary of the Governor’s Cabinet
  3. Secretary of Finance
  4. Director of the Budget.

If the Governor is successful in choosing the right people his administration will be successful.

The second most important factor is the development of the biennial budget. The process will be time consuming, but is an extremely important factor to the success of the administration.

Another important factor is the Governor’s plan to develop a public relations program. Under Governor Combs, we developed a program called “take government to the people?.  Each Cabinet assigned staff to go with the governor to locations in Kentucky where he worked to hold “court? for 1 or 2 days. Anyone could register and talk to the Governor. This gave the Governor a chance to see and talk to the people. This was a very, very successful program.

Cordially, Fontaine Banks, Jr.  Frankfort, Ky.

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STAN BILLINGSLEY, Carrollton, Ky. -Admin. Asst. to Gov. Edward Breathitt l966-67Pleasae permit me to make the following suggestions: 1)      Executive Branch Ethics Commission:
      The Executive Branch Ethics Commission has demonstrated over the last two  years a partisan bent. They have unilaterally enlarged their jurisdiction to include monitoring the conduct of Commonwealth Attorneys and the Attorney General.  All current members were appointed by Gov. Fletcher, and it will be two years before a majority of the commission can be appointed by the new administration.  The Governor should take advantage of provisions of KRS 11A.015.
This statute allows the governor to issue an executive order that would remove Commonwealth Attorneys and the Attorney General from the jurisdiction of the EBEC.  We also suggest that the Governor pursue the creation of a Prosecutors Conduct Commission that would do for prosecutors what the Judicial Conduct Commission does for the judiciary. 2)    Criminal Sentencing Reform:  UK College of Law Professor Robert Lawson is one of the great natural resources of the Commonwealth of Kentucky. He has published a comprehensive study of current mandatory sentencing laws, that have taken away from the judiciary the discretion of setting sentences, and effectively given that power to prosecutors.  Prosecutors by use of their power to decide which charges to file, and which to plea bargain, have greatly restricted courts in their sentencing function.  The result has been a dramatic increase in Kentucky’s prison population.       The Corrections budget has increased by $42 million dollars since 2006. For 2008 the budget submitted by Gov. Fletcher for Corrections will rise to $392,686,300.   The continued increase in funding for prisons, is restricting the ability of the state to adequately fund education needs.  Prison construction cannot keep up with the increase in new state prisoners, and the state for the last decade has placed excess prisoners in County Jails, creating a real crisis for counties.   Something is wrong when we ignore relatively inexpensive supervised probation solutions for non-violent offenders and build prisons and mandate longer sentences. The Governor should meet with Professor Lawson and work towards implementing some of his suggestions.  See the Lawson studies at: CORRECTIONS: TOUGH ON CRIME PHILOSPHY by ROBERT G. LAWSON   Discussion of the effect of Tough On Crime sentencing policies on the public- and CORRECTIONS: TURNING JAILS INTO PRISONS-BY ROBERT G. LAWSONCollateral Damage from Kentucky’s War on Crime3)      Ethics Code for Governors Executive Office Staff:
We suggest that the Governor impose a simple ethics code for all members of his executive office, that mandates respect for the law, particularly the Merit System. The example should be made from the top down that the Merit System laws are not to be ignored by this administration.4)      Adoption of Conflict of Interest protocols for appointment of Special Justices of Supreme Court.
We suggest the Governor publish a protocol which sets out the procedure for the appointment of Special Justices of the Sup. Ct. when cases personally involving the Governor are to be heard by the Ky. Sup. Ct., and two Justices have recused themselves.  That protocol would remove the Gov. from the taint of packing the court that is to hear any case concerning the Governor in a personal matter.5)      Policy for Restoring Civil Rights to Felons:
We suggest the Governor change the policy of the last administration which greatly restricted the restoration of civil rights to felons.  6)      Control of Pardon Powers:
The Governor should declare a policy that he will not pardon any member of his administration charged with a criminal offense, until they have at least confronted a jury.  7) Adopt Meet the Public Days:Governor Breathitt successfully created a practice where he appeared around the state every several days each month, and invited citizens to call on him. Top aides and Cabinet Representatives often attended and were assigned to review any complaints or issues raised at these meetings. 8)      Caution in Appointments to Task Forces:
The outcome of any task force (i.e. criminal justice) can be determined by the interests of the appointed members.  We have seen a criminal justice task force that was captured by police/prosecutor members because their interests were weighted against members of the judiciary, public defenders, and law professors.   More members were appointed from the police/prosecutor interests, and every vote taken was controlled by their group thereby ignoring the proposals of the parties who actually deal with sentencing issues for example.  Remember that the makeup of a task force may determine in advance the work product of the task force. 9)      Buy Kentucky
The Beshear campaign pledged to takes steps to see that Kentucky businesses would be favored over out of state vendors if they offered similar quality service and products.  One thing that could be done to make that program a reality is to create an office that provides education and information on how to correctly negotiate the extremely complex bid process in place in Kentucky.  The current vendor interface is so difficult that small vendors simply can’t afford to participate.  Each Cabinet Secretary and the heads of all Boards and Commissions should be required to make an public annual report to the Governor on their efforts to assist Kentucky vendors in participating with state government.Stan Billingsley is the Senior Editor and Chairman of the Board of LawReader, Inc. He has served in the Ky. Legislature (1974-75), and retired from the judiciary after 23 years as a District Judge and Senior Status Circuit Judge. He is the author of several law books. In l995 he was selected by the KBA as the Outstanding Judge in Kentucky.

Back to top JAMES L. DECKARD, Frankfort, -  Aide to Gov. Ernie Fletcher  2005-2007 I’ve been lucky enough to call Frankfort home for quite some time now.   As you and the First Lady know from your previous time here, it’s an easy place to make lifelong friends, and more than a few enemies.   It’s also a remarkable mix of small town life, government, and ready access to our commonwealth’s urban centers.  It does seem, at times, to be populated with an inordinate number of people who see in every mirror a future Governor staring back at them.             And while many in your new administration have been close to the big chair, there is nothing like the view from that singular seat.  The ready access to facts and data is astounding.  The ability to call upon any number of groups or individuals, whether inside or outside government, is without limit.  But so, it seems, are the number of individuals willing to invoke your name for their own designs.             Within the next few days, the Capitol building will be occupied with some new, and not a few old, faces whose primary focus will be on bringing their best efforts to make our shared Kentucky a better place.  Many, however, will be looking over your shoulder to measure the drapes for the next governor’s race. But, that is nothing new.  You have a strong reputation as an able attorney, and you are to be commended for some adroit early steps in surrounding yourself with capable people of good experience.            No one can predict the moments that will transcend the politics in your coming term as Governor.  For my time there, those extraordinary moments often came when least expected.  Unparalleled is my recollection of a television news crawl during an early Sunday morning cartoon in August of 2006, with news that an outbound flight from Bluegrass Field was no more, and being humbled within minutes by not only the courage and efficiency of our first responders, but the families grieving together as one. 

Earlier that year brought my informal medical education from Doctor Fletcher, then acting as patient, when I learned more than I ever expected to know about gallstones, bile ducts, pancreatitis, E. coli, sepsis, blood clots and Coumadin. 

And I am still in awe at witnessing every quiet moment when the family of a fallen Kentucky Guardsman, one of our State Troopers, or even a Supreme Court Justice, is presented a triangular folded flag with an official, yet whispered, condolence.             I encourage you to get out into the far reaches of the Commonwealth as often as possible, no matter what your official staff driven schedule may require.  Sometimes it seems that the weight of the dome of the Capitol itself is squarely on the shoulders of Kentucky’s First Family. 

But it is in places like Marion, Tompkinsville, Maysville, Whitesburg and Hyden where true perspective can be gained, and a better appreciation for what being “Governor? means.  Kentuckians want to see their Governor, in their towns and villages.  And, all of those that surround and travel with a Governor should know, if they don’t already, that it’s not about them.             Able hands around the Capitol will assist with your message, and with pressing it through the filter of the Frankfort media.  It seems any fair perspective on accomplishment and legacy must come in hindsight.  And with a little help from the messengers.             I’ve found it possible to have many friends in the press corps, but to feel their blade on occasion as well.  As Governor Fletcher said during his remarks on election night, “High office brings distinction, but also trouble?.  Best of luck, Governor. 

Jim Deckard serves as Executive Director of the Kentucky Bar Association.  He was General Counsel to Governor Fletcher from June 20, 2005 to February 28, 2007.  Previously, he served as Chief of Staff and Counsel to the Chief Justice of Kentucky, and was in private law practice in Nashville, Tennessee.  Jim lives in Frankfort with his wife, Mandy, and their two sons, Levy (5) and Henry (2). 

Back to top  CATTIE LOU MILLER, Horse Cave, Ky. Aide to Gov’s Earle Clements, Lawrence Wetherby, Bert Combs, Edward Breathitt, John Y. Brown, Wendell Ford, Julian Carroll, and Martha Layne Collins. To Gov. Elect Steve Beshear:   Congratulations and best wishes!If you asked for suggestions, I’d say:

  1. Early and often, tell your appointees they work for the public and must always meet the highest standards of honesty. Governor Edward T. Breathitt took time in his first cabinet meeting to tell us he expected everyone to live up to strong ethical standards. He said, “Think through your decisions, because, whatever you do, we don’t want any scandals in this administration.?  He emphasized that theme many times while he was governor, and wonderfully enough, in his entire four years no scandals occurred.
  2. Ban free trips and gifts.
  3. Tell newcomers there’s no such thing as a secret in Frankfort. The paperwork that carries out their decisions passes through many hands, is seen by many eyes, and is sniffed by many noses. Sooner or later, the details of every unseemly decisions stares back from the morning paper.
  4. Provide copies, and require everyone from cabinet secretaries to division directors to read the State Constitution and the Statute chapters on purchasing, contracting and the Merit System.
  5. Sidestep the pitfall of winter’s first big snow. Many administrations rush to bring in new appointees, including highway officials and the county highway foreman. Sometimes however, no one tells the new people (especially in Franklin County) about a snow plan or who’s to send out the snow plows and sand truck s ahead of morning traffic.  After fender benders and gridlock, there’s very little rosy that first snowy Capital city-except, of course, some very red faces in might high places.

Lots of luck and best regards,  Cattie Lou Miller

Cattie Lou Miller, the first woman to serve in the cabinet of a Kentucky governor, came to state government in l947 as secretary to Gov. Earle C. Clements and continued as secretary to Gov. Lawrence W. Wetherby.
She worked a year as assistant to Gov. Bert Combs, a year as assistant to Wendell H. Ford, and a year as chief administrative assistant to Gov. Edward T. Breathitt.
She was commissioner of the Dept. of Public Information (Combs and Breathitt administration), commissioner of the Dept. of Personnel (Ford administration and early in Gov. Julian Carroll’s administration), commissioner of the Department of Finance Administration in the administrations of Gov. John Y. Brown and Gov. Martha Layne Collins.
Earlier, Ms. Miller left Frankfort the day before Gov. A.B. Chandler arrived (1955) and returned the day after he left (1959).
Later Gov. Julian Carroll appointed her executive director of the State Board of Claims and the then-new Crime Victims Compensation Board.
She retired from full-time state posts in l986 with a still remembered civic-center party given by Gov. Collins.  Ms. Miller remained a member of the Ky. Retirement System Board until she retired from that post in l996 after 24 years as an employee-elected member.
Ms. Miller was a member of six state campaign headquarters staffs: Clements, Wetherby, and Combs for Governor, and Clements campaign, the Clements and Wetherby campaign, and for the Alben W. Barkley for U.S. Senate campaign. 
Ms. Miller lives in her hometown of Horse Cave.

Back to top   DON MILLS, Lexington, Ky. Aide to Governor Edward T. Breathitt  1963-1967, and Governor John Y. Brown  1979- 1980  Shortly after I joined state government as press secretary to the late Gov. Edward T. Breathitt in 1963, I learned that you never put anything into a memorandum to another official that you didn’t want to read about it the next morning in the newspapers.
 
    Members of the present administration could have learned from that wisdom when they freely and often sent recorded messages through their BlackBerrys, a type of cell phone, to one another concerning the hiring and firing of state employees, particularly merit employees.  Hopefully, the new members of this administration will heed that advice, quash an inquiry by the new attorney general and avoid breaking the law.
 
    Gov.-elect Steve Beshear, as all governors of the past, faces a quick and upcoming legislature in early January. He will be judged on the program and quality of bills that he pushes and passes, including enabling legislation for his casino plan.  And he must present a budget, which was mostly written by the outgoing administration, rather quickly, to reflect the emphasis of the new governor and to catch any lines or figures that would be misleading as far as he is concerned.
 
    During all this time he and his aides must work on the inaugural celebration, the big dances that follow, the planned Holiday parties and all the other social events that mark every new administration
 
    When Breathitt was inaugurated, his budget had been largely prepared by the friendly Combs administration.  But very little ”new money” was available for his tight budget — the same problem, if not more so that Beshear faces. Breathitt put his “new money” into teacher and education programs. His other legislation lacked meaning and quality because of the shortness between election and the legislature.  So Breathitt got mixed reviews by the press on his first session.
 
    The second legislative session was quite different.  Having made a pledge not to increase taxes, as Beshear has done, Breathitt looked instead at what really was needed for Kentucky — a strong civil rights bill, a tough, new strip-mine bill, legislation covering air and water pollution, traffic safety and a host of other bills that were enacted with very little cost involved to the taxpayers and which won Breathitt nationwide praise
 
    The new governor-elect could get revenue help from the casino gaming bill.  But it must first pass a GOP-dominated  Senate, then be approved by voters in the 2008 General Election. Revenue could begin to trickle into the state coffers through gaming licenses shortly thereafter.  But any real revenue could be two years down the road along with a lot of “ifs.”  Meanwhile, the state, in all likelihood, faces a fiscal crisis.
 
    I also had the opportunity to work as chief administrative assistant to Gov. John Y. Brown.  His administration stood out for the inclusion of women and African-Americans not only in his Cabinet but in administrative positions as well. He made a real effort to include both on the scores of boards he named.
 
    Any governor and his aides must be open to the public and press. You never fib to a reporter or you will be in deep trouble. If something goes wrong in the administration, like an employee stealing funds or equipment missing,  you are better off  calling a press conference to announce the problem, rather than trying to hide it or waiting for a reporter to write about it. These are simple matters but a cover-up can be deadly to any administration.
 
    Gov.-elect Beshear is fortunate in that he is 63-years-old.  He should have no further political ambitions, such as running for the U. S. Senate or even being elected president.  So, he can serve out his full eight years with only one main priority — making the best governor this state has ever had.  He will be judged, accordingly.
 
Don Mills formerly has served as the Editor of the Lexington Herald-Leader, and as a member of the Ky. Public Service Commission.
 
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Unanimous Ga. Supreme Court Court Ruling Overturns Residency Restrictions on Sex Offenders

Wednesday, November 21st, 2007

By BILL RANKIN, RHONDA COOK The Atlanta Journal-Constitution 11/21/07 

 

The Georgia Supreme Court on Wednesday declared unconstitutional a provision of a 2006 state law that prohibits registered sex offenders from living within 1,000 feet of day care centers, schools, churches and other places where children congregate. 

In striking down the residency restrictions, the justices said they can amount to an “illegal taking” because they force sex offenders who are homeowners to abandon their homes if a place where children congregate is suddenly built nearby. 

“Sex offenders face the possibility of being repeatedly uprooted and forced to abandon homes in order to comply with the [law's] restrictions,” Justice Carol Hunstein wrote. 

“It is apparent that there is no place in Georgia where a registered sex offender can live without being continually at risk of being ejected,” Hunstein added. 

According to the Georgia Bureau of Investigation, there are almost 15,000 sex offenders on the state’s sex offender registry. While the court’s ruling focused on the issue of sex offenders who are homeowners, it appears to also extend to all sex offenders because the entire residency restrictions were stricken. 

The unanimous decision was a legal victory for Anthony Mann of Clayton County, who researched neighborhoods before he and his wife bought a house in Hampton in 2003. A day care center later opened nearby. When Mann’s probation officer told him to quit his barbecue business and move from his home, he filed suit. 

Mann is a registered sex offender for a 2002 conviction in North Carolina for “taking indecent liberties with children.” Once part-owner of a barbecue restaurant located in a restricted area, he also challenged the state law that restricts where he can work. But the court ruled against him on that issue. 

“He gets to stay in his home and he’s very happy,” said Mann’s lawyer, Bailey Wallace of Jonesboro. “This was a severely myopic law that didn’t pass the smell test. It turns people into nomads. Where was he going to live? Under a bridge? Under a trestle? Out in the open?” 

House Majority Leader Jerry Keen (R-St. Simons), the lead sponsor of the sweeping 2006 law, condemned the ruling, saying the state Supreme Court had thwarted the will of the people. 

“Obviously, it’s extremely disappointing,” he said. “In throwing out the residency requirement in total, based on one situation, the effect of their ruling is that now convicted felony sex offenders are free to live anywhere they want to in Georgia, whether it’s a park, playground or day care center next door.” 

Keen said he anticipates revisiting the residency portion of the law when the Legislature reconvenes in January. 

Russ Willard, a spokesman for Attorney General Thurbert Baker, said his office was “reviewing the decision to decide the extent to which the court has limited law enforcement’s ability to enforce the sex offender restrictions.” 

In the state Supreme Court decision. Hunstein wrote that the law essentially places the state’s police powers into the hands of third parties who decide to establish or operate a place where children congregate. This makes any registered sex offender living within a restricted 1,000-foot buffer area at odds with the law and having to decide whether to abandon their homes or face a minimum 10-year prison sentence. 

“While this time it was a day care center,” Hunstein wrote, referring to Mann, “next time it could be a playground, a school bus stop, a skating rink or a church.” 

Other areas where children congregate, under the law, include parks, gyms, swimming pools and any of at least 300,000 school bus stops across the state. The ruling does not affect restrictions on where sex offenders can work or loiter. 

As for the Manns in Clayton County, Hunstein wrote, they could not legally live in their home under the law. Even if Mann could have found another home, “he is faced with the financial burden of maintaining both residences until he and his wife can rent or sell” their Clayton County home, the decision said. 

Even if the Manns could rent their property to others, the sex-offender registry law forces the couple to “become lessors, an unwelcomed and unanticipated role for which they are ill-equipped,” Hunstein wrote. 

Sarah Geraghty, a lawyer for the Southern Center for Human Rights in Atlanta, heralded the ruling. 

“This is the court saying we value property rights in this state and the Legislature cannot arbitrarily snatch them away,” Geraghty said. “This is a sloppily drafted law that came into being because of election-year pandering. No other state in the United States, except Georgia, saw fit to retroactively evict thousands of people from their homes.” 

Geraghty is one of a number of lawyers representing sex-offender plaintiffs in a federal lawsuit that seeks to declare the entire registry law unconstitutional. That case is now pending before U.S. District Judge Clarence Cooper in Atlanta. 

In March, Cooper issued a ruling allowing many facets of the lawsuit to go forward. But he viewed the burden on sex-offenders who own homes differently than the state Supreme Court justices did Wednesday and dismissed claims that sought to hold the law unconstitutional because homeowners would be uprooted from their homes if a child care center or some other place where children congregate was built nearby. Cooper agreed with state attorneys who said the economic impact on sex-offender homeowners was minimal because they could continue to own the property or sell it. 

The federal lawsuit’s challenges that are still alive include a claim that the 1,000-foot residency and workplace restrictions should not be applied on those who were convicted before the law was enacted. The suit also attacks the residency restrictions for those who are in nursing homes and those who are homeless. It also raises a First Amendment challenge to the prohibition against sex offenders working or volunteering at a church. 

Twenty-nine sex offenders who were living in a Cobb County extended-stay lodge were recently told they have to leave by Dec. 1 because a church is under construction nearby, Geraghty said. “These people were there as a last resort.” 

The lead plaintiff in the federal case, Wendy Whitaker, was forced to move from her home in Harlem, Ga., in early 2006. She lives in South Carolina now and has been paying rent there while also paying the mortgage for the Harlem residence. 

Whitaker, now 28, is on the sex offender registry because at age 17 she engaged in consensual oral sex with a 15-year-old boy on school property. 

Whitaker said she was pleased with Wednesday’s ruling. She said she never would have moved if she had not been required to. But now, she said, she’s not sure whether she will return. 

“My husband and I had decided it was in our best interest to leave the state of Georgia,” she said. “I don’t know if we’ll return, given everything we’ve been through.” 

Staff writer Jim Galloway contributed to this article. 

 

 

The U.S. Supreme Court has agreed to rule on the right of the government to regulate firearms.

Wednesday, November 21st, 2007

Editorial by LawReader Senior Editor Stan Billingsley – Nov. 21, 2007
 

The area of established law related to gun control is so fragile, that any ruling by the court will change how business is done.  The Court by agreeing to throw rocks in this pond will cause ripples in current 2nd amendment jurisprudence that may have far ranging consequences.
 

The court has the option to grant the NRA dream ruling, and say the government never can regulate the private possession of firearms.  That in our opinion is unlikely.
 

On the other hand the court’s decision may recognize the right of the government to regulation the possession of firearms. That right once clearly acknowledged, will widen the ability of the government to regulate firearms.
 

The nexus of the District of Columbia law that is on appeal, is that the D.C. law bans all handguns outright.  The Court by accepting this appeal, suggests that there are at least four members who believe that this local law goes to far.
 

The logical alternative is that the Court will say governments cannot impose blanket bans of firearms but may impose “reasonable? regulation of firearms.  Even that ruling may benefit gun regulation more than it hurts such regulation.
 

Look for the court to discuss “reasonable? regulation of firearms.  Will the Court go so far as to define “reasonable? in this context?  Hard to say.
 
I find it very unlikely that the Court will rule that the Constitution mandates an absolute, non-regulated, gun control policy.  That would mean that gangs can carry guns into schools, court houses, banks, convenient stores, and appellate court hearings…..and that would cause a national uproar.  Remember that the Justices themselves live most of the year in D.C. and suburbs, and that gun violence affects them personally just as it does other citizens.
 
More likely, the court will come up with a ruling that says something like:
 
The constitution allows a citizen to possess a gun in his home for personal protection. 
 

The government may impose “reasonable” regulation of guns in public places, and may regulate concealed weapons.
 

“Reasonable? means that governments may not totally ban guns (as in D.C.) but may enact limited regulation of guns.
 

The government may regulate and limit possession of machine guns and military type weapons.
 

The right of the government to require registration of guns may or may not be dealt with, but any right to regulate firearms, will be argued by many to include registration.
 

The court will uphold the denial of the right to possess firearms to convicted felons and insane persons.
 
These principles are generally accepted by the public today.  If the Court allows any regulation, it opens the door wider than it has been for gun control.  If the Court forbids any regulation, then there will be a public outrage