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Bush defends Gonzales' role in US Attorney firings
Political and Legal | 2007/04/01 21:28

US President George W. Bush again defended US Attorney General Alberto Gonzales over his role in the firings of federal prosecutors in a press conference Saturday, saying that Gonzales has his "full confidence." Bush called Gonzales "an honorable and honest man" and said that "there is no credible evidence that there has been any wrongdoing. On Friday White House spokesperson Dana Perino told reporters that despite any reports to the contrary, the president has "100 percent confidence" in Gonzales. Gonzales will testify before Congress on April 17.

Gonzales defended his role in the firings on Friday, admitting that there has been some confusion but that his involvement in the matter was limited to signing off on recommendations made by his former chief of staff Kyle Sampson. Sampson, who resigned last month, told the Senate Judiciary Committee Thursday that the prosecutors were fired for political reasons rather than for poor performance as the Justice Department has claimed. Sampson also said Gonzales did more than merely follow his recommendations, and that Gonzales and former White House counsel Harriet Miers were deeply involved in the firings. On Saturday Republican Rep. Lee Terry of Nebraska joined the call for Gonzales' resignation.



Hicks could face Australian control order after release
Political and Legal | 2007/04/01 21:27

The Australian Federal Police will determine whether Guantanamo Bay military prison detainee David Hicks will be subject to a control order when released from prison later this year, members of the Australian government said Sunday. On Friday a US military commission recommended sentencing Hicks to seven years in prison; all but nine months of that were effectively suspended by a military judge under the terms of a plea agreement kept secret from the panel of military officers during its deliberations. Hicks is expected to be returned to Australia to serve his prison term within two months, after having already spent more than five years in US custody since being captured in Afghanistan.

The controversial "control orders" authorized under Australia's 2005 anti-terror legislation allow "the overt close monitoring of terrorist suspects who pose a risk to the community." The first such order was issued in August 2006 and is still undergoing an appellate court challenge. Similar orders have been called unconstitutional in the European Union. Hicks' lawyer said Sunday that he plans to return to school and will not be a threat, but Australian officials have called him "dangerous" and seek closer surveillance.



Russia bans foreign workers from retail jobs
International | 2007/04/01 20:24

A Russian law banning all foreigners from the country's retail industry took effect Sunday. The new law, passed by the Russian assembly last year, is expected to affect tens of thousands of workers from the former Soviet Republics. The complete ban follows an earlier phase out of foreign workers in the retail industry. Beginning January 15, foreigners could make up no more than 40 percent of a store's staff. Russian police began raiding stores in January and detaining any worker suspected of not being a Russian citizen.

The raids have been widely criticized by human rights and migrant organizations as only targeting non-white workers. The law was introduced last year after a period of increased unrest among migrants and citizens, including a fight in the northern town of Kondopoga between ethnic Chechens and locals which ended with two Russians dead.



Justice Dept. Levies $75M Tax Shelter Fine
Attorneys in the News | 2007/04/01 19:03

One former partner in Jenkens & Gilchrist’s Chicago office, Paul Daugerdas, earned $93 million in fees from tax shelter work, making him one of the single wealthiest participants in the tax shelter business, according to the New York Times.

Jenkens & Gilchrist, which will close its doors at the end of April, will also admit to criminal wrongdoing in the shelters, and will cooperate with the government in its continuing investigations. It was not clear whether Mr. Daugerdas and other colleagues were cooperating, the Times reports.

The agreement with Jenkens & Gilchrist is expected to assist in a wider probe of firms, including Ernst & Young, Deutsche Bank, and Sidley Austin Brown & Wood, and former tax partners with KPMG who were involved in the creation and marketing of the tax shelters.

Law firms have paid fines over the years, but have managed to avoid major damage from scandals involving their clients. Arthur Andersen was indicted in the collapse of Enron, but the company’s outside law firm, Vinson & Elkins, LLP, was not charged.

The main reason is that much of what attorneys do for their clients remains out of sight, according to Stephen Gillers, a legal-ethics professor at New York University School of Law, the Wall Street Journal reports. “Documents are kept confidential, . . . and prosecutors – have a hard time discovering potential wrongdoing by lawyers.”

But the fallout from the original Enron indictments continues. The Securities and Exchange Commission (SEC) announced last week that it is suing two former Enron corporate attorneys for participating in the massive fraud. Jordan H. Mintz, former general counsel, advised the business unit operated by Andrew Fastow, according to the Washington Post. Rex R. Rogers, also named in the suit, is former associate general counsel and a former SEC enforcement lawyer. He reviewed Enron’s public disclosures and securities filings.

The meltdown of Jenkens & Gilchrist, which numbered 600 partners in 2002, has not been as dramatic as the collapse of Andersen, but within a year of the announcement of the investigation in 2004, the firm’s revenue had fallen by 30 percent as partners left taking their clients with them. Only about200 partners remain with the firm, the Journal says.

Gerald Welch, a former Jenkens partner, said that the criminal investigation and the large number of civil lawsuits brought by investors “just became too much of a burden for them to overcome,” according to the Times.

“It became a question of the name,” he said.

A Jenkens’ spokesperson assigned blame to the Chicago office, according to a statement issued by New York prosecutors, the Times reports. “Those responsible for overseeing the Chicago tax practice placed unwarranted trust in the judgment and integrity of the attorneys principally responsible for that practice and failed to exercise effective oversight and control over the firm’s tax shelter practice.”

The firm’s Chicago office issued legal opinion letters blessing the shelters to 1,400 clients according to the IRS. It charged $50,000 apiece for these letters.



Another Enron in Europe?
Practice Focuses | 2007/04/01 19:02

Many European businesses are failing to effectively implement corporate governance codes which is heightening the risk of a serious corporate scandal on the scale of that involving Enron, new research claims.

A poll of Europe's 500 largest publicity listed firms found just 56 percent had the necessary policies in place to protect against ethic and compliance failures, with only 9 percent expecting budgets aimed at addressing the issue to increase.

The worrying figures were despite three-quarters of respondents predicting greater pressure from stakeholders for improved ethics and compliance programs.

The report by Integrity Interactive and the Association of Corporate Counsel (ACC) also found that although 99 percent of companies had a code of conduct or value and principles statement prescribing what staff can or cannot do, only half ensured that all employees were made to read it.

In addition, a quarter of companies confessed to sending their code to selected employees even though 72 percent believed that the entire workforce should be privy to it.

Frederick J. Krebs, ACC president, said: "Companies in the U.S. have spent the last several years ratcheting up their efforts on ethics and compliance but many of their European counterparts still have more work to do.

"For any ethics and compliance program to be effective and successful, it is vital that adequate steps are taken to ensure that all employees understand the policies in place. It is not good enough to have codes of practice buried on an Intranet site where employees have to proactively seek them out.

"Therefore training on codes and policies and the evaluation of levels of understanding of these, play a significant role in protecting a business against scandal and without it many could be heading for trouble."



UK resident released from Guantanamo
International | 2007/04/01 18:18

British resident and Iraqi citizen Bisher al-Rawi was released this weekend from the US military prison at Guantanamo Bay after nearly five years in custody as an enemy combatant. Officials have not confirmed the exact time of al-Rawi's release, but he issued a statement Sunday from his family's home in London. Al-Rawi expressed his happiness to be free and described his "nightmare" at Guantanamo: "Allegations are made against you that are laughably untrue, but you have no chance to prove them wrong. There is no trial, no fair legal process." Al-Rawi was also regretful that his "best friend" Jamil al-Banna remains imprisoned at Guantanamo.

Al-Rawi and al-Banna, also a UK resident, were originally suspected of ties to al Qaeda because of their alleged connection with radical Muslim cleric Abu Qatada. The men were arrested returning to the UK from Gambia with a suspicious electronic device, which they claimed was a battery charger, and were taken into US custody. Despite a general refusal to represent resident aliens at Guantanamo, the British government agreed to help secure al Rawi's release last year after learning that al-Rawi had previously aided British security service MI5. UK Foreign Secretary Margaret Beckett announced al-Rawi's impending release last Thursday; no official comments have been made regarding al-Banna's status.



A Little April Fool's fun from Google
Venture Business News | 2007/04/01 15:21

Google continues its string of technical innovations. On April 1st, to celebrate the ~500th April Fool's Day, they launched a new service: Google TiSP (Toilet Internet Service Provider) BETA. The new internet service, codenamed "Dark porcelain," delivers online connectivity via users' plumbing systems.

"We've got that whole organizing-the-world's-information thing more or less under control," said Google Co-founder and President Larry Page, a longtime supporter of so-called "dark porcelain" research and development. "What's interesting, though, is how many different modalities there are for actually getting that information to you - not to mention from you."

"I couldn't be more excited about, and am only slightly grossed out by, this remarkable new product," said Marissa Mayer, Google's Vice President of Search Products and User Experience. "I firmly believe TiSP will be a breakthrough product, particularly for those users who, like Larry himself, do much of their best thinking in the bathroom."

As you figured it out, unfortunately it's only an April Fool's joke from Google. However, we can't help but fantasize about this great service:

Google has successfully devised a "last hundred smelly yards" solution that takes advantage of preexisting plumbing and sewage systems and their related hydraulic data-transmission capabilities. "There's actually a thriving little underground community that's been studying this exact solution for a long time," says Page. "And today our Toilet ISP team is pleased to be leading the way through the sewers, up out of your toilet and - splat - right onto your PC."

They also have posted do-it-yourself instructions on how to get it started right now:

http://www.google.com/tisp/install.html

It only takes 8 easy steps to get online at full speed, using the do-it-yourself package, or you can have a professional come in and hook up your toilet to the network. For your own physical safety and emotional well-being and in consideration of the nanobots' working conditions, please make absolutely certain that your toilet is unoccupied at the scheduled appointment time, Google warns.

Google has also announced it is actively developing a higher-performance version of TiSP specifically tailored to small and medium-sized businesses, including 24-hour, on-site technical support in the event of backup problems, brownouts and data wipes.

The Toilet Internet Service Provider (TiSP) project is a self-installed, ad-supported online service that will be offered entirely free to any consumer with a WiFi-capable PC and a toilet connected to a local municipal sewage system. TiSP is available today only in the U.S. and Canada. Google announced it has formed an international consortium of utility companies, sewage system experts, toilet manufacturers, and plumbers to develop solutions to the many problems facing all "dark porcelain"-based data-delivery innovators.

Why still in BETA phase? "When things go wrong with TiSP, they go very, very wrong. Let's leave it at that," Google answers.

So, rush out and order this April Fool's Day special from Google. It's such a great offer, it might not be available until the next Fool's Day.



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