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Legal     1 - Duke Energy Employee Advocate

Legal - Page 23

"The liberties of a people never were, nor ever will be, secure, when the
transactions of their rulers may be concealed from them." - Patrick Henry

A Quiet Giant
"John Paul Stevens was, very quietly, a giant on the court"

The American Class System
"But dependency on government has never been bad for the rich"

Age Discrimination

Employee Advocate - – July 9, 2009

This editorial was published by the New York Times on July 7, 2009


Age Discrimination

Amid the stack of decisions issued by the Supreme Court at the end of its term was a dreadful ruling weakening the legal protection against age discrimination. It falls to Congress to undo the damage.

Written by Justice Clarence Thomas and joined by Chief Justice John Roberts and Justices Antonin Scalia, Samuel Alito and Anthony Kennedy, the 5-to-4 decision disregarded legal precedent, longstanding practice and the plain reading of statutory language. It rewrote the rules for litigating age-discrimination cases in favor of employers, which will make it harder for those with legitimate claims of age discrimination to prevail in court.

Essentially, the ruling has shifted the burden of proof in so-called mixed-motive cases. Previously, if a worker could show that age was one of the factors in a layoff, demotion or other adverse employment decision, the employer was then required to show that it had acted for a legitimate reason other than age bias. Going forward, workers will bear the full burden of proving that age was the deciding factor — an ultrahigh hurdle.

In taking this case, the court had agreed to review a comparatively narrow question: the type of proof required to trigger the shifting of the burden to the defendant in a mixed-motive age-discrimination case. But the justices went much further, ruling to end the burden-shifting approach entirely. And they did it without inviting re-argument or supplemental briefing from the parties to the case it was considering.

Justice John Paul Stevens noted that breach of procedure in an angry dissent. “I disagree not only with the court’s interpretation of the statute but also with its decision to engage in unnecessary lawmaking,” he said.

Senator Patrick Leahy, the Senate Judiciary Committee chairman, correctly likened the new ruling to the ignominious 2007 decision in the Lilly Ledbetter case in which the same five justices invented a new rule blocking valid claims of pay discrimination. Congress passed a law reversing that injustice. It must reverse this one.

Huge Age Discrimination Award

Huge Age Discrimination Award

Employee Advocate - – September 30, 2007

Larry Edward Dillon was granted a huge age discrimination award by a Reno jury, according to the Reno Gazette-Journal. Mr. Dillon, 61, charged that he was fired because of his age. Mr. Dillon said he was 53 when West Group of Minnesota fired him, so that a younger person could replace him.

Attorney Randy Rumph said the company routinely replaced older, higher-paid employees with cheaper, younger people.

The lawsuit stated: "The wrongful termination of (the) plaintiff was preceded by years of (the) defendant's negative innuendo concerning his age, which caused plaintiff humiliation and embarrassment in the work place."

Mr. Dillon did earn a nice salary - $280,000 a year. He was also granted a nice award by the jury. He was awarded $1.8 million. Not too bad. But the jury believed the termination was willful and doubled the award to $3.7 million!

Mr. Dillon is now a Las Vegas financial consultant.

NC’s Jim Black is in the Big House

Employee Advocate - – August 2, 2007

Former NC House Speaker Jim Black, 72, began serving a 63-month federal sentence on Monday, according to The Charlotte Observer. On Tuesday, a Wake Superior Court judge ordered Black to pay a $1 million fine or serve an additional 23 months in a state prison. Black must also pay $54,000 in investigative costs to the State Board of Elections.

Judge Donald Stephens said "I do believe that the way you punish a person who has abused his power, who has abused his freedom and has abused his money is by taking away his power, his freedom and his money. I believe the federal government has taken away the power and taken away the freedom. It is the purpose of my sentence to take away the money."

The Tuesday hearing revealed that lobbyist Don Beason wrote Black a $500,000 check on June 28, 2000. The money was deposited in Black's campaign account and refunded a few days later. On July 13, 2000, Beason gave another $500,000 to Black. The money was returned a month later.

Don Beason has lobbied for BB&T and Progress Energy.

Wake District Attorney Colon Willoughby suggested the money was to inflate Black's campaign account, thereby attracting more donations.

Black admitted taking $2,000 cash from Charlotte-area strip-club owner David Baucom and $25,000 in cash from chiropractors.

Colon Willoughby said "It's easy to understand why the public is so cynical about its government, and it's easy to see why the legislature has not been eager to clean up the campaign finance situation."

Cracking Down on Lobbyists?

No Liability for Publishing Third-Party Material

Employee Advocate – – November 21, 2006

Once again, a court has ruled that websites cannot be sued for libel for publishing inflammatory third-party material. Monday, the California Supreme Court ruled in favor of free online expression, according to the Associated Press.

A woman was sued by two doctors for posting allegedly libelous e-mail. In a bid for self-preservation,, America Online, EBay, Google, Yahoo, and Microsoft came down on the side of the defendant.

The state Supreme Court held that the Communications Decency Act provides broad immunity from defamation lawsuits regarding information gathered from other sources and published.

Associate Justice Carol Corrigan wrote: "The prospect of blanket immunity for those who intentionally redistribute defamatory statements on the Internet has disturbing implications. Nevertheless... statutory immunity serves to protect online freedom of expression and to encourage self-regulation, as Congress intended."

Protection for Online Publishers

‘Whooshing’ Judge Thompson Wins Delay

Employee Advocate – – December 12, 2005

“Whooshing” Judge Donald Thompson, accused of indecent exposure on the bench, won another trial delay, according to the Associated Press. This is the second time a judge has recused himself. Who is better qualified to exploit every possible legal maneuver than an ex-judge?

The Case of the Whooshing Courtroom

Energy CEO Nailed on 39 Counts

Employee Advocate – – September 15, 2005

Former Westar Energy Chairman and CEO David Wittig was convicted of all 39 counts against him, according to the Kansas City Star. The federal jury also convicted co-defendant, former Westar Executive Vice President and Chief Strategic Officer Douglas Lake, on 30 of the 39 charges.

Wittig and Lake were found guilty on Monday of wire fraud, money laundering, circumventing internal accounting controls, and conspiracy to loot Westar. The pair could rack up 45 years each.

Utility Guilty of Channeling Money to GOP

Deloitte & Touche Settling with the SEC

Employee Advocate – – May 2, 2005

The Securities and Exchange Commission (SEC) reported that Deloitte & Touche will pay $50 million for engaging in improper professional conduct while auditing Adelphia Communications Corporation for fiscal year 2000.

SEC Northeast Regional Director Mark K. Schonfeld said "What is especially troubling here is that Deloitte recognized the risk of fraud posed by this client at the outset. When auditors turn a blind eye toward misconduct on a high-risk client and allow a fraud of this magnitude to go undetected, the consequences will be severe."

Problems occurred because Adelphia:

  • failed to record all debt on its balance sheet or otherwise failed to disclose that it had improperly excluded $1.6 billion in debt from its balance sheet;

  • failed to disclose significant related party transactions; and

  • overstated its stockholders' equity by $375 million.

There were also SEC proceedings against Deloitte concerning the audit of Just for Feet, Inc.

WebCPA reported that the SEC strongly objected to the press release spin doctoring by Deloitte & Touche. The firm “altered and omitted language” detailing two settlements regarding its failed audits of Adelphia Communications Corp. and defunct Just For Feet.

Deloitte will pay $375,000 in the Just For Feet settlement. The engagement partner, Steven H. Barry, CPA, and the audit manager, Karen T. Baker, CPA, were also charged. Their privileges of appearing or practicing before the SEC were suspended. Of course, Deloitte is not admitting or denying wrongdoing in either case.

Mr. Schonfeld said Deloitte "was not deceived in this case. The findings in the order show that the relevant information was right in front of their eyes. Deloitte just didn't do its job, plain and simple. They didn't just miss red flags. They pulled the flag over their head and then claimed they couldn't see."

This is London reported Deloitte & Touche lost a landmark High Court battle to prevent damaging allegations against it and UK chairman Martin Scicluna being made public.

Deloitte & Touche has audited Duke Energy’s books for a number of years.

A Subpoena for Deloitte & Touche

The Case of the ‘Old and Ugly’ Executive

Employee Advocate – – April 18, 2005

Former Wall Street executive Laura Zubulake, 44, alleged that a male executive said she was "old and ugly," according to the Associated Press. Then she was terminated by UBS AG in 2001. Ms. Zubulake filed a discrimination lawsuit against Switzerland's largest bank. She charged that the bank discriminated against her because she was a woman. She also charged retaliation, after she complained about her treatment.

A federal jury in New York awarded her $29 million in damages.

Ms. Zubulake hopes the verdict will offer encouragement to "all women on Wall Street who experience similar things."

Money for Nothing

New York Times – Editorial – April 16, 2005

Once upon a time, most of the mug shots in newspapers were of violent criminals. These days, the perps wear suits in the lineups.

Just the other day, the Securities and Exchange Commission filed securities fraud complaints against 20 former New York Stock Exchange floor traders who are accused of cheating customers to benefit their firms. This is the second Big Board trading-floor scandal in recent years - the last was in 1999, when the S.E.C. found that the stock exchange had failed to uncover and halt illegal proprietary trading by a ring of independent floor brokers.

This time, the Big Board did a little better - by uncovering the original instances of improper trading itself. But it failed to follow through, leading to the S.E.C.'s supervision of the investigation.

In one case, a trader made $1,280 in about 14 seconds by selling stock from his firm's accounts to clients at an inflated price.

We can't help but note that Todd Christie, the brother of Christopher Christie, the United States attorney for New Jersey, was among the 20 stock traders charged. But while 14 of the traders were charged with criminal fraud, Mr. Christie, a major donor to Republicans and the youngest brother of a prosecutor who has specialized in rooting out political corruption, faces only civil penalties and fines.

The S.E.C. said Mr. Christie's firm had earned $1.59 million for its own account in trading maneuvers that cost customers $1.4 million in extra expenses. Mr. Christie ranked fourth in the S.E.C. complaint among the 20 traders who earned the biggest profits at customers' expense. The top three were indicted, as were 11 traders lower down. We don't know whether this is a case of how nice it is to have big brothers in high places. But it doesn't look good.

Punitive Damages Awarded for Stonewalling

Employee Advocate – – February 16, 2005

Dealing with a corporation is like talking to a large stone wall – it just sits there. No matter what you say or do, it does not respond. The more you butt your head against the stone wall, the more your head will hurt, but nothing else changes.

Corporations get a lot of mileage out of stonewalling. They know that many employees and customers will eventually give up and go away. And that is exactly what the corporations want – for you to just go away.

Those who persist in trying to get an answer will face barrier after barrier. Any reaction will be the minimum response required. It will not likely impart any information, but will only offer more stumbling blocks. The person seeking answers will be shuffled from one person to the next, put on hold, ignored, told the file has been lost, and subjected to a plethora of other stalling tactics, all designed to wear the person down.

The gigantic stone wall around the corporation protects it from having to take responsibility for many things. Often the question must be addressed to a specific entity, at a specific address, within a limited time frame, and in a specific format. If the question is not worded precisely, expect no meaningful answer. The process was probably designed by the same person who devised the rebate process. It was never intended to be easy. The more people who are gobbled up by the process, the more the corporation can remain unaccountable.

The stonewalling professionals do the same thing day in and day out. They know all the esoteric regulations and just how far they can go with their stalling game. The customer or employee may only deal with the situation once in a lifetime. Everything favors the corporation. The best thing for corporations is that stonewalling is free. There is seldom any penalty for dragging everything out for as long as possible.

The Legal Intelligencer reported the welcomed news that one corporation has been punished for stonewalling! The boardroom is probably still in a state of shock. In Willow Inn Inc. v. Public Service Mutual Insurance Co., a three-judge panel unanimously upheld compensatory damages and punitive damages for stonewalling! How sweet it is!

Willow Inn had a lousy $2000 claim against Public Service Mutual (PSM) for tornado damage. PSM could have promptly settled and the matter would have been closed. PSM evidently wanted to hold on to the money as long as possible and started the stonewalling process.

U.S. District Judge Berle M. Schiller had awarded Willow Inn $2,000 in compensatory damages and $150,000 in punitive damages. The judge found the PSM used "stonewalling tactics" to avoid making full payment on the claim. Judge Schiller awarded Willow Inn over $135,000 in attorney fees and costs, in a second opinion.

Company’s Legal Tactic Backfires

Employee Incentive Manipulation Win

Employee Advocate – – February 15, 2005

Employees often get the feeling that their incentive bonus payout is manipulated at the whim of senior management. Where do worker get such ideas?

Just because there are 101 ways that subtle “adjustments” can be made to the incentive payout. Just because the final payout always seems to be a roller-coaster ride, with the numbers bouncing everywhere. Just because it takes months to find out the percentage of the payout. Just because the retirement plan was tinkered with to ensure that many employees will not get the pensions that they have earned. Just because retirement health care has vanished or is in the process of vanishing. People are getting the idea that senior management will tinker with every number to the employees’ disadvantage.

If you are such an employee, congratulations on developing a realistic assessment of the corporate world. Some workers have found out that their concerns were not figments of their imaginations. These employees won a settlement for reduced incentive payouts, according to The Legal Intelligencer.

Siemens Medical Solutions Health Services agreed to pay over $14.4 million to settle the class action incentive pay lawsuit. The shortchanged workers will receive a full recovery of the amount of incentive pay lost in 1998.

The case is Street v. Siemens Medical Solutions Health Services Corp. SMS was alleged to have breached a contract by instituted a 30 percent across-the-board reduction of the 1998 incentive payout.

The SMS attorneys argued that senior management had the right to reduce the employee bonuses at any time.

That pretty well sums up the attitude of senior management at most large corporations. They apparently feel that it is always acceptable to take earned money from employees to fatten the bonuses to executives. In this case, SMS found that it actually has the right to pay up and shut up.

There was the question of whether employees had forfeited their right to sue for breach of contract by signing release forms.

Corporations are always wanting workers to sign away their rights. Sometimes these release forms have the desired effect and sometimes they do not. A release form may state anything. It’s up to the courts to determine just how valid the forms really are. Corporations win by default if employees take the release forms at face value and do not challenge them.

SMS had budgeted a certain amount to pay the 1998 incentive bonuses. When that amount proved to be insufficient, the "leadership team" had the bright idea of adjusting the payout downwards. Some bonuses were cut by $5,000, some were cut by $10,000, and some were cut by $50,000!

You can readily see the problem created if corporations actually paid employees the full pay, bonuses, and pensions earned. Why, there would be less millions to give to the executives - an intolerable situation!

Understand the distinction between executive bonuses and the bonuses awarded to the average employee. Executive bonuses are designed to transfer significant wealth to executives – millions at a whack. Bonuses for the average employee are designed to keep him ever striving to achieve the mythical carrot. Ideally, only enough payout is given to keep the employee from seeing through the game and refusing to play.

What if, by some miscalculation, the employees actually stand to receive a reasonable payout? Well, it is then clearly time to make “adjustments.”

It’s the same as the pension game played by many corporations. Certain specific pension amounts were promised for a certain number of years worked. As the pension payout time neared, many corporations decided that they really did not want to part with the money.

The corporate solution was: “Promise the employees anything; give them cash balance plans!”

New Cash Balance Plan Lawsuit

Asbestos Criminal Indictments

Employee Advocate – – February 9, 2005

Many corporations have been going through contortions to avoid taking any responsibility for employee deaths from asbestos exposure. Some are throwing money at politicians, hoping to get off the hook. Others want to set up a pitifully small pool of cash to cover all claims. When the pool runs out, the victims can, well, just drop dead.

But not everyone has been successful in shirking all responsibility for endangering workers, according to the St. Louis Post-Dispatch. W.R. Grace & Co. and seven current or past executives have been indicted on federal charges over exposing employees and the public to asbestos.

U.S. Attorney Bill Mercer cited 10 federal counts, including allegations of conspiracy, knowing endangerment, obstruction of justice, and wire fraud. He said "A human and environmental tragedy has occurred. This prosecution seeks to hold Grace and its executives responsible."

Lori Hanson, EPA special agent, said "This is one of the most significant criminal indictments for environmental crime in our history."

If found guilty, executives could face up to 70 years in prison. Executives always feel that they should get more than anyone else. Now they stand to get more – time in the big house!

There are also possible fines – up to $280 million, or so.

Thomas Skinner, EPA's acting assistant enforcement administrator, said "This criminal indictment is intended to send a clear message: We will pursue corporations and senior managers who knowingly disregard environmental laws and jeopardize the health and welfare of workers and the public."

The executives charged are:

Alan Stringer, former general manager;
Henry Eschenbach, former director of health;
Jack Wolter, former vice president and general manager;
Bill McCaig, former general manager;
Robert Bettacchi, former president and senior vice president;
O. Mario Favorito, former Grace general counsel; and
Robert Walsh, former senior vice president.

Tens of thousands of documents offer evidence of years of concealing the danger of asbestos. Executives discussed ways to keep federal investigators from getting involved.

Grace has previously been indicted and fined for lying to the EPA. It paid $8 million to settle suits after five children died from leukemia.

Some corporations will not settle for getting into trouble in just one area. Not to put to fine of a point on it, but some corporations have exposed their employees to asbestos, faced market manipulation charges, reduced employee pensions, and have reduced retirees health coverage. Their encore will no doubt be spectacular!

Asbestos Plaintiffs

Class-Action Lawsuits

Employee Advocate – – February 3, 2005

This New York Times editorial explains the true goal of G. W. Bush’s “tort reform” quest:

Published: February 2, 2005

Tort reform is in the eye of the beholder. In the name of reforming the nation's civil justice system, and with scant public debate, President Bush and Congressional Republicans are racing to reward wealthy business supporters by changing the rules for class-action lawsuits. Their real objective is to dilute the impact of strong state laws protecting consumers and the environment and to make it harder for Americans to win redress in court when they are harmed by bad corporate behavior.

The proposed legislation, the so-called Class Action Fairness Act, will be taken up by the Senate Judiciary Committee on Thursday, with a vote by the full chamber expected as early as next week. Under the bill's sweeping provisions, nearly all major class-action lawsuits would be moved from state courts to already stretched federal courts. New procedural hurdles and backlogs would be destined to delay or deny justice in many cases, and to discourage plaintiffs and plaintiffs' lawyers from pursuing legitimate claims in the first place.

The proposed lunge to federal courts is so extreme that cases would be removed to federal courts even when a vast majority of the plaintiffs were from one state, the claimed injuries occurred in the state and involved possible violations of state law, and the principal defendant had a headquarters elsewhere but did substantial business in the state.

In a revealing but disappointing move last year, the measure's proponents rejected a balanced compromise that would have broadened federal jurisdiction while preserving the role of state courts in cases that are more local than national in flavor. Despite some useful provisions aimed at genuine abuses, the bill would reduce the accountability of corporations that violate laws protecting employees, consumers and the environment.

The measure died in the Senate at the close of the last session. But with President Bush now actively campaigning for its passage, the juggernaut may be unstoppable, particularly since some key Democrats, like Senators Charles Schumer of New York and Christopher Dodd of Connecticut, switched sides last year to back the bill in exchange for some modest revisions. The new Judiciary Committee chairman, Senator Arlen Specter, should at least be willing to entertain a handful of improving amendments. The most crucial would fix the bill's Catch-22: plaintiffs filing class-action suits could be refused a hearing in state court if they came from several different states, and then bounced out of federal court because their complaint called for applying the laws of multiple states.

The ability of ordinary citizens with similar injuries to band together to take on powerful corporate interests by utilizing the mechanism of class-action lawsuits is one of the shining aspects of the nation's civil justice system. That reality tends to be overlooked amid all the overwrought spinning by the president and others who are trying to drum up concern about a litigation "crisis" and to pressure Congress to usurp proper state authority and weaken important protections for ordinary Americans.

Wall Street's Mascot

God, Justice Scalia, and Dick Cheney

Employee Advocate – – January 28, 2005

U.S. Supreme Court Justice Antonin Scalia made many headlines last year for refusing to recuse himself in the V. P. Dick Cheney case. He accepted transportation on Air Force Two from Cheney. He went on the infamous duck hunting trip with Cheney. All this occurred right before the Cheney case was to be heard.

Cheney wanted the Supreme Court to save him from having to tell the American people the truth about his energy task force meetings with energy executives in 2001. He is still keeping everything a secret.

Newspapers, law professors, and even the Supreme Court ask Justice Scalia to step aside in the case. He refused.

But Justice Scalia recused himself from the "God in the Pledge of Allegiance” case because he had made statements indicating his support for "under God." That was an interesting turn of events.

Justice Scalia did the honorable thing by stepping aside on the "under God" issue. But he steadfastly refused to abandon Dick Cheney, even in the face of massive criticism. Is there any doubt who Justice Scalia really believes is all-powerful? Even God has to play second fiddle to Dick Cheney!

Energy Task Force Meetings Still Secret

The ‘Vigorous Defense’ Crowd

Employee Advocate – – January 21, 2005

It is certainly prudent to defend against bogus charges. But some corporations have failed to grasp the concept of offering a defense because of innocence. No matter what the charge, no matter how guilty, and no matter how much evidence against them, some corporations believe that a “vigorous defense” will magically save them. They will always declare that the charge is “without merit” and vow a “vigorous defense.”

When these corporations “vigorously lose the case,” they will appeal for years. They hope the plaintiffs will die out, the world will end, or anything will happen, so that they do not have to make financial restitution. But it does not always work out.

Consider the case of CGB Occupational Therapy Inc. v. RHA/Pennsylvania Nursing Homes Inc. CGB charged that Sunrise Assisted Living Inc. had violated a "non-raiding" clause by hiring away its independent-contractor therapists. In 2002, Sunrise lost the case, according to The Legal Intelligencer.

The total award was less than $2 million dollars. Sunrise did not want to pay up and appealed. In 2004, the 3rd U.S. Circuit Court of Appeals overturned part of the verdict and reduced the award. Things were looking up for Sunrise, except that a new punitive damages trial was ordered.

How did the new trial work out? Sunrise could have originally paid $1.3 million in punitive damages, but chose to appeal the award. Sunrise’s attorneys argued for zero in punitive damages. The punitive damages awarded in the new trial was $30 million! Sunrise offered their vigorous defense. Now it can vigorously shell out some big bucks.

The ‘Dumb CEO Defense’

Employee Advocate – – January 20, 2005

Many CEO’s try to convince the world of how clever they are at making money. But should they get caught making money by illegal methods, the same CEO’s suddenly become “dumb as a rock.” This amazing transformation was referred to in the New Jersey Law Journal as the “dumb CEO defense.”

Cendant vice chairman E. Kirk Shelton was convicted of accounting fraud. But after a six-month trial and two months of deliberations, a jury could not reach a verdict on the 16 counts against former Cendant chairman Walter Forbes. He successfully used the dumb CEO defense by pleading ignorance.

Expect Former Enron executives to get a lot of mileage out of the dumb CEO defense.

Justice Files Age Discrimination Suit

Employee Advocate – – January 5, 2005

Oklahoma Supreme Court Justice Marian P. Opala filed a federal lawsuit against his fellow justices, according to the Associated Press. The suit charges age discrimination.

Justice Opala’s fellow justices changed the rules to bar him from becoming chief justice. Chief Justice Joseph M. Watt and seven other justices are defendants in the case. The rule change allowed Justice Watt to succeed himself as chief justice. It was time for Justice Opala, 83, to rotate into the position.

The lawsuit charges: ''Defendants participated in, condoned and ratified the denial of equal protection toward plaintiff…As result of the rule change, plaintiff has been deprived of the opportunity to earn additional income and to achieve the prestige of the position of chief justice.”

It’s a real jungle out there.

Company’s Legal Tactic Backfires

Employee Advocate – – December 10, 2004

It is not news that some companies will go to any length to avoid compensating injured employees. But the aggressive defense of Metro-North Commuter Railroad backfired, according to the New York Law Journal.

Employee Robin Hairston slipped and fell on the job in 1997. She underwent fusion surgery for a herniated cervical disc. Post-operative complications resulted in a severe degenerative arthritic condition.

Hairston sued under the Federal Employees Liability Act. This law provides railroad employees with negligence protection. In an attempt to avoid compensating Ms. Hairston, Metro-North hired an investigator to videotape her activities. The intent was to catch the plaintiff showing no signs of injury.

The ploy failed. All the footage showed Ms. Hairston using a walker and requiring a nurse’s assistance to get into a car. There was no way this would help the railroad’s defense, so it decided not to show the tape to the jury.

However, plaintiff attorney Philip J. Dinhofer did show the tape! He used it to impeach a defense witness. Manhattan Supreme Court Justice Richard F. Braun found for the plaintiff.

Waxing Shakespearean, the judge wrote: "Defendant was hoisted by its own petard in videotaping plaintiff."

Energy Executives on Trial

Employee Advocate – – October 13, 2004

The trial of two former Westar Energy executives is under way, according to the Associated Press. Former CEO David Wittig and former executive vice president Douglas Lake are facing 40 charges each.

Some of the charges are: wire fraud, conspiracy, falsifying books, and circumventing internal accounting controls.

Prosecutors also seek to recover $25.5 million from Wittig and $7.5 million from Lake for salaries received.

Wittig is accused of spending $6.5 million to renovate his office at Westar. Both men are accused of using corporate aircraft for personal trips and family vacations.

Associates of U.S. House Majority Leader Tom DeLay are facing their own trial. Last month, a grand jury handed up 32 indictments for alleged campaign finance violations related to the 2002 state legislative election. The plot starts to thicken here.

Westar executives have been accused of plotting to buy legislative favors from House Majority Leader Tom DeLay (R-Texas), Billy Tauzin (R-La.) and Joe Barton (R-Texas). These favor were to be inserted into the energy bill.

When corruption is investigated, why does the energy bill always seem to pop up?

Westar Energy Scandal Ethics Complaint

Did Scalia Look in the Mirror?

Employee Advocate – – October 1, 2004

The Associated Press reported that Supreme Court Justice Antonin Scalia said that there are some overly-powerful judges! Evidently he has been looking in a mirror!

At Harvard University's Kennedy School of Government, Justice Scalia said that some decisions are “too fundamental” to be resolved by a court. He said "What I am questioning is the propriety, indeed the sanity, of having value-laden decisions such as these made for the entire society ... by judges."

It was good of Justice Scalia to come clean. The Supreme Court justices even decided who would occupy the White House in 2000! The citizens of Florida were denied the right to have their votes counted. The decision not to allow the votes to be recounted, guaranteed that G. W. Bush would sneak into power. It has been a disaster ever since.

He noted that some court decisions are bad for democracy. Glad you noticed, Justice Scalia!

Dick Cheney fought telling the public the truth about the Energy Task Force and its secrete meetings with energy executives. He fought telling the truth all the way to the Supreme Court! Justice Scalia refused to answer why he would not step aside from the Dick Cheney case after he went on a duck hunting trip with him. But then claimed that there was no legal precedent for recusal. Since when does one need a legal precedent to do the honorable thing?

Justice Scalia ignored calls for him to step aside in the Cheney case from newspapers, law professors, and even the Supreme Court. But he got it right when he said that some judges have too much power.

Justice Scalia tried to blame the media for everything. He will always have that excuse. If the media did not report the news, the people would not have known about the unethical situation.

Justice Scalia Ordered Violation of Law

Wachovia to Settle Discrimination Charge

Employee Advocate – – September 26, 2004

Wachovia Corp. will pay $5.5 million to settle discrimination charges brought by the U.S. Department of Labor, according to the Charlotte Business Journal. It is alleged that 2,021 current and former female employees were victims of compensation discrimination. The charge was filed against First Union Corp., now Wachovia, in 2001.

The affected employees will be compensated with back pay and interest.

Here is the most interesting part of the settlement: Wachovia agreed to self-monitor itself for unlawful compensation practices for three years.

What does that imply? Is it just fine to unlawfully underpay employees after three years?

Wachovia and Duke Energy were named for profiting on the demise of employees:

Duke Profits on Death of Employees

Justice Scalia Ordered Violation of Law

Employee Advocate – – September 20, 2004

The government admitted that the U.S. Marshals Service violated federal law under the order of Justice Antonin Scalia, according to the Associated Press. Hey, Justice Scalia just interprets law, he does not necessarily follow the law.

It all started when Justice Scalia ordered a U. S. Marshal to erase reporters recordings of his speech.

The Justice Department said the reporters are each entitled to $1,000 in damages and reasonable attorney fees. The federal Privacy Protection Act prohibits seizing the work of a journalist.

AP Attorney Leonard Van Slyke said "The United States government has acknowledged that it violated the rights of the reporters and their employers by requiring the erasure of their tape recordings of Justice Scalia's speech We feel this is certainly an appropriate concession. What remains before the court are constitutional issues, and the question of whether the United States will be enjoined from taking similar actions in the future."

The kicker was the erased speech was on the Constitution! Again, Justice Scalia just talks about the Constitution, he does not necessarily follow it.

Justice Scalia’s Downhill Slide

Boeing Settling Bias Lawsuit

Employee Advocate – – July 6, 2004

The Seattle Times reported that Boeing is offering an undisclosed amount to settle a bias lawsuit. 28,000 women sued Boeing for discrimination.

Charges included sexual harassment, lower pay than male counterparts, and a disproportional amount of layoffs.

In typical corporate fashion, Boeing is admitting nothing.

Bull in a China Shop

Employee Advocate – – June 25, 2004

V. P. Dick Cheney has refused to release energy documents to the public since 2001. He has been sued, but fought the suits to the Supreme Court. The Bush administration owes the Supreme Court a lot. The Court gave G. W. Bush and Cheney a free ticket to the White House. Without that, Bush would be in Texas clearing brush and Cheney would be somewhere shooting ducks.

Thursday, the Associated Press and AFP reported that the Supreme Court once again scratched Cheney’s back. He will be allowed to continue to withhold energy information from the public. For now, everything’s just ducky for Cheney. But the case is not dead. It was sent back to the lower court.

The suits were filed to find out how much of a hand energy corporation executives had in writing the energy bill. Ken Lay, former Enron CEO, provided jets for the Bush campaign. He was pushing through energy deregulation. It is wondered how much influence he had in writing the energy bill. The bill is heavy of handouts to energy corporations.

Cheney is a former energy industry CEO and was the head of the energy task force in 2001. Cheney has refused to release energy information and Congress has refused to pass the energy bill.

The whole energy task force and energy bill issue has been a three ring circus. Supreme Court Justice Antonin Scalia went on an overnight hunting trip with Cheney before the case was tried. He refused repeated calls for him to step down from the Cheney case.

Phil Singer, Senator John Kerry spokesman, said "The Nixon legacy of secrecy is alive and well in the Bush White House. Americans shouldn't have to rely on court orders to learn what special interest lobbyists are writing White House policies. The president should come clean and make this information public. George Bush and Dick Cheney have forgotten that the White House belongs to America, not Enron, and they owe it to the public to disclose this information."

The Associated Press and Reuters reported other Cheney news on Thursday. Cheney cursed Senator Patrick Leahy on the Senate floor! He was said to have issued a two word insult, using the “F” word. There were multiple witnesses.

Did this encounter take place during a hot debate on important legislation? No. It occurred during the annual Senate group picture taking session! Leahy said hello to Cheney. Cheney took the opportunity to jump the senator about accusations of alleged improprieties by Halliburton in Iraq. Cheney is the former CEO of Halliburton.

Senators, including Leahy, have called for congressional hearings into whether Cheney helped Halliburton win contracts in Iraq. Could Cheney possibly be a little sensitive about the issue?

Senator Leahy said "I was kind of shocked to hear that kind of language on the floor."

Senator Max Baucus said "Things have been pretty bad around here. But as far as I know, as far as I'm concerned, this is a new low."

Earlier in the day, Senate Minority Leader Tom Daschle called upon senators to improve civility with the "politics of common ground."

Dick Cheney, a bull in a china shop. What a perfect complement to G. W. Bush.

The Costs of Secrecy

Former CEO Sues Charity

Employee Advocate – – June 23, 2004

Some CEO’s appear to live only to downsize workers, rob pensions, and cut benefits. But should they get downsized, it’s time to scream and demand millions of dollars.

Surely, nothing like this would ever happen in a charitable organization. These CEO’s do donate their time, don’t they?

Not hardly. Donating is for the masses. Many CEO’s of charitable organizations demand millions of dollars in compensation. Here’s a good rule of thumb: Others give; CEO’s take. Other CEO’s help ensure the corporate charity game succeeds by putting the bite on their employees to “give until it hurts.”

Former American Red Cross CEO of the San Diego chapter, Dodie Rotherham, was terminated in 2002, according to the Associated Press. An audit was conducted in 2001. It found that the San Diego chapter collected money for fire victims, but only a fraction of the money actually reached the intended destination.

Ms. Rotherham is now suing the Red Cross for over $2 million. She wants $1 million in wages and benefits and $1 million for defamation.

The clamor for charitable giving is calculated to buy a good reputation for the corporations. It also serves to distract attention away from their own greed and ruthless business practices. Former Enron CEO Ken Lay made a career of playing the corporate charity game. But in the end, it did not save him. The greed of Enron was too great to be concealed by charitable donations.

To read the PR hype, one would think that all CEO’s do is give money to the needy. CEO’s often make millions of dollars for themselves and give away millions of dollars that came from other people, and take the credit.

The press release always states “Joe Blow, CEO of Joe Blow Inc., Announces $1 Million Given to Charity.”

All Joe Blow really gave was hot air. Where did the money actually come from? It may have come from the investors’ dividends. It may have come from the employees’ pension fund. It may have come from gouged customers. It may have come from outright fraud.

The one thing that is certain is that the money did not come from Joe Blow. The desired results is for the public is to say “Man, that Joe Blow is one swell guy (I want to buy something from him).”

Enron Influence

Cannot Cutback Retirement Benefits

Employee Advocate – – June 8, 2004

On Monday, Reuters reported that the U. S. Supreme Court unanimously ruled in favor of retirees keeping pension benefits. This ruling affects workers who retire early and then take other jobs. Corporations may not change the rules to eliminate or reduce retirement benefits. The "anti-cutback" rule generally prohibits corporations from eliminating or reducing benefits.

Will corporations change the rules in the middle of the game to deprive employees of earned benefits?

Will corporations try to mislead employees into believing that no benefit reduction has occurred?

Will corporations exploit gray areas of the law, on the chance that no one will notice?

Yes, yes and yes!

Millions of American workers are walking proof that many corporations will stop at nothing to take back benefits that have already been earned. This applies to retirement and health benefits. Then the corporations have millions of dollars of “free” money to shower upon the executives.

Thomas Heinz and Richard Schmitt had to sue the Central Laborers' Pension Fund in federal court, to reclaim benefits that they already earned. If these two men had merely slinked away, they would have received no retirement benefits for their years of hard construction work.

‘We're All Going to Jail’

Employee Advocate – – May 3, 2004

The Seattle Times reported on a classic whistling-blowing case. An employee repeatedly told management of illegal activity, but he was completely ignored. Management does not always want to hear of problems when there is money to be made. Ignoring the employee cost the University of Washington (UW) $35 million in penalties, more than $25 million in legal fees, plus the loss of credibility.

In 1991, Mark Erickson was a billing coordinator at the nonprofit doctors' group UW Physicians, earning a salary of $19,000. Two years later he was assigned a project of backdating doctor’s comments on records, to make them insurance billable.

Some of these cases were almost a year old. Mr. Erickson said "The doctors would look up in the air for a minute and write (blood pressure) 100 over 60, patient doing well." Some doctors complained that they had never performed the procedures that they backdated.

He said that a co-worker asked a supervisor "Can we even be doing this? Isn't this fraud?"

Mr. Erickson warned administrators that Medicare and Medicaid were being systematically overcharged, but no one wanted to hear it. Tired of being stonewalled, Mr. Erickson wrote a letter of complaint in 1997 to the Office of Inspector General/Health and Human Services in Washington, D.C. The FBI interviewed him, but did not follow up.

Once, his boss came back from a meeting with accountants and blurted, "We're all going to jail." She started bagging up documents and called for a special garbage pickup.

After his supervisor tried to get him to destroy evidence, Mr. Erickson filed a lawsuit. In 1999, federal agents served a search warrant on university billing offices and medical centers and seized thousands of records.

In spite of the penalty, university officials have chosen to deny it to the grave. At a news conference on Friday, the officials cited "innocent mistakes."

Mr. Erickson will be awarded $7.25 million for his efforts in exposing fraud against the government.

Whistleblowers are not Powerless

Legal - Page 22