BLOG JUSTICE: SSKRP'S BLOG

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 Here is an interesting article from the New York Times about O.J. Mayo, the “freshman” basketball talent at the University of Southern California. The article argues against the absurd age eligibility rule of the NBA enacted with an eye and ear toward what David Stern admits was the mutual back scratching interests of the NBA and the NCAA.

The beauty of the Rule, as revealed in the case of Mayo, is that it makes transparent the hypocrisy of big time college basketball. The requirement of one year of college, “one and done,” compels players, often from poor backgrounds, who are otherwise eligible to earn a living doing what they do best, to enroll in an institution of higher learning for one and a half semesters until their team exits the NCAA tournament. No less an ethicist than Bobby Knight has said, the rule is “the worst thing that’s happened to college basketball since I’ve been coaching.”

Unlike the NFL in the Clarett case, the NBA could not with a straight face argue that the purpose of the rule is to further the education of young athletes and to prepare them for life after a pro career. (Not that anyone believed the NFL in Clarett.) Instead, the purpose of the NBA’s rule is strikingly clear: it gives their scouts a full year of adequate competition to be able to judge the potential of the talent working for free on the farm.

Alan Milstein

An homage to the passing of Robert Rauschenberg, American Artist and visionary, who taught us that the doors of perception are not just at museum entrances but anywhere we train our eyes to see. Rauschenberg was active in trying to move the United States to adopt "droit de suite," literally “right of follow,” which would give painters and sculptors continuing royalty payments when their works are resold, a system in place in most of Europe and much like the way musicians and songwriters in this country receive royalties when their works are replayed or rerecorded. Rauschenberg supposedly began this crusade after Robert Scull sold Thaws, which he purchased in 1958 for $800, for $85,000 in 1973. (The work is probably worth seven figures today.) Rauschenberg told Scull “I’ve been working my ass off just for you to make that profit,” and never spoke to the collector again.

Alan Milstein

Philadelphia’s Bonnie and Clyde apparently are about to plead guilty to a variety of federal charges. United States Attorney Patrick Meehan felt the need to hold a press conference yesterday to announce he was seeking five year prison terms for the young yuppie couple who pilfered all of $119,000 from their friends and neighbors last year. Meehan called the couple, Jocelyn Kirsch and Edward Anderton, the “poster children for identity theft.” Maybe so. But one certainly questions whether the crime merits such a high profile announcement from Mr. Meehan and such a stiff sentence. Could it be just that the pair looks so good in their vacation swimsuits and looks so unlike any criminals other than that long ago famous couple who still capture the American imagination?

Alan Milstein

About once every few months, I am asked about what is involved in "turning someone in to the IRS".  Here is the process. 

The IRS Whistleblower Office pays money to people who inform on other persons who do not pay their fair share of tax or any at all.  If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.

The IRS may pay awards to people who provide specific and credible information to the IRS if the information results in the collection of taxes, penalties, interest or other amounts from the noncompliant taxpayer.

 The IRS must receive solid information, not an “educated guess” or unsupported speculation. Importantly, the IRS is looking for a significant Federal tax issue - this is not a program for resolving personal problems or disputes about a business relationship.

The law provides for two types of awards. If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000. If the whistleblower disagrees with the outcome of the claim, he or she can appeal to the United States Tax Court. 

The IRS also has an award program for other whistleblowers - generally those who do not meet the dollar thresholds of $2 million in dispute or cases involving individual taxpayers with gross income of less that $200,000. The awards through this program are less, with a maximum award of 15 percent up to $10 million. In addition, the awards are discretionary and the informant cannot dispute the outcome of the claim in the United States Tax Court. 

If you decide to submit information and seek an award for doing so, use IRS Form 211. The same form is used for both award programs. Cal me before you do anything. 

John M. Hanamirian

Hillary Andrews, 38, contends that the cable network's brass turned a blind eye to the harassment because her co-anchor, Bob Stokes, was popular with viewers. 

Andrews won her arbitration case three months ago and the final ruling was "highly critical of conduct by both Stokes and TWC management." The Weather Channel is now seeking to keep details of the arbitrator's report secret, while Andrews wants to publicly file the document in the context of a lawsuit she has now brought against Stokes in state court. 

In her federal court filing seeking to release the arbitration ruling, Andrews reported that "TWC fired Stokes the day after" the arbitration award was issued and is now "understandably eager to assure that the Arbitrator's findings and conclusions never see the light of day."  

Court records show that after her initial hire, Andrews was paired with Stokes, and apparently, she replaced a female "on-camera meteorologist" who had worked with Stokes. Andrews' pleadings contend that the prior anchor was abused daily by Stokes and that she "routinely hid in the women's dressing room in between shifts to avoid contact with him." 

Andrews further contends that that anchorwoman was forced out of The Weather Channel after repeatedly complaining to management about Stokes's harassment. 

Andrews then claims that "history quickly repeated itself". Specifically, Stokes began harassing her. Andrews contends that Stokes' behavior was "worse for [her] than for her predecessors because Stokes was sexually attracted to her and romantically obsessed with her." Stokes, she says, made crude sexual remarks to her, leered at her chest, and followed her into the women's dressing room. He also allegedly questioned her "over and over again, non-stop" about her sex life, and once noted, "It tortures me when you wear those heels and skirt." When she rebuffed his advances, Andrews charged, Stokes's "hostility and volatility became a constant" and he sought to "sabotage" her on-air performance and even resorted to insulting her during live shows. 

Andrews eventually reported Stokes' behavior to The Weather Channel corporate officials and attempted to obtain a reassignment with a new co-anchor. Instead, Andrews alleged, she was relegated to a series of undesirable assignments, including "the overnight shift--the same assignment The Weather Channel had given Andrews's predecessor after she complained about Stokes." 

The Weather Channel's owner, Atlanta-based Landmark Communications, has been accepting bids for the network, which it optimistically values at $5 billion. Sounds like they will need the money.

John M. Hanamirian

A Manhattan jury has the case after closing arguments in the Uma Thurman stalking trial. Jack Jordon is accused of following and sending threatening cards and e-mail messages to the actress for about two years, putting her in what she testified was fear for her personal safety. Jordon’s attorney,  George Vomvolakis, made the curious argument that because Thurman “is larger than life,” the prosecutor “went the extra mile,” and that if a member of the general public had been involved, she might  have merely kicked Jordan “to the curb,” but he wouldn’t have faced criminal charges.

Vomvolakis also even more curiously told the jury, “Think about your lives and what you have done in your lives in the name of love. Think about the stupid things you have done.”

Ok. I’ve thought about it. Still guilty. Jordon better hope Marsellus doesn't know about this.

Alan Milstein

The United States Attorney for the Southern District of New York announced today the indictment of James Treacy, former CEO of Monster Worldwide, Inc.("Monster") on charges of securities fraud and conspiracy in connection with an emploee stock option backdating scheme.  Also indicted was Anthony Bonica, Monster's former controller.

According to the indcitment, Treacy conspired with other former Monster senior executives to "systematically backdate stock option grants to Monster employees...in an effort to provide profitable options to employees without recording the required compensation expenses."

Here is how it works: The corporate officers in this case backdated stock options given to certain employees to reflect their issuance at a point prior to the actual issuance date. The backdated options reflected a price equal to the then fair market value of the stock. Because there was no difference between the stock option issuance price and fair marklet value, Monster didn't have to reflect any such difference as compensation to the employee to whom the option was granted. That fraud allows them to eliminate the expense of having given the option to the employee which makes their profit and loss statement look better; more income less expenses. Everyone's happy. The employee gets his stock, the company has no concomittent expense recording obligation. Oh, unless, of course, you abide the law and every governing accounting principle in existence.

John M. Hanamirian