Scandals haunt Miers’ law firm days
DALLAS — Harriet Miers' management of a major Texas law firm, Locke Liddell & Sapp, has been cited by President Bush as one of her chief qualifications for the Supreme Court. But according to an article distributed by the Knight-Ridder news chain, her firm played a questionable role in helping Miers obtain an “excessive” sum in a land deal and, Jerome Corsi reports on Worldnet.com, her tenure as head of the firm was "rocked by one investment-scam scandal after another."
In the 1990s, when Miers was in charge, the firm was forced to pay $30 million to settle lawsuits and came under federal scrutiny for its role in a tax-shelter case. The lawsuits involved two clients, Brian Russell Stearns and Russell Erxleben, the latter a football star at the University of Texas in the 1970s who later played in the NFL.
Erxleben's firm, Austin Forex Investments, placed short-term investments in volatile foreign-currency markets. Investors contended that Erxleben and Stearns used money from new investors to pay off old ones until the scheme unraveled. They also claim Stearns often bragged that he used the same law firm as George W. Bush.
In two lawsuits, the investors charged that the law firm helped make the operations look legitimate and ignored signs of fraud and the selling of unregistered securities. They also alleged that the firm used its trust fund to direct millions in investor money to Stearns. According to Corsi, lawyers at Miers’ firm were accused of negligence in allowing their activities to contribute to the frauds.
While there is no evidence Miers knew about the actions of her partners until investors began filing lawsuits, she publicly defended the firm's actions. Erxleben and Stearns were both sentenced to prison terms.
In 1999, a lawyer with her firm, Brent Clifton, wrote an opinion letter supporting an Ernst & Young tax shelter known as "CDS,” or Contingent Deferred Swap, Corsi also reports.
In May 2004, the U.S. Attorney's Office for the Southern District of New York reportedly initiated a federal criminal grand jury investigation of Ernst & Young regarding its sale of tax shelters to corporations and wealthy individuals to escape or reduce federal taxes.
In 2005, a congressional subcommittee categorized CDS as an abusive tax scheme whose only significant purpose was "the avoidance or evasion of federal, state or local tax in a manner not intended by the law."
Questions are also being raised about Miers’ collection of more than 10 times the market value for a small piece of family-owned land in a Dallas Superfund pollution cleanup site where the state wanted to build a highway off-ramp, according to the Knight Ridder report.
The windfall came after a judge who received thousands of dollars in campaign contributions from Miers' firm appointed a close professional associate of Miers and an outspoken property-rights activist to the three-person panel that determined how much the state should pay.
Miers’ family received $106,915 in 2000, despite the state’s objections to the "excessive” amount and the process used to set the price. The panel recommended paying nearly $5 a square foot for land that was valued at less than 30 cents a square foot.
Mediation efforts in 2003 reduced the award to $80,915, but Miers, who controls the family’s interest in the land, has not reimbursed the state for the $26,000 difference.
A White House spokesperson said that even though Miers was the president of her law firm, she didn’t know the specifics of its campaign contributions to the judge.
Australia to relax anti-terror laws
CANBERRA — Australia's tough anti-terror laws likely will be softened in response to criticism about raids, preventive detention, a shoot-to-kill provision and infringement of free speech, The Australian reports. Attorney General Philip Ruddock said that members of a parliamentary security committee already have forced some "minor changes," and agrees that there could be more.
The new laws allow a sentence of up to seven years in jail for inciting violence or racial hatred. Some lawmakers warn that the law could be misused to restrict legitimate criticism. Muslim and civil liberties groups also object to a shoot-to-kill provision for police in cases where a terror suspect attempts to escape or avoid "preventative detention."
"We are concerned police can shoot to kill without a crime being committed and that you can be held in preventative detention for 24 hours before you even see a judge," said Australian Muslim Civil Rights Advocacy Network spokesman Waleed Kadous.
Under the Terrorism Act passed in 2003, police can enter property by force or using covert means where terrorist planning is suspected. The authorities must let the public know how many warrants have been sought and received, but not much else.
In the last year, police obtained warrants to enter six homes and other private property in Victoria and four homes in Melbourne as part of anti-terrorism operations. Other raids were staged in Sydney, based on suspicions that Muslim extremists were planning attacks on landmarks including Melbourne's stock exchange building and the Sydney Opera House.
posted October 26, 2005
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