Category: Legal Issues

The Most Dangerous Man In Detroit

The Book of the Week is “The Most Dangerous Man in Detroit, Walter Reuther and the Fate of American Labor” by Nelson Lichtenstein, published in 1995.

Born in September 1907 in West Virginia, Walter Reuther was of German ancestry, raised Lutheran. He quit high school to learn the tool and die trade. In February 1927, he and a friend moved to Detroit for better pay and hours. He eventually made his way to Ford Motor Company, where he quickly rose through the ranks before the Great Depression hit America.

In the early 1930’s, Ford opened a plant to manufacture its Model “A” in the Soviet Union. Americans who believed in socialism were aware that the Stalin-led Soviet government ruled via one party– the Communist, and was perpetrating human rights abuses. But they liked certain economic aspects of its experimental “Five Year Plan.”

Beginning in early 1933, Walter and his brother Victor bicycled a distance of approximately twelve thousand kilometers during the nine months they were meeting with their European political contacts in various countries. In spring 1933, they were already seeing Fascist oppression in major German cities. In late 1933, they began working in a few Soviet industrial complexes to see labor and political conditions for themselves.

By the late 1930’s, the famine caused by Stalin’s disastrous agricultural-reform program prompted peasant-farmers to go to work in the factories that made steel, cars and tractors. In mid-1934, since they were foreigners and skilled middle-managers (training workers in tool and die making), Walter and Victor were permitted to travel between Stalingrad and Moscow to visit construction projects, collective farms and tractor factories. They were chaperoned by Party bureaucrats. They got special treatment, so perhaps they did not see the abuses suffered by unskilled workers. Their experiences led them to believe that the Soviet system was far less of a police-state than Germany’s.

Walter and Victor wanted to believe so badly in a Soviet workers’ paradise that they rationalized away the serious problems (such as impossible-to-meet production quotas, and reports of fancifully high numbers of vehicles manufactured). In 1934, on supervised tours, the brothers also took a look at labor conditions in China and Japan. October 1935 saw them return to the United States.

On May Day of 1936, in major cities across America, various political groups were speaking in the public square with the goal of unionizing workers; some of them– the Socialists, Proletarian and Communist parties– united to form a Popular Front (the joke in Spain was, “the girl with the Popular Front”).

By the mid-1930’s, the auto industry (which included carmakers, parts suppliers, tool and die makers, etc.) consisted of about a half million union members, thirty thousand of whom were in the United Auto Workers (UAW), a national union. In autumn 1936, Walter became a member of that union’s executive board. He planned and got employees to execute work-stoppages and sit-down strikes in order to get the big automakers like GM, Ford, Chrysler and Dodge to grant collective bargaining rights exclusively to the UAW. Other workplaces such as U.S. Steel were inspired to take such actions, too.

Ford was particularly hostile in its anti-union activities, as it had an in-house security department that spied on workers, fired some, and used violence against photographers. GM took measures to protect against productivity losses by rotating its parts suppliers and building new plants in different locations.

In the late 1930’s, Walter launched propaganda campaigns with the distribution of leaflets, and ran pro-union candidates in local political elections in Midwestern cities. In October 1945, he knew that his UAW workers couldn’t win their strike on just solidarity and militancy. He needed support from other ordinary Americans and the federal government. In January 1946, union workers in a bunch of other industries struck, too; electrical, meatpacking, steel milling, and iron mining.

By the late 1940’s, the power of the unions and corruption in government skyrocketed, so that organized crime used bribery, patronage-contracts and and physical violence in order to rule the “… construction industry, short haul trucking, East Coast longshoring , and the bakery and restaurant trades.”

It is a little-publicized datum that in 1962, president Kennedy granted a cut to all taxpayers that favored corporate America, which also got tax breaks. The rich got richer. That same year, members of the UAW executive board included 21 Caucasians, and one African American, whom they knew wouldn’t buck the status quo.

By then, Walter, a liberal, realized he had been incorrect in thinking that the American labor movement would eliminate discrimination in the workplace when the unions and the economy were strong. But he was still stubborn in insisting on an all-or-nothing egalitarianism. Others of his political ilk, such as Eleanor Roosevelt, Hubert Humphrey and Adlai Stevenson were willing to compromise with the Dixiecrats (Southern Democrats who opposed civil-rights legislation) to make a little progress rather than none. The following year, Walter had become more flexible, as he was friendly with JFK and his brother.

In July 1967, the race riots in Detroit resulted in the deaths of 43 people and $250 million in property damage. The mayor, and the governor of Michigan assigned a 39-member panel of leaders and influencers in the community to suggest solutions for quelling hostilities. Various actions were taken; among the major ones:

  • throwing money at low-cost housing;
  • hiring of black workers at Ford and GM; and
  • throwing money at black community groups

but nothing seemed to help. The automakers moved their plants from Detroit to Troy and Dearborn.

Read the book to learn a wealth of additional information on Walter’s trials, tribulations, triumphs, and disputes with the AFL and CIO (unions competing against, and with different views from, the UAW); the growing-pains of the labor movement– how it was affected by: the WWII years (hint– the government ordered it to make war weaponry), political elections, regulation of pricing / wages / production in the steel industry, the Civil Rights movement, the Vietnam War; how and why different automakers’ compensation structures changed, and much more. See this blog’s post “See You In Court” for more information on the pros and cons of unions in America.

Serpent on the Rock

The Book of the Week is “Serpent on the Rock” by Kurt Eichenwald, published in 1995.

This volume contained an egregious error. It appeared in an anecdote about a member of the Belzberg family, Canadian Orthodox-Jews. In the late 1970’s, Belzberg was acquiring a large quantity of stock of the retail brokerage named Bache, so one of Bache’s executives met with him, to find out his intentions.

As the meeting ended, the author wrote that Belzberg shook hands with the Bache executive. That was obviously a fictionalized detail of the story, because Orthodox Jews do not shake hands with, or touch others, except for close family members.

Anyway, in the second half of the 1970’s, tax shelters became trendy in the securities industry. In the 1980’s, Bache (with a shady reputation in the first place) sold tax shelters in the form of limited partnerships of various kinds (oil and real estate were the most common) and reaped fat fees of as much as 8%. On a bunch of them, printed marketing communications illegally contained material omissions and misstatements.

Bache’s clients were clearly unsophisticated, because anyone with a minimal knowledge of finance should have seen that the objectives of the investment were contradictory: “income, growth and safety” (!)

Brokers dispensed with the printed prospectuses (which contained disclaimers required by law), and focused on verbally selling the money-losing financial instruments to their clients. They lied about the projected financial returns (14 to 15%, when they were pretty sure there would actually be disastrous losses). They called the investments “safe”– a word that should NEVER be used on Wall Street. The proper lingo should be “low-risk” and only when that’s the truth. The limited partnerships were “high-risk.”

One man, Jim Darr, became particularly powerful in the Direct Investment Group, and engaged in a boatload of excessively greedy, unethical activities and white-collar crimes that made him fabulously wealthy. In 1983, he flew all the way to a small thrift bank in Arkansas to get a home loan of $1.8 million to purchase a mansion in Connecticut. At that time, there were plenty of local lenders he could have approached.

Another sleazy character, Clifton Harrison, after pulling his last act of unbelievable thievery, gave the excuse, “I’ve just been borrowing some money against future fees.” Read the book to learn more about the various individuals who shaped Bache’s history, and what became of them.

ENDNOTE: The above shenanigans happens every few years in the United States. The line from the movie “That Thing You Do” describes it perfectly: A very common tale, boys, a very common tale. Here is a brief elaboration of the last forty years:

Steps of the American Politico-Economic Cycle

  1. An extremely pro-business president comes to power.
  2. Excessive deregulation ensues.
  3. Shady financial instruments and money-making vehicles spike in popularity (tax shelters, savings and loan associations, goodwill valuations, junk bonds, derivatives, dot-com stocks, stock-options-repricing, subprime mortgages, payday lenders, for-profit colleges, the PACE program, etc., etc., etc.)
  4. Out-of-control greed ensues.
  5. Profiteers of all political persuasions dispense with ethical behavior.
  6. The bubble bursts. A financial crash ensues.
  7. Lawsuit time!
  8. The impoverishment rate accelerates for the middle class and the poor.
  9. Election time. “It’s the economy, stupid.” Whether true or not (usually not!), campaign-propaganda convinces voters that the president is solely responsible for their personal financial situations.
  10. The reelected president, or one from the same party, continues some of the same hog-wild policies, or the new president reverses what he can. Re-regulation ensues.
  11. Time for another round of Survival Roulette (See this blog’s post, “Blind Ambition”).
  12. Opposition-propagandists pull strings to reverse what the new president reversed. They make voters impatient for improvement, even though undoing the damage takes years and years.
  13. Election time. Repeat steps 1-12.

The Real Cost of Fracking / The Buffalo Creek Disaster / A Trust Betrayed – BONUS POST

The first Bonus Book of the Week is “The Real Cost of Fracking, How America’s Shale Gas Boom is Threatening Our Families, Pets, and Food” by Michelle Bamberger and Robert Oswald, published in 2014.

Through the decades, monster-sized American corporations have mastered the game of political machinations, public relations and propaganda in doing tremendous harm to Americans (and getting away with it!), and in defending themselves against environmental-damage lawsuits, and premises-liability, personal-injury and wrongful death lawsuits. These corporations tend to be energy companies. See the following posts in this blog for several other examples (in no particular order):

  • Klondike
  • The Law of the Jungle
  • Sons of Wichita
  • Fateful Harvest
  • The World According to Monsanto
  • Superpower: One Man’s Quest…
  • The Oil Road
  • In the Name of Profit
  • Killers of the Flower Moon, and
  • Let the People In (see boldfaced paragraphs)

American companies that do fracking is the same story. The authors loosely define fracking as “unconventional drilling” for gas and oil, and hydraulic fracturing. The fracking industry has successfully convinced landowners (through omissions, half-truths and outright lies in their pitches) that they (the owners of small farms) could make big bucks from leasing their land for the purpose of fracking (when it turned out to be the other way around, most every time).

There are three major reasons it takes so long for the public to catch on to companies that damage the earth and people and can destroy communities and/or a way of life:

  • The companies put political pressure on the EPA and state-politicians to shut up;
  • The companies have the damaged parties sign non-disclosure agreements; and
  • The companies pay hush money to, or threaten any other parties who might give them bad publicity.

“Proving proximate cause for illness is complex because the water, soil and air have multiple chemicals of varying toxicities, and [have] hardly any pre- and post-drilling testing of air, and water, soil, people and animals.”

The consequences of fracking have far-reaching potential to contaminate the nation’s food supply, when cows, chickens and other food-animals are exposed to fracking toxins.

Sadly, Pennsylvania is only one of several states that has sold out to the pro-fracking interests. The authors had hours of discussions with those very adversely affected by the litany of unpronounceable toxins very likely produced by fracking. Beginning in September of 2009, those owners of small farms developed the following health problems: rashes, burning eyes, sore throats, headaches, nosebleeds and unpleasant gastrointestinal symptoms.

The victims’ farm animals and pets had trouble reproducing, or they died. Air pollution resulted from dust, dirt and noise from heavy earth-moving vehicles and tanker trucks. In spring 2010, one family’s only water supply was terminated by the fracking company.

In addition, the family lost their livelihood breeding horses and dogs. They couldn’t afford to buy bottled water for the horses. The fracking company graciously offered to incinerate the horse’s corpse. One of their dogs also died even though it was drinking bottled water and was barely two years old. The suspected reason was that it drank wastewater that was poured on the family’s property.

Further, tests sufficiently specific to provide evidence of proximate cause between:

the family’s health problems, their animals’ deaths, and the drop in their property’s value due to contamination; and

the fracking company’s toxic practices

were prohibitively expensive.

Also, apparently, the company wasn’t legally required to disclose which toxins were produced by its operations, because it didn’t– when the leasing documents were signed with the landowners.

In central Arkansas, fracking wastewater was recycled when it was injected into deep wells, causing small earthquakes. Other states that allowed fracking at the book’s writing included: Ohio, Texas, Louisiana, Colorado, North Dakota and New York.

Read the book to learn a wealth of additional details on fracking, its adverse effects, of the complicated laws governing (or not governing) land in Pennsylvania and New York State at the book’s writing, and the authors’ suggestions for how to regulate the oil and gas industry to strike a balance between extracting needed fossil fuels and public health and safety; and sensible energy policy.

The second Bonus Book of the Week is “The Buffalo Creek Disaster, The Story of the Survivors’ Unprecedented Lawsuit” by Gerald M. Stern, published in 1976.

“If the government ever did knock on my door, I’d probably expect harm and harassment instead of help.”

-The [Caucasian] author’s attitude when he was a federal civil-rights attorney, personally visiting unannounced, helpless black families in Southern States, to inquire whether they required assistance with registering to vote, or with being protected, during the Civil Rights movement in the 1960’s.

In West Virginia coal country in the 1950’s, one dam overflowed. Then two more dams were built. The construction of the third dam– built cheaply– was subpar pursuant to civil engineering standards. The dam-builder was the Buffalo Creek Mining Company. Its holding company Pittston Company knowingly allowed a burning pile of coal waste-products to obstruct the stream, so that sooner or later, a tidal wave would flood the area.

In February 1972, it happened. More than 125 people drowned and hundreds were left homeless in a valley when the third dam broke, causing a stream to overflow in Middle Fork Hollow.

The possible causes of action in the ensuing class action suit included involuntary manslaughter and criminal negligence, but “psychic impairment” was a relatively new concept that had yet to be commonly litigated. It was known as “shell shock” in WWI. The new label for it after the Vietnam War was “Post-Traumatic Stress Disorder” (PTSD).

In April 1972, the author and his public-interest law firm, Arnold & Porter began to represent people harmed by the flood. They had to take the case on contingency, a rarity, only because those survivors couldn’t afford to pay the lawyers with any other fee structure. There occurred the usual frustrations, uncertainties and wrenches in the works that complicated the case, making it more expensive and time-consuming. Just a few included:

  • the fact that the wife of and daughter of, and the rival himself of the recently elected United Mine Workers Union’s president were murdered;
  • Once the lawyers decided whom to sue and in which court, it was hard to guess which of three judges would be assigned to the case (bringing up the cliche, “good to know the law, better to know the judge”);
  • At that time, there was a limit of $110,000 that could be awarded to each personal injury / wrongful death victim in the state of West Virginia; and
  • The disaster occurred less than two months prior to the West Virginia gubernatorial election.

Read the book to learn of the slew of additional details on the case and the fate of the stakeholders.

Yet one more largely similar disaster case was documented in the third Bonus Book of the Week, “A Trust Betrayed, The Untold Story of Camp Lejeune and the Poisoning of Generations of Marines and Their Families” by Mike Magner, published in 2014.

Like the fracking and coal-country stories, this story involved contaminated water, too. However, it was not a monster-sized corporation’s, but the United States government’s, negligence and secrecy that harmed people.

This story also differed in that the residents of the community were fluid– living there only months or a few years, compared to the fracking and coal-country victims. So they didn’t immediately connect the harm done to them with their drinking water, and communication among them was more scattered.

At the dawn of the 1980’s, an under-resourced water-testing lab at Camp Lejeune (where U.S. Marines were stationed) in North Carolina began to get an inkling that wells that provided drinking-water contained toxins such as THM’s, TCE, PCE, pesticides, PCB’s, VOC’s and benzene.

New federal clean-water laws were going into effect, so the Navy had to comply. The water was supposed to be tested regularly for grease, oil and suspended solids. If results showed contamination above a certain level, the lab was supposed to tell the EPA, but it didn’t handle cleanup.

The lab’s five (alarming) test-results between October 1980 and February 1981, were sent to Naval Facilities Engineering Command, Atlantic Division, where they disappeared into a black hole; not necessarily because there was a cover-up at that time, but merely due to bureaucracy– the lab workers thought the Navy knew what they were doing and would do the testing and regulating.

Camp Lejeune’s base commanders didn’t want to know whether individual wells were polluted. They hoped the base had sufficient clean wells to dilute the water from the contaminated ones. Shutting down any of the wells would produce a water shortage for the whole base during the summer, when demand for water was highest. Besides, water-testing was expensive.

Starting in the 1960’s and for decades thereafter, the military families and employees who lived in a certain geographic area on the base saw a disproportionate number of miscarriages, birth defects, and in later years, cancer. The suspected sources of pollution (or legal-defense scapegoats) included a dry cleaners, fuel tanks and a pumping station that exuded gallons and gallons of fuels and chemicals (through spills, leaks and inadequate safety practices) all the time.

In spring 1985, the crisis started to hit the fan, when the Navy was compelled to notify the residents that their drinking water might be unsafe (when in reality, for decades, it definitely had been).

Read the book to learn lots of additional details of what happened then (hint: the usual federal and state inter-agency (and military-branch) fighting, finger-pointing, report-writing, excuses for delays in the form of follow-up-research, and all manner of bureaucratic secrecy and shenanigans; after which the victims and taxpayers were the ones who paid the price).

We’re Still Stuck in the Mire

We’re Still Stuck In the Mire

sung to the tune of “We Didn’t Start the Fire” with apologies to Billy Joel.

Outbreak COVID-Nineteen, pandemic quarantine,
World Health Org, N-I-H and the CDC.
Virus from Wuhan, Trump orders travel ban.
Mouthpiece doc and mouthpiece doc Birx and Fauci.

Short of gowns, gauze and test kits, de-tained cruise ships.
Wrong projections lead to, ventilator snafus.
“Stay at home” Cuomo, “Shelter in place” de Blasio.
No church services, no funerals, nursing homes and lawsuits.

We’re still stuck in the mire.
The plot’s been thickening.
The whole thing’s been sickening.
We’re still stuck in the mire.
It’s history’s ups and downs.
We go round and round.

Guidelines, treatments, deaths of patients.
Govs get power, politics sour, Hydroxychloroquin.
Sources spread panic, profiteers ecstatic, Trump holds rally,
George-Floyd-arrest, GUN VIOLENCE, then real hell begins.
Angry people blow off steam, stress for the response team.
Antifa, BLM, propaganda provoke them.
De-fund the police, book from prez’s niece,
optional masks, vigilante tasks, no one gets any peace.

We’re still stuck in the mire.
The plot’s been thickening.
The whole thing’s been sickening.
We’re still stuck in the mire.
It’s history’s ups and downs.
We go round and round.

Gilead, Seattle, Chicago/Portland battle.
Trump holds rally, SARS-COVID-2, unclear what sources knew.
GUN VIOLENCE, empty malls, fan-cutouts in baseball.
Reopen the schools, Trump-rally, no-TikTok-fools.

GUN VIOLENCE, Trump holds rally, GUN VIOLENCE.
Trump holds rally, GUN VIOLENCE.
Trump holds rally, con-ventions, Kenosha tensions.

GUN VIOLENCE, VP Biden no-see
Trump holds rally, maskless Pelosi.
GUN VIOLENCE, Texas Gulf hurricane-slam,
Bannon wall-scam.

We’re still stuck in the mire.
The plot’s been thickening.
The whole thing’s been sickening.
We’re still stuck in the mire.
It’s history’s ups and downs.
We go round and round.

Trump holds rally and tax returns, Ruth Bader Ginsburg.
Barrett all set, de-bates, Trump holds rally.
Whitmer plot discovered, Hunter emails uncovered.
Trump goes to Walter Reed, says poll-watch on vote-tally.

GUN VIOLENCE, sugar-coating, lots of early-voting.
Poll-sters, guess and pray. What else do I have to say?

We’re still stuck in the mire.
The plot’s been thickening.
The whole thing’s been sickening.
We’re still stuck in the mire.
It’s history’s ups and downs.
We go round and round.

Trump holds rally. Same thing a-gain, stokes fears of Biden win.
GUN VIOLENCE, COVID spreads, Trump holds rally, touts meds.
Trump talks up vaccine, rally, rally rou-tine.
GUN VIOLENCE, same list, screams Biden socialist.
Michigan, Wisconsin, Pennsylvania: uncertain.
GUN VIOLENCE.
Nerves get raw, Trump challenges election law.
American election war, but with a rally whore.
GUN VIOLENCE, GUN VIOLENCE.
Still deafening silence!!!

We’re still stuck in the mire.
The plot’s been thickening.
The whole thing’s been sickening.
We’re still stuck in the mire.
It’s history’s ups and downs.
We go round and round.

We’re still stuck in the mire.
The plot’s been thickening.
The whole thing’s been sickening.
We’re still stuck in the mire.
It’s history’s ups and downs.
We go round and round.

We’re still stuck in the mire.
But we’ll be kind again.
And GOVERN and mend.
And mend and mend.
We’re still stuck in the mire.
The plot’s been thickening.
The whole thing’s been sickening.
We’re still stuck in the mire.
The plot’s been thickening.
We’re still stuck in the mire.
The plot’s been thickening…

Arms and the Dudes

The Book of the Week is “Arms and the Dudes, How Three Stoners From Miami Beach Became the Most Unlikely Gunrunners in History” by Guy Lawson, published in 2015.

In summer 2004, when he was eighteen years old, the Orthodox-Jewish high school dropout, pothead and pathological liar Efraim Diveroli became passionate about the lucrative field of supplying firearms to the U.S. military. He had been mentored by his father and uncle on contracting with the U.S. government, through their businesses. There was one particular website where he could see all the needs for weaponry for the wars in Afghanistan and Iraq.

Diveroli worked around the clock combing the website’s classified ads for competitive-bidding contracts he thought he could win, and making phone calls to contacts he made to find suppliers from whom to purchase arms, to sell and deliver, via planes and / or trucks to the U.S. military on-location. He also needed lenders to finance the deals, as he had to make down-payments of tens of thousands of dollars he didn’t have, when he was finally awarded a bid.

In early 2005, the battles in Iraq between Shiites and Sunnis became even more fierce, resulting in more roadside bombings, kidnappings, sniper incidents and ambushes. Thus, there occurred an increase in demand for rocket-propelled grenades, AK-47’s (or their equivalents; the whole world was already full of them– but apparently still not full enough), ammunition for them, and missiles.

This resulted in an even bigger spike in the number of bribes, kickbacks and Swiss bank accounts among war profiteers. Diveroli also benefited from the high turnover of inexperienced procurement officers in Iraq. Every few years, he attended war-weaponry trade shows, such as Eurosatory in 2006 in Paris, and the International Defence Exhibition and Conference in 2007 in Abu Dhabi.

The State Department rated resellers such as Diveroli pursuant to their reputations for satisfaction in completing contracts, similar to the way eBay does. Eventually, the Department allegedly compiled a “watch list” of resellers (which included a lot of offshore and shell companies) with whom the Department was supposed to exercise caution in doing business. Diveroli’s company’s name (AEY) was on that list, but background checks were (accidentally-on-purpose) sloppy or non-existent, because the shortages of weaponry and ammunition in Afghanistan were so severe.

Unsurprisingly, there was inter-agency rivalry between the State Department and Defense Department (run by the bureaucrats in the Pentagon). When Congress authorized the establishment of the Department of Homeland Security through a long, complicated document, one little phrase gave the Defense Department unlimited powers: “Notwithstanding any other provision of law.”

To boot, the Pentagon used its new hegemony to wreak capricious vengeance on people who gave it bad publicity for its misdeeds and embarrassed it; there was no honor among thieves in the cut-throat war-weaponry business. One specific overzealous individual at yet another agency, the Defense Criminal Investigative Service (DCIS), helped with the Pentagon’s dirty work.

In May 2007, the main plot of a suspenseful saga started when Diveroli’s two friends (also only in their twenties) from grade-school assisted him with a $300 million (!) contract (that had an interesting origin) with the Department of Defense.

Unfortunately, the trio encountered numerous obstacles in trying to complete the contract and get their money. For one, the shipment of arms and ammunition that was supposed to go from Albania to Kabul was held up at an airport in Kyrgyzstan on a legal technicality. Two, an irresponsible article in the New York Times completely botched up the real story, prompting the Department of Justice to get involved.

Read the book to learn the rest, and what became of the participants (which included a wayward Albanian official, and an Albanian-American investment banker, among other pesky characters).