Eric Dixon's Crime, Politics and Policy

Housing Crash Necessary For Recovery

2012-02-10T23:47:00.000-05:00

The only way housing will recover is for all government intervention in the housing market to stop, allowing foreclosures to occur and prices to fall as quickly and as far as necessary to achieve an equilibrium between supply and demand.

All government efforts to "fix" housing have failed miserably. Well, not entirely. The government has succeeded on two counts. First, it succeeded in wasting taxpayer money through its plan to pick winners and losers. Here, the winners were sellers getting sale prices at still-inflated prices, and the banks holding and servicing the mortgages; they got the money transferred from taxpayers funding the homeowner "assistance." Second, the government succeeded in favoring existing and past sellers, who got higher prices than they otherwise would have gotten had prices not been artificially supported. However, their windfall came at the expense of current buyers in the market who still risk paying inflated prices for homes which are very likely to continue to fall substantially in price.

Note what I wrote at the end of the foregoing paragraph: "inflated prices...very likely to continue to fall substantially."

The Obama Administration's homeowner rescue plan announced Thursday was quickly panned by analysts and commentators who understand the housing market. Their criticisms were largely that the payouts to foreclosed owners and victims of robosigning (all of whom have also, remarkably, been delinquent on their mortgages) do little to help any individual homeowner, do little to support prices, transfer large amounts of money from the banks (who will make future borrowers and current depositors pay) to recipients who will individually benefit little if at all, and do little or nothing to prevent the risk of future default if prices continue to fall.

The government expects home prices to still fall substantially. If it didn't, it would not be worried about supporting prices in the face of the three-year-long foreclosure backlog in states, like New York and New Jersey, in which foreclosure is a judicial system process.

Housing prices face significant downward pressure for many reasons, which I enumerated in an October 2011 article predicting housing could fall between 50% and 80% from its all-time maximum price.

More to come...

Eric Dixon is a New York corporate lawyer and member of the Board of Directors of the Financial Policy Council, Inc.

Obama's War on Religion; Picking Winners And Losers in Faith

2012-02-08T23:06:00.001-05:00

President Obama's edict that religious institutions must pay for contraceptives for female employees is an unconstitutional infringement upon the exercise of religion. Tragically, the Obama Administration now seeks to pick winners and losers, not only in the justice system and our economy, but now on matters of faith.

The danger of the edict is the mandate that religious institutions must pay for the cost of contraceptives. This is a compulsory new "cost of doing business" and as such, burdens religious institutions both financially (with the cost) and spiritually (by forcing the institutions to act in ways contrary to their faith). The constitutional test is that such burdens on such "bedrock" First Amendment rights must survive a "strict scrutiny" test when evaluated by courts, which will examine whether such impositions can be achieved using a method less burdensome on such a fundamental, protected right to the free exercise of religion.

The "free exercise of religion" is interpreted to mean more than the mere freedom of a religion from overt government persecution. The concept -- as with the concept of virtually all rights in an age of the "living Constitution" -- has expanded to include all sorts of actions. In fact, it has been expanded by some aggressive judges (and surely with the cooperation of some inept or less than enthusiastic advocates for the side of a restrained, traditional interpretation) to become an entitlement to certain privileged status. The New York City Landmark Preservation Board's unique 2010 denial of landmark designation for the planned site of the planned "Ground Zero Mosque" has been lauded -- incorrectly -- as an example of the government's respect for religion, when in fact in has acted as an unconstitutional government preference for a certain religion, a preference which by its nature acts as an unconstitutional disfavoring of non-preferred, lesser faiths.

A larger and also disturbing issue is the assertion that women are entitled to have religious institutions pay for their contraceptives, an assertion which implies that the religious institutions are obligated to pay, despite or in fact because of their religious objections to contraception. The core issue at dispute here is the question of who gets stuck with the bill for the contraceptives; women are free to get and use contraceptives, but that does not mean -- horror of horrors -- that women who want them get them for free (and get to stick the Roman Catholic Church or other religious employers with the bill).

Whether the Roman Catholic Church -- the largest singular religious institution in our nation -- or other institutions are correct on contraception is a matter for their respective religious doctrines and is beyond the scope of this article. However, these institutions are on the most solid ground in objecting to the claim that others are entitled to contraception on the dime of devout believers who object on moral grounds to contraception. Under these circumstances, the Roman Catholic Church is rightfully taking a lead role in fighting the culture of the free ride, the culture of demanding an entitlement and passing off the obligations to fund it to others -- to the suckers -- within our society.

The reality -- what in Europe was commonly called realpolitick -- is that the Roman Catholic Church and other prominent religions are being punished for the audacity of asserting their primacy on issues of faith. Religious leaders recognize that holding firm on doctrinal issues comes with a price under the Obama Administration, which is making its intolerance for disobedience of the Federal Government well known. It is not an exaggeration to claim that the Obama Administration is pressuring faiths to conform their doctrine and practice to the arbitrary (and some argue, immoral) government policy, or otherwise suffer the pain of a government mandate. It is no longer an exaggeration to fear that the Obama Administration's dictates are the first wave of the persecution, by subjugation through regulation, of organized religion which refuses to modify faith-based doctrine to the demands of secular elected leaders.

Eric Dixon is a New York lawyer and strategic consultant who works with entrepreneurs, investment vehicles, political candidates and select individuals on a variety of legal, political, and investigative matters.

New Jersey Electric and Gas Rates Continue To Drop

2012-02-08T09:33:00.000-05:00

New Jersey residents and small businesses can save even more money on electricity and natural gas by switching their energy supplier.

I personally consult for a marketing group whose energy supplier has achieved 15-20% savings for New Jersey customers, while allowing those customers the freedom of a no-charge switch from PSEG or JCPL (the two leading energy utilities in the state) and a month-to-month plan that does not force customers to commit to a one or two-year plan (such as what Constellation Energy is pushing).

Anyone who wants more information can e-mail me personally at ericdixonlaw@gmail.com with your contact information; please include the best times you can be reached.

Christie's Income Tax Cut Shafts Homeowners

2012-02-05T10:58:00.001-05:00

New Jersey Governor Chris Christie's recent proposal to cut state income taxes by ten percent -- amounting to a less than one percent cut in a taxpayer's average cumulative tax burden -- is a bad idea that would further shift the burden of New Jersey's bloated government bureaucracy onto state homeowners who already have the highest property taxes in the nation.

As this recent Tax Foundation report illustrates, New Jersey has the highest property taxes, highest combined state and local taxes, fifth-highest corporate income tax and sixth-highest personal income tax rate in the nation.

An income tax is preferable to, and fairer than, a property tax. After all, property taxes are a tax on an asset, i.e., your wealth, which you already bought using dollars left over after you originally had your income taxed. Property taxes have the effect of double taxation. At least an income tax is a tax on current income, meaning it is theoretically accounting for (someone else's subjective, arbitrary judgment about) your current ability to pay tax.

Christie's proposal sounds great. He is the YouTube Governor, the reluctant candidate of whom commentators increasingly whisper that there are facts yet to be revealed which are deterring him from a 2012 White House bid. (Source: Bloomberg TV's post-Florida primary coverage this past Tuesday night.) But like almost everything he says and does, the rhetoric that plays well on YouTube (now, there's a high bar) fails to translate into anything great -- or good -- when implemented.

By proposing an income tax cut without accounting for corresponding budget cuts, Christie would shift the burden for services to the municipalities which...you guessed it...fund themselves with the property tax. Moreover, when the decisionmakers at the local level have to choose between funding salaries and benefits for friends and family on the town payroll, and actually providing services (salaries for actual workers plus capital expenses), guess which one they will choose?

(Incidentally, it is the local control and ability for elected officials to stuff town payrolls with friends, family and other supporters and thus buy their reelection votes, which I contend is the root of the "legal plunder" of New Jersey's homeowners and private sector to increasingly fund a bloated, inefficient and often unnecessary public sector.)

The bottom line is that while New Jersey Governor Christie touts his record of fiscal conservatism, New Jersey homeowners face the triple pincers of rising property taxes, declining services and -- in many suburban towns -- declining state funding for local schools (funded by the income tax) which (as explained by Star-Ledger columnist Paul Mulshine here) was designed to offset the property tax burden.

Is it any surprise, then, that New Jersey is ranked DEAD LAST in the nation in state business tax climate -- behind even 49th ranked New York?

PS: I am not in the habit of citing Star-Ledger editorials, but here I agree with them.

Eric Dixon is a New York corporate lawyer.

What Florida Primary Means For Romney, Gingrich

2012-01-31T23:13:00.001-05:00

Mitt Romney won a clear victory in the Florida primary, yet failed to break the 50 percent barrier signifying that more Republican voters rejected him than chose him. With most results in, Romney had about 46 percent of the vote to Newt Gingrich's 32 percent, 13 percent for Rick Santorum and six percent for Ron Paul.

There are commentators claiming tonight that the race for the Republican nomination is over. Nonsense. This is like saying the first team to score a touchdown in Sunday's Super Bowl is the winner. This is the hopeful plea from some establishment Republicans who are eager to call victory and have the referee stop the fight before the opponent bloodies their man. The race is just starting. And it is a delegate race (which is why Ron Paul will stay in the race, in my view) in which all primaries and caucuses in February and March are proportional delegate contests, meaning that delegates can be split among the front-runners.

Gingrich declared tonight that he will "contest every place [state]" and vowed to stay in the race until the August national convention in Tampa, FL. One bright spot for the former Speaker of the House: Gingrich led self-described "very conservative" voters by 43-29 percent. This suggests that in the reddest of the red states, Gingrich stands an excellent chance of winning by sizable margins, and thereby demonstrating the substantial ideological differences between the moderate and conservative wings of the Republican Party.

Establishment Republicans and Romney supporters will be prematurely calling the race over. There are several reasons for this.

First, the 14-point victory is barely half of Romney's advantage in some polls barely two weeks ago, which had the Massachusetts governor with a 24-26 point lead.

Second, just consider for a moment what Gingrich had to endure during those last two weeks: the Newtron bomb of the Marianne Gingrich "open marriage" allegation just 12 days ago.

Objectively, these facts indicate that Gingrich showed resiliency, survived a tough issue that would have destroyed other candidates, and made a competitive showing in a state where mid-January polls indicated a landslide for Romney.

Conversely, Romney got the respectable, decisive victory he needed to quiet the naysayers who were whispering off the record (as NBC's Andrea Mitchell reported the evening of the South Carolina primary) that establishment leaders were ready to reconvene the "smoke filled room" to select a replacement for Romney if he failed to win Florida.

The race is far from over. And far from being destructive, the prolonged primary season will keep voters intrigued and the pressing issues of the day in the news cycle. The Republican Party and its ultimate ticket may end up benefitting from a competitive, if not thrilling, primary race.

Eric Dixon is a New York election lawyer who has worked for Republican presidential and gubernatorial candidates during his 17-year legal career.

Obama's Crony Justice Will Make Business A Crime

2012-01-25T10:59:00.002-05:00

The war on free enterprise has taken a new and dangerous turn.

Largely unnoticed in President Obama's State of the Union speech Tuesday was his call for a new enforcement agency to prosecute financial crime. The implication, from the tone and theme of the rest of the speech, was that financial crime is one of the main causes of the economic crisis of the last five years. What is worrisome is what logically follows: more business leaders, managers and entrepreneurs must go to jail.

Under the guise of a populist appeal to equality, expect a new wave of criminalization of private enterprise. And Obama does not need Congress (which makes the laws) to cooperate; he can create a new executive agency of which the staffing and decisions on which cases to investigate and prosecute can effectively criminalize targeted industries, activities and businesses.

In reality, financial crime is fairly constant in its frequency. What varies is its detection and, yes, the willingness of the authorities to carefully investigate and uncover the various white-collar crimes which plague us. But there are many crimes that are caught, and many agencies that handle this task.

Unlike the Department of Justice, which still retains many career prosecutors committed to upholding the agency's professionalism and commitment to justice over numbers (of convictions), a new agency would be staffed by people who would set the new templates for "how things are done," and would be an invitation for politics or purely personal vendettas to infect each and every decision-making process.

There are plenty of white-collar crimes prosecuted by the Justice Department. We have "regular" securities fraud (e.g., lying about a company's new drug), accounting fraud (making the numbers look better), mortgage fraud (lying to get one), appraisal fraud, bank fraud, identity fraud and wire fraud (e.g., telemarketing).

We have seen huge frauds go unpunished criminally. The Justice Department decided not to prosecute Countrywide Bank management, although it is investigating the recently-deposed management of Freddie Mac and Fannie Mae (and only those officers whose tenures started after the housing bubble burst). There have been no prosecutions of the managements of the "too big to fail" banks. Although business failure is not a crime, the surprising fall of these institutions suggests the possibility of a criminal nondisclosure of material information to the investing public.

Managements of much smaller companies which fail often are investigated and some are prosecuted, sometimes despite circumstantial evidence and, frankly, evidence no stronger that questionable or perjurious cooperating witness testimony. The Justice Department has had little problem finding cases to bring, particularly against smaller enterprises (for they lack the resources of behemoth enterprises and thus are thought easier to attack and get convictions -- the "numbers"). Nothing has prevented a reallocation of resources towards the "big" cases involving the "too big to fail" crowd -- nothing but unannounced agendas that one must suspect to be at work.

The final danger of any new bureaucracy is its tendency to take actions, no matter how harmful, in order to justify its existence and the jobs of its employees, and the temptation for those employees to act with an eye on enhancing the resume rather than pursuing the ends of justice.

With these considerations -- and never mind the new de facto Millionaire's Alternative Minimum Tax -- America's entrepreneurs have just been given new reasons to shut down, preserve capital and hope for the political nuclear winter to eventually pass.

Eric Dixon is a New York investigative lawyer. Follow Mr. Dixon on Twitter at @dixonstrategy.

Do Establishment Republicans Want An Obama Victory?

2012-01-22T18:01:00.002-05:00

Newt Gingrich's punishment for winning Saturday's South Carolina primary came courtesy of New Jersey Governor Chris Christie, who today called Gingrich "an embarrassment to the party" on NBC's Meet the Press. (See the video here.)

The vitriolic attack -- one which is certain to appear in an Obama 30-second ad if Gingrich is the nominee -- raises the question of whether establishment Beltway Republicans are willing to inflict crippling harm on a potential Republican nominee for President, even to risk a second Obama term, in a desperate attempt to force a Romney nomination and, by extension, to retain control of the national party.

Make no mistake, the movement conservatives and the Tea Party movement scare the Republican establishment, which detests and despises them yet demands their fealty and exploits their enthusiasm, votes and contributions.

The Christie comments -- which, you can be assured, come with the direct approval of Governor Romney and the highest levels of the Republican establishment -- signal that the intraparty fight for the nomination will be a no-holds-barred, bare-knuckled, Texas death-cage brawl. Not surprising: politics "ain't beanbag," as New York congressman Charlie Rangel has said. However, party harmony is both a virtue and a necessity for ultimate victory; see Ronald Reagan's Eleventh Commandment about never speaking ill about another Republican.

In light of these principles and the strong personal attacks on Newt Gingrich (and which, you wonder, follow the behind-the-scenes sudden attacks on Herman Cain), one may validly question whether the Republican Establishment has the attitude of: Romney will be the nominee...or else.

If Republicans share the goal of defeating Obama in November at all costs, Christie's most intentional comments today may prove a horrible strategic blunder. Unless, that is, the Establishment's goal is not victory over Obama at all, but rather, to maintain control of the national Republican Party at all costs.

Even if that means another four years of President Obama.

Eric Dixon is a New York investigative lawyer with substantial experience in the private equity and capital finance fields. Mr. Dixon has worked for over two dozen candidates on ballot access and other issues, and has also been a strategic analyst for several campaigns.

New Jersey Devils' Road To Hell Paved With Debt

2012-01-21T09:06:00.000-05:00

The New Jersey Devils are paying the price for too much debt.

The Eurozone nations, governments in this country at all levels, most businesses and most households have found out over the last five years that massive debt can be crippling in the face of declining revenues, increasing expenses and the unavailability (or revocation) of credit.

As this morning's New York Post report indicates, the Devils (a) are losing $20 million this season, (b) already missed an $80 million loan repayment deadline, and (c) are considered by their minority owner Ray Chambers to be worth less than the outstanding $200 million in debt on the franchise. In other words, the Devils' liabilities exceed their assets, meaning the franchise has "negative equity" and can be considered functionally bankrupt.

Now, if Bain Capital stepped in to rescue the Devils, it would be awfully interesting to see what they would do.

Eric Dixon is a New York investigative lawyer who handles business due diligence and investigations, and who offers economic and policy analysis on a professional basis. Mr. Dixon spent the bulk of his early legal career performing corporate transactions, and is a longtime observer of the economics of professional sports.

Romney Took Care Of His Investors

2012-01-12T22:19:00.000-05:00

The past few weeks have seen Republican frontrunner Mitt Romney take a lot of criticism for the structure of his deals while with Bain Capital. The criticism is misplaced: Romney did his job, and did it well.

I used to represent private-equity firms, and sometimes their "targets" or "portfolio companies" in which they invested or managed. I know the structure of these deals and the associated responsibilities.

Above all else, when one is running a private equity fund and using other investors' money to either make or manage investments to work for a return on investment, there is a responsibility to the investors. It is clear that Romney fulfilled his fiduciary duties to his private-equity investors in Bain. He is being criticized, for meeting his responsibilities. It was his job to work these deals and inspect and manage the companies in which other people's money was invested, and to get the best deal and best return on investment for his investors.

The structure of some deals has been criticized. And perhaps the terms of some deals could be considered to have been "too tough" on the target companies. But those companies entered those transactions freely and agreed to those terms. That is the nature of the beast; you want our money, here are the rules. These were mostly very troubled companies, but many of them had a choice among suitors. They could choose whose money to take, which terms to accept. No one put a gun to these companies' figurative heads and told them they absolutely had to take that Bain Capital money.

Incidentally, had the federal government simply taken this approach when it gave out billions of dollars to financial institutions in the Troubled Assets Relief Program (the TARP bailout), we would likely have had a real economic recovery by now, healthier financial institutions and much, much less debt -- and perhaps an entire return on "investment" to the taxpayer -- being incurred. (Our national debt is $15.2 trillion, soon to grow when the debt cap is lifted at President Obama's request.)

With TARP, I would have inserted one paragraph -- maybe a few paragraphs -- more carefully limiting what the banks could do with the TARP funds. This is simple and very customary. Its absence in the original TARP agreement was glaring, obvious, and just had to be intentional -- this was no innocent oversight made in haste. It was a signal that the banks would be bailed out and have few real limits on themselves. The clue was there in October 2008.

My principle would have been real simple: you want TARP funds, here are the rules. You spend it on new loans and creating a reserve for existing loans including some toxic loans, and here are the limits on all employee and executive compensation. The limits are conditions -- requirements -- to the deal.

I used to do these contracts all the time. And unlike many of the sloppy boilerplate contracts you see today that are passed off as high-quality legal work by the large law firms charging $500 per hour for second-rate work, I used to draft these contracts from scratch and often off the top of my head. Original work, real analysis, real thought into the consequences.

Now, Romney got strong and exacting terms for his Bain Capital investors. That was his mandate. Call him a strong negotiator, or at the very least, someone able to capitalize on a target company's distressed situation.

Is it "nice"? Not necessarily, but to make that judgment you must ignore the risk the investors take, and must assume or already know that the investors have gotten their investment back and aren't taking a risk anymore, since it's hard to say that an investor whose investment is still at risk of total loss isn't being nice. And think what would have happened to many of those target companies if they didn't take the Bain Capital money? Many might have had to lay off much of their workforce, or close altogether. How nice would that have been?

Whether its Herman Cain or Mitt Romney -- or Ross Perot two decades ago -- the allure of the businessman in politics is the comfort that he (or she) has experience in negotiating tough terms when needed. This is crucial when negotiating with the other branches of government, with domestic counterparties like unions and regulated industries, and especially with foreign governments. It seems the criticism of Mitt Romney (and implicitly, of any other businessman in politics) is a criticism of a core competency, an essential skill for the job of President. The criticism couldn't be more misplaced.

Eric Dixon is a 1994 graduate of Yale Law School and has practiced law in New York for 17 years. Mr. Dixon has extensive corporate transactional and securities experience including corporate investigations and due diligence, and now consults on various government investigative matters, legal and regulatory compliance and election law issues. Mr. Dixon may be reached at edixon@NYBusinessCounsel.com.

American Bar Association Quotes Eric Dixon on Dodd-Frank Whistleblower Provisions

2012-01-10T12:16:00.000-05:00

Eric Dixon, yours truly, is cited numerous times in recent materials handed out at an American Bar Association symposium on the Dodd-Frank financial reform legislation with regards to attorney confidentiality and whistleblower procedures.

The link to the materials is provided here: http://www2.americanbar.org/calendar/2011-aba-annual-meeting-business-law/Meeting%20Materials/2014.pdf

Eric Dixon is a New York lawyer who has handled statutory and legal analysis for various clients in the past. Mr. Dixon is available for independent retention for projects or questions you may have. Mr. Dixon may be reached at edixon@NYBusinessCounsel.com or at 917-696-2442.

How To Save The New York Mets

2012-01-07T13:11:00.000-05:00

Although this is a legal and policy blog and not a sports blog, I do cover topics of major political importance where policy or economics are involved. The ongoing disaster of the New York Mets baseball club qualifies as being within the scope of this blog.

The Mets are owned by two men, Fred Wilpon and Saul Katz (the latter a relative of Wilpon through marriage, and I refer to them collectively as "the Wilpons" for simplicity's sake), whom I believe are presently considered unindicted co-conspirators of Bernard L. Madoff by virtue at least of their reported recruitment of other investors into Madoff's entities. (At least one victim was a former Mets ballplayer, Tim Teufel.) Most attention is on the Wilpons' civil liability from the clawback of illicit profits sought by Madoff trustee Irving Picard, which could seriously hamper the Wilpons at best and, at worst, force both their sale of the Mets (and perhaps all of their other business assets) and even reduce them to personal bankruptcy. But the criminal exposure -- the prospect of going to jail -- is of far greater import.

At their advanced ages, a jail sentence for the Wilpons would be "effectively life." Federal prison sentences for financial crimes are generally determined based on the amount of the financial loss, and here, a "conspiracy" charge could tie in the Wilpons to a large chunk -- and potentially all -- of the Madoff fraud losses.

Some people plead guilty to crimes in the hope of getting leniency from a judge, and a favorable sentencing recommendation from the government (in legal jargon, what's called a "5K1.1" letter). But Madoff never went to trial; he pleaded guilty and "cooperated" with the government's still-ongoing (and far from done) investigation. His reward: a 250-year-sentence. Message to the Wilpons: Your only chance for freedom is to fight like hell and hope to win.

In this context, should my theory (and let's be honest, it is a theory, an educated guess) be correct, this would explain the Wilpons' fanatical defiance. They have nothing to lose by pulling out all the stops to keep the Mets, on their terms, for as long as possible, even if this hurts the franchise's value and exasperates the fans. In fact, infuriating the fan base might be part of the strategy -- it might spur a white knight to come in and rescue the team, and pay a higher price. Or so the Wilpons' strategy might go...and it might be dead wrong.

As for the team's future, there is no hope for the club as long as the Wilpons are in charge. The team is sinking and must reduce its payroll in order to cut its substantial losses (reported by GM Sandy Alderson to be $70 million, although for what time period he did not state).

There is an equilibrium at which losing will actually no longer result in declining attendance. There is a core which will see this team, no matter whether they lose 100 or 120 games, although they may be buying tickets at deep discounts from the box office if they can't get them for $5 on StubHub. On this basis, chopping payroll by 50% -- from $140 million to $70 million, necessitating the trade of two of the three of Jason Bay, David Wright and Johan Santana -- results in a marginally less competitive team but will not cause attendance to decline that much further. With or without these trades, a reasonable expectation for annual 2012 attendance is about 1.5 million (2011 attendance was just above 2.0 million). Throw in the trades and assume a 50-60 win team, and perhaps overall ticket-sold attendance drops to about 1.25 million. (Remember, ten percent of that total will come just from the Subway Series.)

Think attendance could really drop that much? Consider my math. First, the three Yankees games will sell out, accounting for 125,000 tickets sold. Then take the nine games apiece against the Marlins (with Jose Reyes) and Phillies. In a worst case scenario, can you see those teams drawing anything less than 25,000 per game?  That Phillies fans won't drive en masse up the New Jersey Turnpike to scarf up prime tickets to see games when they can't grab tickets at perpetually sold-out Citizens One Ballpark in central Philadelphia? These 18 games should account for 500,000 tickets sold; throw in the Yankees' games and you've got 625,000 tickets sold for 21 games. (To reach 1.25 million tickets sold, you then need only average 10,000 tickets sold for the remainder of the 60 games on the home schedule.)   Account for special promotions and the home opener; just assume another 150,000 tickets sold for, say, six Sunday afternoon games during the warm months. Now you've got 775,000 tickets sold for 27 games. Can you realistically envision the Mets not selling an average of 10,000 tickets for the remaining 54 games? Even in the all-time low attendance year of 1979 when the total season's attendance was south of 800,000, that was an average crowd of over 10,000. This should be considered a safe "floor" for attendance assumptions, regardless of the depth of fans' anger.

Such attendance should result in a ticket revenue decline of, say, $35 million, but player payroll reductions (yet to be achieved) of a greater amount can be achieved. From this point, however, the team can rebound. Here's how and why.

Mets fans like underdogs. It is in our DNA. The replacement, younger Mets will have some prospects and should not be uncompetitive for long. (As it stands, this team has averaged under 75 wins per season the last three years.) In fact, it is easy to envision the team quickly becoming interesting, if not necessarily a winning team. In the meantime, payroll for unproductive veterans can and must be cut to restore the franchise to "operating profitability" meaning that its ongoing operations (before accounting for stadium and other debt) are making money.

In fact, when you view the foregoing analysis, you should see why Sandy Alderson's tear-down and rebuild philosophy makes sense, no matter who owns the team. A perennially-losing $140 million team can just as easily be replaced by a losing $40 million team with hardly a substantial additional dropoff in attendance and revenues.

The "X factor" in this analysis, however, is the depth of Mets' fans' rage at the Wilpons. Unlike anything ever seen before, Mets fans are now staying away from this team on purpose, in a manner designed to send a message that they will not support a losing team in any way while the Wilpons retain control of the club. For this reason, the Wilpons need to sell the franchise. While their crowds and losses may plateau at a low point, the fans' sentiment will mean that instead of a rebirth and gradual improvement, there will only be financial stagnation and continuing (although not worsening) losses. Once the Wilpons realize there is no light at the end of this tunnel, they may finally concede that their best business option is to do a bankruptcy-aided sale, and to do it sooner than later.

Eric Dixon is a New York corporate lawyer and Mets fan since 1973.

Baby Killing Gets OK by Manhattan DA

2012-01-03T19:05:00.035-05:00

In the latest sign of a world value system turned upside down, the Manhattan District Attorney's Office has declined to prosecute a woman whom they publicly claim self-aborted her allegedly six-month fetus, creating a dangerous precedent.

There is no physiological difference between a six-month fetus and a born-alive, very premature 27-week baby. I openly speculate this baby was actually born alive, murdered after birth and thrown in the trash where he was discovered.

In short, if my theory is right, this woman committed first-degree homicide. Murder One! (Book her, Dano.)

The District Attorney's decision not to prosecute sends a chilling message that a woman can kill her baby...after birth...and get away with it if she can claim (or prosecutors, acting hellbent on making abortion the holiest sacrament, agree to portray evidence to support the theory) that she induced her abortion.

There are many reasons to be extremely sympathetic to women traumatized by an unwanted pregnancy. However, none of these reasons justify the ultimate decision to terminate another's life. At a minimum, this woman had every reason to wait a few weeks until the baby could be safely born viable (and the numbers of ultra-premature babies surviving even 20-22 weeks after gestation are growing).

Her action sends the message to impressionable young women: You can do anything you want, and no one has the right to tell you no. (You go, girl.) The rule of law, rules of morality and decency, none of that applies to women, goes the siren song. And for plenty of women and girls, especially those who might have "daddy issues" or whatever dysfunction they want to blame, the promise of the ultimate power trip -- the power to kill -- has a deadly allure.

At its core, however, this case is really not about a mother and her baby. What it is about, is power; the power of women to declare that they and they alone will shape the standards by which they are judged and held accountable. This drive for "empowerment" is really a blood lust for power, a desire to proclaim that there are no limits on women.

This is the mentality which has allowed some women to abuse power, to exercise hypocrisy and act as bullies, to engage in harassment (including sexual harassment) and to do so with virtual impunity. Under this perspective, some "liberated" women have all but openly declared that they can demand or compel the silence of those with whom they disagree -- or dislike, to create some sectors of society and our economy in which a woman's word is considered sacrosanct.

It is such a dysfunctional world that a pampered TV meteorologist, Heidi Jones, felt she could get away with falsely accusing Hispanic men of trying to sexually assault her in Central Park. (Interestingly, the same Manhattan DA's office prosecuted Jones in a case in which no one was physically harmed.)

Of course, a reminder is needed: For every sense of entitlement, there is a corresponding obligation. A right for one creates a duty for another.

There are some people -- and it's both women AND men, to be sure -- who believe that their past suffering entitles them -- yes, entitles is the accurate verb here -- to act in a way which allows them to heal. This includes hurting others, even if -- or especially if -- they are innocent. It logically follows that this philosophy obligates the hapless victims of this dangerous sense of entitlement to suffer their fate, as new victims, and I guess the cycle of victimization continues.

When a woman and her unborn baby are involved, a woman's "right to choose" requires the baby (literally as innocent and helpless as one can be) to submit to death.

There can be no greater sign of narcissism, self-centeredness and toxic selfishness. Can there be any less desirable and more repulsive character traits?

These purportedly empowered women (who in reality are being enslaved by their peers who wish only for their suffering to be shared, the better to feel about themselves) should note that men retain the right to walk away from these women -- not their babies, mind you -- who demonstrate such antisocial, undesirable tendencies. Regardless of society's march towards "equality," men still look for mates who show personality traits of kindness, charity and compassion towards others. The determination of whether a woman would make a good mother is a key factor in a man's decision to select a mate (just as women evaluate men for their ability to protect and provide for their offspring).

After all is said and done, men retain one right.

The right to reject.

The survival of our species requires it.

PS: The writer was born at 28 weeks gestation.

Eric Dixon, Esq.
Follow me on twitter @dixonstrategy

The Return of Cain? Sizing Up GOP Primaries

2011-12-30T23:58:00.001-05:00

On the eve of the first Republican caucus Tuesday, Herman Cain has announced he will not endorse any of the other candidates for the Republican presidential nomination.

Could Cain re-enter the race? Yes, he suspended his campaign and now has apparent "baggage." (Notably and interestingly, no better proof of any sexual-harassment or infidelity allegations has surfaced.) But all of the other candidates have demerits too, and no one has caught fire. Moreover, Cain has both pledged to and has remained defiantly active in the public/political eye -- not exactly the behavior of a man caught with his pants down -- and has held off on endorsing anyone as he promised to do shortly after withdrawing last month.

It's as if the Republican electorate is like a 40-year-old woman, still looking for Mr. Right (or, Prince Charming) but realizing she has to settle. That attitude explains how Republicans expect Mitt Romney to be their nominee, yet the man can't crack the 30 percent barrier in any poll.

In the absence of Herman Cain, no remaining contender has been able to hold on to a strong lead in a race that seems to be calling for an anti-Romney / anti-establishment candidate. This continuing failure -- which should be viewed in the context that we've yet to have one vote cast -- indicates that a Cain re-entry would re-energize voters and perhaps finally bring the GOP race to a three-man duel between the establishment Romney, intrepid Ron Paul and the everyman businessman Cain.

Often, a candidate's flaws validate his or her decision to withdraw. In Herman Cain's case, his withdrawal has left an apparent void in the race and in the issues debate. He shows an everyman sensitivity to economic and business issues not apparent from anyone else. His re-entry would be a welcome development. Finally, his re-entry would still leave him a viable candidate, as ballot access and petition drives can still be mounted in most states.

Eric Dixon is a New York election lawyer, political strategist, information marketer and entrepreneur.

What Makes a Mortgage Bad, Part 2

2011-12-23T18:37:00.009-05:00

There are many ways a mortgage can be "bad," meaning that either its required payments are unlikely to be made or the collateral securing it can be damaged and lose value. Rarely is the structure of a mortgage, by itself, the problem; rather, the underwriting decision -- whether or not to give a particular borrower the loan -- is almost always the source of later troubles.

(See Part 1 of this series here.)

These decisions are made by the banks, with input (and incentives in the form of order flow) from mortgage brokers. In many cases, the decisions were egregious and show (both at the time and in retrospect) either a disregard for risk or incompetence in identifying it. In short, issuing banks originating mortgages committed an epic fail in their due diligence.

Surely there were irresponsible -- and unscrupulous -- borrowers who were gaming the system. (Many of these borrowers were professional investors and speculators.) Other irresponsible people elected to stop paying mortgages. The notion of strategic defaults and the game of "catch me if you can" has led to people living rent-free for upwards of two and even three years in judicial foreclosure states like New York (986 days on average to close a foreclosure) and New Jersey (984 days).

In many cases, the same banks that were derelict in their due diligence of loans are now equally derelict in pursuing foreclosures. Even worse, there are indications that banks are selectively prosecuting for foreclosure those considered least likely to fight and the ones considered the easiest to evict.

And the rationale? Their homes would presumably be the easiest to flip upon seizure, and the purchasers can be funded with a mortgage from...you guessed it...the bank.

But getting back to the core issue of what makes a bad mortgage. It almost always is a bad underwriting decision.

A keen observer -- such as a lawyer like me who knows what's in the documents and what anomalies to look for -- can spot the flaws and risks in a mortgage applicant's file which make consistent payment a risky proposition.

Responsible due diligence is the key to success. An equally diligent investigation can uncover the mistakes of the past.

Eric Dixon is a New York lawyer.

What Makes A Mortgage Bad?

2011-12-22T00:08:00.000-05:00

The recent Securities and Exchange Commission settlement with Freddie Mac and Fannie Mae and lawsuit against six of their top executives has returned attention to the mortgage origination practices which are widely blamed for the housing bubble collapse and subsequent economic recession.

The issue boils down to one basic question: what makes a particular type of mortgage bad? My answer, put as simply as possible, is that the types of mortgages themselves are not bad; rather, the problem was the total disregard for the risk inherent in a particular mortgage because of the risk assessment, or underwriting decision. Put differently, the problem came from the horrendous underwriting decisions that banks originating the loans made. Many of these mortgages never should have been issued in the first place, on the stated terms or any terms.

In coming days and weeks I will explain the complex issues involved in unwinding the mortgage debacle.

Eric Dixon is a New York lawyer experienced in the public disclosure requirements of the securities laws, and with extensive experience investigating mortgage-backed securities, underwriting and real estate valuation processes, and market conditions in the residential housing market in the Northeast.

Gingrich's Supreme Court Mistake

2011-12-17T23:14:00.000-05:00

Republican presidential candidate Newt Gingrich's comments about ignoring Supreme Court rulings with which he disagrees indicate he is unaware that such a policy would threaten our Founders' concept of the checks and balances among the government's three branches which they considered essential in protecting us from tyranny.

Gingrich, whom as a long-term congressman and former Speaker of the House, will be viewed by an adversarial press corps as being one who ought to know better, said he is "fed up" with the "judicial supremacy" of many activist judges. However, his actions would expose the American people to future tyranny from a future President or Congress emboldened by the precedent that a President Gingrich would create.

Gingrich ignores the following points:

1. All judges, whether they overreach their bounds and whether they are "activists" or "strict constitutionalists," are nominated by the President and then reviewed and voted upon by both houses of Congress. If a judge "goes rogue," the President and Congress bear the blame for picking that judge and, quite frankly, for failing to do the requisite due diligence into that judge's temperament and philosophy.

2. Judges can be impeached (removed) in extraordinary cases.

3. Judges' power is actually quite limited since they can only review the laws passed by Congress and approved and enforced by the Executive Branch (this means the President on down through all the divisions of the federal government, i.e., the bureaucracy). Furthermore, this review power is limited to cases which are brought in our federal courts and which survive all sorts of motions. Judges do not review all the government's laws, only the laws (or portions of them) which are at issue in lawsuits that they hear. Moreover, judges rely heavily on the arguments and evidence presented by both sides in the lawsuit. If a judge seems to make a "wrong" decision, it is reasonable to question how effective one of the sides argued and presented its position, before questioning the judges.

Those who decry and blame "judicial activism" and "activist judges" simply ignore their own ability to elect representatives in Congress to vote on those judges and bring the lawsuits that challenge the laws and seek interpretations and guidance on those same laws. Congress may be largely impotent, but it is not powerless. But we don't hear this argument much, since the judiciary (and the legal profession as a whole) make a popular and convenient target for blame.

Many conservatives feel frustrated by an overreaching bureaucracy and many judges whose sensibilities offend those of the voters or of Congress. But the role of the judiciary is not to "rubber stamp" the actions of the President or Congress; it is its role to "stand athwart" the popular tide, to question and scrutinize the actions of the other two branches of government.

Often, the judiciary has been the one branch of government most responsible for protecting the civil rights of Americans from attack by earlier Presidents and, less often, a complicit Congress. Next year, it may be the judiciary which rescues the American people from the colossal overreach of ObamaCare's unconstitutional (my opinion) individual mandate.

Far from being an evil, judges and lawyers advocating for our rights often are our last line of defense against government tyranny, the same type of abuses which led the colonists to seek independence from Great Britain and the Founding Fathers to enact our Constitution.

So tomorrow, go hug a judge!

Eric Dixon is a New York investigative lawyer who handles election law, complex investigations and other serious business, personal and political matters.

Negotiating With Terrorists Shows True Leadership

2011-12-12T23:23:00.001-05:00

It has been virtually anathema to suggest negotiating with terrorists ever since the dawn of the Iran-Contra affair and President Reagan's tortured admission in November 1986 that the United States did so. The taboo has lasted ever since and is a diplomatic third rail. It is also totally unwise and the hallmark of horrible policy.

The goal of a negotiation is the achievement of an objective. Success can be measured simply by whether you won or lost. The process, or how you played the game, is irrelevant. (Bobby Knight's famous saying, "Show me a good loser, and I'll show you a loser," comes to mind.)

The fatal flaw in ruling out negotiations with terrorists is the removal of a powerful weapon from one's arsenal. Just as bad is to reveal this decision to one's adversary. It is like entering a street brawl and declaring one will not use his fists. A unilateral promise not to use each and every weapon at one's disposal is hardly sound strategy; far from it. An announced mothballing of a key weapon reduces flexibility and the very ability to win -- which is all that counts. To do this in order to "take a stand on principle" or gain the imagined public approval of some constituency is not good strategy or policy. Rather, the elevation of diplomatic other-directedness over the achievement of a critical foreign policy objective or the rescuing of innocent lives is the triumph of individual narcissism over true compassion for others. It involves valuing the reputational benefit, the positive public relations, to oneself over the very lives of others!

True altruism would demand sacrificing one's reputation for the tangible and tremendous life-saving benefit of others. Most of us easily see which is more important and would not be so selfish. This is why it was shocking to see the Republican presidential candidates at a recent debate try to outdo one another in trying to take the strongest pledge not to negotiate with terrorists. (This is not a partisan issue; perhaps no elected official today is willing to say he or she would negotiate with terrorists.)

Perhaps a personal scenario will help focus the issue. If your son were held hostage abroad, wouldn't you want our government to take all the steps available to rescue him?

Under the current no-negotiations dogma, your son might die. This inflexible rule, placing politicians' public reputations over your son's life, would result in your son coming back to America in the hold of an Air Force plane, carried in a coffin over which an American flag was draped.

You can expect to be told that your son died a hero, he died for his country.

While Reagan didn't exactly admit it, he knew it was more important to get your son back than to chase after the approval of the rest of the world. Wouldn't it be nice to again have a President who would say he would do whatever it took so that when your son comes off that plane, he's kissing the ground and then running towards you?

Reagan was willing to take the reputational hit, and risked his presidency, to save American lives. Reagan was secure in himself, in his character, and didn't need the affirmation or approval of others. Above all, Ronald Reagan understood that being President was a vocation of service, that it was about serving others, and that trivial matters of one's place in history or standing in the polls.

Sometimes the slavish devotion to ideals, or the terror of risking public scorn, overshadows the genuine priorities of our elected leaders and candidates to replace them. It is a paradox of current political culture that those rare men and women who care little or not at all about making unpopular decisions often end up being the most popular. That is because character makes leaders, and the American people desire more than anything else to be led.

(Eric Dixon is a New York election lawyer and conservative political strategist.)

Eric Dixon
@dixonstrategy

Mets' Bankruptcy Watch On

2011-12-12T19:13:00.000-05:00

The Great Recession, or fate, continues to hammer away at the New York Mets.

The bastard stepchild of New York baseball is reported today to have taken an additional bank loan of $40 million from a "major bank" (separately reported to have been Bank of America) to finance ongoing operations. This loan follows an earlier $25 million loan from Major League Baseball that has not been repaid, and its general manager's assertion that the franchise lost $70 million in 2011. (My opinion is that last claim should be viewed suspiciously, given the team's attendance over two million in 2011 and the likelihood that revenues to affiliate SportsNet New York are classified separately so as to facilitate ownership's sale of a stake in the baseball club without having to attach a stake in SNY as a deal sweetener.)

Whether or not the economy is "recovering," many businesses continue to deteriorate as the mistakes of the past continue to be unraveled.

Eric Dixon is a New York investigative lawyer with a strong background in the securities laws, corporate transactions and negotiations, and election law.

The Hidden Tax of Overcriminalization

2011-12-10T14:05:00.001-05:00

While Congress debates tax policy, a hidden tax has plagued our economy and capital markets the last few years - the tax caused by the creeping de facto criminalization of business.

The American economy is suffering from a hidden tax in the form of overregulation, overcriminalization and an overzealous and often-inconsistent application of laws and statutes to go after otherwise-innocent businesses, owners, entrepreneurs and managers. This raises the risk of doing business, and results in the business community demanding a higher return in order to take that risk.

People are innately risk-averse. Risk, and pain, are felt more acutely than an equivalent level of joy or gain. The greater the risk (e.g., the risk of financial loss or loss of freedom) perceived from engaging in an activity, the likelier that the given activity will not be engaged in, regardless of the likelihood of a substantial positive return. Hence, there has been a downturn in business and investing activity as the capital classes become increasingly aware of the risks of being sued, investigated or prosecuted for engaging in business.

Regulatory and legal certainty is a hallmark of the rule of law that has allowed for capital expansion to fund growing economies for centuries in the Western world. Inconsistent and arbitrary application of the laws makes it hard for anyone with money to invest for fear of losing that money, if not their freedom.

In short, the government's choices of whom to investigate, threaten, sue civilly and even prosecute are another way of picking winners and losers in our economy and society.

There are plenty of people who desire only to know what the rules are, so that they may follow them as best as they can. Varying, inconsistent and even illogical applications and decisions on the law by bureaucrats, investigators and prosecutors acting without the requisite experience or seasoned oversight threaten to deter lots of legal activity and raise the risk awareness of business owners and entrepreneurs who are fearful of a federal government that seems to have a grudge against certain segments of our economy.

Healthy capital markets need regulatory and legal certainty. Arbitrary, capricious and outright unfair or unjust government actions cause a reflexive, defensive posture of conserving, protecting and hoarding capital.

Think about that the next time you wonder why small businesses cannot get a loan on good terms -- or any terms -- or why investors are unwilling to finance any young venture.

This trend has been several years in the making and acts as a hidden tax on existing activity as well as a serious deterrent upon future activity. No wonder our economy has been trending downward for the last four years.

Eric Dixon is a New York investigative attorney who handles policy issues, election law matters and strategic matters for business and political clients.

MF Global, Corzine And The Path To Club Fed

2011-12-10T13:38:00.000-05:00

The failed brokerage-and-commodities firm MF Global (in which the author invested, sadly) is the subject of a criminal investigation by the Manhattan U.S. Attorney's Office, according to this report (go to page 2).

Such investigations often presume guilt and sometimes work backwards, starting with the presumed wrongdoer (in official law enforcement parlance, a "target"). Observers should be patient for the findings to come out, and for justice to be served.

As for MF Global former CEO Jon Corzine, I believe that he placed himself in greater jeopardy of being charged with any crime, merely by talking. (Don't know how? See this analysis, entitled "Corzine Becomes A Criminal," in which I predict attempts to criminalize any misstatement or incomplete recollection, however nuanced and qualified, particularly if prosecutors cannot charge him with a substantive crime.) He is a presumptive subject and desired target -- if only for his name cachet and potential to "make" someone's career -- and on that basis alone it should be presumed that efforts to charge him are already underway.

Eric Dixon is a New York lawyer who helps people under investigation or in the process of litigation handle the stresses of being involved in our legal system, in addition to more conventional legal work like investigations and complex, sensitive situations for business and political clients.

Corzine Becomes A Criminal

2011-12-08T13:45:00.003-05:00

Embattled MF Global Chief Executive Officer Jon Corzine placed his freedom in great jeopardy today by testifying before the House Agriculture Committee this afternoon.

Corzine is a highly recognizable public figure as the former Goldman Sachs CEO, Senator and Governor of New Jersey. Adding his present notoriety to that profile automatically makes him a "name" target for investigators and prosecutors looking to make a name for themselves. In short, career ambition -- resume-building -- puts Corzine in grave danger before he said one word.

The presumed government predisposition to prosecute Corzine will not need any testimony from him to fuel an investigation. Rest assured, efforts are already underway to see how he can be held criminally liable. But his testimony -- regardless of its content and honesty -- will add to the fire by providing the federal government with a series of statements that will be scrutinized to see if any "false statement" can be established as provable "beyond a reasonable doubt." (Note that this is different from the objective of investigating the who, what, when, where and how questions as to what really happened.)

Remember that any discrepancy between the most honest "I don't know" from Corzine and any conflicting account (or mis-recollection) from any other witness involved in MF Global becomes the basis for a criminal investigation -- and likely prosecution -- for perjury.

Corzine's testimony provides a paper trail and video record of his statements. It will be presumptive Government's Exhibit 1. Had he asserted the Fifth Amendment right against self-incrimination, he would at least avoid providing his adversaries with that material with which to work.

Without testifying, the government would have to prove criminal intent regarding wrongdoing, e.g., he either did something illegal and knew about it, or consciously avoided doing something about an act which he knew was illegal (the doctrine of "conscious avoidance"). By testifying, the government can get Corzine convicted of a crime merely by parsing his testimony and finding someone else to give a contrary account of what happened, in order to prove Corzine lied to Congress.

Clearly, the second avenue is much easier to prove.

Regardless of the content of his statements or the genuineness in his heart, Jon Corzine made himself much more likely to be prosecuted for false statements (Title 18 U.S.C. Section 1001), if not for a substantive financial crime like commodities fraud.

In this climate, Jon Corzine chose to speak. Incredible hubris. Incredible mistake.

Eric Dixon is a New York attorney who counsels people under investigation, prosecution or awaiting sentencing on how to handle the stress of these life-altering situations.

Eric Dixon
Eric Dixon LLC
917-696-2442

Could Cain Use Perot's 1992 Playbook For Return?

2011-12-05T13:41:00.002-05:00

Herman Cain's announcement Saturday that he was suspending -- but not terminating -- his campaign to avoid the mainstream news media's onslaught of sex-related accusations marked a rapid fall from front-runner to non-candidate. However, it may not be the actual end of his campaign. Cain could return, if he follows the playbook of another legendary candidate.

Ross Perot was the front-runner as an independent candidate in 1992 as late as the eve of the Democratic National Convention. Perot stumbled badly the week before, losing campaign co-manager Ed Rollins and making his infamous "you people" remark at an NAACP dinner. As the news media smelled a wounded candidate (really, they smelled a great story, everyone loves to watch the fall of a public figure), Perot suspended his campaign on the Tuesday of convention week in mid-July 1992.

Virtually immediately, Bill Clinton catapulted from third place to front-runner over incumbent President George H.W. Bush.

Perot, however, was not done. A special committee called the Perot Petition Committee was started and continued work to get Perot on the ballot in New York State, a notoriously difficult state in which to run as an independent. Perot submitted over 91,000 signatures in late August and qualified for the general election ballot.

Behind the scenes, preparations began for a formal re-entry into the race. Campaign structures were re-staffed. In late September, Perot resumed the campaign with a vengeance.

Perot gave speeches before crowds of upwards of 50,000 in Somerville NJ and elsewhere, and bought blocks of thirty minutes for infomercial-length presentations with the legendary pie charts. He appeared in all the major TV debates and was generally considered to have done very well.

There were gaffes. Perot chose as a stand-in vice presidential candidate Admiral James Stockdale (Ret.), who was visibly addled and likely suffering from dementia during his infamous vice-presidential debate performance in which he said, "Who am I? What am I doing here?"

The post-script: Perot got 19 percent of the national popular vote and came within a few thousand in states like Utah and Wyoming of coming in second ahead of Clinton. While Republicans blamed Perot for Bush's defeat, polls showed Perot took evenly from Bush and Clinton in 1992.

In retrospect, it is clear that Perot never intended to withdraw from the race, but decided on a tactical retreat which stopped his fall from being "the story." At the appropriate time, he resumed his campaign and was able to have a different "story," that of the promise of an impossible comeback.

There is nothing to suggest that this strategy could not be followed by Herman Cain. The roadmap is there.

Eric Dixon is a New York-based investigator, lawyer, strategist and entrepreneur. Mr. Dixon was active in Ross Perot's 1992 New York petition drive as an election lawyer and supervisor, and as a national spokesman for the campaign who appeared in studio on ABC's Good Morning America.

Eric Dixon
Eric Dixon LLC
917-696-2442

Post-Conviction Stress Can Kill You

2011-12-02T08:47:00.000-05:00

Aside from life-threatening diseases and deaths of close ones, perhaps there is no more stressful event than being convicted of a crime and facing jail time.

If you are convicted and over the age of 40, your crime could result in what Manhattan federal judge Jed Rakoff called a sentence of "effectively life." For background, Rakoff (with whom I worked briefly when I started my career) was using this phrase when trying to determine the sentence of former New York power lawyer -- and total fraud -- Marc Dreier. In a morbid twist, the sentencing conversation between Rakoff and Dreier's lawyer Gerald Shargel turned almost entirely on the expected life expectancy of the then-59-year-old Dreier, and ended with Dreier getting 20 years -- probably out in about 17 years with parole and good behavior.

Might a younger defendant have gotten more time? See the case of another really bad lawyer, Scott Rothstein, whose infamous South Florida scam resulted in the then-49-year-old Rothstein getting a 50-year sentence.

A brief aside: Consider the cases of Dreier (59-year-old gets 20 years), Rothstein (49-year-old gets 50 years) and Bernie Madoff (72-year-old gets 200 years from former federal district court judge turned federal appellate judge Denny Chin). All these men plead guilty. No trials. For the lengths of these sentences -- which also result in the convict going to at least a medium-security federal facility (no Club Fed) -- what was the benefit at sentencing in "accepting responsibility"?

Nah, I couldn't figure it out either.

I currently consult for a recent middle-aged federal convict -- whose identity I shall keep confidential -- who has suffered a few heart attacks since losing at trial. He wouldn't be the first to suffer such pain. Former Enron CEO Kenneth Lay suffered a fatal heart attack following his criminal conviction at trial at age 63.

The stress of merely being investigated is one thing -- and that alone can be extremely grueling. Just ask anthrax attack suspect Stephen Hatfill, who was under investigation for five years by the FBI -- and even named publicly by Attorney General John Ashcroft as a "person of interest" -- before the investigation was closed without further action. (Postscript: The federal government paid Hatfill a $6 million settlement.)

If you are innocent, it's even worse. At least if you are guilty and are somewhat able to admit that fact, and do so before a judge, you can avail yourself of the substantial benefits: the promise of leniency at sentencing, and perhaps even the opportunity to get paid by the government to be a federal informant. (But that is a topic for a different time.) The innocent have no escape hatch, nothing to offer for leniency, only the determination that they refuse to admit guilt for something they did not do -- in essence, they refuse to lie.

The stress of being indicted, actively prosecuted, and put on trial is an additional and severe strain. The stress of being convicted and actually facing the very likely prospect of jail just piles on with the stress becoming exponentially greater.

These situations can be deadly and require assistance for all but the most stout of characters to survive. If I can be of assistance -- and if you can pay using funds which are not tainted by or from the proceeds of any arguably criminal activity or origin -- you should contact me.

Eric Dixon is a New York investigative lawyer, management and political consultant, and litigation stress and crisis consultant. Mr. Dixon may be reached at edixon@NYBusinessCounsel.com. Mr. Dixon is also on twitter @dixonstrategy.

Con Edison Ripping Off New Yorkers?

2011-11-28T09:26:00.001-05:00

A report shows that Con Edison raised electric rates nearly ten percent last year while national average electric rates stayed about even. (Link to http://www.nypost.com/p/news/local/con_ed_hike_shock_amid_low_us_bills_IJ0i67Xrbj7lpR7YYm5pUJ )

New York residents paying their own electricity and natural gas can save substantially on the supply portion of their bill. Residents and business owners interested in these savings should contact me for an assessment of their savings potential at ericdixonlaw@gmail.com.

Eric Dixon
@dixonstrategy

Britain Warns Of Riots If Euro Breaks Up

2011-11-26T22:09:00.000-05:00

Extreme civil disorder is being warned about by the British Foreign Office in the event the Eurozone breaks up. A major investment bank is also warning that an extreme scenario would see the loss of "basic property rights" upon the collapse of the Euro currency.

In a multinational economy where banking systems are global in nature, the consequences for businesses in the United States needing ready access to revolving credit cannot be understated. A return to the days in late 2008 when we were -- by some accounts -- within days of a total freeze-up of the financial system and by extension most of the commerce in the nation is not out of the question.

Such concerns would validate corporations' concerns about raising -- or hoarding -- cash. Similar concerns would explain why intelligent people have been raising cash stores personally for months or, in some cases, years.

Eric Dixon is a New York investigative attorney, management consultant, strategic analyst and political consultant. Mr. Dixon follows economic and real estate matters in addition to certain legal and political trends.