Last Wednesday, Satyam Computer Services chairman Ramalinga Raju, admitted that about a billion dollars, or 94 percent of the cash and bank balances on the company’s books at the end of September, did not exist.  As described on its web site, Satyam “is a leading global business and information technology company, delivering consulting, systems integration, and outsourcing solutions to clients in over 20 industries.”   Many believe this scandal will discourage investment in Asia’s third largest economy, especially over its booming outsourcing industry.

The government of India did not take lightly this scandal.  According to  Senior Bharatiya Janata Party (BJP) leader and the party’s prime ministerial candidate in the forthcoming general elections this year, L. K. Advani, business and ethics are inseparable.  He quoted Mahatma Gandhi who said that business without ethics is a sin and that a few businesses who engage in unethical practices bring a bad name to the community as a whole.

Whether this one scandal can affect the Indian economy remains to be seen.

~Dave

~Dave

Proving that truth is stranger than fiction, here’s what we know so far about Blago’s actions –  The information was gathered by tapping the telephones in his office and home.  First, we learned that Blago has a real potty mouth.  He can drop the “f-bomb” more times in a short sentence than my daughter can say the word like in the same length sentence (e.g., “I was all like so like weirded out by his like creepy stare that I like turned around and like ran away until he like yelled at me to like come back.  Like, whatever; he’s so likegross.”).  When Blago learned that he was being taped he arrogantly challenged anyone to tape him.  A few hours after making this statement he was arrested.  This is why many believe he’s insane, delusional, stupid, or whatever word is appropriate to discuss this man.

Second, Americans learned what bad hair Blago has.  We knew this in Illinois, yet we elected him anyway.  Shame on us.

Third, we learned that he was engaged in several “pay to play” schemes.  One was an attempt to get fired his critics on the editorial board at the Chicago Tribune in order to get state money to assist in the sale of Wrigley Field, which, along with the Cubs, is owned by the Tribune Company.

Fourth, we learned that Blago threatened to rescind state money to Children’s Memorial Hospital in Chicago, a large, nationally-known hospital catering exclusively to the needs of very ill children, because hospital executives refused to give money to his campaign.  That alone makes me sick.

Fifth, and probably most importantly, we learned  that Blago, who as governor of Illinois has the duty to fill the vacant U.S. Senate seat of President-Elect Barack Obama, was trying to sell Obama’s vacant seat of to the highest bidder.  He was looking for cash or a higher paying job for not only himself, but his wife — some sort of upward mobility — in order to award the senate seat.  And allegedly, there was someone who was willing to play along (although we do not know who that person is yet).  Moreover, Blago was thinking of appointing himself!

Now even though Blago was caught, the problem remains that until Blago resigns or is impeached, he still has the power to appoint Obama’s successor.  Given Blago’s corrupt, delusional state of mind, I doubt he will resign.  Impeachment proceedings will take months.  Any appointment he now makes will be tainted by this scandal.  The only hope the people of Illinois have is that the legislature somehow amends the governor’s powers and require a special election to fill the vacant Senate seat.  Unfortunately for the cash-strapped state, this will be expensive.  Let’s hope that when Honest Abe rolled over in his grave he called Blago and told him to resign.

–Dave

–Dave

Simpson Thatcher & Bartlett – Maximum 2008 bonus payouts will be $32,500, compared to $115,000 in 2007.  That’s a 72% difference for those keeping score.

Cravath, Swaine & Moore - 2008′s bonuses range from $17,500 to $30,000, depending on individuals’ experience. That’s down from 2007′s $45,000 to $110,000, or as much as a 73% drop.  Ouch.

Skadden- Skadden has not announced its 2008 bonuses, but did issue a statement that it will no longer pay a special bonus (that it paid in 2007) because “[t]hat bonus reflected a strong and growing economy that contributed to a record level of profitability.”  Rather, Skadden will pay year-end discretionary bonuses, and attorneys will find out how much in early December.

McDermott, Will & Emery- In a firm-wide memo to associates, MWE announced that it would pay bonus advance in December as planned.  Thus, $10,000 will be paid to associates in the class of 2006 or 2007, $15,000 to associates in the class of 2004 or 2005, and $20,000 to all other associate classes, assuming the associate is “on-track” to receiving a bonus.  Additional bonuses may be paid in March 2009.  Nothing was stated about income partners’ bonuses.

Morgan Lewis – The firm will not be making bonus decisions until 2009.

In case you missed it, here are the details of the bailout, as reported by the New York Times:   

Citigroup and regulators will back up to $306 billion of largely residential and commercial real estate loans and certain other assets, which will remain on the bank’s balance sheet. Citigroup will shoulder losses on the first $29 billion of that portfolio.

Any remaining losses will be split between Citigroup and the government, with the bank absorbing 10 percent and the government absorbing 90 percent. The Treasury Department will use its bailout fund to assume up to $5 billion of losses. If necessary, the Federal Deposit Insurance Corporation will bear the next $10 billion of losses. Beyond that, the Federal Reserve will guarantee any additional losses.

In exchange, Citigroup will issue $7 billion of preferred stock to government regulators. In addition, the government is buying $20 billion of preferred stock in Citigroup. The preferred shares will pay an 8 percent dividend and will slightly erode the value of shares held by investors.

Citigroup will effectively halt dividend payments for the next three years and will also agree to certain executive compensation restrictions, which will be reviewed by regulators. It will also put in place the F.D.I.C.’s loan modification plan, which is similar to one it recently announced.

So why does this look like a bad deal?  Can someone explain to me how Citigroup is going to pay back all this money, or are taxpayers supposed to be happy that we now have ownership interest in a failing financial institution?

–Dave

• She felft the meeting in Chicago that she had with Obama was too general and needed more discussion to understand her role.
• The additional meeting with Obama addressed his plans regarding foreign policy and the nature of Clinton’s role.
• Clinton did not seek concessions from Obama, but just wanted to get comfortable with the idea of working with him.
• One anonymous source has called the nomination a “done deal.”
• An Obama staffer – anonymous of course – stated that no offer had been formally accepted and no announcement would be made until after Thanksgiving.
• Attorneys for Mr. Obama and former President Bill Clinton combed through Clinton’s finances and agreed to guidelines for Clinton’s future activities intended to avoid any appearances of conflict of interest if HIllary Clinton took the job.
• While Mrs. Clinton will have had a powerful platform to travel the world to help repair relations with  countries strained after eight years of President Bush’s policies, she will now have to subordinate her own agenda and ambitions to Mr. Obama’s.  She will also sacrifice the independence that comes with a Senate seat.

–Dave

Remarkably, this is similar to what I hear is going on at my old firm, McDermott, Will & Emery.  I ran into a partner walking down the street who confided in me that there were no “layoffs” at MWE, but several surprising “performance-based” terminations.  This is unconfirmed. 

Hmmmm.  That’s thoughtful of these firms.  Fire associates because there is not enough work, and make them feel like they are stupid or didn’t work hard enough.  What class acts.

Now here’s an example of how to do it with class – Mayer Brown recently laid off several attorneys.  A memo to attorneys and staff (from ATL) is re-printed below:

Despite the current conditions in the worldwide financial markets, Mayer Brown is having a strong year, with an increase in gross revenues. Most of our practice areas are performing well. We have benefited greatly from our practice area and geographic diversity, including our recent merger with JSM in Asia. However, as is the case in all other comparable law firms, some of our practice areas have been adversely affected by the slowdown in economic activity.Accordingly, we have asked 33 lawyers and some support and administrative staff in our US offices to leave the firm. This reduction does not include lawyers who were asked to leave this year through our performance review process.

Those affected by this decision are good lawyers who have made valuable contributions to the firm. We intend to give them access to outplacement services and other benefits and a substantial period of time to find another job.

Allegedly, the offices hardest hit were New York and Charlotte.

Squire Sanders recently laid off 30 associates and paralegals.  Many of the layoffs occurred in Phoenix and Tampa, where legal markets are particularly hurting.

–Dave

• He graduated from Columbia Law School in 1976.
• Holder served as deputy Attorney General under Bill Clinton from 1997 until the end of Clinton’s administration.
• In 1999, he drafted the first federal legal guidelines for prosecuting corporations, known widely as “The Holder Memorandum.”  Holder has expressed concern, however, regarding how his guidelines have evolved.
• Holder participated in awarding clemency to fugitive billionaire financier Marc Rich and approximately 139 others just two hours before Clinton left the White House.  In Rich’s case, it looked very much like a quid pro quo for financial support from the convicted felon’s wife for Clinton’s presidential library.
• At 57, he spent his last several years representing large companies at Washington’s Covington & Burling.
• Some of Holder’s clients include Chiquita (“I’m a Chiquita banana and I’m hear to say . . . .”), Merck & Co., and the National Football League.
• His career began in the Justice Department’s Public Integrity Section, prosecuting corruption cases against government officials including the Florida state treasurer, a Pennsylvania crime family, the Ambassador of the Dominican Republic, an Assistant United States Attorney in New York City, and a local judge in Philadelphia.  He also handled the mail fraud conviction against Rep. Dan Rostenkowski, the influential Illinois Democrat who chaired the House Ways and Means Committee.
• In 1988, President Regan appointed him as an Associate Judge of the Superior Court of the District of Columbia, where he served for five years.
• He participates in many charitable activities including Columbia University, the Meyer Foundation, Save the Children, and Concerned Black Men, a group that seeks to help the youth of the District of Columbia.
• On top of several other awards, in 2007, Holder was named one of the Best Lawyers in America.

–Dave

Supporters of Proposition 8 claim that the case is closed:  the proposition to amend the constitution was placed on the ballot by petition and the voters chose to support Proposition 8 and ban gay marriages.  They also point to past voter-backed constitutional amendments upheld in the courts, including California’s death penalty law and Proposition 13′s overhaul of the property tax system.

Not so fast, say proponents of Proposition 8.  It is inappropriate to use a ballot measure to strip away the constitutional rights established in this spring’s Supreme Court ruling.  Proponents contend the gay marriage ban amounted to a revision to the existing state constitution, requiring a two-thirds majority of the Legislature — or a state constitutional convention — to the get the issue on the ballot.  This was not done.  Furthermore, this is a different situation than other propositions - this is the first time voters singled out one group of individuals entitled to the highest level of constitutional protection and took away their civil rights, possibly violating the equal protection clause.

At any rate, I never understood why either party should care about this.  First, gays are not being given special rights, just the same rights that we all enjoy.  Democrats, in general, believe in gay rights.  Republicans believe that the government should stay out of our lives.  So why do Republicans spend so much time fighting gay rights?  (And for that matter, why are Republican lawmakers the ones so frequently caught having secret gay affairs?)  Do people really think that people choose to be gay and should be punished for this decision by being denied the rights that all Americans have?  Why anyone would choose to be gay in this anti-gay society is beyond me.  Are they scared that if gays are given equal rights it will cause their children to turn gay?

I think a lot of ignorance exists around this issue, and the gay community needs to start educating those who choose to discriminate against them.  Until the ignorance is overcome, and gay life is considered more mainstream, I don’t, unfortunately, think gays will earn more rights.

–Dave