THE HEIGHT OF DISINGENUOUSNESS : INVESTMENT BANKS "MAKING A DIFFERENCE"

OESTERHOUDT STRIKES

Last week, I took a walk in Brooklyn. As I made my way up Tillary Street past Flatbush Avenue, I noticed an incredible commercial message from Charles Schwab adorning a bus stop: "We want to make a difference, not just a buck. Let's make a difference together."

I beg your pardon? Do investment houses really care about making anything more than a buck? Why do people invest money in the first place? To turn one buck into two or more bucks. It's all about making bucks. If investing makes any "difference," it's a differential between the amount invested and the amount returned. And everyone wants that differential to be positive.

But let's leave investors aside for a moment. Let's focus on the institutional guys. You know, the investment bankers who craft bewildering "portfolios" designed to churn fees and hopefully yield a nifty profit for the client. Now, an investment banker exists to do two things: (1) To maximize the monetary return on a client's investment; and (2) To maximize his own fees by selecting appropriate transactions. To be blunt, it is all about money. In fact, investment bankers are more than mere employees; they are fiduciaries. They must subordinate their own interests to their clients' interests. They can even be sued for failing to make enough money, because that shows "they did not sufficiently have their clients interests at heart."

In that light, it is preposterous for Charles Schwab to suggest that investment bankers care about anything more than "making a buck." If they cared about anything else--like "making a difference"--they would lose their jobs, clients and everything else they value.

And what does "making a difference" really mean? Have investment houses suddenly lost their collective minds? Do they want to open soup kitchens or something? Do they want to build houses for the homeless? How about pay for health care for indigents? Is that the kind of "social difference" they want to make? The phrase "making a difference" implies broader service to the public, or even ethical purity. It rings with selfless nobility. Yet such things are completely antithetical to an investment house's primary mission: To make profits for themselves and their private clients. There is nothing "public" or "noble" about that enterprise.

Recent stock market scandals only weaken Charles Schwab's pitiful attempt to appear altruistic. Did Lehman Bros. care about "making a difference" when they lured investors into placing money on a housing market they bet would fail? The bottom line is that people expect investment bankers to engage in dirty dealing. It is par for the course. Worse, most investors would prefer their bankers to engage in the most barely legal conduct possible so long as that conduct yields a maximal return. That is what it means to "make a buck," not "a difference."

Commerce is about making bucks, not a difference. That is just the way it works. And it is the height of disingenuousness for anyone to suggest otherwise, let alone massive investment banks that personify the commercial spirit. If investment banks choose to "make a difference," chances are they do so in order to gain tax advantages, not to soothe their conscience.

Put thematically, the clash between "making a buck" and "making a difference" is a clash between commerce and ethics. It is also a clash between ends and means. Commerce is about ends; ethics is about means. A commercial man only cares about the bottom line, no matter how he gets there (provided he does not risk criminal sanction). An ethical man cares about the way he achieves his goal. When a person commits to making bucks, he has a distinctly result-oriented motive. But when a person wishes to make a difference in the ethical sense, he is as much concerned about the way he brings about positive change as he is concerned about the change itself.

In commerce, means are secondary. Investment houses like Charles Schwab know that. If it suddenly adopted "making a difference" as its primary business model, its clients would leave in droves. And the company's shareholders would angrily vote off the "insane" directors who approved such an idiotic way to do business. In their place, the shareholders would quickly appoint directors with a more sensible business model, namely: "Making a buck."

And the new directors would immediately yank those ridiculous posters from the bus stops.

Hey, at least they would be honest.

THE IT'S ALL ABOUT ME PARTY (AND SCREW EVERYBODY ELSE)

POLITICAL PARTIES FOR A CHANGING WORLD

By: Mr. E.G. O'Miner, President and Chief Spokesman; Chairman of the Board of Directors, O'Miner Property Acquisition & Development Co., Inc., a Delaware Corporation Specializing in Real Estate Hedges; Profilee, Fortune Magazine's Gold 100 (March 2007); Author, "It's Mine : Stop Apologizing for Your Money" N.Y. Times Bestseller for 24 consecutive weeks; Married subject to prenuptial contract.

No one ever got anywhere in this country helping others. Rather, our ancestors achieved success by focusing on themselves. There is no shame in being selfish when being selfish buys you a house. There is no shame in being selfish when you get the job and the bonus. Just think of it this way: If you stopped to help the other guy, you might not have gotten the job or the bonus. Where would you be then? I assure you, you wouldn't like it.

Yet somehow it has become fashionable in the United States to deprecate wealth. Even really rich people learn that it is rude to mention incomes, portfolios and real estate holdings in public. They even open themselves up to ridicule when they refuse to give money to charitable foundations. Put simply, successful Americans feel increasing pressure to express shame for their success, even though they have realized the American dream.

This is outrageous. We believe it is time to stop feeling guilty for our money and our success. As successful Americans with substantial property holdings and minimal financial worry, we refuse to be modest any longer. We refuse to flagellate ourselves for achieving precisely what everyone sets out to achieve in this country. Rather, we want the world to know what it takes to be successful. We want to step out and say: "It's All About Me." And we're going to be honest, too. We're also going to say from the top of our lungs: "Screw Everybody Else."

I started the It's All About Me Party (And Screw Everybody Else) because I got sick and tired of all the public recriminations about wealth. I started the party because I want to be honest about success. Look, you can't become a millionaire by giving money to others. Being a millionaire requires a decidedly self-centered mental outlook. You need to think about yourself if you want to possess money and property. You can't put together favorable business deals, meaningful commercial contacts or cash large checks unless you adopt a relatively egotistical approach to life. I say to you: It's OK. Don't give yourself "permission." Don't apologize. Rather, say: "It's all about me and I don't give a good two shits what anyone else thinks of me."

Let the moralists complain and call you selfish. You'll be the one laughing in a Bentley while they're talking to themselves in a used Honda.

Let me explain what I mean by "It's All About Me." Being selfish is a lifestyle. It is a commitment, too. When you say "It's All About Me," you take an oath to live for yourself and yourself alone. You tell everyone else to fuck off because if they're not making money for you, they're not worth being around. True, it takes courage to live for yourself; everyone from day one has told you that it's wrong to eat the whole cake without sharing. But you can do it. Be strong. If you really want to be a millionaire, you need to think unconventionally. Don't apologize. Don't share. Take it all for yourself. And be happy doing it.

When it's all about you, you use the word "mine" a lot. Don't be afraid to think about "my house," "my money," "my wife," "my beach home," "my portfolio," "my cars," "my coin collection" and "my inheritance." This stuff belongs to you. You worked hard for it. Why should you give it away? Stop punishing yourself for caring about "mine." Sure, your parents and teachers always scolded you for shouting "mine mine mine" when you refused to let some brat share your toys. But they didn't know what the hell they were talking about. Rebel against convention. Stop the guilt. Go ahead and scream "MINE MINE MINE MINE" without a shred of shame. After all, who's the one with the mansion?

You can do this. You can finally make yourself the center of your world. No matter how much you have been brainwashed to care about others, you must dare to see through the lies. If you crave success, you must penetrate the deception. Make yourself the star of the show. Put your needs first, not your paraplegic uncle's. Pleasure yourself, not your spouse. Keep your money in a high-yield account; forget about the charity fund. Screw your brother; he can make it on his own. The minute you start worrying about other people is the minute you veer off the path to success. When it's all about you, you enrich yourself and you even feel good about it. Don't be weak. Don't be conflicted. When it's all about you, there is no conflict: It's just you, my man.

We stand for freedom. We stand for liberty from guilt, self-doubt, pity and compassion. It's amazing what you can accomplish when you only think about yourself all the time. Although we also believe in telling people to "screw off," we do not think that it is a bad thing. After all, putting yourself first means screwing everyone else. It's all part of the ball game. The trick is shedding all those compassionate impulses you learned since birth. If you really want to make a name for yourself, you need the courage to tell everyone else: "Screw you and your problems; it's all about me."

Our opponents say that we live unvirtuous lives. They say we are cruel, unforgiving, heartless and superficial. They can call us all the bad names they want. We're the ones with the big jobs, the big houses and the big cars. We're the ones who get the hot chicks and go on the ritzy vacations. We feel no shame for serving ourselves, because selfish people make the world turn. We don't think "selfish" is a bad word because selfishness creates jobs for all the people who live to share. Put simply, when we say "It's All About Me," we drive the economy. So in a weird way, we share a lot more by refusing to share than we would if we lived to share. And not just that: Virtue doesn't buy villas or hire hot whores; selfishness does.

Be a man. Do yourself a favor and drop the guilt, will you? Join the It's All About Me Party (And Screw Everybody Else). Liberate yourself from bloodsuckers and annoying relatives. Make money without shame. Spend it on yourself, not greedy dependent children, beggars and wives. Because when you permit yourself to be a selfish, greedy, arrogant rapacious pig, you drive this Nation to prosperity. Plus you get a really nice house and a bulging stock portfolio. And that, my friend, is the surest chick magnet on earth.

So shut the fuck up with this "sharing" business. Because when you share, you cheat yourself. And there's no "share" in the phrase "It's All About Me."

Be different. Be selfish. Be strong. Be yourself.

MR. BLOOMBERG, CONDEMN THIS PROPERTY

New York Landlords United for Better Land Uses

The New York Chapter of LUBLU, an International Brotherhood of Property Owners

March 9, 2009

Dear Mayor Bloomberg,

As you know, LUBLU has a long history in New York. As committed landlords, we care about the city. Like no other location in the United States, New York offers exceptional opportunity for profitable real estate development. We do not like to see good properties go to waste, and neither should you. When land is productive, it pays more property taxes. Additionally, when land is productive, the economy improves, people get jobs, tenants are happy and landlords make money. In short, when we use land properly, everybody wins. LUBLU is committed to maximizing good property uses in New York. We know you share our enthusiasm for prudent land use, because prudent land use makes New York a better place for everyone.

We write today concerning a property located at 135 West 23rd Street in Manhattan. It is a large lot, occupying approximately 20% of the block between 6th and 7th Avenues. The current occupant is “Visions Services for the Blind and Visually Impaired of New York.” This tenant occupies a 15-story brick building on the above-mentioned lot. The building is located in a bustling commercial and residential neighborhood in which property values and rents have risen sharply in recent years. Numerous commercial establishment and rental apartment buildings surround the property. They bring in plentiful rents and taxes: An 850-square-foot two-bedroom apartment in the neighborhood yields up to $4700 per month, while a major retail outlet yields up to $100,000 per month. That translates to large tax bills at year’s end.

Yet the property at 135 West 23rd brings in no rent. Instead, blind, deaf, mute and handicapped welfare recipients live there rent-free. They pay no fees, taxes or rents. In fact, they actually cost the city money. They loiter outside the building all day, disturbing passers-by, residents, tourists and shoppers. They also look very shabby and they smell. The mutes and deaf people also utter bothersome, monosyllabic sounds that anger residents. Within the building, these people receive free medical care for eye, ear, mouth, nose and brain disorders. The building is filthy and poorly maintained. Quite simply, it is a disgrace to the neighborhood. It has no place on a block that can fetch $4700 per month for a small apartment. LUBLU believes that the building should be demolished and replaced with a high-end apartment building, condominiums or a Whole Foods® market. Those would be much better land uses from which both private enterprise and the city could benefit.

We think you will agree that a not-for-profit institute providing free services to blind people is not a good land use. New York is a city on the rise. There is no space in Manhattan for clinics, Good Samaritan Centers, cheap housing or free health care for destitute blind people. This may sound cruel. But investors and landlords have a right to use land in a way most suited to satisfy their needs. Frankly, a free service center for blind people does not satisfy an investor’s needs. An investor wants a healthy annual return, not the inward pleasure of knowing a mentally deranged, blind mother of ten has a place to sleep at night. She can sleep in the park or in Brooklyn; land in Manhattan is too precious to waste on worthless uses. International apartment-hunters, venture capitalists, contractors, retailers, merchants, financiers and real estate developers are all waiting for their chance to improve prime Manhattan properties. Can we in good conscience keep them waiting by withholding such a superior location from the market?

We must free 135 West 23rd Street for profitable development. This city—indeed, this country—grew on the idea that land must be used effectively. Land should not lay fallow or dilapidated; it should be improved, refined and put up for sale. In Manhattan, the private real estate market is booming. If a low-end apartment in this neighborhood can fetch $4700, imagine how much a higher-end building could produce on the 135 West 23rd site. As landlords, we are excited by the idea that we could make a healthy profit on this plot. We refuse to let it lay fallow any longer. Whenever a good landlord walks past the site, he says to himself: “Why are they wasting this perfect land on hobos, retards, deaf mutes and blind amputees? I could get $5,000,000 a month from this baby.” This is prudent economic thinking. Landlords do not give; we take. As landlords, we consider what is best for the economy. And when we improve the economy, the city improves, too.

We urge you and the City Council to invoke your eminent domain powers to condemn 135 West 23rd Street. By State statute, you and the Council have the power to seize private property for public use as long as you provide “just compensation” to the former owners. You even have the power to seize property without paying compensation if you declare it a “public health hazard” under your police authority. We argue that 135 West 23rd is a “public health hazard” because it subjects the public to unsightly filth, smells and deaf-mute mutterings. It also endangers the public interest in a vigorous private real estate market, which in turn reduces tax revenues and city services for all. Although the United States Constitution prohibits you from directly delivering 135 West 23rd Street into our hands, you can avoid that stricture by drawing up a contract by which you compel us to build the property with a view to “public economic development.” Kelo v. City of New London, 545 U.S. 469 (2005). No matter what legislative path you pursue, we are confident that you will do the right thing.

Poor land uses harm everyone. They also insult the great spirit of hard work and prudent development that created this Nation. No one likes barren properties. And no one likes barren properties in the country’s most vibrant and profitable neighborhoods. The fact that 135 West 23rd Street looks bad and shelters stinky homeless blind people only strengthens our case that it should be condemned. While we sympathize with Vision Services’ purpose to help the sick, we cannot agree that they are properly using their land. There are better places in which to perform charitable services, such as the South Bronx or East New York. In those neighborhoods, poor land uses would fit right in with the overall impoverished character of the surrounding area. Yet it insults private enterprise to tolerate a poor land use in a neighborhood bustling with strong commerce. Put simply, the contrast is too striking to bear. People who pay $5500 in rent every month should not be forced to hear deaf-mutes moaning outside their door every day.

We must also point out that land use does become “good” simply because people perform charitable work on the property. Rather, land use becomes “good” when viable commercial activity on the property results in profitability, no matter what sort of business occurs there. In other words, a Best Buy® store is a “better land use” than Moe’s Charity Soup Kitchen because it brings in $100,000 in rent per month, while the soup kitchen may only bring in $500 per month. Although the soup kitchen arguably has a “better purpose” than a Best Buy Store (i.e, serving free meals to the hungry is nobler than hawking plasma screen televisions for fair market value on credit), that does not make it “better.” Instead, land uses are “better” only when they are more profitable. Motivation has nothing to do with it. It is all about the rent receipts.

We are confident that you will apply our reasoning in this case. No one benefits from a Vision Center at 135 West 23rd Street except a motley bunch of welfare-sucking deaf-mutes. This is not prudent land use; this is pure waste. The city receives no taxes from the property. Meanwhile, private developers twiddle their thumbs waiting for the spot to clear. In this economy, we should cultivate every opportunity to provide jobs; new construction projects will certainly further that goal. To that end, let us join together to serve both private enterprise and the public. By converting 135 West 23rd Street into a fair market property dedicated to residential and commercial interests, we will provide work to contractors, business opportunities to banks, homes to renters and taxes to the city. Just as our ancestors could not bear to watch Native Americans let immensely fertile land lay fallow, so too do we recoil when we see 135 West 23rd Street. This land is a gem; and it is going to waste. It is finally time to let the market dictate property uses, not philanthropic impulses.

We look forward to your prompt attention to this matter. If you require a contribution of any kind—or if you would like us to pay the “just compensation” fee to the Vision Center upon condemnation—please do not hesitate to contact our offices.

Yours sincerely,

Mr. Charles G. Stack

Associate Director of New Projects
Silver Cup Portfolio Holder

THE AMERICAN BAR ASSOCIATION INSULTS SUCCESSFUL PRIVATE ATTORNEYS

By : Nathaniel L. Billingforth, Esq., Order of the Coif; Equity Partner, Irkland & Mellish, LLP; 2007 Am Law Biller Rank #11 in the United States

Every licensed attorney must pass the Multistate Professional Responsibility Examination (MPRE®). Success in this examination reflects an attorney’s knowledge of all relevant rules contained within the American Bar Association’s (ABA) Model Rules of Professional Conduct (MRPC) and applicable State codes. When an attorney passes the examination, he certifies that he is ethical. Once he is ethical, he may practice law without restriction, provided that he pays his bar dues and does not break any rules. Lawyers secure the rule of law in America. They help business function. Through zealous representation, they vindicate the rights of successful organizations all over the country. Without them, companies would not be as successful as they are. In a word, good lawyers are essential.

Yet the American Bar Association insults successful lawyers with unrealistic demands. In its preamble to the Model Rules of Professional Conduct, the ABA notes: “Virtually all difficult ethical problems arise from conflict between a lawyer’s responsibilities to clients, to the legal system and to the lawyer’s own interest in remaining an ethical person while earning a satisfactory living.” MRPC Preamble, Clause 9.

I beg your pardon? What conflict? Is the ABA insinuating that lawyers who wish to “earn a satisfactory living” somehow do not serve their clients? Are they saying we are not “ethical people” because we want to earn money? This is utter nonsense. We here at Irkland & Mellish love earning money. And we serve our clients twice as hard in order to win. Our clients love us because we win for them, and when we win, they win. We make everyone happy, including ourselves. This does not make us “unethical.” We already passed the MPRE and the State Bar Board certified us all as having the “requisite character and fitness to practice law.” You bet your ass we have character. Our character wins cases. We are successful. Just look at me. In 2007, I was AM Law’s #11 biller in the United States. I “earned a satisfactory living” while serving the client with all my heart. I am insulted that the ABA thinks I was somehow “unethical” simply because I wanted to earn money from winning antitrust suits for pharmaceutical conglomerates. I simply did what I was trained to do: To win at all costs for the client.

But the ABA goes further. It says: “A lawyer should strive to attain the highest level of skill, to improve the law and the legal profession and to exemplify the legal profession’s ideals of public service.” MPRC Preamble, Clause 7. Public service? This is not what we do. We sell private services to private clients. Our clients include major banks, pharmaceutical manufacturers, film production houses and successful inventors. These people do not want their secrets known. And they certainly do not want us to represent them in a way that holds out their practices for the public to see. This is private business. Our clients make money in private; there is nothing public about it. The government does not pay our clients, and it does not pay us. Why, then, should we strive to “exemplify ideals of public service?” What ideals? Private lawyers do not serve the public; they serve private clients who engage in private business for private profit. They do not have to listen to government, nor do they owe any duties to the public. Successful people do not want the public to peek into their finances. As attorneys, we have a duty to protect our clients’ secrets, and we do. We are not public servants. We are private advocates who resort to anything to protect our private clients. Public service plays no role in our daily practice. When we show up to work, we think about making private profit, not “improving the law” or “serving ideals of public service.” In short, the ABA is completely out of touch with reality here.

You may think that the ABA has said all it could on these matters. Wrong. It makes even more ludicrous statements. Consider this one: “[A]ll lawyers should devote professional time and resources and use civic influence to ensure equal access to our system of justice for all those who because of economic or social barriers cannot afford or secure adequate legal counsel.” MRPC Preamble, Clause 6. Excuse me? You want me to waste precious firm resources representing a beggar who says the police beat him? Pardon my francais, but give me a fucking break! What planet are you from? Law firms do not do things for free. Our services are billed on an hourly basis, beginning at $325 per hour for associates, up to $1,275 per hour for senior partners. We serve private clients who can afford to pay for our services, not uninfluential minorities and small-time hoodlums trying to get out of jail. We operate our firms like businesses; we avoid wasteful expenses. The ABA cannot reasonably suggest that we set aside our lawyers’ time on unprofitable matters. That is like asking a factory to remain open with only 50% of the machines running. It makes no economic sense.

True, there are firms that take on pro bono cases from time to time. But they do not do this because they care about poor people. They do it because they use it as a publicity stunt to attract new paying clients. After all, it looks fantastic when you can say in a newsletter: “Our altruistic young associate, Ms. Wang Fu Min (Harvard Law summa cum laude), dedicated 100 hours of her time writing an appellate brief for an indigent black death row inmate in Texas.” A client could say: “What selfless lawyers they have at that firm. Let’s hire them to file that patent application for us.” Still, this does not happen often. And firms that spend time on “freebies” are not good businesses. They will never make the AM Law top billing list. Here at Irkland & Mellish, we do not waste our time on cases that yield no fruit. The ABA says that lawyers “should strive to ensure equal access to the legal system.” What for? If you can’t afford a lawyer, that’s your problem. Securing “equal access” is not our job. We even venture to say that “equal access” is not an American value, either. Equal access is not the reason we get up and work for success each morning. We get up and work for success because we want unequal access to wealth. It would defeat the whole purpose if everyone had an equal claim to wealth—and the law exists to protect people like us, not people like them.

Perplexingly, the ABA places incredible importance on this issue. In a separate rule, they say: “Every lawyer has a professional responsibility to provide legal services to those unable to pay. A lawyer should aspire to render at least (50) hours of pro bono publico legal services per year.” MRPC 6.1. We note the words “should” and “aspire” in this rule. “Should” does not mean “must.” “Aspire” means “try to,” not “do it.” These are not commands; they are recommendations. You do not have to follow recommendations. We will leave it at that. No thank you, ABA. We decline your recommendation to waste firm resources on quixotic adventures for unimportant clients.

But the ABA just will not leave us alone. Irkland & Mellish practices in all 50 States, but we do most of our business in Illinois. As if the ABA did not interfere enough, the Illinois Supreme Court has its own meddlesome “ethics” rules. Wisely, Illinois does not impose even an “aspirational” duty to waste firm resources on hobos and petty criminals. But it nonetheless needles lawyers who do not “volunteer their time” to help the poor. In its preamble to the Illinois Professional Code, the Illinois Supreme Court writes about pro bono service: “An individual lawyer’s efforts in these areas is evidence of the lawyer’s good character and fitness to practice law.”

When will these idiots realize that lawyers are not saints? How dare the Illinois Supreme Court suggest that lawyers do not have “good character and fitness” simply because they refuse to refuse to handle worthless cases? What is this, church? We are not a charity; we are a major Chicago law firm with major industrial clients. We do not have the time, resources or patience to represent penniless black guys who say the police falsely arrested them for something they did not do. How does this indicate “bad character?” We are not “good characters” because we refuse to make brainless economic decisions? If that reasoning were applied to business across America, there would not be a single “good character” to be found from coast to coast. The Illinois Supreme Court has gone too far. After all, we all passed the MPRE and the Bar Board certified us as having “good character and fitness” after we passed the Bar Exam. The Illinois Supreme Court cannot disparage our “good character” simply because we refuse to make bad business choices. Practicing law is about profit, not public service. The Illinois Supreme Court would be wise to calmly remove its head from its rectum in order to see that truth.

It saddens us to see that the ABA and Illinois Supreme Court know so very little about lawyers. In fact, the Illinois Supreme Court actually writes in its Ethics Preamble: “Legal services are not a commodity. Rather, they are the result of the efforts, training, judgment and experience of the members of a learned profession.” We beg strongly to differ. Legal services are undoubtedly a “commodity.” We define the word: “Something useful that can be turned to commercial or other advantage.” The American Heritage Dictionary of the English Language, 2006 Ed. While we do not deny that we are a “learned profession,” we disagree that legal services are not a “commodity.” Our services are “useful” and we turn them to “commercial advantage.” We learned our skills, people need them, and we get serious money from them. That fits the definition perfectly. The Illinois Supreme Court likely understood the word “commodity” to refer to easily interchangeable, cheap, street-level goods. While the word “commodity” embraces that concept, there is no “dignity” qualification. Selling legal services is no different than selling apples, carburetors, syringes or massage parlor services. These are all “useful things” that can be turned to “commercial advantage.” We may have had to learn some fancy words and phrases before we could sell our crafts, but in the end it’s all the same: A way to make money.

In sum, the ABA and Illinois Supreme Court grossly misunderstand the legal profession. They insult us with unrealistic demands and confuse business with principle. We believe the ABA should reevaluate its “ethics rules” in light of current professional practice. No one practices law to be a good person; people practice law to buy nice homes and “earn a respectable living.” If people want to soothe their souls, they can join the clergy. Here at Irkland & Mellish, we pride ourselves on the fact that our lawyers know who they are: Businessmen with accounts to service and annual billing quotas to satisfy. We passed all the tests and we have all the certificates we need to ply our trade. Nothing the ABA says can take away our livelihood, no matter what moral judgment it makes about our culture of success.