Showing posts with label Conflicts of Interest. Show all posts
Showing posts with label Conflicts of Interest. Show all posts

Friday, February 26, 2010

NAUGHTY BAILED-OUT BANKERS ARE ENEMIES OF THE PEOPLE

Советские Решения Современных Экономических Проблем в Америке Обамы
(SOVIET SOLUTIONS TO CONTEMPORARY ECONOMIC PROBLEMS IN OBAMA'S AMERICA)

By : Mr. Lavrenty Pavlovich Beria, Member, Communist Party of the Soviet Union; Commissioner, National Office of Internal Affairs (NKVD)(1938-1945); Senior Investigator, People's Commissariat to Eradicate Spies, Traitors and Unpatriotic Defeatists Uncommitted to the Public Good (1934-1948); Close Confidant to Joseph Stalin (1926-1953); Orchestrator of Soviet Wartime Production (1941-1945); Manager of Undesirable Population Relocation Program to Central Asia (1941-1951); People's Prosecutor against Lithuanian, Polish, Latvian, Estonian, Ukrainian, German, Hungarian, Czech, Romanian, Slovak and Yugoslavian Traitors and Capitalist Counter-Revolutionary Troublemakers (1938-1953); Pistol Enthusiast and Marksman; Executed 1953; Resurrected 2010.

I am here in America at the request of the Chairman of the Federal Reserve System, Mr. Ben Shalom Bernanke. This Mr. Bernanke--Jewish capitalist intellectual counterrevolutionary though he may be--is a capable man. He understands that your country is in grave danger. He knows that the American economy is teetering on the brink. Most importantly, he understands that traditional "American" methods will not return your country to prosperity. That is why he called me.

Let me briefly summarize my conversation with Mr. Bernanke. He said that the United States is now suffering from a "persistent recession" that has resulted in massive unemployment. He attributed this "recession" to unregulated banking practices and large-scale greed among large financial firms. He also informed me that government has begun playing a much larger role in private financial affairs. He even said that government has paid billions to private banks in order to prevent them from failing. I believe I say this correctly: Your government "bailed out" the wealthiest capitalist pigs in order to allow them to continue loaning money to everyone else.

I applaud America's new commitment to government intervention in the economy. Although it does not come close to the Soviet example, it nonetheless represents a step in the right direction. In Stalin's Russia, we regulate everything. There is no private property. The State owns the banks. If a miserable little banker gets out of line, we shoot him and bury him in an unmarked grave. We even shoot his children and wife. That's how we regulate bankers in Russia. True, this frightens bankers. But it also prevents them from defrauding the people. Sometimes pistols are more effective than laws.

I understand that your country is not the Soviet Union. Mr. Bernanke informed me, however, that these ungrateful bankers have actually taken government money and used it to pay their own bonuses. Additionally, they have thumbed their noses at the very government that saved them from ruin. Mr. Bernanke told me that "something must be done" about these devious, greedy bankers. He asked my advice on the subject.

I am happy to lend my expertise in dealing with your banking problem. First off, let us understand the situation. Your government has taken an unprecedented step to rescue private banks from their own capitalist follies. It has actually given State money in order to prevent them from failing. In return, government can expect allegiance from the banks. In essence, "bailed-out" banks are no longer private. By taking government money, they have subjected themselves to government regulation. They have ceded their private nature. As such, they must listen to your orders. If they don't, they must suffer serious consequences.

Yet now the bankers act as if they never took your money. Worse, they have used your money to invest in the evil New York stock market, where they earned spectacular profits. Rather than return the money to you, they have insolently awarded themselves monstrous bonuses and sent their children on European vacations. They have renovated their villas and hired high-priced prostitutes for week-long champagne orgies at sultry Caribbean hideaways. They have purchased long yachts, "cigarette boats" and Bentley automobiles. They have gallivanted on million-dollar ski trips. All the while, they have refused to hire more workers or act in the public good. To the contrary, they have done little but enrich themselves. They are having the time of their lives--all thanks to government funds.

I share your disgust with these ungrateful outlaws. I am pleased to offer my assistance in "regulating" them. They are Enemies of the People.

We must increase our regulation efforts. Your country must cease relying on "laws" and "procedures" to tame wayward bankers. You will only stop naughty bankers by adopting Soviet-style banking regulations. Bankers are ruthless pirates by nature. Ruthless pirates only understand one language: Brutality. If America wishes to rein in these pirates, it must start regulating with pistols.

Let me explain what I mean by "pistol regulation." As Commissioner of the Secret State Police in the Soviet Union, I became an expert in the craft. Here’s how it works: Once I identify an enemy of the People, I quickly dispatch agents to his home at about 4:30 AM. Generally, most people are either asleep or just waking up at that time--even ambitious capitalist pigs like your wayward bankers. They are in no position to resist ten armed police agents. Most surrender without a fight. In fact, very few ever know we're coming. We investigate in secret.

Once taken into custody, my agents bring the enemy to a secret building with no windows. There, a State security agent informs the enemy why he is an enemy, then tells him to explain himself. This is just a formality: Nothing he says will save him. Basically, it just gives us an opportunity to have a good laugh while the man pisses himself, falls on his knees and begs for mercy. After we've laughed enough, we bring in an officer who says he has judicial power to pronounce sentence. He gravely tells the enemy that he has been found guilty of treason, at which time several armed guards take him into another dimly-lit room. They push the enemy face first against the wall, then shoot him in the back of the head with a pistol like this one:

After that, the guards clean the blood, skull fragments and brains off the floor, remove the body and send it off for cremation. Then I release a press statement describing the enemy's crimes against the people. I close the statement by noting that the "dangerous enemy" has "faced justice for high treason."

Now, once your naughty bankers know that they may face "pistol regulation" for squandering State funds, they will think twice about buying new homes and throwing lavish dinner parties. In fact, some might even invest their money in public projects or--God forbid--hire some people. As you can see, "pistol regulation" carries two benefits. First, it eliminates bad behavior, like embezzling public money. Second, it encourages good behavior, like reducing unemployment. After all, no one wants to get that knock on the door at 4:30 AM. Bankers start behaving much better once they notice that their greedy colleagues aren't in their offices anymore.

You have made a wise decision to enlist my help in regulating your financial industry. You understand that your traditional "American" methods will not impress these rapacious profit-hounds. To the contrary, your entire constitutional system--with its burdensome right to counsel, "independent judiciary" and "proof beyond a reasonable doubt" procedure--favors the accused. Worse, when the accused has money--as these bankers do--it is even more difficult to convict them. Even then, it takes years for appeals to pass. Plus there's a chance that banker-friendly judges will free their pals. Under your laws, you can't even execute these piratical bankers for their offenses.

This is simply unacceptable: You need Soviet "pistol regulation" or these dogs will walk all over you with "procedures."

Still, you can do it. You have already made an unprecedented step by allowing the government to intervene in the economy. Now, you must take the next step by holding bailed-out bankers to their bargains. If a banker takes government money, he must do as the government says. No more can you tolerate their ingratitude. It is not just embarrassing. It is bad for the country.

To that end, I will do my part to hunt down these criminals. Their lawyers and cash bribes will not stop my agents from putting bullets in their brains. I have wide experience sniffing out wrongdoing; nothing escapes my notice. We will work together to send a simple message: "If you take government money, you had better not use it to pay your own bonus."

I will find every banker who scoffs at government regulation. Believe me, they won't be scoffing after my agents show up at their swanky penthouses at 4:30 in the morning. In fact, they'll be crying, begging, moaning, wailing, pissing and shitting themselves. A few will get angry and shout. But my men will pistol-whip them until they behave.

Enough talking. Let's get to work. We have an industry to regulate. And we have Enemies of the People to eliminate.

Tuesday, October 20, 2009

IF YOU ARE "RESULT-ORIENTED" AND "CLIENT-FOCUSED," YOU MUST BE DISHONORABLE WHEN NECESSARY

AN ESSAY

Law firm websites amuse me because they all use similar words. Generally, they like to advertise their ability to "win" so that new clients will hire them. After all, potential litigants want to win their lawsuit; there's a lot of money at stake. And no one likes losing money. In essence, law firms strut their prowess in obtaining "favorable outcomes." You constantly run across muddy phrases like: "result-oriented," "client-focused," "winning team," "success-centered" and "dedicated to your cause."

You could be forgiven if you thought law firms were sports teams. After all, they talk about winning all the time. Does that mean legal disputes are simply games? If you read civil procedure rules, you might think they are.

But I am not writing today to draw parallels between gaming and the law. Instead, I am writing to argue that the legal profession's relentless fixation on "results" requires lawyers to adopt a "result-determinative" approach to problems. That approach, in turn, makes it impossible for lawyers to adhere to larger principles without sinking into a conflict of interest.

American lawyers occupy an awkward philosophical position. On the one hand, they swear to advance principles such as "justice," "right" and "honesty" as "officers of the court" in a democratic system. Put briefly, lawyers swear to adhere to an "honor code." Put broadly, "honor" means that a person adheres to certain metaphysical ideals no matter the circumstances, even if it is unprofitable. Honor imposes restrictions on the means calculated to obtain certain results. Yet lawyers constantly use words like "results," "outcome," "winning," "goal" and "dedication to client interest." These concepts involve the ends of particular conduct, not means. An honorable man refuses to adopt certain tactics to obtain ends, even if the ends are favorable. But that puts lawyers in an uncomfortable position, because they also swear to "zealously advocate their clients' interests." In short, how can a lawyer both remain true to his honor code while retaining every trick in the book to win for his client?

As a profession, lawyers almost invariably sink into ethical conflict. Law schools attempt to remedy this problem by forcing lawyers to take an "ethics course," while States force them to take an "official ethics exam" before admission to the Bar. But ethics is not about external compliance and multiple-choice answers. No, ethics is about spirit and character. It is internal, not external. It is hard to police and even harder to teach. There is an immense difference between "the rules for being an honorable person" and "being an honorable person." Lawyers learn the rules; that is all they need to do. It does not matter whether they actually are honorable. In fact, the substance of their work makes honor almost an impossible path.

People throw around the term "conflict of interest" all the time. For the longest time, it made no sense to me. I knew it was bad; I just did not understand it. I did not grasp what it meant until I went to law school and saw what lawyers do. A conflict of interest simply means that a person attempts to serve two masters. It is about loyalty and integrity. If a person gives his full loyalty to one "master," there is no way he can be fully loyal to the other. Thus, a conflict of interest cripples a person's ability to be faithful to another. And it is not just about money. Conflicts of interest can arise between principles, too. Put another way, a person cannot remain faithful to a set of principles while contradicting those principles in the service of someone else.

This is what happens with lawyers. When the State administers the attorney's oath to newly-admitted lawyers every year, it obligates them to advance core principles, like justice, fairness, honor, integrity and collegiality . But at the same time, lawyers take an oath to "fully and zealously represent clients." From the very first moment, then, lawyers swear to serve two masters. They promise to vindicate larger principles at the same time they promise to obtain "favorable results" for their private clients. Private clients do not care how lawyers get the results they want; they just want the results. In this climate, how can a lawyer maintain his honor?

Are there any honorable lawyers in the world? Probably. I did not encounter many when I practiced. In truth, that is not surprising given the impossible ethical position lawyers must occupy. Consider this: Honor imposes restrictions on the means and methods calculated to reach a certain goal, while clients demand a certain goal. If a dishonorable method is the only way to achieve that goal, how can the lawyer remain true to both his honor code and his client?

In my view, lawyers' obsession with "client focus" and "results" reveals their predisposition to abandon honor when necessary. When a person deeply wants to achieve a goal, he adopts the means most likely to achieve it. Honor, however, might bar a person from resorting to the most effective means. Do lawyers have the courage to abstain from certain victory merely to appease their ethical sensibilities? If a lawyer could win a multimillion dollar case through some trick--and he knew no one would ever discover it--would he resort to it? If he were loyal to his honor code, then he would not. But he would if he were loyal to his client. His client wants to win. The client does not care about honor. He just wants victory at the lowest cost and lowest risk. If a dishonorable means leads to victory at low cost and low risk, so be it.

Lawyers contend with these philosophical tensions every day. They face inevitable conflict between their clients' wishes and the principles they swore to uphold. Most troublingly, this conflict has a decidedly commercial dimension. After all, lawyers need money to stay in business. Only money pays rent and keeps offices running. Only money buys cars and sends kids to college. It takes money to pay the heat bill and buy presents for your wife at Christmas. Between principles and clients, who pays money? Only clients. In that light, to whom do you think a lawyer will give his maximum effort? Honor doesn't stand a chance in these circumstances. Debt collectors do not take "honor" or "principle" as payment; they take cash, checks, money orders, bank transfers or MasterCard®.

Lawyers might say they support justice, fairness and right. They might insist that they have integrity. They might even think they have honor. They might point to the wall and show you their Bar Association plaques. Still, did justice or integrity pay for their offices? No, winning cases for their clients did. That does not necessarily mean that winning is always dishonorable. But adopting a "flexible" approach to honor greatly increases a lawyer's chances to win a case. At day's end, winning matters. Law firms say it themselves. Why should a lawyer hamstring himself with honor? Great players don't win by tearing plays from the playbook; they keep every option open.

Adopting a "result-oriented" approach to any human enterprise inevitably leads to a debate about probability. If a person wants results, he adopts means that will "most probably" lead to those results. Yet honor excludes certain means. In that sense, honor represents a barrier to sought-after results. Honor reduces the probability of obtaining results. For the result-oriented person, that is an unbearable idea. When winning matters, it is frustrating to know that effective tactics are off the table.

Honor takes many tactics off the table. For a lawyer who swears to obtain results for a private client, that is not good. Pleasing the client leads to monetary success. Fulfilling honor, by contrast, gains nothing except intellectual satisfaction. As commercial actors who need money to stay afloat, lawyers cannot survive on intellectual satisfaction. Rather, they must please their clients. In so doing, they reveal their classic conflict of interest: Client wins; principles lose (if necessary).

Their own rhetoric shows which master matters more. You don't see law firm websites advertising "polite lawyers who try their best to win consistent with overreaching ethical imperatives, but who refuse to adopt certain dishonorable methods to win you money." Nor do you see websites proudly describing their lawyers' refusal to countenance client fraud to win a case. No, ethical victories don't make good advertising material. Money victories do. Results sell, not principles.

I would like to see an honest law firm slogan: "We're all about results : You don't care how you get 'em… and neither do we."

In this environment, how can honor survive? When results are all that matter, how can a lawyer insist on principles that might threaten those results?