Category: Law and Lawyers

Devin Nunes v Fusion GPS

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Devin Nunes

What are the limits of a congressional committee’s power?

That is the question posed by the actions of Rep. Devin Nunes who is using — abusing, some say — his power as chairman of the House intelligence committee to investigate Fusion GPS, the company that produce the Steele dossier.

In its purported investigation of Russian meddling in the 2016 election, the committee has issued a single subpoena for financial records. That subpoena went to Fusion GPS’ bank and is now the subject of a lawsuit in U.S. District Court in Washington D.C.

You’ll recall that Chairman Nunes worked on the Trump campaign and purportedly recused himself from his committee’s Russia investigation. But he is unable to restrain himself when it comes to Fusion GPS. The subpoena to the firm went out with his signature on it.

Fusion GPS says the subpoena, which demands years of records, is little more than a transparent effort by Chairman Nunes to expose its clients — even those that had nothing to do with Russia — and destroy the secretive company’s business model.

It’s worth noting that Deutsche Bank, which has all sorts of shady dealings with Russia and continued lending to Trump even after he sued them, got a pass from Chairman Nunes’ committee.

In a more recent court filing a few days ago, lawyers for Fusion GPS make the claim that Chairman Nunes is actively working to undermine his own committee’s investigation:

There is evidence that the Committee is coordinating with the President, his personal lawyers, and the Senate Judiciary Committee to misdirect attention to Fusion and its associates in an effort to punish and discredit Fusion, due to their perceived role in exposing the ties between the Trump campaign and the Russians. This coordinated effort includes the subpoena to Fusion’s bank and the apparent leaks from the Committee, and it has been amplified in recent days by attacks on the FBI and Justice Department by members of Congress, the President, and his lawyers.

In its pleadings to the court, Fusion GPS cites the Supreme Court ruling in Watkins v. United States. This case involved John Watkins, a labor organizer, who in 1954 was subpoenaed to testify before Sen. Joe McCarthy’s House Committee on Un-American Activities. Watkins answered questions about his own activities in the Communist Party but he refused to answer questions about other people.  He was convicted of contempt of Congress, but appealed his conviction saying Congress had abused its powers.

The Supreme Court agreed, ruling 6-1, that Congress’ power to investigate was broad, but not unlimited.  “No inquiry is an end in itself; it must be related to, and in furtherance of, a legitimate task of the Congress,” the court ruled. “Investigations conducted solely for the personal aggrandizement of the investigators or to ‘punish’ those investigated are indefensible.”

Indefensible seems an apt work to describe Chairman Nunes’ investigation of Fusion GPS.

 

Mark Cuban files brief supporting … Ray Lucia?

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What was I thinking?

 

Update: A federal appeals court denied Ray Lucia’s appeal to have his lifetime ban overturned in August 2016.

Mark Cuban, the outspoken Dallas Mavericks owner, is a regular on Shark Tank, a show where he’s regularly pitched by entrepreneurs seeking to expand their businesses.

Cuban and the other investors say “I’m in” or “I’m out” depending on whether they like the pitch or not.

Cuban is obviously a savvy investor, but he’s an explosive guy. He’s known in the sports world for his outbursts at NBA officials and referees that have cost him more than $1 million in fines.

Today, I learned that Cuban has filed a friend of the court brief on behalf of Ray Lucia, a former San Diego investment adviser who was permanently banned from trading by federal securities regulators. This legal brief is the courtroom equivalent of an angry outburst at NBA official.

Cuban filed his brief this month in Lucia’s appellate lawsuit against the U.S. Securities and Exchange Commission before the D.C. Circuit Court of Appeals.  Lucia argued that his lifetime ban should be thrown out since his case was heard by an administrative law judge, instead of an appointed officer, as required by the U.S. Constitution.

His brief, filed Feb. 8, states, “As a first-hand witness to and victim of SEC overreach, Mr. Cuban has an interest in supporting petitioners’ appeal in this case, and in particular demonstrating that both statutory language and legislative history clearly show that Congress specifically intended that SEC hearings only be held before constitutional officers.”

Seems like weak stuff to me, but Mark Cuban is a vindictive fellow and he has an axe to grind.

The SEC accused Cuban of insider trading when he sold his stake in a Canadian Internet company to avoid a $750,000 loss. Cuban maintained his innocence, and was acquitted by a federal jury in Texas three years ago.

Cuban goes on to state, “When the laws are applied inconsistently or the process by which they are enforced is rigged to favor the government, capital formation is impeded because market participants do not have clear rules for understanding their investment risks.”

This is the point where I say “I’m out.” Ray Lucia wasn’t some bold entrepreneur chasing the next big thing. He was making millions fleecing retirees out of their nest eggs.

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Ray Lucia addressing the crown at Sean Hannity’s Freedom Concert in 2010.

I started writing critically about Lucia in 2010 after his attorney  threatened to sue me for $300,00 . I figured that if someone would bother with a bozo like me something must be seriously wrong.  Turns out, I was right.

Back then, Lucia was at the height of his power. He had thousands of accounts and $300 million in assets under management. In the 12 months leading up to January 31, 2010, his family of companies reported $14.1 million in gross income, according to court records.

Lucia made money mainly by collecting commissions on those who fell for his “Buckets of Money” strategy. He pitched retirees at flashy seminars, often with the help of his buddy, actor Ben Stein. 

Elderly clients were convinced to invest in non-traded real estate investment trusts (REITs) that locked away their money for years. That’s not a great position for an elderly person who needs liquidity, but when REITs are generating $8.7 milllion in gross commissions for Lucia’s companies in 2010, you might overlook such details.

Lucia assured his clients they could retire in comfort because he had backtested his “Buckets of Money” strategy and it was based on “science, not art.”  The SEC called his bluff and today, Lucia says he is nearly bankrupt.

Someone, however, must be paying for Lucia’s legal team at Gibson, Dunn & Crutcher, one of the country’s top law firms. Is that you Mark?

Saudi Takedown Notice

I have received a letter from a law firm requesting that I takedown an affidavit filed in New York State Supreme Court that listed $1 billion worth of properties secretly owned by HRH Prince Abdul-Aziz bin Fahd, the youngest and favorite son of King Fahd, and his relative, Sheik Khalid N Al Assaf.

I downloaded the document while it was publicly available on the court’s website and posted it here after I read an article about it in Britain’s Independent newspaper. The affidavit has since been sealed and removed from the court’s website.

Attorney Howard Kaplan of Arkin Kaplan Rice LLP says the affidavit “contains or purports to contain obviously proprietary and sensitive business information. It is extremely detrimental to our clients’ interests to have this confidential information still available on and downloadable from your blog side. Moreover, the Hill affidavit itself is not only one-sided but, in many instances, demonstrably false.”

I am considering Kaplan’s request and would like to hear from any readers as to whether they believe there is any value in having this information remain publicly available.

Full disclosure: Kaplan’s partner, Stanley Arkin, and I met socially, but we have not communicated in years.

 

Saudi Takedown Letter

US: Brent Wilkes Is Still a Douchebag

In my last post on Cunningham briber Brent Wilkes, I noted that he has been playing poker and farting around while his team of court-appointed attorneys fights to keep him from serving a 12-year sentence for plying Duke with hookers, lavish trips to Hawaii in exchange for defense contracts.

In court papers filed ahead of a hearing granted by the 9th Circuit Court of Appeals, prosecutors say Wilkes has been doing more than that: Wilkes has been committing crimes by stealing more than $100,000 from the pension fund of his now defunct company to pay his living expenses.

Since Wilkes’s release from custody on January 5, 2009, Wilkes has engaged in additional fraudulent conduct: just as he once raided his children’s college funds to obtain operating cash, he has unabashedly raided the Wilkes’s Corporation’s employee benefit plan to obtain spending money for himself – while failing to reimburse the public for his taxpayer-funded attorneys.

Update: After a day-long hearing, Judge Larry Burns decided that Wilkes has to go to jail on Friday unless the 9th Circuit Court of Appeals saves his ass again.  (U-T San Diego)

US: Brent Wilkes Belongs in Jail

Brent "The Enigma" Wilkes Continues to Drain Taxpayers

Another Winning Hand for "The Enigma"

It’s been a long time since we heard from Brent “The Enigma” Wilkes. But the Enigma is back, baby!

Last week, the 9th U.S. Circuit Court of Appeals granted Wilkes a new hearing in his case in San Diego federal court.

Wilkes, you may recall, was the sleazy defense contractor at the center of the Randy “Duke” Cunningham bribery trial. Cunningham steered defense contracts to Wilkes, who used the money to live high on the hog. He was poker buddies with Kyle “Dusty” Foggo, once the No. 3 guy at the CIA.

In 2008, Wilkes was convicted of bribing Cunningham with prostitutes and other goodies and sentenced to 12 years prison. By all rights, he should be there. But Wilkes, the master manipulator, continues to game the system.

The 9th Circuit allowed Wilkes to go free on bond pending his appeal. While Cunningham, Foggo and others do time, Wilkes runs around playing poker at San Diego casinos (where he goes by the nickname “The Enigma”). Meanwhile, his taxpayer-funded attorneys bombard federal prosecutors with reams of paper on his behalf. What a fucking waste.

Now it looks like the legal maneuvering by Team Enigma will drag into a fourth year. Your taxpayer dollars bought Wilkes more time because The Enigma’s lawyers argued successfully that the judge presided over Wilkes jury trial failed to read the minds of the judges 9th Circuit Court of Appeals.

The trial judge, Larry Burns, declined to grant immunity to one of the government’s witnesses that Wilkes wanted to call for his defense. According to the 9th Circuit, this was a no-no because Burns failed to apply the 9th Circuit’s holding in a separate, unrelated case that was decided after Burns made his ruling. Wow. Just wow.

All of Wilkes other arguments were brushed aside, including one that I found particularly interesting: Why was Cunningham never called to testify. According to prosecutors, “one of the reasons the Government did not call Cunningham at trial was because prosecutors did not trust him to refrain from fabricating testimony that he believed would help the prosecution (and thus enhance his chances for a reduced sentence).”