Notice the co-author - Jerome R. Corsi, PH.D.
Posted on 10/06/2005 10:22:32 AM PDT by SirLinksalot
Harriet Miers at center of investment fraud
Jerome Corsi
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Posted: October 6, 2005 1:00 a.m. Eastern
© 2005 WorldNetDaily.com
"She's a woman of principle and deep conviction," President Bush pleaded on Tuesday in the Rose Garden, trying desperately to justify his nomination of his White House counsel, Harriet Miers, to the Supreme Court. Somehow, the president's praise belies the record of the corrupt Dallas law firm Ms. Miers managed before being named by Gov. George W. Bush to the Texas Lottery Commission.
While Miers was co-managing partner of Locke, Liddell & Sapp, the firm was involved in a $30 million investment scam for which Miers' firm had to pony up $22 million to settle an investor suit that the firm aided in defrauding the investors. All this happened on Harriet Miers' watch.
The case involves Russell Allen Erxleben, a University of Texas football player who shares a record for the longest field goal in NCAA history. Erxleben played 10 seasons in the NFL as a place kicker, first for the New Orleans Saints, then for the Detroit Lions. He never made the Pro Bowl.
Then, in 1977, he set up an investment firm under the name Austin Forex International. The idea was to trade in international currencies. Unfortunately, Erxleben ran a Ponzi scheme which ended up defrauding investors of some $33 million. Locke, Liddell & Sapp were more than passive professional advisers – the firm provided legal documents that Erxleben used to convince investors and potential investors the deal was legit and their investments were secure.
On Sept. 18, 2000, Denise Voigt Crawford, the Texas Securities Commissioner, was able to announce that Russell Allen Erxleben had been sentenced by U.S. District Court Judge James R. Nowlin to a total of 84 months in federal prison, a $1 million fine, and $28 million in restitution in connection with his conviction for one count of conspiracy to commit securities fraud, mail fraud and money laundering, and a second count of securities fraud in connection with his activities as president of Austin Forex International, Inc.
On Oct. 13, 1999, a suit had been filed in Travis County alleging that Miers' Dallas firm had developed work product including internal memos and notes that aided Austin Forex International in their scheme to defraud investors. When the case naming the law firm as a defendant surfaced in 1999, Harriet Miers was almost as brave in support of Locke, Liddell & Sapp as President George W. Bush was of her in his Rose Garden press conference defense of his nomination. "Locke Liddel has done nothing improper and in our judgment never should have been named as a defendant," she told the press at the time.
Still, on April 14, 2000, Locke Liddel agreed to pay $22 million to settle the suit. Bankrupt.com noted that the amount was so high because court authorities approving the settlement believe that Locke Liddel's behavior in the fraud was so outrageous that an example needed to be made of the firm to serve as a warning to other firms that they have an obligation to take action when they become aware that a client's actions are causing harm to third parties. Moreover, no firm can ever participate in a client's fraud, whether by advice and internal memos, or by guidance which ends up being communicated to clients.
Think about it. Erxleben's scheme was slick. Here was a famed University of Texas football player with NFL credentials, backed by a prestigious Dallas firm, peddling sure-to-win arbitrage currency plays to investors who thought they couldn't lose. In the first stage of a Ponzi, everybody wins and the word-of-mouth alone is good enough to expand the scheme to proportions where no mortal can manage, regardless of how brilliant they are. What will Harriet Miers do on the Supreme Court – recuse herself from any cases involving the Securities and Exchange Commission or investment fraud? We wonder how many seniors lost their lifetime savings in the currency scam because they relied upon Locke Liddel to give honest advice.
According to Bankrupt.com, the case was viewed as a test of the Texas Supreme Court's April 1999 ruling that a lawyer can be sued by a non-client for negligent representation. This ruling only applies if the lawyer's actions invited the non-client to rely upon the lawyer's fraudulent opinions and misrepresentations. Managing a law firm that advises a Ponzi scheme on how best to defraud investors of $33 million is hardly an admirable credential for confirmation to the U.S. Supreme Court.
In the 2004 presidential campaign, John Kerry underestimated the degree to which the Swift Boat Veterans for the Truth remembered his conduct during the Vietnam War and still held resentments sufficient for them to conclude that he was "Unfit for Command." Who took the time to vet Harriet Miers for President Bush? Or, did President Bush think we would all simply roll over and accept his "stealth" nomination simply because he begged "Trust me"?
Maybe President Bush should be reminded of the admonition of a true conservative who preceded him to the nation's highest office: "Trust, but verify." That motto seems more applicable in the present case. Mr. President: Please withdraw this dreadful nomination. There are highly qualified conservatives with stellar credentials who merit your consideration.
Joe Farah is an idiot, and because he runs WorldNetDaily I never read the rag.
So you are saying that the law firm she was a MANAGING PARTNER of did not pay a $22 million settlement to resolve charges that they aided fraud? I thought this was established fact - if you have information to the contrary you should share it with everyone.
All snarkiness aside, this is a US Supreme Court appointment - how is she going to look when a Senator asks her how this sort of thing happened on her watch without her having a clue, or worse, with knowledge of it happening?
This is a problem.
My guess is that the defendant was broke.
This is about as credible as Chairman Hao's recent "salami" insinuation.
I can't imagine that those who authorized these memos didn't know that to offer such an opinion is to assume liability for the truth of the opinion. One would think that a large law firm with a lot to lose would have emplaced systems to catch such things with a review process involving a signature from a managing officer.
We'll see. Right now, it looks like it has the potential to get ugly.
Information coming from World Net Daily should always be confirmed from other sources before any conclusion is drawn. That's my practice. I won't comment on any WND story until I've been able to check other sources.
It is an unreliable publication.
Exactly. Anybody who has ever worked a day in a professional services firm knows it. It happens all the time.
If there was any true wrongdoing (participation in fraud) there would have been criminal indictments, (anyone remember Arthur Anderson) not merely a monetary settlement. There would have been disbarments. The firm would have gone under. None of this seems to have happened in this case.
Notice the co-author - Jerome R. Corsi, PH.D.
Of course he has not the grace to admit an error and pull the appointment.
She was a MANAGING PARTNER but she was unaware of cases being managed by the firm she was a part of? The story may not be true and I will wait to hear it from several sources before determining that it is.
I'm just thinking that the story that she is innocent because she did not know what was happening is not going to fly. Even if it is true.
Agreed and agreed. I do not support her nomination, but this is a low blow and there is absolutely nothing here to suggest she had any involvement in this. Nothing.
He may have agreed, but who knows if he actually had the means to do so? Defendants often agree to restitution with the understanding they will never have the ability to repay.
I hate the idea of linking to a paid Soros stooge, but I believe the O'Neill quotes are accurate:
"During an appearance on MSNBC's Scarborough Country on August 10 with substitute host Pat Buchanan, when asked by Buchanan about some of Corsi's more bigoted statements, O'Neill downplayed Corsi's role in writing the book, claiming that he was "simply an editor and not really any sort of co-author" and complained about "stories in circulation about his e-mails where he made stupid statements."
On August 11, on CNN's Wolf Blitzer Reports, when Blitzer asked O'Neill if he would like to "disassociate" himself from Corsi's comments "which appear to be anti-Muslim, anti-Jewish, anti-Catholic," O'Neill quickly responded, "Oh, absolutely" -- but then O'Neill proceeded again to downplay Corsi's role. "Corsi acted as sort of an editor of our book. ... He simply helped us in editing the book," O'Neill said. When Blitzer returned, asking, "All right, but he's listed as the co-author of the book, isn't he?" O'Neill admitted that Corsi was listed as the book's co-author but again claimed that he performed only "a function in editing, in -- particularly in the second half of the book, in historical research, because he had done a great deal of research on the anti-war movement, the Vietnam Veterans Against the War, but not in the Vietnam section of the book."
http://mediamatters.org/items/200408120005
And, indeed, a lot of the VVAW research Corsi is cited as doing was first done by others.
Jerome Corsi disparages Bush at every turn? I seem to remember a year ago on FR he was our hero for telling the truth about John Kerry. And now?
He's not my hero; I like truth -- and from what I remembering, he was sorely lacking in personal truthfulness.
But since you brought it up, I was speaking of Farah and WND.
I've read through the article now and I am beginning to agree with your assessment. The article brings up the case, and the fact that Miers was managing partner, but it never demonstrates a real link between Miers and the wrongdoing. Some have said that it is purely guilt by association, but that's not a legitimate argument because she was the managing partner and bore a lot of the responsibility for what occurred under her watch. That being said, as you pointed out, it has not been demonstrated that ANY of the wrongdoing occurred under her watch. Corsi may be a credible source, but he has not convinced me, someone very critical of the President's appointment of Miers, that this controversy has anything at all to do with Miers beyond a very weak association.
Just checked and confirmed she was not named as a defendant in the lawsuit, meaning she was not one of the lawyers allegedly abetting the fraud. At worst she was one of several hundred other lawyers in the same firm as the alleged bad guys.
I was pointing out that Farah did not write the article, Jerome Corsi did.
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