Friday, March 30, 2012

Detroit Negotiates with Unions

Story first appeared in The Detroit News.

Detroit-- The latest plan to keep Detroit from an emergency manager unveiled Thursday includes tough new terms for city employee unions that labor leaders vowed to fight.  This has piqued the interest of Dearborn Labor and Employment Lawyers in the area.
The City Council on Thursday got a first look at a proposed financial agreement crafted by state officials. The plan calls for negotiating or imposing tough new union contracts by July 16, but includes no new money requested by the Mayor to help the city restructure its finances.
Reaction was swift from union leaders, who said the proposal is more about politics than saving money. The chief negotiator for AFSCME Council 25, said their coalition of 30 unions have brokered significant savings with the mayor. Those agreements have yet to be approved by the City Council, and sources have said state officials don't think the concessions go far enough.  Without proper Union provisions, a Dearborn Labor and Employment Lawyer may be called in to review the facts.
The goal would be to build off a single template for all unions, including police and fire. The contracts would call for:
Promotions based on merit, not seniority, for some positions.
Restricted bumping rights and permission to outsource.
Alter work rules to support the city's financial restructuring.
Defined contribution retirement health care benefit for new hires. This opens up the possibility for addition of Home Healthcare Supplies to the template.
Consolidated departments to achieve cost savings.
An earlier version of the proposal union officials obtained Thursday included a provision to ban unions from suing or filing grievances over terms of the contract. That phrasing was removed from later versions. Union leaders said that provision would have devastated their representation of employees.  Local Dearborn Labor and Employment Lawyers are gearing up for proper defense and representation of factory employees.
A State Treasury Department spokesman defended the proposals.
A report this week from the state financial review team overseeing Detroit's finances indicated city officials have overstated potential savings from the earlier negotiated union concessions.
City officials said the proposed adjustments would save $102 million for fiscal year 2012 and $258 million in fiscal year 2013, states the review team's report.
The Chief Negotiator said the savings the mayor and the coalition of 30 unions negotiated are real and the severe proposal put forth Thursday isn't necessary. He said the city spent $2.1 million to verify the savings with a third party, Ernst & Young.
The Michigan Governor to date has shied away from battling with unions, despite pushes from Republicans nationwide over cost-cutting measures some call anti-labor. Indiana in January became the first manufacturing state to adopt so-called right-to-work laws, joining 22 states that allow employees at unionized businesses to opt out of paying dues.  Indianapolis Labor and Employment Lawyers followed the legislation process closely.
Ohio and Wisconsin have passed legislation limiting collective bargaining. Arizona is considering legislation to require annual approval by workers to deduct union dues from paychecks. And Utah is considering a bill to limit collective bargaining for wages and benefits.
Ballot fights are looming over right-to-work initiatives in several states, including Michigan. Unions in Michigan also are pushing several ballot initiatives for November, including one that would put collective bargaining rights for home health providers in the state constitution.

Tuesday, March 27, 2012

Defunct Doctor Dumps Private Records

Story first appeared in The Washington Post.

Overland Park, Kan.— More than 1,000 private abortion records from a defunct clinic have been found discarded in a recycling bin outside an elementary school near Kansas City, Kan., prompting a police investigation and outrage from people on both sides of the abortion debate.  This could amount to a  Wichita Medical Malpractice Lawyer investigating the data, which includes breach of doctor/patient confidentiality.
The patient records found Saturday came from Affordable Medical and Surgical Services in Kansas City, Kan., which closed after its doctor lost his medical license in 2005. The records detail names, birth dates, telephone numbers, Social Security numbers and the patients' health history, including if any abortions were performed, The Kansas City Star reported. They included patients from almost every county in the Kansas City area and beyond, from Topeka to Freeman, Mo.  This information lends itself to a very large invasion of privacy, and possible medical negligence that aid a Wichita Medical Malpractice Lawyer in their case against the defunct doctor in question.
Between 2000 and 2005, the doctor was either fined or disciplined four times by the Kansas Board of Healing Arts and inspectors who visited his clinic in 2005 and reported it was not clean.  This leads to substandard care being a possible factor, and again assists the ideas of a Wichita Medical Malpractice Lawyer building a claim against the doctor.
The daughter of the woman who found the records contacted the Kansas City Star after Overland Park police initially declined to respond to her call. The women did not want their names released.
Overland Park police were investigating and other agencies, including the Johnson County district attorney's office and the Kansas Board of Healing Arts, were seeking information about the handling of the documents to determine if they lend themselves to a Wichita Personal Injury Lawyer and their building case.
The doctor said he threw the personal documents into recycling bins at Brookridge Elementary School on Friday.  Kansas law requires that all medical records be kept a minimum of 10 years. Hundreds of the discarded records were dated after March 2002, The Star said. The defunct doctor said he dumped the records because they were old and that he thought they would be picked up quickly. The bins are emptied monthly.
The federal Health Insurance Portability and Accountability Act, or HIPAA, makes it a federal violation to release private medical information without patient permission or other authorization. The law does not dictate exactly how medical records should be destroyed but it specifically prohibits discarding records in public dumpsters unless they have been made unreadable.
It is unclear what actions might be taken against the unscrupulous doctor. Medical providers that don't transmit payment or other information to third-party payers electronically are not subject to HIPAA regulations. On Monday, the doctor said his clinic was cash-only, although some of the retrieved records clearly showed photocopies of insurance cards on the back page, The Star reported.

Auto Parts Supplier Exec Gets Prison Term

Story first appeared in the Detroit Free Press.

An executive with automotive supplier Denso, pleaded guilty and will serve one year and one day in prison for conspiring to fix prices and rig bids for heater control panels installed in cars, the U.S. Department of Justice announced Monday.

According to the charge, the involvement in the conspiracy lasted from at least as early as August 2006 until at least June 2009. He has agreed to pay a $20,000 criminal fine and to cooperate with the department's investigation.

Denso is the world's largest automotive supplier with sales of $37.7 billion for the year ended March 31, 2011. Its U.S. headquarters are in Southfield. The Japanese manufacturer makes a wide range of parts and technologies, including air-conditioners, fuel-injection and other engine control components, windshield wipers, horns, air bags and cruise control systems, as well as the heater control systems at the center of this charge.

In January, Denso agreed to pay a $78-million fine, while electrical component supplier Yazaki agreed to pay a $470-million fine and plead guilty as part of the largest antitrust case ever brought by the U.S. Department of Justice.

Yazaki's fine is the second-highest imposed on a company for price-fixing, the Justice Department said. The biggest was $500 million paid by Switzerland's F. Hoffmann-La Roche in 1999 for conspiring to raise vitamin prices.

The supplier also said its chairman, president and some board members and executive directors would voluntarily return 10% to 30% of their compensation for three months starting in February.

Four Yazaki executives pleaded guilty and agreed to serve prison time ranging from 15 months to two years.

The Justice Department previously settled with Tokyo-based Furukawa Electric, which agreed to plead guilty and pay a $200-million fine for price-fixing in the same probe.

The cases against Furukawa, Yazaki and Denso are all filed in U.S. District Court for the Eastern District of Michigan.

The settlements triggered a slew of civil lawsuits involving wire-harness systems that are making their way through the courts. Competing suppliers and car buyers say they were financially injured because of the price fixing involving the wire-harness systems and other components.

Although Justice Department officials have declined to say which automakers were harmed by the price-fixing, two of four Yazaki executives charged managed business with Toyota and Honda.

Currently, more than 50 suits are pending nationwide with at least a dozen in Detroit.

Friday, March 9, 2012

Two Parts of Alabama Immigration Law Appealed

First appeared in USA Today
A federal appeals court has blocked two more parts of a tough Alabama law that targets illegal immigrants.

One prohibited courts from enforcing contracts, including rental agreements, with people known to be in the country illegally, and the other banned state and local agencies from doing business with illegal immigrants, our Gannett colleagues at the Montgomery Advertiser report.

The 11th Circuit Court of Appeals blocked sections 27 and 30 of the law, known as HB 56. The court did not explain its reasoning in a two-page decision.  A Raleigh Immigration Lawyer has been watching the decisions.

In October, an 11th Circuit panel blocked a requirement that undocumented immigrants carry identification and that schools collect information on immigration status.

In November, two months after the law took effect, a lower court judge blocked the piece of Section 30 that called for denying registration permits for manufactured homes bought by people who couldn't prove their U.S. citizenship.

Although illegal immigrants left the state when the law took effect, some have begun returning despite the uncertainty, USA TODAY's Alan Gomez reported last month.

Mississippi Supreme Court Validates Barbour’s Pardons

First appeared in USA Today
The Mississippi Supreme Court upheld the pardons issued by former Gov. Haley Barbour during his final days in office, including several that freed convicted killers.

The Republican pardoned 198 people before finishing his second term Jan. 10, including four convicted murderers and a robber who worked as inmate trusties at the Governor's Mansion. Of those pardoned, 10 were in jail at the time.

Democratic Attorney General Jim Hood challenged the pardons. Hood argued before the Supreme Court on Feb. 9 that some pardons didn't meet the requirements of the Mississippi Constitution, which says people seeking pardons must publish notices for 30 days in a newspaper.

In a 6-3 opinion, the justices wrote "we are compelled to hold that — in each of the cases before us — it fell to the governor alone to decide whether the Constitution's publication requirement was met."

The 10 people who were incarcerated when Barbour pardoned them had the most at stake. Among those, five have been held in prison on a temporary restraining order pending the outcome of Hood's legal challenge. It was not immediately clear whether they would not be released.

The other five had already been released by the time Hood persuaded a lower court judge to issue that restraining order.

At the heart of the pardon dispute was Section 124 of the Mississippi Constitution, which says "no pardon shall be granted" by the governor until the convicted felon applying for the pardon publishes notice of that application for 30 days in a newspaper in or near the county where the crime was committed.

Hood contended that if ads weren't run in daily papers every day for 30 days, or weekly newspapers once a week for five weeks, the pardons weren't valid.

Barbour, who once considered a 2012 White House run, was limited to two terms as governor. In addition to the pardons, he also granted medical release and conditional clemency to some inmates, but they weren't required to give public notice.

Wednesday, March 7, 2012

LulzSec Hackers Busted

Last appeared in Mercury News
A group of expert hackers who attacked governments and corporations around the globe has been busted after its ringleader -- one of the world's most-wanted and most-feared computer vandals -- turned against his comrades and secretly became an informant for the FBI months ago, authorities announced Tuesday.

Five people, including a Chicago man, were charged in court papers unsealed in federal court in New York, and authorities revealed that a sixth person, Hector Xavier Monsegur, a legendary figure known in the hacking underworld as "Sabu," has pleaded guilty in New York, where he lives.

Authorities said it marked the first significant prosecution of major Internet hackers.

According to court papers, members of the group got their start as part of a large worldwide hacking organization known as Anonymous, which authorities said has been operating at least since 2008. Court papers accused Anonymous of a "deliberate campaign of online destruction, intimidation and criminality."

In chat rooms and on Twitter, Anonymous supporters erupted into a chorus of disappointment, confusion and anger. Some wondered whether the news was an elaborate fraud.

As members of Anonymous surveyed the damage Tuesday, one of its most popular Twitter feeds assured its followers that it was still OK.

"We're sailing close to the wind," the feed read. "Our crew is complete and doing fine."

Monsegur was portrayed in court papers as the ringleader of some of the group's more infamous deeds. Authorities said he formed an elite hacking organization last May -- a spinoff of Anonymous -- and named it "Lulz Security" or "LulzSec." "Lulz" is Internet slang that can mean "laughs" or "amusement."

Despite the organization's lighthearted name, authorities said Monsegur and his followers embarked on a dastardly stream of deeds against business and government entities in the U.S. and around the world, resulting in the theft of confidential information, the defacing of websites and attacks that temporarily put victims out of business.

Tax Evasion Results In Prison Time for Luxury Car Buyer

First appeared in Mercury News
A South Bay white collar criminal will spend 30 months in prison after pleading guilty to tax evasion, authorities said Tuesday.

The U.S. Attorney's Office said Gary Linn Packer, 51, did not report $8.8 million in stock earnings to the IRS after liquidating shares from his former company, Sunnyvale-based Network Appliance, in 2000. He was supposed to pay the IRS $1.8 million in taxes from the stock earnings, but concealed the profits in trusts and by using false identification numbers.

That year, Packer moved from San Jose and bought a $1.2 million home in Morgan Hill using a trust that was not registered with the IRS. He also used cash to buy an Audi TT, BMW X5 and Volkswagen Cabriolet, and a condo in Nashville, Tenn.

Most recently living in Wyoming, Packer pleaded guilty to one count of tax evasion in a San Jose court in November. On Monday, he was sentenced to 30 months on prison, followed by three years of supervised release, and ordered to pay $1.8 million in restitution.

Tuesday, March 6, 2012

Fraud Fines Must Be Paid By Drugmakers

First appeared in USA Today
The nation's largest drugmakers have paid at least $8 billion in fines for repeatedly defrauding Medicare and Medicaid over the past decade, but they remain in business with the federal government because they are often the sole suppliers of critical products, records show. A Minneapolis Defective Drug Lawyer has been following the case.

Pfizer, the maker of drugs that help alleviate arthritis and other ailments, has paid almost $3 billion in fines since 2002 and entered into three corporate integrity agreements with the Department of Health and Human Services aimed at preventing future fraud. It and other companies are fighting attempts by Congress to exclude them from government business because of their history of fraud.

Merck, another pharmaceutical giant, paid $1.6 billion in fines since 2008, Medicare and Justice Department records show, to resolve claims it was not paying proper rebates to the government.

Pfizer's 2009 settlement was for improperly promoting the use of drugs for purposes other than those for which they were approved by the government. Merck's 2008 settlement involved claims the company paid illegal kickbacks to health care providers in exchange for prescribing its drugs. A Charleston Defective Drug Lawyer is interested.

Government investigators say their hands are tied with the tools they have. They can exclude Pfizer and other pharmaceutical companies from providing medications to Medicaid and Medicare beneficiaries as punishment for bad behavior, but that would leave beneficiaries without drugs patented through a particular company.

Or they can fine the companies and force them to enter corporate integrity agreements that require government oversight and a promise not to defraud the government again — a promise that often goes unkept. An Indianapolis Defective Drug Litigation Lawyer is committed to these kinds of cases.

"We're seeing some of the big companies a second and third time," said Gregory Demske, assistant inspector general for legal affairs for Health and Human Services. "The corporate integrity agreement is not sufficient to deter further misconduct."

In addition, the cases are labor- and cost-intensive as the companies fight often for years to avoid an exclusion, Demske said.

To try to change that trend, the government announced in 2010 that, rather than exclude an entire company, investigators would go after individuals within a company. Demske said his organization, the Justice Department and the Food and Drug Administration have come up with some ideas to use within the scope of the rules — such as taking away a company's patent rights as a condition of a settlement. That could begin with cases being investigated now, he said.

Sen. Chuck Grassley, R-Iowa, introduced a bipartisan bill that would make it easier for the government to find a middle ground, saying the law now forces "the inspector general to use all-or-nothing, mandatory exclusion penalties against corporations that have committed fraud." The bill would allow the exclusion of individuals from working with the government even after they've left the company where the fraud occurred.  A Salt Lake City Defective Drug Lawyer finds this interesting.

Pharmaceutical companies altogether spent more than $200 million lobbying Congress in 2011, including $12 million spent by Pfizer. At least 12 pharmaceutical and medical device companies are lobbying specifically against a House bill, HR 675, that complements Grassley's.

None of the pharmaceutical companies —Abbott Laboratories, Pfizer or Bristol-Myers Squibb— contacted by USA TODAY responded to questions about their response to the government's proposed enforcement actions.

The industry's trade group, the Pharmaceutical Research and Manufacturers of America, says excluding an individual should occur only when there is "significant wrongdoing" that the individual knew about and did nothing to stop, said Matthew Bennett, the group's senior vice president.

Mets Owe Madoff Investors Upwards of $83 Million

First appeared in USA Today
The New York Mets' owners must pay up to $83 million to the trustee recovering money for Bernard Madoff investors, a judge said Monday, though he expressed doubt that the trustee will succeed in proving at a trial this month that he's entitled to as much as $300 million more.

U.S. District Judge Jed S. Rakoff issued his four-page ruling to narrow the subject of a March 19 trial in Manhattan that results from Trustee Irving Picard's effort to force the club's owners to pay as much as $1 billion into a fund established to repay thousands of investors cheated of billions of dollars during Madoff's decades-long fraud.

Last year, Rakoff had ruled that the team's owners wouldn't owe more than $386 million to other Madoff investors. He made it clear then that they would likely owe up to $83 million but said the trustee must prove that the Mets' owners "willfully blinded" themselves to Madoff's fraud to get more.

His ruling Monday determined that the exact amount up to $83 million won't be left to the jury but will be decided by him in a future written decision, likely after he hears more from lawyers on both sides.

Rakoff rejected a request by lawyers for the Mets' owners to say Picard was not entitled to more money, a ruling that would have eliminated the need for the trial.

But he said he "remains skeptical that the trustee can ultimately rebut the defendants' showing of good faith."

He said he was concerned that much of the evidence offered by both sides in court papers so far would not be admissible at trial.

"Conclusions are no substitute for facts, and too much of what the parties characterized as bombshells proved to be nothing but bombast," he wrote.

Amanda Remus, a spokeswoman for Picard, said the trustee and his lawyers were aware of Rakoff's order and were reviewing it.

The Mets did not immediately respond to a request for comment.

The trustee previously sued the Mets' owners, saying they had to know Madoff was acting illegally. Lawyers for the Mets' owners have repeatedly said that their clients had no idea Madoff wasn't investing their money as he said he was.

Nearly 5,000 investors were deceived in the fraud by the former Nasdaq chairman, who told them their $20 billion investment had grown to $68 billion by November 2008. Weeks later, he revealed his fraud, confessing that only several hundred million dollars were left.

In his lawsuit, Picard said the Mets' owners received $83.3 million in fictitious profits and $301 million in principal in the two years before a bankruptcy filing was made regarding the Madoff assets.

Rakoff's rulings limiting what Picard can collect have been encouraging to Mets co-owners Fred Wilpon and Saul Katz, who have said they were victims of Madoff's fraud. The Mets announced last year that they were considering selling up to 25% of the franchise because of "uncertainty" caused by the lawsuit. Despite the upcoming trial, the tension surrounding the team over the Madoff issue seems to have relaxed.

Wilpon said at an appearance in Port St Lucie, Fla. last week that the Mets' owners plan to keep the franchise "for a very long time."

He cited a slashed payroll and an encouraging outlook in the courts.

"When it started, there was a really big number out there and now — I'm not minimizing — but it's a different number," Wilpon said.

Madoff is serving a 150-year prison sentence in North Carolina for his multibillion-dollar fraud.

Cancer Society Embezzler Out of Prison

First appeared in USA Today
A former chief administrative officer imprisoned for stealing nearly $8 million from the American Cancer Society of Ohio more than a decade ago has been released and is on house arrest.

Daniel Wiant fled to Europe in 2000 after wiring $6.9 million in stolen funds from the organization to a bank account in Austria. He was brought back to face charges after he called his wife to tell her what he had done and she called police.

Wiant, now 47, pleaded guilty to four embezzlement-related charges. He was sentenced in 2001 to 13½ years in prison, but the sentence was shortened for good behavior. Authorities say he has been on house arrest since Feb. 1 and will begin five years' probation after the house arrest ends March 26.

A Dec. 31 posting on Wiant's Facebook page said that he would "start my new job Tuesday a fresh beginning for a new year," The Columbus Dispatch reported.

Wiant worked for the cancer society for six years before he was charged with stealing $6.9 million, money that later was returned to the charity. The FBI said he'd been stealing money from the organization for three years before that. He had taken about $1 million that he used for such things as adding pear trees to his yard, buying all-terrain vehicles and renting an apartment for a co-worker, authorities said.

Before the society hired Wiant, he had been convicted of credit card theft in the 1980s and the theft of $21,000 from a Hawaii food bank in the 1990s and had faked education and job credentials to get hired, according to the Dispatch.

"He was a criminal — pathological, by all accounts," said Greg Donaldson, a spokesman for the American Cancer Society in Atlanta. Donaldson helped the Ohio chapter deal with the crime and the negative publicity.

He said that what Wiant did "was a reminder that charities can be victimized and we have to be vigilant."

A spokesman for the U.S. Bureau of Prisons in Washington, D.C., said Wiant went to a prison in McKean, Pa., and then was transferred to Elkton, south of Youngstown in eastern Ohio. From Nov. 1 to Feb. 1, he was in a halfway house in the Atlanta area. Burke couldn't say why Wiant was sent to an Atlanta halfway house, but he said prisoners usually ask to be close to their families.

Prisons spokesman Chris Burke wouldn't comment on where Wiant is living. But information online indicates that Wiant's wife moved to Acworth, Ga., near Atlanta and that Wiant is living with her there, the newspaper reported.

Kathy Wiant pledged to remain loyal to her husband after his arrest, saying she would "eagerly await his return home" from prison.

There was no Acworth listing for the Wiants. Messages were left Monday by The Associated Press at a Georgia telephone number listed on the Web for a Kathleen Wiant and a Daniel Wiant. It was not immediately clear whether that was the correct number.

In addition to getting back the $6.9 million, the cancer society also received an insurance reimbursement and some restitution from Wiant, Donaldson said. Wiant also owes $1.5 million for a judgment from a lawsuit.

The charity has since instituted centralized financial management nationwide, Donaldson said.

Harassment Lawsuit for Paula Deen’s Brother

First appeared in USA Today
The former general manager of a restaurant co-owned by Paula Deen claimed in a lawsuit filed Monday she was sexually harassed and subjected to a hostile work environment rife with sexual innuendo, physical intimidation and racial slurs. A Chicago Employment Lawyer is very familiar with these kinds of lawsuits.

Lisa Jackson said in the lawsuit that her physician encouraged her to quit working at Uncle Bubba's Seafood and Oyster House because she suffered from panic attacks and other stress from working there. The restaurant is owned by Deen and her brother Bubba Hiers.

Jackson said in the lawsuit that Hiers routinely made inappropriate sexual and racial remarks and that she heard both Hiers and Deen use racial slurs. She also said in the lawsuit she saw Hiers violently shake a black employee and that he fostered an environment of intimidation.

A spokesman for Deen, who won a Daytime Emmy as Outstanding Lifestyle Host in 2007, declined to comment on the pending litigation, and Hiers didn't immediately return calls seeking comment.

Jackson, who is white, was hired at the restaurant in February 2005 and within months was promoted to general manager with a mandate from Deen to turn it into a success.

Hiers soon began targeting her with unwanted advances, she said, and he watched pornography in the small office the two shared. He also distributed pictures of two women having sex at an office meeting and complained about heavier staff members, the complaint said. A Salt Lake City Employment Lawyer considers this to be inexcusable.

She said Hiers made racially insensitive remarks and that his restaurant required black staff members to use the back entrance and banned them from using a customer restroom that white staffers were allowed to use.

During one meeting in July 2010, she said Hiers violently shook a black male kitchen worker. Deen later decided to invite the man to her mansion to smooth things over rather than to address her brother's conduct, the lawsuit said. In another incident, Hiers challenged his staffers to a fight, she said.

Jackson said she routinely suffered from panic attacks that often began when Hiers came to work each morning. The situation came to a head in August 2010 when Jackson said Hiers grabbed her face during a dinner for vendors at the restaurant and declared "I love you," then later screamed at her and spit in her face. A Boston Employment Lawyer finds these acts intolerable.

Jackson said she left her job days later after her doctor suggested quitting her job would improve her health. She said in the lawsuit, which seeks unspecified damages, that she "continues to endure immense pain and has suffered greatly at the hands of Defendants' outrageous and intolerable conduct."

Cyber Security Is Necessary for NASA

First appeared in USA Today
It sounds like the plot of a campy science fiction flick: Thieves steal a laptop containing the codes used to command and control the International Space Station.

Except it happened.

The March 2011 theft of the unencrypted computer was one of 5,408 cybersecurity incidents — many foreign-based — the space agency reported during the past two years, according to NASA Inspector General Paul Martin. A San Francisco IP Lawyer finds this curious.

The incidents, which include the installation of malicious software and unauthorized access to NASA systems, have caused disruptions and cost taxpayers millions in missing equipment and repairs.

Some cases are clearly more serious than others, such as the theft of space station algorithms, though there's nothing to indicate the ISS was affected in any meaningful way.

"The threat to NASA's information security is persistent and ever-changing," warned Rep. Paul Braun, R-Ga., who chairs a House Science, Space and Technology subcommittee that conducted a hearing on cybersecurity lapses Wednesday. "Unless NASA is able to continuously innovate and adapt, their data systems and operations will continue to be in danger."  A Boston IP Lawyer watches closely.

These incidents are among those the inspector general's office says have taken place since 2010:

—Terra and Landsat-7, both Earth observation satellites, "have each experienced at least two separate instances of interference apparently consistent with cyberactivities against their command and control systems."

—An unidentified NASA center released to the public 10 surplus computers connected to the space shuttle program that weren't properly sanitized and may have contained sensitive data.

—Intruders stole credentials for more than 150 NASA employees in one cyber attack, while another intrusion provided hackers access to key information and user accounts at the Jet Propulsion Lab in Pasadena, Ca.

—A Texas man pleaded guilty last year to hacking NASA computers, an incident that prevented some 3,000 registered users from accessing oceanographic data collected by the agency.

Martin told the House panel the agency's vulnerability stems from two issues: It's a high-profile target that generates plenty of sought-after data, and it offers potential hackers a wide array of entry points.  A Nasheville IP Lawyer is familiar with these issues.

NASA manages approximately 3,400 websites — nearly half of all the federal government's non-defense sites — and is home to some 176,000 individual e-mail addresses. Its assets include 550 information systems that control spacecraft, collect and process scientific data, and enable NASA to interact with colleagues and researchers in other agencies and universities around the globe, according to Martin.

"There are many gates to guard," NASA Chief Information Officer Linda Cureton told the House panel.

Sen. Bill Nelson, D-Fla., a member of the Intelligence Committee who rode on the space shuttle, said that while the country's national security computers are protected, he's concerned foreign hackers could infiltrate government computers through a back door provided by NASA or another non-defense agency.

"Of course it's worrisome," he said. "And that's what we're working on."

NASA has made some progress addressing problems Martin and his office have pointed out in the 21 audit reports his office has conducted over the past five years. Of the 69 recommendations the inspector general has made during that period, all but 18 have been fully addressed, officials said.

Martin said only 1% of the agency's laptops and other portable devices have been encrypted to prevent easy deciphering, which he called "very disturbing" given the highly sensitive nature of the information stored on them. More than half of the computers used government-wide are encrypted.

In addition, a risk assessment Cureton's office was supposed to have completed by August 2011 won't be finished until June.

"We are determined to improve NASA's capability to predict, prevent and effectively contain potential IT security incidents," she told lawmakers.

Cureton told the House panel the agency has taken a number of steps, including accelerating encryption of NASA laptops. But she said cybersecurity isn't taken as seriously as it should be because of "culture" issues. And much of the sensitive information is managed not by her office but by mission directorates.  A Pittsburgh IP Lawyer wonders who should be in charge.

Martin said Cureton's efforts have been hampered because she doesn't control much of the budget devoted to improving cybersecurity.

"As we've all seen in Washington," Martin said, "when you don't control the funding, you have a difficult time getting folks' full attention."

Monday, March 5, 2012

Google Insists New Policy is Legal

First appeared in Information Week
Google has consolidated its privacy policies, as it said it would, despite the concerns of regulators in the U.S., Europe, and Asia.

Alma Whitten, Google director of privacy, product and engineering, said in a blog post that the consolidation effort makes it easier to understand the company's privacy policy, enables a better experience for signed-in Google users, and leaves existing privacy controls intact.

Although EU Justice Commissioner Viviane Reding told the BBC that Google's privacy policy consolidation violates data protection laws, Google maintains that its changes are legally compliant.

"We are confident that our new simple, clear and transparent privacy policy respects all European data protection laws and principles," a company spokesperson said in an email. "It provides all the information required in Articles 10 & 11 of the directive, plus much additional information, and it follows the guidelines published by the Article 29 Working Party in 2004."

NYU Stern School of Business professor Arun Sundararajan says Google is moving in the right direction, but hasn't yet done enough to protect consumers.

"On the one hand, I do give Google credit for providing a greater level of transparency about what information they have about their consumers," Sundararajan said in a phone interview. "What Google isn't doing enough of is telling us what they're going to do with this information. That's a little troubling to me. The policy doesn't say enough about what limits Google will place on this information for advertising purposes. And beyond one small assurance they've given us [about not sharing personal information], we don't know how much they're going to share with marketing partners."

Sundararajan says he doesn't see Google's privacy policy consolidation as altering the privacy risks consumers face. "I see it as a move where Google is reducing its own risk. But I'd like to see them be more forthright in spelling out what they will and won't do with customer data."

Sundararajan suggests that Google's distinction between "personally identifiable information" and "non-personally identifiable information" is outdated, given the extent to which non-personally identifiable data can be correlated to identify someone.

"Re-identifying people based on their [anonymized] activity data is not hard and it's getting increasingly easier," he said.

Sundararajan proposes that companies and regulators adopt an "intent-based" approach to privacy as an alternative to burdensome rules that attempt to define permissible privacy practices.

As he sees it, companies should consider the intention of the customer who provided the data as a guideline for how the customer's data can be used. If a customer signs up for an online service with an email address, for example, the company should be able to use that address to contact the customer about the service but not to identify the customer for an activity profile or some other purpose.

"If companies start to align the way they use their data with the intent the customer had when providing the information, this will go a long way toward mitigating the privacy risk," he said. "There are good-intentioned firms out there that just don't have good guidelines about how to responsibly manage consumer data."

Friday, March 2, 2012

BP Trial on Hold for Settlement Talks

First appeared in Yahoo! News
BP Plc has delayed by one week the start of a massive trial to decide who should pay for the 2010 Gulf of Mexico oil spill, to allow more time to cut a deal with tens of thousands of businesses and individuals affected by the disaster.

In a statement on Sunday, BP said the start date for the trial in New Orleans federal court has been pushed back to March 5 from February 27.

The Plaintiffs' Steering Committee (PSC) represents fishermen, hoteliers, condominium owners and other local businesses and individuals who say their livelihoods were damaged by the April 20, 2010 explosion of the Deepwater Horizon drilling rig and subsequent oil spill.

Eleven people died, and 4.9 million barrels of oil spewed from the mile-deep Macondo oil well, in by far the worst offshore U.S. oil spill.

"BP and the PSC are working to reach agreement to fairly compensate people and businesses affected by the Deepwater Horizon accident and oil spill," BP said in a statement.

A BP spokeswoman declined to comment further on the talks. Lawyers for BP and the steering committee did not immediately respond to requests for comment. A spokeswoman for the U.S. Department of Justice, which is also suing BP, declined to comment.

In an order dated Sunday, Barbier said the adjournment was appropriate "for reasons of judicial efficiency and to allow the parties to make further progress in their settlement discussions."

A BP settlement with the businesses would remove a significant portion of the complex litigation, the trial of which was expected to take nearly a year.

But the U.S. government has sued BP and others for Clean Water Act and other federal violations, which could result in fines totaling tens of billions of dollars. Gulf states are also seeking compensation for their losses.

Apart from BP, which owned 65 percent of the Macondo well, the main defendants are Vernier, Switzerland-based Transocean Ltd, which owned the Deepwater Horizon rig, and Houston-based Halliburton Co, which provided cementing services for the well. They are also suing each other. Several other companies are also involved in the trial.

BP said earlier this month it had set aside $6.1 billion to cover claims by businesses. Lawyers for those plaintiffs said the amount was too low to cover their clients' actual losses, and that BP should also award punitive damages, which the oil company believes are not warranted.

BP has accepted responsibility for the disaster. It has projected its total legal and cleanup costs at roughly $43 billion.

Chief Executive Robert Dudley has said BP is willing to settle for reasonable terms, and many industry analysts and experts say a quick settlement is in the London-based oil company's interest.

The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

US Wants AIG Lawsuit Dismissed

First appeared in CNBC
The U.S. government has asked a court to dismiss a lawsuit relating to its 2008 takeover of American International Group that was filed by a company run by former AIG Chief Executive Maurice Greenberg, court documents showed.

In November, Greenberg's company, Starr International Co, sued the U.S. government for $25 billion, calling the 2008 federal takeover of the insurer unconstitutional.

Starr sued the government in the U.S. Court of Federal Claims in Washington, D.C., which handles lawsuits seeking money from the government. It brought that lawsuit on behalf of itself and other AIG shareholders.

The lawsuit marks an unusual effort to force the government to pay shareholders, who have seen AIG's stock price tumble since the middle of 2007, when the insurer's risky bets on mortgage debt through credit default swaps began to falter.

Greenberg had led AIG for nearly four decades prior to his 2005 ouster. Starr once owned 12 percent of AIG.

In a filing with the U.S. Court of Federal Claims in Washington, D.C., on Thursday, the government said although Starr may disagree with the terms to which AIG agreed, any loss resulting from that agreement should be borne by AIG and its shareholders, and not the public.

"Starr demands that the court second guess AIG and rewrite the rescue agreement by making American taxpayers pay an additional $25 billion, based upon a market valuation of AIG after the rescue," the government said in the filing.

The U.S. government argued that AIG had asked and agreed to be rescued, "electing to save itself from a failure of its own making."

AIG [AIG  29.66 ^ 0.21  (+0.71%) ], which was once the world's largest insurer by market value, was rescued by the U.S. government from the verge of collapse at the height of financial crisis in 2008. AIG's bailouts eventually totaled $182.3 billion.

The $25 billion estimate reflects what Starr called the value of the government's stake on January 14, 2011, when it swapped AIG preferred stock for 562.9 million common shares.

The cases are Starr International Co v. U.S., U.S. Court of Federal Claims, No. 11-00779.

Former AIG CEO Files Lawsuit Against US for Alleged Unconstitutional Takeover

First appeared in CNBC
A company run by former American International Group Chief Executive Maurice "Hank" Greenberg Monday filed a $25 billion lawsuit against the United States, claiming that the government takeover of the insurer was unconstitutional.

In its complaint, Greenberg's Starr International said that in bailing out AIG [AIG  29.45 ] and taking a nearly 80 percent stake, the government failed to compensate existing shareholders. It said this violated the Fifth Amendment, which bars the taking of private property for public use without just compensation.

"The government's actions were ostensibly designed to protect the United States economy and rescue the country's financial system," Starr said. "Although this might be a laudable goal, as a matter of basic law, the ends could not and did not justify the unlawful means employed."

The United States, it went on, "is not empowered to trample shareholder and property rights even in the midst of a financial emergency."

Monday's lawsuit was filed with the U.S. Court of Federal Claims in Washington, D.C., which handles lawsuits seeking money from the government.

The $25 billion estimate reflects what Starr called the value of the government's stake on Jan. 14, 2011, when it swapped AIG preferred stock for 562.9 million common shares.

The Treasury Department did not immediately respond to a request for comment. AIG spokesman Mark Herr declined to comment. AIG was named as a nominal defendant in the lawsuit.

Once the world's largest insurer by market value, AIG accepted $182.3 billion of federal bailouts beginning on Sept. 16, 2008, amid a liquidity crisis spurred by its exposure to risky debt through credit default swaps.

The government's stake in AIG has fallen to about 77 percent. AIG itself has sued Bank of America [BAC  8.12 ] for $10 billion over alleged losses on mortgage securities.

Greenberg left AIG in March 2005, after nearly four decades at the helm, amid questions by regulators over its accounting practices.

AIG in 2006 paid $1.64 billion to settle federal and state probes into its business practices, and in July 2010 agreed to pay $725 million to settle a shareholder lawsuit accusing it of accounting fraud and stock price manipulation.

The case is Starr International Co et al v. U.S., U.S. Court of Federal Claims, No. 11-00779.