THOSE SEX HARASSMENT LAWSUITS AGAINST AMERICAN APPAREL CEO DOV CHARNEY WERE MOSTLY BOGUS, IT TURNS OUT

Original Story:  Business Insider

Some people owe American Apparel CEO Dov Charney an apology: The vast majority of the sexual harassment claims made against him have come to nothing.

A couple of years ago, Charney's name was synonymous with sexual harrassment — he was accused at one time in seven different cases of unwanted sexual contact with female staffers or the models he shoots for the chain's advertising.

Most notoriously, one woman, Irene Morales, claimed she was briefly kept as Charney's sex slave inside his Los Angeles apartment.

Fast forward to today and it turns out most of the claims against Charney were bogus.

In American Apparel's annual report — which contains an update of the litigation against Charney and the company — only one very old case remains outstanding in court. That case, filed in 2006 by Sylvia Hsu, doesn't even have any specific allegations against Charney — it's a class action on behalf of all female employees and it cites an unidentified co-worker as a defendant.

The annual report describes three harrassment cases in arbitration. One was settled "with no monetary liability to the Company." And, "The Company recently prevailed on the sexual harassment claims in another of these cases." (Normally, when companies settle cases they pay to make them go away, to avoid embarrassing facts from coming out. The fact that AA hasn't made any payout so far on the harrassment claims suggests Charney's defense was a strong one.)

That leaves the Hsu case and one other case in arbitration. Here's the company's update:

The Company has previously disclosed an arbitration filed by the Company on February 17, 2011, related to cases filed in the Supreme Court of New York, County of Kings (Case No. 5018-1) and Superior Court of the State of California for the County of Los Angeles (Case Nos. BC457920 and BC460331) against American Apparel, Dov Charney and certain members of the Board of Directors asserting claims of sexual harassment, assault and battery, impersonation through the internet, defamation and other related claims.  The Company recently settled one of these cases with no monetary liability to the Company.  The Company recently prevailed on the sexual harassment claims in another of these cases.  While the ultimate resolution of the remaining claims cannot be determined, in light of the favorable ruling in one of these cases, the amount of settlement in the other of these cases, and based on information available at this time regarding the remaining cases, we believe, but we cannot provide assurances that, the amount and ultimate liability, if any, with respect to these remaining actions will not materially affect our business, financial position, results of operations, or cash flows.

COURT STRIKES BLOW TO TENURE

Original Story; WSJ.com

LOS ANGELES—A California judge declared the state's strong teacher-tenure laws unconstitutional in a rebuke that promises to spur similar challenges around the country.

The student plaintiffs in the lawsuit against the state and two teachers unions successfully argued that statutes protecting teacher tenure, dismissal procedures and "last-in, first-out" layoff policies serve more often to keep ineffective instructors in the schools—hurting students' chances to succeed.

In Tuesday's decision in Vergara v. California, Los Angeles County Superior Court Judge Rolf M. Treu cited the Supreme Court's 1954 Brown v. Board of Education "separate but equal" ruling, writing that the laws in this case "impose a real and appreciable impact on the students' fundamental right to equality of education."

The unions in the case—the California Teachers Association and the California Federation of Teachers—said they planned to appeal the ruling. The laws at issue will remain in effect pending that appeal.

The case seems certain to reverberate to other states. U.S. Education Secretary Arne Duncan called the ruling "a mandate" for lawmakers and education leaders to address "practices and systems that fail to identify and support our best teachers and match them with our neediest students."

California has some of the strongest teacher-employment protections in the nation, and is one of only 10 states that require seniority be considered in layoff decisions. It also is one of five states where tenure can be earned within two years or less.

The court found in Tuesday's decision that as a result of that policy, "teachers are being released who would not have been had more time been provided for the process"—hurting not only students, but also many younger teachers.

The ruling also agreed with the plaintiffs' arguments that the poorest-quality teachers tend to end up in economically underprivileged schools and "impose a disproportionate burden on poor and minority students." Judge Treu, who was appointed by Republican Gov. Pete Wilson, found all five of the statutes challenged in the case to be unconstitutional.

William Koski, a law professor at Stanford University, said the case will have "ripple effects" nationally. "We are going to see some litigation" in other states, he said, "and it's going to raise some pretty thorny issues about the role of courts and the judiciary in teacher employment policies and more specifically in education policies."

Frank Wells, a spokesman for the California Teachers Association, said, "We don't believe the court is the place to be making these kinds of policy decisions," adding that the state legislature is currently working on ways to amend the laws in question.

Marcellus McRae, a lawyer representing the student plaintiffs in the California case, called the ruling "an enormous validation and recognition of the fundamental constitutional right of all California students to equal educational opportunity," describing the case as "a catalyst for a discussion at the national level."

Dave Welch, a Silicon Valley entrepreneur who funded the nonprofit advocacy group Students Matter, which brought the student plaintiffs together and filed the lawsuit, said after the ruling that it would be "within our realm to look at filing lawsuits in other states." Ted Olson, a U.S. solicitor general under President George W. Bush, leads the legal team.

Mr. Welch said Students Matter will "work tirelessly ourselves, as well as with other organizations" to "continue to fight for kids' rights to get what they deserve—a good education—throughout the country."

Research has pointed to teacher quality as the biggest in-school determinant for student performance. In recent years, many states have moved to simplify dismissal procedures for ineffective teachers and to encourage districts to consider teacher performance in layoff decisions rather than relying solely on seniority.

Such efforts to overhaul dismissal procedures in California failed in the legislature, so students and their advocates took the case to court—a novel way to test the longstanding state policies and one that could now become a template for a broader push. The trial, which ran for more than 30 days, concluded in late March.

"This is a huge deal," said Sandi Jacobs, a policy director for the National Council on Teacher Quality, a privately funded group that aims to change states' teacher-employment policies. "This has a huge ripple effect nationally in telling policy makers that policies that harm students can be challenged," said Ms. Jacobs, who testified on behalf of the plaintiffs in the case.

Ms. Jacobs's group points to Florida, Indiana and Colorado as having what it considers to be best-practice policies where classroom performance is a "top criterion" to be considered in layoff decisions.

Randi Weingarten, president of the American Federation of Teachers called it "a sad day for public education," saying the decision focused on a small number of bad teachers, and "strips the hundreds of thousands of teachers who are doing a good job to any right to a voice."

California school districts employ roughly 280,000 full-time equivalent teachers, and the average annual teacher's salary is just under $70,000. One in eight public-school students in the nation attend California public schools.

James Ryan, dean of Harvard University's graduate school of education, said the verdict "will likely cause lawyers in other states to think about bringing similar suits." But he pointed out that the decision explicitly called on the state Legislature to fix the unconstitutional statues at issue. As a result, there will likely be "back-and-forth" between the Legislature and courts for many years to come.

"This has a long way before it's over in California and it hasn't even started yet in other states," Mr. Ryan said.

THE SCANDAL AT THE VATICAN BANK

Original Story: FT.com

An 11-month FT investigation reveals the extent of mismanagement at the €5bn-asset ban.


On June 28 this year, Italian police arrested a silver-haired priest, Monsignor Nunzio Scarano, in Rome. The cleric, nicknamed Monsignor Cinquecento after the €500 bills he habitually carried around with him, was charged with fraud and corruption, together with a former secret service agent and a ­financial broker. All three were suspected of attempting to smuggle €20m by private plane across the border from Switzerland.

Prosecutors alleged that the priest, a former banker, was using the Institute for Religious Works – the formal name for the Vatican’s bank – to move money for businessmen based in the Naples region, widely regarded in Italy as a haven of organised crime. Worse still, Scarano (who, together with the other men, has denied any wrongdoing) had until only a month earlier been head of the accounting department at the Administration of the Patrimony of the Apostolic See, the treasury of the Vatican.

The arrest, and the headlines that screamed across the Italian press, was the latest shock for the Holy See. The year had already witnessed an emotional upheaval in the church with the resignation in February of the aged Pope Benedict XVI – the first time in 700 years a pope had stepped down voluntarily. But this new crisis demanded cold, hard resolve. For regulators and politicians in Europe who had pushed for change in the Vatican’s scandal-plagued bank over the previous four years – from the Bank of Italy under Mario Draghi to officials in Mario Monti’s government and in Brussels – it served as evidence of their concerns. Those worries also jolted a number of international financiers determined to press for reform.

In early July, Peter Sutherland, non-executive chairman of Goldman Sachs International and the former attorney-general of Ireland, flew into Vatican City. His mission – although described by some insiders as simply a “bit part” in the wider drive for change – was an illuminating one. Sutherland, a practising Catholic and an unpaid consultant to the Vatican’s treasury, had been asked by reformers in the church to speak with the council of cardinals, the most senior advisers to the pope. His message to the men who filed into a room near Doma Santa Marta, the plain-fronted residence of Pope Francis, was respectful but direct.

The banker, who declined to comment for this story, added his voice to the many in and outside the church asking the world’s smallest city-state to change its ways. “Transparency is important and necessary,” Sutherland said, according to two people who were informed of proceedings in the closed-door meeting.

The cardinals, known for long, contemplative consultations, were surprisingly receptive, said one of those informed. After a decade of paedophilia scandals, the allegations of financial impropriety seemed set to unleash another storm of criticism and had to be addressed. Outside auditors as well as financial risk consultants were already coming into the Vatican but the arrest of Scarano made the case for reform unavoidable. “We cannot have any more scandal. It is so shameful,” a senior member of the Vatican’s financial administration said.

How God’s bank ended up as a financial penitent this year is a bracing chapter in the history of financial reforms that have swelled up in the aftermath of the 2008 credit crisis. Untouchable havens such as Switzerland and Liechtenstein were forced to open their chocolate-box palaces to the probes of international regulators. This year the power of the popes was challenged.

The FT interviewed two dozen bankers, lawyers, regulators and Catholic insiders over 11 months to understand how the murky operations of a bank with €5bn in assets, and which says its aim is to serve the global mission of the Catholic Church, had unnerved bankers, regulators and governments across Europe and the US.

The reforms now under way at the Vatican have come about in part because of the pressure brought to bear by banks such as Deutsche Bank, JPMorgan and UniCredit, all of which found themselves in the sights of regulators because of their business relationships with the Holy See. About three dozen banks, including some of the world’s biggest financial institutions, were for years “correspondent” banks to the Vatican, providing services when the pope’s business went beyond the boundaries of Vatican City. As with other institutional clients, the banks gave the Vatican access to foreign financial markets. Correspondent banks moved as much as €2bn a year from the Vatican’s bank to other accounts across the globe, according to a Vatican spokesman. It was the bankers’ fear of being tarnished by their links with the Vatican bank after the credit crisis – and fears of fines from emboldened regulators – that led them to take steps that forced it to clean up its act.

Several financial professionals talked in detail to the FT about their dealings with Vatican staff and provided documents about the bank’s structure. None wanted to speak on the record, citing sensitivities in both their banking and religious worlds. All told the FT that they were speaking out in order to help the bank keep to its programme of reform.

Senior executives from some correspondent banks had been questioned by regulators over the past two years and several had the same refrain about their dealings with the Vatican bank: it operated unlike any other bank they had encountered. Some who spoke to the FT reinforced what later emerged from reports by European officials on the bank’s workings. There were surprisingly few checks and balances on cash flow – and far less documentation than expected. The staff was small – 112 people, largely Italian until this year, with cardinals acting as supervisors. Many of the staff seemed unversed in customer due diligence, according to some. “They would not answer basic [Know Your Client] requests,” a senior manager at an international bank says.

The Institute for Religious Works issued its first annual report in early October, which showed that the bank has 19,000 clients, from around the world, 33,000 accounts and €5bn in assets. Few loans are made; the bank holds deposits, transfers money and makes investments. Half the bank’s clients come from religious orders; another 15 per cent are Holy See institutions, 13 per cent are cardinals, bishops and clergy, 9 per cent are from Catholic dioceses around the world. The rest of the clients are split among those who have, or should have, some “affiliation to the Catholic Church”, the report says.

Vatican insiders also revealed that the bank is awash in donations and cash, from Sunday collections and charitable giving. As much as 25 per cent of the bank’s business is done in cash – a feature that regulators said raised red flags for money laundering. About a third of its business comes from donations rooted in charities.

Laura Pedio, a Milan anti-Mafia prosecutor who specialises in white-collar crime, was one of the few sources willing to speak publicly to the FT. Pedio, who had been investigating the bankruptcy of a Catholic hospital in 2011 and needed access to Vatican bank information, said she was astonished to find a complex system of proxies, the authorisations given to representatives to execute transactions on behalf of often unidentified beneficial account holders.

She found multiple people often had proxies but details about the proxy holders were apparently not recorded anywhere in the bank. Some, she said, could be verbally identified by only a few people within the Vatican bank. There was, she said, literally no way to force an answer. “The issue was always: ‘Who is the ultimate beneficiary of this account?’” she says.

One adviser to the Vatican, who lives hundreds of miles from the marble colonnades of Rome, says the pursuit by prosecutors and regulators of the Vatican created a shift in mood among bankers to the Holy See. Under pressure themselves from a clampdown by European regulators, the banks were no longer open for business with a secretive Vatican. “There was a no-nonsense approach from the correspondent banks,” this adviser says. “‘We are not here to cover the ass of the Vatican.’”

Vatican City, a sovereign state that fiercely guards its privacy, has some of the trappings of a small town, with a supermarket, pharmacy, petrol station and a post office within its borders. But its hometown bank has the plummiest of addresses: the Apostolic Palace.

Popes Benedict and John Paul II both had their bedrooms two floors above the bank. An elevator was installed in the Apostolic Palace for John Paul II when he became too infirm to take the stairs. The elevator’s ground-floor entrance is next to the back door of the bank. (Pope Francis has opted for a less palatial residence, notably on the opposite side of Vatican City to the bank.)

Debate about what the popes knew about who came and went through the bank’s doors has occupied generations of Vatican watchers. The bank’s forerunner was created in 1887 as “an administration” to gather and use money for religious works. In 1942, in the chaotic war years, Pope Pius XII gave it a new name and a clear banking purpose.

The Institute for Religious Works was to provide for “the custody and the administration of monies (in bonds and cash) and properties transferred or entrusted to the Institute itself by fiscal or legal persons for the purposes of religious works, and works of Christian piety”. In the decades that followed, questions about some of that work – notably relationships and business deals examined by David Yallop in his 1984 bestseller, In God’s Name – would stir intrigue about possible Mafia connections. A 1996 book, His Holiness by Marco Politi and Carl Bernstein, offered a more benevolent view of Vatican cash flow in the 1980s: Pope John Paul II had systemically sent money to Solidarity, the Polish resistance movement, through a papal discretionary account, in an effort to break the back of communism in eastern Europe.

The most infamous publicity surrounded revelations about the Vatican bank’s dealings with Milan’s Banco Ambrosiano, one of the most high-profile bank collapses in Italy’s history. The Vatican bank was Banco Ambrosiano’s main shareholder. After its demise in 1982, Banco Ambrosiano’s chairman, Roberto Calvi, was found hanged under London’s Blackfriars Bridge. Prosecutors in Rome concluded that he was killed by the Sicilian Mafia but no one has ever been convicted of his murder.

In recent years, the bank has again featured in media reports for its funding of religious and humanitarian activities across the world. Former and current Vatican officials have confirmed to the FT that the bank has been used to channel cash, often secretly or with ­limited information given to correspondent banks, to vulnerable Christian groups in Cuba and Egypt.

But Vatican insiders, bankers and prosecutors admit that a system aimed at quickly getting money to difficult places has also potentially been open to abuse by tax cheats and by organised crime. “The issue is that once you start doing opaque transactions in an institution, people don’t know where to draw a line and to stop. What started in effect with moving money to Poland got out of control,” says a senior European banker at a US bank with a longstanding relationship with the Vatican. “There were no rules,” a Vatican insider commented. “So if you add to that someone with a criminal [motivation], you are finished.”

Up until 2008, according to one former senior Vatican banker, regulation of the Vatican bank was “indulgent”. This person says that no pressure was brought to bear on the Vatican to clean up its act either by regulators overseeing its correspondent banks or by officials within the Holy See.

A routine Bank of Italy anti money-laundering investigation at the branch had stumbled upon inconsistencies in its dealings with the Vatican bank, and it referred the issue to Rome prosecutors. According to a source familiar with the matter, payment slips from unnamed holders of Vatican bank accounts were found in the branch, ringing alarm bells for anti-money laundering investigators. The investigation was shelved later that year but not without consequences for the Vatican. UniCredit says it cut off all contact with the Holy See. It would not be the last bank to do so.

Forcing change was a challenge. Part of the problem was that the European Union had no regulatory power over the Vatican’s bank. So it was decided that the Bank of Italy, at the time headed by Draghi, would put pressure on the banks that did business with the Vatican. A former Italian minister with direct knowledge says: “That is the way you do it in these situations, when you have a state that you do not have regulatory powers over but you want to enforce changes. You make their life very difficult. You tell the banks they are not allowed to do business with them.”

By 2009, the Vatican bank was caught in various financial crosshairs. As prosecutors continued their line of questioning, the Bank of Italy was putting on the pressure by making life tough for the correspondent banks, according to several people with direct knowledge of events.

The Vatican, with an increasingly frail Benedict at the helm, tried to put its own stamp on the probes by appointing a well-connected conservative banker, Ettore Gotti Tedeschi, to take over the presidency of the bank. It also made a request to the Council of Europe for an investigation by Moneyval, the council’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism. Pope Benedict even gave his blessing to the creation of a financial supervisor within the walls of the Vatican.

Gotti Tedeschi was well known to the central bank. He was the head of Banco Santander in Italy and considered to be the right-hand man of Santander’s powerful executive chairman Emilio Botín in the country. He also sat on the board of Italy’s giant state financing agency, Cassa Depositi e Prestiti. But according to people familiar with the events, Gotti Tedeschi was viewed with distrust among some members of the council of cardinals which he tried to encourage to be more transparent. Personal battles with the Vatican hierarchy took their toll as well: in May 2012 he was ejected from the presidency after a no-confidence vote by the board. He even faced criminal charges that were later dropped after an investigation by Italian prosecutors.

That year, correspondent banks also grew increasingly worried. The Vatican’s failure to comply with international anti-money laundering rules had the potential to affect their own businesses. As regulators cracked down on tax cheats in offshore havens such as Switzerland, the banks feared regulators would turn on them for working with a Vatican that was still guarding its own banking secrets.

In March 2012, JPMorgan closed the bank account it held for the Vatican because the Vatican bank was providing insufficient information about funds that it was asking the US bank to move around the world, according to two sources at two different financial institutions. Other banks started to push back against the Vatican. “We would say, ‘We need to answer the regulator on this matter.’ They would say, ‘We answer to God,’” says another manager at a large European bank.

The EU’s Moneyval reinforced the sense of embattlement at the Vatican with its report in July 2012. Moneyval said that the Financial Information Authority, the regulator set up with Pope Benedict’s blessing, lacked the legal powers and independence needed to monitor and sanction the Vatican’s financial institutions. It had found that the regulator had no clear right to demand access to books or information. The Vatican bank was deemed to be compliant or largely compliant on only nine out of 16 core standards.

Moneyval provided ammunition for other banks and the crunch came when regulators turned to Deutsche Bank, the German financial powerhouse. Its Italian subsidiary had managed the Vatican City’s 80 cash machines and credit card payment services since 1997. In the summer of 2012, the Bank of Italy began questioning Deutsche about whether it possessed a licence to operate cash machines for the Vatican state. The central bank said that the Vatican was not compliant with international rules; was Deutsche breaking the law by servicing the ATMs? The Bank of Italy then sent another letter, seen by the FT, that ordered Deutsche Bank to close its accounts with the Vatican bank by the end of the year.

Deutsche did what regulators had hoped it would. On January 1 2013, a peak holiday time, there were no ATMs functioning anywhere inside Vatican City. Lines of visitors to the Sistine Chapel were unable to enter unless they paid in cash. “The message sent was simple: if you want to participate in the modern world, you have to adopt modern rules,” says a senior banker at another correspondent bank.

In the waning days of his papacy, Benedict made appointments that would help steer the church towards some sort of financial resolution. He appointed Rene Bruelhart, a Swiss lawyer who made his name as the head of Liechtenstein’s ­financial intelligence unit, as head of the Vatican’s financial regulator. Among the pontiff’s last official decrees was to appoint a new Vatican bank chief, Ernst von Freyberg, a mergers and acquisitions banker and aristocratic German who in his spare time led pilgrims to the healing waters of Lourdes.

Bruelhart, the younger of the two men, was involved in the return of assets owned by the regime of Saddam Hussein to the new Iraqi government. He also helped to uncover the Siemens contract scandal of 2006, which involved bribery of government officials. This legal profile, combined with his crisp good looks, led some in the media to dub the 41-year-old the James Bond of the financial world.
But the euro crisis changed all that. Pressure from the Organisation for Economic Co-operation and Development, Europe’s Financial Stability Board and the Financial Action Task Force led to a crackdown on states that failed to comply with international rules. At the same time, prosecutors in Rome were probing suspicious transactions that appeared to be emanating out of the Holy See into the Italian banking system. Their focus was a branch of UniCredit, Italy’s largest bank by assets, that sits on the road leading up to Vatican City.

Bruelhart worked swiftly to restore ATM services in Vatican City. By February 12, he had engaged Aduno Group, a Swiss ­company, to take over operation of the cash machines, neatly circumventing Italian and EU regulatory pressures.

In March 2013, there was a new pope – a Jesuit evoking the poverty and humility of St Francis of Assisi – and he quickly set a tone on financial correctness. Pope Francis spoke out against the “idolatry of money”, “all-encompassing corruption” and “tax evasion that had reached global dimensions”. Behind the scenes, he sent out another sign: Pope Francis moved his ­personal residence away from the Apostolic Palace and the Vatican bank.

Francis also began issuing papal decrees that helped speed inspections and made changes within the upper ranks of the cardinals. According to Bank of Italy sources, the new pope “marked important steps toward real reform of the legal and institutional framework”. Backed by Francis, the Financial Information Authority was strengthened with broader powers of supervision.

The pope had also asked for a review of the bank’s activities and appointed two boards made up of senior clergy and lay bankers to give advice regarding the future of the institution so that “it was in harmonization with the mission of the Catholic Church”, according to Vatican statements.

So far, Bruelhart and von Freyberg have complemented each other in their approach to reform, insiders say. Bruelhart quickly set up a crisis management team to review accounts and track money transfers. Within months of the two financial outsiders arriving, Sutherland flew in from London to discuss the virtues of transparency with the cardinals.

Before the meeting, Sutherland went into the dining hall of the Doma Santa Marta. Pope Francis was also there, eating breakfast, according to a witness. “I could not believe my eyes. I thought this is impossible,” says this person. “The pope in one corner and one of the world’s best-known bankers in the other.”

By this summer, von Freyberg had sought out Promontory Financial, a global risk-control group that specialises in regulatory and compliance issues. Promontory’s contract, according to von Freyberg, costs “well above seven digits”.

On a bright morning in late October, nine Promontory Financial employees sat in an office beneath a painting of the crucifixion of Christ, sorting through computer scans of account holders’ passports. They were manually and methodically cross-checking the names and faces with newly filled-in bank forms. Promontory employees now comprise 25 per cent of the staff of the Vatican bank, according to the Vatican.

Next door sat Rolando Marranci, a former chief financial officer for BNP Paribas’s Italian subsidiary and now the Vatican bank’s new director-general. He was hired in the wake of the arrest of Scarano, the Vatican accountant.

By next year, these new employees are expected to have closed hundreds of bank accounts listed in the Vatican ledgers, according to people familiar with the situation. Vatican bank officials say it will take well into next year to review them all. Accounts are being targeted when a client has been found to no longer have links to the Holy See. Where accounts are missing basic information or a client is found not to have such links, those accounts have been handed over to Bruelhart and his team. Bruelhart then judges whether to close these accounts when he reviews them in the light of the Vatican’s new, stricter anti-money laundering rules, according to bank insiders.

Both Bruelhart and von Freyberg have tried to calm internal fears about the Vatican’s suspected links to money laundering. Its volume of transactions – about €2bn in and out annually – is too small to be much of a threat, say people familiar with their thinking. But suspicions remain that the bank may have been a refuge for tax cheats from Italy, which European officials admit has a problem with tax evasion.

Bankers familiar with the transition between popes describe the past year as marking an epochal change. The Vatican hierarchy is taking steps to appoint experienced regulators to head a new, prudential supervisor, Vatican insiders say. Big Four auditors are looking at its accounts. The Vatican bank staff was once dominated by Italians; now it is opening its doors to foreign bankers with global experience. The clean-up has also extended to enhanced oversight of the Vatican’s treasury, known as the Administration of the Patrimony of the Apostolic See (Apsa), which controls the Catholic Church’s real estate portfolio and oversees holdings of government bonds. Sutherland and fellow international financier Bob McCann, chief executive of UBS Americas, are listed as two of five “consultors” or advisers at Apsa, according to a 2013 Vatican directory. The Vatican announced in October that its consultors would become part of a newly created supervisory board. Neither man would respond to questions about the board but there is work to be done there as well.

A handful of current accounts was recently discovered within Apsa – to the surprise of auditors and Vatican officials – and they are in the process of being moved to the Vatican bank, according to people with direct knowledge of the events. The very existence of these accounts is yet another sign, these people say, of how the financial system operated for years without any clear rules.

More changes are ahead. Bruelhart has signed a memorandum of understanding to swap information on suspicious transactions with the US, Italy, Spain, Belgium, the Netherlands and Slovenia, and it has another 15 to 20 in the pipeline. He has also reached out to the Egmont Group, an informal network of national financial intelligence units that swaps information about suspicious transactions, according to the Vatican.

There is a cautious sense of optimism among technical ­advisers in Rome and beyond. But they admit that there is still tension between the high priests of finance and the Vatican. “It is a case of political will in the end,” says an adviser to the bank. “Though what is happening here is surprisingly unpolitical. This is about IT and handbooks, and staff training and processes and fact-checking.”

How far the Vatican reforms go depends on the man at the top. Named after a saint who was plain-spoken and happy with simple pursuits, Pope Francis’s approach so far has inspired the bank investigators to work some long and late hours. For them, his early reflections on what banking should be – in this bejewelled city of saints and sinners, or anywhere in the world – is worthy of some meditation. “Some say the best thing is to have a bank, others say it should be a relief fund, other recommend it be closed down,” Pope Francis said in July. “I trust the work the [Vatican bank] team is doing?.?.?.?But whether it’s a bank, a fund, a whatever, it should be based on transparency and honesty.”

In Italy, there is a sense that Pope Francis, a native of Argentina, was chosen in part because he was an outsider. He understands that the Vatican’s insular nature has hurt the image of the Catholic Church and raised concerns about its relevance. His papacy will be a mission to prove that the church remains a touchstone for morality – and, to some observers, he has defined the bank scandal as an opportunity.

Massimo Faggioli, an academic and author from Bologna who has studied the Vatican for the past 20 years, says that other pontiffs in his lifetime had no reason to think that the bank was important to the outside world. But now it is – and Francis, by speaking out about it early, has signalled its importance. “Pope John Paul II didn’t touch the bank because it served his purpose of funding Solidarity from the Vatican. Pope Benedict did not touch it because he had no interest in controlling it,” says Faggioli. “Pope Francis is different because he knows the damage that has been done to the credibility of the church by this very small bank and its history of scandals.”

More questions of modernity also will test the church: ongoing paedophilia scandals, the role of women, the possibility that priests may marry. For now it seems the newest occupant of St Peter’s throne wants the church to set an example and do what most everyday people must: get its finances straight.

HACKER HELPED DISRUPT 300 WEB ATTACKS, PROSECUTORS SAY

Original Story:  NYTimes.com

A prominent hacker set to be sentenced in federal court this week for breaking into numerous computer systems worldwide has provided a trove of information to the authorities, allowing them to disrupt at least 300 cyberattacks on targets that included the United States military, Congress, the federal courts, NASA and private companies, according to a newly filed government court document.  This shows that we need more people with a Criminal Justice Degree to stop these types of crime.

The hacker, Hector Xavier Monsegur, also helped the authorities dismantle a particularly aggressive cell of the hacking collective Anonymous, leading to the arrest of eight of its members in Europe and the United States, including Jeremy Hammond, who the Federal Bureau of Investigation said was its top “cybercriminal target,” the document said. Mr. Hammond is serving a 10-year prison term.

The court document was prepared by prosecutors who are asking a judge, Loretta A. Preska, for leniency for Mr. Monsegur because of his “extraordinary cooperation.” He is set to be sentenced on Tuesday in Federal District Court in Manhattan on hacking conspiracy and other charges that could result in a long prison term.

It has been known since 2012 that Mr. Monsegur, who was arrested in 2011, was acting as a government mole in the shadowy world of computer hacking, but the memorandum submitted to Judge Preska late on Friday reveals for the first time the extent of his assistance and what the government perceives of its value. It also offers the government’s first explanation of Mr. Monsegur’s involvement in a series of coordinated attacks on foreign websites in early 2012, though his precise role is in dispute.

The whereabouts of Mr. Monsegur have been shrouded in mystery. Since his cooperation with the authorities became known, he has been vilified online by supporters of Anonymous, of which he was a member. The memo, meanwhile, said the government became so concerned about his safety that it relocated him and some members of his family.

“Monsegur repeatedly was approached on the street and threatened or menaced about his cooperation once it became publicly known,” said the memo, which was filed by the office of Preet Bharara, the United States attorney in Manhattan.

Born in 1983, Mr. Monsegur moved to the Jacob Riis housing project on the Lower East Side of Manhattan at a young age, where he lived with his grandmother after his father and aunt were arrested for selling heroin. He became involved with hacking groups in the late 1990s, drawn, he has indicated, to the groups’ anti-government philosophies.

Mr. Monsegur’s role emerged in March 2012 when the authorities announced charges against Mr. Hammond and others. A few months later, Mr. Monsegur’s bail was revoked after he made “unauthorized online postings,” the document said without elaboration. He was jailed for about seven months, then released on bail in December 2012, and has made no further postings, it said.



The memo said that when Mr. Monsegur (who used the Internet alias Sabu) was first approached by F.B.I. agents in June 2011 and questioned about his online activities, he admitted to criminal conduct and immediately agreed to cooperate with law enforcement.

That night, he reviewed his computer files with the agents, and throughout the summer, he daily “provided, in real time, information” that allowed the government to disrupt attacks and identify “vulnerabilities in significant computer systems,” the memo said.

“Working sometimes literally around the clock,” it added, “at the direction of law enforcement, Monsegur engaged his co-conspirators in online chats that were critical to confirming their identities and whereabouts.”

His primary assistance was his cooperation against Anonymous and its splinter groups Internet Feds and LulzSec.

“He provided detailed historical information about the activities of Anonymous, contributing greatly to law enforcement’s understanding of how Anonymous operates,” the memo said.

Neither Mr. Bharara’s office nor a lawyer for Mr. Monsegur would comment about the memo.

Mr. Monsegur provided an extraordinary window on the activities of LulzSec, which he and five other members of Anonymous had created. The memo describes LulzSec as a “tightly knit group of hackers” who worked as a team with “complementary, specialized skills that enabled them to gain unauthorized access to computer systems, damage and exploit those systems, and publicize their hacking activities.”

The memo said that LulzSec had developed an “action plan to destroy evidence and disband if the group determined that any of its members had been arrested, or were out of touch,” and it credits Mr. Monsegur for agreeing so quickly to cooperate after being confronted by the bureau. Had he delayed his decision and remained offline for an extended period, the document said, “it is likely that much of the evidence regarding LulzSec’s activities would have been destroyed.”

After his arrest, Mr. Monsegur provided information that helped repair a hack of PBS’s website in which he had been a “direct participant,” and helped patch a vulnerability in the Senate’s website. He also provided information about “vulnerabilities in critical infrastructure, including at a water utility for an American city, and a foreign energy company,” the document said.

The coordinated attacks on foreign government websites in 2012 exploited a vulnerability in a popular web hosting software. The targets included Iran, Pakistan, Turkey and Brazil, according to court documents in Mr. Hammond’s case. The memo said that “at law enforcement direction,” Mr. Monsegur tried to obtain details about the software vulnerability but was unsuccessful.

“At the same time, Monsegur was able to learn of many hacks, including hacks of foreign government computer servers, committed by these targets and other hackers, enabling the government to notify the victims, wherever feasible,” the memo said.

The memo does not specify which of the foreign governments the United States alerted about the vulnerabilities.

But according to a recent prison interview with Mr. Hammond as well as logs of Internet chats between him and Mr. Monsegur, which were submitted to the court in Mr. Hammond’s case, Mr. Monsegur seemed to have played a more active role in directing some of the attacks. In the chat logs, Mr. Monsegur directed Mr. Hammond to hack numerous foreign websites, and closely monitored whether Mr. Hammond had success in gaining access to the sites.

Sarah Kunstler, a lawyer for Mr. Hammond, said on Saturday: “The government’s characterization of Sabu’s role is false. Far from protecting foreign governments, Sabu identified targets and actively facilitated the hacks of their computer systems.”

At his sentencing in November, Mr. Hammond was prohibited by Judge Preska from naming the foreign governments that Mr. Monsegur had asked him to hack. But, according to an uncensored version of a court statement by Mr. Hammond that appeared online that day, the target list included more than 2,000 Internet domains in numerous countries.

Mr. Hammond’s sentencing statement also said that Mr. Monsegur encouraged other hackers to give him data from Syrian government websites, including those of banks and ministries associated with the leadership of President Bashar al-Assad.

AS WARS END, MILITARY GIVES ITS TRADEMARKS NEW VIGILANCE

Original Story:  NYTimes.com.

WASHINGTON — United States Marine G-string underwear. The Starfleet Marine Corps Academy. And the motto from a human resources company: “The Few. The Proud. The Well-Paid.”

Of course, none of those are actually from the United States Marine Corps.

As one war has ended and another winds down, enterprising members of the armed services are rushing home to get their piece of the American dream and woo consumers by showing off any affiliation with the American military. As a result, the Pentagon’s handful of trademark attorneys have been churning out cease-and-desist letters to try to protect their brands from look-alike logos on products that are not always the image of dignity, including a toilet paper called Leatherneck Wipes. An Oklahoma City Trademark Lawyer said these cases are not a joking matter.

The Pentagon is playing offense as well. Military attorneys have been running back and forth to the United States Patent and Trademark Office to register trademarks for military brands — in part to make sure that the services will get a cut of licensing fees. In the past year, the Marines have been to the trademarks office 68 times for products like Guadalcanal sweatshirts, meant to evoke the World War II battle against the Japanese, and Tip of the Spear newsletters, named for the motto of the Marine Corps’ First Light Armored Reconnaissance Battalion. There are also “Pain Is Weakness Leaving the Body” water bottles, meant to promote, well, general Marine toughness.
The Marines registered only one trademark in 2003 and four in 2008. But as troops came home from Iraq and then Afghanistan, efforts began picking up. In 2010 and the first half of 2011, the Marines registered nine trademarks.  A Fresno Trademark Lawyer said that current employee familiar with a business are often the competition later.  In this case the employees are the troops.

Then Navy SEALs killed Osama bin Laden in May 2011, Disney tried to trademark the name SEAL Team Six, and things ratcheted up from there. The Navy immediately fired back at Disney, filing its own trademark for the phrases “SEAL team” and “Navy SEALs,” terms that, the Navy said in its filing, imply membership in a Navy organization that “develops and executes military missions involving special operations strategy, doctrine and tactics.”

Still, the berm had been breached, especially with so many servicemen and women returning home and setting up small businesses. In 2012 and 2013, the Army, Navy, Air Force and Marines all saw a big spike in efforts to use military branding to sell goods and services, military trademark lawyers said.

“Because we’ve been in two wars in 10 years, we’ve had a lot of patriotism,” said Philip Greene, the Marines’ trademark counsel. “A lot of people are getting out of the service, saying, ‘I want to go into business.’ ” He said the “unpleasant part of my job is going out and talking to a Marine” and having to say no to someone who, proud of his or her affiliation with the service, wants to show it conspicuously in branding. A Idaho Trademark Lawyer agreed that it can be a difficult conversation.

Such was the conversation Mr. Greene had recently with Shadrach Brooks, a Marine veteran who started Semper Fidelis Garage Doors in Mesa, Ariz., in 2012. In addition to the company name — Latin for “always faithful,” and the Marine motto — Mr. Brooks initially put the iconic Marine seal on the company’s masthead, complete with a bald eagle, a globe showing the Americas and an anchor. And, at the bottom of the seal, “garage doors.”

Mr. Greene promptly called him. “At first I thought it was a friend playing a joke on me,” Mr. Brooks recalled. Eventually the two worked things out — and Semper Fidelis Garage Doors is still called Semper Fidelis Garage Doors. But now there is no Marine seal logo, just two crossed swords.

The military services do allow some use of their brands in exchange for a license fee. Since 2009, the Marines have collected $5.4 million in such fees, and last year their trademarks office turned over $700,000 to a morale, welfare and recreation fund.

There are plenty of critics who say government entities like the Marines should not be making it so hard for American taxpayers to wear — or sell — their brand. “Should the military be able to monetize expressions of support for these entities?” asked Paul Levy, a lawyer with Public Citizen, a consumer advocacy group. “I would say no.” Americans, he added, “should be able to express our affinity to government agencies we like without paying them a fee.”

For some Marines, being told that they cannot use a brand they fought for does not sit well. “They believe they earned it on Parris Island,” said Capt. Eric Flanagan, a Marine Corps spokesman, referring to the installation near Beaufort, S.C., where 16,000 enlisted Marines go through basic training every year. “They died for it, and now you’re going to try to take it? You going to take that tattoo off my arm, too?”

The Army, Navy and Air Force have been furiously registering trademarks for their brands as well. Mike Sullivan, the Army’s brand director, said his office more than doubled its number of licenses in two years, to 265 in 2013 from 120 in 2011.

But the Marines, who assiduously promote themselves as a brand that is the first, fastest and best in the military, have had the biggest spike, relative to their smaller size, in registering trademarks. And the desire of former Marines to identify their postservice professional lives with that branding is exactly why so many of them run into legal entanglements. A Lexington Patent Lawyer said that he has also seen an increase from military personal with patents.

“The most important thing to us is preserving the historic integrity of the Marine Corps trademarks,” said Jessica O’Haver, director of the Marine Corps Trademark Licensing Office. The same things that entrepreneurial former Marines want to capitalize on — including Marine slogans like “No better friend, no worse enemy” and “Earned, not given” — are the slogans that the Marine Corps, she said, must fight to protect.

Which is why Mr. Greene, the lawyer for the Marines, fired off another cease-and-desist letter recently when he spotted a website for the Starfleet Marine Corps, a “Star Trek” fan site complete with the Marine eagle.

The usual negotiations ensued, and the intergalactic warriors got rid of the Marine eagle but kept the name.

Mr. Greene said he did not have a problem with the Marine Corps name being a part of the “Star Trek” fan site. “There’s a British Royal Marines, there are all kinds of marines out there,” he said. “And if you’re out in this galaxy somewhere, I care even less. But don’t copy my logo.”

DETROIT MAYOR'S OFFICE: WE WON'T KEEP ORR OR LAW FIRM AFTER TIME'S UP

Original Story:  Freep.com

Mayor Mike Duggan's office said Thursday he won't support extending Kevyn Orr's time as the city's emergency manager or keeping on his former law firm, Jones Day, if Detroit's bankruptcy extends beyond Orr's expected exit date in late September.  A Tulsa Bankruptcy Lawyer is viewing details of the story.

The issue arose after U.S. Bankruptcy Judge Steven Rhodes questioned Jones Day lawyers during a hearing Thursday, asking what impact a delay in the schedule of the bankruptcy case would have on the high-priced law firm the city hired.

Lawyers for Detroit's financial creditors and for Oakland and Macomb counties tried Thursday to convince Rhodes to delay the case by a month because city lawyers aren't releasing critical documents quickly enough to meet ambitious timetables for this summer's confirmation trial on the plan to exit the nation's largest-ever municipal bankruptcy. A Boston Bankruptcy Lawyer agrees that this makes things difficult.

Rhodes appeared concerned about whether such a delay would push the ultimate resolution of Detroit's bankruptcy beyond the tenure of the state-appointed emergency manager, whose 18-month term is set to end in late September, when city officials have the legal option to vote to fire Orr under Michigan's emergency manager law.

Rhodes asked whether Jones Day, the law firm hired by the city under former Mayor Dave Bing, would stay on after Orr is gone. Greg Shumaker, a Jones Day lawyer, acknowledged that the uncertainty about that matter "could be dramatic." But he told the judge: "We have not talked to the mayor or the City Council about that issue."

"I'm surprised by that," Rhodes said.

He then asked Shumaker whether the goal of ending Detroit's bankruptcy case before Orr leaves sets up deadlines that might conflict with sound practices in bankruptcy court. Shumaker concurred.

Duggan made clear that if the bankruptcy proceedings extend beyond Sept. 25, he won't support keeping Jones Day as the city's law firm in bankruptcy.

"We have no intention of keeping Jones Day," Duggan's spokeswoman and chief of staff, Alexis Wiley, told the Free Press. "We have every intention of running this city, and that means both services and finances."

Wiley declined to discuss how Duggan would handle the bankruptcy after ditching Jones Day, or which lawyers would pick up where the firm left off.

Bill Nowling, a spokesman for Orr, acknowledged there have been no discussions about Jones Day staying on after Orr is gone, noting that Orr and the firm's lawyers have been "operating on the schedule which has the confirmation hearings concluding in August."

Orr, who was working out of the Jones Day office in Washington before coming to Detroit, has said previously that he is not interested in staying in Detroit beyond September.  A Lexington Commercial Bankruptcy Attorney said he doesn't blame him.

The confirmation hearings are to determine whether Rhodes approves the city's blueprint for exiting bankruptcy, which has been on a fast-track schedule in large part because Orr's time in Detroit was limited to 18 months. The hearings had been set to begin July 24 and last into August, but a group of financial creditors this week asked Rhodes to push the beginning of the hearings to Aug. 26.

Lawyers for creditors including Syncora -- a bond insurer that's on the hook for nearly $250 million because it guaranteed a disastrous $1.4-billion debt deal meant to shore up underfunded pensions in 2005 -- argued that delays in the city's release of documents creditors have requested make the schedule impossible to follow.

"The city's actions are crippling our efforts," Syncora lawyer Stephen Hackney said during a status conference Thursday.

Creditors' lawyers say that their expert witnesses won't have enough time to analyze and report on city financial assumptions without the delay.

The creditors are seeking access to a number of documents they say the city hasn't released, including reports on the physical condition of Detroit Water and Sewerage Department infrastructure and long-term financial projections for the system, as well as financial background used by consultants such as Milliman, Ernst & Young and Conway MacKenzie, who have advised the city on some matters including restructuring city government and its liabilities and devising a long-term plan to operate Detroit after bankruptcy.

Jones Day lawyer Heather Lennox, representing the city, said that Detroit had already released key documents to the creditors and that the remainder would be handed over by next week. She and other lawyers for the city suggested that the creditors were seeking access to documents in a bid to delay the trial.

Geoff Irwin, also representing the city, said the crush of requests for additional documentation "is becoming incredibly burdensome and unmanageable for the city."  A New Orleans Business Bankruptcy Attorney said that they should expect this type of request.

Rhodes didn't immediately rule on the request for the delay, saying he would issue an order soon to address the concerns. But he told lawyers for the city that the creditors are entitled to access a significant number of the documents they're requesting.

How a major shift in legal representation during the endgame of the case would impact Detroit's bankruptcy wasn't immediately clear.

Even if Orr departs before the bankruptcy is settled, under the state's emergency manager law, Public Act 436, Detroit would remain under a financial emergency -- with significant state oversight -- until Gov. Rick Snyder declares the emergency over. That could put pressure on Duggan and the council to accept new agreements to maintain Jones Day's representation in some form.

Snyder's spokeswoman couldn't be reached for comment Thursday.

As of last fall, Jones Day's contract with the city had been approved up to $18 million, among the largest fees charged by lawyers and consulting firms addressing Detroit's financial collapse. .

CANDID CAMERAS PROVE KEY IN DRUG BUST

Original Story:  DetNews.com

Detroit— Three fez-wearing drug dealers who fled ahead of guilty verdicts Monday were once among the most closely watched crooks in Metro Detroit, thanks to a little known surveillance tool that helped crack one of the area’s biggest drug rings. A Hudson Valley Criminal Defense Lawyer did not agree with the legality of the submission of the video as evidence.

Federal drug agents secretly mounted video cameras atop utility poles next to drug dealers’ homes and a warehouse to record narcotics shipments and watch millions in cash change hands. Investigators do not need search warrants if the cameras shoot footage in a place where a person would not have a reasonable expectation of privacy.

The camera footage played a key role in the indictments of drug kingpin Carlos Powell and 12 others in early 2012. The surveillance by investigators, and the trio’s later escape, provide an ironic twist to an ongoing manhunt as federal agents search for the Washington Township man, his brother Eric Powell and friend Earnest Proge.

Federal agents have used the so-called pole cameras for about 30 years, occasionally to devastating effect in court.  Business Video Security Systems can have the same effect is catching criminals in the act.

“It’s video,” said defense attorney Michael Rataj, who represented a courier charged in the case. “Not much you can do about it.”

Pole cameras are one weapon in the government’s arsenal and, in this case, were used alongside physical surveillance, search warrants, wiretaps and vehicle-tracking devices.

The camera footage played a starring role in opening arguments during the Powell trial this month. Prosecutors showed jurors footage of Carlos Powell behind a home on Detroit’s east side in June 2010.

Agents watched a second man arrive in a Nissan Murano and go into the brick ranch on Conley Street. Powell arrived soon after in a truck and was seen carrying a large bag into the house.

As agents watched footage from the pole camera, the second man left the home and put several objects into the rear of his sport utility vehicle before driving away.

Agents followed the Murano as it traveled along Interstate 69 in Charlotte. A Michigan State Police trooper stopped the Murano.

“Did you find anything unusual?” Assistant U.S. Attorney Steven Cares asked DEA Special Agent Edward Donovan during the trial.

“Yes,” Donovan testified. “A concealed compartment.”

Agents couldn’t figure out how to unlock the secret compartment, however.

“So we got a saw to cut it open,” the agent said.

“Did you find anything?” the prosecutor asked.

“Yes,” Donovan said. “Bundles of money: $259,000.”

The size, scope and profits of Powell’s alleged drug ring places Powell among the most prolific drug dealers in Metro Detroit history. During a years-long investigation, agents seized 66 pounds of heroin, 12 kilograms of cocaine, 1,000 pounds of marijuana and more than $21 million in cash.
Powell tried unsuccessfully to suppress the pole camera footage. Possibly House Arrest Services Detroit may be needed.

The DEA installed hidden cameras atop DTE Energy utility poles at four locations in Detroit, Centerline and Eastpointe. Two locations, outside a brick ranch on Conley on the city’s east side and an Eastpointe home, were used by Powell’s drug ring to stash drugs and money, prosecutors say.

The cameras are camouflaged to blend in with other utility pole equipment and can be rotated and zoomed. They can capture footage 24 hours a day and allow agents to monitor footage remotely via the Internet.

Federal agencies have their own teams of armed agents who are tasked with secretly shimmying up utility poles, sometimes dressed in utility worker uniforms.

The DEA declined to comment on investigative techniques used in the Powell case.

Few criminals are aware of a technology used by federal agents for about 30 years. Paranoid crooks are often more concerned about wire taps, helicopters and agents tailing behind in traffic, law enforcement sources said.

“Because it is so low-tech, people aren’t as aware of it,” said criminal defense lawyer Keith Corbett, a former chief of the U.S. Attorney’s Organized Crime Strike Force in Detroit. “If you have photos of the bad guys, and blow them up, and the jury can see the defendant going into a drug house, it’s pretty compelling and a pretty effective piece of evidence.”

Installing the pole cameras can be too risky, depending on the target.

Corbett never considered using pole cameras while investigating former Detroit mafia boss Jack Tocco.

“If I wanted to put a camera outside Jack Tocco’s house, it would have been problematic in the sense that while you’re installing it, someone might see you and Jack might have become aware of it,” Corbett said.

Carlos Powell and his co-defendants had an expectation of privacy that was violated by the use of pole cameras, defense lawyers wrote in a November 2012 court filing.

“In some instances, the placement of the cameras allowed the investigators to peer into areas within the (private areas) of a dwelling, and to observe events which would not have been visible by a person standing at street level,” defense lawyers wrote.

During opening statements, Carlos Powell’s defense lawyer Deday LaRene tried to blunt the footage’s impact, insisting the footage did not show drug deals. However, someone may still end up using a Criminal Ankle Bracelet in the near future.

“Saying something doesn’t make it so,” LaRene told jurors.

The key is trying to undercut the footage during cross-examination, Rataj said.

“Sometimes what one person thinks they’re observing isn’t necessarily what another person thinks,” Rataj said. “But generally, like a wiretap, it’s your own words and actions coming back to haunt you.”

From The Detroit News: http://www.detroitnews.com/article/20140517/METRO01/305170025#ixzz32HWKfZ6E

PAUL WALKER CRASH: DRIVER'S WIDOW SUES PORSCHE, ALLEGES DESIGN FLAWS

Original Story: LATimes.com

The widow of the man behind the wheel of the Porsche Carrera GT that crashed and killed actor Paul Walker last year has sued the car manufacturer, alleging that faults with the design and suspension led to the fatal crash. A Tacoma Product Liability Lawyer may be consulted on the case.

The lawsuit filed Monday on behalf of Roger Rodas’ widow, Kristine Rodas, also contradicts a Los Angeles County Sheriff’s Department's report that found the sports car was traveling at an unsafe speed of more than 90 mph along a road in a Santa Clarita business park.

Both men died within seconds of the crash.

The suit alleges that the $500,000 vehicle was going just 55 mph on Nov. 30, 2013, when it “malfunctioned” and crashed, wrote attorney Mark Geragos.

The lawsuit contends that the right rear tire suddenly steered to the left and that despite the efforts of Rodas, a veteran race car driver, the vehicle continued a clockwise movement before climbing the curb, swiping a tree and then hitting a light pole and a second tree.

The car then hit a third tree on the passenger side, causing the vehicle to split and catch fire.

Geragos alleges the car’s suspension system forced it to careen out of control. The lightweight construction in the 605-horsepower vehicle described by Porsche as "close to a race car as we will ever get” lacked a proper crash cage and safety features in the gas tank that would have saved Rodas and Walker, Geragos wrote in the Los Angeles Superior Court lawsuit. A Nashville Product Liability Lawyer is watched this case closely.

The impact of the crash caused the fuel tank to rupture and spill fuel into the engine compartment, the suit said.

"The Carrera GT was unsafe for its intended use by reason of defects in its manufacture, design, testing, component and constituents, so that it would not safely serve its purpose," according to the suit.

Rodas' family is  seeking unspecified damages from Porsche Cars North America.

The sheriff’s and CHP reports released in March found unsafe speed and not mechanical problems was responsible for deadly crash. Investigators reached those conclusions after consulting with Porsche technicians.

The vehicle is known to be difficult to drive. A Denver Product Liability Lawyer said that could be the ground work that gives this case some legs to stand on.

"Tonight Show" host Jay Leno, a veteran super-car driver, spun a Porsche Carrera GT at 180 to 190 mph at Talledega. "It was kind of like driving on ice," Leno said on his Jay's Garage website. Leno, however, praised the vehicle for its engine built for Le Mans and incredible gearbox.

The car was the subject of a lawsuit after a 2005 crash that claimed the lives of two men at the California Speedway when they swerved into a concrete wall.

In 2006, Porsche contributed 8% of a $4.5-million settlement after owner Ben Keaton and his passenger, Corey Rudl, died. They swerved to avoid a collision with a slower-moving Ferrari that had entered the track, according to records and attorneys. Rudl's widow sued the track, Keaton's estate and the car manufacturer in San Diego Superior Court.

They settled without acknowledging any wrongdoing. Porsche says the car is safe. A New Mexico Product Liability Lawyer said that just because the case was settled does not mean that the car is safe.

Craig McClellan, the San Diego-based personal injury attorney representing Rudl's widow, argued that Porsche was partly to blame for the crash because it knew the car had a history of over-steering problems during development and the company designed it without an electronic stability control system.

"It is a fairly stripped-down car designed for the race track," McClellan said.

DRIVING WHILE PREGNANT: CAR CRASH RISK SPIKES 42% IN SECOND TRIMESTER

Orginal Story: LATimes.com

Pregnancy is not without health risks, and now researchers from Canada have identified a new one: serious car crashes. This information greatly intrigued a Grand Rapids Car Accident Lawyer who defends many types of clients.

During the second trimester of pregnancy, a woman’s odds of being behind the wheel in a multi-vehicle accident that was bad enough to send her to a hospital emergency room were 42% greater than they were in the three years before she became pregnant, according to a study published Monday in CMAJ, the Canadian Medical Assn. Journal. However, by the third trimester, the risk was significantly lower than it was before pregnancy, and it fell even further in the first year after the women gave birth.

“It amounts to about a 1 in 50 statistical risk of the average women having a motor vehicle crash at some point during her pregnancy,” said Dr. Donald Redelmeier of the University of Toronto, who led the study. A Hackensack Car Accident Lawyer found this information extremely surprising.

The research team, from the University of Toronto and affiliated institutions, wondered whether the fatigue, distraction, nausea and other annoyances that accompany pregnancy might make women more vulnerable behind the wheel. They were particularly curious about the second trimester, a time when pregnant women often feel like their normal selves. As a result, they don’t change their behavior to account for the significant physiological changes happening in their bodies.

The researchers identified more than 500,000 women who gave birth in Ontario during a five-year period from 2006 to 2011. They combed through data from Ontario hospitals to see how often they got into serious car crashes during the three years before they became pregnant; during each trimester of their pregnancy; and for the first year after their babies were born.

The women in the study were not paragons of perfect driving during the baseline period. The researchers counted up a total of 6,922 crashes, which worked out to about 4.55 crashes per 1,000 women per year. That was more than double the population-wide average of roughly 2 crashes per 1,000 people per year. However, the researchers noted that the women in the study were relatively young, which helps explain their higher crash rate.

During the first month of the first trimester of pregnancy, the crash rate fell slightly to 4.33 crashes per 1,000 women, the researchers found. However, that difference was too small for the drop to be considered statistically significant. A Chicago Car Accident Attorney thought that women are often over cautious during this time, especially during first pregnancies.

But something had definitely changed by the first month of the second trimester. During that month, the women’s crash rate soared to 7.66 collisions per 1,000 women per year, according to the study. That was the most dangerous month for pregnant women behind the wheel. For the entire second trimester, the crash rate was 6.47 collisions per 1,000 women per year, which was 42% higher than during the baseline period.

Women from all walks of life became more vulnerable during this period, the researchers found. The increased crash risk was seen in all women regardless of age, socioeconomic status, whether their babies were born early, the gender of their babies and most other factors. Time of day, week and year also had no effect. The only characteristic that seemed to influence the crash rate in the second trimester was whether the women lived in urban or rural areas (it was higher for city drivers).
The safest month for all women turned out to be the last month of pregnancy. In those final weeks, the women tracked in the study had only 2.74 crashes per 1,000 women per year. And in the year after giving birth, the accident rate dropped even more, to 2.35 crashes per 1,000 women per year, the researchers reported.

The women saw no increase in car accident injuries when they were passengers in other people’s cars, or as pedestrians, according to the study.

Health experts have previously identified auto accidents as the leading cause of fetal death related to a trauma. However, the study did not include data on crashes that caused injuries serious enough to kill a fetus because women in those cases didn’t go on to give birth. As a result, the statistics probably underestimate the true risk of driving while pregnant, the study authors wrote. A Minneapolis Car Accident Lawyer would like to know this data.

“The message here is not to stop driving,” Redelmeier said in a video released by the Sunnybrook Research Institute, which is affiliated with the University of Toronto and the Sunnybrook Health Sciences Centre (where Redelmeier is a staff physician). “The message is to start driving more carefully.”

He added that the pregnant women he cares for ask about the risks of flying planes, soaking in hot tubs and skating on Rollerblades. However, he said, “not once has a woman asked me about road safety despite it being the much larger, greater risk.”  A Nashville Car Accident Lawyer thought that this information should be shared with all women especially those who are pregnant.

Redelmeier’s previous research on automobile accidents has found that American drivers are more likely to crash on days when presidential elections are held.

Legal Alliance Gains Host of Court Victories for Conservative Christian Movement

Original Story: NYTimes.com

SCOTTSDALE, Ariz. — Alan Sears, who has run the Christian legal group Alliance Defending Freedom since its founding 20 years ago, turned to a picture of Abraham Lincoln in his office here and noted the decades of blood and tears it took to abolish slavery.

“I think there is no question that one day, this country will again recognize that marriage is between a man and a woman,” said Mr. Sears, a former top official in the Reagan Justice Department.

The comparison may or may not prove apt, but these are heady days for Alliance Defending Freedom, which, with its $40 million annual budget, 40-plus staff lawyers and hundreds of affiliated lawyers, has emerged as the largest legal force of the religious right, arguing hundreds of pro bono cases across the country. It has helped shift the emphasis of religious freedom enshrined in the Constitution. For decades, courts leaned toward keeping religion out of public spaces. Today, thanks to cases won by the alliance and other legal teams focused on Christian causes, the momentum has tilted toward allowing religious practices with fewer restrictions.

The group last Monday celebrated a major victory in the Supreme Court, where a client, the Town of Greece, N.Y., won the right to open council meetings with mainly Christian prayers.

The alliance awaits the decision in another case that could redefine the boundaries of religious freedom — the challenge by its client Conestoga Wood Specialties, along with Hobby Lobby, to the provision in the Affordable Care Act requiring companies to cover birth control in employee-funded health plans.

Things have gone less well in the fight against same-sex marriage, but the group is in the fray, arguing before the United States Court of Appeals for the Fourth Circuit in Richmond, Va., on Tuesday in defense of Virginia’s marriage restrictions. This case, like that of Oklahoma, which the group also argued in a federal appeals court, may end up in a climactic Supreme Court battle in the year ahead.

Alliance Defending Freedom was created by Christian leaders including Bill Bright, the founder of Campus Crusade for Christ, and James C. Dobson Jr., the founder of Focus on the Family. In the early 1990s the groups had watched with growing dismay as secular groups like the American Civil Liberties Union used the courts to ban school prayer and advance abortion rights even as an emerging gay-rights movement threatened, in their view, to upend the country’s social values.

“People of faith were being outgunned in court,” said Mr. Sears, 62, a Roman Catholic in an organization populated with evangelical Protestants. So the group — then called the Alliance Defense Fund — was founded to foster Christian legal firepower.

The new Christian lawyers have proved to be sophisticated litigants in court, wielding constitutional arguments without invoking religion. But outside the courtroom, the group has provoked the enmity of gay-rights advocates, in particular, by expressing harsh views such as those in a book Mr. Sears co-wrote in 2003, “The Homosexual Agenda: Exposing the Principal Threat to Religious Freedom Today.” It describes gay people as “trapped” and gay-rights advocates as bent on creating a nation of “broken families and broken lives.”

One lesson Christian conservatives learned, Mr. Sears said, is that lower court decisions that violate what he considers to be original constitutional principles can lead to more dangerous assaults. Griswold v. Connecticut, for example, the 1965 Supreme Court ruling that Connecticut could not ban the use of contraceptives by married couples, was a travesty, he said, because it established a new right of privacy, used in 1973 to justify legalizing abortion in Roe v. Wade.

In 2003, the alliance worked against what became another landmark ruling in Lawrence v. Texas, which declared laws against “homosexual sodomy” unconstitutional. Its lawyers feared that the decision would help open a legal path to same-sex marriage.

The group originally focused on channeling donations to other lawyers as well as training more Christian lawyers in issue-oriented litigation, which remains a major part of its work. Its summer fellowship program has drawn 1,300 law students, and some 1,700 practicing lawyers have attended training sessions.

But the alliance soon expanded its own legal team, joining a cluster of like-minded, nonprofit law firms including Liberty Institute, which is devoted entirely to “religious liberty” issues; the American Center for Law and Justice; the Becket Fund for Religious Liberty; Liberty Counsel; and the Pacific Justice Institute. Alliance Defending Freedom, which changed its name in 2012, relies on private donors, whom it does not disclose.

“A.D.F. and the other groups wanted to counter more liberal legal forces, and they have largely achieved that goal,” said Douglas Laycock, an expert on law and religion at the University of Virginia Law School. “On the whole, they work at pretty high levels, and they’ve got a lot of boots on the ground.”

Along the way, the alliance has sometimes ruffled the feathers of sister organizations. When California state officials declined to defend Proposition 8, the amendment banning same-sex marriage, the alliance took up the cudgel. But when it lost in federal court in 2010 in the case, Hollingsworth v. Perry, Liberty Counsel complained publicly that Alliance Defending Freedom had excluded it and had performed poorly.

Many of the alliance’s legal victories (it says it has an 80 percent success rate) have involved defense of religious activities and symbols at universities and in public spaces.

But the alliance has gained a reputation as a hard-line opponent of gay rights, and critics say the principles in its legal briefs mask prejudice, a contention that Mr. Sears denies.

Fred Sainz, a vice president of the Human Rights Campaign, a gay-rights group, said, “They are easily the most active antigay legal group.”

On same-sex marriage, the group did secure a temporary win in California in 2004 when it forced Mayor Gavin Newsom of San Francisco to stop granting same-sex marriage licenses. But more recently, this group, like others seeking to preserve marriage restrictions, has suffered a chain of defeats.

Beyond its lawsuits and training of legal allies, the alliance is often involved behind the scenes, helping state officials prepare briefs justifying marriage restrictions or, in an example uncovered by RH Reality Check, a reproductive-rights website, mobilizing states to sign friend-of-the-court briefs in the contraceptive-mandate case.

The legal group has a growing international program, working primarily in Europe, where it has helped defend religious displays before the European Court of Human Rights and Ireland’s ban on abortion.

In perhaps its most aggressive effort, the alliance organizes an annual Pulpit Freedom Sunday, enlisting pastors, who under federal rules may not endorse politicians or bills, to link “biblical principles” to politics in their sermons. In June, more than 1,000 pastors signed up to preach “the truth about marriage.”

Asked to evaluate the success of the Christian legal movement Mr. Sears said, “We’re much better off in terms of our ability to respond in court, but we’re still a long way from catching up with the other side. The A.C.L.U. had a 74-year head start and set a lot of precedents. Who knows what would have been the outcome if there had been more faith-based lawyers all along?”