Thursday, May 20, 2021

Tulsa Race Massacre Centennial Symposium

The Tulsa Law Review will host a special symposium issue of the law review as part of a commemoration of the 1921 Tulsa Race Massacre with a one-day live/hybrid event on May 21 and publication of the papers in September 2021.

During the Tulsa Race Massacre, which occurred May 31–June 1, 1921, a white mob attacked residents, homes and businesses in the predominantly Black Greenwood district of Tulsa, Oklahoma. The event remains one of the worst incidents of racial violence in U.S. history and one of the least-known; news reports were largely squelched, despite the fact that hundreds of people were believed to have been killed and thousands left homeless.

May 21 @ 9:00 am - 5:00 pm

Virtual Event Free: Register Here

This one-day conference will feature the work of law professors, artists, poets, Black Wall Street business owners and historians.

Suzette Malveaux, provost professor of civil rights law at the University of Colorado School of Law, will provide the keynote address. For six years, Malveaux served as pro bono counsel to the plaintiffs in Alexander v. State of Oklahoma, a suit filed against Tulsa by victims of the 1921 Tulsa Race Massacre. As part of a team of attorneys, she represented the victims before the federal courts, the Inter-American Commission on Human Rights (Organization of American States) and the U.S. House of Representatives.

Other featured law professors will include Keeva Terry of Howard University School of Law; andre cummings of the Bowen School of Law at the University of Arkansas at Little Rock; Amos Jones, executive director of the African American Trust for Historic Preservation; Angela Addae of the University of Oregon School of Law; and many others. Confirmed participants include Dwight Eaton, a descendant and owner of Black Wall Street Liquid Lounge; TU Professor Kristen Oertel, who will present a talk titled Black Indians, Red Dirt: A Brief History of African Americans in Indian and Oklahoma Territories, 1840–1907; and Professor DeWayne Dickens, who will present a talk titled Learning from Greenwood: When Voices Are Silenced.

Tuesday, April 6, 2021

Race and Policing in America - St. Thomas University Law Review Symposium


All times are Eastern.  

To register and attend by Zoom for free, click here.

Monday, March 22, 2021

Momentous Appointment

The Biden administration's nomination of and subsequent Senate confirmation of Secretary of the Interior Deb Haaland is a monumentally important moment in our nation's history.  Secretary Haaland becomes the first Cabinet level Secretary of Native American descent in the history of the nation.  This after Ms. Haaland served as the first native Congressperson (along with Sharice Davids of Kansas, both elected in 2018) in U.S. history.  This nomination and confirmation is critical for many reasons, including according to Secretary Haaland herself:  “A voice like mine has never been a Cabinet secretary or at the head of the Department of Interior,” she wrote on Twitter before the vote. “Growing up in my mother’s Pueblo household made me fierce. I’ll be fierce for all of us, our planet, and all of our protected land.”

The New York Times reports:  "Representative Deb Haaland of New Mexico made history on Monday when the Senate confirmed her as President Biden’s secretary of the Interior, making her the first Native American to lead a cabinet agency.  Ms. Haaland in 2018 became one of the first two Native American women elected to the House. But her new position is particularly redolent of history because the department she now leads has spent much of its history abusing or neglecting America’s Indigenous people.  Beyond the Interior Department’s responsibility for the well-being of the nation’s 1.9 million Native people, it oversees about 500 million acres of public land, federal waters off the United States coastline, a huge system of dams and reservoirs across the Western United States and the protection of thousands of endangered species."

Secretary Haaland said the following at her Senate confirmation hearing:  “You’ve heard the Earth referred to as Mother Earth, it’s difficult to not feel obligated to protect this land. And I feel every Indigenous person in the country understands that.”

Again, per the NY Times: "Ms. Haaland will quite likely assume a central role in realizing Mr. Biden’s promise to make racial equity a theme in his administration. Ms. Haaland, a member of the Laguna Pueblo who identifies herself as a 35th-generation New Mexican, will assume control of the Bureau of Indian Affairs and the Bureau of Indian Education, where she can address the needs of a population that has suffered from abuse and dislocation at the hands of the United States government for generations, and that has been disproportionately devastated by the coronavirus."

A hearty congratulations to Secretary Haaland on this momentous appointment, to President Biden for the foresight to seize this moment, and for an appointment that was far too long in the making.

photo in the public domain

Friday, March 19, 2021

Corporations Become Unlikely Financiers of Racial Equity

Corporate giving has exploded since the racial reckoning in summer 2020 brought on by the police killings of George Floyd and Breonna Taylor.  Corporation donations have far outpaced donations from foundations and individual philanthropists since the summer of Black Lives Matter protests, per the philanthropy research organization Candid.  "Companies donated or pledged about $8.2 billion of the $12 billion in total contributions earmarked for racial equity--the 'first time direct corporate giving to racial equity cases has reached this magnitude'--said Andrew Grabois, Candid's corporate philanthropy manager."

Some of the most significant corporate commitments have come from JPMorgan Chase, Microsoft, AMEX, Bank of America, PayPal, Salesforce and Chase.  These large corporate commitments do not account for the other minority-focused investments, such as JP Morgan's initiative to lend more openly to minority owned businesses and black and brown home purchasers.  The corporate giving trend is fueled by changing expectations of younger employees and progressive consumers that expect corporations to become serious about corporate responsibilities to social issues and causes.  Advocates argue that these corporate commitments will not be enough to achieve racial equity in housing, employment and policing, but acknowledge that if these corporations are serious about their commitments, that it can mark an important start.  "'The world is changing, and the expectations of how companies engage are changing,' said Brandee McHale, Citi’s head of community investing and development."

ABC News reports that "[s]ince late May, Grabois said, financial commitments by companies to racial equity causes have grown 'exponentially larger' than any other cause other than COVID-19. A report by McKinsey & Company, which tracked corporate responses from May to October, found that of the top 1,000 U.S. companies, 18% made internal commitments, like diversifying their hiring, and 22% pledged to promote racial equity through donations or other means."

Whether corporate giving to racial equity causes results in systemic change and reform remains to be seen.  Holding corporations to their commitments will likely be an important undertaking.

photo courtesy of wikimedia commons

Thursday, March 4, 2021

Count the Black Lawyers

I was an associate at Paul Weiss Rifkind Wharton & Garrison from 1988 until 1991. These almost three years were impactful even though my time there was brief. To say that I learned a great deal is an understatement. My work at the firm took me to places like Gracie Mansion, and to Hollywood for several weeks to perform due diligence for a music publishing company. My time there was further evidence of my African American family’s dramatic upward mobility in just six generations. My maternal grandmother was the granddaughter of enslaved African Americans. She worked as a maid and cook before she went back to school. With a sixth-grade education, she passed the New York State licensing exam for cosmetology. She opened a successful hair salon, and she and my grandfather sent my mom to Hunter College. My mother retired decades ago from a successful career as a scientist and school administrator. And when I went to Paul Weiss, I was making more money than anyone in my immediate and extended family had ever made.

There were about 400 lawyers at the firm’s New York office during the years I was there. Only six of those lawyers (associates) were Black/African American. None of the approximately 80 partners were Black.  My time at Paul Weiss was brief because my plan was to become a law professor. But while I was at the firm, I was supported and mentored. That is why I was surprised to see a 2018 LinkedIn photo of the firm’s new partners in which almost all were white and male. None were Black.

Happily, much has changed in the years since I was associated with the firm, and even in the almost three years after the LinkedIn photo. I attended the firm’s webinar (The Biden Administration:  What’s Next for Businesses) on March 3rd, 2021. Two of the firm’s (Black) litigation partners were on the panel– Loretta Lynch, former U.S. Attorney, and Jeh Johnson, Former Secretary of Homeland Security. After the webinar I went to the firm’s website that reported the following: “27% of our attorneys self-identify as racially diverse compared to the 20% Big Law average” and “Racially diverse partners are 13% of the equity partnership, compared to the 8% national average”. 

After seeing this website report, I was left wondering how many of these “racially diverse” individuals are Black. Paul Weiss played such a significant role in the upward trajectory of my African American family. And Paul Weiss issued a statement in the aftermath of George Floyd’s death. But its racial diversity disclosure had only a fraction of the precision that has made the firm a giant in the legal profession. Law firms can address antiblack racism, if they choose to do so, only if they confront the problem and its impact on the success of Black lawyers. Firms can’t do this if they fail to consider that Black lawyers face issues that are saliently different from those endured by white women, and indigenous, Asian and Latinx individuals. Firms can make their disclosure on these issues more meaningful by counting the Black lawyers. If the numbers are not good (on retention, percentages of partners), it’s time for the firm to engage in some meaningful introspection.

Oh, and one more small, but important point. People of color bring racial diversity to an organization. White people bring racial diversity to an organization. But to say that an individual (a partner, for example) is “racially diverse” is the kind of inaccurate, imprecise language that clouds discussions about difficult issues like antiblack racism. 

Thursday, February 25, 2021

Cherokee Nation Requests that Jeep Discontinue Use of "Cherokee" Name

Chuck Hoskin, Jr., the principal chief of the Cherokee nation has asked carmaker Jeep to change the name of its Grand Cherokee vehicle stating that Jeep's use of the name without the tribe's permission is troubling and perpetuates international misinformation of the Cherokee people.  According to Hoskin "The use of Cherokee names and imagery for peddling products doesn't deepen the country's understanding of what it means to be Cherokee, and I think it diminishes it somewhat."  As might be expected for those that have followed American Indian cultural appropriation throughout the last several decades, the carmaker is resisting such a move claiming that the name "honors" the tribe.

Stellantis, the automobile conglomerate that owns Jeep, formed recently from the merger of Fiat Chrysler and Peugeot, defended its use of the Cherokee name claiming "our vehicle names have been carefully chosen and nurtured over the years to honor and celebrate Native American people for their nobility, prowess and pride."  This argument echoes the same arguments used for decades by Daniel Snyder, the owner of the Washington Football Team (formerly the Redskins) and the owners of the Cleveland Indians (who have also recently agreed to change the team name after phasing out the offensive Chief Wahoo logo a few years ago).  For Stellantis, the Grand Cherokee is one of Jeep's most popular models selling more than 200,000 units in 2020.

Suzan Shown Harjo, long an activist fighting against cultural misappropriation and offensive use of American Indian imagery, is not buying the "honor" argument.  "Of course it's not an honor" states Harjo, "That’s the assumption that was made by so many people about our land, water, gold, silver, copper — name a mineral. Now it’s about our imagery, our names and our cultural icons . . . When does this thievery stop?"  

The Cherokee Nation describes itself as a sovereign tribal government. "Upon settling in Indian Territory (present-day Oklahoma) after the Indian Removal Act, the Cherokee people established a new government in what is now the city of Tahlequah, Oklahoma. A constitution was adopted on September 6, 1839, 68 years prior to Oklahoma’s statehood.  Today, the Cherokee Nation is the largest tribe in the United States with more than 380,000 tribal citizens worldwide. More than 141,000 Cherokee Nation citizens reside within the tribe’s reservation boundaries in northeastern Oklahoma. . . . The Cherokee Nation is committed to protecting our inherent sovereignty, preserving and promoting Cherokee culture, language and values, and improving the quality of life for the next seven generations of Cherokee Nation citizens."

Whether Jeep drops the moniker will likely depend on whether the same kind of financial pressure is brought against Jeep and Stellantis similar to what was brought to bear on Daniel Snyder and the Washington Football Team and corporate entities like Aunt Jemima, Land-O-Lakes and Uncle Ben's.  Each of these entities have been persuaded to change/drop racist depictions and monikers because of the economic pressure of threatened boycotts and sponsorship withdrawals, particularly in light of the 2020 summer of protests following the police killings of George Floyd and Breonna Taylor.

hat tip: Savannah Johnston, Arkansas Little Rock Bowen School of Law, 3L

images courtesy of Wikimedia Commons

Tuesday, January 26, 2021

President Biden Signs Executive Order To End the Use of Private For-Profit Prisons

Wikimedia Commons
Philadelphia County Prison
In an important move that returns federal government policy to the Obama era, today President Biden signed an executive order calling on the Department of Justice to ends its use of private prisons.  While this executive order does not end federal government reliance on for-profit immigration detention centers, it does require that no future contracts with private prison operators be entered into between the federal government and private prison corporations CoreCivic, GEO Group and others.  Use of the executive order to end private for-profit prison reliance has proven difficult politically as Obama ended their use before the 2016 election, but once Trump entered the White House, he rescinded the policy and made robust use of private prisons for federal prisoners as well as immigration detention.

This executive order, while lauded as a positive step in addressing mass incarceration and systemic racism, will not permanently end its practice.  Legislation outlawing private prisons would be a more permanent solution.  Or, a judicial pronouncement that private for-profit incarceration is unconstitutional would effectively end the use of private prisons as well.  An Arizona 501(c)(3), Abolish Private Prisons, has filed a lawsuit in Arizona federal district court on behalf of inmates housed in private prison facilities, arguing that for-profit incarceration is unconstitutional under the 13th, 14th and 8th amendments as well as a violation of the non-delegation doctrine.  The lawsuit Nielsen v. Shinn is currently pending in Arizona federal court.  

The complaint filed by plaintiffs, together with the Government motion to dismiss, the plaintiff's motion in opposition and the Government's reply can all be viewed here

Monday, December 14, 2020

Corporate Justice at the Micro Level

Several years ago, my friend, colleague and mentor, andre cummings, and I created and defined what we call "Corporate Justice."  "At its core, Corporate Justice refers to a responsibility, even a moral obligation, which businesses and corporations have to engage fairly, civilly and responsibly in the world and community that they do business and from which they derive profits. More than that, the concept of Corporate Justice also focuses on the roles that shareholders, policy makers, other stakeholders and the community at large have in fostering a more just and responsible business community."  Our conversation led to the creation of a course, a book, several presentations, and this blog.  In conceptualizing "Corporate Justice," our primary focus was on large corporations and their impact on the world around us.  That perspective influenced much of the work we have completed on the topic as well as the way that we conceptualized its impact.  However, after a recent community event I facilitated here in Miami, Florida, I was presented with a thought provoking question “what does corporate justice mean for small businesses?”  I had never considered this question and realized that I had made a substantial oversight in failing to do so.  Small business are the life line of many communities and they meet the immediate needs of the people in areas in which they operate.  Given that reality, I have begun to critically think about what Corporate Justice at the “micro” level means.  Specifically, do small businesses have the same obligations that we might expect from large corporations?  Over the next few days I plan to think more about this question and welcome your input and insight.  Next week, I will provide you with my initial response.  I look forward to reading about your insights on the issue.  


Wednesday, December 9, 2020

NASDAQ Promotes Diversity Through New Listing Requirements

On December 1st, 2020, Nasdaq filed a proposal with the Securities and Exchange Commission to adopt additional listing rules requiring enhanced board diversity and disclosure of firm diversity efforts.  The new listing rules require Nasdaq-listed companies to have on their board of directors, at least two diverse directors, including one who self-identifies as female and one who self-identifies as an underrepresented minority or LGBTQ+.  If the firm does not meet this listing requirement, it must explain why they do not have at least two diverse directors sitting on their board.  Additionally, the new listing rules require Nasdaq-listed companies to publicly disclose consistent, transparent diversity statistics regarding its board of directors.  Nasdaq defines underrepresented minorities to include Black or African America, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, two or more races or ethnicities.  Smaller reporting companies and foreign companies have additional flexibility in satisfying these new listing requirements by seating at least two female directors.  These new listing rules require approval from the SEC.

NASDAQ's stated goal for requiring diversity among its listed companies board makeups is to provide the investing public with a "better understanding of the company's current board composition and enhance investor confidence that all listed companies are considering diversity in the context of selecting directors, either by including at least two diverse directors on their boards or explaining their rationale for not meeting that objective." To support this new listing requirement, Nasdaq pointed to over 24 studies that found a link between diverse board and more robust financial performance with better corporate governance.  Under this proposal, Nasdaq-listed companies are required to publicly disclose board-level diversity statistics within one year of the SEC's approval of the rule.

CNN reports that Nasdaq CEO Adena Friedman stated, "Nasdaq's purpose is to champion inclusive growth and prosperity to power stronger economies." Non compliance by Nasdaq-listed companies could lead to delisting.  

Nasdaq's move is part of a growing momentum to see that corporate board diversity is taken seriously across the United States.  California has for two years been requiring gender diversity on corporate boards and has recently begun requiring racial and ethnic diversity on California boards as well.  Goldman Sachs has recently announced that it will require any company that it assists in taking public must include at least one diverse board member. 

The Corporate Justice Blog has long advocated for board diversity as a priority for expanding human capital and realizing greater financial benefits for the firms and its shareholders. We argue that a commitment to diversifying the board, both in gender and racial diversity as well as worldview diversity enhances the performance of the corporations that so commit.  See here, here, here and here.

hat tip:  Deepali Lal, 3L, Arkansas at Little Rock William H. Bowen School of Law 

photo: courtesy of Wikimedia Commons

Monday, November 30, 2020

Systemic Racism in the Home Mortgage Context: We Don't Have Time to Notice

In 2020, pivotal events ushered in a season of antiracism rhetoric in the U.S. The brutal deaths of unarmed black Americans at the hands of police officers and white vigilantes, and the disproportionately harsh impact of COVID-19 in the black American community, launched the nation into a discussion about systemic racism. Unfortunately, it seems likely that the 2020 antiracism discourse was merely seasonal rather than enduring, and unlikely to result in meaningful change. 

Black American’s vulnerability in the face of systemic racism is not limited to death, sickness and injury as a result of COVID-19 or antiblack bias in police departments. Our vulnerability is precipitated by things like lack of access to nonpredatory financial services. This is just one of the contexts that compromise black Americans’ economic survival. Unacknowledged systemic racism destroys the wealth and wellbeing of black individuals, families and communities, sometimes causing working and middle-class black Americans to plummet into poverty. As 2020 comes to a close, an election that threatened democracy in the U.S. and the existential threats of an uncontrolled pandemic, eclipse a system of intentional antiblack racism on the part of the financial institutions that engaged in predatory mortgage lending in the years leading up to and beyond the 2008 recession. It is now well documented that lenders, brokers, and mortgage servicers engaged in conduct that was fraudulent and misleading. The mortgage market charged excessively high rates and fees, engaged in high-pressure sales tactics, imposed unnecessarily harsh prepayment penalties, and distorted loan structures to avoid the application of consumer protection statutes.  But, more than a decade later, many black Americans are still fighting to prevent financial institutions from taking away their homes. 

In a book I coauthored with Dr. Janis Sarra, a law professor at the University of British Columbia, Predatory Lending and the Destruction of the African American Dream (Cambridge University Press, 2020), we describe new iterations of predation that continue to target black consumers years after financial institutions settled litigation that alleged pervasive fraud on their part for steering black Americans into predatory subprime loans. But these renovated predatory practices are obscured by the nation’s focus on COVID-19 and a vitriolic election season. Meanwhile, more black Americans will lose their homes even after investing all or most of their wealth in attempts to keep them. This reality requires the calls for moratoriums on mortgage foreclosures to be answered in the affirmative.

Thursday, November 12, 2020

The Political Economy of Inequality, Democracy & Oligarchy - Panel Presentation - November 13, 2020

The Law and Political Economy Project at Yale Law School is hosting the following panel:

The Political Economy of Inequality, Democracy & Oligarchy, on Friday, November 13, 2020 at 5:00 pm eastern time.

This panel discussion will focus upon the erosion of democratic institutions and the rise of oligarchy that has followed in the wake of unprecedented economic inequality. The panel will address elite efforts to entrench themselves politically as well as economically, including the consequences of such efforts in terms of human development. The panel will focus upon the specific context of election 2020 and the uncertainty it is creating. The subversion of democracy and the law governing our democracy naturally holds many costs, and each panelist will address such costs. Each panelist will also seek to articulate some mechanism for a path forward.  Register here


Emma Coleman Jordan, Georgetown Law Center

andré douglas pond cummings, Univ. of Arkansas at Little Rock William H. Bowen School of Law

Atiba Ellis, Marquette University Law School

Steven Ramirez, Loyola University of Chicago School of Law

Gerald Torres, Yale Law School

Friday, November 6, 2020

Do Black Lives Matter to Major Corporations?

The summer of Black Lives Matter protests responding to the police killings of George Floyd, Breonna Taylor and Rayshard Brooks, among others, has led to stunning commitments from major banks and corporations to commit to social justice and promoting practices to recruit, hire and retain underrepresented populations, including black Americans, Latinx and female colleagues.  American Express just announced its pledge to invest $1 Billion to advance racial and gender equity.  JP Morgan Chase in October announced a $30 Billion commitment to advance racial equity.  Similarly, Citi and Bank of America have each pledged $1 Billion to promote economic mobility among communities of color.  Goldman Sachs, famously referred to as a vampire squid during the mortgage crisis in 2008, has announced its "Launch With Goldman Sachs" program "to increase capital and facilitate connections for women, Black, Latinx and other diverse entrepreneurs and investors."  These commitments represent huge infusions of capital into causes that these major corporations have just recently found religion upon.  Numerous corporations have made recent pledges to financially support social justice and economic equality including Google, Disney, Facebook, Amazon,  Cisco, DoorDash, Etsy, Home Depot, Intel, TikTok, Lego, Nike, Proctor & Gamble, Fashion Nova, WeWork, and YouTube, among so many others.

Jamie Dimon, CEO of JP Morgan Chase stated in announcing its $30 billion-over-five-year commitment, that “[s]ystemic racism is a tragic part of America’s history. . . . We can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people. It’s long past time that society addresses racial inequities in a more tangible, meaningful way.”

For those long-time followers of the Corporate Justice Blog, these corporate pronouncements may seem ironic or perhaps will be received with trepidation or doubt.  Profit maximization has for years furiously driven corporate leadership to dizzying examples of fraud, corruption, and malfeasance as recorded on these blog pages for years.  Still, these Billion dollar commitments respond to a summer of true discontent and protest over inequality and the value of black lives, and if these corporations are to be taken seriously, these capital infusions could come as true gamechangers.  Will these corporations truly put their money where their commitments are?  And how do we hold these companies accountable to their commitments to advancing racial equality and economic mobility for those communities previously shut out?  

photo: Jamie Dimon, Wikimedia Commons

hat tip: Jessica Smith, 3L, Arkansas Little Rock Bowen School of Law

Saturday, October 31, 2020

Typhoid Trump's COVID-19 Death Count Includes 700 Deaths from Rallies and 99,300 New Cases Yesterday

Arlington-National-Cemetery | Scattered Thoughts and Rogue Words 

The Wall Street Journal reports today that the U.S. suffered 99,300 new COVID-19 cases yesterday. The WSJ notes that this marks a new record high. COVID marches on in the U.S. with its death toll at about 230,000. Fox News reports that number does not count total "excess deaths" suffered in the U.S. which would bring the death toll to 305,000 dead Americans.

Such numbers demand reflection and context. The COVID death toll now amounts to 100 times the number of deaths Osama Bin Laden inflicted on the U.S. on 9/11. The COVID death toll more than doubles the total U.S. deaths from the Viet Nam War, the Korean War and World War I combined. It exceeds U.S. combat deaths in World War II. All this death in only six months.

The U.S. death count per capita now exceeds 70 fatalities per 100,000 people. The U.S. death toll amounts to 6 times the deaths per capita in Germany from COVID, and 10 times the death rate in Greece. Singapore boasts at least as much diversity as the U.S. and its death toll is less than 1/100th of the U.S. per capita death rate. South Korea boasts the same 4-season climate as the U.S. and their death toll per 100,000 stands at less than 1. Taiwan with a total of 7 deaths has a per capita rate that stands at 1/2000th of the U.S. death rate. In the "US political failures have driven COVID-19 morbidity and mortality."

For example, the Trump Administration raised the White Flag on COVID-19 in recent days and pushed the pseudo-science of "Herd Immunity" as its excuse for abject failure to control the contagion. Thus, White House Chief of Staff Mark Meadows stated in a live interview with CNN that: "We are not going to control the pandemic." 

This finally explains the consistent recklessness of the Trump Administration in hosting super-spreader events, mocking the use of masks, and ignoring its own guidelines for the isolation of Administration personnel infected by COVID. In short, Trump now seeks herd immunity as cover for an out of control pandemic that now rips through our population sowing deaths beyond any war, conflict or terrorist attack.

In fact, a team of Stanford economists just posted a paper demonstrating that Trump rallies leave behind localized spikes in COVID cases and they attribute 700 American deaths to these super-spreader events. Here is the (edited) abstract:

We investigate the effects of large group meetings on the spread of COVID-19 by studying the impact of eighteen Trump campaign rallies. To capture the effects of subsequent contagion within the pertinent communities, our analysis encompasses up to ten post-rally weeks for each event. Our method is based on a collection of regression models, one for each event, that capture the relationships between post-event outcomes and pre-event characteristics, including demographics and the trajectory of COVID-19 cases, in similar counties. [W]e conclude that these eighteen rallies ultimately resulted in more than 30,000 incremental confirmed cases of COVID-19. Applying county-specific post-event death rates, we conclude that the rallies likely led to more than 700 deaths (not necessarily among attendees).

Typhoid Mary only infected 53 persons with Typhoid fever!

I urge all thoughtful Americans to read this study prior to casting a vote for Trump. The reckless disregard of U.S. citizens evinced by the Trump campaign in terms of exposing Americans to more death and disease renders Trump unfit to govern.

More fundamentally, the Typhoid Trump approach to COVID implies millions of deaths and long-term disabilities due to the 156 million cases we will need to reach herd immunity without a vaccine: "A strategy of going for herd immunity from natural infection would lead to a massive death toll—estimates suggests the result could be somewhere between 1 million to 2.5 million dead Americans. The U.S. health system would buckle under the weight of so many hospitalizations and ICU admissions." Only our most vicious enemies could want an American massacre of such a scale!

Very recent research shows the folly of seeking herd immunity before mass vaccination: the COVID anti-bodies fade over time.

Surging COVID cases will also crash the stock market and kill small businesses with all the job losses that follow which explains the massive support of Wall Street for Joe Biden. Herd immunity spells economic devastation.

We simply cannot afford the costs of Trump's herd immunity approach of doing nothing to control this pandemic.

Friday, October 30, 2020

Teaching "Corporate Governance" Differently in 2020

by Cheryl Wade, Harold F. McNiece Professor of Law, St. John's University School of Law

I decided to teach my Corporate Governance seminar slightly differently this semester in light of all that is happening in 2020. We have discussed the nuts and bolts of corporate governance – the roles of officers, directors and the process for nominating them; fiduciary duty; compliance; and shareholder democracy, among other things – but our discussion is taking place in the context of the corporation’s position and status in civil society. Some of my students will explore the role of public companies in addressing existential issues such as the global pandemic as a matter of social responsibility. We discussed the ability and appropriateness of public companies in addressing climate change. We considered the corporate governance failures at financial institutions that exploited consumers. Our approach this semester acknowledges the inextricable link between even the most mundane corporate governance issues on one hand and environmental and social matters on the other. 

Earlier this semester, I asked my students to think about the role of the corporate lawyer in helping companies avoid the public relations nightmares that sometimes ensue socially irresponsible behavior. Zach Sobel wrote, “imagine this, a corporate lawyer pushes their client to accept responsibility for whatever actions were alleged (assuming they actually did do what they are accused of). The public would be left with nothing to complain or hypothesize over, and the conversation moves from what the company did to how the company will respond.” Ricardo Gray agrees with Zach about the benefits of a corporation admitting wrongdoing “The corporate attorney serves the corporation so advice to have the corporation admit wrongdoing may seem backward, but after a corporation is caught red-handed remedial steps that do not leave those injured with a bad taste in their mouth, will only improve the likelihood of the corporation's success in the future.” Then Ricardo waxed poetic. “Specifically, once the corporation has caused harm to stakeholders, a corporate attorney becomes both a shield of the corporation, in that he or she will attempt to minimize liability and defend it from lawsuits and a sword, in that he or she will cut a path forward for the corporation to continue operations after the harm is caused.” 

I asked my students how firms can avoid litigation in the first place? Chris Gaine suggested that risks may be mitigated “by creating and implementing robust legal compliance systems.  In seeking to comply with the law, companies should look at relevant legal standards and aim to exceed them instead of just adhering to them.  Companies should also aim to comply with the “best practices” of a given industry, which manifest ideal ethical standards beyond what the law requires.” Greg Kramer also focuses on the potential of adequate corporate compliance. “One lesson from the spate of fraudulent, coercive, and otherwise illegal behavior of financial institutions leading up to the Great Recession (as well as more recent examples like Wells Fargo) is that these crises were not merely the result of a handful of bad actors at the top of an organization.  They involved systemic misbehavior of frontline employees across different parts of the organization.  But obviously, a board is incapable of monitoring every single operational activity of a company where the potential for misconduct exists.  Thus, boards must sift through this “noise” and focus their monitoring on key “signals” of systemic misconduct.” Federica Marini mentioned another crisis-avoidance structure that complements what Chris calls “robust” compliance. Federica writes that “while solving crises focuses on ending on-going emergencies and limiting damages to a client’s business, risk management is about finding solutions to avoid loss altogether prior to the occurrence of crises.”

Ryan Smith was concerned about another context with which public companies grappled in recent years – sexual harassment allegations. Ryan considers this problem in light of companies’ public disclosure about their investigation of harassment claims. “In the course of investigation, the firm should ask outside counsel to assess whether the company’s public statements require correction or updating based on what the investigation reveals.” Alexa Major also wrote about disclosure but did so in the context of COVID-19 and admonished firms to be careful about disclosing information about “the impact of the current pandemic on ‘business as usual’.”

All of my students submitted answers that reflect hopeful perspectives concerning the roles and obligations of public corporations. I have shared the ideas from just a few of them in this post.

Monday, October 19, 2020

Never Ever, Thought I Would See This . . . . Warren Buffett Gets Bamboozled?

Just out . . .  Berkshire Hathaway, Warren Buffet's investment firm, is suing international law firm Jones Day for fraud.  In 2017, a Berkshire Hathaway subsidiary Precision Castparts purchased Wilhelm Schulz, a German oil and gas pipemaker for $940 million dollars.  Only problem, Wilhelm Schulz fraudulently manufactured invoices, invented "phantom customers," and misrepresented their financial position during the acquisition (they were in fact at the time in discussion with insolvency representatives).  Precision Castparts, the Berkshire subsidiary, ended up losing some $755 million in the deal as the fraud and misrepresentation later became clear.  In fact, an arbitrator recently awarded Precision Castparts 643 million euros ($756 million) based on Wilhelm Schulz's true value at the time of acquisition of 157 million euros (approximately $200 million).  Because Wilhelm Schulz is in bankruptcy, it is very unlikely that Precision Castparts will recover much of any of the arbitration award.  Thus, the lawsuit against Jones Day, the lawyers that represented Wilhelm Schulz in the acquisition.

From Bloomberg:  "According to the suit, Jones Day conspired with Schulz to create a misleading picture of the German company’s value. Toward that end, the firm’s lawyers drafted documents including a securities purchase agreement and disclosure statements they knew were false, Precision claims."

This represents a rare misstep in Warren Buffet's empire, as he is recognized as one of the world's savviest investors.  If Berkshire and Precision were taken in a "fast shuffle," one has to assume that the fraud was deep indeed.

hat tip to Molly Curington, University of Arkansas at Little Rock Bowen Law School, 2L
photo: public domain