The Electric Commentary

Thursday, July 22, 2004

The Age of Irresponsibility


I will die a happier man if I never again hear "values" discussed in a political campaign as the rhetoric it has become. "Values" as discussed on the stump trail seem only connected to who can marry whom, or who can have sex with whom and in what manner. If you want to isolate a specific act that is damaging to families, children, institutions, and society in general, it’s not two men honeymooning in Key West; it’s the current trend of our leaders and icons to shirk responsibility and decline to assume fault. The "Age of Responsibility" is bullshit. What kind of example does it set for youth when esteemed members of industry, sport, government, and culture consistently deny responsibility? Let’s dissect a few recent statements across the social spectrum and note what they said and what they should have said.
Martha Stewert on her sentencing– "I have done nothing wrong."
The responsible thing to say (RTTS), "I have broken the law and been justly convicted by a jury of my peers. I hope all of my supporters can forgive this transgression. I promise a new and socially responsible Martha Stewert Living upon my release."
Dick Cheney on saying "fuck yourself" on the Senate floor – "I may have said it; if I did I felt better afterwards."
The responsible thing to say, "Yes, I said it and it was wrong and out of character. I apologize and promise the American people a respectable level of discourse from now until I vacate my office."
David Beckham the overpaid soccer star on shanking two penalty kicks in the Euro Cup- "It was Real Madrid’s fault for their training."
The RTTS, "I guess it proves I’m human. I will train with a vengeance so the next time Madrid calls on my skills I will not disappoint."
Sandy Berger on taking classified documents from the National Achieves- "It was an honest mistake."
The RTTS, "It was a mistake for which I will pay the consequences. It was a breach of national security and I want to restore faith in homeland security by assuming responsibility and cooperating with the investigation."
Ken Lay, "I have done nothing wrong."
The RTTS, "I have realized the err of my ways and apologize to Enron stockholders, creditors, and deeply to the people of California. May God have mercy on my twisted soul." (Ok, the last one is a little overboard)
"Values" are more than blow-jobs, homosexuals, dirty words, and atheists; they are truth, justice, equal rights, and the pursuit of life, liberty and happiness whatever those pursuits may consist of. I personally don’t care if the Vice President said "fuck yourself" or "how about a reach around?" I just wish he would take responsibility for saying it. The next time a politician from either side of the aisle claims they more accurately represent "the values of real Americans" they would do well to consider more than just sex and religion and consider truth and responsibility.

Oh, and "reach around"...yeah I said it.


  • For the record, I think Martha Stewart is innocent and will probably win on appeal.

    By Blogger PaulNoonan, at 3:08 PM  

  • Why is that?

    By Blogger RyanSimatic, at 8:26 PM  

  • This is off the top of my head, so I may mistate the law a little, but the gist is correct.

    Martha was being investigated for insider trading. THe rationale for insider trading as illegal is that it's stealing. It is using secret or proprietary information not generally available to the public, and cashing out at their expense. Now Martha was being investigated for this, but was never charged with it. She was charged, and convicted of securities fraud. THe law on this is as follows:

    "one can only be held liable for securities fraud if one has made a material misrepresentation or omitted to state a material fact that one had a duty to disclose."

    Most of the time this is applied to someone lying about the state of their own company to affect stock prices. Martha, on the other hand, lied about the reason for her trade (even though the actual reason was not itslef material), and that trade was not of her own companies stock, but of Imclone. While lying is never right, and she should apologize for it (and I think that she has) it is not always criminal. Here is what the gov has to prove:

    1. She lied. I think that they can do this.
    2. That the lie was material. Here is the legal lingo of this standard:

    In order for a misrepresentation to be material, the government will have to prove that there was a substantial likelihood that the reasonable investor would have considered it important in deciding whether to buy or sell Martha Stewart Omnimedia stock. (From Prof. Bainbridge).

    Notice that the gov must prove that her lying about imclone stock must have influenced reasonable investors about there lielihood to buy or sell MARTHA stock.

    This is a real stretch of securities law. IT's way more than was ever intended.

    There are also good public policy reasons to find for Martha, as those that have knowledge or minor involvement with insider trading scandals will be less likely to come forward if they can be put in the pokey for five years for a lie or mistatement. The bad guys here all work for imclone.

    Had her Imclone contact informed her that Imclone was not going to get FDA approval for the drug in question, then we have a different animal altogether. But that would be insider trading, and this whole analysis would be unnecessary, because that is relatively easy to prove. That's not what happened.

    By Blogger PaulNoonan, at 8:08 AM  

  • "Now Martha was being investigated for [insider trading], but was never charged with it"

    *The appeal is not the only legal proceeding in Stewart's and Bacanovic's future. The Securities and Exchange Commission has filed civil insider trading charges against both, alleging that the tip about Waksal violated securities laws.*

    "She was charged, and convicted of securities fraud."

    *Martha Stewart was sentenced Friday to five months in prison for obstructing a federal securities investigation*

    What they got her on is lying to federal officers regarding a securities fraud investigation, not actual securities fraud. You agree that they can prove she lied, so there it is: conviction. Federal authorities also argue that the tip she received from her broker's assistant did constitute insider trading, hence the forthcoming civil suit.

    The comments shown as *such* are drawn from:

    Masters, Brooke A., "Martha Stewert Sentenced to Prison." The Washington Post. 17 July 2004: A1.

    By Blogger RyanSimatic, at 9:54 PM  

  • It is my understanding that the lesser charge "lying to federal investigators" IS securities fraud, a lesser included offense of insider trading. I think my general analysis is still correct. Lying alone is not enough.

    By Blogger PaulNoonan, at 4:52 PM  

  • Even lying to a federal investigator is not necessarily a crime. Say you're being investigated for embezzlement. On the Monday that the cops claim you embezzled $1,000,000 you had 2 big macs for lunch from McDonalds. During questioning, you answer all of the FBi and SEC officers questions. One of them asks you, in a conversational tone, "what did you have for lunch?" You are embarassed about your meal as your wife and you had both been on the South Beach Diet, as a means of supporting each other through the dieting process. Furthermore, you have a reputation around the office as the pinnacle of health. You are overcome with embarrassment, and say that you got lunch at Baja Fresh, a local healthy Mexican fast food joint.

    Have you committed a crime? Nope. It's not material.
    This is obviously an extreme example, but there is a line (a fine line) between what you can legally lie about and what you can not.

    So, assuming the lie actually hindered an investigation, she should be guilty, but did it?
    I say no, because the investigation that it allegedly hindered was into a crime that was ultimately not committed. Furthermore, it is my opinion that the crime of insider trading by Martha had obviously not been committed, and there was no reasonable basis to believe at the time that the lie interfered with the investigation.

    But we'll see in a few months.

    By Blogger PaulNoonan, at 3:42 PM  

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