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Politics at heart of law firm dispute
Legal Career News | 2007/05/30 13:32

An unusual vote on an issue perceived by many to be intensely political has once again sparked controversy over who the District 209 Board of Education turns to for legal advice.

During its regular monthly meeting on May 21, the board voted to dump the law firm Odelson and Sterk, and instead, retain the services of Giglio and Del Galdo. Both firms have donated bundles of cash to campaign efforts by board President Chris Welch and Melrose Park Mayor Ron Serpico, a major backer of Welch and Welch's political ally, Cook County Recorder of Deeds Eugene Moore.

Aside from the tangled web of political connections, the method by which Giglio and Del Galdo was hired is causing rumblings, as well. When the motion to hire the firm was made, it failed in a tie vote with board Secretary Sue Henry abstaining. After moving on to other business and without holding any further public discussion on the issue, Welch announced that Henry and another board member had changed their vote, thus awarding the district's business to Giglio and Del Galdo.

The vote to dismiss the law firm of Odelson and Sterk was taken prior to deciding whether to retain Giglio and Del Galdo. Both Henry and school board newcomer Robin Foreman said they changed their votes after realizing the district was left without a law firm to represent its interests.

Henry, an employee of Moore's at the county office, didn't explain specifically why she initially abstained.

"I just felt pushed at the time the vote was going down," Henry said.

Robert Cox, a newly elected board member from Forest Park, voted to bring in the new legal firm largely out of fiscal concerns, he said. Based on information provided by the superintendent, Cox said he understood that Odelson and Sterk was attempting to bilk the district out of money.

"Basically, they were billing for services that weren't requested but were being handed down," Cox said.

Superintendent Stan Fields declined to comment on the bills received by Odelson and Sterk, but said that changing law firms was a "business decision" in an effort to get a better value.

"During my nine month tenure I came to the conclusion that the school district would be better served with a different general counsel," Fields said.

A phone call to a managing partner in the law firm, Burt Odelson, was not returned.

Dating back to 1999, Burt Odelson and his managing partner Mark Sterk, have donated more than $19,700 to Proviso's school board president and his political allies, according to campaign filing records maintained by the state.

District 209's Director of Auxiliary Programs Kyle Hastings has taken in more than $14,000 in campaign money from the firm, according to the same state records. Hastings is also the mayor of Orland Hills.

Though less prolific, the managing partners of Giglio and Del Galdo have also been generous with area politicos. Since 2002, Joseph Giglio and Michael Del Galdo have given $19,500 to Serpico's campaign efforts and $1,500 to Welch. Illinois campaign disclosure records indicate the firm has given no money to Moore, the county recorder of deeds.

Welch, the school board president, did not return several phone calls seeking comment.

A little more than one year ago, the District 209 board wrestled with this very proposal, though no vote was taken at the time. At that meeting in April of 2006, board members accused one another of playing politics. In 2006, board member Charles Flowers said he had reservations with both law firms.

"I was all for firing (Odelson and Sterk), but I certainly wasn't interested in bringing in more crooked people," Flowers said after last year's debacle.

At the May 21 board meeting, Flowers voted to dismiss Odelson and Sterk, and then voted against hiring Giglio and Del Galdo. After board members Foreman and Henry reversed their original votes on whether to hire the new firm, Flowers was joined only by Theresa Kelly in the minority.



DOJ expands investigation into politicized decisions
Legal Career News | 2007/05/25 12:52

The US Department of Justice Office of Professional Responsibility has expanded its investigation into whether department aides illegally made hiring decisions based on consideration of applicants' political beliefs, the Los Angeles Times reported Thursday. The move follows Wednesday's testimony to the House Judiciary Committee by former DOJ aide Monica Goodling, where she admitted making hiring decisions based on political party affiliation. The DOJ also said that it found no evidence to support Goodling's claim that the practice was approved by officials in the department.

Goodling was testifying about her role in the firings of eight US Attorneys. She disputed testimony by resigning Deputy Attorney General Paul McNulty, and claimed that at least one US Attorney was fired to open a spot for a protege of Karl Rove.



Supreme Court Ruling Splits Anti-abortionists
Legal Career News | 2007/05/24 17:20

A supreme court decision on abortion widely seen as the most important legal victory for the religious right in years has opened up a rift within the anti-abortion movement. In a full-page advertisement in a Colorado newspaper yesterday, the leaders of four anti-abortion groups accused a powerful evangelical leader of misleading his fellow Christians on the court verdict. The unusual attack on James Dobson, the founder of Focus on Family and arguably one of the most powerful figures on the religious right, comes only days after the death of the Rev Jerry Falwell, a leading conservative.

The breach prompted immediate speculation about cracks in what has until now been a remarkably united movement.

In their ad, the leaders of the four anti-abortion groups say Mr Dobson was wrong to see last April's supreme court decision as a victory. The verdict banned a particular procedure for terminations later in pregnancy, which the anti-abortion movement has labeled "partial birth abortions".

The campaign against that particular procedure has been a rallying point in the anti-abortion movement. Last month's decision was also seen as an indication of a shift to the right on the supreme court following two appointments by President Bush. Opponents of abortion now believe it could soon be possible to overturn the decision legalizing abortion.

However, yesterday's ad argues that the ban on late abortions will not reduce terminations. Instead, the ad says the ban will simply encourage doctors to find other methods for such terminations.

"Dr Dobson, you mislead Christians claiming this ruling will 'protect children.' The court granted no authority to save the life of even a single child," the ad said. It also called on Mr Dobson to repent.



Supreme Court Takes Municipal Bond Case
Legal Career News | 2007/05/22 17:22

The Supreme Court Monday said it will consider a case that could have big implications for the $3 trillion municipal bond market. The issue is whether states can exempt their muni bonds from taxes while taxing such bonds issued by other states. A Kentucky court ruled last year that the practice violates the Constitution, which prohibits states from discriminating against out-of-state commerce.

Kentucky's lawyers appealed to the Supreme Court. "The outcome ... has broad implications for the municipal bond market at large, far beyond Kentucky's borders," John R. Farris, Kentucky's secretary of finance, said in a written statement.

If the justices uphold the Kentucky court's ruling, states that exempt their bonds while taxing those from other states would either have to tax municipal bonds from all states equally or exempt all bonds in order to come into compliance, several legal experts said.

But based on a separate Supreme Court decision last month involving interstate commerce, which ruled in favor of local governments in New York, many observers think the Court is likely to overrule the Kentucky decision and maintain the status quo.

By exempting municipal bonds from state taxes, governments can offer in-state investors lower interest rates and as a result lower their cost of borrowing. Muni bonds, which are used to fund roads, schools and other public projects, are also exempt from federal taxes.

The bonds can be particularly appealing to investors from high-tax states such as California, New York and Massachusetts. There are hundreds of mutual funds comprised of muni bonds from single states, with over $160 billion in assets, bond analysts said.

State and local governments issued approximately $400 billion in municipal bonds in 2006, one bond analyst said.

Like Kentucky, more than 40 states exempt at least some of their in-state bonds from taxation, the National Association of State Treasurers said in a friend-of-the-court brief.

Kentucky's policy was challenged by George and Catherine Davis, who argued it is unconstitutional and requested a refund of the taxes they paid on out-of-state muni bonds.

If the Davises prevail at the high court, Kentucky and the other states could be forced to pay those refunds, said Alan Viard, a resident scholar at the American Enterprise Institute.

The case could also impact the Section 529 college savings plans offered by many states, said Leonard Weiser-Varon, a public finance expert at the Mintz Levin law firm in Boston.

Bond fund managers downplayed the issue. Tom Metzold, a vice president and portfolio manager at Eaton Vance Corp., said that a ruling against the states could result in a one-time reduction in the value of muni bonds. Otherwise, "it will be much ado about nothing," he said.

Ronald Fielding, who manages the municipal bond funds group at Oppenheimer Funds, estimated that investors who own bonds from high-tax states could see the value of their portfolios decline by 1.5 percent to 2 percent if the Supreme Court rules in favor of the Davises.

But many legal experts think the justices are likely to rule in favor of Kentucky instead. Last month, the justices found that local governments in New York could compel private trash haulers to use government-owned facilities, even if it would be cheaper to dispose of it at out-of-state dumps.

Gregory Germain, an associate professor at the Syracuse University College of Law, said that ruling carved out "a very broad exemption" to the commerce clause for laws that may discriminate against interstate commerce but favor a government entity.

The case is Kentucky v. Davis, 06-666. It won't be argued until the Court's next term, which begins in October.



N.C. Court of Appeals Hears Lottery Lawsuit
Legal Career News | 2007/05/21 19:20

Is the North Carolina Education Lottery a tax, and was the law making it legal in the Tar Heel state passed unconstitutionally? State Superior Court Judge Henry Hight, in March 2006, ruled against a lawsuit challenging the lottery's legality, saying the bill was legally passed, because it is not a tax and no one is forced to play the lottery. But Bob Orr, former executive director of the North Carolina Institute of Constitutional Law and one of the lawyers pressing the challenge to the lottery, argued before the state Court of Appeals Tuesday that it was indeed a tax, because 35 percent of the lottery proceeds are allocated for education and that any money raised for the public's general benefit is a tax.

At issue in the case is how the General Assembly passed the law and whether it was constitutional.

North Carolina law requires votes on separate days for laws that lead to higher taxes or borrow against the state's credit.

Attorneys for the state have argued that the lottery law does neither and that both chambers' votes were legal. (In April 2005, the House approved the lottery bill by a vote of 61-59. In August of the same year, the Senate needed a tie-breaking vote from Lt. Gov. Beverly Perdue for the measure to pass 25-24.)

The bigger question, however, for appeals court judges Tuesday was what happens if the lottery, which recently reached the $1 billion sales mark, is ruled unconstitutional -- specifically, what would happen to all the money already rewarded.

Attorneys for the plaintiff, however, said they were only seeking to change the future of the lottery law and wasn't interested in lottery winnings since the lottery launched in March 2006.



CA Supreme Court turns down stem cell research case
Legal Career News | 2007/05/18 17:10

The California Supreme Court denied review of a lower court ruling Wednesday, effectively allowing the continuation of a state-sponsored program for stem cell research operated by the California Institute for Regenerative Medicine. A California state appeals court upheld the validity of the program in February, writing that it "suffers from no constitutional or other legal infirmity." Commenting on the Supreme Court's action, California Governor Arnold Schwarzenegger said:

Today's action by the California Supreme Court is a victory for our state because potentially life-saving science can continue without a shadow of legal doubt. This decision reaffirms voters' will to keep California on the forefront of embryonic stem cell research. California's leadership gives the best promise of finding a cure for deadly and debilitating diseases.

The research program, known as Proposition 71, was approved in a 2004 state referendum by a 59 percent margin.

The lawsuit against the program was brought by the California Family Bioethics Council and two anti-tax organizations - the People's Advocate and the National Tax Limitation Foundation. The trial court determined that the stem cell program was being administered with sufficient state control and did not violate ballot initiative or conflicts of interest rules.



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