Tuesday, September 30, 2008

Sex and Finance

September 30, 2008, 8:30 a.m., 5:00 p.m.

Sexual Assault Aftermath, Global Collapse, Links and More

Sexual Assault Aftermath

5:00 p.m. Breaking News: Brian Morelli, "Faculty Circulating Petition to Reinstate Mills," Iowa City Press-Citizen, September 30, 2008, 4:23 p.m.

First, here are links to some recent and related entries:

The most extensive collection of material: Nicholas Johnson, "University of Iowa Sexual Assault Controversy -- 2007-08," July 19-present
"Cleaning Up After the Party," September 26, 27, 2008 (includes link to Mills' response to Stolar Report)
"Which Would be Worse?" September 25, 2008
"Scapegoat Bites Back," September 24, 2008
"Got Questions?" September 23, 2008
"Rational Responses to Stolar and Global Finance" (includes "The Case for Mills and Jones"), September 20, 2008
"Extra: Stolar Report," September 18, 19, 2008 (includes liink to Stolar Report)

To which the Press-Citizen has added a couple of additional stories this morning:

Brian Morelli, "Campus reaction to recent events varies," Iowa City Press-Citizen, September 30, 2008, p. A1, which reports, as the headline suggests, that some are supportive of the Regents/Mason firings, some very disturbed, and the remainder make up the ever-present apathetic ("UI history professor Katherine Tachau said having read comments from well-regarded people in the UI community such as former UI President Sandy Boyd, former law school dean Bill Hines and former UI General Counsel Mark Schantz, who don't often comment publicly, 'I take that as a sign that there are serious governance problems now because of what is seen as an overly hasty decision with insufficient due process.'").

Lee Hermiston, "Ex-education lawyer criticizes UI firings," Iowa City Press-Citizen, September 30, 2008, p. A1 ("Sheldon Steinbach, a Washington, D.C., attorney, [who] served for 37 years as the general counsel for the American Council on Education . . . said he questions the report done by the Stolar Partnership . . .. 'Having read this sort of B-minus report over a second time, I fail to see what in that report ... warrants their termination, if anything," Steinbach said, adding that their firings 'border on the extraordinary.'").

And The Daily Iowan reports the UI's proposed all-employee sexual harassment training program is also opening to mixed reviews: Matt De La Peña, "Harassment training receives mixed response," The Daily Iowan, September 29, 2008, p. A1 -- and check out the comments while you're there.

Meanwhile, The Gazette reports: Diane Heldt, "UI investigates anti-gay graffiti," Gazette Online, Updated September 29. 2008 7:40 p.m.

"Global Collapse"?

First, a couple links to prior entries:

"How Much Do You Owe the Chinese?" September 6, 8, 2008

"Global Finance: The Great Fountain Pen Robbery," September 21, 2008.

"Alternatives to 'The Plan,'" September 28, 2008.

Well, "The Plan" got voted down yesterday. Jonathan Weisman, "House Rejects Financial Rescue, Sending Stocks Plummeting," Washington Post, September 30, 2008, p. A1.

The sky has yet to fall. The Dow's drop was predictable -- but much of it occurred before the vote. The Japanese market was down around 4%, but that was about the world's worst. Europe's markets regained most of their decline. Russia's problems had to do with the price of oil, not U.S. mortgages and bankers' greed.

Two-thirds of the House Republicans voted against it -- a plan created, strongly supported, and widely publicized by their own Party's President and Secretary of the Treasury.

Forty percent of the House Democrats voted against it -- because (among other things) provisions they felt essential had been stripped out of it in order to get more Republican support.

I think both groups of nay voters were right to reject it -- albeit for their different reasons.

That's not the same thing as saying we should do "nothing." It's only saying Congress shouldn't be doing what they are being urged to do, with the speed at which they are being urged to do it.

The Republicans say we have not yet begun to consider a whole range of marketplace options that could reduce or eliminate the need to socialize the financial sector and require taxpayers pick up the predictable losses from irresponsible, excessive private greed.

As I laid out in "Alternative to 'The Plan,'" linked above, we need to focus more on the needs of depositors (let's first fully fund FDIC), the unemployed (unemployment compensation, training programs, and a CCC-like program ready to roll), and homeowners (permitting those declaring bankruptcy to keep their one home, or at least have their mortgage readjusted to represent the home's actual value), and less on the CEOs.

Bankruptcy is not my field, so I can't personally say what follows is true. But a bankruptcy lawyer recently pointed out to me that when a firm declares bankruptcy, if the CEO and other executives have paid themselves bonuses based on fraudulently inflated accounting statements, those bonuses have to be repaid to the trustee in bankruptcy for distribution to creditors. Thus, when Henry Paulson the magnificent magician one evening turned Goldman Sachs and Morgan Stanley from investment banks into conventional banks, thereby enabling them to avoid bankruptcy, he may have also enabled their CEOs to keep millions of dollars in self-awarded bonuses they would have otherwise had to surrender.

"Doing something" is not always the best response to a crisis -- when, as in this case, the details of that "something" are unknown, there is no confidence the "something" will make things better, it will have known adverse effects, will transfer enormous and Constitution-challenging power to one unelected person, and will redistribute an unprecedented amount of debt from the wealthy to the middle class and poor.

We took a long time to think through and respond to the savings and loan bailout. This challenge deserves no less.

# # #

Monday, September 29, 2008

Blogging About Blogging

September 29, 2008, 9:45 a.m.

"Censorship" and Anonymous Electronic Speech

The Daily Iowan has, without explanation, removed comments, and shut down the ability of readers to add more, to a couple of stories about the UI's President Sally Mason. Until the paper explains what happened and why it is premature to assume it was either a "computer error" or an outrageous bit of state censorship.

[See Amanda McClure, "No Raise for Mason," The Daily Iowan, September 26, 2008, and Amanda McClure, "Mason Apologizes to Regents," The Daily Iowan, September 26, 2008, and the six comments complaining about those deletions posted between September 26 11:34 a.m. and September 28 7:41 a.m. to Lauren Sieben, "Regent: No 2nd Thoughts," The Daily Iowan, September 26, 2008.]

But that's not the only bit of blogging news.

Some of the best literary as well as policy writing on the Press-Citizen's editorial pages occurs when the paper's own editorial page editor, Jeff Charis-Carlson, writes and publishes a piece that is entirely his own.

But it's a significant commentary about the role of blogs and other forms of electronic speech these days that someone who has such exclusive access to his own editorial page in a newspaper also chooses to communicate by way of a blog.

It's especially appropriate that he would do so in this case.

He's blogging about blogging.

Specifically, he's addressing some of today's hot issues surrounding the propriety of mainstream media permitting on their online Web sites anonymous comments from readers about stories in the paper's hard-copy edition. These comments can sometimes include those that are little more than name calling and mean-spirited allegations with little or no factual basis, coming from those able to hide their lack of decency and manners behind their anonymity.

Charis-Carlson sides with the practice of anonymous speech utilized by three of our nation's founding fathers, Alexander Hamilton, James Madison, and John Jay. Jeff Charis-Carlson, "Anonymous Online Comments: Good, Bad or Just Ugly?", September 24, 2008, 4:24 p.m. He begins:

I was asked to take part in an Iowa City Public Library panel discussion on Online News and Message Boards. I had prepared five-minutes worth of introductory remarks, but the organizers launched right into questions. So, I thought I'd share these remarks with the people who could appreciate them most -- anyone reading and commenting on www.press-citizen.com:

"Introduction for the Intellectual Freedom Festival: Online News and Message Boards."

Last week, I attended the annual convention of the National Conference of Editorial Writers — this year in Little Rock, Ark.

As you can imagine, our focus was primarily on trying to justify our own profession at a time when anyone with an Internet connection can set himself or herself up as a purveyor of opinion.

Not only did we discuss the issues arising from our own anonymity — writing the nameless consensus opinions of our editorial boards — but we had many discussions on the degree to which allowing anonymous online responses to news and opinion articles either:

a) Represents a revolution in citizen journalism (which is good),

b) Provides a crass way to drive up online traffic statistics at the expense of reasoned, vetted, well-edited news and opinion (which is bad), or

c) Does a lot of both (which is just ugly).
The three witnesses called by Charis-Carlson are, as you'll recall the authors of the famous and influential "Federalist Papers," writings encouraging the ratification of the Constitution while impressing the authors' interpretations of it upon the public and judges who followed. They chose to write anonymously, using the name, "Publius." (Originally published as newspaper articles, October 1787-August 1788, they were ultimately published in book form as The Federalist (J. and A. McLean, 1788).)

The courts have tended to look favorably upon anonymous speech as well -- and to some extent for the same reasons Charis-Carlson identifies: "at times, cyber-anonymity is the only way to allow contrary opinions to be raised without retaliation against those who dare speak out against majority opinion. At times it is the means by which a voice crying in the wilderness can find an audience." (See, e.g., "Anonymous pamphlets, leaflets, brochures and even books have played an important role in the progress of mankind. Persecuted groups and sects from time to time throughout history have been able to criticize oppressive practices and laws either anonymously or not at all." Talley v. California, 362 U.S. 60 (1960).)

I guess, while I would not differ with the basic doctrine approving anonymous speech (with such a distinguished historical foundation), I do think it is not compromised by modifying it in the specific context of readers' comments on a newspaper-owned Web site.

As it was put in Justice Jackson's separate opinion in Kovacs v. Cooper, 336 U.S. 77, 97 (1949): "The moving picture screen, the radio, the newspaper, the handbill, the sound truck and the street corner orator have differing natures, values, abuses and dangers. Each, in my view, is a law unto itself."

The Court has made clear that the only people who have meaningful First Amendment rights in our monopoly-media-dominated society are those who own them. And those are only rights as against government action. Editors and journalists can be fired by owners; they certainly don't have any First Amendment rights as against the owners. Even though a paper has a local monopoly, and has posted rates for the sale of advertising, it can refuse to publish an ad just because it doesn't like the content. It can attack someone in its pages and refuse to sell or give them the space to reply. (See, e.g., Miami Herald v. Tornillo, 418 U.S. 241 (1974), overturning as unconstitutional a Florida statute providing for precisely that right.) Clearly, the public doesn't have any First Amendment right as against the owners. (All are actions that would in most contexts be violations of the First Amendment if done by governments -- a consideration that may impact on the propriety of The Daily Iowan's recent actions.)

As the Court argued in upholding the Fairness Doctrine (now repealed) in Red Lion v. FCC, 395 U.S. 367 (1969), the Congress/FCC could have decided to require broadcast licensees to share frequencies (that is, one licensee might broadcast Sunday through Wednesday, another Thursday through Saturday -- both in the same town and on the same frequency). Therefore the much lesser Fairness Doctrine requirement was clearly permissible (i.e., the sole licensee had to (a) deal with local controversial issues of his/her choice, and (b) present a range of views, also of their choice, in doing so).

Similarly, if a privately owned newspaper can refuse to carry any letters to the editor, and refuse to permit any comments from readers about its stories on its Web page, it would seem to me perfectly permissible for it to allow only the comments of those willing to identify themselves.

Most papers will go to some considerable lengths before publishing a letter to the editor to confirm that the letter submitted to the paper has been written and sent by the person indicated as the author. Of course, once published the author's name is known. And at least two of the standards the paper will use in deciding which letters to publish, presumably, are (1) the extent to which the letter makes a worthwhile substantive contribution to the community dialog, and (2) the civility of the language employed.

By what rationale does a paper apply such relatively rigid, responsible, professional standards to the letters to the editor in its hard copy edition, and virtually none to what amount to the "e-letters to the editor" in its online edition?

If (1) there is, in fact, a problem of outrageously offensive comments about stories being placed on newspapers' Web pages (what Charis-Carlson calls "grossly inappropriate commentary"), and if (2) there is reason to believe that requiring those placing comments to identify themselves might reduce or eliminate the problem, why would it be so wrong to require those commenting to identify themselves by their actual names?

On the other hand -- like President Truman's request for "a one-handed economist," would you really want me to be a one-handed blogger? -- the printing press has been around a lot longer than the World Wide Web. (China had movable porcelain type in 1040; Korea the first metal movable type in 1230. Johannes Gutenberg was a Johannes-come-lately, waiting around in Mainz until 1439.) The Congress and the courts have taken a somewhat lenient free market approach to the Internet's wild west excesses during its baby years. Section 230 of the Communications Decency Act of 1996 gives those who provide an opportunity for online comments from others something of a base on balls when it comes to what would otherwise be the provider's liability for third-party content.

Many papers and other services have at least some mechanism for readers to flag comments of others they believe to be over the top. As Charis-Carlson notes, "in the past year we’ve [the Press-Citizen] had to kick off dozens of participants for grossly inappropriate commentary."

But that sort of thing can raise other problems -- as anyone can quickly discover when their e-mail provider gets put on an industry-wide "do not receive" list, friends no longer get their emails, and there is little to nothing they can do about it. (It's kind of similar to the "Red Channels" list of tainted actors and writers during the "anti-communist" years of Senator Joseph McCarthy.)

Privately-owned papers are not restrained by the First Amendment. They can, legally, be selective about which readers' ideas will be permitted on their Web sites, and which will be removed. When the government opens up what is called a "public forum" it cannot make such content-based distinctions between who can, and cannot, use the facility. But even though not legally required to do so, the underlying principles suggest a similar standard would also make sense for privately owned newspapers. If you're going to open up your Web site to reader comments, a community dialog, doesn't it make more sense to permit all of them?

That's the way this blog of mine has been operated. The only comments I've ever removed are those that are clearly advertising for goods or services (primarily from gambling casinos; comments appended to blog entries dealing with gambling). As long as I get my say in the blog, I think readers are entitled to their say in the comments -- though I would tend to be more tolerant of comments criticizing me than comments bordering on defamation, or invasions of privacy, regarding others, were those situations to arise.

It helps, in trying to understand both the First Amendment and the utility of considering its underlying foundations' applicability to private media as well, to lay any proposal involving speech alongside the First Amendment's purposes to see how it fares.

1. "Marketplace of ideas." It is believed that "truth" is more likely to emerge from a public dialog in which all persons and ideas can be presented and weighed.

2. "Self-governing." If a self-governing people are to have a prayer at making democracy work they must at least have access to the maximum possible range of information and opinion on public matters (whether they take advantage of that access is, of course, another matter).

3. "Checking value." The press is sometimes called "the Fourth Estate" because it is both recognized in our Bill of Rights as an important component of government and one that is totally outside of government. As every school child knows, the legislative, executive and judicial branches provide a check on each other. But the media can serve as an additional "check" as well, not only on abuses by government, but abuses by other powerful institutions as well (this week think "Wall Street").

4. "Safety valve." There is a theory/assertion that by permitting the frustrated and angry an opportunity to speak we can reduce somewhat their alternative response: violent actions of one kind or another perpetrated against the community and the elements within it they perceive to be the cause of their misery.

5. "Self-actualization." Humans belong to, as a general semanticist has observed, "the only species able to talk itself into difficulties that would otherwise not exist." We are bested by the other species -- especially squirrels -- in many ways (speed and athletic prowess; sight and hearing; survival skills; the bats' radar; etc.). Our superiority is in our ability to create and use language. Speaking and writing -- and the analytical thought that, hopefully, precedes it -- contribute to our growth as individuals, our self-actualization, with regard to the only quality that sets us apart.

To the extent those "First Amendment values" resonate with you, most if not all would seem to be served by readers' comments on newspapers' Web pages.

As Charis-Carlson concludes, permitting them is: "an act of optimism as well as commercial exploitation, but we’re betting its potential benefits of increasing conversation will outweigh the current hazards of having those conversations end in a flame out."

# # #

Sunday, September 28, 2008

Alternatives to "The Plan"

September 28, 2008, 7:00 a.m., 2:00 p.m.

2:00 p.m. Extra: Here's a link to, "Draft Proposal on Financial Rescue Legislation," Office of Speaker Nancy Pelosi, September 28, 2008, 12:23 p.m., and a section-by-section summary of the 42 sections of the 106-page proposed bill.

What are we to make of the money changers in the temple, worshipers at the alter of "the free market," overturning their own tables, leaving the temple, and following the anti-Christ through the desert to the land of socialism?

Many of my favorite radio programs come from the BBC World Service.

The most relevant today -- as 100 million American families are each about to add an additional $7000 in debt by this evening to what they already owe for homes, cars, credit cards and student loans -- is this week's "Global Business" with Peter Day. The program pretty consistently offers a weekly look inside that enormous wad of chewing gum we call "business" that results in creative insights not likely to be found elsewhere in the business media.

There was a time when banks provided capital for goods and services -- people who grew things, or manufactured things, or sold things, real things you could hold as well as services to a consumer economy. Peter Day calls them "businesses which employed people and made money for shareholders and suppliers etc, and built prosperity for various owners who maybe did good things with their money." Today, he notes,

Many big banks have diluted their old primary business of lending to enable enterprise, and started investing on their own behalf in . . . foreign exchange, or warrants or options or packages of debts so arranged that the liability falls off the balance sheet and cannot readily be ascertained by outsiders. . . .

[T]these banks seem to have lost a lot of their commercial compass or moral purpose of employment or prosperity.

Their feet are no longer on the ground, in the real world.

They are run by contract employees working for annual bonuses, and profits are the only measuring stick they know.
To understand what such "banks" have created, why they are in trouble, and what needs to be done about them, Peter Day -- along with five seasoned analysts and academics (including Andrew Hilton, Director of the Centre for the Study of Financial Innovation) -- explored possible analogies for understanding and concluded that "financial capitalism" (as Day calls it) is most like the casino business.

It's just that the casino industry has done a much better job of analyzing and managing its risk.

Ownership [in "financial capitalism"] no longer carries the old burden of responsibility. The sole measure of success is the medium term returns. . . .

Businesses are not built any more, but sliced and diced and reassembled in a similar way to the toxic mortgages assembled by the banks during the sub-prime bubble.

Bubbles burst, and (as we are now learning) real people are hurt. Casinos know what the odds are, but these new international investment banks don't, despite their complex risk management algorithms.

Unlike the casinos, they are houses of cards.
Now that Iowans are betting that we can gamble our way to economic prosperity, if our casinos weren't doing such a good job of managing their risk we might someday confront their demand that unless we bail out a few failing casinos our state's economy will collapse.

Clearly, that's what the gamblers in Wall Street -- the most generous source of funding for our elected officials in Washington -- are telling America's taxpayers this morning.

I suffer under no illusion that my suggestions in this little blog will have the slightest impact on what Washington will decide today my great-grandchildren's debt should be. Nor do I represent that I have any credentialed expertise in economics or finance. But that's never held me back before.

1. "From those wonderful folks who brought you the Iraq War."

Jon Stewart's "Daily Show," last Thursday, September 25, opened with a wonderful bit comparing videos of the almost word-for-word similarity between the way President Bush explained the God-awful consequences that would flow from our not going to war in Iraq and our not giving Wall Street $700 billion.

Whatever happened to "fool me once, shame on you; fool me twice, shame on me"?

Whatever calamity it is we're about to confront, it was created on the watch of a former Secretary of the Treasury from Goldman Sachs. It is now the subject of a three-page proposal from a Presidential aide and Secretary of the Treasury, both from Goldman Sachs, that we trust them with $700 billion of our money and give it to them immediately. Shouldn't we at least consider the possibility that there may be a lot more rhetoric than reality to the "sky is falling" predictions from this crowd?

Last weekend we were told unless the problem was solved by this past Monday global financial collapse would follow. It wasn't solved by Monday, and the world's economy and stock markets continued to operate on Tuesday, Wednesday, Thursday and Friday.

Secretary Paulson said if any restraints were put on how much could be earned by the CEOs of the bailed out firms those CEOs might not agree to the plan. Think about that for a moment. How serious can this disaster be -- and how worthy the CEOs we're about to bail out -- if they're willing to go through it rather than lose the opportunity to buy another yacht?

2. Frankly, I have a lot more trust in "the market" than these "free market" ideologues recently turned socialists.

These are the folks who complain that there's a "shortage of workers." Offer pay and benefits that someone can live on and the "shortage" evaporates. "The market" will produce those workers.

"There just aren't any buyers for my house." Well, no, not when houses in your neighborhood are selling for $180,000 to $220,000 and you're asking $375,000. Lower the price and there will be buyers.

Banks have taken our deposits and instead of investing them in the local community as we assumed they were doing, they have gone off on a drunken toot on the global market, gambled them away and lost. Having lost what was our money in the first place, they now want us to cover their gambling losses and give them the money all over again. No; I don't think so.

It's not our fault they violated our trust and lost our money.

Moreover, however little their investments are worth, they are worth something. The market will respond to that worth -- and is, in fact, the most accurate way of measuring it.

Warren Buffett found something at the bottom of this barrel he was willing to pay $5 billion to buy. Bank of America picked up Merrill, Lynch. Didn't Barclay's buy at least some of Lehman Brothers? Why not let the market work?

Not the least of the problems with the $700 billion proposal is the difficulty in assessing what the taxpayers should be paying for these "toxic" assets. If we pay what Warren Buffett or Bank of America would have been willing to pay, why are we doing it with taxpayers' money, and how have the investment banks been benefited by our generosity?

If we end up paying more than market value -- either because Washington is being incredibly generous with our money, or because, without a true market, there's no real way of knowing what they are worth -- aren't we being taken to the cleaners?

The spin the last couple of days from Washington has been, "Not to worry; actually you're going to get most of this money back; in fact, you might even make a big profit."

With all respect, I think this is BS. If there's a possibility of actually making money on this transaction there's somebody out there in the private sector who will figure out a way to come up with the capital to do it. If not, don't tell me this is really a scheme to enrich my great-grandchildren.

3. Trickle up, not down.

There are three groups of people I care about in this mess -- none of which is made up of Wall Street or Main Street bankers.

I am concerned about (a) depositors, (b) workers, and (c) homeowners.

The money should go to them, and can, at a fraction of what we're going to be handling over to America's richest individuals.

(a) Bank depositors are insured, up to $100,000 per account, by the Federal Deposit Insurance Corporation (FDIC). Even if their bank fails, those funds are protected. Credit unions' members have a somewhat similar protection. With multiple accounts, or multiple banks, individuals can have even greater protection.

(b) Some 600,000 workers have already lost their jobs this year. They, and those whose layoffs may follow, are the true innocents in this mess. We should extend and expand unemployment compensation and job training programs. Beyond that, we should put in place, ready to roll out, programs like the Civilian Conservation Corps from the 1930s -- potential construction jobs for the unemployed, working to rebuild our aging infrastructure of roads, bridges, dams, hospitals, schools, floodplains, parks and other public projects. The 1930s jobs programs included writing, theater, and other opportunities for the unemployed beyond construction jobs.

(c) Homeowners who've cut back on their discretionary spending, sacrificed, and continued to make their mortgage payments shouldn't be left to think themselves fools. Those who made unrealistic, stupid commitments to make mortgage payments they had no realistic way of making will suffer a bit -- as will the investment bankers. But those who were taken advantage of, those who could make payments based on the current value of their homes (but not their inflated value) should be permitted by bankruptcy judges to do so.

Those three things would, in my judgment, do more to restore America's economy than whatever Secretary Paulson may end up getting from the taxpayers.

4. "The plan" is not "a solution."

Even the plan's advocates acknowledge they can't promise it will fix everything.

There are other financial problems coming down the line.

There's no free lunch. Not only does this put $700 billion on our great-grandchildren's credit card.

There are implications for the value of the dollar vis-a-vis the Euro and other currencies -- indeed other nations' willingness to continue to treat the dollar as the preferred international currency.

There are implications for China and other nations' willingness to continue to loan us the money to enable us to cut the taxes of our wealthiest, fund our two current wars and the world's most bloated military-industrial establishment, and now this $1.3 trillion-plus bailout of those whose greed drove them to take the short-term profits along with the long-term excessive risks for which we've now been asked to pay.

There are implications for inflation, and for the squeeze this puts on -- indeed the probable cancellation of -- very badly needed social programs of all kinds with potential to add even more to our long-term economic growth.

5. Baby steps.

If we're going to do this anyway, why do it through the Secretary of the Treasury, and why do it this weekend all in one fell swoop?

Why not use a separate agency, as was done the last time we bailed out a segment of the financial community -- the savings and loan industry -- rather than handing it over to one person (who will be leaving Washington in three months anyway)?

Paulson says he can "only" spend $50 billion a month. That being the case, why not require whoever is running this to return to Congress for no more than $100 billion at a time as we work out the procedures and monitor the results?

Just some thoughts about Wall Street's casinos.

# # #

Friday, September 26, 2008

Cleaning Up After the Party

September 26, 2008, 8:30 a.m., 2:30 p.m. (links to today's stories); September 27, 2008, 6:30 a.m. (links to additional stories)

"Which Would be Worse?" September 25, 2008
"Scapegoat Bites Back," September 24, 2008
"Got Questions?" September 23, 2008
"Rational Responses to Stolar and Global Finance" (includes "The Case for Mills and Jones"), September 20, 2008
"Extra: Stolar Report," September 18, 19, 2008
And, of course, the monster collection of material in Nicholas Johnson, "University of Iowa Sexual Assault Controversy -- 2007-08," July 19-present

The Party's Over; Cleaning Up Begins

[Links to today's stories at bottom of blog entry.

SPECIAL: Link to Mills Response to Stolar Report (note that the Press-Citizen has a bad link), but this one works.]

The party's over. They're shutting off the lights. The media's off in search of the next big story. The University community has shifted its focus to the Homecoming parade tonight, and another aspect of the Iowa football program: the Northwestern football game tomorrow at 11:00. (As Kembrew McLeod reported hearing "two drunk guys in downtown Iowa City joking that they didn't care how many women the football team rapes, as long as it keeps winning.")

But after that game the neighborhoods surrounding the stadium will once again be filled with flattened beer cans, broken glass, plastic cups, cardboard cases emptied of their of beer cans, and tipped over empty trash cans along with a rich variety of unidentifiable trash. But within a day or two or three the streets will have been swept and the homeowners will have crawled under their bushes and hedges to remove what's been thrown under them by fans.

Cleaning up after the football program participants' alleged rapes is proving to take a little more time.

The Regents have demonstrated their verbal facility in their review of President Sally Mason, on the one hand with a Bush-like praise of the great job she has done ("You're doing a heck of a job, Brownie"), while on the other hand refusing to raise her base pay because of her responsibility for the mess that was made of last October's alleged sexual assault by two football players.

(Meanwhile, both of those players are off playing football elsewhere -- interrupted only by the occasional need to return to Iowa City for a Johnson County court proceeding. And a three-judge panel of the Iowa Supreme Court has voted two-to-one for Pierre Pierce, the basketball player who starred in the last really big sexual-assault-by-Iowa-athlete saga (the new organizational and procedural clean-up from which was supposed to prevent the administrative chaos we've recently witnessed from ever happening again). Notwithstanding his probationary status for subsequent crimes as well, they decided it would be all right for him to leave the state, indeed the country, to play basketball in France. I've just never understood where the public could get the idea that athletes are treated differently from everyone else.)

So now that President Mason is securely back in Jessup Hall, what's left to clean up after the Regents' party?

o The Regents have yet to respond to the media's public records request for the ten-page document they received from former UI General Counsel Marc Mills, protesting his peremptory firing.

o Mills now has a lawyer of his own, but we've yet to hear what he's prepared to do legally.

o Vice President Phil Jones, also peremptorily fired, also has a lawyer, whose four-page letter and attachments we've seen (linked from yesterday's blog entry), and who seems to be prepared to pursue a wrongful dismissal law suit.

o Sheldon Steinbach, a Washington, D.C., lawyer and former general counsel for the American Council on Education, thinks they both have solid wrongful discharge cases.

o The criminal case against the two football players is going through lawyers' motions, and getting postponed, but is still very much ongoing.

o We've heard nothing from the alleged victim or her family since this whole thing blew up with regard to whether they are looking to sue the University (or may already be negotiating a "settlement").

o The Regents never have come up with "ends policies," or goals -- some metric, measurable way of answering "How would we know if she is 'successful'?" -- as promised, before handing out more added bonuses to President Mason as "incentive packages." They've now increased the incentive from $50,000 to $80,000 and reiterated that promise, but it's an exercise well worth the media and public following. (Obviously, counting the number of times she makes statements that "I expect" or "I will not tolerate" are not the kind of metrics I have in mind.)

o Athletes aren't the only students who engage in unacceptable, violent behavior. But however much praise is heaped on the UI Athletic Department by the Regents, the Stolar Partnership, and President Mason, the fact remains that at least from a public relations perspective, it's the criminal behavior of high profile athletes that gets the attention of the media, public, and public officials. What the football and basketball programs are willing to do in controlling that behavior, starting with the vetting of the quality of the recruits brought here in the first place, also deserves watching.

o Credit President Mason with mentioning yesterday at the Regents meeting the role of alcohol in well over 90% of sexual assaults. (Alcohol is involved in roughly 50%, give or take, of all crimes.) Actually accomplishing a reduction in the seriousness, number of students, and amount of binge drinking -- and its consequences -- should remain near the top of the City's and University's agenda. Given that, as the saying goes, "you get what you measure," figuring out a way to measure progress on this one should be the starting point.

o President Mason has put in place immediately a new set of interim procedures for handling sexual assaults. They need to be communicated, assessed, tweaked, and covered by the media.

o The Regents read off a list of what they want in a set of new policies, consistent across all three Regents' universities. That study, meetings, drafting, and reviewing process will be beginning soon.

o There will be a search under way for permanent replacements for Mills and Jones -- something President Mason said yesterday she'd like to have concluded this year.

Moral: Some parties take longer to clean up after than others.

What else is there? Put in a comment to this blog entry and tell me what I've left out.

Links to Today's Stories

Daily Iowan

Bryce Bauer, "Mills: Inaccuracies in Stolar Partnership Report,"
The Daily Iowan, September 26, 2008.

Amanda McClure, "Mason Apologizes to Regents," The Daily Iowan, September 26, 2008, p. A1.

Lauren Sieben, "Regent: No 2nd Thoughts," The Daily Iowan, September 26, 2008, p. A1 ("Former UI Provost Michael Hogan, who was denied the UI presidency in 2006, this week turned down a $100,000 bonus for exemplary service as the president of the University of Connecticut.").

Amanda McClure, "No Raise for Mason," The Daily Iowan, September 26, 2008, p. A1.

Des Moines Register

Ben Fornell, "U of I to control student 'ghosting' rooms," Des Moines Register, September 28, 2008 ("Ghosting is hard to track on the campuses of Iowa's three public universities, but it became an issue in an alleged assault case at the U of I last fall. A Hillcrest Hall room involved in the alleged sex assault was unoccupied. It had been assigned to two Hawkeye football players, but they were living off campus.").

Staff, "Mills Insists He Did Not Botch Assault Case," Des Moines Register, September 26, 2008; William Petroski, "Fired lawyer offers rebuttal," Des Moines Register, September 27, 2008.

Editorial, "Lesson for Regents: Opt for Openness," Des Moines Register, September 26, 2008 ("Both the regents and Mason must rebuild Iowans' confidence in their management of the university. Secrecy won't help.").

Editorial, "Policy Change a Good Step, But Follow-Through is Key," Des Moines Register, September 26, 2008.

Lee Rood, "Mason's Salary Frozen in Wake of Scandal," Des Moines Register, September 26, 2008.

Video of Board of Regents Meeting, September 25, 2008 Des Moines Register, September 26, 2008.

Video of Press Conference Following Board of Regents Meeting, September 25, 2008 Des Moines Register, September 26, 2008.

The Gazette

Diane Heldt, "Mason: School failed student who sought help; Regents support UI president but deny pay increase," The Gazette, September 26, 2008, p. A1; online as, "Regents Express Confidence in Mason After Apology, Reform Vow," Gazette Online, September 25, 2008, 9:56 p.m.

Gregg Hennigan, "Iowa's Mills responds to assault report," Gazette Online, Updated September 26. 2008 6:56 p.m.; hardcopy as "UI's Mills Responds to Assault Report," The Gazette, September 27, 2008, p. B1.

Jennifer Hemmingsen, "Mason Speech to Regents Leaves Lingering Skepticism," The Gazette, September 27, 2008, p. B1 ("[W]e learned much of the blame lay with those policy and procedure changes that were supposed to prevent another Pierce fiasco. . . . This time, [UI President Sally] Mason told regents on Thursday, the UI will get expert help . . .. In the interim, she’s put an end to the informal reporting process, named a single point of contact for people reporting sexual assaults and is requiring they be paired with a trained advocate. She says she has zero tolerance for sexual assault and misconduct and will work to create a respectful campus community. Sounds good, but I’ve been talking with fellow alums over the past couple of days and our consensus is this: We’ll believe it when we see it. We thought the problem was fixed last time. We were duped. . . . I’m keeping my eyes on what happens now. Show me, Sally.").

Iowa City Press-Citizen

Editorial, "More Questions Before UI and Regents Move On," Iowa City Press-Citizen, September 27, 2008, p. 16A.

Thomas Walz, "University Problems Aren't the Fault of Any One Person," Iowa City Press-Citizen, September 27, 2008, p. 17A.

David Roston, "Pinpointing Mills' conflict of interest," Iowa City Press-Citizen, September 27, 2008, p. 17A.

Lee Hermiston, "Mason implements changes; Appoints sexual assault response coordinator," Iowa City Press-Citizen, September 27, 2008, p. 5A ("University of Iowa president Sally Mason put into effect Friday several policy changes in the wake of a report criticizing the university's policies and procedures in responding to allegations of sexual assault.").

Brian Morelli, "Mills: I Wasn't Leading Investigation," Iowa City Press-Citizen, September 26, 2008, including a link to Mills' Response to Stolar Report; and Brian Morelli, "Mills Says He Didn't Manage Investigation," Iowa City Press-Citizen, September 27, 2008, p. 3A.

Brian Morelli, "Mason apologizes; UI president outlines interim abuse policies," Iowa City Press-Citizen, September 26, 2008, p. A1

Brian Morelli, "Regents Say Denying Raise Sends Message," Iowa City Press-Citizen, September 26, 2008, p. A1.

Michael O'Hara, "UI Fortunate to Have Sally Mason Leading the Way," Iowa City Press-Citizen, September 26, 2008 (O'Hara is President, UI Faculty Senate; this op ed column is essentially a reply to Kembrew McLeod, "Recent Events at UI Embarrassing, Disgusting," Iowa City Press-Citizen, September 22, 2008).

Brian Morelli, "Regents Stick by Athletics, Give No Raise to Mason," Iowa City Press-Citizen, September 25, 2008.

"Mason's Remarks to the Regents," Iowa City Press-Citizen, September 25, 2008 (advance speech text as released by the University).

"Regent President Statement on Mason, Athletics," Iowa City Press-Citizen, September 25, 2008.

"Mason Sends E-mail to UI Employees," Iowa City Press-Citizen, September 25, 2008.

Lee Hermiston, "Hearing for Everson, Satterfield Pushed Back,"
Iowa City Press-Citizen, September 25, 2008.

Lee Hermiston, "Satterfield Ordered to Appear, Spies Wants Separate Trials," Iowa City Press-Citizen, September 23, 2008.


"Mason announces termination of employment for Jones, Mills," University of Iowa News Release, Sept. 23, 2008.

# # #

Thursday, September 25, 2008

Which Would be Worse?

September 25, 2008, 6:40 a.m., 9:50 a.m. (Regents' videotaped session), 11:25 a.m. (Athletic Department's lying basketball ads), 11:45 a.m (Mason's pay raise)

"Scapegoat Bites Back," September 24, 2008
"Got Questions?" September 23, 2008
"Rational Responses to Stolar and Global Finance" (includes "The Case for Mills and Jones"), September 20, 2008
"Extra: Stolar Report," September 18, 19, 2008
And, of course, the monster collection of material in Nicholas Johnson, "University of Iowa Sexual Assault Controversy -- 2007-08," July 19-present

Which Would be Worse?

[9:50 a.m.. Brief, early report on Regents' meeting consideration of Stolar Report, just concluded (as the Board went into closed session, as predicted, for the final session evaluating the performance of President Sally Mason with regard to those events): As predicted, Mason began with an apology, following which no criticism was leveled at Mason. The Board approved a resolution essentially adopting the proposals of the Stolar firm. Discussion of whether the crime of rape should always be reported to the police by UI officials (as distinguished from the alleged victim being required to press charges) was postponed. The athletic department was proclaimed to be exemplary. The Gazette's running blog/textual notes of meeting are posted. Here's the Register's early report of the session: Lee Rood, "U of I president to regents: We'll do better," Des Moines Register, September 25, 2008; and "Mason Apologizes to Alleged Victim, Family," Iowa City Press-Citizen, September 25, 2008.

11:45 a.m. Mason's Pay Raise: The Regents, as predicted, held UI President Mason's base pay steady, while giving her more money, thereby assuring headlines like the Press-Citizen's: "Mason Gets No Raise in Base Pay," Iowa City Press-Citizen, September 25, 2008. How does that work? Well, the base pay is a mere $450,000 a year. Given the high cost of living in Iowa City, where a football coach needs at least $2-4 million a year to survive, the University president requires both an additional "deferred compensation" package of $60,000 a year (more that a good many university employees get for their "entire compensation" package), plus an "incentive package." Although an incentive to what has never been defined by the Board, she was awarded the $50,000 for the first year automatically -- so we have to presume the way she handled the sexual assault was a part of what the Regents were trying to provide an incentive for her to do. Moreover, although the Board has still left undefined what it will be paid for, the incentive has nonetheless been increased from $50,000 to $80,000 a year -- on top of the $60,000, on top of the $450,000. Never mentioned, as is the usual practice with public disclosure of the pay packages of CEOs in the top 1% of the nation's wage earners, are such things as the value of the free housing in one of Iowa City's grandest homes, car and other travel allowances, additional expense accounts, retirement, health and other benefit packages, and so forth.]

So, what happened yesterday? Oh, not much, just . . .

o UI Vice President Phil Jones -- a 40-year employee who was planning on retiring next spring anyway, and was peremptorily fired Tuesday -- is appealing that decision to the Board of Regents as "wrongful termination," and released through his lawyers a statement of the reasons why, e.g., "It is indeed ironic that Phillip E. Jones is being terminated and criticized for failing to act when the university's athletic department was doing everything in its power to keep this matter 'informal' and prevent the dean from acting on a formal complaint based on an EOD investigation."

o The letters from President Mason to Jones, his lawyers' letter to the Board of Regents, along with a number of attachments, are now available online.

o "Sheldon Steinbach, a Washington, D.C., lawyer and former general counsel for the American Council on Education, said he had read the Stolar report and believes Jones and Mills were scapegoats, fired to protect Mason's job and to move on from the controversial story. . . . Steinbach said he believes the university has exposed itself to wrongful-termination lawsuits."

o UI General Counsel Marc Mills -- a 20-year employee who was also fired Tuesday, and who sent a 10-page letter of protest to the UI president and Regents -- has now hired his own lawyer.

o James Bryant, the Stolar lead investigator, has been thrown into defensive mode as he endeavors to respond to Marc Mills' criticisms of the firm's Stolar Report.

o The University, and the Board of Regents, are both refusing to release a copy of the Mills' letter to the media notwithstanding the media lawyers' assertion it is a "public record" under Iowa law that cannot legally be withheld and that "Mills said Wednesday that when he sent the memo he gave permission for it to be made public."

o Mark Schantz, a former UI General Counsel (1992-2005), says Mills was "thrown under the bus."

Schantz said he is upset about how Mills was treated and called the Stolar report "quite wrong" in some places and that some omissions with regards to Mills testimony were made consciously. Schantz particularly had issue with the rapid terminations. . . .

"This is not the way the university usually proceeds. I haven't heard of anyone being summarily dismissed short of a felony without at least telling their side of the story."
o Former law school dean Bill Hines is quoted as saying that for President Mason to peremptorily fire two long-term employees three business days after the Stolar Report appeared, for "an episode that began last year . . . seems like an almost indecent speed to find someone to blame things on."

o Meanwhile, before resolving any of the above, the Regents are going ahead with their special meeting today to review the University's response to the Stolar Report, and to conclude this portion of their review of President Sally Mason's first year on the job. (It should be available in streaming video from the Des Moines Register and The Gazette sites -- unless, of course, the Regents insist on closing the meeting to the media and taxpayers, as is a possibility.)

o A blockbuster buried in Brian Morelli's story is "I believe the decision was made by the regents, at least in the case of some, before they even saw the report," he [Mark Schantz] said." Of course, I cannot know (a) if Schantz said that (he's certainly never said it in my presence), or (b) if his assertion is true. How could I know? But neither do I have any reason for believing that it's not true. And it is confirmed in some ways by former UI interim President Gary Fethke, who supports President Mason's firing of Jones and Mills:

"I don't know there was any other alternative at this point," Fethke said. "I think she made the choice she had to make at this point. . . .

I think she had to go to the meeting with something, a credible and forceful response," he said. "Either she makes the decisions or they will be made by someone else."
"I believe the decision was made by the regents." "Either she makes the decisions or they will be made by someone else."

Source for quotes: Brian Morelli, "Jones appeals to Board of Regents; Says AD officials tried to keep assault allegations informal," Iowa City Press-Citizen, September 25, 2008, p. A1.

And see, Editorial, "More Questions to Answer, More Policies to Fix," Iowa City Press-Citizen, September 25, 2008, p. A9 ("Suddenly, rather that having faith in the Stolar report's conclusions, we're experiencing a new round of he said/she said.");

Lee Rood and Erin Jordan, "New lawsuit, firings face Mason amid work review," Des Moines Register, September 25, 2008 ("Sheldon Steinbach, a Washington, D.C., lawyer and former general counsel for the American Council on Education, said he had read the Stolar report and believes Jones and Mills were scapegoats, fired to protect Mason's job and to move on from the controversial story. 'In the heat of passion, with the spotlights of the media and public on you, the easiest thing to do is fire somebody,' Steinbach said. 'It's a desire to smooth the water and get off the front page of the newspaper. That's all fine except for the people summarily executed.' Steinbach said he believes the university has exposed itself to wrongful-termination lawsuits.").

Commentary: Which Would be Worse?

Why do I say those quotes from Schantz and Fethke constitute a blockbuster?

One of the biggest, and so far largely unaddressed, issues in all of this is yet another "which would be worse?" dilemma.

Earlier, in Nicholas Johson, "Rational Responses to Stolar and Global Finance," September 20, 2008, I wrote "Would it be worse that neither the University president, nor anyone else in administrative positions, has thought to review its organizational structure and procedures for handling football players' sexual assaults over the past six years? Or would it be worse that a review was conducted during President Mason's first year in office but no one thought of any of the obvious remedies proposed by Stolar?"

Now we have another.

Was President Sally Mason, in effect, ordered by one or more members of the Board of Regents to fire Marc Mills and Phil Jones? If so, that would of course raise all kinds of governance questions about the propriety of the Board intervening in that way, questions I've written about so often and at such length that I'm not even going to provide the links to those discussions once again. [Credit: Bob Patton, "Regents Adjust UI Half-Staff Policy" (with "Administration Credibility" flag at half-staff), posted September 26, 2008, and Iowa City Press Citizen.]

But put those serious concerns aside for a moment and focus on President Mason.

Let me preface this discussion by noting that my former beloved University of Texas Law School Dean, Page Keeton, made quite a reputation for himself standing up to a very tough Board of Regents, threatening to resign over matters of principle when he thought they'd stepped over the line. He never had to resign.

Now let us consider which would be worse: (1) That President Mason, after one year on the job, personally and unilaterally chose to peremptorily fire two University vice presidents with more than 60 years service to the university between them -- over a matter that has far more to do with the University's organizational structure and procedures (and football culture) than the behavior of any given individual (as even the Stolar Report concedes) -- or that, (2) being inappropriately told to do so by the Regents, she simply "followed orders" and took actions she knew to be wrong and did not personally support, rather than standing up to the Regents and threatening to resign if they persisted?

As Senator Joe Biden said in Iowa City during the primary season, "There are some things worth losing elections over." Well, there are some things worth losing one's job over. This may very well be one.

Permit me to note that I have not joined the chorus of those suggesting that firings are the answer to this -- firing some regents, the UI president, the football coach. I haven't suggested anyone be fired.

But I would note that a common response of those who defend the firing of Mills and Jones in the face of the assertions of others that this is not the way we handle such things (e.g., Mark Schantz, above: "I haven't heard of anyone being summarily dismissed short of a felony") is to cite cases of firings at other universities.

For example, The Gazette concludes its story this morning,

The Chronicle of Higher Education has reported in recent years on such situations at other universities. The University of Colorado at Boulder eventually lost its athletics director, football coach and President Elizabeth Hoffman — now the provost at Iowa State University — after two women claimed they were gang raped by football players and recruits at a 2001 party.

And Eastern Michigan University lost three leaders, including the president, over the handling of a rape and murder of a student in 2006.
Diane Heldt and Erika Binegar, "Former Dean Says He Was Wrongfully Fired," The Gazette, September 25, 2008, p. A1, available as earlier online version, "UI Official Says He Was Wrongfully Fired," September 24, 2008, updated 11:46 p.m.

I would simply note that at least in each of these two cited cases the university president was also fired. (And see the comments of Sheldon Steinbach quoted in the Register's story by Rood and Jordan, above.)

Iowa Athletic Department's Lying Basketball Ads

. . . And there's more to this blog entry, because the Athletic Department has been ruled out of bounds once again in a major way with regard to a series of decisions totally unrelated to this mess. Having been found by Stolar and the Regents to have behaved in an exemplary fashion when handling football players charged with sexual assault, it's now time to move on to the next allegation.

The UI Athletic Department, has long since decided to give the NCAA a poke in the eye with a sharp stick and continue the football program's ties to organized gambling by advertising to students and fans a local gambling casino on its enormous scoreboard at the Kinnick football stadium. Meanwhile the casino's customers are offered a shuttle service to and from the stadium from the casino, and its high rollers' package deal also includes game seats in a luxury Kinnick skybox where alcohol is served in an otherwise-dry stadium. (The Athletic Department's see-through justification for the ad promoting gambling is that because they do not use the word "casino" the ad isn't really promoting gambling -- as if any Iowan seeing that ad would fail to recognize that it was an ad for the well-known Riverside gambling casino. The actual corporate name, and Web site, is the "Riverside Casino & Golf Resort." )

Now this academic department that represents it's engaged in "character building" has decided that, as an alternative to actually winning basketball games, an easier alternative is simply to lie in its advertising in order to sell tickets.

Iowa's first full-page ad showed Hawkeye forward Jarryd Cole dunking the ball, claiming Cole's dunk brought the Ohio State Buckeyes to their knees and brought a sellout crowd to its feet. The problem is that Cole did not play against OSU last year.

Iowa's second full-page ad featured a picture of Hawkeye guard Jeff Peterson, claiming his steal against Illinois sparked a 14-0 run. There's a problem with that one, too. Peterson played against Illinois but was not credited with a steal, and Iowa never had a 14-0 run.

Rick Klatt, the director of Iowa's marketing department and an associate athletic director, told The Gazette that neither ad was a mistake. He said the ads are fictional examples of how "slam dunk" and "steal" can be used in a sentence. . . .

Steven Helle, a journalism professor at Illinois and an Iowa grad himself, sent an e-mail to Iowa President Sally Mason to complain about the ads. . . .

"To defend a slam-dunk that never happened not only as not a mistake but merely as 'an example of how the word 'slam-dunk' could be used in a sentence' turned my stomach. He added disingenuousness to prevarication." . . .

Bourne Morris, a journalism professor at Nevada, had similar thoughts. He teaches advertising and media ethics and spent 25 years in advertising in New York and Los Angeles.

"Writing a false story in an ad injures the credibility of the Iowa sports program and may make folks wonder what other bits of 'information' they made up, or might make up, just to sell tickets," he wrote in his e-mail to The Gazette. . . .

Sam Becker . . . served as chairman of the department of communications studies, wrote six textbooks and is the Samuel L. Becker whose name appears on the Communications Studies Building at Iowa. "I think it's a mistake to mislead people," he told The Gazette, referring specifically to the ads. He does not agree with Klatt's explanation. "I think he's wrong. I think especially at a university they should be truthful," Becker said.
Jim Ecker, "College professors slam Iowa's basketball ad," Gazette Online, September 24, 2008, 9:53 p.m.; hardcopy version as "College Professors Slam Iowa's Basketball Ad," The Gazette, September 25, 2008, p. C3.

# # #

Wednesday, September 24, 2008

Scapegoat Bites Back

September 24, 2008, 9:00 a.m.

The Lawyer Did It

The first recorded use of a "scapegoat" of which I am aware was 4500 years ago. Whatever the actual facts may be, clearly it is an ancient and -- in modern times -- sometimes dishonorable ritual. [Picture credit: William Holman Hunt, 1854; Wikipedia.]

Is it being played out once again right here in River City?

UI President Sally Mason has responded to the Stolar Report of the University's mishandling of an alleged sexual assault last October 14 ("a perfect storm," the firm's lead investigator put it) by firing the UI's General Counsel Mark Mills (and also UI Vice President Phil Jones). She first checked with the Regents, who indicated they supported her action. The matter is to be reviewed by Regents tomorrow when she will presumably apologize, and they will, presumably, tell her to "go forth and sin no more" -- while at least maintaining (if not increasing) her $500,000-plus salary and benefits.

Before any of this happened I wrote "The Case for Mills and Jones" in Nicholas Johnson, "Rational Responses to Stolar and Global Finance," September 20, 2008. (The largest collection of documents, news coverage, commentary and links regarding all this remains the Web site, Nicholas Johnson, "University of Iowa Sexual Assault Controversy -- 2007-08," July 19-present. Sometime later today, hopefully, all of the enormous additional material available this morning will be commented upon, and linked to, from that Web site.)

In "The Case for Mills and Jones" I didn't attempt to defend everything the Stolar Report said they did (and didn't) do. But I noted five categories of reasons why their peremptory dismissals would not be appropriate -- never realizing last Saturday when I wrote it that they would be gone by yesterday (Tuesday). I mentioned, among other things, that because so many people were involved that it would be unfair to single them out; that if they were to be fired their overall performance needed to be evaluated in a routine and calm way (as the Regents are doing with President Mason); that "the buck stops," normally, at the CEO/presidential level, not the vice-presidential level; and that focusing on them, making it look like the problem was simply the consequence of the behavior of two individuals, diverts attention from the football culture of the campus and the need for organizational restructuring (as recommended by Stolar).

Finally, I noted that we had not yet really heard in full from Mills and Jones. We didn't know what the "back story" might prove to be.

We still don't know.

But we sure know a lot more than we knew yesterday afternoon.

I'll reproduce excerpts from Brian Morelli's story, below, and then provide some commentary of my own.

University of Iowa President Sally Mason was aware of how an alleged sexual assault investigation was being handled, a former UI executive said.

Marcus Mills said, "Yes, absolutely," when asked Tuesday if Mason knew what was happening in the investigation. . . .

Mills said he and Mason initially discussed student privacy concerns regarding the letters, but ultimately that did not preclude them releasing the letters to the regents.

The letters were not turned over because the regents didn't ask for documents during its investigation and because "we had the perception that whoever sent the letter, the family, did not want it to go to the regents and did not want it to be made public," Mills said.

Mills said he and Mason received a letter from UI public safety director Chuck Green, which Mills said he took to indicate Mason was aware of the family's concern about the letters becoming public. Mills declined to comment further on this.

Mills rejected his portrayal in the report as having the lead role in UI's investigation of an alleged sexual assault that involved two former UI football players Oct. 14, 2007, in Hillcrest Residence Hall.

"I didn't feel that I was overseeing the investigation. There wasn't an investigation in that sense. Different departments were heading up different aspects of the investigation," Mills said.

Mills also said Stolar failed to ask for his version of certain events and omitted parts of his testimony from their report, such as his side of conversations with the alleged victim's father. Mills also said UI's actions were affected by county attorney subpoenas, the criminal case against the former UI football players and a lawsuit filed by the Iowa City Press-Citizen.

"I think I handled this to the best of my ability with integrity under the circumstances," Mills said.
Brian Morelli, "Mills says Mason knew what was happening," Iowa City Press-Citizen, September 24, 2008, p. A1.

Among the documents I make available in full text from Nicholas Johnson, "University of Iowa Sexual Assault Controversy -- 2007-08," July 19-present is Thomas Evans, "REPORT ON THE UNIVERSITY OF IOWA’S COMPLIANCE WITH POLICY AND PROCEDURES WHILE INVESTIGATING A SEXUAL ASSAULT COMPLAINT," Iowa Board of Regents, Agenda Item 17, June 11-12, 2008 (a pdf file).

This is the report of the Regents' first investigation.

Why is that relevant?

Because it provides the foundation for judging the credibility of Marc Mills' assertions.

Consider the Board of Regents' characterization of their charge to Tom Evans regarding their own first investigation. As its "Executive Summary" puts it:

"On November 16, 2007, the Board of Regents requested the Board Office to review the University of Iowa’s compliance with University and Board policies and procedures and applicable statutes while investigating an alleged sexual assault that occurred on campus on October 14, 2007. The Board further requested the Board Office to examine whether current policies and procedures are adequate." (emphasis supplied)

And what was Evans' conclusion? "After a comprehensive review of the facts of the alleged incident and each of the applicable University policies, it is clear that University officials fully complied with internal procedural requirements."

Given this mission, and conclusion -- consistent with President Mason's assurances at the time that all procedures had been followed -- it becomes relevant to ask: Were any documents necessary to Evans' investigation? Were any documents asked for? If not -- especially if there was reason to believe that the alleged victim's family definitely did not want the letter/s made public at that time -- does the University President's, and General Counsel's, and others', failure to gratuitously offer up hundreds and hundreds of documents -- including those the family wanted to be kept confidential -- warrant the firing of the General Counsel?

I may have missed something (literally; I may have) but I can't recall off the top of my head anything in the Stolar Report of events -- of which the lead investigator said "everything that could have gone wrong did" -- that any one of those things "that could have gone wrong" included a failure to comply with internal procedures.

If President Mason thought there were none, and Evans found none, and Stolar mentioned none (after examining all those documents the University did not gratuitously offer up to Evans), and if Stolar found there was no effort at a "cover-up," it seems a little disingenuous to unceremoniously fire Marc Mills on the grounds, in part, that he failed to offer up the mothers' letter/s.

Moreover, if Mills' account is correct (and of course I'm not saying it is; how could I know?), it sounds like President Mason was more intimately involved in the decision not to turn over documents (including the letter/s) than she has yet let on. She earlier referred to a rationale that the material was covered by a federal law protecting student privacy. Mills is now saying they discussed, but rejected, that interpretation, and decided (jointly?) not to turn over the letter/s and other documents for other reasons. As Morelli reports, "The letters were not turned over because the regents didn't ask for documents during its investigation and because 'we had the perception that whoever sent the letter, the family, did not want it to go to the regents and did not want it to be made public,' Mills said."

Whatever President Mason has done with regard to Mills dismissal, and whatever the Regents may do about it tomorrow, I do think it is a little premature for any fair, impartial and judicious member of the public to be volunteering time and talent building the gallows for Marc Mills.

# # #

Tuesday, September 23, 2008

Got Questions?

September 23, 2008, 6:45, 10:00 a.m.

Currently Most Popular Blog Entries

"University of Iowa Sexual Assault Controversy -- 2007-08," July 19-present (incorporating and updating original blog entry, "UI Sexual Assault Update," July 19-August 9).
"Extra: Stolar Report," September 18 and 19, 2008.
"How Much Do You Owe the Chinese?" September 8, 2008.
"Rational Responses to Stolar and Global Finance," September 20, 2008.
"Random Thoughts on Law School Rankings," April 29, 2008.
"Global Finance: The Great Fountain Pen Robbery," September 21, 2008.
"Hawkeyes' Criminal Record Lengthens," February 25 and 27, 2008.
"Rumors, Reporting and Reputations," September 13, 2008.

And see, Database Index of 500-plus blog entries

Got Questions? Like: Who's the latest addition to the football team's criminal record? Who said, "[I don't] care how many women the football team rapes, as long as it keeps winning"? What's the answer to "Guess who's not coming to dinner"? Which UI prof went toe-to-toe with President Sally Mason in the Press-Citizen's op ed pages? Should we really advocate for victim advocates? Congress decides the future of global financial collapse and "The Great Fountain Pen Robbery" on Wednesday, the first presidential debate is Friday, Homecoming is Saturday -- so what's happening Thursday? You'll find the answers on this morning's updated "University of Iowa Sexual Assault Controversy -- 2007-08," July 19-present.

Mattresses Enter Commodities Markets
Mattress futures must be climbing about now. At least that's Bob Patton's view of our present financial dilemma:
The headlines on the newpapers in the rack read "U.S. Near Financial Chaos" and "Where is our money safe?" One of the "Mattress Store" workers is saying, "Call me an alarmist, but I still say they know something we don't" as four customers are running down the street with mattresses on their heads. [Credit: Bob Patton, "Economic 'Down'turn?"
Posted September 16, 2008; and Iowa City Press-Citizen.]

What they may know is that Treasury Secretary Henry Paulson has declared that his $1.3 trillion remedy must be enacted by Congress immediately, as he says, "Clean and quick."

Why have I always associated that phrase with a killing -- whether by the mafia, or the military, or of domestic animals?

Here we have another sense of a killing -- a killing being made, a killing being made by the bankers. The only folks actually being killed are us. And I don't think those killings are going to be "clean and quick." I have a sense they'll be messy and slow, perhaps going on for years and years. (See, Nicholas Johnson, "Global Finance: The Great Fountain Pen Robbery," September 21, 2008.)

On the other hand, as the Maverick episode put it, "If you can't trust your banker, whom can you trust?"

I'm not an economist -- "but I play one on this blog." So it's always reassuring when, after relying on gut instinct to think through a problem and present the results here as a blog entry, a couple of days later the "experts" in whatever area may be involved seem to be engaging in an analysis either identical to, or at least consistent with, my own.

Paul Krugman is a distinguished academic economist as well as a New York Times columnist. He is currently a Professor of Economics and International Affairs in the Woodrow Wilson School at Princeton, and was formerly Ford International Professor of International Economics at the Massachusetts Institute of Technology (from which he received his Ph.D.). He has also served on the U.S. Council of Economic Advisers. That may not mean he's "right," but it at least means he's well informed.

So take a look at his column from last Sunday: Paul Krugman, "Cash for Trash," New York Times, September 21, 2008 ("[Secretary of the Treasury Henry] Paulson is demanding extraordinary power for himself — and for his successor — to deploy taxpayers’ money on behalf of a plan that, as far as I can see, doesn’t make sense. . . . [His plan] will be crippled by inadequate capital unless the federal government hugely overpays for the assets it buys, giving financial firms — and their stockholders and executives — a giant windfall at taxpayer expense. Did I mention that I’m not happy with this plan? . . . [T]he financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to — a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place."). There's more to his analysis. The column is definitely worth reading.

I don't know Krugman's politics, but I do know former Speaker Newt Gingrich's politics, so for the benefit of those who might be more persuaded by an avid Republican spokesperson, this former Speaker of the House of Representatives and author of the "contract on America" thinks "what they're doing is just wrong. And I think that it's likely to fail, and it's likely to make the situation worse over time. And I think that [U.S. Treasury] Secretary [Henry] Paulson has shown almost no understanding of how a democracy operates. His initial draft would have given him $700 billion of your tax money with no oversight, no judicial review, no accountability. I mean, we're not a dictatorship." For more along the same lines see the transcript of his NPR interview and his National Review article. "Gingrich on Why Bailout Plan is 'Just Wrong,'" All Things Considered, National Public Radiio, September 22, 2008, Newt Gingrich, "Before D.C. Gets Our Money, It Owes Us Some Answers," The Corner, National Review, September 21, 2008 ("Congress has an obligation to protect the taxpayer. Congress has an obligation to limit the executive branch to the rule of law. Congress has an obligation to perform oversight. Congress was designed by the Founding Fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess.").

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Sunday, September 21, 2008

Global Finance: The Great Fountain Pen Robbery

September 21, 2008, 3:30 p.m.

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The Great Fountain Pen Robbery of 2008

Yesterday I promised "Rational Responses to Stolar and Global Finance," September 20, 2008. I may or may not have satisfied you with the rationality of my response to Stolar. But I left you hanging with regard "global finance," since other things intervened before I could get back to it.

Now I've seldom if ever been charged with being a man of few words -- "turn on a light bulb and he'll make a speech," my critics say -- but the events of the past two weeks (or has it only been one week?) have been so totally appalling that I really am close to speechless.

One can just sputter and scream, of course; but having done that what more is there to say?

I'm wishing we still had Woodie Guthrie around to sing to us about it. Do you remember his "The Ballad of Pretty Boy Floyd" (March 1939)? The last two stanzas of lyrics read:

Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.

And as through your life you travel,
Yes, as through your life you roam,
You won't never see an outlaw
Drive a family from their home.
Lyrics as reprinted in Woody Guthrie, American Folksong, New York, NY, 1961 (reprint of 1947 edition), p. 27. © 1958 Sanga Music Inc., New York, NY.

T. Boone Pickens has been urging us to convert our cars to run on natural gas to avoid (or at least reduce) the "transfer of wealth" represented by our purchase of foreign oil. As he notes: "Over 700 billion dollars are leaving this country to foreign nations every year . . . The largest transfer of wealth in the history of mankind."

Well, ol' T. Boone has just been one upped by Secretary of the Treasury Henry M. Paulson, Jr.

Secretary Paulson -- with the support of President Bush, candidates Senators McCain and Obama, the leadership of the U.S. House and Senate, and the urging of their campaign contributors -- is about to provide "the largest transfer of wealth in the history of the United States," $1.3 trillion, to their wealthy friends in finance, banking and real estate, ultimately to be paid by our grandchildren.

"Campaign contributors"? Yes, campaign contributors. OpenSecrets.org, which tracks this kind of thing for us by industry sectors, has calculated that the "finance, insurance and real estate sector" has been the largest single sector providing support to both McCain and Obama. (It was the leading source of Senator Hillary Clinton's contributions as well.) Massie Ritsch, "Bundlers for McCain, Obama Are Among Wall Street's Tumblers," OpenSecrets.org, September 18, 2008.

How dumb do these bandits think we are? Unlike those who play by the rules of Pretty Boy Floyd, these are outlaws who not only would "Drive a family from their home," they've already done it.

Think about it. We're roughly six weeks from a presidential and congressional election. McCain is having a tough enough time distancing himself from President Bush. He darn sure doesn't want to have to distance himself from President Hoover as well.

Nobody knows the details of what's in Secretary Paulson's $1.3 trillion proposal, or the packages of worthless debt he's offering to buy from his friends. All we know is that (a) we're going to end up paying for it, and (b) he's got a provision in there that no one can oversee or challenge what he does. He himself acknowledges he can't guarantee it will work.

Appropriately, it's a strategy comparable to the "short term gains from long term risks" strategy that the financial geniuses undertook to enrich themselves and impoverish us and create this mess. So long as we aren't dealing with the next "Great Depression" on the day we go to vote -- November 4 -- who cares what happens between then and inauguration day?

If the McCain forces had access to enough troops they could have salvaged this thing by starting a war. See, "Wag the Dog." The Iraq War is going to end up costing us $2 or $3 trillion. But we could wage a third war for far less than this $1.3 trillion bailout if we could get it over with in something between six weeks and six months -- something like the promise regarding Iraq, or the reality with Granada. The problem, as I say, is that we don't have enough troops for the two wars we're already in; and besides with two wars going on a third wouldn't give McCain that much of a bounce in the polls.

So scaring the Congress into capitulation is the best short term strategy for the next six weeks. Anything to keep Obama out of the White House.

Besides, it's a way to pay back those campaign contributors in the coin they know best.

The problem for the taxpayers is the contributors' rate of return. We're used to campaign contributors being given a 1000-to-one to 2000-to-one return on their contributions -- from us, whether as taxpayers or as consumers. That's bad enough. But the payback on this corrupt deal is more like 30,000-to-one.

Warren Buffett has been candid enough to recognize that “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

A $1.3 trillion transfer of wealth from the poor and middle class to the wealthiest class has got to be a record-setting "shock and awe" attack in class warfare.

Now I'm not saying that there may not be some problems in the financial sector of our economy. I'm not even saying that this unprecedented robbery may not produce some small benefit.

But I do see a lot of hypocrisy when those who've been most vocal in advocating free, unregulated markets -- while ridiculing socialism -- suddenly welcome the latter as an alternative to free private enterprise when their going gets rough.

It really is "heads I win, tails you lose." "If I'm lucky and make a profit, I get to keep it. If I'm not, I still get to keep my profits, salary, bonuses, stock options and golden parachutes, but I don't have to worry about the losses -- because I can just hand them off to you and all the other taxpayers." It's the very sweet deal called "socialism for the rich and free private enterprise for the poor."

By what rationale should taxpayers' money be going onto the bottom line of any for profit business at any time -- whether tax breaks, TIFs, subsidies, earmarks or bailouts? But even if you can answer that one, why should businesses be rewarded by taxpayers for their greed, risky behavior and stupidity when they fail? Isn't that just going to encourage them to continue the path of "short term gains from long term risk"? Whatever happened to Secretary Paulson's observation that "Market discipline is best served when shareholders bear both the risk and the reward of their investment"?

Consider the alternatives -- and what they say about the priorities of our elected officials who are funded by this "finance, insurance and real estate sector."

How else might we have boosted our economy with $1.3 trillion?

o We could have spent it upgrading and building infrastructure: roads and bridges, hospitals and schools -- providing employment for those 600,000 who lost jobs this year, and who would have put most all of that $1.3 trillion to circulating in our economy as well as paying off mortgages and credit card debt.

o We could use it to create T. Boone Pickens' plan: convert our cars, and build the natural gas infrastructure, to run our cars on natural gas -- plus, as he proposes, getting 20% of our energy from wind.

o We could use it to virtually eliminate future economic losses from flooding by moving homes and businesses from floodplains, and converting the floodplains to parks, pastures and prairies.

o As many acknowledge, if you really want to improve our economic position in the world, invest in education: K-12, college, graduate schools, research. The economic return on the post-WW II "GI Bill" (paying for veterans' college education) was enormous. The Sputnik "Defense Education Act" boosted our students' learning and preparation.

o If you want to use it to pay down debt, or eliminate bad debt, give it to those who have the debt: provide relief to those struggling under the weight of near-usurious interest rate credit card debt, buy up their debt, or the debt of those trying to get a college education -- or who got one, now can't find a job, and are unable to pay off their debt.
Now I'm not willing to undertake the burden of demonstrating that these expenditures would be wise either. We need more savings, not more expenditures. There is no secret slush fund from which this $1.3 trillion comes. We have a nearly one-half-trillion additional federal debt (expenditures greater than income) for just this one year. We are running our government, and country, on a credit card we never pay off with loans from the Chinese. The $1.3 trillion payment will run just our current debt to nearly $12 trillion -- the long term, unfunded obligations will now be more like $55 trillion.

No, all I'm saying is that it's kind of obvious what's going on here with this "fountain pen robbery" in terms of priorities and it's shameful.

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