speaking of conflicts of interest…

Posted on Tuesday 29 June 2010

I’ve wondered what anyone reading this blog might think about my meanderings, particularly recently with my diversion into an idiosyncratic case from my own history, the case of Dr. Nemeroff – the number one paradigm for Conflicts of Interest in Psychiatry. How does that fit with the other things  I like to write about – the Iraq War, the deceit of the Bush Administration, the absurdity of Republican oppositionalism, the Vatican sexual abuse scandal, etc.? I guess it all fits together to me, though I wouldn’t have been able to say it clearly yesterday. It’s all about hidden agendas – people with power misusing that power by not showing their cards.

I don’t think it’s only some morality thing that makes this stuff bother us so much. It’s just the fact that life is confusing enough without throwing in a bunch of unnecessary deceit to complexify it further. George Bush and Dick Cheney had a hair-brained scheme about oil and foreign policy that made an unholy mess. The guys on Wall Street had a field day playing with Derivatives and cdo’s and turned our economy  into mush. Nemeroff and his pals got into the drug marketing business and played havoc with the an entire medical specialty. Conflicts of interest are inevitable, but they only do their damage when they’re secret.

Speaking of conflicts of interest, plausible deniability isn’t a standard for judges either:
By bmaz
June 29, 2010

Last week Federal district court judge Matin Feldman of the Eastern District of Louisiana,  in what has become a controversial decision, overturned the six month moratorium on deepwater oil drilling imposed by the Department of the Interior. It was a legally curious decision to start with as it, on its face, appeared to be contrary to the well established standard of review. Almost immediately from the time Judge Feldman’s decision hit the public conscience, information on Feldman’s undisclosed [at least on the case record at issue)]financial ties to the oil and gas exploration industry started coming out of the woodwork. From Saturday’s Washington Post:
    The federal judge who presided over a challenge to the Obama administration’s six-month moratorium on deepwater oil drilling simultaneously owned stock in an oil company affected by the ban, according to a financial disclosure statement released Friday. U.S. District Judge Martin L.C. Feldman sold the stock in Exxon Mobil 14 days after the case was filed in New Orleans by a group of oil service firms — and less than five hours before he struck down the moratorium. Feldman said in a statement elaborating on the disclosure that he was unaware of his holdings in Exxon Mobil and a smaller oil company until 9:45 p.m. Monday, the day before he issued his ruling.

    “Because he remembered that Exxon, who was not a party litigant in the moratorium case, nevertheless had one of the 33 rigs in the Gulf, the judge instructed his broker to sell Exxon and XTO [Energy Inc.] as soon as the market opened the next morning,” according to a statement released by his chambers and reported by Bloomberg News. Even before this latest disclosure, Feldman was criticized by environmental groups and others for not recusing himself from the case. The groups pointed to his 2008 disclosure form, which showed that he had invested in companies involved in offshore oil and gas exploration.
So Judge Feldman not only held numerous oil and gas interest stocks, but was trading them up to and including the morning of his fateful decision, and doing so out of an admitted realization that he had an appearance of ethical conflict. Feldman owned and was trading Exxon stock, a company whose Gulf of Mexico rigs were losing money at the rate of a half million dollars a day due to the moratorium, during the entire time he was assigned the case. Yet, failing to disclose his appearance of conflict on the record or recuse, Feldman nevertheless proceeded to issue a questionable decision clearly benefitting the oil and exploration industry he is so invested in.

Lest there be any confusion that perhaps Judge Feldman somehow put himself in the clear by suddenly selling off his holdings in Exxon on the morning of June 22 just hours before issuing his surprising opinion contrary to normal standards of review for such issues, keep in mind the subject case of Hornbeck Offshore Services et. al v. Salazar had been assigned to Feldman for two weeks and, significantly, the adversarial hearing the opinion resulted from actually occurred the day prior, June 21, while Feldman obviously still held the stock even he considered an ethical issue.

Even more distressing is the fact that it has now been revealed from Judge Feldman’s 2009 financial disclosure, literally just filed and only released this week after demand resulting from his questionable ruling, that Feldman is very heavily invested in Blackrock Financial products. Blackrock is, of course, the single biggest shareholder in BP. As the New York Times put it:

    No single institution has more money riding on BP than BlackRock, the money management firm that is BP’s largest shareholder.

Well that certainly sounds like reason to pause, eh? There are two sources of guidance for federal judges such as Feldman in instances like this, the statutory guidance of 28 USC 455 and the Code of Conduct for United States Judges contained within the Guide to Judiciary Policy of the US Courts…

[bmaz reviews the statutes here which show clear Conflict of Interest in this case]

Feldman was required by both statutory and ethical considerations to recuse himself; at a absolute base minimum to disclose his appearances of conflict on the record; but he did neither. Any competent standard of lawyering would mandate the government to raise the issue if they are going to competently fight Feldman’s ruling; but they have not, and they have engaged in other consistently questionable lawyering on this case as well.

The public ought to be asking what in the world is going on here. On all fronts.

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